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RHYTHMS NETCONNECTIONS INC., as Issuer
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee
---------------------------
INDENTURE
Dated as of May 5, 1998
---------------------------
$290,000,000 principal amount at maturity
13 1/2% Senior Discount Notes due 2008, Series A
13 1/2% Senior Discount Notes due 2008, Series B
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--------------------------------------------------------------------------------
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of May 5, 1998
Trust Indenture Indenture
Act Section Section
----------------- --------------
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . 6.09
(a)(2) . . . . . . . . . . . . . . . . . . . 6.09
(a)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . 6.05
(b) . . . . . . . . . . . . . . . . . . . 6.05, 6.08
. . . . . . . . . . . . . . . . . . . 6.10
Section 311 (a) . . . . . . . . . . . . . . . . . . . 6.07
(b) . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . Not Applicable
Section 312 (a) . . . . . . . . . . . . . . . . . . . 3.05, 7.01
(b) . . . . . . . . . . . . . . . . . . . 7.02
(c) . . . . . . . . . . . . . . . . . . . 7.02
Section 313 (a) . . . . . . . . . . . . . . . . . . . 7.03
(b) . . . . . . . . . . . . . . . . . . . 7.03
(c) . . . . . . . . . . . . . . . . . . . 7.03
(d) . . . . . . . . . . . . . . . . . . . 7.03
Section 314 (a) . . . . . . . . . . . . . . . . . . . 10.09
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 1.04, 4.04(10), 10.21,
12.01
(c)(2) . . . . . . . . . . . . . . . . . . . 1.04, 4.04(10), 10.21, 12.01
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . 1.04
Section 315 (a) . . . . . . . . . . . . . . . . . . . 6.01(a)
(b) . . . . . . . . . . . . . . . . . . . 6.02
(c) . . . . . . . . . . . . . . . . . . . 6.01(b)
(d) . . . . . . . . . . . . . . . . . . . 6.01(c)
Trust Indenture Indenture
Act Section Section
----------------- --------------
(e) . . . . . . . . . . . . . . . . . . . 5.14
Section 316 (a) (last sentence) . . . . . . . . . . . . . 3.14
(a)(1)(A) . . . . . . . . . . . . . . . . . . 5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 5.08
(c) . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . 5.03
(a)(2) . . . . . . . . . . . . . . . . . . . 5.04
(b) . . . . . . . . . . . . . . . . . . . 10.03
Section 318 (a) . . . . . . . . . . . . . . . . . . . 1.08
TABLE OF CONTENTS
Page
--------
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions.. . . . . . . . . . . . . . . . . . . . . . . . 24
Section 1.03. Rules of Construction.. . . . . . . . . . . . . . . . . . . . . . 25
Section 1.04. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . 26
Section 1.05. Acts of Holders.. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 1.06. Notices, etc., to the Trustee and the Company.. . . . . . . . . . 27
Section 1.07. Notice to Holders; Waiver.. . . . . . . . . . . . . . . . . . . . 28
Section 1.08. Conflict with Trust Indenture Act.. . . . . . . . . . . . . . . . 28
Section 1.09. Effect of Headings and Table of Contents. . . . . . . . . . . . . 28
Section 1.10. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 28
Section 1.11. Separability Clause.. . . . . . . . . . . . . . . . . . . . . . . 29
Section 1.12. Benefits of Indenture.. . . . . . . . . . . . . . . . . . . . . . 29
Section 1.13. GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 1.14. No Recourse Against Others. . . . . . . . . . . . . . . . . . . . 29
Section 1.15. Independence of Covenants.. . . . . . . . . . . . . . . . . . . . 29
Section 1.16. Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . 29
Section 1.17. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 1.18. Duplicate Origin . . . . . . . . . . . . . . . . . . . . . . . . 30
2. TWO
FORM OF NOTES
Section 2.01. Form and Dating.. . . . . . . . . . . . . . . . . . . . . . . . . 30
3. THREE
THE NOTES
Section 3.01. Title and Terms.. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.02. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . 31
Section 3.03. Execution and Authentication. . . . . . . . . . . . . . . . . . . 32
Section 3.04. Temporary Notes.. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.05. Transfer and Exchange.. . . . . . . . . . . . . . . . . . . . . . 34
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes.. . . . . . . . . . . 35
Section 3.07. Payment of Interest; Interest Rights Preserved. . . . . . . . . . 35
(i)
Section 3.08. Persons Deemed Owners.. . . . . . . . . . . . . . . . . . . . . . 36
Section 3.09. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.10. Computation of Interest.. . . . . . . . . . . . . . . . . . . . . 37
Section 3.11. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.12. CUSIP and CINS Numbers. . . . . . . . . . . . . . . . . . . . . . 37
Section 3.13. Paying Agent To Hold Money in Trust.. . . . . . . . . . . . . . . 38
Section 3.14. [Intentionally Omitted].. . . . . . . . . . . . . . . . . . . . . 38
Section 3.15. Deposits of Monies. . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.16. Book-Entry Provisions for Global Notes. . . . . . . . . . . . . . 38
Section 3.17. Special Transfer Provisions.. . . . . . . . . . . . . . . . . . . 40
Section 3.18. Components of Unit. . . . . . . . . . . . . . . . . . . . . . . . 43
4. FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or
Covenant Defeasance.. . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.02. Defeasance and Discharge. . . . . . . . . . . . . . . . . . . . . 43
Section 4.03. Covenant Defeasance.. . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.04. Conditions to Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.05. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous
Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.06. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . . . . . 47
5. FIVE
REMEDIES
Section 5.01. Events of Default.. . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.02. Acceleration of Maturity, Rescission and
Annulment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . . . . . . . . 49
Section 5.04. Trustee May File Proofs of Claims.. . . . . . . . . . . . . . . . 50
Section 5.05. Trustee May Enforce Claims Without Possession
of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.06. Application of Money Collected. . . . . . . . . . . . . . . . . . 51
Section 5.07. Limitation on Suits.. . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest. . . . . . . . . . . . . . . . . 52
Section 5.09. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . 53
Section 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . 53
Section 5.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . 53
Section 5.12. Control by Majority.. . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.13. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . . . . . 54
Section 5.14. Undertaking for Costs.. . . . . . . . . . . . . . . . . . . . . . 54
Section 5.15. Waiver of Stay, Extension or Usury Laws.. . . . . . . . . . . . . 54
(ii)
6. SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.. . . . . . . . . . . . . . . 55
Section 6.02. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.03. Certain Rights of Trustee.. . . . . . . . . . . . . . . . . . . . 56
Section 6.04. Trustee Not Responsible for Recitals,
Dispositions of Notes or Application
of Proceeds Thereof.. . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.05. Trustee and Agents May Hold Notes; Collections;
Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.06. Money Held in Trust.. . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.07. Compensation and Indemnification of Trustee and
Its Prior Claim.. . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.08. Conflicting Interests.. . . . . . . . . . . . . . . . . . . . . . 58
Section 6.09. Corporate Trustee Required; Eligibility.. . . . . . . . . . . . . 58
Section 6.10. Resignation and Removal; Appointment of
Successor Trustee.. . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.11. Acceptance of Appointment by Successor. . . . . . . . . . . . . . 60
Section 6.12. Merger, Conversion, Amalgamation, Consolidation
or Succession to Business.. . . . . . . . . . . . . . . . . . . . 61
7. SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders. . . . . . . . . . . . . . 62
Section 7.02. Communications of Holders.. . . . . . . . . . . . . . . . . . . . 62
Section 7.03. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . 62
8. EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain
Terms.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.02. Successor Substituted.. . . . . . . . . . . . . . . . . . . . . . 64
9. NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders. . . . . . . . . . . . . . . . . . . . 64
Section 9.02. Supplemental Indentures, Agreements and Waivers
with Consent of Holders.. . . . . . . . . . . . . . . . . . . . . 65
Section 9.03. Execution of Supplemental Indentures,
Agreements and Waivers. . . . . . . . . . . . . . . . . . . . . . 66
Section 9.04. Effect of Supplemental Indentures.. . . . . . . . . . . . . . . . 67
Section 9.05. Conformity with Trust Indenture Act.. . . . . . . . . . . . . . . 67
Section 9.06. Reference in Notes to Supplemental Indentures.. . . . . . . . . . 67
(iii)
Section 9.07. Record Date.. . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 9.08. Revocation and Effect of Consents.. . . . . . . . . . . . . . . . 68
10. TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest. . . . . . . . . . . . 68
Section 10.02. Maintenance of Office or Agency.. . . . . . . . . . . . . . . . . 68
Section 10.03. Money for Note Payments To Be Held in Trust.. . . . . . . . . . . 69
Section 10.04. Corporate Existence.. . . . . . . . . . . . . . . . . . . . . . . 70
Section 10.05. Payment of Taxes and Other Claims.. . . . . . . . . . . . . . . . 70
Section 10.06. Maintenance of Properties.. . . . . . . . . . . . . . . . . . . . 71
Section 10.07. Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 10.08. Books and Records.. . . . . . . . . . . . . . . . . . . . . . . . 71
Section 10.09. Provision of SEC Reports. . . . . . . . . . . . . . . . . . . . . 71
Section 10.10. Change of Control.. . . . . . . . . . . . . . . . . . . . . . . . 72
Section 10.11. Limitation on Additional Indebtedness.. . . . . . . . . . . . . . 74
Section 10.12. Statement by Officers as to Default.. . . . . . . . . . . . . . . 75
Section 10.13. Limitation on Restricted Payments.. . . . . . . . . . . . . . . . 75
Section 10.14. Limitation on Transactions with Affiliates. . . . . . . . . . . . 78
Section 10.15. Disposition of Proceeds of Asset Sales. . . . . . . . . . . . . . 79
Section 10.16. Limitation on Liens Securing Certain
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.17. Limitation on Status as Investment Company. . . . . . . . . . . . 83
Section 10.18. Limitation on Issuances and Sales of Capital
Stock of Restricted Subsidiaries. . . . . . . . . . . . . . . . . 83
Section 10.19. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries. . . . . . . . . . 84
Section 10.20. Limitation on Designations of Unrestricted
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.21. Compliance Certificates and Opinions. . . . . . . . . . . . . . . 86
Section 10.22. Limitation on Issuances of Guarantees by
Restricted Subsidiaries.. . . . . . . . . . . . . . . . . . . . . 86
Section 10.23. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . 87
Section 10.24. [Intentionally Omitted].. . . . . . . . . . . . . . . . . . . . . 88
Section 10.25. Business Activities.. . . . . . . . . . . . . . . . . . . . . . . 88
Section 10.26. Limitation on Sale/Leaseback Transactions.. . . . . . . . . . . . 88
11. ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture.. . . . . . . . . . . . . 89
Section 11.02. Application of Trust Money. . . . . . . . . . . . . . . . . . . . 89
(iv)
12. TWELVE
REDEMPTION
Section 12.01. Notices to the Trustee. . . . . . . . . . . . . . . . . . . . . . 90
Section 12.02. Selection of Notes To Be Redeemed.. . . . . . . . . . . . . . . . 90
Section 12.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . 91
Section 12.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . . 91
Section 12.05. Deposit of Redemption Price.. . . . . . . . . . . . . . . . . . . 92
Section 12.06. Notes Redeemed or Purchased in Part.. . . . . . . . . . . . . . . 92
EXHIBIT A-l - Form of Rhythms NetConnections Inc. 131/2% Senior
Discount Notes due 2008, Series A
EXHIBIT A-2 - Form of Rhythms NetConnections Inc. 131/2% Senior
Discount Notes due 2008, Series B
EXHIBIT B - Form of Supplemental Indenture
EXHIBIT C - Form of Legend for Book-Entry Securities
EXHIBIT D - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
EXHIBIT E - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S
SCHEDULE A - Existing and Committed Indebtedness
(v)
INDENTURE
INDENTURE (this "Indenture"), dated as of May 5, 1998,
between RHYTHMS NETCONNECTIONS INC., a corporation incorporated under the
laws of the State of Delaware, as issuer (the "Company"), and STATE STREET
BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a national banking corporation,
as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of
(i) 13 1/2% Senior Discount Notes due 2008, Series A, and (ii) 13 1/2% Senior
Discount Notes due 2008, Series B, to be issued in exchange for the 13 1/2%
Senior Discount Notes due 2008, Series A, pursuant to the Registration Rights
Agreement (as hereinafter defined) (collectively, the "Notes"; such term to
include the Initial Notes (as hereinafter defined) and the Unrestricted Notes
(as hereinafter defined), if any, including the Exchange Notes (as
hereinafter defined), if any, treated as a single class of securities under
this Indenture), of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary 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 each of the Company and the Trustee in
accordance with the terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Notes by the Holders (as hereinafter defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Notes, as follows:
1. ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS.
"Accreted Value" means, as of any date (the "Specified
Date"), with respect to each $1,000 principal amount at maturity of Notes:
(i) if the Specified Date is one of the following dates
(each a "Semi-Annual Accrual Date"), the amount set forth opposite such
date below:
Semi-Annual Accreted
Accrual Date Value
-------------------- ---------
Issue Date . . . . . . . . . . . . . . . . . . . . . .$ 518.50
May 15, 1998 . . . . . . . . . . . . . . . . . . . . . .$ 520.38
November 15, 1998 . . . . . . . . . . . . . . . . . . . . . .$ 555.51
May 15, 1999 . . . . . . . . . . . . . . . . . . . . . .$ 593.00
November 15, 1999 . . . . . . . . . . . . . . . . . . . . . .$ 633.03
May 15, 2000 . . . . . . . . . . . . . . . . . . . . . .$ 675.76
November 15, 2000 . . . . . . . . . . . . . . . . . . . . . .$ 721.37
May 15, 2001 . . . . . . . . . . . . . . . . . . . . . .$ 770.07
November 15, 2001 . . . . . . . . . . . . . . . . . . . . . .$ 822.05
May 15, 2002 . . . . . . . . . . . . . . . . . . . . . .$ 877.53
November 15, 2002 . . . . . . . . . . . . . . . . . . . . . .$ 936.77
May 15, 2003 . . . . . . . . . . . . . . . . . . . . . .$1,000.00
(ii) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the sum of (a) the Accreted Value for the Semi-Annual
Accrual Date immediately preceding the Specified Date and (b) an amount
equal to the product of (x) the Accreted Value for the Semi-Annual
Accrual Date immediately following the Specified Date less the Accreted
Value for the Semi-Annual Accrual Date immediately preceding the
Specified Date and (y) a fraction, the numerator of which is the number
of days actually elapsed 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; and
(iii) if the Specified Date is after May 15, 2003, $1,000.
"Acquired Indebtedness" means Indebtedness of a Person (i)
assumed in connection with an Asset Acquisition from such Person or (ii)
existing at the time such Person is merged or consolidated with or into the
Company or any Restricted Subsidiary or becomes a Restricted Subsidiary, in
each case not incurred in connection with, or in anticipation of, such Asset
Acquisition or merger or consolidation or such Person becoming a Restricted
Subsidiary; PROVIDED that Indebtedness of such Person which is redeemed,
defeased, retired or otherwise repaid at the time of or immediately upon
consummation of such Asset Acquisition or the transactions by which such
-2-
Person is merged or consolidated with or into the Company or any Restricted
Subsidiary or becomes a Restricted Subsidiary shall not constitute Acquired
Indebtedness.
"Affiliate" of any specified Person means (i) any other
Person which, directly or indirectly, controls, is controlled by or is under
direct or indirect common control with, the specified Person, (ii) any other
Person that owns, directly or indirectly, 10% or more of the specified
Person's Voting Stock or (iii) any executive officer or director of the
specified Person; PROVIDED that ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. and its
Affiliates shall not be deemed to be Affiliates of the Company solely as a
result of such entities holding the Units, the Notes, the Warrants, the
Series A Preferred Stock or the Series B Preferred Stock (or any security
which is convertible into or exchangeable for any of the foregoing) or having
the right to nominate and have elected one member of the Board. For the
purposes of this definition, "control" when used with respect to any 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 "affiliated," "controlling" and
"controlled" have meanings correlative to the foregoing.
"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 (a)
become a Restricted Subsidiary or (b) shall be merged or consolidated 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)
(including by way of a Sale/Leaseback Transaction) 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 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 (iii) 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 under Article Eight hereof, (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, and (iii) for purposes of Section 10.15
hereof, (a) sales, conveyances, transfers, leases or other dispositions of
property or assets, whether in one transaction or a series of related
transactions occurring within one year, involving assets with a Fair Market
Value not in excess of $500,000 in any 12 month period and (b) any asset of
the Company or a Restricted Subsidiary that is the subject of a
Sale/Leaseback Transaction with a Person (other than the Company or an
Affiliate of the Company) made in accordance with Section 10.26 hereof
-3-
and that was acquired by the Company or such Restricted Subsidiary no more
than 120 days prior to the transfer to a third party in a Sale/Leaseback
Transaction.
"Attributable Debt" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate implicit in the terms of the lease included
in such Sale/Leaseback Transaction) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from such
date to the date or dates of each successive scheduled principal payment
(including, without limitation, any sinking fund requirements) of such
Indebtedness multiplied by (b) the amount of each such principal payment by
(ii) the sum of all such principal payments; PROVIDED that, in the case of
any Capitalized Lease Obligation, all calculations hereunder shall give
effect to any applicable options to renew in favor of the Company or any
Restricted Subsidiary.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code or any
similar federal, state or foreign law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors.
"Bankruptcy Order" means any binding court order made in a
proceeding pursuant to or within the meaning of any Bankruptcy Law,
containing an adjudication of bankruptcy or insolvency, or providing for
liquidation, receivership, winding-up, dissolution or reorganization, or
appointing a Custodian of a debtor or of all or any substantial part of a
debtor's property, or providing for the staying, arrangement, adjustment or
composition of indebtedness or other relief of a debtor.
"Board" means the Board of Directors of the Company.
"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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"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, New York, or the city in which the Corporate Trust Office
of the Trustee is located, are authorized or obligated by law, regulation or
executive order to close.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, participations, rights in, or other equivalents
(however designated and whether voting and/or non-voting) of, such Person's
capital stock, including Preferred Stock, whether outstanding on the
-4-
Issue Date or issued after the Issue Date, and any and all rights (other than
any evidence of Indebtedness), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay
rent or other amounts under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed, immovable or
movable) that is required to be classified and accounted for as a capitalized
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
which matures 365 days or less from the date of purchase or acquisition
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality thereof (PROVIDED that the full
faith and credit of the United States Government is pledged in support
thereof or such Indebtedness constitutes a general obligation of such
country); (ii) deposits, certificates of deposit or acceptances with a
maturity of 365 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 (or any similar capital concept) of not less than
$500.0 million and whose senior unsecured debt is rated at least "A-1" by S&P
or "P-1" by ▇▇▇▇▇'▇; (iii) commercial paper with a maturity of 365 days or
less issued by a corporation (other than an Affiliate of the Company)
organized under the laws of the United States or any State thereof and rated
at least "A-1" by S&P or "P-1" by ▇▇▇▇▇'▇; (iv) repurchase agreements and
reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States Government maturing within 365 days from the date of
acquisition; and (v) money market funds in the United States which invest
substantially all of their assets in securities of the type described in any
of the preceding clauses (i) through (iv).
"Cedel" means Cedel Bank, Societe Anonyme.
"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) or 14(d) of the Exchange Act, PROVIDED that no "group" shall
be deemed to result solely from the Investors' Rights Agreement, the Voting
Agreement or the Voting Trust Agreement (as each such term is defined in the
Offering Memorandum) or the transactions contemplated thereby), excluding
Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 or 13d-5 under the Exchange Act, except that a person shall be deemed
to have "beneficial ownership" of all securities that such person has or
acquires the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50%
of the total voting power of all Voting Stock of the Company (except that the
person or group shall not be deemed the "beneficial owner" of shares tendered
pursuant to a tender or exchange offer made by that person or group or any of
their Affiliates until the tendered shares are accepted for purchase or
exchange) or has, directly or indirectly, the right to elect or designate a
majority of the Board or (b) the Company consolidates with, or merges with or
into, another person
-5-
or sells, assigns, 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
converted into or exchanged for (1) Voting Stock (other than Disqualified
Stock) of the surviving or transferee corporation or its parent corporation
and/or (2) cash, securities and other property in any amount which could be
paid by the Company as a Restricted Payment under this Indenture, (ii) the
"beneficial owners" (as so defined) of the Voting Stock of the Company
immediately before such transaction own, directly or indirectly, immediately
after such transaction, at least a majority of the voting power of all Voting
Stock of the surviving or transferee corporation or its parent corporation
immediately after such transaction, as applicable, or (iii) immediately after
such transaction, no "person" or "group" (as such terms are defined above),
excluding the Permitted Holders, is the "beneficial owner" (as defined
above), directly or indirectly, of more than 50% of the Voting Stock of such
surviving or transferee corporation or its parent corporation, as applicable,
or has, directly or indirectly, the right to elect or designate a majority of
the board of directors of the surviving or transferee corporation or its
parent corporation, as applicable, or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
(together with any new directors whose election by the Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board then in office. The good faith determination by the
Board, based upon advice of outside counsel, of the beneficial ownership of
securities of the Company within the meaning of Rules 13d-3 or 13d-5 under
the Exchange Act shall be conclusive, absent contrary controlling precedent
or contrary written interpretation published by the SEC. No inference shall
be created that officers or employees of the Company are acting as a "person"
or "group" (as such terms are used in Sections 13(d) or 14(d) of the Exchange
Act) with the power to designate a majority of the members of the Board
solely because such officers or employees constitute a majority of the
members of the Board.
"Closing Time" has the meaning specified in the Purchase
Agreement.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or rights in, or other equivalents (however
designated and whether voting and/or non-voting) of, such Person's common
stock and includes, without limitation, all series and classes of such common
stock.
"Company" means the Person named as the "Company" in the
first paragraph of this Indenture, until a successor Person shall have
replaced such Person 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 any one of its Chairman of the
Board, its Vice-Chairman, its Chief
-6-
Executive Officer, its President or a Vice President, and by its Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer, and
delivered to the Trustee.
"Consolidated Income Tax Expense" means, with respect to any
period, the provision for federal, state, 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, with respect to any
period, without duplication, the sum of (i) the interest expense of the
Company and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation,
(a) any amortization of debt discount, (b) the net cost under Interest Rate
Obligations (including any amortization of discounts), (c) the interest
portion of any deferred payment obligation, (d) all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and similar transactions and (e) all
capitalized interest and accrued interest, (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and the Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP, (iii) the portion
of any rental obligation in respect of any Sale/Leaseback Transaction
allocable to interest expense (determined as if such were treated as a
Capital Lease Obligation), and (iv) the amount of dividends and distributions
in respect of Preferred Stock or Disqualified Stock paid by the Restricted
Subsidiaries to a Person other than the Company or a Restricted Subsidiary or
by the Company during such period.
