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EXHIBIT 4.1
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PETERSBURG LONG DISTANCE INC.
as Issuer
and
NWE CAPITAL (CYPRUS) LIMITED
PLD ASSET LEASING LIMITED
PLD CAPITAL LIMITED
BALTIC COMMUNICATIONS LIMITED
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
as Guarantors
$123,000,000
14% SENIOR DISCOUNT NOTES DUE 2004
INDENTURE
Dated as of May 31, 0000
XXX XXXX XX XXX XXXX,
Trustee
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CROSS REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939,
as amended, and the Indenture, dated as of May 31, 1996
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
Section 310 (a)(1) ....................................... 7.10
(a)(2) ....................................... 7.10
(a)(3) ....................................... N.A.
(a)(4) ....................................... N.A.
(a)(5) ....................................... 7.10
(b) ....................................... 7.8; 7.10
(c) ....................................... N.A.
Section 311 (a) ....................................... 7.11
(b) ....................................... 7.11
(c) ....................................... N.A.
Section 312 (a) ....................................... 7.6(a); 7.6(b)
(b) ....................................... 7.6(c)
(c) ....................................... 7.6(d)
Section 313 (a) ....................................... 7.6(e)
(b) ....................................... N.A.
(c) ....................................... 7.6(e); 7.6(f)
(d) ....................................... 7.6
Section 314 (a) ....................................... 4.20; 4.21
(b) ....................................... 11.2
(c)(1) ....................................... 11.4
(c)(2) ....................................... 11.4
(c)(3) ....................................... N.A.
(d) ....................................... 11.4
(e) ....................................... 11.5
(f) ....................................... N.A
Section 315 (a) ....................................... 7.1(b)
(b) ....................................... 7.5(a)
(c) ....................................... 7.1(a)
(d) ....................................... 7.1(c)
(e) ....................................... 6.10
Section 316 (a) ....................................... 2.8
(a)(1)(A) ....................................... 6.5
(a)(1)(B) ....................................... 6.4
(a)(2) ....................................... N.A.
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(b) ....................................... 6.7
(c) ....................................... 9.5
Section 317 (a)(1) ....................................... N.A.
(a)(2) ....................................... 6.8
(b) ....................................... 2.4
Section 318 (a) ....................................... 11.1
(b) ....................................... N.A
(c) ....................................... 11.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions................................................. 1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........... 26
SECTION 1.3 Rules of Construction....................................... 26
SECTION 1.4 Form of Documents Delivered to Trustee...................... 27
SECTION 1.5 Acts of Holders; Record Dates............................... 28
ARTICLE II
THE NOTES
SECTION 2.1 Form and Dating............................................. 30
SECTION 2.2 Execution and Authentication................................ 33
SECTION 2.3 Registrar and Paying Agent.................................. 34
SECTION 2.4 Paying Agent to Hold Money in Trust......................... 35
SECTION 2.5 Global Notes................................................ 35
SECTION 2.6 Transfer and Exchange....................................... 36
SECTION 2.7 Replacement Notes........................................... 39
SECTION 2.8 Outstanding Notes........................................... 40
SECTION 2.9 Temporary Notes............................................. 41
SECTION 2.10 Cancellation............................................... 41
SECTION 2.11 Payment of Interest; Interest Rights Preserved............. 41
SECTION 2.12 Authorized Denominations................................... 42
SECTION 2.13 Computation of Interest, etc............................... 42
SECTION 2.14 Persons Deemed Owners...................................... 43
SECTION 2.15 CUSIP Numbers.............................................. 44
ARTICLE III
REDEMPTION
SECTION 3.1 Notice to Trustee........................................... 44
SECTION 3.2 Selection of Notes to be Redeemed........................... 44
SECTION 3.3 Notice of Redemption........................................ 45
SECTION 3.4 Effect of Notice of Redemption.............................. 46
SECTION 3.5 Deposit of Redemption Price................................. 46
SECTION 3.6 Notes Redeemed in Part...................................... 46
SECTION 3.7 Optional Redemption......................................... 47
SECTION 3.8 Mandatory Redemption........................................ 48
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ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Notes............................................ 48
SECTION 4.2 Maintenance of Office or Agency............................. 48
SECTION 4.3 Money for the Note Payments to be Held in Trust............. 49
SECTION 4.4 Corporate Existence......................................... 49
SECTION 4.5 Maintenance of Property..................................... 50
SECTION 4.6 Payment of Taxes and Other Claims........................... 50
SECTION 4.7 Repurchase at the Option of Holders
upon a Change of Control................................. 50
SECTION 4.8 Limitation on Asset Sales................................... 52
SECTION 4.9 Limitation on Indebtedness.................................. 59
SECTION 4.10 Limitation on Issuances of Guarantees by
Restricted Subsidiaries.................................. 61
SECTION 4.11 Limitation on Liens........................................ 61
SECTION 4.12 Limitation on Sale and Leaseback Transactions.............. 61
SECTION 4.13 Restricted Payments........................................ 62
SECTION 4.14 Limitation on Dividends and
Other Payment Restrictions Affecting
Restricted Subsidiaries.................................. 64
SECTION 4.15 Limitation on Issuance and Sale of
Preferred Stock of Restricted
Subsidiaries............................................. 65
SECTION 4.16 Transactions with Affiliates............................... 65
SECTION 4.17 Restricted and Unrestricted Subsidiaries................... 67
SECTION 4.18 Limitations on Line of Business............................ 67
SECTION 4.19 Limitation on Sales of
Telecommunications Asset Leases or
Qualified Investments.................................... 67
SECTION 4.20 Reports.................................................... 68
SECTION 4.21 Compliance Certificate; Notice of Default
or Event of Default...................................... 68
SECTION 4.22 Payment of Additional Amounts.............................. 69
SECTION 4.23 Leasing Companies and NWE Cyprus........................... 71
SECTION 4.24 Technocom.................................................. 71
SECTION 4.25 Collateral Agents.......................................... 71
SECTION 4.26 WTC........................................................ 71
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Merger, Consolidation, Sale of Assets, Etc.................. 71
SECTION 5.2 Successor Corporation Substituted........................... 73
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PAGE
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default........................................... 74
SECTION 6.2 Acceleration................................................ 76
SECTION 6.3 Other Remedies.............................................. 78
SECTION 6.4 Waiver of Past Defaults..................................... 78
SECTION 6.5 Control by Majority......................................... 79
SECTION 6.6 Limitation on Suits......................................... 79
SECTION 6.7 Rights of Holders to Receive Payment........................ 80
SECTION 6.8 Trustee May File Proofs of Claim............................ 80
SECTION 6.9 Priorities.................................................. 81
SECTION 6.10 Undertaking for Costs...................................... 82
SECTION 6.11 Waiver of Stay or Extension Laws........................... 82
SECTION 6.12 Trustee May Enforce Claims
Without Possession of the Notes.......................... 82
SECTION 6.13 Restoration of Rights and Remedies......................... 82
SECTION 6.14 Rights and Remedies Cumulative............................. 82
SECTION 6.15 Delay or Omission Not Waiver............................... 83
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee........................................... 83
SECTION 7.2 Rights of Trustee........................................... 84
SECTION 7.3 Concerning the Trustee, Collateral
Agents, and Collateral Held by
Collateral Agents......................................... 85
SECTION 7.4 Trustee's Disclaimer........................................ 87
SECTION 7.5 Notice of Defaults.......................................... 87
SECTION 7.6 Preservation of Information;
Reports by Trustee to Holders............................. 87
SECTION 7.7 Compensation and Indemnity.................................. 88
SECTION 7.8 Replacement of Trustee...................................... 91
SECTION 7.9 Successor Trustee by Merger................................. 93
SECTION 7.10 Eligibility; Disqualification.............................. 94
SECTION 7.11 Preferential Collection of Claims Against Company.......... 94
ARTICLE VIII
DEFEASANCE
SECTION 8.1 Company's Option to Effect
Legal Defeasance or Covenant Defeasance................... 96
SECTION 8.2 Legal Defeasance and Discharge.............................. 96
SECTION 8.3 Covenant Defeasance......................................... 97
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PAGE
SECTION 8.4 Conditions to Defeasance or Covenant Defeasance............. 97
SECTION 8.5 Deposited Money and U.S. Government Obligations
to be Held in Trust: Miscellaneous Provisions............. 99
SECTION 8.6 Repayment to Company........................................ 99
SECTION 8.7 Reinstatement...............................................100
ARTICLE IX
AMENDMENTS
SECTION 9.1 Without Consent of Holders..................................100
SECTION 9.2 With Consent of Holders.....................................101
SECTION 9.3 Effect of Supplemental Indentures...........................102
SECTION 9.4 Compliance with Trust Indenture Act.........................102
SECTION 9.5 Revocation and Effect of Consents and Waivers...............102
SECTION 9.6 Changed Terms of Notes......................................103
SECTION 9.7 Trustee to Execute Supplemental Indentures..................103
SECTION 9.8 Solicitation of Consents....................................104
ARTICLE X
GUARANTEES
SECTION 10.1 Guarantees.................................................104
SECTION 10.2 Limitation of Guarantor's Liability........................106
SECTION 10.3 Execution and Delivery of Guarantees.......................107
SECTION 10.4 When a Guarantor May Merge, etc............................107
SECTION 10.5 Additional Guarantors......................................108
SECTION 10.6 Release of a Guarantor.....................................108
ARTICLE XI
COLLATERAL AND SECURITY
SECTION 11.1 Collateral Documents.......................................109
SECTION 11.2 Recording and Opinions.....................................110
SECTION 11.3 Further Assurances and Security............................111
SECTION 11.4 Possession, Use and Release of Collateral..................111
SECTION 11.5 Certificates of the Company................................119
SECTION 11.6 Authorization of Actions to be Taken by
the Trustee Under the Collateral Documents...............119
SECTION 11.7 Authorization of Receipt of Funds by the Trustee
Under the Collateral Documents...........................119
SECTION 11.8 Possession, Use and Release of
Convertible Note Collateral..............................119
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ARTICLE XII
SATISFACTION AND DISCHARGE
SECTION 12.1 Satisfaction and Discharge.................................123
SECTION 12.2 Application of Trust Money.................................124
SECTION 12.3 Repayment to the Company...................................124
SECTION 12.4 Reinstatement..............................................125
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls...............................125
SECTION 13.2 Notices....................................................125
SECTION 13.3 Communications by Holders with Other Holders...............126
SECTION 13.4 Certificate and Opinion as to Conditions Precedent.........126
SECTION 13.5 Statements Required in Certificate or Opinion..............126
SECTION 13.6 Rules by Trustee, Paying Agent and Registrar...............127
SECTION 13.7 Payments on Business Days..................................127
SECTION 13.8 Governing Law; Submission to Jurisdiction..................127
SECTION 13.9 Judgment Currency; Currency Indemnity......................128
SECTION 13.10 No Recourse Against Others................................129
SECTION 13.11 Successors................................................129
SECTION 13.12 Counterparts..............................................129
SECTION 13.13 Table of Contents; Headings...............................129
SECTION 13.14 Severability..............................................129
SECTION 13.15 Further Instruments and Acts..............................129
SECTION 13.16 Final Expression..........................................130
SECTION 13.17 Independent Covenants.....................................130
ARTICLE XIV
SUBORDINATION OF NOTES
SECTION 14.1 Notes Subordinated to Senior Indebtedness..................130
SECTION 14.2 Payment Over of Proceeds Upon Dissolution, Etc.............130
EXHIBIT A FORM OF INITIAL GLOBAL NOTE
EXHIBIT B FORM OF INITIAL CERTIFICATED NOTE
EXHIBIT C FORM OF EXCHANGE GLOBAL NOTE
EXHIBIT D FORM OF EXCHANGE CERTIFICATED NOTE
EXHIBIT E REGISTRATION AGREEMENT
EXHIBIT F FORM OF COMPANY SENIOR NOTE SECURITY
AGREEMENT
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EXHIBIT G FORM OF COMPANY SENIOR NOTE ESCROW
ACCOUNT AGREEMENT
EXHIBIT H FORM OF LEASING COMPANY ESCROW AGREEMENT
EXHIBIT I FORM OF LEASING COMPANY SECURITY
AGREEMENT
EXHIBIT J FORM OF NWE CYPRUS SENIOR NOTE SECURITY
AGREEMENT
EXHIBIT K FORM OF AGENCY AGREEMENT
SCHEDULE 1.1(a) EXISTING INDEBTEDNESS
SCHEDULE 1.1(b) SPECIAL PURPOSES PROVISIONS, FOR LEASING
COMPANIES
SCHEDULE 1.1(c) EXISTING AGREEMENTS TO MAKE INVESTMENTS
SCHEDULE 1.1(d) EXISTING LIENS
SCHEDULE 1.1(e) EXISTING QUALIFIED JOINT VENTURES
SCHEDULE 4.14 EXISTING DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
SCHEDULE 4.16 EXISTING CONTRACTS WITH AFFILIATES
SCHEDULE A SPECIAL INTEREST
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INDENTURE, dated as of May 31, 1996, between PETERSBURG LONG DISTANCE
INC., an Ontario corporation (the "Company"), as issuer, NWE CAPITAL (CYPRUS)
LIMITED, a Cypriot corporation ("NWE Cyprus"), PLD ASSET LEASING LIMITED, a
Cypriot corporation ("PLD Leasing"), PLD CAPITAL LIMITED, a Cypriot corporation
("PLD Capital"), WIRELESS TECHNOLOGY CORPORATIONS LIMITED, a British Virgin
Islands corporation ("WTC"), and BALTIC COMMUNICATIONS LIMITED, a Russian joint
stock company of the closed type ("BCL"), as Guarantors, and THE BANK OF NEW
YORK, a New York banking corporation, as trustee hereunder (the "Trustee").
RECITALS
The Company has duly authorized the creation and issue of its 14%
Senior Discount Notes due 2004 (the "Initial Notes") of substantially the tenor
and amount hereinafter set forth; and to provide therefor and for, if and when
issued as further evidence of the Company's indebtedness and in substitution for
the Initial Notes pursuant to this Indenture and the Registration Agreement (as
defined herein), the Company's 14% Senior Discount Notes due 2004 (the "Exchange
Notes," and together with the Initial Notes, the "Notes"), the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid instrument of the Company and the Guarantors, in accordance with their
respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
"Accreted Value" of any outstanding Note as of or to any date of
determination prior to December 1, 1998 shall mean an amount equal to the sum of
(i) the issue price of such Note as determined in accordance with Section 1273
of the Code, plus (ii) the aggregate of the portions of the original issue
discount (the excess of the amounts considered as part of the "stated redemption
price at maturity" of such Note within the meaning of Section 1273(a)(2) of the
Code or any successor provisions, whether denominated as principal or interest,
over the issue price of such Note) that shall theretofore have accrued pursuant
to
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Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from
the date of this Indenture (a) for each six-month or shorter period ending June
1 or December 1 prior to the date of determination and (b) for the shorter
period, if any, from the end of such immediately preceding six-month or shorter
period, as the case may be, to the date of determination plus (iii) accrued and
unpaid interest to the date such Accreted Value is paid (without duplication of
any amount set forth in (ii) above), minus all amounts theretofore paid in
respect of such Note, which amounts are considered as part of the "stated
redemption price at maturity" of such Note within the meaning of Section
1273(a)(2) of the Code or any successor provisions (whether such amounts paid
were denominated principal or interest). On or after December 1, 1998, the
Accreted Value of any outstanding Note will equal the principal amount of such
Note.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a Subsidiary
of such specified Person.
"Act" when used with respect to any Holder, has the meaning set forth
in Section 1.5 hereof.
"Additional Amounts" has the meaning set forth in Section 4.22 hereof.
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided
that, except for purposes of Sections 2.8, 4.1 and 10.6 hereof, neither the
Company nor any of its Wholly-Owned Restricted Subsidiaries shall be deemed to
be Affiliates of each other. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "under common
control with," and "controlled by"), and as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise; provided,
further, that beneficial ownership of 10% or more of the Voting Stock of a
Person (on a fully diluted basis) shall be deemed to be control.
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"Affiliate Transaction" has the meaning set forth in Section 4.16
hereof.
"Agent Member" has the meaning set forth in Section 2.5(a) hereof.
"Aggregate Unused Proceeds" has the meaning set forth in Section 4.8(d)
hereof.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation, amalgamation or merger) by such
Person or any of its Restricted Subsidiaries to any Person other than to such
Person or a Restricted Subsidiary of such Person, in one transaction, or a
series of related transactions (each hereinafter referred to as a
"Disposition"), of (a) Capital Stock of or other equity interests in any
Restricted Subsidiary (other than directors' qualifying shares), (b) all or
substantially all of the assets of any division or line of business of such
Person or of any of the Restricted Subsidiaries or (c) Property or assets of
such Person or any of its Restricted Subsidiaries, the Fair Market Value of
which exceeds $1,000,000, other than (i) a Disposition of Property in the
ordinary course of business consistent with industry practice, (ii) a
Disposition of Eligible Cash Equivalents, (iii) a Disposition that constitutes a
Restricted Payment permitted under Section 4.13 hereof, (iv) a Disposition by
Technocom of all of its assets and liabilities to a newly-formed corporation
organized in a jurisdiction other than Ireland formed to acquire such assets and
owned in a substantially identical proportion and manner (and the preferential
$20,000,000 dividend and liquidation, dissolution or winding-up rights of the
Technocom Preferred Stock are not changed) as Technocom is owned immediately
prior to such Disposition and such Disposition does not adversely affect the
perfection or priority of the Liens in the Technocom Preferred Stock, (v) a
Disposition by WTC of its interest in BECET to NWE Cyprus, in connection with a
winding-up or liquidation of WTC, and (vi) a Disposition by the Company in
connection with a transaction permitted pursuant to Article V hereof.
"Asset Sale Offer" has the meaning set forth in Section 4.8(c) hereof.
"Asset Sale Payment Date" has the meaning set forth in Section
4.8(e)(ii) hereof.
"Attributable Indebtedness" means, with respect to any Sale and
Leaseback Transaction of any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect of such transaction that would
appear on the balance sheet of such Person in accordance with GAAP and (ii) the
present value (discounted at a rate consistent with accounting guidelines, as
determined in good faith by such Person) of the payments during the remaining
term of the lease (including any period for which such lease has been extended
or may, at the option of the lessor, be extended) or until the earliest date on
which the lessee may terminate such lease without penalty or upon payment of a
penalty (in which case the rental payments shall include such penalty) .
"Average Life" means, as of any date, with respect to any debt security
or Disqualified Stock, the quotient obtained by dividing (i) the sum of the
products of (x) the number of
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years from such date to the dates of each scheduled principal payment or
redemption payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security or Disqualified Stock multiplied in each
case by (y) the amount of such principal or redemption payment, by (ii) the sum
of all such principal or redemption payments.
"BECET" means BECET International, a Kazak joint stock company of the
closed type.
"Board of Directors" means the Board of Directors of the Company or any
Guarantor or any committee thereof duly authorized to act on behalf of such
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close.
"Cable & Wireless" means Cable and Wireless plc, an English
corporation.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with GAAP
and the stated maturity thereof shall be the date of the last payment of rent or
any amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash or Eligible
Cash Equivalents; provided that with regard to an Asset Sale, any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes, the
Guarantees, the Convertible Notes and the guarantees under the Convertible Note
Indenture) which are assumed by the transferee of any such assets and from which
the Company and such Restricted Subsidiary are completely released shall be
deemed Cash Proceeds.
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"Certificated Notes" means Initial Certificated Notes and Exchange
Certificated Notes.
"Change of Control" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease, whether direct or indirect, of all or
substantially all of the assets of the Company or the Company and the Restricted
Subsidiaries taken as a whole to any "Person" or "group" (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(i) under the Exchange Act) (other than any Wholly-Owned Restricted
Subsidiary of the Company) shall have occurred; (ii) any "Person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(i) under the Exchange Act), other than any Permitted Holder,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 50% of the total voting power of all classes of the Voting Stock of
the Company and/or warrants or options to acquire such Voting Stock, calculated
on a fully diluted basis, and such voting power percentage is greater than or
equal to the total voting power percentage then beneficially owned by the
Permitted Holders in the aggregate; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election or appointment by such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Change of Control Offer" has the meaning set forth in Section 4.7(a)
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
4.7(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in Section
4.7(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all "collateral" referred to in the Collateral
Documents and all other Property or assets that become subject to a Lien in
favor of the Trustee or a collateral agent for the benefit of the Trustee and
the Holders of the Notes and, if the Convertible Notes are outstanding and the
Convertible Note Indenture so requires, for the benefit of the Convertible Note
Trustee and the Holders of the Convertible Notes, but Collateral shall not
include Convertible Note Collateral.
"Collateral Documents" means the Company Senior Note Security
Agreement, the Company Senior Note Escrow Account Agreement, the Leasing Company
Security
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Agreements, the Leasing Company Escrow Account Agreements, the NWE Cyprus Senior
Note Security Agreement and/or any other document creating a Lien that secures
the Notes or the Guarantees other than the Convertible Note Collateral
Documents.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture such commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, the body performing such duties at such time.
"Common Stock" means, with respect to any Person, Capital Stock of such
Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding-up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the party named as such in the preamble to this
Indenture unless and until a successor replaces it pursuant to the applicable
provisions hereof and, thereafter, means such successor.
"Company Order" means a written order signed in the name of the Company
by (i) its Chairman of the Board, its President, its Chief Executive Officer,
its Chief Operating Officer, a Vice Chairman or a Vice President and (ii) its
Chief Financial Officer, its Treasurer, Assistant Treasurer, its Secretary and
an Assistant Secretary.
"Company Senior Note Escrow Account Agreement" means the Company Senior
Note Escrow Account Agreement among the Company, the Trustee, the Convertible
Note Trustee, the Convertible Note Trustee and the escrow agent named therein in
the form attached hereto as Exhibit G.
"Company Senior Note Escrow Account" means the escrow account
established under the Company Senior Note Escrow Account Agreement.
