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CD RADIO INC.
TO
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
Trustee
--------------------
Indenture
Dated as of November , 1997
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$296,930,000 principal amount at maturity
15% Senior Secured
Discount Notes
due 2007
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Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of November , 1997
Trust Indenture
Act Section Indenture Section
'SS' 310(a)(1) ....................................... 607
(a)(2) ....................................... 607
(b) ....................................... 607, 608
'SS' 312(c) ....................................... 701
'SS' 314(a) ....................................... 703
(a)(4) ....................................... 1008(a)
(c)(1) ....................................... 102
(c)(2) ....................................... 102
(e) ....................................... 102
'SS' 315(b) ....................................... 601
'SS' 316(a)(last
sentence) ....................................... 101 ("Outstanding")
(a)(1)(A) ....................................... 502, 512
(a)(1)(B) ....................................... 513
(b) ....................................... 508
(c) ....................................... 104(d)
'SS' 317(a)(1) ....................................... 503
(a)(2) ....................................... 504
(b) ....................................... 1003
'SS' 318(a) ....................................... 111
TABLE OF CONTENTS
Page
PARTIES..................................................................................... 1
RECITALS OF THE COMPANY..................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions............................................................... 2
SECTION 102. Compliance Certificates and Opinions...................................... 27
SECTION 103. Form of Documents Delivered to Trustee.................................... 28
SECTION 104. Acts of Holders........................................................... 29
SECTION 105. Notices, Etc., to Trustee and Company..................................... 30
SECTION 106. Notice to Holders; Waiver................................................. 30
SECTION 107. Effect of Headings and Table of Contents.................................. 31
SECTION 108. Successors and Assigns.................................................... 31
SECTION 109. Separability Clause....................................................... 31
SECTION 110. Benefits of Indenture..................................................... 31
SECTION 111. Governing Law............................................................. 32
SECTION 112. Legal Holidays............................................................ 32
ARTICLE TWO
NOTE FORMS
SECTION 201. Form of Note and Trustee's Certificate of Authentication.................. 32
SECTION 202. Notes Issued in Global Form............................................... 33
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms........................................................... 34
SECTION 302. Denominations............................................................. 34
SECTION 303. Execution, Authentication, Delivery and Dating............................ 35
--------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Indenture.
ii
Page
SECTION 304. Temporary Notes........................................................... 36
SECTION 305. Registration, Registration of Transfer and Exchange....................... 36
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes............................... 37
SECTION 307. Payment of Interest; Interest Rights Preserved............................ 38
SECTION 308. Persons Deemed Owners..................................................... 39
SECTION 309. Cancellation.............................................................. 40
SECTION 310. Computation of Interest................................................... 40
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture................................... 40
SECTION 402. Application of Trust Money................................................ 42
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default......................................................... 42
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................ 44
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee........... 45
SECTION 504. Trustee May File Proofs of Claim.......................................... 46
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.................... 47
SECTION 506. Application of Money Collected............................................ 47
SECTION 507. Limitation on Suits....................................................... 48
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest........................................................... 48
SECTION 509. Restoration of Rights and Remedies........................................ 49
SECTION 510. Rights and Remedies Cumulative............................................ 49
SECTION 511. Delay or Omission Not Waiver.............................................. 49
SECTION 512. Control by Holders........................................................ 49
SECTION 513. Waiver of Past Defaults................................................... 50
SECTION 514. Waiver of Stay or Extension Laws.......................................... 50
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults........................................................ 50
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Page
SECTION 602. Certain Rights of Trustee................................................. 51
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Notes................. 52
SECTION 604. May Hold Notes............................................................ 53
SECTION 605. Money Held in Trust....................................................... 53
SECTION 606. Compensation and Reimbursement............................................ 53
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests............ 54
SECTION 608. Resignation and Removal; Appointment of Successor......................... 54
SECTION 609. Acceptance of Appointment by Successor.................................... 56
SECTION 610. Merger, Conversion, Consolidation or Succession to Business............... 56
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.............................. 57
SECTION 702. Reports by Trustee........................................................ 57
SECTION 703. Reports by Company........................................................ 57
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms....................... 58
SECTION 802. Successor Substituted..................................................... 59
SECTION 803. Notes to Be Secured in Certain Events..................................... 60
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders........................ 60
SECTION 902. Supplemental Indentures with Consent of Holders........................... 62
SECTION 903. Execution of Supplemental Indentures...................................... 63
SECTION 904. Effect of Supplemental Indentures......................................... 63
SECTION 905. Conformity with Trust Indenture Act....................................... 63
SECTION 906. Reference in Notes to Supplemental Indentures............................. 63
SECTION 907. Notice of Supplemental Indentures......................................... 64
iv
Page
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest...................... 64
SECTION 1002. Maintenance of Office or Agency.......................................... 64
SECTION 1003. Money for Note Payments to Be Held in Trust.............................. 65
SECTION 1004. Corporate Existence...................................................... 66
SECTION 1005. Payment of Taxes and Other Claims........................................ 66
SECTION 1006. Maintenance of Properties................................................ 66
SECTION 1007. Insurance................................................................ 67
SECTION 1008. Statement by Officers as to Default...................................... 68
SECTION 1009. Provision of Financial Statements........................................ 68
SECTION 1010. Purchase of Notes upon Change in Control................................. 69
SECTION 1011. Limitation on Indebtedness............................................... 70
SECTION 1012. Limitation on Restricted Payments........................................ 70
SECTION 1013. Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries....................................................... 73
SECTION 1014. Limitation on Transactions with Affiliates............................... 74
SECTION 1015. Limitation on Liens...................................................... 75
SECTION 1016. Limitation on Sale of Assets............................................. 75
SECTION 1017. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries............................................ 76
SECTION 1018. Waiver of Certain Covenants.............................................. 77
SECTION 1019. Required Stock Ownership................................................. 78
SECTION 1020. Further Assurances....................................................... 78
SECTION 1021. Limitation on Subsidiary Business Activities............................. 78
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption...................................................... 78
SECTION 1102. Applicability of Article................................................. 78
SECTION 1103. Election to Redeem; Notice to Trustee.................................... 79
SECTION 1104. Selection by Trustee of Notes to Be Redeemed............................. 79
SECTION 1105. Notice of Redemption..................................................... 79
SECTION 1106. Deposit of Redemption Price.............................................. 80
SECTION 1107. Notes Payable on Redemption Date......................................... 80
SECTION 1108. Notes Redeemed in Part................................................... 81
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Page
ARTICLE TWELVE
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1201. Collateral Documents..................................................... 81
SECTION 1202. Trustee May Perform...................................................... 81
SECTION 1203. Collateral Trust Arrangements............................................ 82
SECTION 1204. Certificates and Opinions................................................ 82
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance............. 82
SECTION 1302. Defeasance and Discharge................................................. 83
SECTION 1303. Covenant Defeasance...................................................... 83
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.......................... 84
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.............................. 86
SECTION 1306. Reinstatement............................................................ 86
TESTIMONIUM................................................................................ 87
SIGNATURES................................................................................. 87
EXHIBIT A -- FORM OF NOTE
INDENTURE, dated as of November , 1997 between CD Radio Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at Sixth Floor, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
a bank duly organized and existing under the laws of the State of New York,
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 15%
Senior Secured Discount Notes due 2007 (herein called the "Notes"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
The Notes have been issued in the form of Units consisting of
Notes and Warrants to acquire additional Notes with an aggregate principal
amount at maturity of $38,730,000 (the "Warrants").
The Company has determined to secure its obligations in respect
of the Notes and duly authorized the execution and delivery of the Collateral
Documents (as defined herein) to which it is a party.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
2
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article One have the meanings
assigned to them in this Article One, and include the plural as well as
the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under
the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Accreted Value" is defined to mean, for any specified date, the
amount calculated pursuant to clause (i), (ii), (iii) or (iv) below for each
$1,000 principal amount at maturity of Notes:
(i) If the specified date occurs on one or more of the following
dates (each a "Semi-Annual Accrual Date"), the Accreted Value will equal
the amount set forth below for such Semi-Annual Accrual Date:
3
Semi-Annual Accreted
Accrual Date Value
------------ ------
[ ], 1998....................... $[ ]
[ ], 1998..................... $[ ]
[ ], 1999....................... $[ ]
[ ], 1999....................... $[ ]
[ ], 2000....................... $[ ]
[ ], 2000....................... $[ ]
[ ], 2001....................... $[ ]
[ ], 2001....................... $[ ]
[ ], 2002....................... $[ ]
[ ], 2002....................... $1,000
(ii) If the specified date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (a) the original
issue price and (b) an amount equal to the product of (1) the Accreted
Value for the first Semi-Annual Accrual Date less the original issue
price multiplied by (2) a fraction, the numerator of which is the number
of days from the date of this Indenture to the Specified Date, using a
360-day year of twelve 30-day months, and the denominator of which is
the number of days elapsed from the date of this Indenture to the first
Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months;
(iii) If the specified date occurs between two Semi-Annual
Accrual Dates, the Accreted Value will equal the sum of (a) the Accreted
Value for the Semi-Annual Accrual Date immediately preceding such
specified date and (b) an amount equal to the product of (1) the
Accreted Value for the immediately following Semi-Annual Accrual Date
less the Accreted Value for the immediately preceding Semi-Annual
Accrual Date multiplied by (2) a fraction the numerator of which is the
number of days from the immediately preceding Semi-Annual Accrual Date
to the specified date, using a 360-day year of twelve 30-day months, and
the denominator of which is 180; or
(iv) If the specified date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of a Person (a)
existing at the time such Person becomes a Restricted Subsidiary or (b) assumed
in connection with the acquisition of assets from such Person, in each case,
other than Indebtedness incurred in connection with, or in contemplation of,
such Person becoming a Restricted Subsidiary or such acquisition; provided that,
for purposes of Section 1011, such Indebtedness shall be deemed to be incurred
on the date of the related acquisition of assets from any Person or the date the
acquired Person becomes a Restricted Subsidiary.
4
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Adjusted Consolidated Operating Cash Flow" means Consolidated
Operating Cash Flow for the latest four fiscal quarters for which consolidated
financial statements of Company are available, taken as a whole. For purposes of
calculating "Consolidated Operating Cash Flow" for any four fiscal quarter
period for purposes of this definition, (i) all Restricted Subsidiaries of the
Company on the date of the transaction giving rise to the need to calculate
"Adjusted Consolidated Operating Cash Flow" (the "Transaction Date") shall be
deemed to have been Restricted Subsidiaries at all times during such four fiscal
quarter period and (ii) any Unrestricted Subsidiary on the Transaction Date
shall be deemed to have been an Unrestricted Subsidiary at all times during such
four fiscal quarter period. In addition to and without limitation of the
foregoing, for purposes of this definition, "Consolidated Operating Cash Flow"
shall be calculated after giving effect on a pro forma basis for the applicable
four fiscal quarter period to, without duplication, (i) any Asset Sales or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of the Company or a Restricted
Subsidiary (including any Person who becomes a Restricted Subsidiary as a result
of the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the period commencing on the first day
of such four fiscal quarter period to and including the Transaction Date (the
"Reference Period"), as if such Asset Sale or Asset Acquisition occurred on the
first day of the Reference Period and (ii) any incurrence or repayment,
retirement or permanent reduction of any Indebtedness of the Company or any
Restricted Subsidiary during the Reference Period, as if such incurrence,
repayment, retirement or reduction occurred on the first day of the Reference
Period.
"Affiliate" means, with respect to any specified Person, (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person or (ii) any other Person
that owns, directly or indirectly, 10% or more of such specified Person's Voting
Stock or any executive officer or director of any such specified Person or other
Person or, with respect to any natural Person, any Person having a relationship
with such Person by blood, marriage or adoption not more remote than first
cousin. For the purposes of this definition, "control", when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Arianespace Agreement" means, collectively, the two Customer
Loan Agreements, each dated July 22, 1997, between the Company and Arianespace
S.A., as either such agreement is from time to time amended or supplemented in
accordance with its terms.