"Consolidated Net Income" means, with respect to any period,
the net income (or loss) of the Company and the Restricted Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP,
adjusted, to the extent included in calculating such consolidated net income
(or loss), by excluding, without duplication, (i) all extraordinary, unusual
or nonrecurring gains or losses and all gains or losses from sales or other
dispositions of assets (including Asset Sales) out of the ordinary course of
business (net of taxes, fees and expenses relating to the transaction giving
rise thereto) for such period, (ii) that portion of such net income (or loss)
derived from or in respect of Investments in Persons other than Restricted
Subsidiaries, except to the extent of any cash dividends actually received by
the Company or any Restricted Subsidiary (subject, in the case of any
Restricted Subsidiary, to the provisions of clause (vi) of this definition),
(iii) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan during such period, (iv) that portion of such
net income (or loss) allocable to minority interests in any Restricted
Subsidiary for such period, (v) net income (or loss) of any other Person
combined with the Company or any Restricted Subsidiary on a "pooling of
interests" basis attributable to any period prior to the date of combination
and (vi) the net income of any Restricted Subsidiary for such period to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time permitted, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
-7-
"Consolidated Net Worth" means, with respect to any Person, the
consolidated stockholders' or partners' equity of such Person reflected on the
most recent balance sheet of such Person, determined in accordance with GAAP,
less any amounts attributable to redeemable capital stock (as determined under
applicable accounting standards promulgated by the SEC) of such Person.
"Consolidated Operating Cash Flow" means, with respect to any
period, Consolidated Net Income for such period (a) increased (without
duplication), to the extent deducted in arriving at such Consolidated Net
Income, by the sum of (i) Consolidated Income Tax Expense for such period; (ii)
Consolidated Interest Expense for such period; and (iii) depreciation,
amortization and any other non-cash items for such period of the Company and the
Restricted Subsidiaries (other than any noncash item which requires the accrual
of, or a reserve for, cash charges for any future period), including, without
limitation, amortization of capitalized debt issuance costs for such period, all
determined on a consolidated basis in accordance with GAAP, and (b) decreased by
any non-cash items (including non-recurring gains and non-recurring items of
income) to the extent they increased Consolidated Net Income for such period
(including any partial or complete reversal of reserves taken in a prior
period).
"Corporate Trust Office" means the Office of the Trustee at
which at any particular time the trust created by this Indenture shall be
principally administered, which office at the date of execution of this
Indenture is located at Library Tower, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, except for
purposes of Sections 3.02 and 10.02 hereof. For purposes of such Sections, such
office is located at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other Person with like powers
whether appointed judicially or out of court and whether pursuant to an interim
or final appointment.
"Debt Securities" means any debt securities issued by the
Company in a public offering or in a private placement to institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act).
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Default Amount" means (i) as of any date prior to May 15, 2003,
the Accreted Value of the Notes (and any applicable premium thereon) as of such
date and (ii) as of any date on and after May 15, 2003, the principal amount at
maturity of the Notes (and any applicable premium thereon) and any accrued and
unpaid interest thereon.
"Depository" means The Depository Trust Company, its nominees
and their respective successors until a successor Depositary shall have become
such pursuant to the applicable provisions
-8-
of this Indenture, and thereafter "Depositary" shall mean or include each
Person who is then a Depositary hereunder.
"Disinterested Director" means, with respect to any transaction
or series of related transactions, a member of the Board other than a director
who (i) has any material direct or indirect financial interest in or with
respect to such transaction or series of related transactions or (ii) is an
employee or officer of the Company or an Affiliate that is itself a party to
such transaction or series of transactions or an Affiliate of a party to such
transaction or series of related transactions.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Notes; PROVIDED that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require
such Person to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring prior to the final maturity date
of the Notes will not constitute Disqualified Stock so long as the "asset sale"
or "change of control" provisions applicable to such Capital Stock are no more
favorable to the holders thereof than Sections 10.10 and 10.15 hereof and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Sections
10.10 and 10.15 hereof.
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Notes" means the 13 1/2% Senior Discount Notes due
2008, Series B, of the Company, to be issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement.
"Exchange Offer" shall have the meaning specified in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or
property, the price (after taking into account any liabilities relating to such
asset or property) that could be negotiated in an arms-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise specified in the Indenture, Fair Market Value shall be determined by
the Board acting in good faith and shall be evidenced by a Board Resolution.
-9-
"GAAP" means, as of any date of determination, generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, the SEC or in such other statements by such other entity as may
be approved by a significant segment of the accounting profession of the United
States, which are in effect as of such date of determination and which are
consistently applied for all applicable periods.
"Global Notes" means one or more Regulation S Global Notes and
144A Global Notes.
"Guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, any
obligation (A) to pay amounts drawn down by letters of credit, (B) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
obligation (whether arising by virtue of partnership arrangement, agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (C) entered into for
purposes of assuring in any other manner the obligee of such obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Holder" means a Person in whose name a Note is registered in
the Note Register.
"Indebtedness" means, with respect to any Person, without
duplication (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (i) every liability of such
Person, whether or not contingent, (A) for borrowed money, (B) evidenced by
notes, bonds, debenture or other similar instruments (whether or not
negotiable), (C) for reimbursement of amounts expended under letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (D) issued or assumed as the deferred purchase price of property or
services, (E) relating to a Capitalized Lease Obligation and all Attributable
Debt in respect of Sale/Leaseback Transactions of such Person and (F) in respect
of an Interest Rate Obligation of such Person; (ii) every liability of others of
the kind described in the preceding clause (i) which such Person has Guaranteed
or which is otherwise its legal liability; or (iii) every obligation secured by
a Lien (other than (x) Permitted Liens of the types described in clauses (b),
(d) or (e) of the definition of Permitted Liens; PROVIDED that the obligations
secured would not constitute Indebtedness under clauses (i) or (ii) or (iii) of
this definition, and (y) Liens on Capital Stock or Indebtedness of any
Unrestricted Subsidiary) to which the property or assets of such Person are
subject, whether or not the obligations secured thereby shall have been assumed
by or shall otherwise be such Person's legal liability (the amount of such
obligation being deemed to be the lesser of the Fair Market Value of such
property or asset or the amount of the obligation so secured); (iv) all
Disqualified Stock of such Person, valued
-10-
at the greater of its voluntary or involuntary maximum fixed repurchase or
redemption price (plus accrued and unpaid dividends to the date of
determination); and (v) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any liability
of the kind described in any of the preceding clauses (i), (ii), (iii) or
(iv). In no event shall "Indebtedness" include trade payables and accrued
liabilities that are current liabilities incurred in the ordinary course of
business, excluding the current maturity of any obligation which would
otherwise constitute Indebtedness. For purposes of Section 10.11 and Section
10.13 hereof 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, (i) the principal
amount of any Indebtedness which 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; (ii) the principal amount of any Indebtedness shall be reduced
by any amount of cash or Cash Equivalent collateral securing on a perfected
basis, and dedicated for disbursement exclusively to the payment of principal
of and interest on, such Indebtedness; and (iii) the amount of Indebtedness
of any Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability of
any Guarantees at such date.
"Indebtedness to EBITDA Ratio" means, as at any date of
determination (the "Transaction Date"), the ratio of (i) Total Consolidated
Indebtedness (including all Permitted Indebtedness) as at the Transaction Date
to (ii) Consolidated Operating Cash Flow for the four full fiscal quarters
immediately preceding the Transaction Date for which financial statements are
available (such four full fiscal quarter period being referred to herein as the
"Measurement Period"). For purposes of calculating Consolidated Operating Cash
Flow for the relevant Measurement Period prior to a Transaction Date, (A) any
Person that is a Restricted Subsidiary on the Transaction Date (or would become
a Restricted Subsidiary on such Transaction Date in connection with the
transaction that requires the calculation of such Consolidated Operating Cash
Flow) shall be deemed to have been a Restricted Subsidiary at all times during
the Measurement Period, (B) any Person that is not a Restricted Subsidiary on
such Transaction Date (or would cease to be a Restricted Subsidiary on such
Transaction Date in connection with the transaction that requires the
calculation of Consolidated Operating Cash Flow) will be deemed not to have been
a Restricted Subsidiary at any time during the Measurement Period, and (C) if
the Company or any Restricted Subsidiary shall have in any manner (x) acquired
through an Asset Acquisition or (y) disposed of (including by way of an Asset
Sale or the termination or discontinuance of activities constituting such
operating business) any operating business during such Measurement Period or
after the end of such period and on or prior to the Transaction Date, such
calculation will be made on a PRO FORMA basis in accordance with GAAP as if, in
the case of an Asset Acquisition, such transaction had been consummated on the
first day of the Measurement Period and, in the case of an Asset Sale or other
disposition, termination or discontinuance of activities constituting such an
operating business, such transaction had been consummated prior to the first day
of the Measurement Period; PROVIDED, HOWEVER that such PRO FORMA adjustment
shall not give effect to the operating cash flow of any Person that would become
a Restricted Subsidiary on the Transaction Date in connection with the
transaction that requires the calculation of Consolidated Operating Cash Flow to
the extent that such Person's net income would be excluded from the calculation
of Consolidated Net Income pursuant to clause (vi) of the definition of
Consolidated Net Income.
-11-
"Indenture" means this instrument as originally executed
(including all exhibits and schedules hereto) 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.
"Indenture Obligations" means the obligations of the Company and
any other obligor under this Indenture or under the Notes, to pay principal of,
premium, if any, and interest on the Notes when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Notes and the performance of all other obligations to the
Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 6.07 hereof) and the Holders of the Notes under this Indenture and
the Notes, according to the terms thereof.
"Independent Financial Advisor" means a United States investment
banking firm of national or regional standing in the United States (i) which
does not, and whose directors, officers and employees or Affiliates do not have,
a direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board, is otherwise independent and qualified to perform the
task for which it is to be engaged.
"Initial Notes" means the 131/2% Senior Discount Notes due 2008,
Series A, of the Company.
"Initial Purchasers" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"interest" means, when used with respect to any Note, the amount
of all interest accruing on such Note, including all additional interest payable
on the Notes pursuant to the Registration Rights Agreement and all interest
accruing subsequent to the occurrence of any events specified in Sections
5.01(vii), (viii) and (ix) hereof or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means, when used with respect to any
Note, the Stated Maturity of an installment of cash interest on such Note, as
set forth in such Note.
"Interest Rate Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars, forward interest rate agreements and similar
agreements.
-12-
"Investment" means, with respect to any Person, any direct or
indirect advance, loan, account receivable (other than an account receivable
arising in the ordinary course of business), or other extension of credit
(including, without limitation, by means of any Guarantee) or any capital
contribution to (by means of transfers of cash or other property or assets to
others, payments for property or services for the account or use of others, or
otherwise), or any purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness of any other Person.
The amount of any Investment shall be the original cost of such Investment, PLUS
the cost of all additions thereto, and MINUS the amount of any portion of such
Investment repaid to such Person in cash as a repayment of principal or a return
of capital, as the case may be, but without any other adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment. In determining the amount of any Investment involving a
transfer of any property or assets other than cash, such property shall be
valued at its Fair Market Value at the time of transfer.
"Issue Date" means the original date of issuance of the Notes.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction). 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.
"Market Capitalization" of any Person means, as of any day of
determination, the product of (i) the average Closing Price of a share of such
Person's Common Stock over the 20 consecutive trading days immediately preceding
such date and (ii) the number of shares of such Common Stock issued and
outstanding on such date. "Closing Price" on any trading day with respect to
the per share price of any shares of Common 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 Common Stock are not listed
or admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on The Nasdaq National Market but such
Person is a "Foreign Issuer" (as defined in Rule 3b-4(b) under the Exchange Act)
and the principal securities exchange on which such shares are listed or
admitted to trading is a "designated offshore securities market" (as defined in
Rule 902(b) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on the Nasdaq National Market and such Person and any securities markets in
which such Person's Common Stock trades does not meet any of the foregoing such
requirements, the average of the closing bid and asked prices in the
-13-
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 the purpose and is
reasonably acceptable to the Trustee.
"Maturity Date" means, with respect to any Note, the date
specified in such Note as the fixed date on which the principal of such Note is
due and payable.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. (and any
successor).
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof received by the Company or any Restricted Subsidiary in the
form of cash (including assumed Indebtedness (other than Subordinated
Indebtedness) and other items deemed to be cash under the proviso to the first
sentence of Section 10.15 hereof) or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of 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, costs and expenses (including fees and
expenses of legal counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes paid or payable as a result of such Asset Sale,
(iii) amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in or having a Lien on the
assets subject to the Asset Sale, (iv) with respect to Asset Sales by Restricted
Subsidiaries, the portion of such cash and Cash Equivalents attributable to any
Persons holding a minority interest in such Restricted Subsidiary 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.
"Non-U.S. Person" means any Person that is not a U.S. Person, as
such term is defined in Regulation S.
"Notes" shall have the meaning specified in the recitals of this
Indenture.
"Offering Memorandum" means the Offering Memorandum of the
Company, dated April 28, 1998, pursuant to which the Initial Notes were offered,
and any supplement thereto.
"Officer" means, with respect to the Company, the Chairman of
the Board, a Vice Chairman, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by the Chairman of the Board, a Vice Chairman, the President
or a Vice President, and by the Secretary, an
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Assistant Secretary, the Treasurer or an Assistant Treasurer, of the Company
and delivered to the Trustee.
"144A Global Note" means a permanent global note in registered
form representing the aggregate principal amount of Notes sold in reliance on
Rule 144A.
"Opinion of Counsel" means a written opinion of legal counsel
who may be counsel for the Company, the Trustee or any Subsidiary Guarantor, as
applicable, and who shall be reasonably acceptable to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled 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 or any Affiliate thereof) in
trust or set aside and segregated in trust by the Company or any Affiliate
thereof (if the Company or such Affiliate shall act as Paying Agent) for the
Holders of such Notes; PROVIDED, HOWEVER, 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 with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the extent
provided in Sections 4.02 and 4.03 hereof; and
(iv) Notes 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
aggregate principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any other obliger upon the Notes or any Affiliate of the Company or
such other obliger shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. The Company shall notify the Trustee, in writing, when it
purchases or otherwise acquires Notes, of the aggregate principal amount of such
Notes so purchased or otherwise acquired; PROVIDED that any failure on the part
of the Company to provide the aforesaid notice to the Trustee shall not
constitute a Default under this Indenture. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the
-15-
Company or any other obliger upon the Notes or any Affiliate of the Company
or such other obliger. If the Paying Agent holds, in its capacity as such,
on any Maturity Date or on any optional redemption date money sufficient to
pay all accrued interest and principal with respect to such Notes payable on
that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such
Notes cease to be Outstanding and interest on them ceases to accrue. Notes
may also cease to be outstanding to the extent expressly provided in Article
Four.
"Permitted Business" means any of the following: (i)
transmitting, providing services relating to or developing network and software
applications for the transmission and management of voice, data, video or other
information through owned or leased wireline or wireless transmission facilities
or over the internet; (ii) creating, developing, constructing, installing,
integrating, repairing, maintaining or marketing communications-related systems,
network equipment and wireless and wireline transmission facilities, software
and other related products; and (iii) evaluating, owning, operating,
participating in or pursuing any other business that is primarily related to
those identified in the foregoing clauses (i) and (ii).
"Permitted Business Investments" means an Investment in any
Person the primary business of which consists of a Permitted Business.
"Permitted Credit Facility" means any senior secured or
unsecured commercial term loan and/or revolving credit facilities (including any
letter of credit subfacility) entered into principally with commercial banks
and/or other financial institutions.
"Permitted Holders" means Brentwood Venture Capital, Enterprise
Partners, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, The Sprout Group and ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, and their respective Affiliates.
"Permitted Indebtedness" means the following Indebtedness (each
of which shall be given independent effect):
(a) Indebtedness under the Notes and the Indenture;
(b) Indebtedness (including Disqualified Stock) of the
Company and/or any Restricted Subsidiary outstanding, or committed but
undrawn, on the Issue Date and identified on SCHEDULE A to this
Indenture;
(c) (i) Indebtedness of any Restricted Subsidiary owed to
and held by the Company or a Wholly Owned Restricted Subsidiary and (ii)
Indebtedness of the Company, which is not secured by any Lien and is
subordinated to the Company's obligations with respect to the
Notes, owed to and held by any Restricted Subsidiary; PROVIDED that an
incurrence of Indebtedness shall be deemed to have occurred upon (x) any
sale or other disposition of any Indebtedness of the Company or a
Restricted Subsidiary referred to in this clause (c) to a Person other
than the Company or a Restricted Subsidiary, (y) any sale or other
disposition of
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Capital Stock of a Restricted Subsidiary which holds Indebtedness
of the Company or another Restricted Subsidiary such that
such Restricted Subsidiary ceases to be a Restricted Subsidiary or (z)
the Designation of a Restricted Subsidiary which holds Indebtedness of
the Company or another Restricted Subsidiary as an Unrestricted
Subsidiary;
(d) Interest Rate Obligations of the Company and/or any
Restricted Subsidiary relating to Indebtedness of the Company and/or
such Restricted Subsidiary, as the case may be (which Indebtedness (i)
bears interest at fluctuating interest rates and (ii) is otherwise
permitted to be incurred under Section 10.11 hereof), but only to the
extent that the notional amount of such Interest Rate Obligations does
not exceed the principal amount of the Indebtedness (and/or Indebtedness
subject to commitments) to which such Interest Rate Obligations relate;
(e) Indebtedness of the Company and/or any Restricted
Subsidiary in respect of performance bonds of the Company or any
Restricted Subsidiary or surety bonds provided by the Company or any
Restricted Subsidiary, in each case incurred in the ordinary course of
business;
(f) Indebtedness of the Company and/or any Restricted
Subsidiary to the extent it represents a replacement, renewal,
refinancing or extension (a "refinancing") of the Notes (during the
periods for which redemption is permitted under the terms of the
Indenture) or other outstanding Indebtedness of the Company and/or of
any Restricted Subsidiary incurred or outstanding pursuant to clause
(a), (b), (g) or (h) of this definition or the proviso in the first
paragraph of Section 10.11 hereof; PROVIDED that (i) no Restricted
Subsidiary may incur Indebtedness to refinance Indebtedness of the
Company (except for Guarantees issued in accordance with Section 10.22
hereof); (ii) if such Indebtedness being refinanced has an Average Life
to Stated Maturity equal to or longer than the Average Life to Stated
Maturity of the Notes, any such refinancing shall have an Average Life
to Stated Maturity longer than the Average Life to Stated Maturity of
the Notes and a final stated maturity for the payment of principal
thereof later than the final stated maturity of the Notes; (iii) if such
Indebtedness being refinanced has an Average Life to Stated Maturity
shorter than the Average Life to Stated Maturity of the Notes, any such
refinancing shall have an Average Life to Stated Maturity longer than,
and a final stated maturity later than, the Indebtedness being
refinanced; (iv) any such refinancing 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
refinanced, PLUS the amount of accrued and unpaid interest thereon, PLUS
the amount of any reasonably determined prepayment premium necessary to
accomplish such refinancing and such reasonable fees and expenses
incurred in connection therewith; (v) the Notes and Indebtedness that
ranks PARI PASSU with the Notes may be refinanced only with Indebtedness
that is made PARI PASSU with or subordinate in right of payment to the
Notes, and Subordinated Indebtedness may only be refinanced with
Subordinated Indebtedness; and (vi) the refinancing Indebtedness shall
be incurred by the obliger of the Indebtedness being refinanced or by
the Company;
-17-
(g) Indebtedness of the Company such that, after giving
effect to the incurrence thereof, (i) the total aggregate principal
amount of Indebtedness incurred under this clause (g) and any
refinancings thereof otherwise incurred in compliance with this
Indenture would not exceed 200% of Total Incremental Equity, and (ii)
such Indebtedness does not mature prior to the final stated maturity of
the Notes and has an Average Life to Stated Maturity longer than the
Notes;
(h) Indebtedness of the Company or any Restricted Subsidiary
incurred under any Permitted Credit Facility and/or Indebtedness of the
Company represented by Debt Securities, and any refinancings of the
foregoing otherwise incurred in compliance with this Indenture, in an
aggregate principal amount not to exceed $40 million at any time
outstanding;
(i) Indebtedness of the Company or any Restricted Subsidiary
that is Purchase Money Indebtedness;
(j) Indebtedness in respect of (i) letters of credit,
bankers' acceptances or other similar instruments or obligations, issued
in connection with liabilities incurred in the ordinary course of
business or (ii) surety, judgment, appeal, performance and other similar
bonds, instruments or obligations provided in the ordinary course of
business; and
(k) in addition to the items referred to in clauses (a)
through (j) above, Indebtedness of the Company having an aggregate
principal amount not to exceed $5 million at any time outstanding.
"Permitted Investments" means (a) any Investment in the Company
or in a Wholly Owned Restricted Subsidiary of the Company or in a Person as a
result of which such Person becomes a Wholly Owned Restricted Subsidiary; (b)
Investments constituting Permitted Business Investments, the sum of which does
not exceed $25 million at any one time outstanding; (c) Cash Equivalents; (d)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (e) Interest Rate Obligations incurred in compliance with Section
10.11 hereof; (f) loans and advances to employees made in the ordinary course of
business not to exceed $500,000 in the aggregate at any one time outstanding;
(g) bonds, notes, debentures or other securities (other than Capital Stock of
any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary)
received as a result of Asset Sales permitted under Section 10.15 hereof; (h)
any Investment to the extent that the consideration therefor consists of Capital
Stock (other than Disqualified Stock) of the Company; and (i) the extension by
the Company of (x) trade credit to Subsidiaries of the Company represented by
accounts receivable, extended on usual and customary terms in the ordinary
course of business or (y) Guarantees of commitments for the purchase of goods or
services incurred in the ordinary course of business so long as such Guarantees,
to the extent constituting Indebtedness, are permitted to be incurred under
Section 10.11 hereof.
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company
or any Restricted Subsidiary or becomes a
-18-
Restricted Subsidiary; PROVIDED that such Liens were in existence prior to
the contemplation of such merger, consolidation or acquisition and do not
secure any property or assets of the Company or any Restricted Subsidiary
other than the property or assets subject to the Liens prior to such merger
or consolidation or acquisition; (b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business that secure payment of obligations not more than
60 days past due or that are being contested in good faith and by appropriate
proceedings; (c) Liens existing on the Issue Date (including Liens securing
Indebtedness permitted under clause (b) of the definition of Permitted
Indebtedness); (d) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted;
PROVIDED that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefor; (e) easements, rights
of way, restrictions and other similar easements, licenses, restrictions on
the use of properties, or minor imperfections of title that, in the
aggregate, are not material in amount and do not in any case materially
detract from the properties subject thereto or interfere with the ordinary
conduct of the business of the Company or the Restricted Subsidiaries; (f)
Liens to secure the performance of statutory obligations surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in
the ordinary course of business (exclusive of obligations for the payment of
borrowed money); (g) Liens securing Indebtedness incurred under a Permitted
Credit Facility; PROVIDED, HOWEVER, that the incurrence of such Indebtedness
is permitted by Section 10.11 hereof; (h) Liens to secure any refinancing of
any Indebtedness secured by Liens permitted by this Indenture, but only to
the extent that such Liens do not extend to any other property or assets
(other than improvements thereto); (i) Liens to secure the Notes and Liens
created under this Indenture; (j) Liens securing Purchase Money Indebtedness;
(k) Liens on and pledges of Capital Stock of any Unrestricted Subsidiary
securing any Indebtedness of such Unrestricted Subsidiary; (l) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the
products and proceeds thereof; (m) Liens to secure Capitalized Lease
Obligations permitted to be incurred under the Indenture; (n) Liens that do
not materially detract from the value of the property subject to such Liens,
that do not materially interfere with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries, and that are made on
customary and usual terms applicable to similar assets; (o) pledges or
deposits by a Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person, or deposits or cash or United States
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred in the ordinary course of
business; (p) Liens customary in the industry and incurred in the ordinary
course of business securing Interest Rate Obligations so long as the related
Indebtedness is, and is permitted to be under the Indenture, secured by a
Lien on the same property securing such Interest Rate Obligations; and (q)
Liens held by the Company on the assets or property of a Restricted
Subsidiary of the Company to secure Indebtedness of such Restricted
Subsidiary owing to and held by the Company.