"Company Senior Note Security Agreement" means the Company Senior Note
Security and Pledge Agreement among the Company, the Trustee and the collateral
agent named therein, in the form attached hereto as Exhibit F.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication (A) the sum of (i) the aggregate amount of cash
and non-cash interest expense (including capitalized interest) of such Person
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP in respect of Indebtedness (including, without
limitation, (v) any amortization of debt discount, (w) net costs associated with
Interest Hedging Obligations (including any amortization of discounts), (x) the
interest portion of any deferred payment obligation calculated in accordance
with the effective interest method, (y) all accrued interest and (z) all
commissions, discounts and other fees and charges owed with respect to letters
of credit, bankers' acceptances or similar
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facilities) paid or accrued, or scheduled to be paid or accrued, during such
period; (ii) dividends or distributions with respect to preferred stock or
Disqualified Stock of such Person (and of its Restricted Subsidiaries if paid to
a Person other than such Person or its Restricted Subsidiaries) declared and
payable in cash; (iii) the portion of any rental obligation of such Person or
its Restricted Subsidiaries in respect of any Capital Lease Obligation allocable
to interest expense in accordance with GAAP; (iv) the portion of any rental
obligation of such Person or its Restricted Subsidiaries in respect of any Sale
and Leaseback Transaction allocable to interest expense (determined as if such
were treated as a Capital Lease Obligation); and (v) to the extent any
Indebtedness of any other Person is guaranteed by such Person or any of its
Restricted Subsidiaries, the aggregate amount of interest paid, accrued or
scheduled to be paid or accrued by such other Person during such period
attributable to any such Indebtedness, less (B) to the extent included in (A)
above, amortization or write-off of deferred financing costs of such Person and
its Restricted Subsidiaries during such period and any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness of such Person and its Restricted Subsidiaries prior to its stated
maturity; in the case of both (A) and (B) above, after elimination of
intercompany accounts among such Person and its Restricted Subsidiaries and as
determined in accordance with GAAP. For purposes of clause (ii) above, dividend
requirements attributable to any Preferred Stock or Disqualified Stock shall be
deemed to be an amount equal to the amount of dividend requirements on such
Preferred Stock or Disqualified Stock times a fraction, the numerator of which
is the amount of such dividend requirements, and the denominator of which is one
minus the applicable combined federal, state, local and foreign income tax rate
of the Company and its Restricted Subsidiaries (expressed as a decimal), on a
consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis determined in accordance
with GAAP; provided that there shall be excluded therefrom, without duplication,
(i) all items classified as extraordinary, unusual or nonrecurring, (ii) for any
Person (the "Other Person") in which the Person in question or any of its
Restricted Subsidiaries has less than a 100% interest which interest does not
cause the net income of such other Person to be consolidated into the net income
of the Person in question in accordance with GAAP) any net income of such other
Person, except to the extent of the amount of dividends or other distributions
actually paid to such Person or its Restricted Subsidiaries by such other Person
during such period, (iii) the net income of any Person acquired by such Person
or any of its Restricted Subsidiaries in a pooling-of-interests transaction for
any period prior to the date of the related acquisition, (iv) any gain or loss,
net of taxes, realized on the termination of any employee pension benefit plan,
(v) net gains (but not net losses) in respect of Asset Sales by such Person or
its Restricted Subsidiaries, (vi) the net income (but not net loss) of any
Restricted Subsidiary of such Person to the extent that the payment of dividends
or other distributions to such Person is restricted by the terms of its charter
or any agreement, instrument, contract, judgment, order, decree,
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statute, rule, governmental regulation or otherwise, except for any dividends or
distributions actually paid by such Restricted Subsidiary to such Person, and
(vii) with regard to a non-Wholly-Owned Restricted Subsidiary, any aggregate net
income (or loss) in excess of such Person's or such Restricted Subsidiary's pro
rata share of such non-Wholly-Owned Restricted Subsidiary's net income
(or loss).
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.
"Convertible Note Collateral" means all "collateral" referred to in the
Convertible Note Collateral Documents and all other Property or assets that
become subject to a Lien in favor of the Convertible Note Trustee or a
collateral agent for the benefit of the Convertible Note Trustee and the holders
of the Convertible Notes and, if the Senior Notes are outstanding and the Senior
Note Indenture so requires, for the benefit of the Senior Note Trustee and the
Holders of the Senior Notes, but Convertible Note Collateral shall not include
the Collateral.
"Convertible Note Collateral Documents" means the Company Convertible
Note Security and Pledge Agreement among the Company, the Convertible Note
Trustee, the Trustee and the collateral agent named therein, the Company
Convertible Note Escrow Account Agreement among the Company, the Convertible
Note Trustee, the Trustee and the escrow agent named therein, and/or any other
document creating a Lien that secures the Convertible Notes other than the
Collateral Documents, all as such documents are defined in or otherwise
described in the Convertible Note Indenture.
"Convertible Note Indenture" means the Indenture, dated the date
hereof, among the Company, the Guarantors and The Bank of New York, as trustee
thereunder, relating to the Convertible Notes, as amended and supplemented from
time to time.
"Convertible Note Trustee" means The Bank of New York, as trustee under
the Convertible Note Indenture and any successor appointed in accordance with
the terms thereof.
"Convertible Notes" means the 9% Convertible Subordinated Notes due
2006 of the Company to be issued pursuant to the Convertible Note Indenture.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust Department.
"Covenant Defeasance" has the meaning set forth in Section 8.3 hereof.
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18
"Default" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"Default Amount" has the meaning set forth in Section 6.2 hereof.
"Defaulted Interest" has the meaning set forth in Section 2.11 hereof.
"Defeasance" has the meaning set forth in Section 8.2 hereof.
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors.
"Disposition" has the meaning set forth in the definition of "Asset
Sale" in this Section 1.1.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the date on which
the Notes mature.
"Dominion Resources" means Dominion Resources Inc.
"EBITDA" means, with respect to any Person for any period, the sum for
such Person for such period of Consolidated Net Income plus, to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense of such Person and its consolidated
Subsidiaries, (iii) depreciation expense, (iv) amortization expense, (v) any
non-cash expense related to the issuance to employees of such Person of options
to purchase Capital Stock of such Person and (vi) any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity and minus, to the extent reflected in
such income statement, any non-cash credits that had the effect of increasing
Consolidated Net Income of such Person for such period.
"Eligible Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits,
certificates of deposit, or Eurodollar deposits of any commercial bank organized
in the United States having capital and surplus in excess of $500,000,000 or a
commercial bank organized under the laws of any other country that is a member
of the Organization for Economic Cooperation and Development ("OECD") and has
total assets in excess of $500,000,000 with a maturity date not more than one
year from the date of
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acquisition, (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing, or subject to tender at the option of the
holder thereof, within ninety days after the date of acquisition thereof and, at
the time of acquisition having a rating of A or better from Standard & Poor's or
A-2 or better from Moody's, (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD and has total assets in
excess of $500,000,000 and commercial paper issued by non-bank issuers rated A-1
by Standard & Poor's or P-1 by Moody's and in each case maturing within 270 days
after the date of acquisition, (vi) overnight bank deposits and bankers'
acceptances at any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD and has total assets in
excess of $500,000,000, (vii) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the laws of any
other country that is a member of the OECD and has total assets in excess of
$500,000,000, (viii) investments in money market funds substantially all of
whose assets comprise securities of the types described in clauses (i) through
(vi), and (ix) with respect to a Restricted Subsidiary conducting operations in
the Russian Federation or Kazakstan, demand deposits, certificates of deposit
and bank promissory notes denominated in Russian Roubles or Kazak Tenge, as the
case may be, and used for ordinary course of business operations by such
Restricted Subsidiary solely in the jurisdiction where such Restricted
Subsidiary does business.
"Event of Default" has the meaning set forth in Section 6.1 hereof.
"Excess Proceeds" has the meaning set forth in Section 4.8(b) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Certificated Notes" means Notes issued in definitive, fully
registered form to beneficial owners of interests in the Exchange Global Note
pursuant to Section 2.6(c) hereof.
"Exchange Global Note" has the meaning set forth in Section 2.1(d)
hereof.
"Exchange Notes" has the meaning set forth in the Recitals to this
Indenture and more particularly means any of the Notes, substantially in the
forms of Exhibits C and D hereto, as applicable, authenticated and delivered
under this Indenture pursuant to the Registered Exchange Offer.
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20
"Exchange Rate Obligation" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates.
"Excluded Holder" has the meaning set forth in Section 4.22 hereof.
"Existing Indebtedness" means Indebtedness outstanding on the Issue
Date and disclosed in Schedule 1.1(a) attached hereto.
"Fair Market Value" means, with respect to any asset or Property, the
net sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors of the Company or a Restricted Subsidiary, as applicable.
"Final Memorandum" means the final Offering Memorandum, dated May 24,
1996, used in connection with the Initial Placement, as supplemented on June 6,
1996.
"Five Year Date" means the fifth anniversary of the Issue Date.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided, all
calculations made for purposes of determining compliance with the terms of the
provisions of the Indenture shall utilize GAAP as in effect on the Issue Date.
"Global Notes" means the Initial Global Note and the Exchange Global
Note.
"guarantee" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner (and
"guaranteed", "guaranteeing" and "guarantor" shall have meanings correlative to
the foregoing).
"Guarantee" means a guarantee of a Guarantor pursuant to Article X.
"Guaranteed Indebtedness" has the meaning set forth in Section 4.10
hereof.
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"Guarantor" means NWE Cyprus, PLD Leasing, PLD Capital, WTC and BCL,
any other Leasing Company, any Person that becomes a Wholly-Owned Subsidiary of
the Company after the Issue Date and any other Subsidiaries that guarantee any
Indebtedness of an Obligor.
"Holder" means (i) in the case of any Certificated Note, the Person in
whose name such Certificated Note is registered in the Note Register, (ii) in
the case of any Global Note, the Depositary and (iii) in the case of the
Convertible Notes, any Person constituting a Holder (as such term is defined in
the Convertible Note Indenture).
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or obligation on the balance sheet of such Person (and
"incurrence", "incurred", "incurrable" and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness. Indebtedness otherwise
incurred by a Person before it becomes a Restricted Subsidiary of the Company
shall be deemed to have been incurred at the time at which it becomes a
Restricted Subsidiary.
"Indebtedness" means at any time (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and, to the extent held by other Persons, the maximum fixed
redemption or repurchase price of Disqualified Stock of such Person's Restricted
Subsidiaries, at the time of determination, (vii) the notional amount of any
Interest Hedging Obligations or Exchange Rate Obligations of such Person at the
time of determination, (viii) any Attributable Indebtedness with respect to any
Sale and Leaseback Transaction to which such Person is a party and (ix) any
obligation of the type referred to in clauses (i) through (viii) of this
definition of another Person and all dividends and distributions of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise. For purposes of the preceding sentence, the maximum fixed repurchase
price of any Disqualified Stock that does not have a fixed repurchase price
shall
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be calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant hereto; provided that if such Disqualified
Stock is not then permitted to be repurchased, the repurchase price shall be the
book value of such Disqualified Stock. 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; provided that for purposes of calculating the amount of the Notes
outstanding at any date, such amount shall be the Accreted Value thereof as of
such date unless cash interest has commenced to accrue pursuant to the terms of
the Notes, in which case the amount of the Notes outstanding will be determined
pursuant to the terms of the Notes and will not include any accrued and unpaid
cash interest which would otherwise be included in Accreted Value because of
clause (iii) of the definition thereof.
"Indebtedness to Operating Cash Flow Ratio" means, as at any date of
determination, the ratio of (i) the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis as of the date
of determination to (ii) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the four preceding fiscal quarters for which
financial information is available immediately prior to the date of
determination; provided that any Indebtedness incurred or retired by the Company
or any of its Restricted Subsidiaries during the fiscal quarter in which the
date of determination occurs shall be calculated as if such Indebtedness was so
incurred or retired on the first day of the fiscal quarter in which the date of
determination occurs; and provided, further, that (x) if the transaction giving
rise to the need to calculate the Indebtedness to Operating Cash Flow Ratio
would have the effect of increasing or decreasing Indebtedness or EBITDA in the
future, Indebtedness or EBITDA shall be calculated on a pro forma basis as if
such transaction had occurred on the first day of such four fiscal quarter
period preceding the date of determination, and (y) if during such four fiscal
quarter period, the Company or any of its Restricted Subsidiaries shall have
engaged in any Asset Sale, EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive), or increased by an amount equal to the EBITDA
(if negative), directly attributable to the assets which are the subject of such
Asset Sale and any related retirement of Indebtedness as if such Asset Sale and
related retirement of Indebtedness had occurred on the first day of such four
fiscal quarter period or (z) if during such four fiscal quarter period the
Company or any of its Restricted Subsidiaries shall have acquired any material
assets outside the ordinary course of business, EBITDA shall be calculated on a
pro forma basis as if such asset acquisition and related financing had occurred
on the first day of such four fiscal quarter period.
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture, and any such supplemental indenture,
respectively.
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"Initial Certificated Notes" means Notes issued in definitive, fully
registered form to beneficial owners of interests in the Initial Global Note
pursuant to Section 2.6(c) hereof.
"Initial Global Note" has the meaning set forth in Section 2.1(c)
hereof.
"Initial Notes" has the meaning set forth in the Recitals to this
Indenture and, more particularly, means any of the Notes, substantially in the
forms of Exhibits A and B hereto, authenticated and delivered under this
Indenture other than pursuant to the Registered Exchange Offer.
"Initial Placement" means the initial sales of the Units by the Initial
Purchaser.
"Initial Purchaser" means the Initial Purchaser, as such term is
defined in the Purchase Agreement.
"Intercompany Notes" means a promissory note representing Indebtedness
of a Restricted Subsidiary owing to the Company or a Restricted Subsidiary,
which, if representing a loan of net proceeds of the Notes to a Leasing Company,
shall have substantially the same Maturity as the Notes and substantially the
same interest payment dates, the same interest rate and substantially the same
covenants as are contained in this Indenture and the Collateral Documents and
shall be secured by the applicable Telecommunications Asset Leases and by the
applicable Qualified Investments.
"Interest Hedging Obligation" means, with respect to any Person, an
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"International Vendor Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary other than the Leasing Companies or NWE Cyprus
incurred or assumed in connection with the purchase within 180 days of such
incurrence or assumption of Property or assets to be used in the business of
such Person or any of its Restricted Subsidiaries in the Russian Federation or
Kazakstan; provided that the net cash proceeds from the issuance of such
Indebtedness do not exceed 100% of the lesser of the cost or Fair Market Value
of the Property or assets constructed or acquired.
"Inventory" means, with respect to any Person, all present or future
inventory in which a Person has any interest, including goods, wares and
merchandise held for sale or lease or leased or furnished or to be leased or
furnished under a contract of service and all of a Person's present and future
raw materials, work in process, finished goods, parts,
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24
components, assemblies, and packing and shipping materials, wherever located,
and documents of title representing any of the above.
"Investment" in any Person means any direct, indirect or contingent (i)
advance or loan to, guarantee of any Indebtedness of, or extension of credit or
capital contribution to, such Person, (ii) the acquisition of any shares of
Capital Stock, bonds, notes, debentures or other securities of such Person, or
(iii) the acquisition, by purchase or otherwise, of all or substantially all of
the business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude accounts receivable and other
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices. The amount of an Investment shall be the original cost
of such Investment, plus the cost of all additions thereto and minus the amount
of any portion of such Investment repaid to such Person in cash as a repayment
of principal or a return of capital, as the case may be, but without any other
adjustments for increases or decrease 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 other than cash, such Property
shall be valued at its Fair Market Value at the time of such transfer.
"Issue Date" means the date on which the Notes are first authenticated
and delivered under this Indenture, being June 12, 1996.
"Joint Venture" means a Telecommunications Company of which less than
50 percent of the Voting Stock is held by the Company, provided that the
Telecommunications Business of such Person is principally conducted in the
Russian Federation and/or Kazakstan.
"Leasing Company" means a special purpose Cypriot corporation which is
a Guarantor and a Wholly-Owned Restricted Subsidiary organized for the limited
purpose of acquiring Telecommunications Assets and leasing such
Telecommunications Assets to Restricted Subsidiaries pursuant to
Telecommunications Asset Leases and/or making Qualified Investments permitted by
this Indenture. Each Leasing Company will have corporate organizational
documents containing the provisions set forth on Schedule 1.1(b) attached
hereto. Each Leasing Company must execute a Leasing Company Security Agreement
and a Leasing Company Escrow Account Agreement.
"Leasing Company Escrow Account" means an escrow account established
pursuant to a Leasing Company Escrow Account Agreement.
"Leasing Company Escrow Account Agreement" means a Leasing Company
Escrow Account Agreement among the Leasing Company party thereto, the Trustee
and the escrow agent named therein in the form attached hereto as Exhibit H.
"Leasing Company Security Agreement" means a Leasing Company Security
and Pledge Agreement among the Leasing Company party thereto, the Trustee, the
Convertible Note Trustee and the collateral agent named therein, in the form
attached hereto as Exhibit I.
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"Lien" means, with respect to any Property or other asset, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien (statutory or other), charge, easement, encumbrance,
preference, priority or other security or similar agreement or preferential
arrangement of any nature whatsoever on or with respect to such Property or
other asset (including, without limitation, any conditional sale or title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Maturity" means, when used with respect to a Note, the date on which
the principal of such Note becomes due and payable as provided therein or in
this Indenture, whether at Stated Maturity, on the Change of Control Payment
Date or purchase date established pursuant to the terms of the Indenture with
regard to a Change of Control Offer or an Asset Sale Offer, as applicable, or by
declaration of acceleration, call for redemption or otherwise.
"Minimum Amount" has the meaning set forth in Section 11.4 hereof.
"Moody's" means Xxxxx'x Investors Service, Inc., or, if Xxxxx'x
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor Person; provided that if Xxxxx'x Investors
Service, Inc. ceases rating the specified debt securities and its ratings
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is Standard & Poor's, then "Moody's" shall mean
any other nationally recognized rating agency (other than Standard & Poor's)
that rates the specified debt securities selected by the Trustee.
"NASD" means the National Association of Securities Dealers, Inc.
"Navona" means Navona Communications Corporation, Ltd., a wholly-owned
indirect Subsidiary of Cable & Wireless.
"Net Cash Proceeds" means, with respect to the sale of any Property or
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds (other
than any liabilities assumed by the transferee constituting Cash Proceeds
referred to in the proviso contained in the definition of "Cash Proceeds" set
forth in this Section 1.1) received, net of (i) all reasonable out-of-pocket
expenses of such Person or such Restricted Subsidiary incurred in connection
with such sale, including, without limitation, all legal, title and recording
tax expenses, commissions and other fees and expenses incurred (but excluding
any finder's fee or broker's fee payable to any Affiliate of such Person) and
all federal, state, foreign and local taxes arising in connection with such sale
that are paid or required to be accrued as a liability under GAAP by such Person
or its Restricted Subsidiaries, (ii) all payments made or required to be made by
such Person or its Restricted Subsidiaries on any Indebtedness which is secured
by such Properties or other assets in accordance with the terms of any Lien upon
or with respect to such Properties or other assets or which must, by the terms
of such Lien, or in order to obtain a necessary consent to such transaction or
by applicable law, be
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repaid in connection with such sale and (iii) all contractually required
distributions and other payments made to minority interest holders (but
excluding distributions and payments to Affiliates of such Person) in Restricted
Subsidiaries of such Person as a result of such transaction; provided that, in
the event that any consideration for a transaction (which would otherwise
constitute Net Cash Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to such Person or its Restricted Subsidiaries from
escrow; provided, further, that any non-cash consideration received in
connection with any transaction, which is subsequently converted to cash, shall
be deemed to be Net Cash Proceeds at such time, and shall thereafter be applied
in accordance with this Indenture.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.3 hereto.
"Notes" has the meaning set forth in the Recitals to this Indenture and
more particularly means any of the Notes authenticated and delivered under this
Indenture.
"NWE Cyprus Senior Note Security Agreement" means the NWE Cyprus Senior
Note Security and Pledge Agreement among NWE Cyprus, the Trustee, the
Convertible Note Trustee and the collateral agent named therein, relating to the
pledge of the Capital Stock of WTC, in the form attached hereto as Exhibit J.
"NWE Cyprus" means NWE Capital (Cyprus) Limited, a Cypriot corporation
and Wholly- Owned Subsidiary of the Company.
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means any of the Obligors, singly.
"Offer Purchase Price" has the meaning set forth in Section 4.8(c)
hereof.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the President or a Vice President, and by the Chief Financial
Officer, the Chief Accounting Officer, the Secretary or an Assistant Secretary
of the Company, a Guarantor or a Restricted Subsidiary, as applicable, and
delivered to the Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or a Guarantor (including inside counsel of the Company
or a Guarantor), and who shall be acceptable to the Trustee.
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"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any), interest (including Additional Amounts, if
any, and Special Interest, if any) on, or other amounts in respect of, any Notes
on behalf of the Company.
"Permitted Holders" means Cable & Wireless, Navona and Dominion
Resources and their respective Affiliates (other than the Company and the
Restricted Subsidiaries).