5
"Asset Acquisition" means (i) any capital contribution (by means
of transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary in any other Person, or any acquisition or purchase of
Capital Stock of any other Person by the Company or any Restricted Subsidiary,
in either case pursuant to which such Person shall become a Restricted
Subsidiary or shall be merged with or into the Company or any Restricted
Subsidiary or (ii) any acquisition by the Company or any Restricted Subsidiary
of the assets of any Person which constitute substantially all of an operating
unit or line of business of such person or which is otherwise outside of the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer or lease (that has the effect of a disposition and is not for security
purposes) or other disposition (that is not for security purposes) to any Person
other than the Company or a Restricted Subsidiary in one transaction or a series
of related transactions, of (i) any Capital Stock of any Restricted Subsidiary,
(ii) any material license or other authorization of the Company or any
Restricted Subsidiary, (iii) any assets of the Company or any Restricted
Subsidiary which constitute substantially all of an operating unit or line of
business of the Company and the Restricted Subsidiaries or (iv) any other
property or asset of the Company or any Restricted Subsidiary outside of the
ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include (i) any disposition of properties and assets of
the Company that is governed by the provisions of Article Eight, (ii) sales of
property or equipment that have become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Restricted Subsidiary, as the case may be, (iii) sales of accounts
receivable by the Company for cash in an amount at least equal to the fair
market value of such accounts receivable, (iv) for purposes of Section 1016 any
sale, conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions, involving assets
with a Fair Market Value not in excess of $250,000 in any twelve-month period
and (v) sales of rights to the Company's transmissions outside the continental
United States and outside the ordinary course of the Company's business if (a)
after giving effect to such sale and for a six month period thereafter, the
Company and the Restricted Subsidiaries shall have no Indebtedness outstanding
under any Bank Credit Agreement, (b) the consideration received by the Company
for such sale is at least 80% cash or Cash Equivalents and (c) the proceeds of
such sale are used by the Company for working capital or as provided in clause
(i) or (ii) of paragraph (b) of Section 1016.
"Attributable Indebtedness" means with respect to an operating
lease included in any Sale and Leaseback Transaction at the time of
determination, the present value (discounted at the interest rate implicit in
the lease or, if not known, at the Company's incremental borrowing rate) of the
obligations of the lessee of the property subject to such lease for rental
payments during the remaining term of the lease included in such transaction,
including any period for which such lease has been extended or may, at the
option of the
6
lessor, be extended, or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of penalty (in which case
the rental payments shall include such penalty), after excluding from such
rental payments all amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water, utilities and similar charges.
"Average Life" means, as of the date of determination with
respect to any Indebtedness, the quotient obtained by dividing (a) the sum of
the products of (i) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness multiplied by
(ii) the amount of each such principal payment by (b) the sum of all such
principal payments.
"Bank Credit Agreement" means any one or more credit agreements
(which may include or consist of revolving credit agreements or similar
arrangements) between the Company or any Restricted Subsidiary and one or more
banks or other financial institutions providing financing for the business of
the Company and its Restricted Subsidiaries.
"Bankruptcy Law" means Title 11 of the United States Code, as
amended, or any similar United States federal or state law, or any similar law
of any other jurisdiction, relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization or relief of debtors or any amendment
to, succession to or change in any such law.
"Board of Directors" means the Board of Directors of the Company
or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Bond Collateral" has the meaning specified in the definition of
Permitted Liens.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations, rights in or
other equivalents (however designated) of such Person's capital stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Stock, and any
7
rights (other than debt securities convertible into capital stock), warrants or
options exchangeable for or convertible into such capital stock, whether now
outstanding or issued after the date of this Indenture.
"Capitalized Lease Obligation" of any Person means any obligation
of such Person and its subsidiaries on a consolidated basis under a lease of (or
other agreement conveying the right to use) any property (whether real, personal
or mixed) that is required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture, the amount of
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 180 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptances with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System, in each case having combined capital and surplus and
undivided profits of not less than $500,000,000; (iii) commercial paper with a
maturity of 180 days or less issued by a corporation that is not an Affiliate of
the Company and is organized under the laws of any state of the United States or
the District of Columbia and rated at least A-1 by S&P or at least P-l by
Moody's and (iv) any money market mutual fund organized under the laws of the
United States or any state thereof whose assets consist solely of cash or the
foregoing instruments.
"CD Radio Assets" means all assets, rights, services and
properties, whether tangible or intangible, used or intended for use in
connection with a CD Radio Business, including, without limitation, satellites,
terrestrial repeating stations, uplink facilities, musical libraries and other
recorded programming, furniture, fixtures and equipment and telemetry, tracking,
monitoring and control equipment.
"CD Radio Business" means the business of transmitting digital
radio programming throughout the United States by satellite to be received by
paying subscribers, including, without limitation, any business in which the
Company is engaged on the date of this Indenture, and any business reasonably
related thereto.
"Change of Control" means the occurrence of any 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 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 40% of the total outstanding Voting Stock of the
8
Company; (b) the Company consolidates with, or merges with or into another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with
or merges with or into the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is not
converted or exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation of the Company) or is converted into
or exchanged for (A) Voting Stock (other than Redeemable Capital Stock) of the
surviving or transferee corporation or (B) Voting Stock (other than Redeemable
Capital Stock) of the surviving or transferee corporation and cash, securities
and other property (other than Capital Stock of the Surviving Entity) in an
amount that could be paid by the Company as a Restricted Payment as described
under Section 1012 and (ii) immediately after such transaction, no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total outstanding Voting Stock
of the surviving or transferee corporation; (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office;
or (d) the Company is liquidated or dissolved or a special resolution is passed
by the shareholders of the Company approving the plan of liquidation or
dissolution other than in a transaction which complies with the provisions of
Article Eight.
"Closing Price" on any Trading Day with respect to the per share
price of any shares of Capital Stock means the last reported sale price regular
way or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the
National Association of Securities Dealers Automated Quotations National Market
System or, if such shares are not listed or admitted to trading on any national
securities exchange or quoted on such automated quotation system but the issuer
is a Foreign Issuer (as defined in Rule 3b-4(b) of the Exchange Act) and the
principal securities exchange on which such shares are listed or admitted to
trading is a Designated Offshore Securities Market (as defined in Rule 902(a) of
the Securities Act of 1933, as amended), the average of the reported closing bid
and asked
9
prices regular way on such principal exchange, or, if such shares are not listed
or admitted to trading on any national securities exchange or quoted on such
automated quotation system and the issuer of such shares and/or principal
securities exchange or quoted on such automated quotation system and the issuer
of such shares and/or principal securities exchange do not meet such
requirements, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
that is selected from time to time by the Company for that purpose.
"Collateral" means all property in which a security interest is
granted or purported to be granted pursuant to the Collateral Documents and not
released pursuant to the terms hereof and thereof.
"Collateral Agent" means initially IBJ ▇▇▇▇▇▇▇▇ Bank and Trust
Company and thereafter any successor Collateral Agent that is a financial
institution in the State of New York selected by the Trustee, acting as the
agent and designee of the Trustee pursuant to a Custodian Agreement, that
(a) is a financial intermediary (not a clearing corporation)
within the meaning of Section 8-313(4) of the Uniform Commercial Code
carrying on business in the State of New York,
(b) issues (or whose parent issues) commercial paper or
certificates of deposit rated as described in clause (c) of the
definition of Cash Equivalent,
(c) has combined capital and surplus and undivided profits of not
less than $500,000,000 and
(d) enters into a Custodian Agreement.
"Collateral Documents" means the Indenture, Custodian Agreement,
Pledge Agreement and the other Collateral Documents referred to therein.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such Person's common stock or
ordinary shares, whether outstanding
10
at the date of this Indenture, and includes, without limitation, all series and
classes of such common stock or ordinary shares.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, its Chief Executive
Officer, its President, any Vice President, its Treasurer or an Assistant
Treasurer, and delivered to the Trustee.
"Consolidated Income Tax Expense" means, with respect to any
period, the provision for United States corporation, local, foreign and other
income taxes of the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (a) the interest expense of the Company and the
Restricted Subsidiaries for such period, including, without limitation, (i)
amortization of original issue discount, (ii) the net cost of Interest Rate
Agreements (including amortization of discounts), (iii) the interest portion of
any deferred payment obligation (excluding the amortization of fees related to
the issuance of the Notes), (iv) accrued interest, (v) the consolidated amount
of any interest capitalized by the Company, and (vi) all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, plus (b) the interest component of Capitalized Lease
Obligations of the Company and the Restricted Subsidiaries paid, accrued and/or
scheduled to be paid or accrued during such period, in each case as determined
on a consolidated basis in accordance with GAAP, plus (c) cash and non-cash
dividends paid on Redeemable Capital Stock by the Company and any Restricted
Subsidiary (to any Person other than the Company and any Restricted Subsidiary),
in each case as determined on a consolidated basis in accordance with GAAP;
provided that the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and (A) bearing a floating interest
rate shall be computed as if the rate in effect on the date of computation had
been the applicable rate for the entire period and (B) which was not outstanding
during the period for which the computation is being made but which bears, at
the option of the Company, a fixed or floating rate of interest, shall be
computed by applying, at the option of the Company, either the fixed or the
floating rate.
"Consolidated Net Income" means, for any period, the consolidated
net income (or loss) of the Company and all Restricted Subsidiaries for such
period as determined in accordance with GAAP, adjusted by excluding, without
duplication, (a) any net after-tax extraordinary gains or losses (less all fees
and expenses relating thereto), (b) any net after-tax
11
gains or losses (less all fees and expenses relating thereto) attributable to
asset dispositions other than in the ordinary course of business, (c) the
portion of net income (or loss) of any Person (other than the Company or a
Restricted Subsidiary), including Unrestricted Subsidiaries, in which the
Company or any Restricted Subsidiary has an ownership interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Company or any Restricted Subsidiary in cash dividends or distributions during
such period, (d) net income (or loss) of any Person combined with the Company or
any Restricted Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination, (e) the net income of any Restricted
Subsidiary, to the extent that the declaration or payment of dividends or
similar distributions by such Restricted Subsidiary is not at the date of
determination permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Restricted Subsidiary or its
stockholders and (f) any non-cash items of the Company and any Restricted
Subsidiary (including monetary corrections) increasing or decreasing
Consolidated Net Income for such period (other than items that will result in
the receipt or payment of cash).
"Consolidated Operating Cash Flow" means, with respect to any
period, the Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period increased by (in each case to the extent included
in computing consolidated Net Income) the sum of (i) the Consolidated Income Tax
Expense of the Company and its Restricted Subsidiaries accrued according to GAAP
for such period (other than taxes attributable to extraordinary, unusual or
non-recurring gains or losses); (ii) Consolidated Interest Expense for such
period; (iii) depreciation of the Company and its Restricted Subsidiaries for
such period; and (iv) amortization of the Company and its Restricted
Subsidiaries for such period, including, without limitation, amortization of
capitalized debt issuance costs for such period, all determined on a
consolidated basis in accordance with GAAP.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee, at which at any particular time its corporate trust
business shall be administered which office at the date of execution of this
Indenture is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
except that with respect to presentation of Notes for payment or for
registration of transfer or exchange, such term shall mean the office or agency
of the Trustee at which, at any particular time, its corporate agency business
shall be conducted.
"Cumulative Available Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the date of this Indenture and ending on the
last day of the most recent fiscal quarter immediately preceding the date of
determination for which consolidated financial information of the Company is
available or, if such cumulative Consolidated Operating Cash
12
Flow for such period is negative, the negative amount by which cumulative
Consolidated Operating Cash Flow is less than zero.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement entered into
by a Person that is designed to protect such Person against fluctuations in
currency values.
"Custodian Agreement" means an agreement between the Trustee and
a Collateral Trustee that provides for the holding of the Collateral in
accordance with the terms of the Indenture.
"Default" means any event that after notice or passage of time or
both would be an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" has the meaning specified in Section 205.
"Disinterested Director" means, with respect to any transaction
or series of transactions in respect of which the Board of Directors is required
to deliver a resolution of the Board of Directors under this Indenture, a member
of the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, consistently
applied, that are in effect on the date of this Indenture.
"guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance)
13
of all or any part of such obligation, including, without limiting the
foregoing, the payment of amounts drawn down by letters of credit.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered in the Note Register.
"Indebtedness" means, with respect to any Person, without
duplication, whether recourse is to all or a portion of the assets of such
Person and whether or not contingent, (a) all liabilities of such Person for
borrowed money (including overdrafts) or for the deferred purchase price of
property or services, excluding any trade payables and other accrued current
liabilities (including outstanding disbursements) incurred in the ordinary
course of business (whether or not evidenced by a note), but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit and acceptances issued under letter of
credit facilities, acceptance facilities or other similar facilities, (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized Lease
Obligations of such Person, (e) all Indebtedness referred to in (but not
excluded from) the preceding clauses of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured), (f) all guarantees by such
Person of Indebtedness referred to in this definition of any other Person, (g)
all Redeemable Capital Stock of such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, (h) all obligations of such Person under or in respect of Interest
Rate Agreements or Currency Agreements and (i) all Attributable Indebtedness of
such Person. For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock. For purposes of
Section 1011 and Section 1012 and the definition of "Events of Default", in
determining the principal amount of any Indebtedness to be incurred by the
Company or a Restricted Subsidiary or which is outstanding at any date, (x) the
principal amount of any Indebtedness which
14
provides that an amount less than the principal amount at maturity thereof shall
be due upon any declaration of acceleration thereof shall be the Accreted Value
thereof at the date of determination and (y) effect shall be given to the impact
of any Currency Agreement with respect to such Indebtedness.
"Indenture" means this instrument as originally executed and as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Notes.
"Interest Rate Agreements" means any interest rate protection
agreement and other types of interest rate hedging agreements or arrangements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements) designed to protect against or manage exposure to
fluctuations in interest rates in respect of Indebtedness.