-19-
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Predecessor Note" means, with respect to any particular Note,
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 3.06 hereof in exchange for a
mutilated Note 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 Issue Date, and including, without limitation, all classes and series
of preferred or preference stock of such Person.
"Private Placement Legend" shall mean the first paragraph of the
legend initially set forth in the Initial Notes in the form set forth on Exhibit
A-l.
"Public Equity Offering" means an underwritten primary public
offering of Common Stock of the Company for cash pursuant to an effective
registration statement filed under the Securities Act.
"Purchase Agreement" means the Purchase Agreement, dated as of
April 28, 1998, by and among the Company and the Initial Purchasers, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Purchase Money Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary (including Acquired Indebtedness and Indebtedness
represented by Capitalized Lease Obligations, Attributable Debt in respect of
Sale/Leaseback Transactions, mortgage financings and purchase money obligations)
incurred at any time within 180 days of and for the purpose of financing all or
any part of the cost of, the construction, expansion, installation, acquisition
or improvement by the Company or any Restricted Subsidiary of any Permitted
Business Assets or not less than 662/3 percent of the outstanding Voting Stock
of a Person that becomes a Restricted Subsidiary the assets of which consist
primarily of Permitted Business Assets; PROVIDED that the proceeds of such
Indebtedness are expended for such purposes within such 180-day period; and
PROVIDED FURTHER that the amount of such Indebtedness does not exceed, as of the
date of incurrence of such Indebtedness, 100 percent of the lesser of the cost
or the Fair Market Value of such Permitted Business Assets.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A.
"Redemption Date" means, with respect to any Note to be
redeemed, the date fixed by the Company for such redemption pursuant to this
Indenture and the Notes.
-20-
"Redemption Price" means, with respect to any Note to be
redeemed, the price fixed for such redemption pursuant to the terms of this
Indenture and the Notes.
"refinancing" has the meaning set forth in clause (f) of the
definition of "Permitted Indebtedness."
"Registrable Securities" means Transfer Restricted Notes, as
defined in the Registration Rights Agreement.
"Registration Rights Agreement" means the Notes Registration
Rights Agreement, dated as of May 5, 1998, between the Company and the Initial
Purchasers, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date specified in
the Notes.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent global note in
registered form representing the aggregate principal amount of Notes sold in
reliance on Regulation S.
"Responsible Officer" means, with respect to the Trustee, any
trust officer or assistant trust officer 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 of the Trustee to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Note" means a Note that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
PROVIDED, HOWEVER, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
"Restricted Payment" means any of the following: (i) the
declaration or payment of any dividend or any other distribution on any Capital
Stock of the Company or any Restricted Subsidiary or any other payment made to
the direct or indirect holders (in their capacities as such) of Capital Stock of
the Company or any Restricted Subsidiary (other than any dividends,
distributions or payments made to the Company or any Restricted Subsidiary and
dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) of the Company or in options, warrants or other rights to
purchase Capital Stock (other than Disqualified Stock) of the Company); (ii) the
purchase, redemption or other acquisition or retirement for value of any Capital
Stock of the Company or any Restricted Subsidiary (other than any such Capital
Stock owned by the Company or a Restricted Subsidiary); (iii) the purchase,
redemption, defeasance or other acquisition or retirement for value, or the
making of any principal payment on, prior to any scheduled repayment, scheduled
sinking fund payment or scheduled maturity, of any Subordinated Indebtedness
(other than any Subordinated
-21-
Indebtedness held by a Wholly Owned Restricted Subsidiary); or (iv) the
making by the Company or any Restricted Subsidiary of any Investment (other
than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that
has not been designated by the Board, by a Board Resolution delivered to the
Trustee, as an Unrestricted Subsidiary pursuant to and in compliance with
Section 10.20 hereof. Any such designation may be revoked by a Board Resolution
delivered to the Trustee, subject to the provisions of such covenant.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies (and any successor).
"Sale/Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or assets of such
Person which has been or is being sold or transferred by such Person after its
acquisition thereof or the completion of construction or commencement of
operations thereof to such lender or investor or to any other Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such property or asset.
"SEC" means the Securities and Exchange Commission, as from time
to time constituted, or if at any time after the execution of this Indenture
such agency is not existing and performing the applicable duties now assigned to
it, then the body or bodies performing such duties at such time.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" shall have the meaning specified
in the Registration Rights Agreement.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Note or any
installment of interest thereon, the dates 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, is
due and payable.
"Strategic Equity Investor" means any Person that, as of the
date of determination, has a Market Capitalization or Consolidated Net Worth of
at least $2.0 billion and derives a substantial portion of its revenues from a
business related to the Permitted Business.
-22-
"Subordinated Indebtedness" means any Indebtedness of the
Company which is expressly subordinated in right of payment to any other
Indebtedness of the Company.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, by such Person, or (b) any other Person of which
at least a majority of voting interest is at the time, directly or indirectly,
owned by such Person.
"Subsidiary Guarantor" means each Restricted Subsidiary that
becomes a guarantor of the Notes pursuant to the provisions of Section 10.22
hereof, in each case until it is released from its Subsidiary Guarantee pursuant
to the terms thereof.
"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 such date of
determination.
"Total Incremental Equity" means, at any time of determination,
the sum of, without duplication, (a) the aggregate net cash proceeds received by
the Company from capital contributions in respect of existing Capital Stock
(other than Disqualified Stock) or the issuance and sale of Capital Stock (other
than Disqualified Stock but including Capital Stock issued upon the conversion
of convertible Indebtedness or from the exercise of options, warrants or rights
to purchase Capital Stock (other than Disqualified Stock)) subsequent to the
Issue Date, other than to a Subsidiary of the Company, PLUS (b) 80 percent of
the Fair Market Value of property (other than cash and Cash Equivalents)
received by the Company after the Issue Date as a contribution of capital or
from the sale of its Capital Stock (other than Disqualified Stock) to a Person
that is not a Subsidiary of the Company, MINUS (c) any amounts included in
clause (a) above to the extent used to make a Restricted Payment pursuant to
clauses (2) or (3)(A)(x) of Section 10.13 hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended, as in force at the date as of which this Indenture was
executed, except as provided in Section 9.05 hereof; PROVIDED, HOWEVER, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Person shall have replaced such
Person pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Person.
"Unit Agent" means State Street Bank and Trust Company of
California, N.A., a national banking association, as unit agent for the Units,
and any successor unit agent.
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"Unrestricted Notes" means one or more Notes that do not and are
not required to bear the Private Placement Legend in the form set forth in
Exhibit A, including, without limitation, the Exchange Notes.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 10.20 hereof. Any
such designation may be revoked by a Board Resolution delivered to the Trustee,
subject to the provisions of such covenant.
"U.S. Government Securities" means securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged.
"Voting Stock" means, with respect to any Person, the Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors or other members of the governing body of such Person.
"voting power" means, with respect to the Capital Stock of any
Person, the relative voting power in any general election of directors or other
members of the governing body of such Person.
"Warrant Agreement" means the Warrant Agreement, dated as of May
5, 1998, between the Company and State Street Bank and Trust Company of
California, N.A., as warrant agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary of which 100% of the outstanding Capital Stock is owned by the
Company or another Wholly Owned Restricted Subsidiary. For the purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Restricted Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
----- ----------
"Act" 1.05
"Additional Interest" 10.23
"Additional Interest Payment Date" 10.23
"Affiliate Transaction" 10.14
"Agent" 3.02
"Agent Members" 3.16
"Asset Sale Offer" 10.15
"Asset Sale Offer Purchase Date" 10.15
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Defined in
Term Section
----- ----------
"Assumed Indebtedness" 10.15
"assumed liabilities" 10.15
"Change of Control Date" 10.10
"Change of Control Offer" 10.10
"Change of Control Payment Date" 10.10
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Notes" 4.01
"Designation" 10.20
"Designation Amount" 10.20
"Event of Default" 5.01
"incur" 10.11
"Investment Company Act" 4.04
"Note Amount" 10.15
"Note Pro Rate Share of Unutilized
Net Cash Proceeds 10.15
"Note Register" 3.05
"Other Indebtedness" 10.15
"Paying Agent" 3.02
"Permitted Business Assets" 10.15
"Physical Notes" 2.01
"Registrar" 3.02
"Registration Default" 10.23
"Restricted Period" 3.17
"Revocation" 10.20
"Separability Date" 3.18
"Subsidiary Guarantee" 10.22
"surviving entity" 8.01
"Unit" 3.18
"Unutilized Net Cash Proceeds" 10.15
SECTION 1.03. RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article (including terms
referred to in Section 1.02 hereof) have the meanings assigned to them in this
Article, and include the plural as well as the singular;
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(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;
(c) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP as in effect on the Issue
Date;
(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;
(e) all references to "$" or "dollars" refer to the lawful
currency of the United States of America; and
(f) the words "include," "included" and "including" as used
herein are deemed in each case to be followed by the phrase "without
limitation."
SECTION 1.04. 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 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 may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows 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
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 knows 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,
with proper identification of each matter covered therein, and form one
instrument.
SECTION 1.05. ACTS OF HOLDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
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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 (as provided below in this
Section 1.05) of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01 hereof) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof to the same extent as the original
Holder, in respect of anything done, suffered or omitted to be done by the
Trustee, any Paying Agent, the Company or any other obliger upon the Notes in
reliance thereon, whether or not notation of such action is made upon such Note.
SECTION 1.06. NOTICES, ETC., TO THE TRUSTEE AND THE
COMPANY.
Any request, demand, authorization, direction, notice, consent,
waiver or other action of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(a) 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: State Street Bank and Trust Company of
California, N.A., Library Tower, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, or at any other address
previously furnished in writing to the Holders and the Company by the Trustee;
or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at Rhythms NetConnections Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Executive Officer, or at any
other address previously furnished in writing to the Trustee by the Company.
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SECTION 1.07. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise expressly
provided herein) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder 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, 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 when mailed to a Holder in the aforesaid manner shall be
conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. 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 regular mail service
or by reason of any other cause, it shall be impracticable to mail notice of
any event as required by any provision of this Indenture, then any method of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
SECTION 1.08. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision which is
required or deemed to be included in this Indenture by any of the provisions
of the Trust Indenture Act, such provision or requirement of the Trust
Indenture Act shall control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 1.09. 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 1.10. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its respective successors and assigns, whether so expressed or not.
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SECTION 1.11. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes
issued pursuant hereto 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 1.12. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes issued pursuant
hereto, express or implied, shall give to any Person (other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders) any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.13. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND EACH SUBSIDIARY GUARANTEE, IF
ANY, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 1.14. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company or such Subsidiary Guarantor under the Notes, any
Subsidiary Guarantee or this Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation.
SECTION 1.15. INDEPENDENCE OF COVENANTS.
Except as otherwise expressly provided herein, all covenants
and agreements in this Indenture shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or be otherwise
within the limitations of, another covenant shall not avoid the occurrence of
a Default if such action is taken or condition exists.
SECTION 1.16. EXHIBITS AND SCHEDULES.
All exhibits and schedules attached hereto are by this reference
made a part hereof with the same effect as if herein set forth in full.
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SECTION 1.17. COUNTERPARTS.
This Indenture may be executed in any number of counterparts
and by telecopier, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
SECTION 1.18. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
2. TWO
FORM OF NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication
with respect thereto shall be as required by Section 3.03 hereof.
The definitive Notes shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or
may be produced in any other manner permitted by the rules of any securities
exchange on which the Notes may be listed, all as determined by the Officers
executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its issuance and shall
show the date of its authentication.
Notes offered and sold in reliance on Rule 144A and Notes
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Notes, substantially in the form set forth in
EXHIBIT A-1, deposited with the Trustee, as custodian for the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided and shall bear the legend set forth in EXHIBIT C. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Notes issued in exchange for interests in a Global Note
pursuant to Section 3.17 hereof may be issued in the form of permanent
certificated Notes in registered form in substantially the form set forth in
EXHIBIT A-1 with respect to the Initial Notes and EXHIBIT A-2 with respect to
Exchange Notes (in each case, the "Physical Notes").
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The Notes shall have notated thereon evidence of each
Subsidiary Guarantee, if any, in the form set forth in ANNEX A to EXHIBIT B;
PROVIDED, HOWEVER, that the failure of any Note to include such notation
shall not affect the validity or enforceability of such Subsidiary Guarantee
or such Note against any Subsidiary Guarantor.
3. THREE
THE NOTES
SECTION 3.01. TITLE AND TERMS.
The aggregate principal amount at maturity of Notes which may
be authenticated and delivered under this Indenture is limited to
$290,000,000 in aggregate principal amount at maturity of Notes, except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 3.03, 3.04,
3.05, 3.06, 9.06, 10.10 or 10.15 hereof or the optional redemption provisions
of the Notes.
The Stated Maturity of the principal of the Notes shall be
May 15, 2008. Cash interest on the Notes will not accrue prior to May 15,
2003. Thereafter, cash interest on the Notes shall accrue at the rate of
13 1/2% per annum from May 15, 2003 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, payable
semi-annually on May 15 and November 15, in each year, commencing on November
15,2003, to the registered Holders at the close of business on the May I or
November 1, respectively, immediately preceding such Interest Payment Dates,
until the principal thereof is paid or duly provided for.
At the election of the Company, the entire Indebtedness on
the Notes or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
SECTION 3.02. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall
be located in the Borough of Manhattan in The City of New York, State of New
York) where Notes may be presented or surrendered for registration of
transfer or for exchange (the "Registrar"), an office or agency (which shall
be located in the Borough of Manhattan in The City of New York, State of New
York) where Notes may be presented or surrendered for payment (the "Paying
Agent" or "Agent") and an office or agency where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.
The Registrar and any co-Registrar shall keep a register of the Notes and of
their transfer and exchange. The Company may have one or more co-registrars
and one or more additional paying agents. The term "Paying Agent" or "Agent"
includes any additional paying agent. The Company may act as its own Paying
Agent. The Company may change the Paying Agent or Registrar without notice
to any Holder.
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The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the Trust Indenture Act. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar
and Paying Agent and agent for service of notices and demands in connection
with the Notes, until such time as the Trustee has resigned or a successor
has been appointed.
SECTION 3.03. EXECUTION AND AUTHENTICATION.
The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of EXHIBIT A-1 hereto, and
the Exchange Notes and the Trustee's certificate of authentication relating
thereto shall be substantially in the form of EXHIBIT A-2 hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are permitted or required by this Indenture. The Notes may
have such letters, numbers or other marks of identification and such
notations, legends or endorsements required by law, stock exchange rule, rule
of the Depository or any clearing agency or usage. The Company shall approve
the form of the Notes and any notation, legend or endorsement thereon. Each
Note shall be dated the date of issuance and shall show the date of its
authentication.
The terms and provisions contained in the Notes annexed
hereto as EXHIBIT A-1 and EXHIBIT A-2 shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Two Officers, or an Officer and an Assistant Secretary, of
the Company shall sign, or one Officer of the Company shall sign, and one
Officer or an Assistant Secretary of the Company (each of whom shall, in each
case, have been duly authorized by all requisite corporate actions) shall
attest to, the Notes for the Company by manual or facsimile signature and may
be imprinted or otherwise reproduced.
An officer of a Subsidiary Guarantor (who shall have been
duly authorized by all requisite corporate actions) shall sign by manual or
facsimile signature, which may be imprinted or otherwise reproduced, a
notation, in the form of ANNEX A to EXHIBIT B, in respect of the Subsidiary
Guarantee of such Subsidiary Guarantor, on the Notes transferred and
exchanged subsequent to the issuance of such Subsidiary Guarantee for so long
as it remains outstanding.
If an Officer or Assistant Secretary of the Company or an
officer of a Subsidiary Guarantor whose signature is on a Note or a notation,
as the case may be, was an officer or (in the case of the Company) Officer or
Assistant Secretary at the time of such execution but no longer holds that
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office or position at the time the Trustee authenticates the Note, then the
Note, the Subsidiary Guarantee, if any, and any notation thereon shall
nevertheless be valid.
A Note shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Note.
The signature of such representative of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount at maturity not to exceed $290,000,000
and (ii) Unrestricted Notes from time to time only in exchange for a like
principal amount at maturity of Initial Notes, upon a written order of the
Company in the form of an Officers' Certificate of the Company. Each such
written order shall specify the amount of Notes to be authenticated and the
date on which the Notes are to be authenticated, whether the Notes are to be
Initial Notes or Unrestricted Notes and whether (subject to Section 2.01 and
this Section 3.03) the Notes are to be issued as Physical Notes or Global
Notes and such other information as the Trustee may reasonably request. The
aggregate principal amount at maturity of Notes Outstanding at any time may
not exceed $290,000,000, except as provided in Section 3.06 hereof.
Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Notes may vote or consent) as one class and no series of Notes will have
the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent
has the same rights as an Agent to deal with the Company and Affiliates of
the Company.
The Notes shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 3.04. TEMPORARY NOTES.
Until definitive Notes are prepared and ready for delivery,
the Company may execute and upon a Company Order the Trustee shall
authenticate and deliver temporary Notes. The Company Order shall specify
the amount of temporary Notes to be authenticated and the date on which the
temporary Notes are to be authenticated. Temporary Notes shall be
substantially in the form of definitive Notes, in any authorized
denominations, but may have variations that the Company reasonably considers
appropriate for temporary Notes as conclusively evidenced by the Company's
execution of such temporary Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay but in no event
later than the date that the Exchange Offer is
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consummated. 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 10.02 hereof, 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 of definitive Notes of like tenor and 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 3.05. 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 10.02 hereof
being sometimes referred to herein as the "Note Register") in which, subject
to such reasonable regulations as the Registrar may prescribe, the Company
shall provide for the registration of Notes and of transfers and exchanges of
Notes. The Trustee is hereby initially appointed Registrar for the purpose
of registering Notes and transfers of Notes as herein provided.
Subject to Sections 3.16 and 3.17, when Notes are presented
to the Registrar or a co-Registrar with a request from the Holder of such
Notes to register the transfer or exchange for an equal principal amount of
Notes of other authorized denominations, such Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements
for such transaction are met; PROVIDED, HOWEVER, that every Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed
or be accompanied by a written instrument of transfer or exchange in form
satisfactory to the Company and the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing. Whenever
any Notes are so presented for exchange, at the Registrar's or co-Registrar's
written request, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive, and each Subsidiary Guarantor, if any, shall execute a
notation on such Notes with respect to its Subsidiary Guarantee. No service
charge shall be made to the Holder for any registration of transfer or
exchange. The Company may require from the Holder payment of a sum
sufficient to cover any transfer taxes or other governmental charge that may
be imposed in relation to a transfer or exchange, but this provision shall
not apply to any exchange pursuant to Section 10.10, 10.15 or 9.06 hereof (in
which events the Company will be responsible for the payment of all such
taxes which arise solely as a result of the transfer or exchange and do not
depend on the tax status of the Holder). The Trustee shall not be required
to exchange or register the transfer of any Note for a period of 15 days
immediately preceding the first mailing of notice of redemption of Notes to
be redeemed or of any Note selected, called or being called for redemption
except, in the case of any Note where public notice has been given that such
Note is to be redeemed in part, the portion thereof not to be redeemed.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company and each
Subsidiary Guarantor, if any, evidencing the same Indebtedness, and entitled
to the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
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Any Holder of a beneficial interest in a Global Note shall,
by acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Notes may be effected only through a book-entry
system maintained by the Holder of such Global Note (or its agent), and that
ownership of a beneficial interest in the Note shall be required to be
reflected in a book-entry system.
SECTION 3.06. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If a mutilated Note is surrendered to the Trustee or if the
Holder of a Note of any series claims that the Note has been lost, destroyed
or stolen, the Company and each Subsidiary Guarantor, if any, shall execute
and upon a Company Order, the Trustee shall authenticate and deliver a
replacement Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding if the Holder of such Note furnishes to the
Company, each Subsidiary Guarantor, if any, and to the Trustee evidence
reasonably acceptable to them of the ownership and the destruction, loss or
theft of such Note and an indemnity bond shall be posted by such Holder,
sufficient in the judgment of the Company or the Trustee, as the case may be,
to protect the Company, each Subsidiary Guarantor, if any, the Trustee or any
Agent from any loss that any of them may suffer if such Note is replaced.
The Company may charge such Holder for the Company's expenses in replacing
such Note (including (i) expenses of the Trustee charged to the Company and
(ii) any tax or other governmental charge that may be imposed) and the
Trustee may charge the Company for the Trustee's expenses in replacing such
Note.
Every replacement Note issued pursuant to this Section in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company and each Subsidiary
Guarantor, if any, whether or not the 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 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 3.07. 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 that Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date and
interest on such defaulted interest at the then applicable interest rate
borne by the Notes, to the extent lawful (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the Regular Record Date; and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in subsection (a) or (b) below:
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(a) 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 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 provided in
this subsection (a). 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 in writing
of such Special Record Date. In the name and at the expense of the Company,
the Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at its address as it appears in the Note
Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Notes (or their respective Predecessor Notes) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following subsection (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements of
any securities exchange or market on which the Notes may be listed, and upon
such notice as may be required by such exchange or market, if, after written
notice given by the Company to the Trustee of the proposed payment pursuant
to this subsection (b), such payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, 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 3.08. PERSONS DEEMED OWNERS.
Prior to and at the time of due presentment for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Note is registered in the Note
Register as the owner of such Note for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.07 hereof) interest
on such Note and for all other purposes whatsoever, whether or not such Note
shall 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.
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SECTION 3.09. CANCELLATION.
All Notes surrendered for payment, redemption, registration
of transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled 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 all Notes so delivered shall be promptly canceled by the
Trustee. The Registrar, any co-Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer or
exchange, redemption or payment. The Trustee and no one else shall cancel
all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section 3.09, except
as expressly permitted by this Indenture. All canceled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered
to the Company unless by a Company Order the Company shall direct that the
canceled Notes be returned to it. The Trustee shall provide the Company a
list of all Notes that have been canceled from time to time as requested by
the Company.
SECTION 3.10. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed.
SECTION 3.11. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
date established for the payment of Defaulted Interest or Stated 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, 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, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be. In such
event, no interest shall accrue with respect to such payment for the period
from and after such Interest Payment Date, Redemption Date, date established
for the payment of Defaulted Interest or Stated Maturity, as the case may be,
to the next succeeding Business Day and, with respect to any Interest Payment
Date, interest for the period from and after such Interest Payment Date shall
accrue with respect to the next succeeding Interest Payment Date.
SECTION 3.12. CUSIP AND CINS NUMBERS.
The Company in issuing the Notes may use "CUSIP" and "CINS"
numbers (if then generally in use), and, if so, the Trustee shall use the
CUSIP or CINS numbers, as the case may be, in notices of redemption or
exchange as a convenience to Holders; PROVIDED, HOWEVER, that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP or CINS number, as the case may be, printed in the notice or on the
Notes, and that reliance may be placed only
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on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee in writing of any change in the CUSIP or CINS
number of any series of Notes.