"Permitted Investments" means (i) Eligible Cash Equivalents; (ii)
Investments in Property used in the ordinary course of business; (iii)
Investments in any Wholly-Owned Restricted Subsidiary or any Person as a result
of which such Person becomes a Wholly-Owned Restricted Subsidiary, provided that
the aggregate amount of Investments in non-Guarantor Wholly-Owned Subsidiaries
shall be $1,000,000, reduced by any repayments of loans or advances, return of
capital or other distributions of Property but only to the extent that such
repayments, returns or distributions are not included in the calculation of
Consolidated Net Income of the Company); (iv) Investments pursuant to certain
agreements or obligations of the Company or a Restricted Subsidiary, in effect
on the Issue Date, to make such Investments, and disclosed on Schedule 1.1(c)
attached hereto; (v) Investments in the Leasing Companies of funds constituting
the net proceeds of the Notes; (vi) Investments in Restricted Subsidiaries and
Qualified Joint Ventures by the Leasing Companies; provided that such
Investments shall be made as Telecommunications Asset Leases; (vii) Qualified
Investments, if (a) such Qualified Investments are made with no more than
$9,000,000 of net proceeds of the Notes contained in the Company Senior Note
Escrow Account or in Leasing Company Escrow Accounts, and are otherwise made in
compliance with the applicable conditions contained in Section 11.4 hereof, (b)
such Qualified Investments are made with funds in the Leasing Company Escrow
Accounts or, if applicable, the Company Senior Note Escrow Account not
representing net proceeds of the Notes in compliance with the applicable
conditions contained in Section 11.4 hereof, provided that the aggregate amount
of Qualified Investments constituting Capital Stock or other equity pursuant to
this clause (b) shall be $9,000,000 reduced by any return of capital or other
distributions of Property but only to the extent that such returns or
distributions are not included in the calculation of Consolidated Net Income of
the Company, (c) such Qualified Investments are made directly by the Company
with the proceeds of distributions, dividends or payments by Technocom to the
Company or loans by Technocom to the Company, or are utilized by the Company to
make an intercompany loan to a Leasing Company evidenced by an Intercompany Note
(which Leasing Company thereupon shall make such Qualified Investments with the
proceeds of such Investment by the Company so long as such Qualified Investments
are made in compliance with the terms of the Convertible Note Indenture,
provided, that the aggregate amount of Qualified Investments constituting
Capital Stock or other equity that pursuant to this clause (c) shall be
$5,000,000 reduced by any return of capital or other distribution of Property
but only to the extent that such returns or distributions are not included in
the calculation of Consolidated Net Income of the Company, (d) such Qualified
Investment is Capital Stock of a Restricted Subsidiary, which Investment has the
effect of increasing the percentage of ownership interest of the Company or a
Restricted Subsidiary in Capital Stock of such Restricted Subsidiary, or (e)
such
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Qualified Investment is in a Person that as a result of such Qualified
Investment becomes a Restricted Subsidiary of the Company; (viii) Investments by
Restricted Subsidiaries which are lessees under Telecommunications Asset Leases,
provided that such Investments shall be made as a sublease of the
Telecommunications Assets subject to the Telecommunications Asset Leases to
which such Restricted Subsidiary is a party as lessee; (ix) Investments in
Restricted Subsidiaries, provided that such Investments in excess of an
aggregate principal amount of $5,000,000 shall be made as loans evidenced by
Intercompany Notes or such Investments are Technocom Preferred Stock and are
made with funds constituting proceeds of the Notes; (x) Investments in prepaid
expenses, negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits; (xi) Interest
Hedging Obligations with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding, (xii) Exchange Rate
Obligations, provided that such Exchange Rate Obligations were entered into in
connection with transactions in the ordinary course of business or the
incurrence of Indebtedness that is permitted by the terms of this Indenture to
be outstanding; (xiii) bonds, notes, debentures or other debt securities
received as a result of Asset Sales permitted under Section 4.8 hereof, and
(xiv) Investments in existence on the Issue Date.
"Permitted Liens" means (i) Liens created by this Indenture and the
Collateral Documents or that otherwise secure the payment of the Notes, the
Guarantees and other obligations under this Indenture and the Collateral
Documents, and liens created by the Convertible Note Indenture or the
Convertible Note Collateral Documents or which otherwise secure the payment of
the Convertible Notes and other obligations under the Convertible Note
Indenture, the guarantees contained therein and the Convertible Note Collateral
Documents; (ii) Liens on Property or assets of a Person existing at the time
such Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company or becomes a Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not secure any Property or assets of the Company
or any of its Restricted Subsidiaries other than the Property or assets subject
to the Liens prior to such merger or consolidation; (iii) Liens on Property or
assets existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary, provided that such Liens were not given in contemplation
of such acquisition; (iv) Liens to secure the payment of all or a part of the
purchase price or construction cost of Property or assets acquired or
constructed in the ordinary course of business after the Issue Date, provided
that the Indebtedness secured by such Liens shall not exceed the lesser of 80%
of the cost or Fair Market Value of the Property or assets acquired or
constructed and such Liens shall not extend to any other Property or assets; (v)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases not constituting Capitalized Lease Obligations, statutory or regulatory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business consistent with industry
practice; (vi) Liens existing as of the Issue Date and disclosed in Schedule
1.1(d) attached hereto; (vii) Liens on Receivables and Inventory of the Company
and its Restricted Subsidiaries to secure Indebtedness permitted to be incurred
under clause (i) of Section 4.9(b) hereof; (viii) any Lien on Property of the
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Company in favor of the United States of America or any state thereof, or any
instrumentality of either, to secure certain payments pursuant to any contract
or statute; (ix) any Lien for taxes or assessments or other governmental charges
or levies not then due and payable (or which, if due and payable, are being
contested in good faith and for which adequate reserves are being maintained, to
the extent required by GAAP); (x) easements, rights-of-way, licenses and other
similar 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 its Restricted Subsidiaries;
(xi) any Lien to secure obligations under workmen's compensation laws or similar
legislation, including any Lien with respect to judgments which are not
currently dischargeable; (xii) any statutory warehousemen's, materialmen's or
other similar Liens for sums not then due and payable (or which, if due and
payable, are being contested in good faith and with respect to which adequate
reserves are being maintained, to the extent required by GAAP); (xiii) Liens to
secure any International Vendor Indebtedness, provided that such Liens do not
extend to any Property or assets other than the Property or assets the
acquisition of which was financed by such Indebtedness; (xiv) Liens in favor of
the Company or any Wholly-Owned Restricted Subsidiary, including Liens securing
the Intercompany Notes and the Telecommunications Asset Leases; (xv) Liens in
favor of Technocom securing any leases by Technocom of Telecommunications Assets
to its Restricted Subsidiaries; (xvi) Liens in favor of a Restricted Subsidiary
which is a lessee under a Telecommunications Asset Lease securing a sublease of
such Telecommunications Assets to its Restricted Subsidiary, (xvii) 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; and (xviii) Liens to secure any permitted
extension, renewal, refinancing or refunding (or successive extensions,
renewals, refinancings or refundings), in whole or in part, of any Indebtedness
secured by Liens referred to in the foregoing clauses (ii) and (iii), provided
that such Liens do not extend to any other Property or assets and the principal
amount of the Indebtedness secured by such Liens is not increased.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PeterStar" means PeterStar Company Limited, a Russian joint stock
company of the closed typed organized under the laws of the Russian Federation
and a Restricted Subsidiary.
"Pledged Stock" means all of the Capital Stock of each of the Leasing
Companies, BCL, NWE Cyprus, WTC and any other future Wholly-Owned Subsidiary of
the Company or future Guarantor, and any and all dividends, distributions,
payments and proceeds thereof.
"Predecessor Security" means, with respect to any particular Security,
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular
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Security; and, for the purposes of this definition, any Security authenticated
and delivered under Section 2.7 in exchange for a mutilated Security or in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the mutilated, lost destroyed or stolen Security.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Private Placement Legend" means the legend in the form set forth in
Section 2.1(e)(i) hereof.
"Process Agent" has the meaning set forth in Section 13.8 hereof.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
"Purchase Agreement" means the Purchase Agreement relating to the Units
and the Convertible Notes, dated May 24, 1996, between the Company and the
Initial Purchaser.
"Qualified Investment" means an Investment in a Telecommunications
Company primarily engaged or proposing to engage in the Telecommunications
Business in the Russian Federation or Kazakstan.
"Qualified Joint Venture" means a Joint Venture in which the Company
owns directly or indirectly Voting Stock thereof on the Issue Date, which Joint
Ventures are disclosed in Schedule 1.1(e) attached hereto, and any future Joint
Venture in which the Company owns 20% or more of the Voting Stock thereof.
"Qualified Stock" of any Person means a class of Capital Stock other
than Disqualified Stock.
"Receivables" means, with respect to any Person, all of the following
Property and interests in Property of such Person, whether now existing or
existing in the future or hereafter acquired or arising: (i) accounts, (ii)
accounts receivable, including, without limitation, all rights to payment
created by or arising from sales of goods, leases of goods or the rendition of
services no matter how evidenced, whether or not earned by performance, (iii)
all unpaid seller's or lessor's rights including, without limitation,
rescission, replevin, reclamation and stoppage in transit, relating to any of
the foregoing or arising therefrom, (iv) all rights to any goods or merchandise
represented by any of the foregoing after creation of the foregoing, including,
without limitation, returned or repossessed goods, (v) all reserves and credit
balances with respect to any such accounts receivable or account
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debtors, (vi) all letters of credit, security or guarantees for any of the
foregoing, (vii) all insurance policies or reports relating to any of the
foregoing, (viii) all collection or deposit accounts relating to any of the
foregoing, (ix) all proceeds of any of the foregoing, and (x) all books and
records relating to any of the foregoing.
"Record Date" means, for the interest payable on any Interest Payment
Date, the date specified in Section 2.11 hereof.
"Record Expiration Date" has the meaning set forth in Section 1.5
hereof.
"Redemption Date" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the date fixed for redemption of such Notes
pursuant to the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the price fixed for redemption of such Note
pursuant to the terms of the Notes and this Indenture, plus accrued and unpaid
interest thereon, if any (including Additional Amounts, if any, and Special
Interest, if any), to the Redemption Date.
"Refinance" has the meaning set forth in Section 4.9(b)(xii) hereof.
The terms "Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means any Indebtedness incurred in
connection with the Refinancing of other Indebtedness.
"Registered Exchange Offer" means an "Exchange Offer" as defined in the
Registration Agreement.
"Registrar" has the meaning set forth in Section 2.3 hereof.
"Registration Agreement" means the Registration Rights Agreement
relating to the Notes, dated as of May 31, 1996, between the Company and the
Initial Purchaser, attached hereto as Exhibit E.
"Related Proceeding" has the meaning set forth in Section 13.8 hereof.
"Required Filing Date" has the meaning set forth in Section 4.20
hereof.
"Replacement Assets" has the meaning set forth in Section 4.8(b)
hereof.
"Replacement Telecommunication Assets" has the meaning set forth in
Section 4.8(b) hereof.
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"Restricted Payment" means (i) a dividend or other distribution
declared or paid on the Capital Stock of the Company or to the Company's
stockholders (in their capacity as such), or declared or paid to any Person
other than to the Company or any Restricted Subsidiary of the Company on the
Capital Stock of any Restricted Subsidiary of the Company, in each case, other
than dividends, distributions or payments made solely in Qualified Stock of the
Company or such Restricted Subsidiary, (ii) a payment made by the Company or any
of its Restricted Subsidiaries (other than to the Company or any Restricted
Subsidiary of the Company) to purchase, redeem, acquire or retire any Capital
Stock of the Company or of a Restricted Subsidiary of the Company, (iii) a
payment made by the Company or any of its Restricted Subsidiaries (other than a
payment made solely in Qualified Stock of the Company) to redeem, repurchase,
defease (including an in-substance or legal defeasance) or otherwise acquire or
retire for value (including pursuant to mandatory repurchase covenants), prior
to any scheduled maturity, scheduled sinking fund or mandatory redemption
payment, Indebtedness of the Company or such Restricted Subsidiary which is
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the Notes, or the Guarantees, as applicable) or which was scheduled
to mature on or after the maturity of the Notes or (iv) an Investment in any
Person, including an Unrestricted Subsidiary or the designation of a Subsidiary
as an Unrestricted Subsidiary, other than a Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been classified as an "Unrestricted Subsidiary."
"Revolving Credit Facilities" means revolving credit agreements to
which the Company and the Restricted Subsidiaries are or become parties, and all
related amendments, notes, collateral documents, guarantees, instruments and
other agreements executed in connection therewith, as the same may be amended,
modified, supplemented, restated, renewed, extended, refinanced, substituted or
replaced from time to time.
"Rule 144" means Rule 144 under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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"Senior Indebtedness" means all obligations of the Company under the
Convertible Notes, the Convertible Note Indenture, the guarantees contained in
the Convertible Note Indenture and the Convertible Note Collateral Documents.
"Separation Date" shall mean the first to occur of (i) the commencement
of the Registered Exchange Offer, (ii) a date 180 days after the Issue Date,
(iii) such date as the Initial Purchaser may determine and (iv) in the event of
a Change of Control, the date the Company mails notice thereof to the holders of
the Senior Notes.
"Shelf Registration Statement" has the meaning set forth in the
Registration Agreement.
"Significant Restricted Subsidiary" means a Restricted Subsidiary that
is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Interest" means (a) such additional interest as is specified
as such in paragraph 4(a) of each Initial Note and the Registration Agreement;
and/or (b) such additional interest as is specified as such in paragraph 4(b) of
each Initial Note and Schedule A to this Indenture.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.11 for the payment of Defaulted Interest.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc., or if Standard & Poor's Ratings Group shall cease rating
the specified debt securities and such ratings ceases with respect thereto shall
have been transferred to a successor Person, such successor Person, provided
that if Standard & Poor's Ratings Group ceases rating the specified debt
securities and its ratings business with respect thereto shall not have been
transferred to any successor Person or such successor Person is Moody's, then
"Standard & Poor's" shall mean any other materially recognized rating agency
selected by the Trustee.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding shares of Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or
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more other Subsidiaries of such Person, (ii) any general partnership, joint
venture or similar entity, more than 50% of the outstanding partnership or
similar interests of which are owned, directly or indirectly, by such Person, or
by one or more other Subsidiaries of such Person, or by such Person and one or
more other Subsidiaries of such Person, or (iii) any limited partnership of
which such Person or any Subsidiary of such Person is a general partner, and
BECET, provided that the Company owns directly or indirectly 50% of the then
outstanding shares of Voting Stock of BECET.
"Surviving Entity" has the meaning set forth in Section 5.1 hereof.
"Technocom" means Technocom Limited, an Irish corporation and a
Restricted Subsidiary, including any transferee in a Disposition contemplated in
clause (iv) of the definition of "Asset Sale" set forth in this Section 1.1.
"Technocom Preferred Stock" means all Preferred Stock of Technocom
owned directly or indirectly by the Company.
"Telecommunications Asset Lease" means a lease by a Leasing Company of
Telecommunications Assets to Restricted Subsidiaries and Qualified Joint
Ventures in the Russian Federation and Kazakstan, which leases will be
Collateral.
"Telecommunications Assets" means, with respect to any Person, assets
(including, without limitation, rights of way, trademarks and licenses to use
copyrighted material), that are utilized by such Person, directly or indirectly,
in a Telecommunications Business. For purposes of determining a
Telecommunications Company but not for purposes of determining whether Property
or assets may be subject to a Telecommunications Asset Lease, Telecommunications
Assets shall also include stock, joint venture or partnership interests in
another Person, provided that substantially all of the assets of such other
Person consist of Telecommunications Assets, and provided, further, that if such
stock, joint venture or partnership interests are held by the Company or a
Restricted Subsidiary, such other Person either is, or immediately following the
relevant transaction shall become, a Restricted Subsidiary of the Company
pursuant to this Indenture. The determination of what constitutes
Telecommunication Assets shall be made by the Board of Directors of the Company
and evidenced by a Board Resolution delivered to the Trustee.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in (i) above or (iii) evaluating, participating or pursuing any other
activity or opportunity that is related to those specified in (i) or (ii) above
and includes, without limitation, any business which the Company and its
Restricted Subsidiaries are currently engaged on the Issue Date.
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"Telecommunications Company" means any Person substantially all of the
assets of which consist of Telecommunications Assets.
"Temporary Notes" has the meaning set forth in Section 2.9 hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture except
as required by Section 9.4 hereof, provided that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939,
as so amended.
"Trust Officer" means any Vice President, Assistant Vice President,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of the Trustee
assigned by the Trustee to administer this Indenture or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means such successor.
"U.S. Government Obligations" means (x) securities that are (i) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which in either case are not callable or redeemable at the
option of the issuer thereon, and (y) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (x) above and held
by such bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depository receipt.
"Unit" means a Unit consisting of one Note, in principal amount at
Stated Maturity of $1,000, and one Warrant to purchase 34 Common Shares of the
Company as described in the Purchase Agreement.
"Unit Legend" means the legend in the form set forth in Section
2.1(e)(iii) hereof.
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"Unrestricted Subsidiary" means any Subsidiary of the Company that the
Company has classified as an "Unrestricted Subsidiary," and that has not been
reclassified as a Restricted Subsidiary, pursuant to the terms of this
Indenture.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"Warrant" means a Warrant issued by the Company pursuant to a Warrant
Agreement dated as of May 31, 1996 between the Company and the Bank of New York
as Warrant Agent.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the outstanding Capital Stock (other than directors' qualifying shares)
of which are owned, directly or indirectly, by the Company.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms incorporated by reference in
this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other
obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference
in this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
SECTION 1.3 Rules of Construction. Unless context otherwise requires:
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(a) 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;
(b) "or" is not exclusive;
(c) a term has the meaning assigned to it;
(d) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(e) words in the singular include the plural, and words in the
plural includes the singular;
(f) provisions apply to successive events and transactions;
(g) the principal amount of any non-interest bearing or other
discount security (other than the Notes), at any date shall be the
principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP;
(h) except for the purposes of Section 4.8(d) hereof, when
used with respect to the Notes, the term "principal amount" shall mean
the principal amount thereof at the Stated Maturity of such principal
amount; and
(i) unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred
Stock.
SECTION 1.4 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion of
counsel or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate
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or opinion of counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Company or a Guarantor stating that the information with respect to such
factual matters is in the possession of the Company or such Guarantor, as
applicable, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.5 Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantors. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.1) conclusive in favor of
the Trustee, the Company and the Guarantors, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
an acknowledgment of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of the signer's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company or the Guarantors
in reliance thereon, whether or not notation of such action is made upon such
Security.
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The Company may set any day as a record date for the purpose of
determining the Holders of outstanding Notes entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Notes, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
outstanding Notes on such record date, and no other Holders, shall be entitled
to take the relevant actions whether or not such Holders remain Holders after
such record date; provided that no such action shall be effective hereunder
unless taken on or prior to the applicable Record Expiration Date by Holders of
the requisite principal amount of outstanding Notes on such record date; and
provided, further, that for the purpose of determining whether Holders of the
requisite principal amount of such Notes have taken such action, no Note shall
be deemed to have been outstanding on such record date unless it is also
outstanding on the date such action is to become effective. Nothing in this
paragraph shall prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action taken by Holders of
the requisite principal amount of outstanding Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company at its own expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Record Expiration Date to be given to the
Trustee in writing and to each Holder of Notes in the manner set forth in
Section 13.2 hereof.
The Trustee may set any day as a record date for the purpose of
determining the Holders of outstanding Notes entitled to join in the giving or
making of (i) any notice of Default under Section 6.1(d) or (i) hereof, (ii) any
declaration of acceleration referred to in Section 6.2 hereof, (iii) any request
to institute proceedings referred to in Section 6.6 hereof or (iv) any direction
referred to in Section 6.5 hereof. If any record date is set pursuant to this
paragraph, the Holders of outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Record Expiration Date by Holders of the requisite
principal amount of outstanding Notes on such record date; and provided,
further, that for the purpose of determining whether Holders of the requisite
principal amount of such Notes have taken such action, no Security shall be
deemed to have been outstanding on such record date unless it is also
outstanding on the date such action is to become effective. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record
date for any action (whereupon the record date previously set shall
automatically and without any action by any Person be cancelled and of no
effect), nor shall anything in this paragraph be construed to render ineffective
any action taken by Holders of the requisite principal amount of outstanding
Notes on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the
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Trustee, at the Company's expense, shall cause notice of such record date, the
matter(s) to be submitted for potential action by Holders and the applicable
Record Expiration Date to be given to the Company in writing and to each Holder
of Notes in the manner set forth in Section 13.2 hereof.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Notes in the manner set forth in
Section 13.2 hereof, on or before the existing Record Expiration Date. If a
Record Expiration Date is not designated with respect to any record date set
pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the
Record Expiration Date with respect thereto, subject to its right to change the
Record Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Record Expiration Date shall be later than the 180th day after the
applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Note may do so with regard to all
or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
ARTICLE II
THE NOTES
SECTION 2.1 Form and Dating.
(a) The Initial Notes, with the notation of the Guarantees endorsed
thereon and the certificate of authentication of the Trustee thereon, shall be
substantially in the form of Exhibit A or Exhibit B hereto, as applicable, which
are hereby incorporated in and expressly made a part of this Indenture. The
Exchange Notes, with the notation of the Guarantees endorsed thereon and the
certificate of authentication of the Trustee thereon, shall be substantially in
the form of Exhibit C or Exhibit D hereto, as applicable, which are hereby
incorporated in and expressly made a part of this Indenture.
(b) The Notes may have such letters, numbers or other marks of
identification and such legends and endorsements, stamped, printed, lithographed
or engraved thereon, (i) as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, (ii) as may be required to
comply with this Indenture, any law or any rule of any securities exchange on
which the Notes may be listed and (iii) as may be necessary to
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conform to customary usage. Each Note shall be dated the date of its
authentication by the Trustee.
(c) Initial Notes, with the notation of the Guarantees endorsed
thereon, shall be issued initially in the form of a permanent, global note in
definitive, fully registered form, without coupons, substantially in the form of
Exhibit A hereto (the "Initial Global Note"). Upon issuance, such Initial Global
Note shall be duly executed by the Company, with the endorsement of Guarantees
thereon executed by the Guarantors, and authenticated by the Trustee as
hereinafter provided and deposited with the Trustee as custodian for the
Depositary. Any Initial Certificated Note that may be issued pursuant to Section
2.6(c) hereof, shall be issued in the form of a note in definitive, fully
registered form, without coupons, substantially in the form set forth in Exhibit
B hereof. Upon issuance, any such Initial Certificated Note shall be duly
executed by the Company, with the endorsement of Guarantees therein executed by
the Guarantors, and authenticated by the Trustee as hereinafter provided.