"Investment" means, with respect to any Person, any direct or
indirect advance, loan or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. In addition, the Fair Market
Value of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary shall be deemed
to be an "Investment" made by the Company in such Unrestricted Subsidiary at
such time. "Investments" shall exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Loral Satellite Purchase Contract" means the ▇▇▇▇▇▇▇▇ ▇▇.
▇▇/▇-▇▇▇▇▇▇▇-▇▇, dated March 2, 1993, between the Company and Loral Space
Systems, Inc., as amended, modified or supplemented from time to time.
15
"Maturity" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity with respect to such principal or by declaration
of acceleration, call for redemption or purchase or otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale,
the proceeds thereof in the form of cash or Cash Equivalents including payments
in respect of deferred payment obligations or escrowed funds, but only when
received in the form of, or stock or other assets when disposed for, cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants, consultants and investment banks) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of such Asset
Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset
Sale or becomes due and payable as a result thereof, (iv) amounts required to be
paid to any Person (other than the Company or any Restricted Subsidiary) owning
a beneficial interest in the assets subject to the Asset Sale and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee and (b) with respect to any
capital contribution or issuance or sale of Capital Stock as referred to under
Section 1012, the proceeds of such capital contribution, issuance or sale in the
form of cash or Cash Equivalents, including payments in respect of deferred
payment obligations when received in the form of, or stock or other assets when
disposed for, cash or Cash Equivalents (except to the extent that such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary), net of attorney's fees, accountant's fees and brokerage,
consultation, financial, advisory, underwriting and other fees and expenses
actually incurred in connection with such capital contribution, issuance or sale
and net of taxes paid or payable as a result thereof.
"Notes" has the meaning stated in the first recital of this
Indenture and more particularly means any Notes authenticated and delivered
under this Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
16
"Officers' Certificate" means a certificate signed by the
Chairman, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, including an employee of the Company, and who shall
be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Notes; provided that,
if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made;
(iii) Notes, except to the extent provided in Sections 1302 and
1303, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in
whose hands the Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned which have been pledged in good
faith may be regarded as
17
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium, if
any) or interest on any Notes on behalf of the Company.
"Pari Passu Indebtedness" means Indebtedness of the Company that
is pari passu in right of payment to the Notes.
"Permitted Holder" means Loral Space & Communications Ltd. and
Arianespace S.A.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Company or any Restricted Subsidiary
incurred under any one or more Bank Credit Agreements or Vendor Credit
Facilities, in an aggregate principal amount not to exceed $50 million
at any one time outstanding;
(b) Indebtedness of the Company incurred under the Arianespace
Agreement and Loral Satellite Purchase Contract, in an aggregate
principal amount not to exceed $145 million at any one time outstanding;
(c) Indebtedness of the Company pursuant to the Notes or the
Warrants or of any Restricted Subsidiary pursuant to a guarantee of the
Notes;
(d) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of this Indenture and listed on a schedule
thereto;
(e) Indebtedness of the Company owing to any Restricted
Subsidiary; provided that any Indebtedness of the Company owing to any
such Restricted Subsidiary is subordinated in right of payment to the
Notes from and after such time as the Notes shall become due and payable
(whether at Stated Maturity, acceleration or otherwise) to the payment
and performance of the Company's obligations under the Notes; provided
further that any disposition, pledge or transfer of any such
Indebtedness to a Person (other than a disposition, pledge or transfer
to the Company or another Restricted Subsidiary) shall be deemed to be
an incurrence of such Indebtedness by the Company not permitted by this
clause (e);
(f) Indebtedness of a Restricted Subsidiary owing to the Company
or to a Restricted Subsidiary, provided that any disposition, pledge or
transfer of any such
18
Indebtedness to a Person (other than a disposition, pledge or transfer
to the Company or a Restricted Subsidiary) shall be deemed to be an
incurrence of such Indebtedness by such Restricted Subsidiary not
permitted by this clause (f);
(g) obligations of the Company entered into in the ordinary
course of business (i) pursuant to bona fide Interest Rate Agreements
designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates in respect of Indebtedness of the Company
or any Restricted Subsidiary, which obligations do not exceed the
aggregate principal amount of such Indebtedness, and (ii) pursuant to
bona fide Currency Agreements entered into by the Company or any of its
Restricted Subsidiaries and designed to protect such Person against
fluctuation in currency values in respect of its (x) assets or (y)
obligations;
(h) Capitalized Lease Obligations and Purchase Money Obligations
of the Company, the aggregate value (in the case of Capitalized Lease
Obligations) or principal amount (in the case of Purchase Money
Obligations) of which (including any refinancings (as defined in clause
(l) below) thereof) does not exceed $20 million at any one time
outstanding, less the amount of any Capitalized Lease Obligations and
Purchase Money Obligations outstanding which are included in the amount
of Indebtedness permitted under clause (d) above;
(i) (x) Indebtedness of the Company incurred on or prior to
December 31, 2000 such that, after giving effect to the incurrence
thereof, the total aggregate principal amount of Indebtedness incurred
under this clause (i)(x) and any refinancings thereof pursuant to clause
(l) below would not exceed 125% of the Total Incremental Equity; and (y)
Indebtedness incurred by the Company after December 31, 2000 such that,
after giving effect to the incurrence thereof, the total aggregate
principal amount of Indebtedness incurred under this clause (i)(y) and
any refinancings thereof pursuant to clause (l) below would not exceed
the sum of (1) 125% of the Total Incremental Equity on December 31, 2000
plus the total aggregate principal amount of Indebtedness incurred under
clause (i)(x) and any refinancings thereof pursuant to clause (l) below,
and (2) 100% of the difference between the Total Incremental Equity on
the date of incurrence and the Total Incremental Equity on December 31,
2000.
(j) Indebtedness incurred (i) by the Company in an aggregate
principal amount not to exceed $60 million at any one time outstanding
to finance the operation of CD Radio Assets or the construction,
expansion, development or acquisition of music libraries and other
recorded programming, furniture, fixtures and equipment, provided that
immediately prior to incurring such Indebtedness the Total Incremental
Equity shall equal or exceed $40 million and (ii) by the Company or any
Restricted Subsidiary to finance the purchase, construction, launch,
insurance and other costs
19
with respect to Satellite Assets for use in the CD Radio Business;
provided that the net cash proceeds from the issuance of such
Indebtedness does not exceed, as of the date of incurrence of such
Indebtedness, 100% of the cost of such Satellite Assets less the
aggregate principal amount of Indebtedness outstanding that was
incurred to finance Satellite Assets;
(k) unsecured Indebtedness of the Company incurred to finance the
operation of CD Radio Assets or the construction, expansion, development
or acquisition of music libraries and other recorded music programming,
furniture, fixtures and equipment if such Indebtedness has an Average
Life longer than the Average Life of the Notes and has a Final Stated
Maturity after the Final Stated Maturity of the Notes;
(l) in addition to the items referred to in clauses (a) through
(k) above, Indebtedness of the Company having an aggregate principal
amount not to exceed $15 million at any time outstanding; and
(m) Indebtedness of the Company or any Restricted Subsidiary to
the extent it represents a replacement, renewal, refinancing, refunding
or extension of outstanding Indebtedness of the Company or any
Restricted Subsidiary incurred or outstanding pursuant to clauses (b),
(c), (d), (i), (j)(ii) and (k) of this definition or the proviso of
Section 1011; provided that (i) Indebtedness of the Company may not be
replaced, renewed, refinanced, refunded or extended to such extent under
this clause (l) with Indebtedness of any Restricted Subsidiary and (ii)
any such replacement, renewal, refinancing, refunding or extension (x)
shall not result in a lower Average Life of such Indebtedness as
compared with the Indebtedness being replaced, renewed, refinanced,
refunded or extended, (y) shall not exceed the sum of the principal
amount (or, if such Indebtedness provides for a lesser amount to be due
and payable upon a declaration of acceleration thereof, an amount no
greater than such lesser amount) of the Indebtedness being replaced,
renewed, refinanced, refunded or extended plus the amount of accrued
interest thereon and the amount of any reasonably determined prepayment
premium necessary to accomplish such replacement, renewal, refinancing,
refunding or extension and the reasonable fees and expenses incurred in
connection therewith, and (z) in the case of any replacement, renewal,
refinancing, refunding or extension by the Company of Pari Passu
Indebtedness or Subordinated Indebtedness, such new Indebtedness is made
pari passu with or subordinate to the Notes, at least to the same extent
as the Indebtedness being replaced, renewed, refinanced or extended.
"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business; (d) Interest Rate Agreements and Currency Agreements; (e) bonds,
notes, debentures or other securities received as a result of Asset Sales
permitted under Section 1016, provided that the Company and/or the Restricted
20
Subsidiaries, as the case may be, have received at least 80% of the aggregate
consideration therefrom in cash or Cash Equivalents; (f) Investments by the
Company or any Restricted Subsidiary in another Person, if as a result of such
Investment (i) such other Person becomes a Restricted Subsidiary or (ii) such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all of its assets to, the Company or a Restricted Subsidiary;
(g) Investments in the Company or in any Restricted Subsidiary and (h)
investments not otherwise permitted by the foregoing clauses (a) through (g) in
an amount not to exceed $5.0 million at any one time outstanding.
"Permitted Liens" means the following types of Liens:
(a) Liens existing on the date of this Indenture;
(b) Liens securing Indebtedness under any Vendor Credit Facility
or Bank Credit Agreement incurred pursuant to clause (a) of the
definition of Permitted Indebtedness so long as such Liens do not extend
to (i) shares of Satellite CD Radio Inc. or any License owned by
Satellite CD Radio Inc. that is required to operate a CD Radio business
("Bond Collateral");
(c) Liens securing Indebtedness under the Arianespace Agreement
and the Loral Satellite Purchase Contract;
(d) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any other Restricted Subsidiary;
(e) Liens securing the Notes;
(f) Liens securing Acquired Indebtedness created prior to (and
not in connection with or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary; provided that
such Lien does not extend to any property or assets of the Company or
any Restricted Subsidiary other than the assets acquired in connection
with the incurrence of such Acquired Indebtedness;
(g) any interest or title of a lessor under any Capitalized Lease
Obligation or any Purchase Money Obligation, in each case as permitted
under clause (h) of the definition of "Permitted Indebtedness", and
Liens securing Indebtedness incurred pursuant to clause (j)(ii) of the
definition of Permitted Indebtedness to finance the purchase,
acquisition, construction or launch of a satellite that is not one of
the first three satellites acquired or constructed by the Company so
long as such Lien does not extend to any property or assets of the
Company or any Restricted Subsidiary other than the satellite financed;
(h) statutory Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other like Liens arising
in the ordinary course of
21
business of the Company or any Restricted Subsidiary and with respect to
amounts not yet delinquent or being contested in good faith by
appropriate proceeding promptly instituted and diligently proceeding and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(i) Liens for taxes, assessments, government charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(j) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money);
(k) easements, rights-of-way, encroachments and survey defects
restrictions and other similar charges or encumbrances not interfering
in any material respect with the business of the Company or any
Restricted Subsidiary incurred in the ordinary course of business;
(l) Liens arising by reason of any judgment, decree or order of
any court or arbitration proceeding so long as such Lien is adequately
bonded and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment, decree or order shall not
have been finally terminated or the period within which such proceedings
may be initiated shall not have expired;
(m) Liens securing obligations of the Company under Interest Rate
Agreements or Currency Agreements or any collateral (other than Bond
Collateral) for the Indebtedness to which such Interest Rate Agreements
or Currency Agreements relate;
(n) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(o) Liens securing reimbursement obligations of the Company or
any Restricted Subsidiary with respect to letters of credit that
encumber documents and other property relating to such letters of credit
and the products and proceeds thereof so long as such Liens do not
extend to Bond Collateral;
22
(p) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses (a), (b), (c) (with
respect to extensions, renewals or replacements either (i) securing
Indebtedness incurred to Arianespace S.A., Loral Space Systems Inc. or
any of their Affiliates or (ii) on assets that are not Bond Collateral)
or (d) through (o); provided that any such extension, renewal or
replacement shall be no more restrictive in any material respect than
the Lien so extended, renewed or replaced and shall not extend to any
additional property or assets;
(q) Liens on Bond Collateral securing Indebtedness of the Company
incurred pursuant to clause (i), (j) (i) or (l) of the definition of
Permitted Indebtedness or Indebtedness incurred pursuant to the proviso
of Section 1011 (other than Permitted Indebtedness); provided that each
such Lien shall be equal and ratable in priority to the Lien on the Bond
Collateral securing the Notes; and
(r) Liens incurred in the ordinary course of business of the
Company or any shareholder Restricted Subsidiary with respect to
obligations that do not exceed $5 million at any one time outstanding.
"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.
"Pledge Agreement" means the Pledge Agreement dated as of
November __, 1997 from CD RADIO INC., as Pledgor, to IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Collateral Agent, as amended, modified or supplemented from time to
time.
"Pledged Stock" means the capital stock of Satellite CD Radio
Inc., a Delaware Corporation, that is pledged to secure the Notes.