SECTION 3.13. PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. Money held
in trust by the Paying Agent need not be segregated except as required by
law, and in no event shall the Paying Agent be liable for any interest on any
money received by it hereunder. The Company at any time may require the
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed, and the Trustee may at any time during the continuance of
any Event of Default, upon a Company Order to the Paying Agent, require such
Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
SECTION 3.14. [INTENTIONALLY OMITTED].
SECTION 3.15. DEPOSITS OF MONIES.
Prior to 11:00 a.m. New York City time on each Interest
Payment Date, maturity date, Redemption Date, Change of Control Payment Date,
date for the payment of Defaulted Interest and Asset Sale Offer Purchase
Date, the Company shall have deposited with the Paying Agent in immediately
available funds money sufficient to make cash payments, if any, due on such
Interest Payment Date, maturity date, Redemption Date, Change of Control
Payment Date, date for the payment of Defaulted Interest or Asset Sale Offer
Purchase Date, as the case may be, in a timely manner which permits the
Paying Agent to remit payment to the Holders on such Interest Payment Date,
maturity date, Redemption Date, Change of Control Payment Date, date for the
payment of Defaulted Interest or Asset Sale Offer Purchase Date, as the case
may be.
SECTION 3.16. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in EXHIBIT C.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its
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Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to
transfers in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in the Global
Notes may be transferred or exchanged for Physical Notes in accordance with
the rules and procedures of the Depository and the provisions of Sections
3.03 and 3.17 hereof. In addition, Physical Notes shall be transferred to
all beneficial owners in exchange for their beneficial interests in Global
Notes if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for any Global Note, or that it will cease
to be a "Clearing Agency" under the Exchange Act, and in either case a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar or co-Registrar has received a written request from the Depository
to issue Physical Notes.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Note to beneficial owners
pursuant to paragraph (b) of this Section 3.16, the Registrar or co-Registrar
shall (if one or more Physical Notes are to be issued) reflect on its books
and records the date and a decrease in the principal amount of the Global
Note in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and the Company shall execute, and upon
receipt of a Company Order the Trustee shall authenticate and deliver, one or
more Physical Notes of like tenor and principal amount of authorized
denominations, and each Subsidiary Guarantor, if any, shall execute a
notation thereon in respect of its Subsidiary Guarantee.
(d) In connection with the transfer of Global Notes as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 3.16,
the Global Notes shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and upon receipt of a Company
Order the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Notes, an equal aggregate principal amount at maturity of Physical
Notes of like tenor of authorized denominations, and each Subsidiary
Guarantor, if any, shall execute a notation thereon in respect of its
Subsidiary Guarantee.
(e) Any Physical Note constituting a Restricted Note
delivered in exchange for an interest in a Global Note pursuant to
subparagraph (b), (c) or (d) of this Section 3.16 shall, except as otherwise
provided by Section 3.17 hereof, bear the Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
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SECTION 3.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED
INVESTORS. The following additional provisions shall apply with respect to
the registration of any proposed transfer of an Initial Note to any
Institutional Accredited Investor which is not a QIB:
(i) the Registrar or co-Registrar shall register the
transfer of any Initial Note, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date; PROVIDED, HOWEVER, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the second anniversary
of the Issue Date and such transfer can otherwise be lawfully made under the
Securities Act without registering such Initial Notes thereunder or (y) the
proposed transferee has delivered to the Registrar or co-Registrar a
certificate substantially in the form of EXHIBIT D hereto and any legal
opinions and certifications required thereby;
(ii) if the proposed transferor is an Agent Member seeking
to transfer an interest in a Global Note, upon receipt by the Registrar or
co-Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's or co-Registrar's procedures and (y) the
appropriate certificate if any, required by clause (y) of paragraph (i)
above, together with any required legal opinions and certifications, the
Registrar or co-Registrar shall register the transfer and reflect on its
books and records the date and a decrease in the principal amount of the
Global Note from which such interests are to be transferred in an amount
equal to the principal amount of the Notes to be transferred and the Company
shall execute, each Subsidiary Guarantor, if any, shall execute a notation on
and, upon a Company Order, the Trustee shall authenticate Physical Notes in a
principal amount equal to the principal amount of the Global Note to be
transferred.
(b) TRANSFERS TO NON-U.S. PERSONS. The following
additional provisions shall apply with respect to the registration of any
proposed transfer of an Initial Note to any Non-U.S. Person:
(i) the Registrar or co-Registrar shall register the
transfer of any Initial Note, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date; PROVIDED, HOWEVER, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the second anniversary
of the Issue Date and such transfer can otherwise be lawfully made under the
Securities Act without registering such Initial Notes thereunder or (y) the
proposed transferor has delivered to the Registrar or co-Registrar a
certificate substantially in the form of EXHIBIT E hereto;
(ii) if the proposed transferee is an Agent Member and the
Notes to be transferred consist of Physical Notes which after transfer are to
be evidenced by an interest in the Regulation S Global Note, upon receipt by
the Registrar or co-Registrar of (x) written instructions given in accordance
with the Depository's and the Registrar's or co-Registrar's procedures and
(y) the appropriate certificate, if any, required by clause (y) of paragraph
(i) above, together with any required legal opinions and certifications, the
Registrar or co-Registrar shall register the transfer and reflect on
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its books and records the date and an increase in the principal amount of the
Regulation S Global Note in an amount equal to the principal amount of
Physical Notes to be transferred, and the Trustee shall cancel the Physical
Notes so transferred;
(iii) if the proposed transferor is an Agent Member seeking
to transfer an interest in the 144A Global Note, upon receipt by the
Registrar or co-Registrar of (x) written instructions given in accordance
with the Depository's and the Registrar's or co-Registrar's procedures and
(y) the appropriate certificate, if any, required by clause (y) of paragraph
(i) above, together with any required legal opinions and certifications, the
Registrar or co-Registrar shall register the transfer and reflect on its
books and records the date and (A) a decrease in the principal amount of the
144A Global Note from which such interests are to be transferred in an amount
equal to the principal amount of the Notes to be transferred and (B) an
increase in the principal amount of the Regulation S Global Note in an amount
equal to the principal amount of the 144A Global Note to be transferred; and
(iv) until the 41st day after the Issue Date (the
"Restricted Period"), an owner of a beneficial interest in the Regulation S
Global Note may not transfer such interest to a transferee that is a U.S.
Person or for the account or benefit of a U.S. Person within the meaning of
Rule 902(k) of the Securities Act. During the Restricted Period, all
beneficial interests in the Regulation S Global Note shall be transferred
only through Cedel or Euroclear, either directly if the transferor and
transferee are participants in such systems, or indirectly through
organizations that are participants.
(c) TRANSFERS TO QIBS. The following provisions shall
apply with respect to the registration of any proposed transfer of an Initial
Note to a QIB (excluding Non-U.S. Persons):
(i) the Registrar or co-Registrar shall register the
transfer of any Initial Note, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date; PROVIDED, HOWEVER, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the second anniversary
of the Issue Date and such transfer can otherwise be lawfully made under the
Securities Act without registering such Initial Note thereunder or (y) such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar or co-Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar or co-Registrar in writing,
that it is purchasing the Note for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the sale
to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested pursuant
to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A;
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(ii) if the proposed transferee is an Agent Member and the
Notes to be transferred consist of Physical Notes which after transfer are to
be evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar or co-Registrar of written instructions given in accordance with
the Depository's and the Registrar's or co-Registrar's procedures, the
Registrar or co-Registrar shall register the transfer and reflect on its book
and records the date and an increase in the principal amount of the 144A
Global Note in an amount equal to the principal amount of Physical Notes to
be transferred, and the Trustee shall cancel the Physical Note so
transferred; and
(iii) if the proposed transferor is an Agent Member seeking
to transfer an interest in the Regulation S Global Note following the
expiration of the Restricted Period, upon receipt by the Registrar or
co-Registrar of written instructions given in accordance with the
Depository's and the Registrar's or co-Registrar's procedures, the Registrar
or co-Registrar shall register the transfer and reflect on its books and
records the date and (A) a decrease in the principal amount of the Regulation
S Global Note in an amount equal to the principal amount of the Notes to be
transferred and (B) an increase in the principal amount of the 144A Global
Note in an amount equal to the principal amount of the Regulation S Global
Note to be transferred.
(d) PRIVATE PLACEMENT LEGEND. Upon the registration of
transfer, exchange or replacement of Notes not bearing the Private Placement
Legend, the Registrar or co-Registrar shall deliver Notes that do not bear
the Private Placement Legend. Upon the registration of transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the circumstances contemplated by paragraph (a)(i)(x) of this
Section 3.17 exist, (ii) there is delivered to the Registrar or co-Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee
to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of
the Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act.
(e) OTHER TRANSFERS. If a Holder proposes to transfer a
Note constituting a Restricted Note pursuant to any exemption from the
registration requirements of the Securities Act other than as provided for by
Section 3.17(a), (b) and (c) hereof, the Registrar or co-Registrar shall only
register such transfer or exchange if such transferor delivers an Opinion of
Counsel satisfactory to the Company and the Registrar or co-Registrar that
such transfer is in compliance with the Securities Act and the terms of this
Indenture; PROVIDED, HOWEVER, that the Company may, based upon the opinion of
its counsel, instruct the Registrar or co-Registrar by a Company Order not to
register such transfer in any case where the proposed transferee is not a
QIB, Non-U.S. Person or Institutional Accredited Investor.
(f) GENERAL. By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture.
-▇▇-
▇▇▇ ▇▇▇▇▇▇▇▇▇ and each co-Registrar shall retain copies of
all letters, notices and other written communications received pursuant to
Section 3.16 hereof or this Section 3.17. The Company shall have the right
to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable prior
written notice to the Registrar or co-Registrar.
SECTION 3.18. COMPONENTS OF UNIT.
The Notes shall initially be issued as part of a unit
("Unit"), each Unit consisting of $1,000 principal amount at maturity of
Notes and four Warrants. The Notes and the Warrants comprising a Unit shall
not be separately transferable until the "Separability Date," which means the
earliest to occur of: (i) November 1, 1998; (ii) the date on which a
registration statement with respect to the Exchange Offer is declared
effective under the Securities Act; (iii) the occurrence of a Change of
Control; and (iv) such earlier date as may be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co. in its sole discretion. Transfers of the Units shall be made by the Unit
Agent in accordance with the restrictions set forth in Section 3.17 hereof.
The Unit Agent shall be entitled to the same benefits, indemnities and
privileges as those accorded to the Trustee under this Indenture.
4. FOUR
DEFEASANCE OR COVENANT DEFEASANCE
SECTION 4.01. 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 4.02 or Section
4.03 hereof be applied to all of the Outstanding Notes (the "Defeased
Notes"), upon compliance with the conditions set forth below in this Article
Four.
SECTION 4.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 4.01 hereof of the
option applicable to the Defeased Notes pursuant to this Section 4.02, the
Company shall be deemed to have been discharged from its obligations with
respect to the Defeased Notes on the date the conditions set forth below 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 Defeased Notes, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 4.05 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 and upon Company Request, shall execute proper instruments
acknowledging the same), except for the following, which shall survive until
otherwise terminated or
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discharged hereunder: (a) the rights of Holders of Defeased Notes to receive,
solely from the trust fund described in Section 4.04 hereof and as more fully
set forth in such Section, payments in respect of the principal of, premium,
if any, and interest on such Notes when such payments are due, (b) the
Company's obligations with respect to such Defeased Notes under Sections
3.04, 3.05, 3.06, 10.02 and 10.03 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including, without
limitation, the Trustee's rights under Section 6.07 hereof, and (d) this
Article Four. Subject to compliance with this Article Four, the Company may
exercise its option applicable to this Section 4.02 notwithstanding the prior
exercise of its option applicable to Section 4.03 hereof with respect to the
Notes.
SECTION 4.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 4.01 hereof of the
option applicable to the Defeased Notes pursuant to this Section 4.03, the
Company shall be released from its obligations under any covenant or
provision contained in Sections 10.06 through 10.22, 10.25 and 10.26 hereof
and the provisions of Article Eight shall not apply, with respect to the
Defeased Notes, on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Defeased 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
Defeased 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 Sections or Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article 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 5.01(iii) or (iv) hereof, but, except as
specified above, the remainder of this Indenture and such Defeased Notes
shall be unaffected thereby.
SECTION 4.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of
either Section 4.02 or Section 4.03 hereof to the Defeased Notes:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 6.09 hereof who shall agree to comply with
the provisions of this Article Four 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) cash (in United States dollars) in an amount,
or (b) U.S. Government Securities which through the scheduled payment of
principal, premium, if any, 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, in any such case, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered
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to the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of, premium, if any, and interest on the Defeased Notes at the
Stated Maturity of such principal or installment of principal, premium,
if any, or interest; PROVIDED, HOWEVER, that the Trustee shall have been
irrevocably instructed to apply such cash or the proceeds of such U.S.
Government Securities to said payments with respect to the Notes;
(2) No Default shall have occurred and be continuing on the
date of such deposit (other than a Default or Event of Default with
respect to this Indenture resulting from the incurrence of Indebtedness
all or a portion of which will be used to defease the Notes concurrently
with such incurrence) or, insofar as Section 5.01(vii), (viii) or (ix)
hereof is concerned at any time during the period ending on the
ninety-first day after the date of such deposit;
(3) Neither the Company nor any Subsidiary of the Company is
an "insolvent person" within the meaning of any applicable Bankruptcy
Law on the date of such deposit or at any time during the period ending
on the ninety-first day after the date of such deposit;
(4) Such defeasance or covenant defeasance shall not cause
the Trustee for the Notes to have a conflicting interest in violation of
Section 6.08 hereof and for purposes of the Trust Indenture Act with
respect to any securities of the Company;
(5) Such defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a default under, this
Indenture (other than as permitted by clause (2) above) or any other
material agreement or instrument to which the Company is a party or by
which it is bound;
(6) In the case of an election under Section 4.02 hereof,
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 the
date hereof, 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;
(7) In the case of an election under Section 4.03 hereof,
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;
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(8) The Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, immediately following the
ninety-first day after the deposit, the trust funds established pursuant
to this Article will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally under any applicable U.S. Federal or state
law;
(9) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit made by the Company
pursuant to its election applicable to Section 4.02 or 4.03 hereof was
not made by the Company with the intent of preferring the Holders over
the other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;
(10) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that (i)
all conditions precedent (other than conditions requiring the passage of
time) provided for relating to either the defeasance under Section 4.02
or the covenant defeasance under Section 4.03 (as the case may be) have
been complied with as contemplated by this Section 4.04 and (ii) if any
other Indebtedness of the Company shall then be outstanding or
committed, such defeasance or covenant defeasance will not violate the
provisions of the agreements or instruments evidencing such
Indebtedness; and
(11) Such defeasance or covenant defeasance shall not result
in a trust arising from such deposit constituting an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
Opinions required to be delivered under this Section may have
such qualifications as are customary for opinions of the type required and
reasonably acceptable to the Trustee.
SECTION 4.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS.
Subject to the last paragraph of Section 10.03, all money and
U.S. Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 in respect of the
Defeased 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 (other than the Company)
as the Trustee may determine, to the Holders of such Notes of all sums due
and to become due thereon in respect of principal, 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 and hold it
harmless against any tax, fee or other charge imposed on or assessed against
the U.S. Government Securities deposited pursuant to Section 4.04 or the
principal, premium, if any, 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 Defeased Notes.
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Anything in this Article Four 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 Securities held by it
as provided in Section 4.04 which, in the opinion of an internationally
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.
SECTION 4.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money
or U.S. Government Securities in accordance with Section 4.02 or 4.03 hereof,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 4.02 or 4.03 hereof, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such money and U.S.
Government Securities in accordance with Section 4.02 or 4.03 hereof, as the
case may be; PROVIDED, HOWEVER, that if the Company makes any payment of
principal, 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
and U.S. Government Securities held by the Trustee or Paying Agent.
5. FIVE
REMEDIES
SECTION 5.01. 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):
(i) default in the payment of interest on the Notes when it
becomes due and payable and continuance of such default for a period of
30 days or more; or
(ii) default in the payment of the principal of, or premium,
if any, on the Notes when due at maturity, upon redemption or otherwise;
or
(iii) default in the performance, or breach, of any covenant
described under Section 10.10, Section 10.15 or Article Eight; or
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(iv) default in the performance, or breach, of any
covenant in the Notes, this Indenture (other than defaults specified
in clause (i), (ii) or (iii) above), and continuance of such default
or breach for a period of 30 days or more after written notice to the
Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount at maturity of
the outstanding Notes (in each case, when such notice is deemed given
in accordance with this Indenture); or
(v) (a) failure to pay, following any applicable grace
period, any installment of principal due (whether at maturity or
otherwise) under one or more classes or issues of Indebtedness in an
aggregate principal amount of $5 million or more under which the
Company or any Restricted Subsidiary is obligated or (b) failure by
the Company or any Restricted Subsidiary to perform any other term,
covenant, condition or provision of one or more classes or issues of
Indebtedness in an aggregate principal amount of $5 million or more
under which the Company or such Restricted Subsidiary is obligated
and, in the case of this clause (b), such failure results in an
acceleration of the maturity thereof; or
(vi) one or more judgments, orders or decrees for the
payment of money of $5 million or more, either individually or in the
aggregate, shall be entered against the Company or any Restricted
Subsidiary or any of their respective properties and shall not be
discharged and there shall have been a period of 60 consecutive days
or more during which a stay of enforcement of such judgment or order,
by reason of pending appeal or otherwise, shall not be in effect; or
(vii) the Company or any Restricted Subsidiary pursuant to
or under or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any
case against it;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
(E) files an answer or consent seeking reorganization
or relief;
(F) shall admit in writing its inability to pay its
debts generally; or
(G) consents to the filing of a petition in
bankruptcy; or
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(viii) a court of competent jurisdiction in any involuntary
case or proceeding enters a Bankruptcy Order against the Company or
any Restricted Subsidiary, and such Bankruptcy Order remains unstayed
and in effect for 60 consecutive days; or
(ix) a Custodian shall be appointed out of court with respect
to the Company or any Restricted Subsidiary with respect to all or
any substantial part of the assets or properties of the Company or
any Restricted Subsidiary; or
(x) this Indenture or the Registration Rights Agreement
ceases to be in force and effect in all material respects (other than
with respect to the invalidity or alleged invalidity of any provision
in the Registration Rights Agreement regarding indemnification for
matters arising under the federal securities laws) or is declared
null and void or the Company denies that it has any further
obligation or liability thereunder or gives notice to that effect
(other than by reason of termination or release in accordance with
the terms thereof).
SECTION 5.02. ACCELERATION OF MATURITY, RESCISSION AND
ANNULMENT.
If an Event of Default (other than an Event of Default
specified in clause (vi), (vii), or (viii) of Section 5.01 hereof with
respect to the Company or any Restricted Subsidiary) occurs and is
continuing, then the Trustee or the holders of at least 25% in principal
amount at maturity of the then Outstanding Notes may, by written notice, and
the Trustee upon the request of the holders of not less than 25% in principal
amount at maturity of the then Outstanding Notes shall, declare the Default
Amount of all Outstanding Notes to be immediately due and payable and upon
any such declaration such amount shall become immediately due and payable. If
an Event of Default specified in clause (vi), (vii), or (viii) above with
respect to the Company or any Restricted Subsidiary occurs and is continuing,
then the Default Amount of all 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.
After a declaration of acceleration, the holders of a
majority in aggregate principal amount at maturity of the then Outstanding
Notes may, by notice to the Trustee, rescind such declaration of acceleration
if all existing Events of Default, other than nonpayment of the Default
Amount of the Notes that has become due solely as a result of such
acceleration, have been cured or waived and if the rescission of acceleration
would not conflict with any judgment or decree.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
The Company covenants that, if an Event of Default specified
in Section 5.01(i) or 5.01(ii) shall have occurred and be continuing, then
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, premium, if any, and interest, with interest
upon the overdue principal, premium, if any, and, to the extent that payment
of such interest shall be legally enforceable, upon overdue installments of
interest, at the rate then borne by the Notes; and, in addition thereto, such
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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 and as trustee of an express trust, may,
but is not obligated under this paragraph to, institute a judicial proceeding
for the collection of the sums so due and unpaid and may, but is not
obligated under this paragraph to, prosecute such proceeding to judgment or
final decree, and may, but is not obligated under this paragraph to, enforce
the same against the Company, any Subsidiary Guarantor 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, any Subsidiary
Guarantor or any other obliger upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion, but is not obligated under this paragraph to, (i)
proceed to protect and enforce its rights and the rights of the Holders under
this Indenture by such appropriate private or judicial proceedings as the
Trustee shall deem most effectual to protect and enforce such rights, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted herein or (ii)
proceed to protect and enforce any other proper remedy. No recovery of any
such judgment upon any property of the Company shall affect or impair any
rights, powers or remedies of the Trustee or the Holders.
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIMS.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company, any Subsidiary
Guarantor or any other obliger upon the Notes or the property of the Company,
any Subsidiary Guarantor or of such other obliger 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
or any Subsidiary Guarantor for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of
principal, 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, fees, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
Custodian, 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
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for the reasonable compensation, expenses, disbursements and advances of the
Trustee its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof.
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 5.05. 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, fees, 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 5.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of
principal, premium, if any, 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 Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for interest;
Third: to Holders to principal and premium, if any, amounts
owing under the Notes, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and premium, if any; and
Fourth: the balance, if any, to the Company or any other obliger
on the Notes, as their interests may appear, or as a court of competent
jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may
fix a record date and payment date for any payment to Holders pursuant to
this Section 5.06.
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SECTION 5.07. 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
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate
principal amount at maturity of the then 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;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred hi compliance with such request which is satisfactory to the Trustee;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount at maturity of the then 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, any Note or any Subsidiary Guarantee 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, any Note or any Subsidiary Guarantee, except in the manner
provided in this Indenture and for the equal and ratable benefit of all the
Holders.
SECTION 5.08. 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 cash payment of the principal of, premium, if any, and (subject to
Section 3.07 hereof) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption, on the
respective 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 5.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Note and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, each Subsidiary Guarantor, if any, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as provided in Section 3.06, 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 5.11. 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 5.12. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount at
maturity of the then 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, HOWEVER, that:
(a) such direction shall not be in conflict with any rule
of law or with this Indenture or any Note or expose the Trustee to personal
liability;
(b) such direction shall not be unduly prejudicial to the
rights of another Holder; and
(c) the Trustee may take any other action deemed proper
by the Trustee, in its discretion, which is not inconsistent with such
direction.
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SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate
principal amount at maturity of the then Outstanding Notes by notice to the
Trustee may on behalf of the Holders of all the Notes waive any past Default
or Event of Default hereunder and its consequences, except a Default or Event
of Default
(a) in the payment of the principal of, premium, if any,
or interest on any Note, or
(b) 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 thereby.
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 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Note by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right
or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.14 shall not apply
to any suit instituted by the Trustee, to any suit instituted by any Holder,
or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount at maturity of the then Outstanding Notes, or to any suit
instituted by any Holder for the enforcement of the payment of the principal
of, premium, if any, or interest on any Note on or after the respective
Stated Maturities expressed in such Note (or, in the case of redemption, on
or after the respective Redemption Dates).
SECTION 5.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury or other law wherever enacted, now or at any time hereafter
in force, which would prohibit or forgive the Company from paying all or any
portion of the principal of, premium, if any, or interest on the Notes
contemplated herein or in the Notes or 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
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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.