(d) In the event Exchange Notes are issued pursuant to a Registered
Exchange Offer in substitution for Initial Notes held in the form of the Initial
Global Note, such Exchange Notes shall be issued initially in the form of a
permanent global note in definitive, fully registered form, without coupons,
substantially in the form set forth in Exhibit C hereto (the "Exchange Global
Note"). Upon issuance, such Exchange Global Note shall be duly executed by the
Company, with the endorsement of Guarantees therein executed by the Guarantors,
and authenticated by the Trustee as hereinafter provided and deposited with the
Trustee as custodian for the Depositary. Any Exchange Certificated Note that may
be issued pursuant to Section 2.6(c) hereof or in substitution for Initial
Certificated Notes pursuant to a Registered Exchange Offer shall be issued in
the form of a note in definitive, fully registered form, without coupons,
substantially in the form set forth in Exhibit D hereto. Upon issuance, any such
Exchange Certificated Notes shall be duly executed by the Company, with the
endorsement of Guarantees therein executed by the Guarantors, and authenticated
by the Trustee as hereinafter provided.
(e) The following legends shall appear on each Global Note and each
Certificated Note as indicated below:
(i) Except as provided in Section 2.6(a)(iii) hereof, each
Initial Global Note and Initial Certificated Note shall bear the
following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
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THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND THE PROVINCES OF CANADA.
(ii) Each Global Note shall bear the following legend on the
face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO
PETERSBURG LONG DISTANCE INC. OR THE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS HAS BEEN
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.6 OF THE INDENTURE, DATED AS OF MAY 31,
1996, AMONG PETERSBURG LONG DISTANCE INC., CERTAIN
CORPORATIONS ACTING AS GUARANTORS AND NAMED THEREIN AND THE
TRUSTEE NAMED THEREIN, PURSUANT TO WHICH THIS NOTE WAS ISSUED.
(iii) Except as provided in Section 2.6(j) hereof, each
Initial Global Note and Initial Certificated Note shall bear the
following legend on the face thereof:
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THE NOTES EVIDENCED HEREBY WERE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL
AMOUNT AT STATED MATURITY OF 14% SENIOR DISCOUNT NOTES DUE
2004 OF PETERSBURG LONG DISTANCE INC. (THE "NOTES") AND ONE
WARRANT (THE "WARRANTS") EACH ENTITLING THE HOLDER THEREOF TO
PURCHASE 34 COMMON SHARES WITHOUT NOMINAL OR PAR VALUE OF
PETERSBURG LONG DISTANCE INC. PRIOR TO THE EARLIEST TO OCCUR
OF (A) 180 DAYS AFTER THE DATE OF ORIGINAL ISSUANCE OF THE
UNITS, (B) THE COMMENCEMENT OF A REGISTERED EXCHANGE OFFER FOR
THE NOTES, (C) SUCH DATE AS THE INITIAL PURCHASER MAY
DETERMINE AND (D) IN THE EVENT OF A CHANGE OF CONTROL, THE
DATE ON WHICH THE COMPANY MAILS NOTICE THEREOF TO THE HOLDERS
OF THE NOTES, THE NOTES EVIDENCED HEREBY MAY NOT BE
TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE WARRANTS.
(f) Definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of such methods or produced in any other manner
permitted by the rules of any securities exchange on which such Notes may be
listed, all as determined by the officers of the Company executing such Notes,
as evidenced by their execution of such Notes.
SECTION 2.2 Execution and Authentication. The Notes may be issued in
two series, a series of Initial Notes and a series of Exchange Notes. The
aggregate principal amount at Stated Maturity of Notes outstanding at any time
shall not exceed $123,000,000 except as provided in Section 2.7 hereof. The
Notes shall be executed by manual or facsimile signature on behalf of the
Company by two of the following officers of the Company: Chief Executive
Officer, its Chief Operating Officer, its President, its Chief Financial Officer
or any Vice President or either its Secretary or any Assistant Secretary (but
not both). The Company's corporate seal shall be reproduced or imprinted on the
Notes by facsimile or otherwise. The Notes shall have the notation relating to
the Guarantees executed by each Guarantor in the manner provided for in Section
10.3 hereof and endorsed thereon.
In case any officer of the Company whose signature shall have been
placed upon any of the Notes shall cease to be such officer of the Company
before authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such officer of the Company.
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Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Notes only upon receipt by the Trustee of an Officers'
Certificate and Opinion of Counsel complying with Sections 13.4 and 13.5 hereof
with respect to satisfaction of all conditions precedent contained in this
Indenture to authentication and delivery of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate (a) Initial Notes for original issuance in an aggregate
principal amount at Stated Maturity not to exceed $123,000,000 in the form of
the Initial Global Note or (b) Exchange Notes for issuance pursuant to a
Registered Exchange Offer for Initial Notes in a principal amount equal to the
principal amount of Initial Notes replaced in such Registered Exchange Offer.
Such Company Order shall specify the amount of Notes to be authenticated and the
date on which, in the case of clause (a) above, the Initial Notes or, in the
case of clause (b) above, the Exchange Notes, are to be authenticated and shall
further provide instructions concerning registration, amounts for each Holder
and delivery.
Upon the occurrence of any event specified in Section 2.6(c) hereof and
compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph, the Company shall execute and the Trustee shall
authenticate and deliver to each beneficial owner identified by the Depositary,
in exchange for such beneficial owner's interest in the Initial Global Note or
Exchange Global Note, as the case may be, Initial Certificated Notes or Exchange
Certificated Notes, as the case may be, representing Notes theretofore
represented by the Initial Global Note or Exchange Global Note, as the case may
be.
A Note shall not be valid or entitled to any benefit under this
Indenture or obligatory for any purpose unless appropriately executed by the
Company and the Guarantors and authenticated by the manual signature of the
Trustee as provided herein. The signature of an authorized officer of the
Trustee shall be conclusive evidence, and the only evidence, that such Note has
been authenticated and delivered under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference to this Indenture to authentication by the Trustee
includes authentication by such agent. Any authenticating agent of the Trustee
shall have the same rights hereunder as any Registrar or Paying Agent.
SECTION 2.3 Registrar and Paying Agent. The Company shall maintain,
pursuant to Section 4.2 hereof, an office or agency where the Notes may be
presented or surrendered for payment, or surrendered for registration of
transfer or for exchange. The Company shall cause to be kept at such office a
register (the register maintained in such office being herein sometimes referred
to as the "Note Register") in which, subject to such reasonable
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regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes entitled to be registered or transferred as
provided herein. The Trustee, at its Corporate Trust Office, is initially
appointed "Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided, and as "Paying Agent" for the payment of principal of
(and premium, if any), interest (including Additional Amounts if any, and
Special Interest, if any) on, or other amounts in respect of the Notes as
provided herein. The Company may, upon written notice to the Trustee, change the
designation of the Trustee as Registrar or Paying Agent and appoint another
Person to act as Registrar for purposes of this Indenture except that, for the
purposes of Article III, Article XII and Sections 4.7 and 4.8, none of the
Company, any Guarantor, any Restricted Subsidiary or any Affiliate of the
Company or of any Guarantor shall act as Paying Agent. If any Person other than
the Trustee acts as Registrar, the Trustee shall have the right at any time,
upon reasonable notice, to inspect or examine the Note Register and to make such
inquiries of the Registrar as the Trustee shall in its discretion deem necessary
or desirable in performing its duties hereunder.
The Company shall enter into an appropriate agreement with any Person
designated by the Company as Registrar or Paying Agent that is not a party to
this Indenture, which agreement shall incorporate the provisions of the Trust
Indenture Act and shall implement the provisions of this Indenture that relate
to such Registrar or Paying Agent. Prior to the designation of any such Person,
the Company shall, by written notice (which notice shall include the name and
address of such Person), inform the Trustee of such designation. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such.
Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Initial Notes or Exchange Notes, as
the case may be, of any authorized denomination or denominations, of like tenor
and aggregate principal amount, all as requested by the transferor.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Registrar) be
duly endorsed, or be accompanied by a duly executed instrument of transfer in
form satisfactory to the Company, the Trustee and the Registrar, by the Holder
thereof or such Holder's attorney duly authorized in writing.
SECTION 2.4 Paying Agent to Hold Money in Trust. On or prior to each
due date of the principal, premium, any payment of interest or any other amount
due with respect to any Note, the Company shall deposit with the Paying Agent a
sum sufficient to pay such principal, premium, interest or other amount when so
becoming due.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that such Paying Agent (i) shall hold in trust for the benefit
of Holders or the
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Trustee all money held by such Paying Agent for the payment of principal,
premium, interest (including Additional Amounts, if any, and Special Interest,
if any) or other amount due with respect to the Notes (whether such money has
been distributed to it by the Company, a Guarantor or any other Obligor), (ii)
shall notify the Trustee of any default by the Company in making any such
payment and (iii) at any time during the continuance of any such default, upon
the written request of the Trustee, shall forthwith pay to the Trustee all sums
held in trust by such Paying Agent.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section 2.4, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.5 Global Notes.
(a) So long as a Global Note is registered in the name of the
Depositary or its nominee, beneficial owners, members of, or participants in,
the Depositary ("Agent Members") shall have no rights under this Indenture with
respect to the Global Note held on their behalf by the Depositary or the Trustee
as its custodian, and the Depositary may be treated by the Company, the
Guarantors, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Guarantors, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or (ii) impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of
Notes.
(b) The Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in such Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under this Indenture or the Notes.
(c) Whenever, as a result of an optional redemption of Notes by the
Company, a Change of Control Offer, an Asset Sale Offer, a Registered Exchange
Offer or an exchange pursuant to the second sentence of Section 2.6(c) hereof, a
Global Note is redeemed, repurchased or exchanged in part, such Global Note
shall be surrendered by the Holder thereof to the Trustee who shall cause an
adjustment to be made to Schedule A thereof so that the principal amount at
Stated Maturity of such Global Note will be equal to the portion of such Global
Note not redeemed, repurchased or exchanged and shall thereafter return such
Global Note to such Holder, provided that each such Global Note shall be in a
principal amount at Stated Maturity of $1,000 or an integral multiple thereof.
SECTION 2.6 Transfer and Exchange.
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(a) The provisions of this paragraph (a) are applicable only to Initial
Notes:
(i) By its acceptance of any Initial Note represented by a
certificate bearing the Private Placement Legend, each Holder of, and
beneficial owner of an interest in, such Initial Note acknowledges the
restrictions on transfer of such Initial Note set forth in the Private
Placement Legend and under the heading "Transfer Restrictions" in the
Final Memorandum and agrees that it will transfer such Initial Note
only in accordance with the Private Placement Legend and the
restrictions set forth under the heading "Transfer Restrictions" in the
Final Memorandum.
(ii) In connection with any transfer of an Initial Note
bearing the Private Placement Legend, each Holder agrees to deliver to
the Company such satisfactory evidence, which may include an opinion of
independent counsel licensed to practice law in the State of New York,
as reasonably may be requested by the Company or by the Trustee to
confirm that such transfer is being made in accordance with the
limitations set forth in the Private Placement Legend. In the event the
Company determines that any such transfer is not in accordance with the
Private Placement Legend, the Company shall so inform the Registrar
which shall not register such transfer; provided that the Registrar
shall not be required to determine (but may rely on a determination
made by the Company with respect to) the sufficiency of any such
evidence.
(iii) Upon the registration of transfer, exchange or
replacement of an Initial Note not bearing the Private Placement
Legend, the Trustee shall deliver an Initial Note or Initial Notes that
do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of an Initial Note bearing the Private Placement Legend,
the Trustee shall deliver an Initial Note or Initial Notes bearing the
Private Placement Legend, unless such legend may be removed from such
Note as provided in the next sentence. The Private Placement Legend may
be removed from an Initial Note if there is delivered to the Company
and the Trustee such satisfactory evidence, which may include an
opinion of independent counsel licensed to practice law in the State of
New York, as reasonably may be requested by the Company to confirm that
neither such legend nor the restrictions on transfer set forth therein
are required to ensure that transfers of such Initial Note will not
violate the registration and prospectus delivery requirements of the
Securities Act and, if the transferee is a resident of Canada, of the
securities laws of the applicable province of Canada; provided that the
Trustee shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of
any such evidence. Upon provision of such evidence, the Trustee shall
authenticate and deliver in exchange for such Initial Note, an Initial
Note or Initial Notes (representing the same aggregate principal amount
of the Initial Note being exchanged) without such legend. If the
Private Placement Legend has been removed from an Initial Note, as
provided above, no other Initial Note issued in exchange for all or any
part of such Initial Note shall bear such legend, unless the Company
has
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reasonable cause to believe that such other Initial Note represents a
"restricted security" within the meaning of Rule 144 and instructs the
Trustee in writing to cause a legend to appear thereon.
(iv) The Company shall deliver to the Trustee, and the Trustee
shall retain for two years, copies of all documents received pursuant
to this Section 2.6(a). The Company shall have the right to inspect and
make copies of all such documents at any reasonable time upon the
giving of reasonable written notice to the Trustee.
(b) Any Initial Notes which are presented to the Registrar for
replacement pursuant to a Registered Exchange Offer shall be replaced by
Exchange Notes of equal principal amount at Stated Maturity upon surrender to
the Registrar of the Initial Notes to be replaced in accordance with the terms
of the Registered Exchange Offer; provided that the Initial Notes so surrendered
for replacement are duly endorsed and accompanied by a letter of transmittal or
written instrument of transfer in form satisfactory to the Company, the Trustee
and the Registrar and duly executed by the Holder thereof or such Holder's
attorney who shall be duly authorized in writing to execute such document on the
behalf of such Holder. Whenever any Initial Notes are so surrendered for
replacement, the Company shall execute, and the Trustee shall authenticate and
deliver to the surrendering Holder thereof, Exchange Notes in the same aggregate
principal amount at Stated Maturity as the Initial Notes so surrendered.
(c) The Initial Global Note or Exchange Global Note, as the case may
be, shall be exchanged by the Company for one or more Initial Certificated Notes
or Exchange Certificated Notes, as the case may be, if (x) the Depositary (i)
has notified the Company that it is unwilling or unable to continue as, or
ceases to be, a "Clearing Agency" registered under Section 17A of the Exchange
Act and (ii) a successor to the Depositary registered as a "Clearing Agency"
under Section 17A of the Exchange Act is not able to be appointed by the Company
within 90 calendar days or (y) the Depositary is at any time unwilling or unable
to continue as Depositary and a successor to the Depositary is not able to be
appointed by the Company within 90 calendar days. If an Event of Default occurs
and is continuing, the Company shall, at the request of the Holder thereof,
exchange all or part of the Initial Global Note or Exchange Global Note, as the
case may be, for one or more Initial Certificated Notes or Exchange Certificated
Notes, as the case may be; provided that the principal amount at Stated Maturity
of each of such Initial Certificated Notes or Exchange Certificated Notes, as
the case may be, and such Global Note, after such exchange, shall be $1,000 or
an integral multiple thereof. Whenever a Global Note is exchanged as a whole for
one or more Initial Certificated Notes or Exchange Certificated Notes, as the
case may be, it shall be surrendered by the Holder thereof to the Trustee for
cancellation. Whenever a Global Note is exchanged in part for one or more
Initial Certificated Notes or Exchange Certificated Notes, as the case may be,
it shall be surrendered by the Holder thereof to the Trustee and the Trustee
shall make the appropriate notations to Schedule A thereof pursuant to Section
2.5(c) hereof. All Initial Certificated Notes or Exchange Certificated Notes, as
the case may be, issued in exchange
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for a Global Note or any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee. Any Initial
Certificated Notes issued pursuant to this Section 2.6(c) shall include (i) the
Private Placement Legend, except as set forth in Section 2.6(a)(iii) hereof, and
(ii) the Unit Legend except as set forth in Section 2.6(j) hereof. Interests in
a Global Note may not be exchanged for Certificated Notes other than as provided
in this Section 2.6(c).
(d) A Holder may transfer a Note only upon the surrender of such Note
for registration of transfer. No such transfer shall be effected until, and the
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer in the Note Register by the Registrar. When
Notes are presented to the Registrar with a request to register the transfer of,
or to exchange, such Notes, the Registrar shall register the transfer or make
such exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Certificated Notes at the Registrar's request.
(e) The Company shall not be required to make and the Registrar need
not register transfers or exchanges of (a) Certificated Notes selected for
redemption (except, in the case of Certificated Notes to be redeemed in part,
the portion thereof not to be redeemed), or (b) any Certificated Note for a
period of 15 calendar days before a selection of Certificated Notes to be
redeemed or the mailing of a notice of a Change of Control Offer pursuant to
Section 4.7 hereof or an Asset Sale Offer pursuant to Section 4.8 hereof and
ending on the close of business on the day of such mailing.
(f) No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer of Notes (other than in respect of a
Registered Exchange Offer, except as provided in the Registration Agreement and
in respect of exchanges or transfers pursuant to Sections 2.9, 3.6, 4.7, 4.8 and
9.6).
(g) All Notes issued upon any registration of transfer, exchange or
substitution pursuant to the terms of this Indenture will evidence the same debt
and will be entitled to the same benefits under this Indenture as the Notes
surrendered for such registration of transfer, exchange or substitution.
(h) Prior to the effectiveness under the Securities Act of a Shelf
Registration Statement, or at any time during the suspension or following the
termination thereof, Holders of Initial Notes (or holders of interests therein)
and prospective purchasers designated by such Holders of Initial Notes (or such
holders of interests therein) shall have the right to obtain from the Company
upon request by such Holders (or such holders of interests) or prospective
purchasers, during any period in which the Company is not subject to Section 13
or Section 15(d) of the Exchange Act, or is exempt from reporting pursuant
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to 12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144A in connection with any transfer or proposed transfer of
such Notes or interests.
(i) Any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note 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
Notes represented hereby shall be required to be reflected in book entry form.
Transfers of a Global Note shall be limited to transfers in whole and not in
part, to the Depositary, its successors, and their respective nominees.
Interests of beneficial owners in a Global Note may be transferred in accordance
with the rules and procedures of the Depositary (or its successors).
(j) By its acceptance of any Initial Note represented by a certificate
bearing the Unit Legend specified in Section 2.1(e)(iii) hereof, each Holder of,
and each beneficial owner of an interest in, such Initial Note acknowledges that
Notes were initially issued as part of an issuance of Units, each of which
consisted of $1,000 principal amount at Stated Maturity of Notes and one Warrant
to purchase 34 Common Shares of the Company, agrees to the restrictions on
transfer of Units set forth in the Final Memorandum and the Unit Legend and
agrees that it will not transfer such Initial Notes separately, but only with
the Warrants as part of a Unit, until the Separation Date.
SECTION 2.7 Replacement Notes. If any mutilated Note is surrendered to
the Trustee, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Note, a new
Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to save either of them and
any agent of each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note, provided such payment is either
not made prior to the day following the Five Year Date or is made only following
the occurrence of an Event of Default.
Upon the issuance of any new Note under this Section 2.7, the Company
may require the payment by the Holder of a sum sufficient to cover any tax or
other governmental
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charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.7 in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost of stolen Notes.
SECTION 2.8 Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.8 as not
outstanding. A Note does not cease to be outstanding because the Company, a
Guarantor or an Affiliate of the Company or a Guarantor holds such Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that such replaced Note is held by a bona fide purchaser. A mutilated Note
ceases to be outstanding upon surrender of such Note and replacement thereof
pursuant to Section 2.7.
If the Paying Agent (other than the Company, a Guarantor or an
Affiliate of the Company or a Guarantor) segregates and holds in trust, in
accordance with this Indenture, on a Redemption Date or Maturity date money
sufficient to pay all principal, premium, if any, interest (including Additional
Amounts, if any, and Special Interest, if any) and any other amounts payable on
that date with respect to the Notes (or portions thereof) to be redeemed or
maturing, as the case may be, then on and after that date such Notes (or such
portions thereof) shall cease to be outstanding and interest on them shall cease
to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent or any amendment,
modification or other change to this Indenture, Notes held or beneficially owned
by the Company or Guarantor or an Affiliate of the Company or a Guarantor of the
Company or by agents of any of the foregoing shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Notes which a Trust Officer knows are so
owned shall be so disregarded. Notes so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction of
the Trustee such pledgee's right so to act with respect to the Notes and that
the pledgee is not the Company, a Guarantor or an Affiliate of the Company or of
a Guarantor or any of their agents.
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SECTION 2.9 Temporary Notes. Pending the preparation of definitive
Notes, the Company may execute, the Guarantors shall endorse and the Trustee
shall authenticate, temporary notes ("Temporary Notes") which are printed,
lithographed, or otherwise produced, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations.
If Temporary Notes are issued, the Company shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the Temporary Notes shall be exchangeable for definitive Notes upon
surrender of the Temporary Notes to the Trustee, without charge to the Holder.
Until so exchanged, Temporary Notes will evidence the same debt and will be
entitled to the same benefits under this Indenture as the definitive Notes in
lieu of which they have been issued.
SECTION 2.10 Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange, purchase or payment. The Trustee shall cancel all Notes surrendered
for registration of transfer, exchange, purchase, payment or cancellation and
shall dispose of such Notes in accordance with the Trustee's policy of disposal;
provided, however, that the Trustee shall not be required to destroy such
canceled Notes. The Company may not issue new Notes to replace Notes it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
SECTION 2.11 Payment of Interest; Interest Rights Preserved. Interest
(including Additional Amounts, if any, and Special Interest, if any) on any Note
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date, commencing on June 1, 1999, shall be paid to the Person in whose
name such Note is registered at the close of business on the Record Date for
such interest payment, which shall be the May 15 or November 15 (whether or not
a Business Day) immediately preceding such Interest Payment Date.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Record Date, and, except as hereinafter provided, such Defaulted
Interest and any interest payable on such Defaulted Interest may be paid by the
Company, at its election, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, to the Persons in whose
names the Notes are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on the Notes and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
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respect of such Defaulted Interest (including Additional Amounts, if any, and
Special Interest, if any) or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this clause (a). Thereupon the Trustee shall
fix a Special Record Date for the payment of such Default Interest which shall
be not more than 15 calendar days and not less than 10 calendar days prior to
the date of the proposed payment and not less than 10 calendar days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be sent, first class
mail, postage prepaid, to each Holder at such Holder's address as it appears in
the Security Register, not less than 10 calendar days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the Notes are registered at
the close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest, (including
Additional Amounts, if any, and Special Interest, if any) and any interest
payable on such Defaulted Interest, on the Notes in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section 2.11, each Note
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, or in substitution for, any other Note, shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Note.