"Predecessor Note" of any particular Note means every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock whether now outstanding, or issued
after the Closing Date, and including, without limitation, all classes and
series of preferred or preference stock of such Person.
23
"Purchase Money Obligations" means Indebtedness of the Company or
any Restricted Subsidiary (i) issued to finance or refinance the purchase or
construction of any assets of the Company or any Restricted Subsidiary, (ii)
issued to finance the construction of satellite dish antennas or radio adapters
to receive the Company's services or (iii) secured by a Lien on any assets of
the Company or any Restricted Subsidiary where the lender's sole recourse is to
the assets so encumbered, (a) in the case of clauses (i) or (iii) above, to the
extent the purchase or construction prices for such assets are or should be
included in "addition to property, plant or equipment" in accordance with GAAP
and (b) in each case, if the purchase or construction of such assets is not part
of any acquisition of a Person or business unit.
"Qualified Capital Stock" of any person means any and all Capital
Stock of such person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital
Stock that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the final Stated Maturity of the Notes or is redeemable at the option of the
holder thereof at any time prior to such final Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
final Stated Maturity; provided, however, that Redeemable Capital Stock shall
not include any Common Stock the holder of which has a right to put to the
Company upon certain terminations of employment and provided further that any
class or series of Capital Stock that would not constitute Redeemable Capital
Stock but for provisions thereof giving holders thereof the right to require the
issuer of such Capital Stock to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
final Stated Maturity of the Notes shall not constitute Redeemable Capital Stock
if the "asset sale" or "change of control" provisions applicable to such class
or series of Capital Stock are no more favorable to the holders of such Capital
Stock in any material respect than the provisions of Section 1010 and Section
1016 and such class or series of Capital Stock specifically provides that the
issuer of such Capital Stock will not repurchase or redeem any such stock
pursuant to such provision prior to the Company's repurchase of such Notes as
are required to be purchased pursuant to Section 1010 and Section 1016, as
applicable.
"Redemption Date", when used with respect to any Note to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
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"Regular Record Date" for the interest payable on any Interest
Payment Date means the [ ] or [ ] (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means a Subsidiary other than an
Unrestricted Subsidiary.
"S&P" means Standard and Poor's Ratings Services, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc. and its successors.
"Sale and Leaseback Transaction" means an arrangement by the
Company or a Restricted Subsidiary with any lender or investor or to which such
lender or investor is a party providing for the leasing by the Company or such
Restricted Subsidiary of any property or asset of the Company or such Restricted
Subsidiary which has been or is being sold or transferred by the Company or such
Restricted Subsidiary not more than 270 days after the acquisition thereof to
such lender or investor or any Affiliate thereof or to any Person to whom funds
have been or are to be advanced by such lender or investor or any Affiliate
thereof on the security of such property or asset.
"Satellite Assets" means satellites, terrestrial repeating
stations, uplink facilities and telemetry, tracking, monitoring and control
equipment.
"Secured Debt" means, as of any date, (i) the unpaid principal
of, and any accrued interest and premiums on, the Indebtedness then outstanding
under the Arianespace Agreement, Loral Satellite Purchase Contract and any
Indebtedness secured by a Lien permitted by clause (q) of the definition of
Permitted Liens, and (ii) fees, expenses and charges (including, without
limitation, indemnification obligations) due or owing to any Secured Party
arising under this Agreement or any Collateral Document.
"Secured Party" means Arianespace S.A., Loral Space Systems,
Inc., holders of Indebtedness secured by a Lien permitted by clause (q) of the
definition of Permitted
25
Liens and the Trustee or any other obligee or indemnified party under any
Collateral Document.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Note or
any installment of interest thereon, the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable, and, when used with respect to any other Indebtedness, means
the date specified in the instrument governing such Indebtedness as the fixed
date on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Stock Offerings" means (i) the offering of 2,240,000 shares of
Common Stock in the United States and Canada and (ii) the offering of 560,000
shares of Common Stock outside the United States and Canada, both of which
offerings are registered under the Securities Act on a From S-3 Registration
Statement (No. 333-34767).
"Strategic Equity Investor" means any company which is (or a
controlled Affiliate of any company which is or a controlled affiliate of which
is) engaged principally in the CD Radio Business or the satellite launch or
manufacturing, broadcasting, programming production, satellite broadcasting,
automotive manufacturing, automotive dealership, telecommunications or other
business reasonably related to the foregoing which has a Total Market
Capitalization of at least $1.0 billion.
"Subordinated Indebtedness" means Indebtedness of the Company
that is expressly subordinated in right of payment to the Notes.
"Subsidiary" means any Person a majority of the equity ownership
or Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries or by the Company and one or more
other Subsidiaries.
"Total Consolidated Indebtedness" means, at any date of
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and the Restricted Subsidiaries outstanding as of the date of
determination.
"Total Incremental Equity" means, at any date of determination,
the sum of, without duplication (i) the aggregate cash proceeds received by the
Company after the date of this Indenture from the issuance or sale of Qualified
Capital Stock of the Company (including Capital Stock issued upon the conversion
of convertible Indebtedness or from the exercise of options, warrants or rights
to purchase Qualified Capital Stock of the Company) to any Person other than a
Restricted Subsidiary; plus (ii) an amount equal to the sum of (1) the net
26
reduction in Investments in any Person (other than the Permitted Investments)
resulting from the payment in cash of dividends, repayments of loans or advances
or other transfers of assets, in each case to the Company or any Restricted
Subsidiary after the date of this Indenture from such Person and (2) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of any Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided,
however, that in the case of (1) or (2) above the foregoing sum shall not exceed
the amount of Investments previously made (and treated as a Restricted Payment)
by the Company or any Restricted Subsidiary in such Person or Unrestricted
Subsidiary and that constitutes a Restricted Payment that has been deducted from
Total Incremental Equity pursuant to clause (iii) below, minus (iii) the
aggregate amount of all Restricted Payments declared or made on or after the
date of this Indenture and minus (iv) the aggregate amount paid pursuant to
clauses (i), (ii), (iii), (iv) and (vi) of the second paragraph of Section 1012.
"Total Market Capitalization" of any Person means, at the time of
determination, the sum of (a) the consolidated Indebtedness of such Person, plus
(b) the product of (i) the aggregate number of outstanding primary shares of
Common Stock of such person (which shall not include any options or warrants on,
or securities convertible or exchangeable into, shares of Common Stock of such
person) and (ii) the average Closing Price of such Common Stock over the
preceding 20 consecutive Trading Days, plus (c) the liquidation value of any
outstanding shares of Preferred Stock of such Person. If no such Closing Price
exists with respect to shares of any such class, the value of such shares for
purposes of clause (b) of the preceding sentence shall be determined by the
Board of Directors in good faith and evidenced by a Board Resolution filed with
the Trustee.
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee
"Unrestricted Subsidiary" means (a) any Subsidiary that at the
time of determination shall be an Unrestricted Subsidiary (as designated by the
Board of Directors, as provided below) and (b) any subsidiary of an Unrestricted
Subsidiary; provided, however, that in no event shall any Person that is a
Restricted Subsidiary on the date of this Indenture become an Unrestricted
Subsidiary. The Board of Directors may designate any newly acquired or newly
formed Subsidiary to be an Unrestricted Subsidiary so long as (i) neither the
Company nor any Restricted Subsidiary is directly or indirectly liable for any
27
Indebtedness of such Subsidiary, (ii) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity, (iii) neither
the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary other than those that might be obtained at the time from
persons who are not Affiliates of the Company and (iv) neither the Company nor
any Restricted Subsidiary has any obligation (1) to subscribe for additional
shares of Capital Stock or other equity interest in such Subsidiary or (2) to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company shall be evidenced to the Trustee by
filing a board resolution with the Trustee giving effect to such designation.
The Board of Directors may designate any Unrestricted Subsidiary as a Restricted
Subsidiary if immediately after giving effect to such designation, there would
be no Default or Event of Default under this Indenture and the Company could
incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 1011.
"Vendor Credit Facility" means any credit facility (other than
the Arianespace Agreement and the Loral Satellite Purchase Contract) entered
into with any vendor or supplier (or any financial institution acting on behalf
of such a vendor or supplier); provided that the Indebtedness thereunder is
incurred solely for the purpose of financing the cost (including the cost of
design, development, construction, or integration) of CD Radio Assets.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means, with respect to any Person, any class or
classes of Capital Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person (irrespective of whether
or not, at the time, stock of any other class or classes shall have, or might
have, voting power by reason of the happening of any contingency).
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent)
28
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel
29
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 104.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount at maturity and serial numbers of Notes
held by any Person, and the date of holding the same, shall be proved by the
Note Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than
30
the date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders
by the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice,
31
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Any notice mailed
to a Holder in the manner herein prescribed shall be conclusively deemed to have
been received by such Holder, whether or not such Holder actually receives such
notice. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of or irregularities in
regular mail service or by reason of any other cause, it shall be impracticable
to mail notice of any event to Holders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
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 110. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Notes Registrar and their successors hereunder, and the Holders any benefit or
any legal or equitable right, remedy or claim under this Indenture.
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SECTION 111. Governing Law.
This Indenture and the Notes shall be governed by and construed
in accordance with the law of the State of New York. This Indenture is subject
to the provisions of the Trust Indenture Act that are required to be part of
this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Stated Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of principal (or premium, if any) or interest need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity or Maturity; provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date, Stated Maturity or
Maturity, as the case may be, to the next Business Day.
ARTICLE TWO
NOTE FORMS
SECTION 201. Form of Note and Trustee's Certificate of
Authentication.
The Notes and the Trustee's certificate of authentication shall
be in substantially the forms set forth in Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Notes, as evidenced by
their execution of such Notes.
33
SECTION 202. Notes Issued in Global Form.
(a) If so specified in the Company Order referred to in Section
303, the Notes may be issued in the form of one or more global Notes, registered
in the name of a securities depository (the "Depository") or its nominee,
representing all the Outstanding Notes.
(b) Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Note in global form in
the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or Section 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Note in global form shall be in writing but need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel.
(c) Notwithstanding the provisions of Section 307, payment of
principal of (and premium, if any) and interest on any Note in global form shall
be made to the Person or Persons specified therein. Notwithstanding the
provisions of Section 308 and except as provided in the preceding sentence, the
Company, the Trustee and any agent of the Company and the Trustee shall treat
the Holder of any global Note as the owner of such Note for the purpose of
receiving payment of principal of (and premium, if any, on) and interest on such
Note and for all other purposes whatsoever, whether or not such Note be overdue,
and none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
(d) If at any time, (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository or if at any time the
Depository shall no longer be registered or in good standing under the Exchange
Act or other applicable statute or regulation and a successor Depository is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, or (ii) any Event of
Default shall have occurred and be continuing and Holders of more than 25% in
principal amount of the Notes Outstanding represented by one or more global
Notes advise the Trustee that the continuation of a book-entry system through
the Depository (or a successor thereto) with respect to the Notes is no longer
required, then in such event this Section 205 shall no longer be applicable to
the Notes and the Company will execute and the Trustee, upon Company Request,
will authenticate and deliver Notes in definitive registered form, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the global Note or Notes in exchange for such global Note whereupon
the global Note or Notes shall be cancelled by the Trustee. Such Notes in
definitive registered form issued in exchange for the global Note or Notes
pursuant to this Section 205(d) shall be registered in such names and issued in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall
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instruct the Trustee. The Trustee shall deliver such Notes to the Persons in
whose names such Notes are so registered.
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms.
The aggregate principal amount at maturity of Notes which may be
authenticated and delivered under this Indenture is limited to $296,930,000,
which includes Notes issuable upon exercise of the Warrants, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906, 1010,
1016 or 1108.
The Notes shall be known and designated as the "[ ]% Senior
Secured Discount Notes due 2007" of the Company. Their Stated Maturity shall be
[ ], 2007, and they shall bear interest at the rate of [ ]% per annum from
[ ], 2002 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, payable on [ ], 2002 and semi-annually
thereafter on [ ] and [ ] in each year and at said Stated Maturity,
until the principal thereof is paid or duly provided for. The principal of this
Note shall not accrue interest until [ ], 2002, except in the case of a
default in payment of the amount due at Maturity, in which case the amount due
on this Note shall bear interest at a rate of [ ]% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default to the date the payment of such amount has been
made or duly provided for. Interest on any overdue principal amount shall be
payable on demand.
The principal of (and premium, if any) and interest on the Notes
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose; provided, however, that at the
option of the Company interest may be paid by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Note Register.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
The Notes shall be issuable only in registered form without
coupons.
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SECTION 303. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by its
Chairman, its Chief Executive Officer, its President or a Vice President, and
attested by its Secretary or an Assistant Secretary. The signature of any of
these officers on the Notes may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee in accordance with
such Company Order shall authenticate and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article Eight, any of the Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Notes executed in the name of the
successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount at maturity; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Notes as specified in such request for the purpose of such exchange. If Notes
shall at any time be authenticated and delivered in
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any new name of a successor Person pursuant to this Section 303 in exchange or
substitution for or upon registration of transfer of any Notes, such successor
Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all Notes at the time Outstanding for Notes authenticated
and delivered in such new name.