6. SIX
THE TRUSTEE
SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the TIA,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates (including Officers
Certificates) or opinions (including Opinions of Counsel) furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by provision hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) During the continuance of an Event of Default, the
Trustee is required to exercise such rights and powers vested in it under
this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise under the circumstances in the
conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that no
provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 6.01.
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SECTION 6.02. NOTICE OF DEFAULTS.
Within 30 days after the occurrence of any Default, the
Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the Note Register, notice of such Default hereunder known to the
Trustee, unless such Default shall have been cured or waived; PROVIDED,
HOWEVER that, except in the case of a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on any Note or in
respect of Article Eight hereof, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE.
Subject to Section 6.01 hereof and the provisions of Section
315 of the Trust Indenture Act:
(a) 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;
(b) the Trustee may request that any request or direction
of the Company mentioned herein be sufficiently evidenced by a Company
Request or Company Order and that any resolution of the Board be sufficiently
evidenced by a Board Resolution thereof;
(c) the Trustee may consult with counsel and any 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 in accordance
with such advice or Opinion of Counsel;
(d) 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 reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of its own negligence;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, other evidence of indebtedness or other paper or document
unless requested in writing so to do by the Holders of not less
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than a majority in aggregate principal amount at maturity of the Notes then
Outstanding; PROVIDED HOWEVER, that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Company upon
demand; PROVIDED, FURTHER, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may deem
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;
(g) 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; and
(h) except with respect to Section 10.01, the Trustee
shall have no duty to inquire as to the performance of the Company's
covenants in Article Ten. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 5.01(i), 5.01(ii) or 10.01 or (ii) any
Default or Event of Default of which a Responsible Officer shall have
received written notification or obtained actual knowledge.
SECTION 6.04. TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITIONS OF NOTES OR APPLICATION OF PROCEEDS
THEREOF.
The recitals contained herein and in the Notes, except 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 to be made by
it in any Statement of Eligibility and Qualification on Form T-l supplied to
the Company will be 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.
SECTION 6.05. TRUSTEE AND AGENTS MAY HOLD NOTES;
COLLECTIONS; ETC.
The Trustee, any Paying Agent, Registrar or co-Registrar or
any other agent of the Company, in its individual or any other capacity, may
become the owner or pledges of Notes, with the same rights it would have if
it were not the Trustee, Paying Agent, Registrar or co-Registrar or such
other agent and, subject to Section 6.08 hereof and Sections 310 and 311 of
the Trust Indenture Act, may otherwise deal with the Company and receive,
collect, hold and retain collections from the
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Company with the same rights it would have if it were not the Trustee, Paying
Agent, Registrar or co-Registrar or such other agent.
SECTION 6.06. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required herein or by law. The Trustee shall not be under any
liability for interest on any moneys received by it hereunder.
SECTION 6.07. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND
ITS PRIOR CLAIM.
The Company covenants and agrees: (a) to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust); (b) to reimburse the Trustee and each predecessor Trustee
upon its request for all reasonable expenses, fees, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation, fees,
and the expenses and disbursements of its counsel and of all agents and other
Persons not regularly in its employ), except any such expense, disbursement
or advance as may arise from its negligence or bad faith; and (c) to
indemnify the Trustee and each predecessor Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence
or bad faith on its part, arising out of or in connection with the acceptance
or administration of this Indenture or the trusts hereunder and its duties
hereunder, including enforcement of this Section 6.07. The obligations of
the Company under this Section to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, fees, disbursements and advances shall
constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture. To secure the obligations of
the Company to the Trustee under this Section 6.07, the Trustee shall have a
prior Lien upon all property and funds held or collected by the Trustee as
such, except funds and property paid by the Company and held in trust for the
benefit of the Holders of particular Notes.
SECTION 6.08. CONFLICTING INTERESTS.
The Trustee shall be subject to and comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Sections 310(a)(1) and (2)
and which shall have (or, in the case of a Trustee that is an Affiliate of a
bank holding company, its Affiliated bank holding company shall have) a
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combined capital and surplus of at least $25,000,000 and a corporate trust
office or agency in the Borough of Manhattan in The City of New York, State
of New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then
for the purposes of this Section, 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, the Trustee shall resign immediately in the manner and with the
effect hereinafter specified in this Article.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.11.
(b) The Trustee, or any trustee or trustees hereinafter
appointed, may at any time resign by giving written notice thereof to the
Company at least 20 Business Days prior to the date of such proposed
resignation. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument executed by
authority of the Board, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor Trustee. If an instrument of acceptance
by a successor Trustee shall not have been delivered to the Trustee within 20
Business Days after the giving of such notice of resignation, the resigning
Trustee may, or (if an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 Business Days after the
giving of such notice of resignation) 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. Such court may thereupon, after such
notice, if any, as it may deem proper, appoint a successor Trustee.
(c) The Trustee may be removed at any time by an Act of
the Holders of a majority in aggregate principal amount at maturity of the
then Outstanding Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act in accordance with Section
6.08 hereof 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
6.09 hereof 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
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(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 or
rehabilitation, conservation or liquidation,
then in any case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, the Holder of any Note 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. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint 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 aggregate principal amount
at maturity of the then 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 of the
Notes and accepted appointment in the manner hereinafter provided, the Holder
of any Note who has been a bona fide Holder for at least six months may,
subject to Section 5.14, on behalf of himself and all others similarly
situated, or the resigning Trustee may, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Notes as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 6.11. 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 as if
originally named as Trustee hereunder; but, nevertheless, on the written
request of the Company or the successor Trustee, upon payment of amounts due
it pursuant to Section 6.07, such retiring Trustee shall duly assign,
transfer and deliver to the successor Trustee all moneys and property at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers, duties and
obligations of the retiring Trustee. Upon request of any such successor
Trustee, the Company shall execute any and all
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instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such Trustee to secure any amounts then due it pursuant to the
provisions of Section 6.07.
No successor Trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under
this Article.
Upon acceptance of appointment by any successor Trustee as
provided in this Section 6.11, the successor shall give notice thereof to the
Holders of the Notes, by mailing such notice to such Holders at their
addresses as they shall appear on the Note Register. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Company fails to give such notice within
10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be given at the expense of the
Company.
SECTION 6.12. MERGER, CONVERSION, AMALGAMATION, CONSOLIDATION
OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or amalgamated, or any
corporation resulting from any merger, conversion, amalgamation 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 (including the trust created by this Indenture), shall be the
successor of the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
such corporation shall be eligible under this Article Six to serve as Trustee
hereunder.
In case at the time such successor to the Trustee under this
Section 6.12 shall succeed to the trusts created by this Indenture any of the
Notes shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Notes so authenticated; and, in case at that time
any of the Notes shall not have been authenticated, any successor to the
Trustee under this Section 6.12 may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of
the Trustee shall have been authenticated.
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7. SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. PRESERVATION OF INFORMATION; COMPANY TO FURNISH
TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
(a) The Trustee shall preserve the names and addresses of
the Holders and otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar or co-Registrar, the Company shall furnish or cause the
Registrar or co-Registrar to furnish to the Trustee before each Interest
Payment Date, and at such other times as the Trustee may reasonably request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders. Neither the
Company nor the Trustee shall be under any responsibility with regard to the
accuracy of such list.
(b) The Company will furnish or cause to be furnished to
the Trustee:
(i) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such Regular Record
Date; and
(ii) at such other times as the Trustee may reasonably
request in writing, within 30 days after receipt by the Company of any
such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
PROVIDED, HOWEVER, that if and so long as the Trustee shall be the Registrar
or co-Registrar, no such list need be furnished pursuant to this Subsection
7.01(b).
SECTION 7.02. COMMUNICATIONS OF HOLDERS.
Holders may communicate with other Holders with respect to
their rights under this Indenture or under the Notes pursuant to Section
312(b) of the Trust Indenture Act. The Company and the Trustee and any and
all other Persons benefited by this Indenture shall have the protection
afforded by Section 312(c) of the Trust Indenture Act.
SECTION 7.03. REPORTS BY TRUSTEE.
Within 60 days after May 15th of each year commencing with
the first May 15th following the date of this Indenture, the Trustee shall
mail to all Holders, as their names and addresses appear in the Note
Register, a brief report dated as of such May 15th, in accordance with and to
the extent required under Section 313 of the Trust Indenture Act. At the
time of its mailing to Holders, a copy of each such report shall be filed by
the Trustee with the Company, the SEC and, if required by the rules of any
such stock exchange or market, with each stock exchange or market on which
the
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Notes are listed. The Company shall notify the Trustee when the Notes are
listed on any stock exchange or market.
8. EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company will not (i) consolidate or combine with or merge
with or into or, directly or indirectly, sell, assign, convey, lease,
transfer or otherwise dispose of all or substantially all of its properties
and assets to any Person or Persons in a single transaction or through a
series of transactions, or (ii) permit any of the Restricted Subsidiaries to
enter into any such transaction or series of transactions if it would result
in the disposition of all or substantially all of the properties or assets of
the Company and the Restricted Subsidiaries on a consolidated basis, unless,
in the case of either (i) or (ii), (a) the Company shall be the continuing
Person or, if the Company is not the continuing Person, the resulting,
surviving or transferee Person (the "surviving entity") shall be a company
organized and existing under the laws of the United States or any State or
territory thereof; (b) the surviving entity (if other than the Company) shall
expressly assume all of the obligations of the Company under the Notes and
this Indenture, and shall execute a supplemental indenture to effect such
assumption which supplemental indenture shall be delivered to the Trustee and
shall be in form and substance reasonably satisfactory to the Trustee; (c)
immediately after giving effect to such transaction or series of transactions
on a PRO FORMA basis (including, without limitation, any Indebtedness
incurred or anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), (I) the Company or the surviving
entity (assuming such surviving entity's assumption of the Company's
obligations under the Notes and this Indenture), as the case may be, would be
able to incur $1.00 of Indebtedness (other than Permitted Indebtedness) under
the proviso of Section 10.11, and (II) the Company or the surviving entity,
as the case may be, would have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions; (d) immediately after giving effect to
such transaction or series of transactions on a PRO FORMA basis (including,
without limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), no Default shall have occurred and be continuing; and (e) the
Company or the surviving entity, as the case may be, shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel stating that
such transaction or series of transactions, and, if a supplemental indenture
is required in connection with such transaction or series of transactions to
effectuate such assumption, such supplemental indenture, complies with this
covenant and that all conditions precedent in this Indenture relating to the
transaction or series of transactions have been satisfied.
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SECTION 8.02. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or any sale, assignment,
conveyance, lease, transfer or other disposition of all or substantially all
of the assets of the Company in accordance with the foregoing in which the
Company or the Restricted Subsidiary, as the case may be, is not the
continuing corporation, then the successor corporation formed by such a
consolidation or into which the Company or such Restricted Subsidiary is
merged or to which such transfer is made, will succeed to, and be substituted
for, and may exercise every right and power of, the Company or such
Restricted Subsidiary, as the case may be, under this Indenture and the Notes
with the same effect as if such successor corporation had been named as the
Company or such Restricted Subsidiary therein; and thereafter, except in the
case of (i) any lease or (ii) any sale, assignment, conveyance, transfer,
lease or other disposition to a Restricted Subsidiary of the Company, the
Company shall be discharged from all obligations and covenants under this
Indenture and the Notes.
For all purposes of this Indenture (including the provisions
of this Article Eight and Sections 10.11, 10.13 and 10.16 hereof) and the
Notes, Subsidiaries of any surviving entity will, upon such transaction or
series of related transactions, become Restricted Subsidiaries or
Unrestricted Subsidiaries as provided pursuant to Section 10.20 hereof, and
all Indebtedness, and all Liens on property or assets, of the surviving
entity and the Restricted Subsidiaries (except Indebtedness, or Liens on
property or assets, of the Company and the Restricted Subsidiaries in
existence immediately prior to such transaction or series of related
transactions) shall be deemed to have been incurred upon such transaction or
series of related transactions.
9. NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
SECTION 9.01. SUPPLEMENTAL INDENTURES, AGREEMENTS AND WAIVERS
WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and any
Subsidiary Guarantor, when authorized by a Board Resolution, and the Trustee,
together, at any time and from time to time, may amend, waive, modify or
supplement this Indenture or the Notes for any of the following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company in the Notes and this Indenture;
(b) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company in the Notes or this Indenture;
(c) to cure any ambiguity, or to correct or supplement
any provision in this Indenture or in the Notes which may be defective or
inconsistent with any other provision herein or to make any
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other provisions with respect to matters or questions arising under this
Indenture or the Notes; PROVIDED, HOWEVER, that, in each case, such
provisions shall not adversely affect the legal rights of the Holders;
(d) to comply with the requirements of the SEC in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to evidence and provide the acceptance of the
appointment of a successor Trustee hereunder;
(f) to mortgage, pledge, hypothecate or grant a security
interest in any property or assets in favor of the Trustee for the benefit of
the Holders as security for the payment and performance of the Indenture
Obligations;
(g) to provide for issuance of the Exchange Notes, which
will have terms substantially identical in all material respects to the
Initial Notes (except that the transfer restrictions contained in the Initial
Notes will be modified or eliminated, as appropriate), and which will be
treated together with any outstanding Initial Notes, as a single issue of
securities;
(h) to add or release a Subsidiary Guarantor in
compliance with the provisions of Section 10.22 hereof; or
(i) to make any other change that does not adversely
affect in any material respect the legal rights of any Holder;
PROVIDED, HOWEVER, that the Company has delivered to the Trustee an Opinion
of Counsel stating that such change, agreement or waiver complies with the
provisions of this Section 9.01.
SECTION 9.02. SUPPLEMENTAL INDENTURES, AGREEMENTS AND WAIVERS
WITH CONSENT OF HOLDERS.
With the written consent of the Holders of not less than a
majority in aggregate principal amount at maturity of the Outstanding Notes
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, together with the Trustee, may amend, waive, modify or
supplement any other provision of this Indenture or the Notes; PROVIDED,
HOWEVER, that no such amendment, waiver, modification or supplement may,
without the written consent of the Holder of each Outstanding Note affected
thereby:
(i) reduce the principal amount of, change the fixed
maturity of, or alter the redemption provisions of, the Notes,
(ii) change the currency in which any Notes or amounts owing
thereon is payable,
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(iii) reduce the percentage of the aggregate principal amount
at maturity Outstanding of Notes which must consent to an amendment,
supplement or waiver or consent to take any action under this Indenture
or the Notes,
(iv) impair the right to institute suit for the enforcement
of any payment on or with respect to the Notes,
(v) waive a Default in payment with respect to the Notes,
other than a waiver consisting of the rescission of any declaration of
acceleration with respect to the Notes effected in compliance with
Section 5.02,
(vi) reduce the rate or change the time for payment of
interest on the Notes,
(vii) following the occurrence of a Change of Control or an
Asset Sale, alter the Company's obligation to purchase the Notes in
accordance with this Indenture or waive any Default in the performance
thereof, or
(viii) affect the ranking of the Notes in a manner adverse to
the Holders of the Notes.
Upon the written request of the Company accompanied by a
Board Resolution authorizing the execution of any such supplemental indenture
or other agreement, instrument or waiver, and upon the filing with the
Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture or
other agreement, instrument or waiver.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture
or other agreement, instrument or waiver, but it shall be sufficient if such
Act shall approve the substance thereof.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES,
AGREEMENTS AND WAIVERS.
In executing, or accepting the additional trusts created by,
any supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel
and an Officers' Certificate from each obligor under the Notes entering into
such supplemental indenture, agreement, instrument or waiver, each stating
that the execution of such supplemental indenture, agreement, instrument or
waiver (a) is authorized or permitted by this Indenture and (b) does not
violate the provisions of any agreement or instrument evidencing any other
Indebtedness of the Company or any other Subsidiary of the Company. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture, agreement, instrument or waiver which affects the Trustee's own
rights, duties or immunities under this Indenture, the Notes or otherwise.
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SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article Nine, this Indenture and/or the Notes, if applicable, shall be
modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture and/or the Notes, if applicable, as the case may be,
for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. 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 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article, 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 Board, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee upon a
Company Order in exchange for Outstanding Notes.
In addition, Notes authenticated and delivered after the
execution of any supplemental indenture in compliance with Section 10.22 and
this Article shall, if required by the Trustee, bear a notation substantially
in the form annexed hereto as ANNEX A to EXHIBIT B, and new Notes bearing
such notation shall be prepared and executed by the Company, with such
notation executed by the Subsidiary Guarantors, if any. The Trustee, upon a
Company Order, shall thereafter authenticate and deliver such Notes in
exchange for Outstanding Notes.
SECTION 9.07. RECORD DATE.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
supplemental indenture, agreement or instrument or any waiver, and shall
promptly notify the Trustee of any such record date. If a record date is
fixed those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such supplemental indenture, agreement or instrument or waiver or to revoke
any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
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SECTION 9.08. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if a notation of the consent is not made on any
Note. However, any such Holder, or subsequent Holder, may revoke the consent as
to his Note or portion of a Note if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. An
amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
10. TEN
COVENANTS
SECTION 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of,
premium, if any, and interest on the Notes in accordance with the terms of the
Notes, this Indenture and the Registration Rights Agreement.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal, premium or interest payments hereunder.
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan in The
City of New York, State 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
office of the Trustee at its Corporate Trust Office will 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, State of New
York) where the Notes may be presented or surrendered for any or all such
purposes, and may from time to time rescind such designation; provided, however,
that no such designation or rescission shall in any manner relieve the
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Company of its obligation to maintain an office or agency in The City of New
York, State 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.
SECTION 10.03. 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, premium, if any, or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Holders entitled thereto a sum sufficient to pay the principal, 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.
If the Company is not acting as Paying Agent, the Company will,
on or before each due date of the principal of, premium, if any, or interest on,
any Notes, deposit with a Paying Agent a sum in same day funds sufficient to pay
the principal, premium, if any, or interest so becoming due, such sum to be held
in trust for the benefit of the Holders 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.
If the Company is not acting as Paying Agent, 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 will agree with the Trustee,
subject to the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Notes in trust for the benefit of
the Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
(b) 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
of, premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such payment
Default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights and
liabilities of 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
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Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent will be released from all further liability
with respect to such money.
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, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company upon receipt of a Company Request therefor, or (if then held by
the Company) will be discharged from such trust; and the Holder of such Note
will 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, will 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, at the option of the Company
in the New York Times or the Wall Street Journal (national edition), 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 shall be repaid to the Company.
SECTION 10.04. 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), licenses and franchises of
the Company and each of the Restricted Subsidiaries; PROVIDED, HOWEVER, that the
Company will not be required to preserve any such right, license or franchise if
the Board shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and the Restricted Subsidiaries as
a whole and that the loss thereof is not adverse in any material respect to the
Holders; PROVIDED, FURTHER, that the foregoing will not prohibit a sale,
transfer or conveyance of a Restricted Subsidiary of the Company or any of its
assets in compliance with the terms of this Indenture.
SECTION 10.05. 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 material taxes,
assessments and governmental charges levied or imposed (i) upon the Company or
any of the Restricted Subsidiaries or (ii) upon the income, profits or property
of the Company or any of the Restricted Subsidiaries and (b) all material lawful
claims for labor, materials and supplies, which, if unpaid, could reasonably be
expected to become a Lien upon the property of the Company or any of the
Restricted Subsidiaries; PROVIDED, HOWEVER, that the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (x) whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted or (y) if the failure to so pay, discharge or cause to be
paid or discharged could not reasonably be expected to have a Material Adverse
Effect (as such term is defined in the Purchase Agreement).
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SECTION 10.06. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties owned by the
Company or any of the Restricted Subsidiaries that are used or held for use in
the conduct of their respective businesses to be maintained and kept in good
condition, repair and working order (subject to ordinary wear and tear) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section 10.06 will 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 of the Restricted Subsidiaries and is not
disadvantageous in any material respect to the Holders.
SECTION 10.07. INSURANCE.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers
(including appropriate self-insurance), believed by the Company in good faith to
be financially sound and responsible, against loss or damage to the extent that,
in the good faith judgment of the Board, property of similar character is
usually and customarily so insured by corporations similarly situated and owning
like properties.
SECTION 10.08. BOOKS AND RECORDS.
The Company will keep proper books of record and account, in
which full and correct entries will be made of all financial transactions and
the assets and business of the Company and each Restricted Subsidiary of the
Company in compliance with GAAP.
SECTION 10.09. PROVISION OF SEC REPORTS.
Whether or not the Company is subject to Section 13(a) or 15(d)
of the Exchange Act or any successor provision of law, the Company shall furnish
without cost to each Holder, and file with the Trustee, (i) within 135 days
after the end of each fiscal year of the Company, financial information with
respect to the Company that would be required to be contained in an Annual
Report on Form 10-K for such year filed by the Company with the SEC (whether or
not the Company is then required to file such Form with the SEC), including (x)
audited financial statements of the Company, including the report of the
Company's independent auditors thereon, and (y) a discussion of the Company's
financial condition and results of operations that complies with Item 303 of
Regulation S-K of the SEC, (ii) within 60 days after the end of each of the
first three fiscal quarters of each fiscal year of the Company, financial
information with respect to the Company that would be required to be contained
in a Quarterly Report on Form 10-Q filed by the Company with the SEC (whether or
not the Company is then required to file such Form with the SEC), including a
discussion of the Company's financial condition and results of operations that
complies with Item 303 of Regulation S-K of the SEC and (iii) on a timely basis,
any information concerning the Company or any Restricted Subsidiary required to
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be contained in a Current Report on Form 8-K (whether or not the Company is
then required to file such Form with the SEC). Until such time as the
Company is otherwise required to file periodic reports with the SEC under the
Exchange Act (or any successor provision of law), the Company shall file with
the SEC (if permitted by SEC practice and applicable law and regulations),
for public availability, a copy of the annual and quarterly financial
information and other information prepared by it for distribution to Holders
and filing with the Trustee.
For so long as any Notes remain Outstanding, the Company shall
furnish to securities analysts and prospective investors, upon their request,
information of the type required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, and, to any beneficial holder of Notes, if not
obtainable from the SEC, information of the type that would be filed with the
SEC pursuant to the foregoing provisions, upon the request of any such Holder.
Delivery of the foregoing reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of the Trustee of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
The Company will also comply with the other provisions of
Section 314(a) of the Trust Indenture Act.
SECTION 10.10. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall make an offer
to purchase (the "Change of Control Offer"), on a Business Day (the "Change of
Control Payment Date") not later than 60 days following the Change of Control
Date, all Notes then outstanding at a purchase price equal to 101% of the
Accreted Value thereof as of such Change of Control Payment Date, plus accrued
and unpaid interest thereon, if any, to, such Change of Control Payment Date.
Notice of a Change of Control Offer shall be mailed to holders of Notes not less
than 30 days nor more than 60 days before the Change of Control Payment Date.