SECTION 2.12 Authorized Denominations. The Notes shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.13 Computation of Interest, etc.
(a) The Notes will be issued at a discounted aggregate principal value
of $87,697,300. The Notes will accrete interest from the Issue Date at a rate
computed as if the Notes had been issued bearing interest at the rate of 14% per
annum on May 31, 1996 (being a rate of 14.9445% per annum for the period from
the Issue Date through November 30, 1996), compounded semi-annually, to an
aggregate principal amount of $123,000,000 by December 1, 1998. Thereafter,
interest on the Notes will accrue at the rate of 14% per annum and will be
payable in cash semi-annually on June 1 and December 1 of each year, commencing
June 1, 1999 to the person in whose name the Note (or any predecessor Note)
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is registered at the close of business on May 15 or November 15 next preceding
such Interest Payment Date. The effect of the foregoing is that the Notes will
bear interest at the rate of 14.9445% per annum from the Issue Date through
November 30, 1996 and 14% per annum thereafter. The payment of interest on the
Notes in respect of the period from the Issue Date to December 1, 1998, however,
will effectively be deferred until Maturity and such deferred interest will be
compounded semi-annually and added to the outstanding principal amount of the
Notes. Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months. If the Company has not received on or before
May 31, 1998, $20,000,000 in Cash Proceeds from a sale or sales of Qualified
Stock of the Company occurring subsequent to the Issue Date (other than
Qualified Stock issued upon the exercise of Warrants or upon conversion of the
Convertible Notes), the Notes will accrete interest to December 1, 1998 and
thereafter accrue interest at the rate of 14.5% per annum, commencing on June 1,
1998 until any Interest Payment Date prior to which the Company shall have
received such $20,000,000 in Cash Proceeds from such a sale of Qualified Stock.
Commencing on any such Interest Payment Date, the Notes will again bear interest
at the rate of 14% per annum. For purposes of this interest rate adjustment
provision, the Company will be deemed to have raised such $20,000,000 in Cash
Proceeds if a Change of Control has occurred.
(b) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever interest, Additional Amounts, Special Interest, or
Defaulted Interest or interest on Defaulted Interest relating to the Notes, is
to be calculated on the basis of a year of 360 days or any other period of time
that is less than a calendar year, the yearly rate of interest to which the rate
determined pursuant to such calculation is equivalent is the rate so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by either 360 or such other period of time, as
the case may be. The rate accruing on the Notes for payment purposes shall be
determined in accordance with Subsection 2.13(a) hereof, and for greater
certainty for the purposes of the Interest Act (Canada) for the period from the
Issue Date through November 30, 1996, the interest rate hereunder shall be
14.9445% per annum, subject to the initial sentence of this Section 2.13(b).
(c) Notwithstanding any other term of this Indenture, the Company shall
not be obliged to pay any interest or other amounts under or in connection with
this Indenture in excess of the amount or rate permitted under or consistent
with applicable law. In particular, the Company shall not be obliged to pay any
interest or other amounts which would result in the receipt by the Holders of
interest on credit advanced at a rate in excess of the rate permitted under the
Criminal Code (Canada).
SECTION 2.14 Persons Deemed Owners. Prior to the due presentation for
registration of transfer of any Notes, the Company, the Guarantors, the Trustee,
the Paying Agent, the Registrar and any co-Registrar may deem and treat the
person in whose name a Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of, premium, if any, and interest
(including Special Interest, if any, but
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excluding Additional Amounts, if any, which shall be determined by the
beneficial ownership of such Note) on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Company, the
Guarantors, the Trustee, the Paying Agent, the Registrar or any co-Registrar
shall be affected by notice to the contrary.
SECTION 2.15 CUSIP Numbers. The Company, in issuing the Notes, may use
a "CUSIP" number for each series of Notes and, if so, the Trustee shall use the
relevant CUSIP number in any notices to Holders as a convenience to such
Holders; provided, that any such notice may state that no representation is made
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee of
any change in any CUSIP number used.
ARTICLE III
REDEMPTION
SECTION 3.1 Notice to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.7(a) and the Notes,
it shall furnish an Officers' Certificate to the Trustee setting forth the
Redemption Date, the principal amount of Notes to be redeemed and the Redemption
Price. The Company shall give each such notice to the Trustee at least 60
calendar days prior to the Redemption Date unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers' Certificate and
an Opinion of Counsel from the Company to the effect that such redemption will
comply with any conditions to such redemption set forth herein and in the Notes.
SECTION 3.2 Selection of Notes to be Redeemed. If less than all the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed on a pro rata basis, or by any other method which the Trustee shall
determine to be fair and appropriate and which complies with any stock exchange
and other applicable requirements, provided that the Trustee may select for
redemption in part only Notes in denominations larger than $1,000. In selecting
Notes to be redeemed pursuant to this Section 3.2, the Trustee shall make such
adjustments, reallocations and eliminations as it shall deem proper so that the
principal amount at Stated Maturity of each Note to be redeemed shall be $1,000
or an integral multiple thereof, by increasing, decreasing or eliminating any
amount less than $1,000 which would be allocable to any Holder. If the Notes to
be redeemed are Certificated Notes, the Certificated Notes to be redeemed shall
be selected by the Trustee by prorating, as nearly as may be, or by any other
method which the Trustee shall determine to be fair and appropriate and which
complies with any stock exchange and other applicable requirements, the
principal amount of Certificated Notes to be redeemed among the Holders of
Certificated Notes registered in their respective names. The Trustee in its
discretion may determine the particular Notes (if there are more than one)
registered in the name of any Holder which are to be redeemed, in whole or in
part. Provisions of this
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Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed. Each redemption of Notes shall be
pro rata as between Initial Notes and Exchange Notes.
SECTION 3.3 Notice of Redemption. At least 30 calendar days but not
more than 60 calendar days before a Redemption Date, the Company shall send a
notice of redemption, first class mail, postage prepaid, to Holders of Notes to
be redeemed at the addresses of such Holders as they appear in the Note
Register.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid interest to
be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(e) if any Global Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, the Global Note, with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unredeemed portion, will be returned
to the Holder thereof;
(f) if any Certificated Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the Redemption
Date, a new Certificated Note or Certificated Notes in principal amount equal to
the unredeemed portion will be issued;
(g) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be redeemed;
(h) that, unless the Company defaults in making the redemption payment,
interest on, or the accretion of the value of, and Additional Amounts, if any,
and Special Interest, if any on, the Notes (or portions thereof) called for
redemption shall cease and such Notes (or portions thereof) shall cease to
accrete in value or cease to accrue such interest on and after the Redemption
Date;
(i) the paragraph of the Notes and the Section of the Indenture
pursuant to which the Notes are being called for redemption; and
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(j) any other information necessary to enable Holders to comply with
the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.3 in a timely manner, provided that the Company shall give the Trustee
not less than 45 calendar days notice of such election prior to the Redemption
Date unless the Trustee consents to a shorter period.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 3.3 hereof, Notes called for redemption
shall become due and payable on the Redemption Date and at the Redemption Price
stated in such notice, including interest, Additional Amounts and Special
Interest, if any, accrued and unpaid and any other amounts payable on the
Redemption Date; provided that if the Redemption Date is after a regular Record
Date and on or prior to the Interest Payment Date, the accrued interest
(including Additional Amounts, if any, and Special Interest, if any) and any
other amounts payable shall be payable to the Holder of the redeemed Note on the
relevant Record Date; and provided, further, that if a Redemption Date is not a
Business Day, payment shall be made on the next succeeding Business Day and no
interest shall accrue, nor shall the Notes accrete in value, for the period from
such Redemption Date to such succeeding Business Day. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price stated in such
notice. Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.5 Deposit of Redemption Price. On or prior to 10:00 a.m., New
York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent money, in federal or other immediately available funds, sufficient
to pay the Redemption Price on all Notes to be redeemed on that date other than
Notes or portions of Note called for redemption on such date which have been
delivered by the Company to the Trustee for cancellation.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article III, interest (and Additional Amounts and
Special Interest, if any) on the Notes to be redeemed on the applicable
Redemption Date shall cease to accrue, or such Notes shall cease to accrete in
value, as the case may be, from and after such date and such Notes or portions
thereof shall be deemed not to be entitled to any benefit under this Indenture
except to receive payment of the Redemption Price on the Redemption Date. If any
Note called for redemption shall not be so paid upon surrender for redemption,
then, from the Redemption Date until such principal is paid, interest (and
Additional Amounts and Special Interest, if any) shall be paid on the unpaid
principal and, to the extent permitted by law, on any accrued but unpaid
interest thereon, in each case at the rate prescribed therefor by such Notes.
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SECTION 3.6 Notes Redeemed in Part. Upon surrender and cancellation of
a Certificated Note that is redeemed in part, the Company shall issue and the
Trustee shall authenticate and deliver to the surrendering Holder (at the
Company's expense) a new Certificated Note equal in principal amount to the
unredeemed portion of the Certificated Note surrendered and canceled, provided
that each such Certificated Note shall be in a principal amount at Stated
Maturity of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is redeemed in part, the Paying
Agent shall forward such Global Note to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount of such Global Note to an
amount equal to the unredeemed portion of such Global Note, as provided in
Section 2.5(c) hereof.
SECTION 3.7 Optional Redemption. (a) Except as set forth in subsection
(b) of this Section 3.7, the Company shall not have the option to redeem the
Notes pursuant to this Section 3.7 prior to June 13, 2001, being the date
following the Five Year Date. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part upon not less than 30 calendar days' nor
more than 60 calendar days' notice, at the Redemption Prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest, if any, Additional Amounts, if any, and Special Interest, if any, to
the applicable Redemption Date, if redeemed during the period from June 13, 2001
through May 31, 2002 at a percentage of 108.000% and thereafter during the
twelve month period beginning June 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002 ................................................. 104.000%
2003 and thereafter .................................. 100.000%
(b) The Notes may be redeemed, at the option of the Company, in whole
but not in part, upon not less than 30 or more than 60 days' notice to the
Holders in accordance with Section 13.2 hereof, at a Redemption Price equal to
the Accreted Value thereof, plus accrued and unpaid interest, if any (including
Additional Amounts, if any, and Special Interest, if any), to the Redemption
Date fixed therefor (subject to the right of Holders of record on the relevant
Record Date to receive interest (including Additional Amounts, if any, and
Special Interest, if any), due on the Interest Payment Date that is on or prior
to the Redemption Date) and any other amounts due if, as a result of any change
in or amendment to the laws or the regulations or rulings promulgated thereunder
of Canada, Cyprus, the Russian Federation or any other jurisdiction with which
the Company or any Guarantor has any connection (other than a connection arising
as a result of a continuance or a merger or consolidation of the Company with or
into a newly formed corporation solely for the purpose of moving the Company's
domicile out of Canada) or any political subdivision thereof or any authority
thereof or having power to tax therein, or any change in the application or
official interpretation of such laws or regulations, or any change in
administrative policy or assessing practice of the applicable taxing authority,
which change or amendment becomes effective on or after May 24, 1996, the
Company or the Guarantors
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(if the Guarantees are called) are or would be required on the next succeeding
Interest Payment Date to pay Additional Amounts with respect to the Notes or the
Guarantees and the payment of such Additional Amounts cannot be avoided by the
use of any reasonable measures available to the Company or the Guarantors, as
the case may be. The Company will also pay to Holders on the Redemption Date any
Additional Amounts payable in respect of the period ending on the Redemption
Date. Prior to the publication of any notice of redemption pursuant to this
provision, which in no event will be given earlier than 90 days prior to the
earliest date on which the Company or the Guarantors, as the case may be, would
be required to pay such Additional Amounts were a payment in respect of the
Notes then due, the Company shall deliver to the Trustee (i) an Officers'
Certificate stating that the obligation to pay such Additional Amounts cannot be
avoided by the Company or the Guarantors, as the case may be, taking reasonable
measures and (ii) an Opinion of Counsel, independent of the Company and the
Guarantors and approved by the Trustee, to the effect that the Company or the
Guarantors have or will become obligated to pay such Additional Amounts as a
result of such change or amendment. Such notice, once delivered by the Company
to the Trustee, will be irrevocable. The Trustee shall accept such Officers'
Certificate and Opinion of Counsel as sufficient evidence of the satisfaction of
the condition precedent set forth in clauses (i) and (ii) above, in which event
it shall be conclusive and binding on the Holders.
SECTION 3.8 Mandatory Redemption. Subject to the Company's obligations
to make an offer to purchase Notes under certain circumstances pursuant to
Sections 4.7 or 4.8 hereof, the Company shall have no mandatory redemption or
sinking fund obligations with respect to the Notes.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Notes. The Company shall promptly pay the
principal of, premium, if any, interest (including Additional Amounts, if any,
and Special Interest, if any) on, and any other amounts in respect of, the Notes
on the dates and in the manner provided in the Notes and in this Indenture.
Principal, premium, interest and such other amounts shall be considered paid on
the date due if, on or before 10:00 a.m., New York City time, on such date, the
Trustee or the Paying Agent, other than the Company or a Guarantor or an
Affiliate of the Company or a Guarantor, holds in accordance with this Indenture
money to pay all principal, premium, interest (including Additional Amounts, if
any, and Special Interest, if any) or other amounts then due.
To the extent lawful, the Company shall pay interest on (i) any overdue
principal of (and premium, if any, on) the Notes, at the interest rate borne on
the Notes plus 1% per annum and (ii) Defaulted Interest (without regard to any
applicable grace period), at the same rate. The Company's obligation pursuant to
the previous sentence shall apply whether
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such overdue amount is due at its Stated Maturity, as a result of the Company's
obligations pursuant to Section 3.7, Section 4.7 or Section 4.8 hereof, or
otherwise.
SECTION 4.2 Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
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 Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all of such purposes, and may from time
to time rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation and any
change in the location of any such other office or agency.
SECTION 4.3 Money for the Note Payments to be Held in Trust. If the
Company, any Guarantor, any Restricted Subsidiary, or any of their respective
Affiliates shall at any time act as Paying Agent with respect to the Notes, such
Paying Agent shall, on or before each due date of the principal of (and premium,
if any), interest on or other amounts in respect of any of the Notes, segregate
and hold in trust for the benefit of the Persons entitled thereto money
sufficient to pay the principal (and premium, if any), interest (including
Additional Amounts, if any and Special Interest, if any) or other amounts so
becoming due until such money shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to the Notes, it shall, prior to or on each due date of the principal of (and
premium, if any), interest on or other amounts in respect of any of the Notes,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any), interest (including Additional Amounts, if any and Special Interest, if
any) or other amounts so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium, if any, interest
(including Additional Amounts, if any and Special Interest, if any) or other
amounts, and (unless such Paying Agent is the Trustee) the Paying Agent shall
promptly notify the Trustee of the Company's action or failure so to act.
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SECTION 4.4 Corporate Existence. Subject to the provisions of Article V
hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company and any such Restricted Subsidiary other
than a Leasing Company or NWE Cyprus shall not be required to preserve the
corporate existence of any such Restricted Subsidiary other than a Leasing
Company or NWE Cyprus or any such right or franchise if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders of Notes.
SECTION 4.5 Maintenance of Property. The Company shall cause all
Property used in the conduct of its business or the business of any of its
Restricted Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as, in the judgment of
the Company, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section 4.5 shall prevent the Company from discontinuing
the operation or maintenance of any of such Property if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any of its Restricted Subsidiaries and not disadvantageous in any
material respect to the Holders of the Notes.
SECTION 4.6 Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the Property of the Company or any of its
Restricted Subsidiaries; provided that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.7 Repurchase at the Option of Holders upon a Change of
Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole or in part in a principal amount at Stated Maturity that is an integral
multiple of $1,000, pursuant to an irrevocable and unconditional offer described
in Section 4.7(b) hereof (the "Change of Control Offer"), at a purchase price
(the "Change of Control Purchase Price") in cash equal to 101 percent of the
Accreted Value of such Notes (or portions thereof) on any Change of
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Control Payment Date plus accrued and unpaid interest, if any, and Additional
Amounts, if any, and Special Interest, if any, to the Change of Control Payment
Date.
(b) Within 30 calendar days of the date of any Change of Control, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.7, and that all
Notes properly tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Notes
are to be purchased pursuant to the Change of Control Offer (the
"Change of Control Payment Date"), which date shall be a date occurring
no earlier than 30 calendar days nor later than 40 calendar days
subsequent to the date such notice is mailed;
(iii) that any Notes or portions thereof not properly tendered
will continue to accrete in value or accrue interest, as applicable,
and Additional Amounts and Special Interest, if applicable;
(iv) that, unless the Company defaults in the payment of the
Change of Control Purchase Price with respect thereto, all Notes or
portions thereof accepted for payment pursuant to the Change of Control
Offer shall cease to accrete in value or accrue interest, as
applicable, and Additional Amounts and Special Interest, if applicable,
from and after the Change of Control Payment Date;
(v) that any Holder electing to have any Notes or portions
thereof purchased pursuant to a Change of Control Offer will be
required to surrender such Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of such Notes completed, to
the Paying Agent at the address specified in the notice, prior to the
close of business on the third Business Day preceding the Change of
Control Payment Date;
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter,
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
such Holder's election to have such Notes or portions thereof purchased
pursuant to the Change of Control Offer;
(vii) that any Holder electing to have Notes purchased
pursuant to the Change of Control Offer must specify the principal
amount that is being tendered for
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purchase, which principal amount must be $1,000 at Stated Maturity or
an integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to
Section 2.6(c), that any Holder of Certificated Notes whose
Certificated Notes are being purchased only in part will be issued new
Certificated Notes equal in principal amount to the unpurchased portion
of the Certificated Note or Notes surrendered, which unpurchased
portion will be equal in principal amount at Stated Maturity to $1,000
or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global
Note that is being purchased in part, such Global Note with a notation
on Schedule A thereof adjusting the principal amount thereof to be
equal to the unpurchased portion of such Global Note; and
(x) the instructions and any other information necessary to
enable any Holder to accept a Change of Control Offer or effect
withdrawal of such acceptance.
(c) On or before the Change of Control Payment Date, the Company shall
(i) accept for payment any Notes or portions thereof properly tendered pursuant
to the Change of Control Offer; (ii) irrevocably deposit with the Paying Agent,
by 10:00 a.m., New York City time, on such date, in immediately available funds,
an amount equal to the Change of Control Purchase Price in respect of all Notes
or portions thereof so accepted, including interest, Additional Amounts and
Special Interest, if applicable; and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof tendered to the Company and accepted for payment.
The Paying Agent shall promptly send by first class mail, postage prepaid, to
each Holder of Notes or portions thereof so accepted for payment, payment in an
amount equal to the Change of Control Purchase Price for such Notes or portions
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 4.7, the Trustee shall act as the Paying
Agent.
(d) Upon surrender and cancellation of a Certificated Note that is
purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Note, a new Certificated Note equal in
principal amount to the unpurchased portion of such surrendered Certificated
Note; provided that each such new Certificated Note shall be in a principal
amount of $1,000 at Stated Maturity or an integral multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant to a
Change of Control Offer, the Paying Agent shall forward such Global Note to the
Trustee who shall make a notation on Schedule A thereof to reduce the principal
amount of such Global Note
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to an amount equal to the unpurchased portion of such Global Note, as provided
in Section 2.5(c) hereof.
(e) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to a Change of Control Offer.
SECTION 4.8 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly to, consummate any Asset Sale, unless:
(i) no Event of Default shall have occurred and be continuing
or shall occur as a consequence thereof;
(ii) the Company or such Restricted Subsidiary, as the case
may be, receives net consideration at the time of such Asset Sale at
least equal to the Fair Market Value (as evidenced by a Board
Resolution delivered to the Trustee) of the Property or assets sold or
otherwise disposed of;
(iii) at least 75 percent of the consideration received in
respect of such Asset Sale by the Company or such Restricted
Subsidiary, as the case may be, for such Property or assets consists of
Cash Proceeds; and
(iv) the Company or such Restricted Subsidiary, as the case
may be, uses the Net Cash Proceeds from such Asset Sale in the manner
set forth in Section 4.8(b) hereof.
To the extent that the assets which are the subject of any Asset Sale
constitute Collateral, all proceeds thereof shall, to the extent permitted by
law, be subject to a perfected Lien in favor of the Trustee or a collateral
agent for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Convertible Note Trustee and the
equal and ratable benefit of the Holders of the Convertible Notes, which Lien
shall have the same priority as the Lien on the Collateral which was the subject
of such Asset Sale, and all Net Cash Proceeds from such an Asset Sale shall be
deposited in the Company Senior Note Escrow Account or a Leasing Company Escrow
Account, if applicable. To the extent that assets which are the subject of any
Asset Sale constitute Telecommunications Assets subject to a Telecommunications
Assets Lease which is Collateral, all proceeds thereof shall, to the extent
permitted by applicable law, be subject to a perfected Lien in favor of the
Trustee or a collateral agent for the benefit of the Trustee and for the equal
and ratable benefit of the Holders of the Notes and for the benefit of the
Convertible Note Trustee and the equal and ratable benefit of the Holders of the
Convertible Notes, which Lien shall have the same priority as the Lien on such
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Telecommunications Asset Leases governing the Telecommunications Assets which
were the subject of such Asset Sale, and all Net Cash Proceeds from such an
Asset Sale of Telecommunications Assets must be deposited in the applicable
Leasing Company Escrow Account. To the extent that assets which are the subject
of any Asset Sale constitute Convertible Note Collateral, all proceeds thereof
shall, to the extent permitted by applicable law, be subject to a perfected Lien
in favor of the Convertible Note Trustee or a collateral agent for the benefit
of the Convertible Note Trustee and the equal and ratable benefit of the Holders
of Convertible Notes and for the benefit of the Trustee and the equal and
ratable benefit of the Holders of Notes, which Lien shall have the same priority
as the Lien on the Convertible Note Collateral which was the subject of such
Asset Sale, and all Net Cash Proceeds from such an Asset Sale of Convertible
Note Collateral must be deposited in the Company Convertible Note Escrow
Account, unless the Convertible Notes are no longer outstanding and the
Convertible Note Indenture has been satisfied and discharged, in which case such
Net Cash Proceeds shall be deposited in the Company Senior Note Escrow Account.