SECTION 304. Temporary Notes.
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount at maturity of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Note Register shall be
open to inspection by the Trustee. The Trustee is hereby initially appointed as
note registrar (the "Note Registrar") for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations of a like aggregate principal amount at
maturity.
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At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denomination and of a like aggregate principal amount at
maturity, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid 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.
Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Note Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906, 1010, 1016 or 1108 not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the selection of Notes to be redeemed under Section 1104
and ending at the close of business on the day of such mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If (i) any mutilated Note is surrendered to the Trustee, or (ii)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon Company Order the Trustee shall authenticate and deliver,
in exchange for any such mutilated Note or in lieu of any such destroyed, lost
or stolen Note, a new Note of like tenor and principal amount at maturity,
bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 306, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 306 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section 306 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 1002;
provided, however, that each installment of interest may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears in the Note Register or (ii) transfer to an account
located in the United States maintained by the payee.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Notes (such defaulted interest
and interest thereon herein collectively called "Defaulted Interest") may be
paid by the Company, at its election in each case, as provided in clause (1) or
(2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a Special
Record Date for the payment of such
39
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given
to the Holders in the manner provided for in Section 106, not less than
10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so given, such Defaulted Interest shall be paid to the
Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 307, each
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to the due presentment of a Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Note is registered as the owner of such
Note for the purpose of receiving payment of principal of (and premium, if any)
and (subject to Sections 305 and 307) interest on such Note and for all other
purposes whatsoever, whether or not such Note be overdue,
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and none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 309, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and certification of their disposal delivered to the
Company unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes expressly provided for herein or pursuant hereto) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
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(1) either
(a) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306
and (ii) Notes for whose payment money has theretofore been
deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for
cancellation; or
(b) all such Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust for such purpose an amount sufficient to
pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for
Accreted Value of, premium, if any, and interest on the Notes to
the date of such deposit (in the case of Notes which have become
due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums
payable under this Indenture, the Notes and the Collateral Documents by
the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited
42
with the Trustee pursuant to subclause (ii) of clause (1) of this Section 401,
the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the Accreted Value of, premium,
if any, and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest on any Note when it
becomes due and payable, and continuance of such default for a period of
30 days;
(2) default in the payment of the principal of or premium, if
any, on any Note at its Maturity;
(3) default in the performance, or breach, of the provisions of
Article Eight, the failure to make or consummate a Change of Control
Offer in accordance with the provisions of Section 1010 or the failure
to make or consummate an Excess Proceeds Offer in accordance with the
provisions of Section 1016;
(4) default in the performance, or breach, of any covenant or
agreement of the Company in this Indenture (other than a default in the
performance, or breach, of a covenant or warranty which is specifically
dealt with elsewhere in this Indenture), and continuance of such default
or breach for a period of 30 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
43
Company and the Trustee by the Holders of at least 25% in principal
amount at maturity of the Outstanding Notes a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder;
(5) any provision of the Collateral Documents shall cease, for
any reason, to be in full force and effect in any material respect, or
the Company shall so assert in writing; or the Trustee shall cease to
have a first priority perfected security interest, for the benefit of
the Trustee and the Holders, in the Collateral (other than by reason of
the release of any such security interest in accordance with the
Collateral Documents), or any representation, warranty or certification
of the Company made in or pursuant to the Collateral Documents shall be
false in any material respect as of the date when made;
(6) (A) there shall have occurred one or more defaults in the
payment of the principal of or premium, if any, on Indebtedness of the
Company or any Subsidiary aggregating $5.0 million or more, when the
same becomes due and payable at the Stated Maturity thereof, and such
default or defaults shall have continued after any applicable grace
period and shall not have been cured or waived or (B) Indebtedness of
the Company or any Subsidiary aggregating $5.0 million or more shall
have been accelerated or otherwise declared due and payable, or required
to be prepaid or repurchased (other than by regularly scheduled required
prepayment), prior to the Stated Maturity thereof;
(7) one or more final judgments, orders, or decrees of any court
or regulatory agency shall be rendered against the Company or any
Subsidiary or their respective properties which require the payment in
money, either individually or in an aggregate amount, that is more than
$5.0 million and either (A) an enforcement proceeding shall have been
commenced by any creditor upon such judgment or order or (B) there shall
have been a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of pending appeal or
otherwise, was not in effect;
(8) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Subsidiary under any Bankruptcy Law or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or any Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 90 consecutive days; or
44
(9) the institution by the Company or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by
it to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any Bankruptcy Law or any other
applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or any Subsidiary or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 501(8) or (9)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount at maturity
of the Outstanding Notes by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee upon the written
request of such Holders shall, declare the Accreted Value of, premium, if any,
and accrued interest on all of the Outstanding Notes immediately due and
payable, and upon any such declaration all such amounts payable in respect of
the Notes shall become immediately due and payable. If an Event of Default
specified in Section 501(8) or (9) occurs and is continuing, then the Accreted
Value of, premium, if any, and accrued interest on all of the Outstanding Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article Five, the Holders of a
majority in principal amount at maturity of the Outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(i) all overdue interest on all Outstanding Notes,
(ii) all unpaid Accreted Value of and premium, if any, on
any Outstanding Notes that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Notes,
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(iii) to the extent that payment of such interest is
lawful, interest on overdue interest and overdue principal at the
rate borne by the Notes, and
(iv) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(b) all Events of Default, other than the non-payment of amounts
of principal of, premium, if any, or interest on the Notes that have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Notes because of an Event of
Default specified in Section 501(5) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or the Holders
thereof have rescinded their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or rescission, as the case
may be, shall have been given to the Trustee by the Company and countersigned by
the holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of the
Notes, and no other Event of Default has occurred during such 30-day period
which has not been cured or waived during such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if
(a) default is made in the payment of any installment of interest
on any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if
46
any) and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installment of interest, at the rate borne by the
Notes, and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Notes,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article Five
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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SECTION 507. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount at
maturity of the Outstanding Notes shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority or more in principal amount at maturity of the Outstanding
Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Thirteen)
and in such Note of the principal of (and premium, if any) and (subject to
Section 307) interest on such Note on the respective Stated Maturities expressed
in such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
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SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of not less than a majority in principal amount at
maturity of the Outstanding Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, provided
that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
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(3) the Trustee need not take any action which might involve it
in personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount at
maturity of the Outstanding Notes may, on behalf of the Holders of all the
Notes, waive any past defaults under this Indenture and their consequences,
except a default
(1) in respect of the payment of the principal of (or premium,
if any) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 30 days after the Trustee receives notice of the
occurrence of any Default or an Event of Default hereunder, the Trustee shall
transmit in the manner and to the extent provided in TIA Section 313(c), notice
of such Default hereunder known to the
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Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of (or premium, if any) or interest on any Note, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders; and provided
further that in the case of any Default of the character specified in Section
501(4) no such notice to Holders shall be given until at least 30 days after the
occurrence thereof.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction reasonably satisfactory to the
Trustee;
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(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture; and
(9) the permissive right of the Trustee to act hereunder will
not be construed as a duty.
The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Notes.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Notes and
perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Notes or the
proceeds thereof.
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SECTION 604. May Hold Notes.
The Trustee, any Paying Agent, any Note Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Note Registrar or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
gross negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The obligations of the Company under this Section 606 to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior to the
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Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Notes.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7) or (8), the
expenses (including the reasonable charges and expenses of its counsel) of and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 606 shall survive the termination
of this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 607, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 607, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article Six.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article Six shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 609 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of not less than a majority in principal amount at maturity of the Outstanding
Notes, delivered to the Trustee and to the Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount at maturity of the Outstanding Notes
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Note for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
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SECTION 609. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article Six.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the
first May 15 after the first issuance of Notes, the Trustee shall transmit to
the Holders, in the manner and to the extent provided in TIA Section 313(c), a
brief report dated as of such May 15 if required by TIA Section 313(a).
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections,
then it shall file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with
58
the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the
extent provided in TIA Section 313(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section 703 as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company will not in a single transaction or a series of
related transactions consolidate with or merge with or into any other Person or
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
Persons, and the Company will not permit any Restricted Subsidiary to enter into
any such transaction, or series of transactions, if such transaction or series
of transactions, in the aggregate, would result in the sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the properties and assets of the Company and its Restricted Subsidiaries on a
consolidated basis to any Person or Persons, unless:
(i) either
(a) the Company shall be the surviving corporation or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company or the Company and its
Restricted Subsidiaries is merged or the Person which acquires by
sale, conveyance, transfer, lease or other disposition, all or
substantially all of the properties and assets of the Company or
the Company and its Restricted Subsidiaries, as the case may be,
(the "Surviving Entity")
(1) shall be a corporation organized and validly
existing under the laws of the United States of America,
any state thereof or the District of Columbia and
59
(2) shall expressly assume, by an indenture
supplemental to this Indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, the
Company's obligations for the due and punctual payment of
the principal of (or premium, if any, on) and interest on
all the Notes and the performance and observance of every
covenant of this Indenture on the part of the Company to
be performed or observed;
(ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (and treating any obligation
of the Company or any Restricted Subsidiary in connection with or as a
result of such transaction as having been incurred of the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (on the assumption that the
transaction or series of transactions occurred on the first day of the
latest four fiscal quarters for which consolidated financial statements
of the Company are available prior to the consummation of such
transaction or series of transactions with the appropriate adjustments
with respect to the transaction or series of transactions, including the
incurrence and repayment of any Indebtedness incident to such
transaction, being included in such pro forma calculation), the Company
(or the Surviving Entity if the Company is not the continuing obligor
under this Indenture) could incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the proviso to
Section 1011;
(iv) if any of the property or assets of the Company or any of
its Restricted Subsidiaries would thereupon become subject to any Lien,
the provisions of Section 1015 are complied with; and
(v) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition and such supplemental indenture
comply with this Article Eight and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with or merger of the
Company with or into any other corporation or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801,
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the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and in the event of any such conveyance or
transfer, the Company (which term shall for this purpose mean the Person named
as the "Company" in the first paragraph of this Indenture or any successor
Person which shall theretofore become such in the manner described in Section
801), except in the case of a lease, shall be discharged of all obligations and
covenants under this Indenture and the Notes and may be dissolved and
liquidated.
SECTION 803. Notes to Be Secured in Certain Events.
If, upon any such consolidation of the Company with or merger of
the Company into any other corporation, or upon any conveyance, lease or
transfer of the property of the Company substantially as an entirety to any
other Person, any property or assets of the Company would thereupon become
subject to any Lien, then unless such Lien could be created pursuant to Section
1015 without equally and ratably securing the Notes, the Company, prior to or
simultaneously with such consolidation, merger, conveyance, lease or transfer,
will as to such property or assets, secure the Notes Outstanding (together with,
if the Company shall so determine any other Indebtedness of the Company now
existing or hereinafter created which is not subordinate in right of payment to
the Notes) equally and ratably with (or prior to) the Indebtedness which upon
such consolidation, merger, conveyance, lease or transfer is to become secured
as to such property or assets by such Lien, or will cause such Notes to be so
secured; provided that, for the purpose of providing such equal and ratable
security, the principal amount of the Notes shall mean that amount which would
at the time of making such effective provision be due and payable pursuant to
Section 502 upon a declaration of acceleration of the Maturity thereof, and the
extent of such equal and ratable security shall be adjusted, to the extent
permitted by law, as and when said amount changes over time as provided in
Section 502.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
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(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
contained herein or such obligor in this Indenture and in the Notes in
accordance with Section 801;
(2) to add to the covenants of the Company or any obligor upon
the Notes for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company or any other obligor upon the
Notes for the benefit of the Holders, as applicable, in this Indenture
or in the Notes;
(3) to add any additional Events of Default;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609;
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; provided that such action shall not adversely
affect the interests of the Holders in any material respect;
(6) to secure the Notes pursuant to the requirements of Section
803 or otherwise;
(7) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act;
(8) to add a guarantor of the securities under this Indenture;
(9) to mortgage, pledge, hypothecate or grant a security interest
in favor of the Trustee for the benefit of the Holders as additional
security for the payment and performance of the Company's obligations
under this Indenture, in any property, or assets, including any of which
are required to be mortgaged, pledged or hypothecated, or in which a
security interest is required to be granted to the Trustee pursuant to
this Indenture or otherwise; or
(10) to convey, transfer, assign, mortgage or pledge to the
Trustee or the Custodian Agent as security for the Notes and the other
Secured Debt any property or assets.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or
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pledge of any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount at maturity of the Outstanding Notes, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the Stated Maturity of the principal of or any
installment of interest on any Note, or reduce the Accreted Value
thereof (or premium, if any) or the rate of interest thereon or any
premium payable upon the redemption thereof or reduce the amount of the
principal of the Notes that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502 or the
amount thereof provable in bankruptcy pursuant to Section 504, or change
the coin or currency in which any Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage in principal amount at maturity of the
Outstanding Notes, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify any of the provisions of this Article Nine, Article
Five or Sections 1018, except to increase any such percentage of
outstanding Notes required for such actions or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(iv) amend, change or modify the obligation of the Company to
make and consummate a Change of Control Offer in the event of a Change
of Control or an Excess Proceeds Offer in connection with any Asset Sale
or modify any of the provisions or definitions with respect thereto; or
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(v) make any change in any of the provisions relating to the
Collateral Documents not authorized by Article Twelve that materially
adversely affects the Holders.