Notice of a Change of Control Offer shall be mailed by the
Company to the Holders at their last registered addresses with a copy to the
Trustee and the Paying Agent. The Change of Control Offer shall remain open
from the time of mailing for at least 20 Business Days and until 5:00 p.m., New
York City time, on the Change of Control Payment Date. The notice, which shall
govern the terms of the Change of Control Offer, shall include such disclosures
as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant
to this Section 10.10 and that all Notes validly tendered into the Change of
Control Offer and not withdrawn will be accepted for payment;
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(b) the purchase price (including the amount of accrued
interest, if any) for each Note, the Change of Control Payment Date and the date
on which the Change of Control Offer expires;
(c) that any Note not tendered for payment will remain
Outstanding and continue to accrue Accreted Value (if the Change of Control
Offer occurs prior to May 15, 2003) and, subsequent to May 15, 2003, will accrue
interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of
the purchase price, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrete Accreted Value or, if the Change of Control
Payment Date is after May 15, 2003, shall cease to accrue interest, in either
case after the Change of Control Payment Date;
(e) that Holders electing to have Notes purchased pursuant
to a Change of Control Offer will be required to surrender their Notes to the
Paying Agent at the address specified in the notice prior to 5:00 p.m., New York
City time, on the Change of Control Payment Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee and
the Paying Agent;
(f) that a Holder that tenders a Note pursuant to a Change
of Control Offer will be entitled to withdraw such Note if the Paying Agent
receives, not later than 5:00 p.m., New York City time, on the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of such
Holder, the principal amount at maturity of Note the Holder tendered for
purchase, the Note certificate number (if any) and a statement that such Holder
is withdrawing his election to have such Note purchased;
(g) that a Holder may tender all or any portion of a Note
owned by such Holder pursuant to the Change of Control Offer, subject to the
requirement that any portion of a Note tendered must be tendered in an integral
multiple of $1,000 in principal amount at maturity, and that any Holder that
tenders a portion of a Note will be issued a Note of like tenor equal in
principal amount at maturity to the portion of the Note not tendered;
(h) the instructions that Holders must follow in order to
tender their Notes; and
(i) information concerning the business of the Company, the
most recent annual and quarterly reports of the Company filed with the SEC
pursuant to the Exchange Act (or, if the Company is not required to file any
such reports with the SEC at that time, the comparable information prepared
pursuant to Section 10.09), a description of material developments in the
Company's business and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control Offer
(including, without limitation, pro forma financial information giving effect to
such Change of Control) as would, in the good faith judgment of the Company, be
material to a Holder in connection with the decision of such Holder as to
whether or not it should tender Notes pursuant to the Change of Control Offer.
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On the Change of Control Payment Date, the Company shall (i)
accept for payment all Notes, or portions thereof, validly tendered and not
withdrawn pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent money, in immediately available funds, sufficient to pay the purchase
price of all Notes, or portions thereof, so tendered and accepted and (iii)
deliver to the Trustee the Notes so accepted together with an Officers'
Certificate setting forth the registered numbers of such Notes. The Paying
Agent shall, with the funds so deposited with it by the Company, promptly mail
or deliver to each Holder that validly tendered and did not withdraw Notes, or
any portion thereof, an amount equal to the purchase price for the portion so
tendered, and the Trustee shall promptly authenticate and mail or deliver to
such Holder a new Note of like tenor equal in principal amount at maturity to
that portion, if any, of any Note surrendered by such Holder but not tendered
pursuant to the Change of Control Offer. The Company will publicly announce or
otherwise notify the Holders of the results of the Change of Control Offer as
soon as practicable following the Change of Control Payment Date. The Company
shall not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements applicable to a Change
of Control Offer otherwise required to be made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
If the Company is required to make a Change of Control Offer,
the Company (or any such third party) shall comply with all applicable tender
offer laws and regulations, including, to the extent applicable, Section 14(e)
and Rule 14e-1 under the Exchange Act, and any other applicable securities laws
and regulations. To the extent that the provisions of any such securities laws
or regulations conflict with the provisions of this Section 10.10, the Company
will comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 10.10 solely by
virtue of such compliance.
SECTION 10.11. LIMITATION ON ADDITIONAL INDEBTEDNESS.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume, issue, Guarantee
or in any manner become directly or indirectly liable for or with respect to,
contingently or otherwise, the payment of (collectively, to "incur") any
Indebtedness (including any Acquired Indebtedness), except for Permitted
Indebtedness (including Acquired Indebtedness to the extent it would constitute
Permitted Indebtedness); PROVIDED, that (i) the Company will be permitted to
incur Indebtedness (including Acquired 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 Indebtedness to EBITDA Ratio would be less than
or equal to 6 to 1, in the case of any such incurrence on or before June 30,
2001, or less than or equal to 5 to 1, in the case of any such incurrence
thereafter.
Indebtedness of any Person or any of its Subsidiaries existing
at the time such Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
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with the Company or any Restricted Subsidiary) shall be deemed incurred at the
time such Person becomes a Restricted Subsidiary or merges into or consolidates
with the Company or any Restricted Subsidiary.
For purposes of determining compliance with this Section 10.11,
in the event that an item of Indebtedness may be incurred by meeting the
criteria of one or more items of Permitted Indebtedness, the Company may, in its
sole discretion, classify and divide such item of Indebtedness among more than
one of such items of Permitted Indebtedness.
SECTION 10.12. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by the chairman or the chief executive officer and by
the principal financial officer or principal accounting officer of the Company,
stating (i) that a review of the activities of the Company during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and (ii) that, to the knowledge
of each Officer signing such certificate, the Company has kept, observed,
performed and fulfilled in all material respects each and every covenant and
condition contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions, conditions and covenants hereof
(or, if a Default shall have occurred, describing all such Defaults of which
such Officers have knowledge, their status and what action the Company is taking
or proposes to take with respect thereto). When any Default under this
Indenture has occurred and is continuing, or if the Trustee or any Holder or the
trustee for or the holder of any other evidence of Indebtedness of the Company
or any Restricted Subsidiary gives any notice or takes any other action with
respect to a claimed Default (other than with respect to Indebtedness (other
than Indebtedness evidenced by the Notes) in the principal amount of less than
$5 million), the Company will promptly notify the Trustee of such Default,
notice or action and will deliver to the Trustee by registered or certified mail
or by telegram, or facsimile transmission followed by hard copy by registered or
certified mail an Officers' Certificate specifying such event, notice or other
action within five Business Days after the Company becomes aware of such
occurrence and what action the Company is taking or proposes to take with
respect thereto.
SECTION 10.13. LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, make, directly or indirectly, any Restricted Payment unless:
(i) no Default shall have occurred and be continuing at the
time of or upon giving effect to such Restricted Payment;
(ii) immediately after giving effect to such Restricted
Payment, the Company would be able to incur $1.00 of Indebtedness under
the proviso of Section 10.11 hereof; and
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(iii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or
made on or after the Issue Date does not exceed an amount equal to the
sum of, without duplication, (a) 50% of Consolidated Net Income
accrued on a cumulative basis during the period beginning on the first
day of the first fiscal quarter immediately subsequent to the Issue Date
and ending on the last day of the fiscal quarter of the Company
immediately preceding the date of such proposed Restricted Payment (or,
if such cumulative Consolidated Net Income of the Company for such
period is a deficit, minus 100% of such deficit) for which financial
statements are available, in any event determined by excluding income
resulting from transfers of assets by the Company or a Restricted
Subsidiary to an Unrestricted Subsidiary, PLUS (b) the aggregate net
cash proceeds received by the Company either (x) as capital
contributions to the Company after the Issue Date or (y) from the
issuance and sale of its Capital Stock (other than Disqualified Stock)
or options, warrants or other rights to acquire its Capital Stock (other
than Disqualified Stock), in each case on or after the Issue Date to a
Person who is not a Subsidiary of the Company, PLUS (c) the aggregate
net proceeds received by the Company from the issuance (other than to a
Subsidiary of the Company) on or after the Issue Date of its Capital
Stock (other than Disqualified Stock) upon the conversion of, or in
exchange for, Indebtedness of the Company or upon the exercise of
options, warrants or other rights of the Company, PLUS (d) in the case
of the disposition or repayment (in whole or in part) of any Investment
constituting a Restricted Payment made after the Issue Date, an amount
equal to the lesser of the return of capital with respect to the
applicable portion of such Investment and the cost of the applicable
portion of such Investment, in either case, less the cost of the
disposition of such Investment, PLUS (e) in the case of any Revocation
with respect to a Subsidiary of the Company that was made subject to a
Designation after the Issue Date, an amount equal to the lesser of the
Designation Amount with respect to such Subsidiary or the Fair Market
Value of the Investment of the Company and the Restricted Subsidiaries
in such Subsidiary at the time of Revocation, MINUS (f) 50% of the
principal amount of any Indebtedness incurred pursuant to clause (g) of
the definition of "Permitted Indebtedness." For purposes of the
preceding clauses (b) (y) and (c), as applicable, (A) the value of the
aggregate net proceeds received by the Company upon the issuance of
Capital Stock either upon the conversion of convertible Indebtedness or
in exchange for outstanding Indebtedness or upon the exercise of
options, warrants or rights will be the net cash proceeds received upon
the issuance of such Indebtedness, options, warrants or rights plus the
incremental amount received, if any, by the Company upon the conversion,
exchange or exercise thereof, (B) there shall be excluded in all cases
any issuance and sale of Capital Stock financed, directly or indirectly,
using funds (I) borrowed from the Company or any Subsidiary until and to
the extent such borrowing is repaid or (II) contributed, extended,
Guaranteed or advanced by the Company or any Subsidiary (including,
without limitation, direct contributions by the Company in respect of
any employee stock ownership or benefit plan) and (C) there shall be
excluded in all cases any issuance and sale of Capital Stock in one or
more Public Equity Offerings or to Strategic Equity Investors to the
extent the net cash proceeds are used, prior to May 15, 2001, to redeem
Notes as permitted under the optional redemption provisions of the
Notes. The Company may not redeem Notes pursuant to the optional
redemption provisions of the Notes referred to in the immediately
preceding sentence
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from net cash proceeds received by the Company from the issuance on
or after the Issue Date of its Capital Stock if such net cash
proceeds have ever been included in a determination of the amount
of Restricted Payments that may be made by the Company pursuant to
this Section 10.13, unless the Company would have been able to make
such Restricted Payment without including such net cash proceeds in
such determination.
For purposes of determining the amount expended for Restricted
Payments, cash distributed shall be valued at the face amount thereof and
property other than cash shall be valued at its Fair Market Value.
The provisions of this Section 10.13 shall not prohibit the
following (each of which shall be given independent effect):
(1) 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 would be permitted by the provisions of this Indenture:
(2) 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 the substantially concurrent issue and sale
(other than to a Subsidiary of the Company) of, shares of Capital Stock of the
Company (other than Disqualified Stock); PROVIDED that any such net cash
proceeds are excluded from clause (iii)(b) above;
(3) so long as no Default shall have occurred and be
continuing, the purchase, redemption, retirement, defeasance or other
acquisition of Subordinated Indebtedness (A) made by exchange for, or out of the
net cash proceeds of, a substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of (x) Capital Stock (other than Disqualified Stock)
of the Company, PROVIDED that any such net cash proceeds are excluded from
clause (iii) (b) above; or (y) other Subordinated Indebtedness to the extent
that (I) its stated maturity for the payment of principal thereof is not prior
to the 91st day after the final Stated Maturity of the Notes, (II) its principal
amount 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 an acceleration thereof, such lesser
amount) of the Subordinated Indebtedness being refinanced, PLUS any premium
required to be paid in connection with such refinancing pursuant to the terms of
such Subordinated Indebtedness being refinanced, PLUS the amount of expenses of
the Company incurred in connection with such refinancing, and (III) such new
Subordinated Indebtedness is subordinated to the Notes to the same extent as the
Subordinated Indebtedness being refinanced, or (B) with Unutilized Cash Proceeds
remaining after completion of an Asset Sale pursuant to the fifth paragraph of
Section 10.15 hereof;
(4) so long as no Default shall have occurred and be
continuing, purchases or redemptions of Capital Stock (including cash
settlements of stock options) held by employees, officers or directors upon or
following termination (whether by reason of death, disability or otherwise) of
their
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employment with the Company or one of its Subsidiaries; PROVIDED that
payments shall not exceed $500,000 in any fiscal year in the aggregate;
(5) payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in contemplation of merger,
consolidation or transfer of assets that complies with the provisions of the
Indenture relating to mergers, consolidations or transfers of substantially all
of the assets of the Company;
(6) any purchase of any fractional share of Common Stock of
the Company in connection with an exercise of the Warrants and any repurchase of
Warrants pursuant to a Repurchase Offer (as defined in the Warrant Agreement);
and
(7) Restricted Payments in addition to those otherwise
permitted pursuant to this Section 10.13 in an aggregate amount not to exceed
$2.0 million.
In determining the amount of Restricted Payments permissible
under this Section 10.13, amounts expended pursuant to clauses (1), (4) and (7)
above shall be included, without duplication, as Restricted Payments.
SECTION 10.14. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit, cause or suffer any
Restricted Subsidiary to, directly or indirectly, conduct any business, sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into any contract, agreement,
loan, advance or Guarantee or engage in any other transaction (or series of
related transactions which are similar or part of a common plan) with or for the
benefit of any of their respective Affiliates or any beneficial owner of 10% or
more of the Common Stock of the Company or any officer, director of the Company
or any Subsidiary (each, an "Affiliate Transaction"), unless the terms of the
Affiliate Transaction are set forth in writing and are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction with an unaffiliated third party. Each
Affiliate Transaction (or series of related Affiliate Transactions)
involving aggregate payments and/or other consideration having Fair Market Value
(i) in excess of $1 million shall be approved by a majority of the Board, such
approval to be evidenced by a Board Resolution stating that the Board has
determined that such transaction or transactions comply with the foregoing
provisions, (ii) in excess of $5 million shall further require the approval of a
majority of the Disinterested Directors and (iii) in excess of $10 million shall
further require that the Company obtain a written opinion from an Independent
Financial Advisor stating that the terms of such Affiliate Transaction (or
series of related Affiliate Transactions) are fair to the Company or the
Restricted Subsidiary, as the case may be, from a financial point of view;
PROVIDED, that this clause (iii) shall not apply to purchases of goods and/or
services in the ordinary course of the Company's business, and on terms no less
favorable to the Company than those customarily granted to purchasers of such
goods and/or services, from Paradyne Corporation or Xylan Corporation. For
purposes of this Section 10.14, any Affiliate Transaction approved by a majority
of the Disinterested Directors or as to which a written
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opinion has been obtained from an Independent Financial Advisor, on the basis
set forth in the preceding sentence, shall be deemed to be on terms that are
no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than would be available in a comparable transaction with an
unaffiliated third party and, therefore, shall be permitted under this
Section 10.14.
Notwithstanding the foregoing, the restrictions set forth in
this Section 10.14 shall not apply to (i) transactions with or among, or solely
for the benefit of, the Company and/or any of the Restricted Subsidiaries,
PROVIDED that in any such case, no officer, director or beneficial owner of 10%
or more of any class of Capital Stock of the Company shall beneficially own any
Capital Stock of any such Restricted Subsidiary, (ii) transactions pursuant to
agreements and arrangements existing on the Issue Date and specified on a
schedule to the Indenture, (iii) any Restricted Payment made in compliance with
Section 10.13, (iv) the payment of reasonable and customary regular fees to
directors of the Company or any Restricted Subsidiary who are not employees of
the Company or any Restricted Subsidiary, (v) employment agreements, stock
option agreements and indemnification arrangements entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with industry practice, (vi) the granting and performance of
registration rights for securities of the Company, (vii) loans and advances to
officers, directors and employees of the Company or any Restricted Subsidiary
for travel, entertainment, moving and other relocation expenses, in each case
made in the ordinary course of business and consistent with industry practice,
and (viii) any Permitted Investment.
SECTION 10.15. DISPOSITION OF PROCEEDS OF ASSET SALES
The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Sale unless (a) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration consists of
cash or Cash Equivalents; PROVIDED that the following shall be treated as cash
for purposes of this Section 10.15: (x) the amount of Indebtedness (other than
Subordinated Indebtedness) of the Company or any Restricted Subsidiary that is
actually assumed by the transferee of assets disposed of in such Asset Sale
pursuant to an agreement that fully and unconditionally releases the Company or
such Restricted Subsidiary from further liability ("Assumed Indebtedness") and
(y) the amount of any notes or other obligations that within 30 days of receipt
are converted into cash (to the extent of the cash (after payment of any costs
of disposition) so received). Notwithstanding the immediately preceding
sentence, the Company and its Restricted Subsidiaries may consummate an Asset
Sale without complying with clause (b) of the immediately preceding sentence if
at least 75% of the consideration for such Asset Sale consists of any
combination of cash, Cash Equivalents and Permitted Business Assets (or in
Capital Stock of any Person that will become a Restricted Subsidiary as a result
of such investment if all or substantially all of the properties and assets of
such Person are Permitted Business Assets); PROVIDED that any non-cash
consideration (other than Permitted Business Assets received by the Company or
any of its Restricted Subsidiaries in connection with such Asset Sale) that is
converted into or sold or otherwise disposed of for cash or Cash Equivalents
within 270 days after such Asset Sale and any Permitted Business Assets
constituting cash or Cash Equivalents received by the
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Company or any Restricted Subsidiary shall constitute Net Cash Proceeds
subject to the provisions of this Section 10.15. The Company or the
applicable Restricted Subsidiary, as the case may be, may (i) apply the Net
Cash Proceeds from such Asset Sale, within 270 days of the receipt thereof,
to the permanent reduction (whether by means of repayment, release pursuant
to clause (x) of the first sentence of this Section 10.15 or otherwise) of
(A) Indebtedness of any Restricted Subsidiary and/or (B) indebtedness of the
Company ranking senior to or PARI PASSU with the Notes, and, in each case,
permanently reduce the amount of the commitments thereunder by the amount of
the Indebtedness so repaid, and/or (ii) apply such Net Cash Proceeds, within
270 days of the receipt thereof, to an investment in properties and assets
that will be used in the same or a related line of business as that being
conducted by the Company or any Restricted Subsidiary at the time of such
Asset Sale (collectively, "Permitted Business Assets") (or in Capital Stock
of any Person that will become a Restricted Subsidiary as a result of such
investment if all or substantially all of the properties and assets of such
Person are Permitted Business Assets).
To the extent all or part of the Net Cash Proceeds of any Asset
Sale are not applied within 270 days of such Asset Sale as described in clause
(i) or (ii) of the preceding paragraph (such Net Cash Proceeds, the "Unutilized
Net Cash Proceeds"), the Company shall, within 20 Business Days after such 270th
day, make an offer to purchase (an "Asset Sale Offer") all outstanding Notes up
to a maximum Accreted Value (expressed as a multiple of $1,000) equal to the
Note Pro Rata Share of Unutilized Net Cash Proceeds, at a purchase price in cash
equal to 100% of the Accreted Value thereof on any purchase date, plus accrued
and unpaid interest, if any, to such purchase date; PROVIDED, HOWEVER, that an
Asset Sale Offer may be deferred by the Company until there are Unutilized Net
Cash Proceeds equal to at least $5.0 million, at which time the entire amount of
such Unutilized Net Cash Proceeds (and not just the amount in excess of $5.0
million) shall be applied as required pursuant to this paragraph and the next
following paragraph.
If any other Indebtedness of the Company which ranks PARI PASSU
with the Notes (the "Other Indebtedness") requires that an offer to repurchase
such Indebtedness be made upon the consummation of an Asset Sale, then the
Company may apply the Unutilized Net Cash Proceeds otherwise required to be
applied to an Asset Sale Offer to offer to purchase such Other Indebtedness and
to an Asset Sale Offer so long as the amount of such Unutilized Net Cash
Proceeds applied to repurchase the Notes is not less than the Note Pro Rata
Share of Unutilized Net Cash Proceeds. Any offer to purchase such Other
Indebtedness shall be made at the same time as the Asset Sale Offer, and the
purchase date in respect of any such offer to purchase and the Asset Sale Offer
shall occur on the same day.
For purposes of this Section 10.15, "Note Pro Rata Share of
Unutilized Net Cash Proceeds" means the amount of the Unutilized Net Cash
Proceeds equal to the product of (x) the Unutilized Net Cash Proceeds and (y) a
fraction, the numerator of which is the aggregate Accreted Value of, and all
accrued interest thereon to the purchase date on, all Notes (or portions
thereof) validly tendered and not withdrawn pursuant to an Asset Sale Offer
related to such Unutilized Net Cash Proceeds (the "Note Amount") and the
denominator of which is the sum of the Note Amount and the lesser of (i) the
aggregate principal face amount, and all accrued interest thereon to the
purchase date,
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or (ii) the accreted value as of the purchase date of all Other Indebtedness
(or portions thereof) validly tendered and not withdrawn pursuant to a
concurrent offer to purchase such Other Indebtedness made at the time of such
Asset Sale Offer.
Each Asset Sale Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law. To the extent
that the Accreted Value, plus accrued interest thereon, if any, to the
payment date, of Notes validly tendered and not withdrawn pursuant to an
Asset Sale Offer is less than the Unutilized Net Cash Proceeds or the Note
Pro Rata Share of Unutilized Net Cash Proceeds, as the case may be, the
Company or any Restricted Subsidiary may use such excess for general
corporate purposes, including the repayment or repurchase of Indebtedness.
If the Accreted Value, plus accrued interest thereon, if any, to the payment
date, of Notes validly tendered and not withdrawn by holders thereof exceeds
the amount of Notes which can be purchased with the Unutilized Net Cash
Proceeds or the Note Pro Rata Share of Unutilized Net Cash Proceeds, as the
case may be, then the Notes to be purchased will be selected on A PRO RATA
basis. Upon completion of such Asset Sale Offer and offer for any Other
Indebtedness, the amount of Unutilized Net Cash Proceeds shall be reset to
zero.
Notice of an Asset Sale Offer shall be mailed by the Company
not more than 20 Business Days after the obligation to make such Asset Sale
Offer arises to the Holders of Notes at their last registered addresses with
a copy to the Trustee and the Paying Agent. The Asset Sale Offer shall
remain open from the time of mailing for at least 20 Business Days and until
5:00 p.m., New York City time, on the date fixed for purchase of Notes
validly tendered and not withdrawn, which date shall be not later than the
30th Business Day following the mailing of such Asset Sale Offer (the "Asset
Sale Offer Purchase Date"). The notice, which shall govern the terms of the
Asset Sale Offer, shall include such disclosures as are required by law and
shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 10.15 and that all Notes validly tendered into the Asset Sale
Offer and not withdrawn will be accepted for payment; PROVIDED, HOWEVER,
that if the aggregate Accreted Value of Notes tendered in an Asset Sale
Offer, plus accrued interest, if any, thereon to the Asset Sale Offer
Purchase Date of such offer exceeds the aggregate amount of the Note Pro
Rata Share of Unutilized Net Cash Proceeds, the Trustee shall select the
Notes to be purchased on a PRO RATA basis (with such adjustments as may
be deemed appropriate by the Trustee so that only Notes in denominations
of $1,000 or multiples thereof shall be purchased);
(b) the purchase price (including the amount of accrued
interest, if any) for each Note, the Asset Sale Offer Purchase Date and
the date on which the Asset Sale Offer expires;
(c) that any Note not tendered for payment will remain
Outstanding and continue to accrete Accreted Value (if the Asset Sale
Offer occurs prior to May 15, 2003) and, subsequent to May 15, 2003,
will accrue interest in accordance with the terms thereof;
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(d) that, unless the Company shall default in the payment of
the purchase price, any Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrete Accreted Value or, if the Asset Sale
Offer Purchase Date is after May 15, 2003, shall cease to accrue
interest, in either case after the Asset Sale Offer Purchase Date;
(e) that Holders electing to have Notes purchased pursuant
to the Asset Sale Offer will be required to surrender their Notes to the
Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the Asset Sale Offer Purchase Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that a Holder of Notes will be entitled to withdraw its
Notes from the Asset Sale Offer if the Paying Agent receives, not later
than 5:00 p.m., New York City time, on the Asset Sale Offer Purchase
Date, a facsimile transmission or letter setting forth the name of such
Holder, the principal amount at maturity of each Note such Holder
delivered for purchase that such Holder elects to withdraw, the Note
certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Notes (or a specified portion
thereof) purchased;
(g) that Holders whose Notes are purchased only in part will
be issued Notes of like tenor equal in principal amount at maturity to
the unpurchased portion of the Notes surrendered;
(h) the instructions that Holders must follow in order to
validly tender their Notes; and
(i) information concerning the business of the Company, the
most recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
required to file any such reports with the SEC at that time, the
comparable information prepared pursuant to Section 10.09), a
description of material developments in the Company's business, and such
other information concerning the circumstances and relevant facts
regarding such Asset Sale (including, without limitation, pro forma
financial information giving effect to such Asset Sale) and Asset Sale
Offer as would, in the good faith judgment of the Company, be material
to a Holder of Notes in connection with the decision of such Holder as
to whether or not it should tender Notes pursuant to the Asset Sale
Offer.