(b) (i) To the extent that assets subject to an Asset Sale consist of
Collateral other than a Telecommunications Asset Lease or
Telecommunications Assets subject to a Telecommunications Asset Lease,
the Company shall have the option, within 365 days of such Asset Sale,
to reinvest the Net Cash Proceeds (or any portion thereof) from such
Asset Sale in another asset or business in the same or similar lines of
business as the Company and its Restricted Subsidiaries (the
"Replacement Assets") (or enter into a binding agreement to reinvest
such Net Cash Proceeds (or any portion thereof) prior to the end of
such 365-day period, provided that such reinvestment is completed
within 90 days after the end of such 365-day period); provided that
such Replacement Assets are subject to a Lien in favor of the Trustee
or a collateral agent for the benefit of the Trustee and for the equal
and ratable benefit of the Holders and for the benefit of the
Convertible Note Trustee and the equal and ratable benefit of Holders
of Convertible Notes, which Lien has the same priority as had the Lien
on such Collateral, which was the subject of such Asset Sale.
(ii) To the extent that assets subject to an Asset Sale
consist of Convertible Note Collateral, the Company shall have the
option, within 365 days of such Asset Sale, to reinvest the Net Cash
Proceeds (or any portion thereof) from such Asset Sale in Replacement
Assets (or enter into a binding agreement to reinvest such Net Cash
Proceeds (or any portion thereof) prior to the end of such 365-day
period, provided that such reinvestment is completed within 90 days
after the end of such 365-day period); provided that such Replacement
Assets are subject to a Lien in favor of the Convertible Note Trustee
or a collateral agent for the benefit of the Convertible Note Trustee
and for the equal and ratable benefit of the Holders of Convertible
Notes and for the benefit of the Trustee and the equal and ratable
benefit of Holders of the Notes, which Lien has the same priority as
had the Lien on such Convertible Note Collateral, which was the subject
of such Asset Sale.
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(iii) To the extent that assets subject to an Asset Sale
constitute Telecommunications Assets subject to a Telecommunications
Asset Lease, the Company shall have the option, within 365 days of such
Asset Sale, to cause the applicable Leasing Company to reinvest the Net
Cash Proceeds from such Asset Sale (or any portion thereof) in
Telecommunications Assets to be leased pursuant to a new
Telecommunications Asset Lease ("Replacement Telecommunication Assets")
(or enter into, or cause the applicable Leasing Company to enter into,
a binding agreement to reinvest such Net Cash Proceeds (or any portion
thereof) prior to the end of such 365-day period, provided that such
reinvestment is completed within 90 days after the end of such 365-day
period), and with respect to any proceeds of insurance paid on account
of the loss of or damage to any such Telecommunications Assets, or
compensation or other proceeds for any such Telecommunications Assets
taken by condemnation, eminent domain or similar proceedings, such Net
Cash Proceeds are applied as provided above or applied to reimburse the
applicable Leasing Company for expenditures made, and costs incurred,
to repair, rebuild, replace or restore the Telecommunications Assets
subject to such loss, damage or taking.
(iv) To the extent that assets subject to an Asset Sale do not
constitute Collateral, Telecommunications Assets subject to a
Telecommunications Asset Lease or Convertible Note Collateral, the
Company shall have the option within 365 days of such Asset Sale (i) to
reinvest (or enter into a binding agreement to reinvest prior to the
end of such 365-day period, provided that such reinvestment is
completed within 90 days after the end of such 365-day period) an
amount equal to the Net Cash Proceeds (or any portion thereof) from
such Asset Sale in Replacement Assets, and/or (ii) apply an amount
equal to such Net Cash Proceeds (or remaining Net Cash Proceeds) to the
permanent reduction of Indebtedness of the Company (other than
Indebtedness to a Restricted Subsidiary) that is pari passu in right of
payment with the Notes or to the permanent reduction of Indebtedness of
any Restricted Subsidiary that is pari passu in right of payment with
the Guarantees, if applicable (other than Indebtedness owed to, or
Preferred Stock owned by, the Company or a Restricted Subsidiary of the
Company).
(v) Any Net Cash Proceeds from any Asset Sale that are not
used to reinvest in Replacement Assets or Replacement
Telecommunications Assets and/or to reduce pari passu Indebtedness of
the Company or the Guarantors to the extent permitted by this Section
4.8(b) shall constitute "Excess Proceeds"; provided that, with respect
to any Asset Sale by a Person which is not a Wholly-Owned Restricted
Subsidiary, the amount of Net Cash Proceeds which shall constitute
Excess Proceeds to be used to make an Asset Sale Offer (as defined in
Section 4.8(c) below) shall be limited to the percentage of such unused
Net Cash Proceeds received by such Person equal to a percentage
determined by dividing the direct or indirect interest of the Company
in the Capital Stock of such Person by the total then outstanding
Capital Stock of such Person determined as of the date of such Asset
Sale.
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(c) Subject to the limitations set out in Section 4.8(d) below, if at
any time the aggregate amount of Excess Proceeds exceeds $5,000,000, the Company
shall, within 30 days thereafter, use such Excess Proceeds to make an offer to
purchase Notes (an "Asset Sale Offer") on a pro rata basis from all Holders of
Notes in an aggregate principal amount equal to the maximum principal amount
that may be purchased out of Excess Proceeds, at a purchase price (the "Offer
Purchase Price") in cash equal to 100% of the Accreted Value thereof on any
purchase date, plus accrued and unpaid interest, if any, Additional Amounts, if
any, and Special Interest, if any, to the Asset Sale Payment Date, in accordance
with the procedures set forth in this Section 4.8; provided that, if any such
assets subject to such Asset Sale constitute Convertible Note Collateral, the
Company shall be required to apply that portion of such Excess Proceeds
attributable to such Asset Sale of Convertible Note Collateral which is
permitted to be so applied pursuant to Section 4.8(d) of the Convertible Note
Indenture (the "Permitted Portion"), first, to an asset sale offer for the
Convertible Notes pursuant to and in the circumstances permitted by the
Convertible Note Indenture (a "Convertible Note Asset Sale Offer") unless the
Convertible Notes are no longer outstanding and the Convertible Note Indenture
has been satisfied and discharged, and, to the extent that the aggregate amount
paid pursuant to the Convertible Note Asset Sale Offer is less than such
Permitted Portion, then to an Asset Sale Offer; and provided further that if
such assets subject to such Asset Sale are subject to a Lien which is and is
permitted to be pari passu with the Lien in favor of the Trustee or a collateral
agent, the Company shall only be required to apply a pro rata portion of such
Excess Proceeds to the Asset Sale Offer. To the extent that assets subject to an
Asset Sale are not and are not required to be subject to a Lien in favor of the
Trustee or do not constitute Telecommunications Assets subject to a
Telecommunications Asset Lease or Convertible Note Collateral, the Company may
apply 100% of the Excess Proceeds thereof to the prepayment of obligations
outstanding in respect of Indebtedness that is pari passu to the Notes or the
Guarantees to the extent required thereunder. If (x) no obligations are
outstanding in respect of or under such pari passu Indebtedness or (y) the
holders of such pari passu Indebtedness entitled to receive payment elect not to
receive the payments provided for in the previous sentence, or (z) the
application of such Net Cash Proceeds results in the complete prepayment of all
such Indebtedness, then such Excess Proceeds or any remaining portion thereof
will be required to be applied by the Company to an Asset Sale Offer subject to
the limitations of Section 4.8(d) below. Subject to the limitations set out in
Section 4.8(d) below, the Company may at any time by delivering an Officers'
Certificate and Board Resolution to the Trustee waive its reinvestment options
and proceed to make an Asset Sale Offer, notwithstanding that any applicable
period for reinvestment shall not have expired.
(d) Notwithstanding Section 4.8(c) above and Section 4.8(e) below, the
Company will not be obligated to repurchase Notes in connection with an Asset
Sale Offer representing in the aggregate more than 25% of the original aggregate
principal amount of the Notes (which original aggregate principal amount shall
for these purposes be the amount originally allocated to the Notes, net of any
amounts allocated to the Warrants and without any adjustment whatsoever) prior
to the date following the Five Year Date, and the original aggregate principal
amount of Notes repurchased in connection with any Asset Sale Offer
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having a purchase date prior to the date following the Five Year Date shall
represent no more than 25% of the original aggregate principal amount of the
Notes less the original aggregate principal amount of Notes purchased pursuant
to Asset Sale Offers relating to all prior Asset Sales. To the extent that the
amount of Excess Proceeds exceeds the amount of Notes purchased because of the
limitation imposed by the immediately preceding sentence (the amount of such
excess being the "Aggregate Unused Proceeds"), such Aggregate Unused Proceeds
shall constitute Excess Proceeds for purposes of the first Asset Sale Offer that
is made after the Five Year Date and, in the event the amount of the Aggregate
Unused Proceeds exceeds $5,000,000, promptly after the Five Year Date, the
Company shall commence an Asset Sale Offer on a pro rata basis for an aggregate
principal amount of Notes equal to the Aggregate Unused Proceeds (and any other
Excess Proceeds that arise between the Five Year Date and such Asset Sale Offer)
at a purchase price equal to 100% of the Accreted Value of the Notes, plus
accrued interest, if any, Special Interest, if any, and Additional Amounts, if
any, to the date of purchase.
(e) Subject to the provisions of Section 4.8(d) above, within 30
calendar days of the date the amount of Excess Proceeds exceeds $5,000,000, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that an Asset Sale Offer is being made pursuant to this
Section 4.8, and that all Notes properly tendered will be accepted for
payment, subject to proration in the event the amount of Excess
Proceeds is less than the aggregate Offer Purchase Price of all Notes
properly tendered pursuant to the Asset Sale Offer;
(ii) the Asset Sale Purchase Price, the amount of Excess
Proceeds that are available to be applied to purchase tendered Notes,
and the date Notes are to be purchased pursuant to the Asset Sale Offer
(the "Asset Sale Payment Date"), which date shall be a date no earlier
than 30 calendar days and not later than 40 calendar days subsequent to
the date such notice is mailed;
(iii) that any Notes or portions thereof not properly tendered
or accepted for payment will continue to accrue interest or accrete in
value, as the case may be, and Additional Amounts, if any, and Special
Interest, if any;
(iv) that, unless the Company defaults in the payment of the
Offer Purchase Price with respect thereto, all Notes or portions
thereof accepted for payment pursuant to the Asset Sale Offer shall
cease to accrete in value or accrue interest and Additional Amounts, if
any, and Special Interest, if any, from and after the Asset Sale
Payment Date;
(v) that any Holder electing to have any Notes or portions
thereof purchased pursuant to the Asset Sale Holder will be required to
surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse
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of such Notes completed, to the Paying Agent at the address specified
in the notice, prior to the close of business on the third Business Day
preceding the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Asset Sale Payment
Date, a telegram, telex, facsimile transmission or letter, setting
forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing such
Holder's election to have such Notes or portions thereof purchased
pursuant to the Asset Sale Offer;
(vii) that any Holder electing to have Notes purchased
pursuant to the Asset Sale Offer must specify the principal amount at
Stated Maturity that is being tendered for purchase, which principal
amount must be $1,000 or an integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to
Section 2.6(c), that any Holder of Certificated Notes whose
Certificated Notes are being purchased only in part will be issued new
Certificated Notes equal in principal amount to the unpurchased portion
of the Certificated Note or Notes surrendered, which unpurchased
portion will be equal in principal amount at Stated Maturity to $1,000
or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global
Note that is being purchased in part, such Global Note with a notation
on Schedule A thereof adjusting the principal amount thereof to be
equal to the unpurchased portion of such Global Note; and
(x) the instructions and any other information necessary to
enable any Holder to tender Notes and to have such Notes purchased, or
to withdraw such tender, pursuant to this Section 4.8.
(f) If the aggregate Asset Sale Purchase Price of the Notes surrendered
by Holders exceeds the amount of Excess Proceeds as indicated in the notice
required by Section 4.8(e) hereof, the Trustee shall select the Notes to be
purchased on a pro rata basis based on the principal amount of the Notes
tendered, with such adjustments as may be deemed appropriate by the Trustee and
to comply with any stock exchange and other applicable requirements, so that
only Notes in denominations of $1,000 or integral multiples thereof shall be
purchased.
(g) On or before the Asset Sale Payment Date, the Company shall (i)
accept for payment any Notes or portions thereof properly tendered and selected
for purchase pursuant to the Asset Sale Offer and Section 4.8(f) hereof; (ii)
irrevocably deposit with the Paying
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Agent, by 10:00 a.m., New York City time, on such date, in immediately available
funds, an amount equal to the Asset Sale Purchase Price in respect of all Notes
or portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof tendered to the Company and accepted for payment.
The Paying Agent shall promptly send by first class mail, postage prepaid, to
each Holder of Notes or portions thereof so accepted for payment, payment in an
amount equal to the Asset Sale Purchase Price for such Notes or portions
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on or as soon as practicable after the Asset Sale Payment Date. For purposes of
this Section 4.8, the Trustee shall act as the Paying Agent.
(h) Upon surrender and cancellation of a Certificated Note that is
purchased in part, the Company shall promptly issue and the Trustee shall
authenticate and deliver to the surrendering Holder of such Certificated Note a
new Certificated Note equal in principal amount to the unpurchased portion of
such surrendered Certificated Note; provided that each such new Certificated
Note shall be in a principal amount at Stated Maturity of $1,000 or an integral
multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant to
an Asset Sale Offer, the Paying Agent shall forward such Global Note to the
Trustee who shall make a notation on Schedule A thereof to reduce the principal
amount of such Global Note to an amount equal to the unpurchased portion of such
Global Note, as provided in Section 2.5(c) hereof.
(i) Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Purchase Price for accepted Notes), any surplus Excess Proceeds that
were subject to such offer shall cease to be Excess Proceeds, and the Company
may then use such amounts for general corporate purposes, including a
Convertible Note Asset Sale Offer pursuant to the asset sale covenant contained
in the Convertible Note Indenture. For greater certainty, such Excess Proceeds
do not include any Aggregate Unused Proceeds until such Aggregate Unused
Proceeds become Excess Proceeds pursuant to Section 4.8(d) hereof.
(j) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to an Asset Sale Offer.
SECTION 4.9 Limitation on Indebtedness. (a) The Company will not, and
will not permit its Restricted Subsidiaries to, directly or indirectly, incur
any Indebtedness (including Acquired Indebtedness) and the Company will not
issue any Disqualified Stock or permit any of its Restricted Subsidiaries to
issue any Disqualified Stock; provided that the Company and its Restricted
Subsidiaries other than the Leasing Companies or NWE Cyprus may incur
Indebtedness or issue Disqualified Stock if, after giving effect to such
issuance or incurrence
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on a pro forma basis, the Indebtedness to Operating Cash Flow Ratio of the
Company does not exceed 5.0 to 1.0.
(b) The provisions of Section 4.9(a) will not apply to:
(i) the incurrence by the Company and its Restricted
Subsidiaries other than the Leasing Companies or NWE Cyprus of
Indebtedness under the Revolving Credit Facilities, provided that the
aggregate principal amount of Indebtedness at any time outstanding
under or in respect of such facilities, together with any Indebtedness
then outstanding which was permitted to be incurred pursuant to clause
(x) below, shall not exceed $25,000,000;
(ii) the incurrence of the Existing Indebtedness;
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness owing to any of its
Restricted Subsidiaries, provided that any such Indebtedness is junior
and subordinate to the Notes and the Guarantees, if applicable, and
such Indebtedness is held at all times by the Company or a Restricted
Subsidiary of the Company;
(iv) Indebtedness of any Restricted Subsidiary to the Company
or a Wholly-Owned Restricted Subsidiary of the Company, provided that
such intercompany Indebtedness is evidenced by an Intercompany Note or
by a Telecommunications Asset Lease;
(v) Indebtedness of a Restricted Subsidiary constituting a
sublease by the lessee of Telecommunications Assets subject to a
Telecommunications Asset Lease to a Restricted Subsidiary of such
lessee;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries other than the Leasing Companies or NWE Cyprus of Interest
Hedging Obligations with respect to any floating rate Indebtedness that
is permitted by the covenant described in this Section 4.9(b);
(vii) the incurrence by the Company of any Exchange Rate
Obligations, provided that such Exchange Rate Obligations were entered
into in connection with transactions in the ordinary course of business
or the incurrence of Indebtedness that is permitted by this Section
4.9(b);
(viii) the incurrence of Indebtedness evidenced by the Notes
and the Guarantees pursuant to the Indenture and the Collateral
Documents and by the Convertible Notes and the Convertible Note
Guarantees pursuant to the Convertible Note Indenture and the
Convertible Note Collateral Documents;
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(ix) Indebtedness in respect of performance, surety or appeal
bonds provided by the Company in the ordinary course of business;
(x) Indebtedness of Restricted Subsidiaries other than the
Leasing Companies or NWE Cyprus in an aggregate principal amount not to
exceed $15,000,000 at any one time outstanding, provided that the
aggregate principal amount of all such Indebtedness at any time
outstanding, together with Indebtedness of Restricted Subsidiaries then
outstanding which was permitted to be incurred pursuant to clause (i)
above, shall not exceed $25,000,000;
(xi) International Vendor Indebtedness not to exceed an
aggregate principal amount of $40,000,000 at any one time outstanding,
provided that the Leasing Companies and NWE Cyprus may not incur any
International Vendor Indebtedness; and
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Refinancing Indebtedness issued in exchange for, or the
proceeds of which are used to refinance, repurchase, replace, refund or
defease ("Refinance" and correlatively, "Refinanced" and "Refinancing")
Indebtedness permitted pursuant to clause (ii) or (viii) of this
Section 4.9(b), provided that (A) the amount of such Refinancing
Indebtedness shall not exceed the principal amount of, premium, if any,
and accrued interest (and Additional Amounts and Special Interest on
the Notes) on the Indebtedness so Refinanced (or if such Indebtedness
was issued with original issue discount, the original issue price plus
amortization of the original issue discount at the time of the
repayment of such Indebtedness) plus the fees, expenses and costs of
such Refinancing and reasonable prepayment premiums, if any, in
connection therewith, (B) such Refinancing Indebtedness shall have a
Stated Maturity no earlier than the Indebtedness being Refinanced, (C)
such Refinancing Indebtedness shall have an Average Life equal to or
greater than the Average Life of the Indebtedness being Refinanced, (D)
if the Indebtedness being Refinanced is subordinated in right of
payment to the Notes or the Guarantees, as applicable, such Refinancing
Indebtedness shall be subordinated in right of payment to the Notes or
the Guarantees, as applicable, on terms at least as favorable to the
holders of Notes as those contained in the documentation governing the
Indebtedness being so Refinanced, and (E) no Restricted Subsidiary
shall incur Refinancing Indebtedness to Refinance Indebtedness of the
Company or another Restricted Subsidiary.
SECTION 4.10 Limitation on Issuances of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary which is
not a Guarantor on the Issue Date to guarantee, directly or indirectly, any
Indebtedness of the Company ("Guaranteed Indebtedness") unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement,
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indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Guarantee. If the Guaranteed Indebtedness is pari passu with the Notes
or its Guarantee, then the guarantee of such Guaranteed Indebtedness shall be
pari passu with or subordinated to such Guarantee; and if the Guaranteed
Indebtedness is subordinated to the Notes or its Guarantee, then the guarantee
of such Guaranteed Indebtedness shall be subordinated to such Guarantee at least
to the extent that the Guaranteed Indebtedness is subordinated to the Notes or
such Guarantee.
(b) Notwithstanding the provisions of Section 4.10(a) hereof, any
Guarantee by a Restricted Subsidiary other than a Leasing Company, NWE Cyprus,
WTC, BCL or a future WhollyOwned Restricted Subsidiary of the Company shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon the release or discharge of the guarantee which resulted in
the creation of such Restricted Subsidiary's Guarantee, except a discharge or
release by, or as a result of, payment under such guarantee.
SECTION 4.11 Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into, create, incur, assume or suffer to exist any Liens of any kind other than
Permitted Liens on or with respect to any of its Property or assets now owned or
hereafter acquired, or any interest therein or any income or profits therefrom,
without effectively providing that the Notes and/or the Guarantees, as
applicable, shall be secured equally and ratably with (and provided that the
Notes and/or the Guarantees, as applicable, shall be secured prior to any
secured obligation that is subordinated in right of payment to the Notes and/or
the Guarantees, as applicable) the obligations so secured for so long as such
obligations are so secured.
SECTION 4.12 Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Sale and Leaseback Transaction at least equal to the Fair Market Value (as
evidenced by a Board Resolution delivered to the Trustee) of the Property or
assets subject to such transaction; (ii) the Attributable Indebtedness of the
Company or such Restricted Subsidiary with respect thereto is included as
Indebtedness and would be permitted by Section 4.9 hereof, and any Liens granted
thereby would be permitted by Section 4.11 hereof; and (iii) the Net Cash
Proceeds from such transaction are applied in accordance with Section 4.8 as if
such proceeds resulted from an Asset Sale.