It shall not be necessary for any Act of Holders under this
Section 902 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustees own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
Nine shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
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SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of Section 902, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and
Interest.
The Company covenants and agrees for the benefit of the Holders
that it will duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York, an office or
agency where Notes may be presented or surrendered for payment, 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 Corporate Trust Office of the Trustee shall be such office or agency
of the Company, unless the Company shall designate and maintain some other
office or agency for one or more of such purposes. The Company will give prompt
written notice to the Trustee of any change in the location of any 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 Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; 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 City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
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SECTION 1003. Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (or premium, if any) or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of (or premium, if
any) or interest on any Notes, deposit with a Paying Agent a sum sufficient to
pay the principal (and premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent (other than the Trustee)
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (or premium,
if any) or interest on any Note and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and
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supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 1006 shall prevent the Company
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. Insurance.
(a) The Company will maintain launch insurance covering the
period from the launch to 180 days following the launch of such satellite in an
amount equal to or greater than the sum of (i) the cost to replace such
satellite with a satellite of comparable or superior technological capability
(as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) and having at least as much
transmission capacity as the satellite to be replaced, (ii) the cost to launch a
replacement satellite pursuant to the contract whereby a replacement satellite
will be launched and (iii) the cost of launch insurance for such replacement or,
in the event that the Company has reason to believe that the cost of obtaining
comparable insurance for a replacement would be materially higher, the Company's
best estimate of the cost of such comparable insurance. Notwithstanding the
foregoing, the Company shall not be obligated to maintain insurance pursuant to
this paragraph (a) with respect to (i) the launch of its first satellite and
(ii) any subsequent launch not preceded by a launch failure or failure of any
satellite within 180 days from the date of its launch; provided that the
Company's spare satellite shall be under construction in accordance with the
terms of the Loral Satellite Contract or the Company shall have otherwise
obtained a spare satellite.
(b) The Company will maintain full in-orbit insurance with
respect to each satellite it owns and launches in an amount at least equal to
(i) the cost to replace such satellite with a satellite of comparable or
superior technological capability (as determined by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution) and
having at least as much transmission capacity as such owned satellites, (ii) the
cost to replace each such satellite pursuant to the contract pursuant to which a
replacement satellite will be constructed and (iii) the cost of launch insurance
for such replacement or, in the event that the Company has reason to believe
that the cost of obtaining comparable insurance for a replacement would be
materially higher, the Company's best estimate of the cost of such comparable
insurance. The in-orbit insurance required by this paragraph will provide that
if 50% or more of a satellite's capacity is lost, the full amount of insurance
will become due and payable, and that if a satellite is able to maintain more
than 50% but less that 100% of its capacity, a portion of such insurance will
become due and payable.
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(c) In the event that the Company receives proceeds from
insurance relating to any satellite, the Company may use all or a portion of
such proceeds to repay any vendor or third-party purchase money financing
pertaining to such satellite that is required to be repaid by reason of the loss
giving rise to such insurance proceeds. The Company shall use the remainder of
such proceeds to develop and construct a replacement satellite; provided that
(i) such replacement satellite is of comparable or superior technological
capability as compared with the satellite being replaced and has at least as
much transmission capacity as the satellite being replaced (as determined by the
Board of Directors, whose determination shall be conclusive and evidenced by a
Board Resolution); (ii) the Company will have sufficient funds (together with
the proceeds of any business interruption insurance) to service the Company's
projected debt service requirements until the scheduled launch of the Company's
spare satellite and for one year thereafter and to develop and construct such
replacement satellite; and (iii) that the Company's spare satellite is scheduled
to be launched within 12 months of the receipt of such proceeds. Any such
proceeds not used as permitted by this paragraph shall constitute "Excess
Proceeds" for purposes of Section 1016.
SECTION 1008. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 60 days after
the end of each fiscal quarter (90 days after the end of the last fiscal quarter
of each fiscal year), a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this Section 1008(a), such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default (other than with respect to
Indebtedness in an aggregate principal amount of less than $1,000,000), the
Company shall deliver to the Trustee by registered or certified mail or by
telegram, telex or facsimile transmission an Officers' Certificate specifying
such event, notice or other action within five Business Days of its occurrence.
SECTION 1009. Provision of Financial Statements.
(a) The Company will file on a timely basis with the Commission,
to the extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act.
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(b) The Company will also (i) file with the Trustee, and provide
to each holder of Notes, without cost to such holder, copies of such reports and
documents within 15 days after the date on which the Company files such reports
and documents with the Commission or the date on which the Company would be
required to file such reports and documents if the Company were so required and
(ii) if filing such reports and documents with the Commission is not accepted by
the Commission or is prohibited under the Exchange Act, to supply at the
Company's cost copies of such reports and documents to any prospective holder of
Notes promptly upon written request.
SECTION 1010. Purchase of Notes upon Change in Control.
(a) If a Change of Control shall occur at any time, then each
Holder shall have the right to require that the Company purchase such Holder's
Notes in whole or in part in integral multiples of $1,000 principal amount at
maturity, at a purchase price (the "Change of Control Purchase Price") in cash
in an amount equal to 101% of the Accreted Value of such Notes as of the date of
purchase plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Purchase Date"), pursuant to the offer described below (the
"Change of Control Offer"), in accordance with the procedures set forth in
paragraphs (b) and (c) of this Section 1010.
(b) Within 15 days following any Change of Control, the Company
shall notify the Trustee thereof and give to each Holder of the Notes in the
manner provided in Section 106 a notice stating:
(1) that a Change in Control has occurred and that such Holder
has the right to require the Company to repurchase such Holder's Notes
at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change in
Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving
effect to such Change in Control);
(3) the Change of Control Purchase Price and the Change of
Control Purchase Date which shall be a Business Day no earlier than 30
days nor later than 60 days from the date such notice is mailed or such
later date as is necessary to comply with requirements under the
Exchange Act or any applicable securities laws or regulations;
(4) that any Notes not tendered will continue to accrue interest
and original issue discount;
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(5) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
and original issue discount after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have its
Notes repurchased in accordance with paragraph (b) of this Section 1010.
The Company shall have no obligation to purchase any Notes in a
Change of Control Offer if no Notes are tendered by the Holders thereof.
(c) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the notice at
least five Business Days prior to the Change of Control Purchase Date. Holders
will be entitled to withdraw their election if the Company receives, not later
than three Business Days prior to the Change of Control Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount at maturity of the Notes delivered for purchase by
the Holder as to which his election is to be withdrawn and a statement that such
Holder is withdrawing his election to have such Notes purchased. Holders whose
Notes are purchased only in part will be issued new Notes equal in principal
amount at maturity to the unpurchased portion of the Notes surrendered.
SECTION 1011. Limitation on Indebtedness.
The Company will not, and will not permit any Restricted
Subsidiary to, create, assume, issue, guarantee or in any manner become directly
or indirectly liable for or with respect to the payment of, or otherwise incur
(collectively, to "incur"), any Indebtedness, except for Permitted Indebtedness;
provided that (i) the Company will be permitted to incur Indebtedness and (ii) a
Restricted Subsidiary will be permitted to incur Acquired Indebtedness, if, in
either case, after giving pro forma effect to such incurrence (including the
application of the net proceeds therefrom), the ratio of (x) Total Consolidated
Indebtedness to (y) Adjusted Consolidated Operating Cash Flow for the latest
four fiscal quarters for which consolidated financial statements of the Company
are available preceding the date of such incurrence, taken as a whole, would be
greater than zero and less than or equal to 4.0 to 1.0.
SECTION 1012. Limitation on Restricted Payments.
The Company will not make, and will not permit any Restricted
Subsidiary to make, directly or indirectly, any of the following: (i) the
declaration or payment of any dividend or any other distribution on Capital
Stock of the Company or any payment made to the direct or indirect holders (in
their capacities as such) of Capital Stock of the Company
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(other than dividends or distributions payable solely in Qualified Capital Stock
of the Company or in options, warrants or other rights to purchase Qualified
Capital Stock of the Company); (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company (other
than any such Capital Stock owned by the Company or a Restricted Subsidiary) or
any affiliate of the Company (other than any Restricted Subsidiary); (iii) the
making of any principal payment on, or the repurchase, redemption, defeasance or
other acquisition or retirement for value of, prior to any scheduled principal
payment, sinking fund payment or maturity, any Pari Passu Indebtedness or
Subordinated Indebtedness (other than any Subordinated Indebtedness held by a
Restricted Subsidiary); or (iv) the making of any Investment (other than a
Permitted Investment) in any Person (such payments or other actions described in
(but not excluded from) clauses (i) through (iv) are collectively referred to as
"Restricted Payments"), unless, in each case:
(A) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(B) immediately after giving effect to such Restricted Payment,
the Company would be able to incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) under the proviso of Section 1011; and
(C) immediately after giving effect to such Restricted Payment,
the aggregate amount of all Restricted Payments declared or made on or
after the date of this Indenture would not exceed an amount equal to the
sum of (a) the difference between (x) the Cumulative Available Cash Flow
determined at the time of such Restricted Payment and (y) 150% of the
cumulative Consolidated Interest Expense of the Company determined for
the period commencing on the date of this Indenture and ending on the
last day of the latest fiscal quarter for which consolidated financial
statements of the Company are available preceding the date of such
Restricted Payment plus (b) the aggregate Net Cash Proceeds received by
the Company from the issue or sale (other than to any Restricted
Subsidiary) of Qualified Capital Stock of the Company after January 1,
1998, plus (c) the aggregate Net Cash Proceeds received after the date
of this Indenture by the Company from the issuance or sale (other than
to any Restricted Subsidiary) of debt securities or Redeemable Capital
Stock that have been converted into or exchanged for Qualified Capital
Stock of the Company, together with the aggregate Net Cash Proceeds
received by the Company at the time of such conversion or exchange, plus
(d) to the extent not otherwise included in the Consolidated Operating
Cash Flow of the Company, an amount equal to the sum of (1) the net
reduction in Investments in any Person (other than the Permitted
Investments) resulting from the payment in cash of dividends, repayments
of loans or advances or other transfers of assets, in each case to the
Company or any Restricted Subsidiary after the date of this Indenture
from such Person and (2) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market
72
value of the net assets of any Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided,
however, that in the case of (1) or (2) above the foregoing sum shall
not exceed the aggregate amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary, minus (e) the sum
of 80% of the outstanding principal amount of all Indebtedness incurred
pursuant to clause (i)(x) or (i)(y)(1) of the definition of Permitted
Indebtedness and 100% of the outstanding principal amount of all
Indebtedness incurred pursuant to clause (i)(y)(2) of the definition of
Permitted Indebtedness.
For purposes of determining the amount expended for Restricted Payments,
property other than cash shall be valued at its Fair Market Value.