On the Asset Sale Offer Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof validly tendered and not withdrawn
pursuant to the Asset Sale Offer, subject to pro ration under the circumstances
and in the manner described in clause (a) of the preceding paragraph, (ii)
deposit with the Paying Agent money, in immediately available funds, sufficient
to pay the purchase price of all Notes or portions thereof so accepted by the
Company and (iii) deliver to the Trustee the Notes so accepted (in whole or in
part) together with an Officers' Certificate setting forth
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the registered numbers of such Notes. The Paying Agent shall, with the funds
so deposited with it by the Company, promptly mail or deliver to the Holders
of Notes so accepted payment in an amount equal to the purchase price
therefor, and the Trustee shall promptly authenticate and mail or deliver to
such Holders new Notes of like tenor equal in principal amount at maturity to
the unpurchased portion of the Notes surrendered in the Asset Sale Offer and
not purchased by the Company. The Company will publicly announce or
otherwise notify the Holders of the results of the Asset Sale Offer as
promptly as practicable following the Asset Sale Offer Purchase Date.
If the Company is required to make an Asset Sale Offer, the
Company shall comply with all applicable tender offer rules, including to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable securities laws and regulations. To the extent that the
provisions of any such securities laws or regulations conflict with the
provisions of this Section 10.15, the Company will comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 10.15 solely by virtue of such compliance.
SECTION 10.16. LIMITATION ON LIENS SECURING CERTAIN
INDEBTEDNESS.
The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of the property or assets of the Company or any Restricted
Subsidiary, whether now owned or hereafter acquired, or any proceeds therefrom,
which secure either (x) Subordinated Indebtedness, unless the Notes are secured
by a Lien on such property, assets or proceeds that is senior in priority to the
Liens securing such Subordinated Indebtedness, or (y) Indebtedness of (A) the
Company that is not Subordinated Indebtedness, or (B) any Restricted Subsidiary,
unless in each case the Notes are equally and ratably secured with the Liens
securing such other Indebtedness, except, in the case of this clause (y),
Permitted Liens.
SECTION 10.17. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company will not, and will not permit any of its
Subsidiaries or Affiliates to, conduct its business in a fashion that would
cause the Company to be required to register as an "investment company" (as that
term is defined in the Investment Company Act), or otherwise become subject to
regulation under the Investment Company Act. For purposes of establishing the
Company's compliance with this provision, any exemption that is or would become
available under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act
will be disregarded.
SECTION 10.18. LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES.
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell any shares of Capital Stock
(or any options, warrants or other rights to purchase such Capital Stock) of a
Restricted Subsidiary, except (i) any sale or issuance of Capital Stock to the
Company or a Wholly Owned Restricted Subsidiary, (ii) any sale or issuance of
Common Stock to directors as director qualifying shares, but only to the extent
required under applicable law,
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(iii) any sale or other disposition of all, but not less than all, of the
issued and outstanding Capital Stock of any Restricted Subsidiary owned by
the Company and the Restricted Subsidiaries or (iv) any sale or issuance of
Capital Stock of a Restricted Subsidiary (other than pursuant to clauses (i)
or (ii)) if such Restricted Subsidiary would no longer be a Restricted
Subsidiary immediately after such transaction and any Investment in such
Person remaining after giving effect to such sale or issuance would have been
permitted to be made under Section 10.13 hereof, and, in the case of both
(iii) and (iv), in compliance with Section 10.15 hereof.
SECTION 10.19. LIMITATION ON DIVIDENDS 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 enter into or cause
to 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 its Capital Stock or any other interest or
participation in, or measured by, its profits to the extent owned by the Company
or any Restricted Subsidiary, (b) pay any Indebtedness owed to the Company or
any Restricted Subsidiary, (c) make any Investment in the Company or any
Restricted Subsidiary or (d) transfer any of its properties or assets to the
Company or to any Restricted Subsidiary, except for (i) any encumbrance or
restriction in existence on the Issue Date, (ii) customary non-assignment
provisions, (iii) any encumbrances or restriction pertaining to an asset subject
to a Lien to the extent set forth in the security documentation governing such
Lien, (iv) any encumbrance or restriction applicable to a Restricted Subsidiary
at the time that it becomes a Restricted Subsidiary that is not created in
contemplation thereof, (v) any encumbrance or restriction existing under any
agreement that refinances or replaces an agreement containing a restriction
permitted by clause (iv) above; PROVIDED that the terms and conditions of any
such encumbrance or restriction are not materially less favorable to the holders
of Notes than those under or pursuant to the agreement being replaced or the
agreement evidencing the Indebtedness refinanced, (vi) any encumbrance or
restriction imposed upon a Restricted Subsidiary pursuant to an agreement which
has been entered into for the sale or disposition of all or substantially all of
the Capital Stock or assets of such Restricted Subsidiary or any Asset Sale to
the extent limited to the Capital Stock or assets in question, and (vii) any
customary encumbrance or restriction applicable to a Restricted Subsidiary that
is contained in an agreement or instrument governing or relating to Permitted
Indebtedness contained in any Debt Securities or Permitted Credit Facility;
PROVIDED that the terms and conditions of any such encumbrance or restriction
contained in any Debt Securities are no more restrictive than those contained in
this Indenture; PROVIDED, FURTHER, that the provisions of such agreement or
instrument permit the payment of interest and principal and mandatory
repurchases pursuant to the terms of this Indenture and the Notes and other
Indebtedness (other than Subordinated Indebtedness) that is solely an obligation
of the Company; and PROVIDED, FURTHER, that such agreement or instrument may
contain customary covenants regarding the merger of or sale of all or any
substantial part of the assets of the Company or any Restricted Subsidiary,
customary restrictions on transactions with affiliates and customary
subordination provisions governing indebtedness owed to the Company or any
Restricted Subsidiary.
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SECTION 10.20. LIMITATION ON DESIGNATIONS OF UNRESTRICTED
SUBSIDIARIES.
The Company will not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which the Company has made an
Investment of $1,000 or less) as an "Unrestricted Subsidiary" under this
Indenture (a Designation") unless:
(a) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation; and
(b) the Company would be permitted under this Indenture to
make an Investment at the time of such Designation (assuming the
effectiveness of such Designation) in an amount (the "Designation
Amount") equal to the Fair Market Value of the interest of the Company
and its Restricted Subsidiaries in such Subsidiary on such date.
In the event of any such Designation, the Company shall be
deemed to have made an Investment constituting a Restricted Payment pursuant to
Section 10.13 hereof for all purposes of this Indenture in an amount equal to
the Designation Amount. Neither the Company nor any Restricted Subsidiary shall
at any time (x) provide a Guarantee of, or similar credit support for, or
subject any of its properties or assets (other than the Capital Stock of any
Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness), (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly
liable for any other Indebtedness which provides that the holder thereof may
(upon notice, lapse of time or both) declare a default thereon (or cause the
payment thereof to be accelerated or payable prior to its final scheduled
maturity) upon the occurrence of a default with respect to any other
Indebtedness that is Indebtedness of an Unrestricted Subsidiary (including any
corresponding right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (x) or (y) to the extent otherwise
permitted under this Indenture, including without limitation under Section 10.13
hereof.
The Company will not revoke any Designation of a Subsidiary as
an Unrestricted Subsidiary (a "Revocation") unless:
(a) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred for all
purposes of this Indenture.
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All Designations and Revocations must be evidenced by Board
Resolutions and Officers' Certificates delivered to the Trustee certifying
compliance with the foregoing provisions.
SECTION 10.21. 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, each
Subsidiary Guarantor, if any, and any other obligor on the Notes will furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenants compliance with
which constitutes a condition precedent) 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, certificates and/or opinions 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 Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture will
include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(ii) 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;
(iii) 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
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 10.22. LIMITATION ON ISSUANCES OF GUARANTEES BY
RESTRICTED SUBSIDIARIES.
The Company will not permit any Restricted Subsidiary, directly
or indirectly, to Guarantee the payment of any other Indebtedness of the Company
unless such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to the Indenture providing for the Guarantee of the
payment of the Notes by such Restricted Subsidiary (a "Subsidiary Guarantee"),
which Subsidiary Guarantee shall be senior to or PARI PASSU with such Restricted
Subsidiary's Guarantee of such other Indebtedness; PROVIDED that this paragraph
shall not apply to any Guarantee of Indebtedness described in clause (h) of the
definition of "Permitted Indebtedness." Notwithstanding the foregoing, any such
Subsidiary Guarantee shall provide by its terms that it shall be automatically
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and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
stock in, or all or substantially all the assets of, such Restricted Subsidiary,
which sale, exchange or transfer is made in compliance with the applicable
provisions of the Indenture, (ii) the Designation of such Restricted Subsidiary
as an Unrestricted Subsidiary in compliance with Section 10.20 hereof or (iii)
the release of such Restricted Subsidiary from all of its obligations under all
of its Guarantees of Indebtedness of the Company. A form of such Subsidiary
Guarantee is set forth as EXHIBIT B hereto.
At the time of the delivery to the Trustee of a Subsidiary
Guarantee by a Restricted Subsidiary pursuant to this Section 10.22, such
Restricted Subsidiary shall also deliver to the Trustee an Opinion of Counsel
and Officers' Certificate to the effect that such Subsidiary Guarantee has been
duly authorized and executed by such Restricted Subsidiary and constitutes the
legal, valid, binding and enforceable obligations of such Restricted Subsidiary
(subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally).
SECTION 10.23. REGISTRATION RIGHTS
(a) Simultaneously with the execution and delivery of this
Indenture, the Company shall enter into the Registration Rights Agreement.
(b) In the event that (a) the Exchange Offer Registration
Statement is not filed with the SEC on or prior to the 90th calendar day
following the Closing Time, (b) the Exchange Offer Registration Statement is not
declared effective on or prior to the 150th calendar day following the Closing
Time, (c) the Exchange Offer is not consummated on or prior to the 30th calendar
day after the date on which the Exchange Offer Registration Statement is
declared effective, (d) if required under the Registration Rights Agreement, a
Shelf Registration Statement with respect to the Notes is not declared effective
on or prior to the 60th calendar day following the date on which the obligation
to file such registration statement arises or (e) the Exchange Offer
Registration Statement or the Shelf Registration Statement is declared effective
but thereafter ceases to be effective or usable except in accordance with
Section 2(d)(iii) of the Registration Rights Agreement (each such event referred
to in clauses (a) through (e) above, a "Registration Default"), then the Company
shall pay as liquidated damages interest ("Additional Interest") on the
Restricted Notes as to which the Registration Default exists. If a Registration
Default exists with respect to Restricted Notes, the Company will, with respect
to the first 90-day period (or portion thereof) while such Registration Default
is continuing immediately following the occurrence of such Registration Default,
make cash payments at a rate of 0.50% per annum multiplied by the Accreted Value
of the Restricted Notes as of the date such payment is required to be made. The
rate of such cash payment shall increase by an additional 0.50% per annum at the
beginning of each subsequent 90-day period (or portion thereof) while such
Registration Default is continuing until such Registration Default is cured, up
to a maximum rate of 1.5% per annum. Upon the cure of a Registration Default in
accordance with Section 2(e) of the Registration Rights Agreement, the accrual
of Additional Interest on the Restricted Notes with respect to such Registration
Default will cease.
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Additional Interest shall be computed based on the actual
number of days elapsed in each 90-day period in which Additional Interest
accrues on the Notes.
The Company shall notify the Trustee within three Business
Days after the occurrence of each Registration Default. Additional Interest
payable with respect to any Restricted Note shall be due and payable on each
May 15 and November 15 (each an "Additional Interest Payment Date") if
Additional Interest has accrued on such Restricted Note during the
semi-annual period immediately preceding such Additional Interest Payment
Date, to the Person in whose name such Restricted Note (or one or more
Predecessor Notes) is registered at the close of business on the May l or
November l, whether or not a Business Day, next preceding such Additional
Interest Payment Date. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the occurrence of the
applicable Registration Default. Additional Interest shall be paid by
depositing with the Trustee, in trust for the benefit of the Holders of
Notes, prior to 11:00 a.m. New York City time on the applicable Additional
Interest Payment Date, immediately available funds sufficient to pay the
Additional Interest then due.
SECTION 10.24. [INTENTIONALLY OMITTED].
SECTION 10.25. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than the Permitted Business.
SECTION 10.26. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit its Restricted
Subsidiaries to, directly or indirectly, enter into, assume, Guarantee or
otherwise become liable with respect to any Sale/Leaseback Transaction.
However, the Company or any Restricted Subsidiary may enter into any such
transaction if (i) the Company or such Restricted Subsidiary would be
permitted under Sections 10.11 and 10.16 hereof to incur secured Indebtedness
in an amount equal to the Attributable Debt with respect to such transaction;
(ii) the consideration received by the Company or such Restricted Subsidiary
from such transaction is at least equal to the Fair Market Value of the
property being transferred; and (iii) to the extent that such transaction
constitutes an Asset Sale, the Net Cash Proceeds received by the Company or
such Restricted Subsidiary from such transaction are applied in accordance
with Section 10.15 hereof.
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11. ELEVEN
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and will cease to be of
further effect (except as to surviving rights or registration of transfer or
exchange of Notes herein expressly provided for) as to all outstanding Notes
and the Trustee, on written demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when either
(a) all Notes theretofore authenticated and delivered (other
than (A) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.06 hereof and (B) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 10.03)
have been delivered to the Trustee for cancellation; or
(b)(i) all such Notes not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee in
trust an amount of money in dollars sufficient to pay and discharge the
entire Indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for the principal of, premium, if any, and
interest to the date of such deposit;
(ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee (A) irrevocable
instructions to apply the deposited money toward payment of the Notes at
the Stated Maturities and the Redemption Dates thereof, and (B) an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.07 and,
if money shall have been deposited with the Trustee pursuant to subclause
(b)(ii) of this Section 11.01, the obligations of the Trustee under Section
11.02 and the last paragraph of Section 10.03, shall survive.
SECTION 11.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
10.03, all money deposited with the Trustee pursuant to Section 11.01 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
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Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal of, premium
if any, on and interest on the Notes for whose payment such money has been
deposited with the Trustee.
12. TWELVE
REDEMPTION
SECTION 12.01. NOTICES TO THE TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph 3
of the reverse side of the Initial Notes or Paragraph 2 of the reverse side
of the Exchange Notes, it shall notify the Trustee of the Redemption Date,
the Redemption Price and the principal amount of Notes to be redeemed.
The Company shall notify the Trustee of any redemption at
least 30 days before the Redemption Date by an Officers' Certificate, stating
that such redemption will comply with the provisions hereof and of the Notes.
SECTION 12.02. SELECTION OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be
redeemed at any time, selection of such Notes for redemption will be made by
the Trustee in compliance with any applicable requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if
the Notes are not then listed on a national securities exchange (or if the
Notes are so listed but the exchange does not impose requirements with
respect to the selection of debt securities for redemption), on a PRO RATA
basis, by lot or by such method as the Trustee in its sole discretion shall
deem fair and appropriate; PROVIDED, HOWEVER, that any redemption pursuant to
the provisions relating to redemptions from the proceeds of one or more
Public Equity Offerings and/or (b) the sale of Capital Stock (other than
Disqualified Stock) to Strategic Equity Investors shall be made on A PRO RATA
basis or on as nearly a PRO RATA basis as practicable (subject to the
Depository's procedures). No Notes of a principal amount at maturity of
$1,000 or less shall be redeemed in part.
The Trustee shall promptly notify the Company and the
Registrar and each co-Registrar in writing of the Notes selected for
redemption and, in the case of any Notes selected for partial redemption, the
principal amount 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 Accreted Value of such Note which has been or is to be
redeemed.
-90-
SECTION 12.03. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Notes to be redeemed, at the address of
such Holder appearing in the Note Register maintained by the Registrar or
co-Registrar.
All notices of redemption shall identify the Notes to be
redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) that, unless the Company defaults in paying the
Redemption Price, any Note called for redemption shall cease to accrete
Accreted Value or, if the Redemption Date is after May l5, 2003, shall
cease to accrue interest, in either case on and after the Redemption
Date, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price upon surrender to the Paying
Agent of the Notes redeemed;
(d) if any Note is to be redeemed in part, the portion of
the principal amount at maturity (equal to $1,000 or any integral
multiple thereof) of such Note to be redeemed and that on and after the
Redemption Date, upon surrender for cancellation of such Note to the
Paying Agent, a new Note or Notes in the aggregate principal amount at
maturity equal to the unredeemed portion thereof will be issued without
charge to the Holder;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price and the name and
address of the Paying Agent; and
(f) the CUSIP or CINS number, if any, relating to such
Notes.
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 written request,
by the Trustee in the name and at the expense of the Company.
SECTION 12.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the
Redemption Price. Upon surrender to the Paying Agent, such Notes called for
redemption shall be paid at the Redemption Price (including accrued interest,
if any, to the Redemption Date), but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable on the
relevant Interest Payment Dates to the Holders of record at the close of
business on the relevant Regular Record Dates referred to in the Notes.
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SECTION 12.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to 11:00 a.m. New York City time on any
Redemption Date, the Company shall deposit with the Paying Agent an amount of
money in same day funds sufficient to pay the Redemption Price of all the
Notes or portions thereof which are to be redeemed on that date (including
any accrued interest to the Redemption Date), other than Notes or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then,
unless the Company defaults in the payment of such Redemption Price, any Note
called for redemption shall cease to accrete Accreted Value or, if the
Redemption Date is after May 15, 2003, shall cease to accrue interest, in
either case on and after the applicable Redemption Date, whether or not such
notes are presented for payment, and the only remaining right of the Holders
of such Notes is to receive payment of the Redemption Price upon surrender to
the Paying Agent of the Notes. If any Note called for redemption shall not
be so paid upon surrender thereof for redemption, the principal, premium, if
any, and, to the extent lawful, accrued interest thereon shall until paid,
bear interest from the Redemption Date at the rate provided in the Notes.
SECTION 12.06. NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender to the Paying Agent of a Note which is to be
redeemed in part, the Company shall execute and upon Company Order 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 that is not redeemed.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
RHYTHMS NETCONNECTIONS INC., as Issuer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: Chief Financial Officer
------------------------------
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Assistant Vice President
------------------------------
EXHIBIT A-1
[FORM OF NOTE]
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THESE SECURITIES FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE
144(k) TAKING INTO ACCOUNT THE PROVISIONS OF RULE I 44(d), IF APPLICABLE,
UNDER THE SECURITIES ACT (THE "RESALE RESTRICTION TERMINATION DATE") RESELL
OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO RHYTHMS NETCONNECTIONS INC.
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY AND THE
TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (1)
PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
This Note is issued with original issue discount for purposes of Section 1271
et seq. of the Internal Revenue Code of 1986, as amended. For each $1,000
principal amount at maturity of this Note, the
A-1-1
issue price is $518.50 and the amount of original issue discount is $481.50.
The issue date of this Note is May 5, 1998 and the yield to maturity is
13.5%.
A-1-2
RHYTHMS NETCONNECTIONS INC.
______________________
GLOBAL NOTE
13 1/2% SENIOR DISCOUNT NOTES DUE 2008, SERIES A
CUSIP No.___________ $________
REGISTERED No.
RHYTHMS NETCONNECTIONS, INC., a corporation incorporated
under the laws of the State of Delaware (herein called the "Company," which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ____________, or
registered assigns, the principal sum of ___________ Dollars ($_________) on
May 15, 2008, at the office or agency of the Company referred to below, and
to pay interest thereon on May 15 and November 15 (each an "Interest Payment
Date"), of each year, commencing on November 15, 2003, accruing from May 15,
2003 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at the rate of 13 1/2% per annum, until the
principal hereof is paid or duly provided for. Interest shall be computed on
the basis of a 360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture referred
to on the reverse hereof, 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
May 1 or November 1 (each a "Regular Record Date"), 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, and interest on such
defaulted interest at the then applicable interest rate borne by the Notes,
to the extent lawful, shall forthwith cease to be payable to the Holder on
such Regular Record Date, and 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 of which 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 or market on which the Notes may be listed, and
upon such notice as may be required by such exchange or market, all as more
fully provided in such Indenture.
Payment of the principal of, 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 Borough of Manhattan in The City of New York, State 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
A-1-3
of interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Note Register. However, payment by wire transfer of immediately available
funds to an account within the United States of America will be required with
respect to payments in respect of all Global Notes and to all other holders
which shall have provided written wire instructions to the Company or Paying
Agent by the record date preceding the payment date.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof.
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.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated:__________ __, 1998 RHYTHMS NETCONNECTIONS INC.
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 13 1/2% Senior Discount Notes due 2008,
Series A, referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:
----------------------------------
Authorized Signatory
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[REVERSE OF NOTE]
1. INDENTURE. This Note is one of a duly authorized issue of
Notes of the Company designated as its 13 1/2% Senior Discount Notes due 2008,
Series A (herein called the "Initial Notes"). The Notes are limited (except
as otherwise provided in the Indenture referred to below) in aggregate
principal amount at maturity to $290,000,000, which may be issued under an
indenture (herein called the "Indenture") dated as of May 5, 1998, by and
between the Company and State Street Bank and Trust Company of California,
N.A., as 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 include the Initial Notes and the Unrestricted Notes
(including the Exchange Notes referred to below), issued in exchange for the
Initial Notes pursuant to the Registration Rights Agreement. The Initial
Notes and the Unrestricted Notes, including the Exchange Notes, are treated
as a single class of securities under the Indenture.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the
date of the Indenture. Notwithstanding anything to the contrary herein, the
Notes are subject to all such terms, and Holders of Notes are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the times, place, and rate, and
in the coin or currency, herein prescribed.