SECTION 4.13 Restricted Payments. (a) The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, make
any Restricted Payment unless, at the time of and after giving effect to such
proposed Restricted Payment (i) no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof; (ii) after
giving effect, on a pro forma basis, to such Restricted
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Payment and the incurrence of any Indebtedness the net proceeds of which are
used to finance such Restricted Payment, the Company could incur at least $1.00
of additional Indebtedness pursuant to Section 4.9(a) hereof; and (iii) after
giving effect to such Restricted Payment on a pro forma basis, the aggregate
amount expended or declared for all Restricted Payments after the Issue Date
does not exceed the sum of (A) 50% of the Consolidated Net Income of the Company
(or, if Consolidated Net Income shall be deficit, minus 100% of such deficit)
for the period (taken as one accounting period) beginning on the last day of the
fiscal quarter immediately preceding the Issue Date and ending on the last day
of the fiscal quarter immediately preceding the date of such Restricted Payment,
plus (B) 100% of the aggregate Net Cash Proceeds received by the Company
subsequent to the Issue Date from the issuance or sale (other than to a
Subsidiary) of shares of its Qualified Stock, including Qualified Stock issued
upon the exercise of options, warrants or rights to purchase Qualified Stock,
plus (C) 100% of the amount of any Indebtedness of the Company or any of its
Restricted Subsidiaries (as expressed on the face of a balance sheet in
accordance with GAAP), or the carrying value of any Disqualified Stock, which
has been converted into, exchanged for or satisfied by the issuance of shares of
Qualified Stock of the Company subsequent to the Issue Date, less the amount of
any cash, or the value of any other Property distributed by the Company or its
Restricted Subsidiaries upon such conversion, exchange or satisfaction, plus (D)
100% of the net reduction in Investments, subsequent to the Issue Date, in any
Person, resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of Property (but only to the
extent such interest, dividends, repayments or other transfers of Property are
not included in the calculation of Consolidated Net Income), in each case to the
Company or any Restricted Subsidiary from any Person (including, without
limitation, from Unrestricted Subsidiaries) or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investments" set forth in Section 1.1 hereof),
not to exceed in the case of any Person the amount of Investments previously
made by the Company or any Restricted Subsidiary in such Person and in each such
case which was treated as a Restricted Payment, minus (E) 100% of the amount of
Investments made or dividends paid pursuant to clauses (v), (vi) and (vii) of
Section 4.13(b) below subsequent to the Issue Date.
(b) The provisions of Section 4.13(a) shall not prevent the Company
from
(i) paying a dividend on its Capital Stock at any time within
60 days after the declaration thereof if, on the declaration date, the
Company could have paid such dividend in compliance with the provisions
of Section 4.13(a) hereof;
(ii) retiring (A) any Capital Stock of the Company or any
Restricted Subsidiary of the Company or (B) Indebtedness of the Company
that is subordinate to the Notes or (C) Indebtedness of a Restricted
Subsidiary of the Company, in exchange for, or out of the proceeds of
the substantially concurrent sale of, Qualified Stock of the Company;
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(iii) so long as no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof,
retiring any Indebtedness of the Company subordinated in right of
payment to the Notes in exchange for, or out of the proceeds of, the
substantially concurrent incurrence of Indebtedness of the Company
(other than Indebtedness to a Subsidiary of the Company), provided that
such new Indebtedness (A) is subordinated in right of payment to the
Notes at least to the same extent as, (B) has an Average Life at least
as long as, and (C) has no scheduled principal payments due in any
amount earlier than, any equivalent amount of principal under the
Indebtedness so retired;
(iv) so long as no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof,
retiring any Indebtedness of a Restricted Subsidiary of the Company in
exchange for, or out of the proceeds of, the substantially concurrent
incurrence of Indebtedness of the Company or any Restricted Subsidiary
that is permitted under Section 4.9 hereof and that (A) is not secured
by any assets of the Company or any Restricted Subsidiary to a greater
extent than the retired Indebtedness was so secured, (B) has an Average
Life at least as long as the retired Indebtedness and (C) is
subordinated in right of payment to the Notes or the Guarantee, as
applicable, at least to the same extent as the retired Indebtedness;
(v) so long as no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof,
making loans to members of management of the Company as required
pursuant to employment agreements with such members, in an aggregate
principal amount not to exceed $500,000, provided that any repayment of
such loans (but only to the extent such payments are not included in
the calculation of Consolidated Net Income of the Company) shall reduce
the amount of such Investments;
(vi) so long as no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof,
making Investments in Qualified Joint Ventures in an aggregate amount
not to exceed $5,000,000, provided that any repayment of loans or
advances, return of capital or other transfer of Property (but only to
the extent such distributions are not included in the calculation of
Consolidated Net Income of the Company) shall reduce the amount of such
Investments;
(vii) paying dividends to minority stockholders or partners of
a Restricted Subsidiary (other than to a Person who is otherwise an
Affiliate), provided that the Company or the Restricted Subsidiary that
is the stockholder or partner of such non-Wholly Owned Restricted
Subsidiary shall receive pro rata dividends at the same time and in the
same form and composition of consideration as the dividends paid to the
minority stockholders or partners; and
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(viii) so long as no Default or Event of Default has occurred,
the Company may redeem Convertible Notes pursuant to the terms of the
Convertible Note Indenture or repurchase Convertible Notes pursuant to
a "Change of Control Offer" (as defined in the Convertible Note
Indenture), a Convertible Note Asset Sale Offer or a repurchase offer
pursuant to Section 4.14 of the Convertible Note Indenture.
(c) Not later than the date of making any Restricted Payment, any
Investment made pursuant to clause (vi) of Section 4.13(b), any dividend made
pursuant to clause (vii) of Section 4.13(b) and any redemption or repurchase
made pursuant to clause (viii) of Section 4.13(b), the Company shall deliver to
the Trustee an Officers' Certificate stating that such Restricted Payment,
dividend, Investment or redemption is permitted and setting forth the basis upon
which any required calculations were computed, which calculations may be based
upon the Company's or applicable Restricted Subsidiary's latest available
financial statements.
SECTION 4.14 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, cause or suffer to exist or
become effective or enter into an encumbrance or restriction (other than
pursuant to law or regulation) on the ability of any Restricted Subsidiary (i)
to pay dividends or make any other distributions in respect of its Capital Stock
or pay any Indebtedness or other obligation owed to the Company or any
Restricted Subsidiary of the Company; (ii) to make loans or advances to the
Company or any Restricted Subsidiary of the Company; or (iii) to transfer any of
its Property or assets to the Company or any other Restricted Subsidiary of the
Company, except:
(a) any encumbrance or restriction existing as of the Issue Date
pursuant to this Indenture, the Collateral Documents, the Convertible Note
Indenture or the Convertible Note Collateral Documents, the Telecommunications
Asset Leases, the Intercompany Notes and the related collateral documents, an
agreement relating to the Revolving Credit Facilities or the Existing
Indebtedness or any existing agreement listed on Schedule 4.14 attached hereto;
(b) any encumbrance or restriction pursuant to an agreement relating to
an acquisition of assets or Property, so long as the encumbrances or
restrictions in any such agreement related solely to the assets or Property so
acquired (and are not or were not created in anticipation of or in connection
with the acquisition thereof);
(c) any encumbrances or restrictions relating to any Indebtedness of
any Restricted Subsidiary existing on the date on which such Restricted
Subsidiary is acquired by the Company or any Restricted Subsidiary (other than
Indebtedness incurred by such Restricted Subsidiary in connection with or in
anticipation of its acquisition), provided that the EBITDA of such Restricted
Subsidiary is not taken into account in determining whether such acquisition is
permitted by the terms of this Indenture;
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(d) any encumbrance or restriction pursuant to an agreement effecting a
permitted Refinancing of Indebtedness issued pursuant to an agreement referred
to in the foregoing clauses (a) through (c), so long as the encumbrances and
restrictions contained in any such Refinancing agreement are not materially more
restrictive than the encumbrances and restriction contained in such agreements;
(e) customary provisions restricting subletting or assignment of any
lease of the Company or any Restricted Subsidiary or customary provisions in
certain agreements that restrict the assignment of such agreement or any rights
thereunder;
(f) any temporary encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock of, or
Property and assets of, such Restricted Subsidiary; and
(g) any restriction on the sale or other disposition of assets or
Property securing Indebtedness as a result of a Permitted Lien on such assets or
Property permitted pursuant to Section 4.11 hereof.
SECTION 4.15 Limitation on Issuance and Sale of Preferred Stock of
Restricted Subsidiaries. The Company (i) shall not permit any Restricted
Subsidiary to issue any Preferred Stock other than to the Company or a
Restricted Subsidiary (provided that the Leasing Companies and NWE Cyprus may
not issue Preferred Stock to a Restricted Subsidiary) and (ii) shall not permit
any Person other than the Company or a Restricted Subsidiary to own any
Preferred Stock of any Restricted Subsidiary, except for (a) a sale of 100% of
the Capital Stock of a Restricted Subsidiary sold in a transaction not
prohibited by Section 4.8 hereof; (b) Preferred Stock of a Restricted Subsidiary
issued and outstanding on the Issue Date and held by Persons other than the
Company or any Restricted Subsidiary, (c) Capital Stock of a Restricted
Subsidiary issued and outstanding prior to the time that such Person becomes a
Restricted Subsidiary so long as such Capital Stock was not issued in
contemplation of such Person's becoming a Restricted Subsidiary or otherwise
being acquired by the Company; and (d) any Disqualified Stock permitted to be
issued under Section 4.9 hereof.
SECTION 4.16 Transactions with Affiliates . The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
sell, lease, transfer, or otherwise dispose of, any of its Property or assets
to, or purchase any Property or assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with or for the benefit of,
any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (a)
such Affiliate
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Transaction complies with the other covenants of this Indenture, (b) such
Affiliate Transaction is on terms that are no less favorable to the Company or
such Restricted Subsidiary than those that would have been obtained in a
comparable arm's-length transaction by the Company or such Restricted Subsidiary
with a Person that is not an Affiliate and (c) the Company delivers to the
Trustee (i) with respect to any Affiliate Transaction involving aggregate
payments in excess of $5,000,000, a Board Resolution certifying that such
Affiliate Transaction complies with clause (a) above and that such Affiliate
Transaction has been approved by a majority of the disinterested directors who
have determined that such Affiliate Transaction is in the best interests of the
Company or such Restricted Subsidiary and (ii) with respect to any Affiliate
Transaction involving aggregate payments in excess of $25,000,000, an opinion as
to the fairness from a financial point of view to the Company or such Restricted
Subsidiary issued by an investment banking firm of national standing, or in the
case of a transaction involving a sale or transfer of assets subject to
valuation such as real estate, an appraisal issue by a nationally recognized
appraisal firm, together with an Officers' Certificate to the effect that such
opinion complies with this clause (ii); provided that the following shall not be
deemed Affiliate Transactions:
(i) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business
and consistent with industry practice;
(ii) any agreement or arrangement with respect to the
compensation of a director of the Company or any Restricted Subsidiary
approved by the Board of Directors and consistent with industry
practice;
(iii) transactions between or among the Company, its
Wholly-Owned Restricted Subsidiaries or its majority-owned Restricted
Subsidiaries (so long as no minority interest is owned by a Person
which is otherwise an Affiliate, provided that the indirect beneficial
ownership interest of Cable & Wireless in PeterStar will not be deemed
to be such a minority interest so long as Cable & Wireless does not
directly or indirectly own beneficially more than 11% of PeterStar);
(iv) transactions constituting Restricted Payments permitted
by Section 4.13(a) hereto; and
(v) transactions pursuant to contracts existing on the Issue
Date and listed on Schedule 4.16 attached hereto; and
(vi) loans and advances to employees and officers of the
Company or a Restricted Subsidiary in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary, provided that the aggregate principal amount of all such
loans and advances shall not exceed $500,000 at any one time
outstanding.
SECTION 4.17 Restricted and Unrestricted Subsidiaries. (a) The Company
may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries, other than the
Leasing Companies, NWE Cyprus, WTC and Technocom, as an Unrestricted Subsidiary,
provided that (i) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (x)
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is guaranteed by the Company or any Restricted Subsidiary, (y) is recourse to or
obligates the Company or any Restricted Subsidiary in any way or (z) subjects
any Property or assets of the Company or any Restricted Subsidiary, directly or
indirectly, contingent or otherwise, to the satisfaction thereof, (ii) such
Subsidiary does not have any obligations which, if in default, would result in a
cross default on Indebtedness of the Company or a Restricted Subsidiary (other
than Indebtedness to the Company or a Restricted Subsidiary) and (iii) such
Subsidiary has total assets of $50,000 or less or such designation is effective
immediately upon such Person's becoming a Subsidiary. Notwithstanding the
foregoing, no Subsidiary may be designated an Unrestricted Subsidiary if such
Subsidiary, directly or indirectly, held Capital Stock of a Restricted
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or any of its Restricted Subsidiaries shall
be classified as a Restricted Subsidiary thereof. Except for Restricted
Subsidiaries having total assets of $50,000 or less, no Restricted Subsidiary
may be redesignated as an Unrestricted Subsidiary.
(b) The Company will not, and will not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed Subsidiary
having no outstanding Indebtedness (other than Indebtedness to the Company or a
Restricted Subsidiary) at the date of determination) becoming a Restricted
Subsidiary (whether through an acquisition, the redesignation of an Unrestricted
Subsidiary or otherwise) unless, after giving effect to such action, transaction
or series of transactions on a pro forma basis, (i) the Company could incur at
least $1.00 of additional Indebtedness pursuant to Section 4.9(a) hereof and
(ii) no Default or Event of Default would occur.
(c) Subject to Section 4.17(b) hereof, an Unrestricted Subsidiary may
be redesignated as a Restricted Subsidiary. The designation of a Subsidiary as
an Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary in compliance with Section 4.17(b) hereof shall be made by
the Board of Directors pursuant to a Board Resolution delivered to the Trustee
and shall be effective as of the date specified in such Board Resolution, which
shall not be prior to the date such Board Resolution is delivered to the
Trustee.
SECTION 4.18 Limitations on Line of Business. Neither the Company nor
any of its Restricted Subsidiaries will directly or indirectly engage to any
substantial extent in any lines or lines of business activity other than the
Telecommunications Business.
SECTION 4.19 Limitation on Sales of Telecommunications Asset Leases or
Qualified Investments. The Leasing Companies will not directly or indirectly
transfer, convey, sell, lease or make any other disposition (including, without
limitation, dispositions pursuant to any consolidation or merger) of a
Telecommunications Asset Lease or any Qualified Investments.
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SECTION 4.20 Reports. Whether or not the Company is subject to Section
13(a) or 15(d) of the Exchange Act, or any successor provision thereto, the
Company shall file with the Commission the annual and other reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Company were subject thereto, such documents to be filed with the Commission
on or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also (whether
or not it is required to file reports with the Commission), within 30 days of
each Required Filing Date, (i) transmit by mail to all Holders, as their names
and addresses appear in the Note Register and to any Persons that request such
reports in writing, without cost to such Holders or Persons, and (ii) file with
the Trustee, copies of the annual and other reports, and other documents
(without exhibits) which the Company has filed or would have filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act, any successor
provisions thereto or this Section 4.20. The Company shall not be required to
file any report with the Commission if the Commission does not permit such
filing.
SECTION 4.21 Compliance Certificate; Notice of Default or Event of
Default.
(a) The Company shall deliver to the Trustee within 120 calendar days
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate (which shall be signed by officers satisfying the
requirements of Section 314 of the Trust Indenture Act) stating whether or not,
to the best knowledge of such officers, the Company has complied with all
conditions and covenants under this Indenture and the Collateral Documents, and,
if the Company shall be in Default, specifying all such Defaults and the nature
thereof of which such officer may have knowledge.
(b) So long as the Canadian Institute of Chartered Accountants does not
provide recommendations regarding the basis on which Canadian accountants can
make the statement in Section 4.21(c) and so long as the Company is incorporated
in Canada, the year-end financial statements delivered pursuant to Section 4.20
above shall be accompanied by (and in substitution for the certificate in
Section 4.21(c)) a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation reasonably
satisfactory to the Trustee) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
which would lead them to believe that the Company is not in compliance, as of
the end of the fiscal year which the financial statements delivered pursuant to
Section 4.20 relate, with Sections 4.9 or 4.13 hereof, it being understood that
such accountants shall not be liable directly or indirectly to any person for
any failure to obtain knowledge of any such violation.
(c) Subject to the provisions of Section 4.21(b) hereof, the year-end
financial statements delivered pursuant to Section 4.11 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation reasonably
satisfactory to the Trustee) that in making the
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examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company or any
of its Restricted Subsidiaries has violated any provisions of Sections 4.1, 4.6,
4.7, 4.8, 4.9 or 4.14 hereof or of Article V of this Indenture or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any person for any failure to obtain knowledge of any such
violation, and it being further understood that such statement may not be
provided to the extent contrary to the then current recommendations of the
accountants' governing body.
(d) The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, within 5 calendar days of any Officer becoming aware of
(i) any Default or Event of Default or (ii) any event of default under any other
mortgage, indenture or instrument referred to in Section 6.1(e), an Officers'
Certificate specifying such Default, Event of Default or other event of default
and what action the Company or applicable Restricted Subsidiary is taking or
proposes to take with respect thereto.
(e) For the purposes of this Section 4.21, compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(f) So long as either (i) The Company has not procured or caused to be
procured a recognized financial institution with capital of not less than
$10,000,000 as collateral agent in the British Virgin Islands which the Trustee
or the Convertible Note Trustee may lawfully appoint in respect of Collateral or
Convertible Note Collateral, or (ii) WTC has not consolidated with or merged
with NWE Cyprus or transferred all or substantially all of its assets to NWE
Cyprus in connection with a winding-up or liquidation of WTC, the Company shall
deliver, on or before the last Business Day of the month following the Issue
Date and each month thereafter, a certificate to the Trustee stating what steps
have been taken to fulfill the Company's best efforts undertaking to the Holders
of the Notes and of the Convertible Notes to give effect to (i) or (ii) above
and what steps will be taken in the month immediately succeeding the month for
which such certificate is delivered.
SECTION 4.22 Payment of Additional Amounts. (a) Except to the extent
required by law, any and all payments of, or in respect of, any Note shall be
made free and clear of and without deduction for or on account of any and all
present or future taxes, levies, imposts, deductions, charges or withholdings
and all liabilities with respect thereto imposed by Canada, the Russian
Federation, Cyprus or any other jurisdiction with which the Company or any
Guarantor has some connection (including any jurisdiction (other than the United
States of America) from or through which payments under the Notes or the
Guarantees are made) or any political subdivision of or any taxing authority in
any such jurisdiction ("Canadian Taxes," "Russian Taxes," "Cypriot Taxes" or
"Other Taxes," respectively). If the Company or any Guarantor shall be required
by law to withhold or deduct any Canadian Taxes, Russian Taxes, Cypriot Taxes or
Other Taxes from or in respect of any sum payable under a Note or pursuant to a
Guarantee, the sum payable by the Company or such Guarantor, as the case may be,
thereunder shall be increased by the
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amount ("Additional Amounts") necessary so that after making all required
withholdings and deductions, the Holder shall receive an amount equal to the sum
that it would have received had no such withholdings and deductions been made;
provided that any such sum shall not be paid in respect of any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes to a Holder (an "Excluded Holder")
of a Note (i) resulting from the beneficial owner of such Note carrying on
business or being deemed to carry on business in or through a permanent
establishment or fixed base in the relevant taxing jurisdiction or any political
subdivision thereof or having any other connection with the relevant taxing
jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of such Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of such Note
or the Guarantees or the enforcement of such Note or the Guarantees, (ii)
resulting from the Company or any Guarantor not dealing at arm's length (within
the meaning of the Income Tax Act (Canada)) with such Holder at the time of such
payment or at the time the amount of such payment is deemed to have been paid or
credited or (iii) that would not have been imposed but for the presentation
(where presentation is required) of such Note for payment more than 180 days
after the date such payment became due and payable or was duly provided for,
whichever occurs later. The Company or the Guarantors, as applicable, will also
(i) make such withholding or deduction and (ii) remit the full amount deducted
or withheld to the relevant authority in accordance with applicable law, and, in
any such case, the Company will furnish to each Holder on whose behalf an amount
was so remitted, within 30 calendar days after the date the payment of any
Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company or the Guarantors, as applicable. The Company will, upon written request
of each Holder (other than an Excluded Holder), reimburse each such Holder for
the amount of (i) any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other
Taxes so levied or imposed and paid by such holder as a result of payments made
under or with respect to any Notes, and (ii) any Canadian Taxes, Russian Taxes,
Cypriot Taxes or Other Taxes so levied or imposed with respect to any
reimbursement under the foregoing clause (i) so that the net amount received by
such Holder (net of payments made under or with respect to such Notes or the
Guarantees) after such reimbursement will not be less than the net amount which
the Holder would have received if Canadian Taxes, Russian Taxes, Cypriot Taxes
or Other Taxes on such reimbursement had not been imposed.
(b) At least 30 calendar days prior to each date on which any payment
under or with respect to the Notes is due and payable, if the Company or the
Guarantors, as applicable, will be obligated to pay Additional Amounts with
respect to such payment, the Company or the Guarantors, as applicable, will
deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
(c) The Company or the Guarantors will pay any stamp, issue,
registration, documentary or other similar taxes and duties, including interest
and penalties, in respect
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of the creation, issue and offering of the Notes payable in Canada, the United
States, the Russian Federation or Cyprus or any political subdivision thereof or
taxing authority of or in the foregoing. The Company and the Guarantors will
also pay and indemnify the Holders and the Trustee from and against all court
fees and taxes or other taxes and duties, including interest and penalties, paid
by any of them in any jurisdiction in connection with any action permitted to be
taken by the Trustee or the Holders to create the Liens on the Collateral and to
enforce the obligations of the Company or the Guarantors under the Notes, the
Indenture, the Guarantees or the Collateral Documents.