The provisions of this covenant shall not prohibit, so long as,
with respect to clauses (ii) through (ix) below, no Default or Event of Default
shall have occurred and be continuing, (i) the payment of any dividend or other
distribution within 60 days after the date of declaration thereof if at such
date of declaration such payment complied with the provisions of this Indenture,
and such payment will be deemed to have been paid on the date of declaration for
purposes of the calculation in the foregoing paragraph; (ii) the purchase,
redemption, retirement or other acquisition of any shares of Capital Stock of
the Company in exchange for, or out of the Net Cash Proceeds of a substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of, shares of
Qualified Capital Stock of the Company; (iii) the purchase, redemption,
retirement, defeasance or other acquisition or retirement for value of
Subordinated Indebtedness made by exchange for, or out of the Net Cash Proceeds
of a substantially concurrent issue or sale (other than to a Restricted
Subsidiary) of, Qualified Capital Stock of the Company; (iv) (A) the purchase of
any Subordinated Indebtedness at a purchase price not greater than 101% of the
principal amount or accreted value thereof, as the case may be, together with
accrued interest, if any, in the event of a Change of Control in accordance with
provisions similar to Section 1010 or (B) the purchase of any Preferred Stock at
a purchase price not greater than 101% of the liquidation preference thereof,
together with accrued dividends, if any, in the event of a Change of Control in
accordance with provisions similar to Section 1010; provided that, in each case,
prior to such purchase the Company has made the Change of Control Offer as
provided in such covenant with respect to the Notes and has purchased all Notes
validly tendered for payment in connection with such Change of Control Offer;
(v) the purchase, redemption, defeasance or other acquisition or retirement for
value of Subordinated Indebtedness in exchange for, or out of the Net Cash
Proceeds of a substantially concurrent incurrence (other than to a Restricted
Subsidiary) of, new Subordinated Indebtedness so long as (A) the principal
amount of such new Indebtedness does not exceed the principal amount (or, if
such Subordinated Indebtedness being refinanced provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination) of the
Subordinated Indebtedness being so purchased, redeemed,
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defeased, acquired or retired, plus the lesser of the amount of any premium
required to be paid in connection with such refinancing pursuant to the terms of
the Subordinated Indebtedness being refinanced or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing, plus, in either case, the amount of expenses of the Company
incurred in connection with such refinancing, (B) such new Subordinated
Indebtedness is subordinated to the Notes to the same extent as such
Subordinated Indebtedness so purchased, redeemed, defeased, acquired or retired
and (C) such new Subordinated Indebtedness has an Average Life longer than the
Average Life of the Notes and a final Stated Maturity of principal later than
the Stated Maturity of principal of the Notes (vi) the purchase of any
Subordinated Indebtedness at a purchase price not greater than 100% of the
principal amount or accreted value thereof, as the case may be, together with
accrued interest, if any, following an Asset Sale in accordance with provisions
similar to Section 1016, provided that prior to making any such purchase the
Company has made the Excess Proceeds Offer as provided in such covenant with
respect to the Notes and has purchased all Notes validly tendered for payment in
connection with such Excess Proceeds Offer; (vii) the optional redemption or
retirement of any Pari Passu Indebtedness if a pro rata principal amount at
maturity of Notes is redeemed or retired by the Company at the same time; (viii)
the payment of cash dividends on outstanding shares of Series C Preferred Stock
of the Company out of the Net Cash Proceeds of a substantially concurrent issue
and sale (other than to a Restricted Subsidiary) of Common Stock of the Company;
and (ix) any other Restricted Payments in an aggregate amount not to exceed
$15.0 million.
In determining the amount of Restricted Payments permissible
under this covenant, amounts expended pursuant to clauses (i), (ii), (iii),
(iv), (vi) (vii), (viii) and (ix) above shall be included as Restricted
Payments.
SECTION 1013. Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries.
The Company (a) will not permit any Restricted Subsidiary to
issue any Capital Stock (other than to the Company or a Restricted Subsidiary)
and (b) will not permit any Person (other than the Company or a Restricted
Subsidiary) to own any Capital Stock of any Restricted Subsidiary; provided,
however, that this covenant shall not prohibit (i) the issuance and sale of all,
but not less than all, of the issued and outstanding Capital Stock of any
Restricted Subsidiary owned by the Company or any Restricted Subsidiary in
compliance with the other provisions of this Indenture or (ii) the ownership by
directors of directors' qualifying shares or the ownership by foreign nationals
of Capital Stock of any Restricted Subsidiary, to the extent mandated by
applicable law.
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SECTION 1014. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with, or
for the benefit of, any Affiliate of the Company (other than the Company or a
Restricted Subsidiary) unless (i) such transaction or series of related
transactions is on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, as determined in good faith by the
Board of Directors, whose determination shall be conclusive and evidenced by a
Board Resolution, than those that could have been obtained in an arm's-length
transaction with unrelated third parties who are not Affiliates, (ii) with
respect to any transaction or series of related transactions involving aggregate
consideration equal to or greater than $2,500,000, the Company shall have
delivered an officers' certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (i) above and
such transaction or series of related transactions has been approved by a
majority of the Disinterested Directors of the Board of Directors of the
Company, or the Company has obtained a written opinion from a nationally
recognized investment banking firm to the effect that such transaction or series
of related transactions is fair to the Company or such Restricted Subsidiary, as
the case may be, from a financial point of view and (iii) with respect to any
transaction or series of related transactions including aggregate consideration
in excess of $10,000,000, or in the event no members of the Board of Directors
of the Company are Disinterested Directors with respect to any transaction or
series of transactions included in clause (ii), the Company shall obtain an
opinion from a nationally recognized investment banking firm as described above;
provided, however, that this provision will not restrict (1) any transaction by
the Company or any Restricted Subsidiary with an Affiliate directly related to
the purchase, sale or distribution of products in the ordinary course of
business consistent with industry practice, (2) the Company from paying
reasonable and customary regular compensation and fees to directors of the
Company or any Restricted Subsidiary who are not employees of the Company or any
Restricted Subsidiary, (3) the payment of compensation (including stock options
and other incentive compensation) to officers and other employees the terms of
which are approved by the Board of Directors, (4) the Company or any Restricted
Subsidiary from making any Restricted Payment in compliance with Section 1012
(including pursuant to the second paragraph thereof), (5) transactions between
the Company and ▇▇▇▇▇▇▇▇▇▇ & Partners Inc. pursuant to agreements in effect on
the date of this Indenture and listed on a schedule to this Indenture; provided
that the Company will not, and will not permit any Restricted Subsidiary to
amend, modify or in any way alter, other than an extension of the termination
thereof, the terms of any such agreement in a manner materially adverse to the
holders of the Notes, (6) transactions among the Company and its Restricted
Subsidiaries, (7) the payment of fees to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company,
Incorporated for investment banking services rendered to the Company or (8)
amendments to the Loral Satellite Purchase Contract;
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provided that the Company will not amend, modify or in any way alter the terms
of such agreement in a manner materially adverse to the holders of the Notes.
SECTION 1015. Limitation on Liens.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind, other than Permitted Liens, on or with respect to any of
its property or assets, including any shares of stock or indebtedness of any
Restricted Subsidiary, whether owned at the date of this Indenture or thereafter
acquired, or any income, profits or proceeds therefrom, or assign or otherwise
convey any right to receive income thereon, unless (x) in the case of any Lien
securing Subordinated Indebtedness, the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Lien and (y) in
the case of any other Lien, the Notes are equally and ratably secured; provided
that in no event may the Company or any Restricted Subsidiary grant any Lien
(other than Permitted Liens) on the Bond Collateral.
SECTION 1016. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any Asset Sale unless (i) the
consideration received by the Company or such Restricted Subsidiary for such
Asset Sale is not less than the Fair Market Value of the shares or assets sold
(as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) and (ii) the consideration
received by the Company or the relevant Restricted Subsidiary in respect of such
Asset Sale consists of at least 80% cash or Cash Equivalents.
(b) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company may use the Net Cash Proceeds thereof within 12 months
after the later of such Asset Sale or the receipt of such Net Cash Proceeds (i)
to permanently repay or prepay any then outstanding Pari Passu Indebtedness,
(ii) to invest in any one or more businesses, capital expenditures or other
tangible assets of the Company or any Restricted Subsidiary, in each case,
engaged, used or useful in the CD Radio Business (or enter into a legally
binding agreement to do so within 6 months); or (iii) to invest in properties or
assets that replace the properties and assets that are the subject to such Asset
Sale (or enter into a legally binding agreement to do so within 6 months). If
any such legally binding agreement to invest such Net Cash Proceeds is
terminated, then the Company may, within 90 days of such termination or within
12 months of such Asset Sale, whichever is later, apply or invest such Net Cash
Proceeds as provided in clause (i), (ii) or (iii) (without regard to the
parenthetical contained in clause (i) or (ii)) above. The amount of such Net
Cash Proceeds not so used as set forth above in this paragraph (b) constitutes
"Excess Proceeds".
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(c) When the aggregate amount of Excess Proceeds exceeds
$10,000,000 the Company shall, within 30 business days, make an offer to
purchase (an "Excess Proceeds Offer") from all holders of Notes, on a pro rata
basis, in accordance with the procedures set forth below, the maximum Accreted
Value as of the date of purchase (expressed as a multiple of $1,000) of Notes
that may be purchased with the Excess Proceeds. The offer price as to each Note
shall be payable in cash in an amount equal to 100% of the Accreted Value of
such Note as of the date of purchase plus accrued interest, if any (the "Offered
Price"), to the date such Excess Proceeds Offer is consummated (the "Offer
Date"). To the extent that the aggregate Accreted Value of Notes tendered
pursuant to an Excess Proceeds Offer is less than the Excess Proceeds relating
thereto, the Company may use such additional Excess Proceeds for general
corporate purposes or to fund an offer to redeem any outstanding Subordinated
Indebtedness or Pari Passu Indebtedness in accordance with provisions similar to
this Section 1016. If the aggregate Accreted Value of Notes validly tendered and
not withdrawn by holders thereof exceeds the Excess Proceeds, Notes to be
purchased will be selected on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset to zero.
(d) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Notes shall be purchased by the Company, at the option of
the holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 30 days and not later than 60 days from the date
the notice is given to holders, or such later date as may be necessary for the
Company to comply with the requirements under the Exchange Act or any other
applicable securities laws or regulations, subject to proration in the event the
amount of Excess Proceeds is less than the aggregate Offered Price of all Notes
tendered.
(e) The Company will comply to the extent applicable with the
requirements of the tender offer rules, including Rule 14e-1 under the Exchange
Act, and any other applicable securities laws and regulations in connection with
an Excess Proceeds Offer.
SECTION 1017. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of its Capital Stock, (b) pay
any Indebtedness owed to the Company or any other Restricted Subsidiary, (c)
make Investments in the Company or any other Restricted Subsidiary, (d) transfer
any of its properties or assets to the Company or any other Restricted
Subsidiary or (e) guarantee any Indebtedness of the Company or any other
Restricted Subsidiary, except
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for such encumbrances or restrictions existing under or by reason of (i) any
agreement in effect on the date of this Indenture and listed on Schedule A
attached to this Indenture, (ii) applicable law or judicial or regulatory
action, (iii) customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary, (iv) any
agreement or other instrument of a Person acquired by the Company or any
Restricted Subsidiary in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired and the
Subsidiaries of such Person, (v) any mortgage or other Lien on real property
acquired or improved by the Company or any Restricted Subsidiary after the date
of this Indenture that prohibit transfers of the type described in (d) above
with respect to such real property, (vi) any encumbrance or restriction
contained in contracts for sales of assets permitted by Section 1016 with
respect to the assets to be sold pursuant to such contract; (vii) any such
customary encumbrance or restriction contained in a security document creating a
Permitted Lien (other than a Lien securing Indebtedness under a Bank Credit
Agreement or a Vendor Credit Facility) to the extent relating to the property or
asset subject to such Permitted Lien; (viii) any agreement or other instrument
governing any Indebtedness under any Bank Credit Agreement or Vendor Credit
Facility if such encumbrance or restriction applies only (x) to amounts which at
any point in time (other than during such periods as are described in clause
(y)) (1) exceed amounts due and payable (or which are to become due and payable
within 30 days) in respect of the Notes or this Indenture for interest, premium
and principal (after giving effect to any realization by the Company under any
applicable Currency Agreement), or (2) if paid, would result in an event
described in the following clause (y) of this sentence, or (y) during the
pendency of any event that causes, permits or, after notice or lapse of time,
would cause or permit the holder(s) of the Indebtedness governed by such
agreement or instrument to declare any such Indebtedness to be immediately due
and payable or require cash collateralization or cash cover for such
Indebtedness for so long as such cash collateralization or cash cover has not
been provided; or (ix) the refinancing of Indebtedness incurred under the
agreements listed on Schedule A attached to this Indenture or described in
clause (v) above, so long as such encumbrances or restrictions are no less
favorable in any material respect to the Company or any Restricted Subsidiary
than those contained in the respective agreement as in effect on the date of
this Indenture.
SECTION 1018. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Section 803, Sections 1007 or 1009
through 1017, inclusive, if before or after the time for such compliance the
Holders of at least a majority in principal amount at maturity of the
Outstanding Notes, by Act of such Holders, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall extend
to or affect such term, provision or condition except to the extent so expressly
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waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
SECTION 1019. Required Stock Ownership.
The Company will at all times be the legal and beneficial owner
of the Pledged Stock and will not sell, transfer or otherwise dispose of any
Capital Stock of Satellite CD Radio Inc.
SECTION 1020. Further Assurances.
The Company will promptly execute and deliver such additional
instruments and do such further acts as in the opinion of the Trustee may be
reasonably necessary or proper to carry out the purposes of this Indenture and
the Collateral Documents.
SECTION 1021. Limitation on Subsidiary Business Activities.
Satellite CD Radio, Inc. shall not engage in any trade or
business other than holding an FCC license to build, launch and operate a
national satellite radio broadcast system.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption.
The Notes (a) may be redeemed, at the election of the Company, as
a whole or from time to time in part, at any time on or after [ ], 2002
subject to the conditions and at the Redemption Prices specified in the form of
Note, together with accrued interest to the Redemption Date and (b) may be
redeemed, at the election of the Company, at any time or from time to time prior
to [ ], 2000 upon the occurrence of the events and subject to the
conditions and at the redemption price specified in the form of Note.
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article Eleven.