2. UNITS. This Note has initially been issued as part of a unit
("Unit"), each Unit consisting of $1,000 principal amount at maturity of
Notes and four Warrants, each Warrant entitling the holder to purchase 1.7
shares of the Company's Common Stock, subject to certain adjustments. The
Warrants have been issued pursuant to a Warrant Agreement dated as of May 5,
1998 (as amended from time to time, the "Warrant Agreement"), between the
Company and State Street Bank and Trust Company of California, N.A., as
warrant agent. Pursuant to the Indenture and the Warrant Agreement, the
Warrants and the Notes will not be separately transferable until the
"Separability Date," which means the earliest to occur of: (i) November 1,
1998; (ii) the date on which a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to a registered
exchange offer for the Notes is declared effective under the Securities Act;
(iii) the occurrence of a Change of Control; and (iv) such earlier date as
may be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. in its sole discretion.
A-1-5
3. REGISTRATION RIGHTS. The Holder of this Note is entitled to
the benefits of a Registration Rights Agreement, dated May 5, 1998, between
the Company and the Initial Purchasers (as amended from time to time, the
"Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Company is obligated to consummate an exchange offer pursuant
to which the Holders of Initial Notes shall have the right to exchange the
Initial Notes for 13 1/2% Senior Discount Notes due 2008, Series B, of the
Company (herein called the "Exchange Notes"), which will have been registered
under the Securities Act, in like principal amount and having identical terms
as the Initial Notes (other than as set forth in this paragraph and paragraph
2 above). The Holders of Initial Notes shall be entitled to receive, as
liquidated damages, certain additional interest payments in the event such
exchange offer is not consummated within a specified period and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement and the Indenture.
4. REDEMPTION. The Notes will be redeemable, at the option of
the Company, in whole or in part, on or after May 15, 2003 upon not less than
30 nor more than 60 days' written notice at the redemption prices (expressed
as percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on May 15 of each of the years
indicated below:
Year Percentage
---- ----------
2003 . . . . . . . . 106.750%
2004 . . . . . . . . 104.500%
2005 . . . . . . . . 102.250%
2006 and thereafter 100.000%
In addition, at any time on or prior to May 15, 2001, the Company
may, other than in any circumstances resulting in a Change of Control,
redeem, at its option, up to a maximum of 35% of the originally-issued
aggregate principal amount at maturity of Notes at a redemption price
(determined as of the applicable redemption date) equal to 113.5% of the
Accredited Value of the Notes so redeemed, with the net cash proceeds of (a)
one or more Public Equity Offerings and/or (b) the sale, subsequent to the
Issue Date, of Capital Stock (other than Disqualified Stock) in one or more
transactions to Strategic Equity Investors, resulting in gross cash proceeds
to the Company of at least $25 million in the aggregate; PROVIDED that not
less than 65% of the originally-issued aggregate principal amount at maturity
of Notes is outstanding immediately following such redemption. Any such
redemption must be effected upon not less than 30 nor more than 60 days'
notice given within 30 days after the consummation of a Public Equity
Offering or sale to one or more Strategic Equity Investors the net proceeds
from which, together with any net proceeds from any prior Public Equity
Offerings or sales
A-1-6
to Strategic Equity Investors, are to be used to effect an optional
redemption in accordance with this paragraph.
5. OFFERS TO PURCHASE. Sections 10.10 and 10.15 of the
Indenture provide that upon the occurrence of a Change of Control and
following certain Asset Sales, and subject to certain conditions and
limitations contained therein, the Company shall make an offer to purchase
all or a portion of the Notes at the purchase prices and in accordance with
the procedures set forth in the Indenture.
6. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Default Amount of all outstanding Notes may be declared due
and payable in the manner and with the effect provided in this Indenture.
7. DEFEASANCE. The Indenture contains provisions (which
provisions apply to this Note) for defeasance at any time of (a) the entire
indebtedness of the Company on this Note and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Company with certain conditions set forth therein.
8. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as provided therein, 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 not less than a majority in aggregate principal amount at
maturity of the Notes at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages 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 this Note 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 herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
9. DENOMINATIONS, TRANSFER AND EXCHANGE. 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 of Notes of a different authorized denomination,
as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable on
the Note Register, upon surrender of this Note for registration of transfer
at the office or agency of the Company maintained for such purpose in the
Borough of Manhattan in The City of New York, State of New York, or at such
other office or agency of the Company as may be maintained for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar or co-Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more
A-1-7
new Notes, of authorized denominations and for the same aggregate principal
amount at maturity, will be issued to the designated transferee or
transferees.
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
payable in connection therewith.
10. PERSONS DEEMED OWNERS. Prior to and at 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 shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
11. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH SUBSIDIARY
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture and the Registration
Rights Agreement unless the same is publicly available from the SEC.
Requests may be made to: Rhythms NetConnections Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; Attention: Secretary.
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
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(Print or type assignee's name and address (including zip code) and social
security or tax ID number)
A-1-8
and irrevocably appoint
-----------------------------------------------------
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agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the date two years (or such shorter period of time as
permitted by Rule 144 under the Securities Act or any successor provision
thereunder) after the later of the original issuance date appearing on the
face of this Note (or any Predecessor Note) or the last date on which the
Company or any Affiliate of the Company was the owner of this Note (or any
Predecessor Note), the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer
and that:
A-1-9
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act
provided by Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance
with (a) above and documents, including (i) a transferee
certificate substantially in the form of Exhibit D to
the Indenture in the case of a transfer to non-QIB
Accredited Investors or (ii) a transferor certificate
substantially in the form of Exhibit E to the Indenture
in the case of a transfer pursuant to Regulation S, are
being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar or co-Registrar shall not be obligated to register this
Note in the name of any Person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Sections
3.16 and 3.17 of the Indenture shall have been satisfied.
-----------------------------------------------------------------------------
Date: Your signature:
------------- -------------------------------------
(Sign exactly as your name appears on
the other side of this Note)
By:
----------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
-------------------
A-1-10
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to Rule 144A (including
the information specified in Rule 144A(d)(4)) or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: Name of
------------------- Purchaser:
--------------------------------------
NOTICE: To be executed by an executive
officer
A-1-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 10.10 or 10.15 of the Indenture, check the appropriate box:
Section 10.10 [ ] Section 10.15 [ ]
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 10.10 or 10.15 of the Indenture, state the Accreted
Value (or percentage of principal amount at maturity):
$ or %
---------- ---
Date: Your signature:
------------------ -------------------------------------
(Sign exactly as your name appears on
the other side of this Note)
By:
----------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
--------------------------
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
This Note is issued with original issue discount for purposes of Section 1271
et seq. of the Internal Revenue Code of 1986, as amended. For each $1,000
principal amount at maturity of this Note, the issue price is $518.50 and the
amount of original issue discount is $481.50. The issue date of this Note is
May 5, 1998 and the yield to maturity is 13.5%.
RHYTHMS NETCONNECTIONS INC.
______________________
GLOBAL NOTE
13 1/2% SENIOR DISCOUNT NOTES DUE 2008, SERIES B
CUSIP No. $
REGISTERED No.
RHYTHMS NETCONNECTIONS INC., a corporation incorporated under
the laws of the State of Delaware (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________, or registered
assigns, the principal sum of ______________________________ ($)___________)
on May 15, 2008, at the office or agency of the Company referred to below,
and to pay interest thereon on May 15 and November 15 (each an "Interest
Payment Date"), of each year, commencing on November 15, 2003, accruing from
May 15, 2003 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate of 13 1/2% per annum, until
the principal hereof is paid or duly provided for. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture referred
to on the reverse hereof, 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
May 1 or November 1 (each a "Regular Record Date"), 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, and interest on such
defaulted interest at the then applicable interest rate borne by the Notes,
to the extent lawful, shall forthwith cease to be payable to the Holder on
such Regular Record Date, and 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 of which 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
A-2-1
inconsistent with the requirements of any securities exchange or market on
which the Notes may be listed, and upon such notice as may be required by
such exchange or market, all as more fully provided in such Indenture.
Payment of the principal of, 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 Borough of Manhattan in The City of New York, State 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 by check mailed to the address of the Person entitled
thereto as such address shall appear on the Note Register. However, payment
by wire transfer of immediately available funds to an account within the
United States of America will be required with respect to payments in respect
of all Global Notes and to all other holders which shall have provided
written wire instructions to the Company or Paying Agent by the record date
preceding the payment date.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof.
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.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: RHYTHMS NETCONNECTIONS INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 13 1/2% Senior Discount Notes due 2008,
Series B, referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
A-2-2
By:
----------------------------
Authorized Signatory
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[REVERSE OF NOTE]
1. INDENTURE. This Note is one of a duly authorized issue of Notes
of the Company designated as its 131/2% Senior Discount Notes due 2008, Series B
(herein called the "Exchange Notes"). The Notes are limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount at maturity to $290,000,000, which may be issued under an indenture
(herein called the "Indenture") dated as of May 5, 1998, by and between the
Company and State Street Bank and Trust Company of California, N.A., as 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 include the Initial Notes
and the Unrestricted Notes (including the Exchange Notes), issued in exchange
for the Initial Notes pursuant to the Registration Rights Agreement. The
Initial Notes and the Unrestricted Notes, including the Exchange Notes, are
treated as a single class of securities under the Indenture.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. REDEMPTION. The Notes will be redeemable, at the option of the
Company, in whole or in part, on or after May 15, 2003 upon not less than 30 nor
more than 60 days' written notice at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on May 15 of each of the years indicated
below:
A-2-4
Year Percentage
---- ----------
2003 . . . . . . . . 106.750%
2004 . . . . . . . . 104.500%
2005 . . . . . . . . 102.250%
2006 and thereafter 100.000%
In addition, at any time on or prior to May 15, 2001, the Company may,
other than in any circumstances resulting in a Change of Control, redeem, at its
option, up to a maximum of 35% of the originally-issued aggregate principal
amount at maturity of Notes at a redemption price (determined as of the
applicable redemption date) equal to 113.5% of the Accredited Value of the Notes
so redeemed, with the net cash proceeds of (a) one or more Public Equity
Offerings and/or (b) the sale, subsequent to the Issue Date, of Capital Stock
(other than Disqualified Stock) in one or more transactions to Strategic Equity
Investors, resulting in gross cash proceeds to the Company of at least $25
million in the aggregate; PROVIDED that not less than 65% of the
originally-issued aggregate principal amount at maturity of Notes is outstanding
immediately following such redemption. Any such redemption must be effected
upon not less than 30 nor more than 60 days' notice given within 30 days after
the consummation of a Public Equity Offering or sale to one or more Strategic
Equity Investors the net proceeds from which, together with any net proceeds
from any prior Public Equity Offerings or sales to Strategic Equity Investors,
are to be used to effect an optional redemption in accordance with this
paragraph.
3. OFFERS TO PURCHASE. Sections 10.10 and 10.15 of the Indenture
provide that upon the occurrence of a Change of Control and following certain
Asset Sales, and subject to certain conditions and limitations contained
therein, the Company shall make an offer to purchase all or a portion of the
Notes at the purchase prices and in accordance with the procedures set forth in
the Indenture.
4. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Default Amount of all outstanding Notes may be declared due and
payable in the manner and with the effect provided in this Indenture.
5. DEFEASANCE. The Indenture contains provisions (which provisions
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company on this Note and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
6. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and
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the rights of the Holders under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount at maturity of the Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages 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 this Note 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 herefor or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note.
7. DENOMINATIONS, TRANSFER AND EXCHANGE. 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 of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in the Borough of Manhattan
in The City of New York, State of New York, or at such other office or agency of
the Company as may be maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar 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.
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 payable in connection
therewith.
8. PERSONS DEEMED OWNERS. Prior to and at 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 shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
9. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH SUBSIDIARY
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
A-2-6
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture unless the same is publicly
available from the SEC. Requests may be made to: Rhythms NetConnections Inc.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; Attention: Secretary.
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ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type assignee's name and address (including zip code) and social
security or tax ID number)
and irrevocably appoint
-------------------------------------------------------
-------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
A-2-8
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 10.10 or 10.15 of the Indenture, check the appropriate box:
Section 10.10 [ ] Section 10.15 [ ]
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 10.10 or 10.15 of the Indenture, state the Accreted
Value (or percentage of principal amount at maturity):
$________ or ____%
Date: Your signature:
----------------- -------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
By:
---------------------------
NOTICE: To be executed
by an executive officer
Signature Guarantee:
-------------------------
A-2-9
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED
BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of
_________ ___, _____ between ________________ (the "Subsidiary Guarantor"), a
subsidiary of Rhythms NetConnections Inc. (or its successor), a company
incorporated under the laws of the State of Delaware (the "Company"), and State
Street Bank and Trust Company of California, N.A.,as trustee under the indenture
referred to below (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "indenture"), dated as of May 5, 1998, providing for
the issuance of an aggregate principal amount at maturity of $290,000,000 of
13 1/2% Senior Discount Notes due 2008 (the "Notes");
WHEREAS, Section 10.22 of the Indenture provides that, under certain
circumstances, the Company is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. INDENTURE PROVISION PURSUANT TO WHICH GUARANTEE IS GIVEN. This
Supplemental Indenture is being executed and delivered pursuant to Section 10.22
of the Indenture.
3. AGREEMENTS TO GUARANTEE. The Subsidiary Guarantor hereby agrees
as follows:
(a) The Subsidiary Guarantor, jointly and severally with all other
Subsidiary Guarantors, if any, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, regardless of the validity and enforceability of the
Indenture, the Notes and the obligations of the Company under the Indenture and
the Notes, that:
(i) the principal of, premium, if any, on and interest on
the Notes shall be promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
B-1
interest on the overdue principal of, premium, if any, and interest on
the Notes, to the extent lawful, and all other obligations of the
Company to the Holders or the Trustee thereunder shall be promptly paid
in full, all in accordance with the terms thereof; and
(ii) in case of any extension of time for payment or renewal
of any Notes or any of such other obligations, that the same shall be
promptly paid in full when due in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
(b) Notwithstanding the foregoing, in the event that this Subsidiary
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under this Supplemental Indenture and its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance.
4. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
(a) To evidence its Subsidiary Guarantee set forth in this
Supplemental Indenture, the Subsidiary Guarantor hereby agrees that a notation
of such Subsidiary Guarantee substantially in the form of ANNEX A hereto shall
be endorsed by an officer of such Subsidiary Guarantor on each Note
authenticated and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor hereby
agrees that its Subsidiary Guarantee set forth herein shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of
such Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental Indenture
or on the Subsidiary Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of the Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of the
Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its obligations
hereof shall be unconditional, regardless of the validity, regularity or
enforceability of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
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(f) The Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company protest, notice and all demands whatsoever and covenants that its
Subsidiary Guarantee made pursuant to this Supplemental Indenture will not be
discharged except by complete performance of the obligations contained in the
Notes and the Indenture or pursuant to Section 5(b) of this Supplemental
Indenture.
(g) If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Supplemental 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 Subsidiary Guarantor,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereof and thereafter all rights and remedies of the
Subsidiary Guarantor, the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
(h) The Subsidiary Guarantor hereby waives and will not in any
manner whatsoever claim or take the benefit or advantage of any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary Guarantor as a result of any payment by such Subsidiary
Guarantor under its Subsidiary Guarantee. The Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand:
(i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Five of the Indenture for the
purposes of the Subsidiary Guarantee made pursuant to this Supplemental
Indenture, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby; and
(ii) in the event of any declaration of acceleration of such
obligations as provided in Article Five of the Indenture, such
obligations (whether or not due and payable) shall forthwith become due
and payable by the Subsidiary Guarantor for the purpose of the
Subsidiary Guarantee made pursuant to this Supplemental Indenture.
(i) The Subsidiary Guarantor shall have the right to seek
contribution from any other nonpaying Subsidiary Guarantor, if any, so long as
the exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantee made pursuant to this Supplemental Indenture.
(j) The Subsidiary Guarantor 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, extension
or usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Indenture or this Subsidiary
Guarantee; and the Subsidiary Guarantor (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
B-3
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.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as set forth in Articles Eight and Ten of the Indenture,
nothing contained in the Indenture, this Supplemental Indenture or in the Notes
shall prevent any consolidation or merger of the Subsidiary Guarantor with or
into the Company or any other Subsidiary Guarantor or shall prevent any
transfer, sale or conveyance of the property of the Subsidiary Guarantor as an
entirety or substantially as an entirety, to the Company or any other Subsidiary
Guarantor.
(b) Except as set forth in Articles Eight and Ten of the Indenture,
upon the sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Capital Stock of the Subsidiary Guarantor held by the
Company and its Subsidiaries, or of all or substantially all of the assets of
the Subsidiary Guarantor, whether by way of merger, consolidation or otherwise,
which sale, exchange or transfer is made in compliance with all applicable
provisions of the Indenture, then such Subsidiary Guarantor (in the event of a
sale, exchange or transfer of all the Capital Stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of a sale,
exchange or transfer of all or substantially all of the assets of such
Subsidiary Guarantor) will be released and relieved of any obligation under its
Subsidiary Guarantee; PROVIDED that the Net Cash Proceeds of such sale, exchange
or transfer are applied in accordance with Section 10.15 of the Indenture.
Except with respect to transactions set forth in the preceding sentence, the
Company and the Subsidiary Guarantor covenant and agree that upon any such
merger, consolidation or sale, the performance of all covenants and conditions
of this Supplemental Indenture to be performed by such Subsidiary Guarantor
shall be expressly assumed by supplemental indenture satisfactory in form to the
Trustee, by the corporation formed by such consolidation, or into which the
Subsidiary Guarantor shall have merged, or by the corporation which shall have
acquired such property. Upon receipt of an Officers' Certificate of the Company
or the Subsidiary Guarantor, as the case may be, to the effect that the Company
or such Subsidiary Guarantor has complied with the first sentence of this
Section 5(b), the Trustee shall execute any documents reasonably requested by
the Company or the Subsidiary Guarantor, at the cost of the Company or such
Subsidiary Guarantor, as the case may be, in order to evidence the release of
such Subsidiary Guarantor from its obligations under its Guarantee endorsed on
the Notes and under the Indenture and this Supplemental Indenture.
6. RELEASES UPON RELEASE OF GUARANTEE OF GUARANTEED
INDEBTEDNESS. Concurrently with the release or discharge of all of the
Subsidiary Guarantor's Guarantees of the payment of Indebtedness of the
Company (other than a release or discharge by or as a result of payment under
such Guarantee of Indebtedness), the Subsidiary Guarantor shall be
automatically and unconditionally released and relieved of its obligations
under this Supplemental Indenture and its Subsidiary Guarantee made pursuant
to Section 4 of this Supplemental Indenture. Upon delivery by the Company to
the Trustee of an Officer's Certificate to the effect that such release or
discharge has occurred, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary Guarantor from
its obligations under this Supplemental Indenture and its Subsidiary
Guarantee made
B-4
pursuant hereto; PROVIDED such documents shall not affect or impair the
rights of the Trustee and Paying Agent under Section 6.07 of the Indenture.
7. RELEASES UPON DESIGNATION AS AN UNRESTRICTED SUBSIDIARY. Upon
the Designation of the Subsidiary Guarantor as an Unrestricted Subsidiary in
compliance with Section 10.20 of the Indentures the Subsidiary Guarantor shall
be automatically and unconditionally released and relieved of its obligations
under this Supplemental Indenture and its Subsidiary Guarantee made pursuant to
Section 4 of this Supplemental Indenture. Upon delivery by the Company to the
Trustee of an Officer's Certificate to the effect that such Designation has
occurred in compliance with Section 10.20 of the Indenture, the Trustee shall
execute any documents reasonably required in order to evidence the release of
the Subsidiary Guarantor from its obligations under this Supplemental Indenture
and its Subsidiary Guarantee made pursuant hereto; PROVIDED such documents shall
not affect or impair the rights of the Trustee and Paying Agent under Section
6.07 of the Indenture.
8. NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not effect the construction hereof.
11. RANKING. [Ranking terms to be provided as required by Section
10.22 of the Indenture.]
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: , [Subsidiary Guarantor]
-------- -- ----
By:
-------------------------
Name:
Title:
Dated: , State Street Bank and Trust Company of
-------- -- ---- California, N.A., as Trustee
By:
-------------------------
Name:
Title:
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ANNEX A TO SUPPLEMENTAL INDENTURE
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes, whether at stated
maturity or an Interest Payment Date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue principal
and premium of, if any, and interest, to the extent lawful, on the Notes and (c)
that in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, the same will be promptly paid in full when due in
accordance with the terms of the extension of renewal, whether at Stated
Maturity, by acceleration or otherwise. Notwithstanding the foregoing, in the
event that the Subsidiary Guarantee would constitute or result in a violation of
any applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the Subsidiary Guarantor under its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance. The Subsidiary
Guarantee shall not be valid or obligatory for any purpose until the certificate
of authentication on the Note upon which the Subsidiary Guarantee is noted shall
have been executed by the Trustee under the Indenture by the manual or facsimile
signature of one of its authorized officers. [Ranking terms to be provided as
required by Section 10.22 of the Indenture.]
Dated , [Subsidiary Guarantor]
---------------- -- ----
By:
----------------------------
Name:
Title:
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EXHIBIT C
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Note authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR
A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN 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.
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EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional (non-QIB) Accredited Investors
____________, ___
State Street Bank and Trust Company
of California, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: Rhythms NetConnections Inc. (the "Company")
Indenture (the "indenture") relating to
13 1/2% Senior Discount Notes due 2008
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 13 1/2% Senior
Discount Notes due 2008 (the "Notes") of the Company we confirm that:
1. We have received such information as we deem necessary
in order to make our investment decision.
2. We understand that any subsequent transfer of the Notes
is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
3. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence.
We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell any Notes, we
will do so only (A) to the Company,
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(B) inside the United States in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined
therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Trustee
a signed letter substantially in the form hereof, (D) outside the United
States in accordance with Regulation S under the Securities Act (E)
pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We understand that, on any proposed resale of Notes, we
will be required to furnish to the Trustee and the Company such
certification, legal opinion and other information as the Trustee and
the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(l), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
our investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or their
investment as the case may be.
6. We are acquiring the Notes purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company and your and their respective counsel are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Proposed Transferee]
By:
------------------------------
[Authorized Signature]
Signature Guarantee:
-------------------------
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EXHIBIT E
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
_____________, _______
State Street Bank and Trust Company
of California, N.A.
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: Rhythms NetConnections Inc. (the "Company")
13 1/2% Senior Discount Notes due 2008
Ladies and Gentlemen:
In connection with our proposed sale of 13 1/2% Senior Discount
Notes due 2008 (the "Notes") of the Company, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule
904(a) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes;
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(6) if the circumstances set forth in Rule 904(b) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Notes may be offered and sold during the
distribution compliance period specified in Rule 903(b)(3), as
applicable, in accordance with the provisions of Regulation S; pursuant
to registration of the Securities under the Securities Act; or pursuant
to an available exemption from the registration requirements under the
Securities Act;
(7) if the sale is made during a distribution compliance
period and the provisions of Rule 903(b)(3) are applicable thereto, we
confirm that such sale has been made in accordance with such provisions;
and
(8) if the provisions of Rule 144 under the Securities Act
are applicable, we have complied with the terms and conditions thereof.
You and the Company and your and their respective counsel are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-----------------------------
Authorized Signature
Signature Guarantee:
-----------------------------
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SCHEDULE A
RHYTHMS NETCONNECTIONS INC.
Outstanding/Committed Indebtedness
May 5, 1998
Committed Amt.
Description Amt. Drawn Remaining
----------- --------- -------- ---------
Silicon Valley Bank 1,000,000 1,000,000 -
Sun Financial Group 2,000,000 2,000,000 -