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SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount at maturity of Notes to be redeemed and shall deliver to
the Trustee such documentation and records as shall enable the Trustee to select
the Notes to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the particular
Notes to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee by such method as the Trustee shall deem fair and
appropriate; provided, however, that no such partial redemption shall reduce the
portion of the principal amount at maturity of a Note not redeemed to less than
$1,000.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount at maturity thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount at maturity of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 1107, if any;
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(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amount at maturity) of the particular Notes to be redeemed;
(4) in case any Note is to be redeemed in part only, the notice
which relates to such Note shall state that on and after the Redemption
Date, upon surrender of such Note, the holder will receive, without
charge, a new Note or Notes of authorized denominations for the
principal amount at maturity thereof remaining unredeemed;
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Note, or the portion
thereof, to be redeemed, and that interest thereon will cease to accrue
on and after said date; and
(6) the place or places where such Notes are to be surrendered
for payment of the Redemption Price and accrued interest, if any.
Notice of redemption of Notes to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request,
by the Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to accrue interest or original issue discount. Upon surrender of any
such Note for redemption in accordance with said notice, such Note shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders
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of such Notes, or one or more Predecessor Notes, registered as such at the close
of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Notes.
SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article Eleven) shall be surrendered at the office or agency
of the Company maintained for such purpose pursuant to Section 1002 (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holders attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in aggregate
principal amount at maturity equal to and in exchange for the unredeemed portion
of the principal amount at maturity of the Note so surrendered.
ARTICLE TWELVE
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1201. Collateral Documents.
Each Holder of a Note, by its acceptance thereof, (i) consents
and agrees to the terms of the Collateral Documents, (ii) authorizes and
ratifies the entering into by the Trustee and the Collateral Agent of each of
the Collateral Documents to which they are a party and (iii) authorizes and
directs the Trustee and the Collateral Agent to perform their respective
obligations and exercise their rights thereunder in accordance therewith.
SECTION 1202. Trustee May Perform.
If the Company fails to perform any agreement contained in this
Article Twelve, the Trustee may, but shall not be obligated to, itself perform,
or cause performance of, such agreement, and the expenses of the Trustee
incurred in connection therewith shall be payable by the Company under Section
606.
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SECTION 1203. Collateral Trust Arrangements.
(a) The Trustee shall, upon request of the Company and upon
receipt of the Opinion of Counsel and Officers Certificate described in
paragraph (c) of this Section 1203, amend, revise and supplement the Pledge
Agreement to assign and pledge to the Collateral Agent for the benefit of the
Holders of the Notes and the equal and ratable benefit of the Secured Parties a
security interest in the Collateral and to enter into a Custodian Agreement that
provides for the enforcement of the payment of Indebtedness under this Indenture
equally and ratably with all other Secured Debt.
(b) Upon any such assignment or pledge pursuant to paragraph (a)
above, the Collateral shall be held in trust under and subject to the terms and
conditions of the Collateral Documents for the benefit of the Secured Parties
and for the enforcement of the payment of Indebtedness under this Indenture
equally and ratably with all other Secured Debt and for the performance of and
compliance with the covenants and conditions of this Indenture and the other
Collateral Documents. It is intended that this Indenture and the other
Collateral Documents shall be construed and enforced to give effect to such
intention.
(c) Prior to giving effect to any assignment or pledge of the
Collateral to the Collateral Agent, the Trustee shall receive an Opinion of
Counsel and an Officer's Certificate as to the validity and perfection of a
first-priority lien on the Collateral for the equal and ratable benefit of the
Secured Parties.
SECTION 1204. Certificates and Opinions.
The Company shall comply with (a) TIA 'SS' 314(b), relating to
Opinions of Counsel regarding the Lien of this Indenture and (b) TIA
'SS' 314(d), relating to, among other matters, the release of Collateral from
the Lien of this Indenture and Officers' Certificates or other documents
regarding fair value of the Collateral, to the extent such provisions are
applicable. Any certificate or opinion required by TIA 'SS' 314(d) may be
executed and delivered by an Officer of the Company to the extent permitted by
TIA 'SS' 314(d).
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have either Section 1302 or Section 1303 be
applied to all
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Outstanding Notes upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1302, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth in Section 1304 are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
Outstanding Notes, which shall thereafter be deemed to be "Outstanding" only for
the purposes of Section 1305 and the other Sections of this Indenture referred
to in (A) and (B) below, and to have satisfied all its other obligations under
such Notes and this Indenture insofar as such Notes are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Notes to receive, solely from the trust fund described in Section
1304 and as more fully set forth in Section 1304, payments in respect of the
principal of (and premium, if any, on) and interest on such Notes when such
payments are due, (B) the Company's obligations with respect to such Notes under
Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (D) this Article Thirteen. Subject
to compliance with this Article Thirteen, the Company may exercise its option
and at any time under this Section 1302 notwithstanding the prior exercise of
its option under Section 1303 with respect to the Notes.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1303, the Company shall be released from its
obligations under any covenant contained in Section 803 and in Sections 1007
through 1017 with respect to the Outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Notes shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501(4), but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby.
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SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Notes, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, money in an
amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, at the principal of (and
premium, if any) and interest on the Outstanding Notes at their Stated
Maturity (or Redemption Date, if applicable) of such principal (and
premium, if any) or installment of interest on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Notes; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes.
Before such a deposit, the Company may give to the Trustee, in
accordance with Section 1103 hereof, a notice of its election to redeem
all of the Outstanding Notes at a future date in accordance with Article
Eleven hereof, which notice shall be irrevocable. Such irrevocable
redemption notice, if given, shall be given effect in applying the
foregoing. For this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the U.S.
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Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) No Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit or,
insofar as paragraphs (8) and (9) of Section 501 hereof are concerned,
at any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a
party or by which it is bound.
(4) In the case of an election under Section 1302, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since [date of final
prospectus], there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(6) In the case of an election under Section 1302 or Section
1303, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States to the effect that after the 91st day
following the deposit or after the date such opinion is delivered, the
trust funds will not be subject to the effect of any applicable
Bankruptcy Law.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the holders of the Notes over the other
creditors of the Company with the intent of hindering, delaying or
defrauding creditors of the Company.
86
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Governmental
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1304 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article Thirteen.
SECTION 1306. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money
in accordance with Section 1305 by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1305; provided, however, that if the Company makes any payment
87
of principal of (or premium, if any) or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CD RADIO INC.
By
------------------------------------
Name:
Title:
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY
By
------------------------------------
Name:
Title:
EXHIBIT A -- FORM OF NOTE
[FACE OF NOTE]
[Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]*
Unless and until it is exchanged in whole or in part for Notes in definitive
registered form, this certificate may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC
or by DTC or any such nominee to a successor Depository or a nominee of such
successor Depository.]*
CD RADIO INC.
[ ]% Senior
Discount Notes
due 2007
No._____ $_____________
CUSIP: [ ]
The following information is supplied for purposes of Sections
1273 and 1275 of the Internal Revenue Code:
Issue Date: [ ], 1997 Original issue discount under
Section 1273 of the Internal
Revenue Code (for each $1,000
principal amount at maturity):
$[ ]
Issue Price (for each $1,000 Yield to Maturity: [ ]%
principal amount at
maturity): $[ ]
--------
* To be included on Notes issued in global form only.
A-2
Method used to determine yield to maturity Original issue discount for short
for short accrual period of [ ] accrual period of [ ] to
to January 1, 1998: exact method January 1, 1998, (for each
$1,000 principal amount
amount at maturity): $[ ]
CD Radio Inc., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________________, or registered assigns, the principal sum of ___________
Dollars on [ ], 2007, at the office or agency of the Company referred to
below, and to pay interest thereon on [ ], 2002, and semi-annually
thereafter, on [ ] and [ ] in each year (each an "Interest
Payment Date"), from [ ], 2002, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of [ ]% per annum, until the principal hereof is paid or duly provided for,
and (to the extent lawful) to pay on demand interest on any overdue interest at
the rate of [ ]% per annum from the date on which such overdue interest
becomes payable to the date payment of such interest has been made or duly
provided for. The principal on this Note shall not accrue interest until
[ ], 2002, except in the case of a default in payment of the amount due
at Maturity, in which case, the amount then due on this Note shall bear interest
at the rate of [ ]% per annum from the date of such default in payment, as
provided in the previous sentence. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which shall be the [ ] or [ ] (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
such defaulted interest, and (to the extent lawful) interest on such defaulted
interest at [ ]% per annum, may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Notes not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. Payment of the
principal of (and premium, if any) and interest on this Note will be made at the
office or agency of the Company maintained for that purpose in The City of New
York, or at such other office or agency of the Company as may be maintained for
such purpose, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company (i) by check mailed to the address of the Person entitled thereto as
such address shall appear on the Note Register or (ii) by transfer to an account
maintained by the payee located in the United States.
A-3
[This Note is a global Note representing $_____ of the Notes. If at any
time, (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository or if at any time the Depository shall no longer be
registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depository is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, or (ii) any Event of Default shall have occurred
and be continuing and Holders of more than 25% in principal amount of the Notes
Outstanding represented by one or more global Notes advise the Trustee that the
continuation of a book-entry system through the Depository (or a successor
thereto) with respect to the Notes is no longer required, then in such event the
Company will execute and the Trustee will authenticate and deliver Notes in
definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of this Note in exchange for this
Note. Such Notes in definitive registered form shall be registered in such names
and issued in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Notes to the Persons in
whose names such Notes are so registered.]*
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under this Indenture, or be valid
or obligatory for any purpose.
--------
* To be included on Notes issued in global form only.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: [ ] CD Radio Inc.
By:____________________________
Name:
Title:
Attest: _______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Trustee
By_____________________________
Authorized Officer
A-5
[REVERSE SIDE OF NOTE]
This Note is one of a duly authorized issue of securities of the
Company designated as its [ ]% Senior Secured Discount Notes due 2007 (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount at maturity to $[ ],
which may be issued under an indenture (herein called the "Indenture") dated as
of [ ] 1997, between the Company and [ ], trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, obligations and immunities thereunder of the Company, the
Trustee and the Holders of the Notes, and of the terms upon which the Notes are,
and are to be, authenticated and delivered. The Notes are secured by the
Collateral.
The Notes are subject to redemption, at the option of the
Company, as a whole or from time to time in part, at any time on or after
[ ], 2002, on not less than 30 nor more than 60 days' prior notice at
the redemption prices (expressed as percentages of principal amount at maturity)
set forth below, together with accrued interest, if any, to the redemption date,
if redeemed during the 12-month period beginning on [ ] of the
years indicated below (subject to the right of holders of record on relevant
record dates to receive interest due on a relevant interest payment date):
Redemption
Year Price
---- -----------
2002 %
2003 %
2004 %
2005 and thereafter 100%
In addition, (i) upon the occurrence of a Change of Control, the
Company is obligated to make an offer to purchase all outstanding Notes at a
price of 101% of the Accreted Value thereof on the applicable date of purchase,
together with accrued interest, if any, to the date of purchase (subject to the
right of holders of record on relevant record dates to receive interest due on
relevant interest payment dates), and (ii) upon the occurrence of an Asset Sale,
the Company may be obligated to make an offer to purchase all or a portion of
the outstanding Notes at a price of 100% of the Accreted Value thereof on the
applicable date of purchase, together with accrued interest, if any, to the date
of purchase (subject to the right of holders of record on relevant record dates
to receive interest due on relevant interest payment dates).
A-6
In the case of any redemption of Notes, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Notes, or one or more Predecessor Notes, of record at the
close of business on the relevant Record Date referred to on the face hereof.
Notes (or portions thereof) for whose redemption and payment provision is made
in accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Note in part only, a new Note
or Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal of all the Notes may be declared to be due and payable in the manner
and with the effect provided in the Indenture and in an amount equal to (i) the
Accreted Value of the Notes as of the date on which the Notes first become due
and payable, if such date occurs prior to [ ], 2002, or (ii) the Accreted
value of the Notes as of the date on which the Notes first become due and
payable plus accrued and unpaid interest, if any, to such date, if such date
occurs on or after [ ], 2002.
This Note is secured by a security interest in certain
Collateral, as provided in the Indenture, and is entitled to the benefits
thereof.
The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company on this Note and (b) certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Note.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount at maturity of the Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount at maturity of the Notes at the time
Outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and
A-7
unconditional, to pay the principal of (and premium, if any, on) and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note Register
of the Company upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to, the Company and the Note Registrar and duly executed by
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate
principal amount at maturity, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount at maturity of Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer
or exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-8
TRANSFER NOTICE
To assign this Note, fill in the form below:
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto:
--------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
--------------------------------------------------------
(Insert assignee's social security or taxpayer identification number)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________________________ attorney to transfer
such Note on the books of the Company with full power of substitution in the
premises.
Date: _______________
Your Signature: ___________________________
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 1010, Section 1016 or Section 1101 of the Indenture, check the box: [ ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1010, Section 1016 or Section 1101 of the Indenture, state
the amount (in principal amount at maturity) below:
$---------------------.
Date: _____________
Your Signature: ___________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________
(Signature must be guaranteed)