SECTION 4.23 Leasing Companies and NWE Cyprus.
(a) Each Leasing Company shall at all times remain a special purpose
Cypriot corporation which is a Guarantor and a Wholly-Owned Restricted
Subsidiary with corporate organizational documents containing the provisions set
forth on Schedule 1.1(b) attached hereto.
(b) NWE Cyprus shall at all times remain a Cypriot corporation and a
Wholly-Owned Subsidiary.
SECTION 4.24 Technocom. Technocom may not, in any transaction or series
of related transactions, consolidate with, or merge with or into, any other
Person or otherwise change its domicile into any other jurisdiction (through a
sale of assets or otherwise) unless Technocom or such Person, as the case may
be, continues to be owned in an identical proportion and manner as Technocom is
now owned immediately prior to such consolidation or merger or change of
domicile, the preferential $20,000,000 dividend and liquidation, dissolution or
winding-up rights of the Technocom Preferred Stock are not changed, there is no
class of Capital Stock authorized having rights superior to the Technocom
Preferred Stock after giving effect to such transaction or transactions, and
such consolidation, merger, or other change of domicile does not adversely
affect the perfection or priority of the Liens in the Technocom Preferred Stock.
SECTION 4.25 Collateral Agents. In the event that any collateral agent
appointed on or before the Issue Date or thereafter in respect of one or more
jurisdictions resigns or is terminated without the contemporaneous appointment
of a new collateral agent in such jurisdiction or jurisdictions, the Company
shall procure or cause to be procured, within 45 days after the Trustee has
given notice to the Company of such resignation or termination, a recognized
financial institution, with capital of not less than $10,000,000, in such
jurisdiction or jurisdictions, which the Trustee or the Convertible Note Trustee
may lawfully appoint as a collateral agent in respect of Collateral or
Convertible Note Collateral.
SECTION 4.26 WTC. Provided no Default or Event of Default has occurred
and is continuing or would occur as a result of the following transaction, WTC
may consolidate with or merge with NWE Cyprus or transfer all or substantially
all of its assets to NWE Cyprus in connection with a winding-up or liquidation
of WTC.
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ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Merger, Consolidation, Sale of Assets, Etc. The Company
shall not, in any transaction or series of related transactions, consolidate
with, or merge with or into, any other Person or permit any other Person to
merge with or into the Company (other than a merger of a Restricted Subsidiary
of the Company into the Company in which the Company is the continuing
corporation), or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation or (ii)
the corporation (if other than the Company) formed by such consolidation or into
which the Company is merged, or the Person which acquires, by sale, assignment,
conveyance, transfer, lease or disposition, all or substantially all of the
Property and assets of the Company and its Restricted Subsidiaries taken as a
whole (any such corporation or Person being the "Surviving Entity") shall be a
corporation organized and validly existing under the laws of Canada or any
province or political subdivision thereof or the United States of America, any
political subdivision thereof, any state thereof or the District of Columbia, or
the United Kingdom or Bermuda and shall expressly assume, by an indenture
supplemental hereto and other appropriate Collateral Documents in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest and Additional Amounts, if any,
and Special Interest, if any, on all the Notes and the performance of every
covenant and obligation in this Indenture and the Collateral Documents on the
part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of related transactions), no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;
(c) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Company (or the
Surviving Entity, if the Company is not continuing) would be permitted to incur
$1.00 of additional Indebtedness under Section 4.9(a) hereof;
(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), the Company (or the
Surviving Entity, if the Company is not continuing) shall have a
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Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
(e) the Company (or the Surviving Entity, if the Company is not
continuing) would not be subject to any materially adverse tax effect as a
result of such transaction or series of transactions.
The provisions of clauses (c), (d) and (e) shall not apply to any
merger or consolidation into or with, or any such transfer of all or
substantially all of the Property and assets of the Company and the Restricted
Subsidiaries, taken as a whole, to a newly formed corporation solely for the
purpose of moving the Company's domicile out of Canada, provided that the
Company shall have certified to the Trustee in writing to such effect, and
provided, further, that in no case shall the adverse tax effect to the Company
(or the Surviving Entity, if the Company is not continuing) of such merger or
consolidation or such transfer be $7,500,000 or more; and provided, further,
that the Company shall not engage in any such merger or consolidation or such
transaction for the purpose of moving the Company's domicile out of Canada to
the United Kingdom if following such transaction, either the Trustee or any
Holder of a Note would be considered to be a "control person" of the Company,
either in such jurisdiction or the jurisdiction of the Trustee or such Holder.
In connection with any consolidation, merger, conveyance, lease or
other disposition contemplated by this Section 5.1, the Company shall deliver,
or cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, lease or disposition and any
supplemental indenture in respect thereto comply with this Article V and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.2 Successor Corporation Substituted. Upon any consolidation
with, or merger by the Company with or into, any other corporation, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the Property and assets of the Company and its Restricted
Subsidiaries taken as a whole in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation or into which the Company is
merged, or the Person to which such sale, conveyance, assignment, transfer,
lease, conveyance or other disposition is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company herein; and thereafter except in the case of a lease the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Notes, except for the obligation to pay the principal of
(and premium, if any) and interest (including Additional Amounts, if any, and
Special Interest, if any) on the Notes.
If such Surviving Entity shall have succeeded to and been substituted
for the Company, such Surviving Entity may cause to be signed, and may issue
either in its own
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name or in the name of the Company prior to such succession any or all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such Surviving
Entity, instead of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Notes which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
which such Surviving Entity thereafter shall cause to be signed and delivered to
the Trustee for that purpose (in each instance with endorsements of Guarantees
thereon by the Guarantors). All of the Notes so issued and so endorsed shall in
all respects have the same legal rank and benefit under this Indenture as the
Notes theretofore or thereafter issued and endorsed in accordance with the terms
of this Indenture and the Guarantee as though all of such Notes had been issued
and endorsed at the date of the execution hereof.
In case of any such consolidation, merger, sale, transfer, conveyance
or other disposal, such changes in phraseology and form (but not in substance)
may be made in the Notes thereafter to be issued or the Guarantees to be
endorsed thereon as may be appropriate.
For all purposes of this Indenture and the Notes, Subsidiaries of any
Surviving Entity will, upon such transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to
this Indenture and all Indebtedness, and all Liens on Property or assets, of the
Surviving Entity and its Restricted Subsidiaries immediately prior to such
transaction or series of transactions shall be deemed to have been incurred upon
such transaction or series of transactions.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. "Event of Default" wherever used herein
with respect to the Notes means any one of the following events (whatever the
reason for such event, and whether it shall be voluntary or involuntary, or be
effected by operation of law, pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of interest (or Additional Amounts and
Special Interest, if any) on, or any other amount due in respect of, any Note
when the same becomes due and payable, and the continuance of such Default for a
period of 30 calendar days; or
(b) default in the payment of the principal of (or premium, if any, on)
any Note when the same becomes due and payable whether upon Maturity, optional
redemption, required repurchase (including pursuant to a Change of Control Offer
or an Asset Sale
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Offer) or otherwise, or the failure to make an offer to purchase any Note as
herein required; or
(c) default in the performance, or breach, of any covenant or agreement
contained in Section 4.7, Section 4.8, Section 4.9, Section 4.12, Section 4.13,
Section 4.25 or Article V hereof; or
(d) default in the performance, or breach, of any other covenant or
warranty of the Company contained in this Indenture or the Notes (other than a
covenant or warranty addressed in Section 6.1(a), Section 6.1(b) or Section
6.1(c) hereof) or any Collateral Document or any Convertible Note Collateral
Document, and the continuance of such Default or breach for a period of 45
calendar days after written notice thereof has been given to the Company by the
Trustee or to the Company and the Trustee by a Holder or the Holders of at least
25 percent of the aggregate principal amount at Stated Maturity of the
outstanding Notes; or
(e) Indebtedness of the Company or any Restricted Subsidiary is not
paid when due within the applicable grace period, if any, or is accelerated by
the holders thereof and, in either case, the principal amount of such unpaid or
accelerated Indebtedness exceeds $10,000,000; or
(f) the entry by a court of competent jurisdiction of one or more final
judgments against the Company or any Restricted Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 which is not discharged,
waived, appealed, stayed, bonded or satisfied for a period of 60 consecutive
calendar days; or
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Restricted Subsidiary of the Company in an involuntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Restricted Subsidiary of the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of, or in respect of, the Company or any Significant Restricted
Subsidiary of the Company under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law, including the Companies Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada) or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Restricted Subsidiary
of the Company or of any substantial part of the Property or assets of the
Company or any Significant Restricted Subsidiary of the Company, or ordering the
winding-up or liquidation of the affairs of the Company or any Significant
Restricted Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive calendar days; or
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(h) (i) the commencement by the Company or any Significant Restricted
Subsidiary of the Company of a voluntary case or proceeding under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal, state or foreign bankruptcy, insolvency or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent; or (ii) the
consent by the Company or any Significant Restricted Subsidiary of the Company
to the entry of a decree or order for relief in respect of the Company or any
Significant Restricted Subsidiary of the Company in an involuntary case or
proceeding under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable federal, state, or foreign bankruptcy, insolvency, or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company or any Significant Restricted Subsidiary of the
Company; or (iii) the filing by the Company or any Significant Restricted
Subsidiary of the Company of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law, including the Companies Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada); or (iv)
the consent by the Company or any Significant Restricted Subsidiary of the
Company to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any Significant Restricted Subsidiary of
the Company or of any substantial part of the Property or assets of the Company
or any Significant Restricted Subsidiary of the Company, or the making by the
Company or any Significant Restricted Subsidiary of the Company of an assignment
for the benefit of creditors; or (v) the admission by the Company or any
Significant Restricted Subsidiary of the Company in writing of its inability to
pay its debts generally as they become due; or (vi) the taking of corporate
action by the Company or any Significant Restricted Subsidiary of the Company in
furtherance of any such action;
(i) any Guarantee, Collateral Document or Convertible Note Collateral
Document ceases to be in effect (except as otherwise permitted by this
Indenture, the Collateral Documents or the Convertible Note Collateral
Documents), or the Company or any Guarantor shall deny or disaffirm its
obligations under its Guarantee, any Collateral Documents, the Notes or any
Convertible Note Collateral Documents, or the Notes and/or the Guarantees fail
to be secured by any theretofore perfected security interests or Liens in the
Collateral or the Convertible Note Collateral (except as permitted by this
Indenture, the Collateral Documents or the Convertible Note Collateral
Documents), which in each circumstance continues for a period of 30 days after
receipt of a written notice thereof from the Trustee to the Company, or from
Holders of at least 25% of the aggregate principal amount of the Notes then
outstanding to the Company and the Trustee;
(j) a Change of Control described in clause (i) of the definition of
"Change of Control" set forth in Section 1.1 hereof occurs; or
(k) if any assets of the Company or any of its Restricted Subsidiaries
shall be nationalized, expropriated, declared forfeit or otherwise permanently
taken by governmental
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action (the "Seized Assets"), and the book value of such Seized Assets (less the
book value of the expropriation proceeds) shall constitute more than 15% of the
book value, on a consolidated basis, of all of the Company's assets minus
current assets as they are reported on the Company's most recent quarterly
consolidated balance sheet.
SECTION 6.2 Acceleration. If any Event of Default (other than an Event
of Default specified in Section 6.1(g) or Section 6.1(h) hereof) occurs and is
continuing, or if an Event of Default specified in Section 6.1(j) above occurs
and is continuing and the Company fails to make the Change of Control Offer
required pursuant to Section 4.7 hereof, then and in every such case the Trustee
or the holders of not less than 25% of the outstanding aggregate principal
amount at Stated Maturity of Notes may declare the Default Amount, premium, if
any, any accrued and unpaid interest (and Additional Amounts, if any, and
Special Interest, if any) on, and any other amounts then due in respect of all
Notes then outstanding to be immediately due and payable by a notice in writing
to the Company (and to the Trustee if given by the Holders of the Notes), and
upon any such declaration, such Default Amount and any accrued and unpaid
interest (and Additional Amounts, if any, and Special Interest, if any) on all
Notes then outstanding will become and be immediately due and payable. If any
Event of Default specified in Section 6.1(g) or Section 6.1(h) hereof occurs,
the Default Amount and any accrued and unpaid interest (and Additional Amounts,
if any, and Special Interest, if any) on the Notes then outstanding shall become
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Notes.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.1(e)
hereof shall be remedied, or cured, or waived by the holders of the relevant
Indebtedness, within 60 calendar days after such event of default; provided that
no judgment or decree for the payment of the money due on the Notes has been
obtained by the Trustee as hereinafter provided in this Article VI.
Until November 30, 1998, the Default Amount in respect of any
particular Note shall equal the Accreted Value of the Note as of the date of
determination. On or after December 1, 1998, the Default Amount of any
particular Note as of the date of determination shall equal 100 percent of the
principal amount payable in respect of the Note at the Stated Maturity thereof.
At any time after a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter provided in this Article VI, the
Holders of a majority in principal amount at Stated Maturity of the outstanding
Notes, by written notice of the Company and the Trustee, may rescind and annul
such declaration and its consequences if,
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay
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(i) all overdue installments of interest (including Additional
Amounts, if any, and Special Interest, if any), on, and any other
amounts then due in respect of, all Notes,
(ii) the principal of (and premium, if any, on) any Notes
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in the Notes and this Indenture,
(iii) to the extent that payment of such interest is lawful,
interest (including Additional Amounts, if any) on the Defaulted
Interest at the rate or rates prescribed therefor in the Notes and this
Indenture, and
(iv) all moneys paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and all other amounts due to the
Trustee pursuant to Section 7.7 hereof; and
(b) all Events of Default with respect to the Notes, other than the
non-payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived by the Holders as
provided herein.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 6.3 Other Remedies. The Company covenants that if an Event of
Default specified in Section 6.1(a) or Section 6.1(b) occurs, the Company shall,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders,
the whole amount then due and payable on the Notes for principal (and premium,
if any), interest (including Additional Amounts, if any, and Special Interest,
if any) and any other amounts then due in respect of the Notes, and to the
extent that payment of such interest shall be legally enforceable, interest upon
the overdue principal (and premium, if any) and upon Defaulted Interest, at the
rate or rates prescribed therefor in the Notes and this Indenture; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee pursuant to Section 7.7 hereof.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of, or pursue any available remedy (under
this Indenture, the Collateral Documents, the Convertible Note Collateral
Documents or otherwise) to collect, the sums so due and unpaid, and may
prosecute any such proceeding to judgment or final decree, and may enforce the
same against the Company, the Guarantors or any other Obligor upon such Notes
and collect the moneys adjudged or decreed to be payable in the manner provided
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by law out of the Property and assets of the Company, any Guarantor or any other
Obligor upon such Notes, wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or the Collateral Documents or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy.
SECTION 6.4 Waiver of Past Defaults. The Holders of not less than a
majority in principal amount at Stated Maturity of the outstanding Notes may, on
behalf of the Holders of all the Notes, waive any past Default and its
consequences under this Article VI, except Default (a) in the payment of the
principal of (or premium, if any) or interest on, any Note, or (b) in respect of
a covenant or provision hereof which under Section 9.2 hereof cannot be modified
or amended without the consent of the Holder of each outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture and the Collateral Documents; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.5 Control by Majority. The Holders of not less than a
majority in principal amount at Stated Maturity of the outstanding Notes shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, the Collateral Documents or the Convertible Note Collateral
Documents or unduly prejudicial to the right of other Holders and would not
subject the Trustee to personal liability, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.6 Limitation on Suits. No Holder of Notes shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, the Collateral Documents or the Convertible Note Collateral Documents
or for the appointment of a receiver or trustee, or for any other remedy
hereunder or thereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes;
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(b) the Holders of not less than 25 percent in principal amount at
Stated Maturity of the outstanding Notes shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
capacity as Trustee hereunder;
(c) such Holders or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee in its reasonable discretion against the
costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 calendar 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
principal amount at Stated Maturity of the outstanding Notes;
in any event, it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture, the Collateral Documents or the Convertible
Note Collateral Documents to affect, disturb or prejudice the rights of any
Holders of Notes, or to obtain or to seek to obtain priority or preference over
any other of such Holders or to enforce any right under this Indenture, the
Collateral Documents or the Convertible Note Collateral Documents, except in the
manner herein provided and for the equal and ratable benefit of all Holders of
Notes.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provisions of this Indenture, the right of any Holder to receive payment
of principal of (and premium, if any,), interest (including Additional Amounts,
if any, and Special Interest, if any) on, and any other amounts due in respect
of, the Notes held by such Holder, on or after the respective due dates
expressed in the Notes or the redemption dates or purchase dates provided for
therein, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall be absolute and unconditional and shall not be
impaired or affected without the consent of such Holder; except that no Holder
shall have the right to institute any such suit, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would under
applicable law result in the surrender, impairment, waiver, or loss of the Liens
of the Collateral Documents upon any Property or assets subject to the Liens.
SECTION 6.8 Trustee May File Proofs of Claim. The Trustee shall be
entitled and empowered, without regard to whether the Trustee or any Holder
shall have made any demand or performed any other act pursuant to the provisions
of this Article and without regard to whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise, by
intervention in any proceedings relative to the Company or other Obligor upon
the Notes, or to the creditors or Property of the Company, any Guarantor or any
other Obligor or otherwise, to take any and all actions authorized
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under the Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee shall be
entitled and empowered in such instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest (including Additional Amounts, if any,
and Special Interest, if any) and any other amounts 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 all amounts
owing to the Trustee and each predecessor Trustee pursuant to Section 7.7
hereof) and of the Holders allowed in any judicial proceedings relative to the
Issuer or other obligor upon the Notes, or to the creditors or property of the
Company, any Guarantor, or any such other Obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf; and any
trustee, receiver, or liquidator, custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to cover all
amounts owing to the Trustee and each predecessor Trustee pursuant to Section
7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for 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 except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
SECTION 6.9 Priorities. Any money collected by the Trustee (including
funds received from collateral agents and escrow agents under the Collateral
Documents and the Convertible Note Collateral Documents) pursuant to this
Article VI shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal (premium, if any) or interest, upon presentation of the
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Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 7.7 hereof including payment of all compensation, expense,
liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any), interest (including Additional
Amounts, if any, and Special Interest, if any) on, and any other
amounts due in respect of, the Notes, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Notes for principal (and premium, if any) and interest (including
Additional Amounts, if any, and Special Interest, if any), and any
other amounts due in respect hereof, respectively; and
THIRD: To the Company, the Guarantors or to such party as is
entitled to be paid as required by the terms of the Collateral
Documents or the Convertible Note Collateral Documents or as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.9. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states such record date, the payment date and amount to be paid. The Trustee may
mail such notice in the name and at the expense of the Company.
SECTION 6.10 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, the Collateral
Documents and the Convertible Note Collateral Documents or in any suit against
the Trustee for any action taken, suffered or omitted to be taken 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 merit and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10 percent in principal amount at Stated Maturity of the outstanding Notes,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal (or premium, if any) or interest on any Note on or after its
Stated Maturity.
SECTION 6.11 Waiver of Stay or Extension Laws. The Company and each of
the Guarantors (to the extent they may lawfully do so) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the
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covenants or the performance of this Indenture, the Collateral Documents or the
Convertible Note Collateral Documents; and the Company and each of the
Guarantors (to the extent that they may lawfully do so) hereby expressly waive
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power granted herein, in the Collateral Documents or in the
Convertible Note Collateral Documents to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 6.12 Trustee May Enforce Claims Without Possession of the
Notes. All rights of action and claims under this Indenture, the Collateral
Documents, the Convertible Note Collateral Documents 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, as
trustee of an express trust, and any recovery of judgment shall be applied in
accordance with Section 6.9.
SECTION 6.13 Restoration of Rights and Remedies. If the Trustee or any
Holder of Notes has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.
SECTION 6.14 Rights and Remedies Cumulative. Except as otherwise
provided in Section 2.7 hereof, no right or remedy conferred herein, in the
Collateral Documents upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.15 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article VI by the Collateral Documents or the Convertible
Note Collateral Documents 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.
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ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and shall use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (ii) in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that in the case of any such
certificates or opinions that by any provision of this Indenture are
specifically required to be furnished to the Trustee, the Trustee shall examine
such certificate and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not investigate or confirm the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, provided that: (i) this paragraph (c) shall not limit the effect of
paragraph (b) of this Section 7.1; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.5 hereof.
(d) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture, the Collateral Documents or the
Convertible Note Collateral Documents 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, in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk of liability is not reasonably assured
to it.
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(g) Every provision of this Indenture relating to the conduct or
affecting the liability or of affording protection to the Trustee shall be
subject to the provisions of this Article VII and to the provisions of the Trust
Indenture Act.
SECTION 7.2 Rights of Trustee.
(a) Subject to the provisions of Section 7.1(a) hereof, the Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any such agent; provided that
such agent was appointed with due care by the Trustee or, subject to Section 7.3
hereof, was selected by the Company.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
misconduct or negligence.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default under Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(h),
6.1(i) or 6.1(j) hereof, of the identity of any Restricted Subsidiary or of the
existence of any Change of Control or Asset Sale unless either (i) a Trust
Officer shall have actual knowledge thereof, or (ii) the Trustee shall have
received notice thereof in accordance with Section 4.21 and 13.2 hereof from the
Company or in accordance with Section 13.2 hereof from any Holder of Notes,
provided that the Trustee shall comply with the "automatic stay" provisions
contained in United States bankruptcy laws, if applicable.
(f) The Trustee may consult with counsel and the 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 to be taken by it
hereunder in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion may make such
further inquiry or investigation into such fact or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
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(h) 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 it in compliance with such
request or direction.
SECTION 7.3 Concerning the Trustee, Collateral Agents, and Collateral
Held by Collateral Agents.
(a) The Trustee shall have no duty to act outside of the United States
in respect of any Collateral or Convertible Note Collateral located in a
jurisdiction other than the United States ("Foreign Collateral") but shall, at
the specific request of the Company and, provided that the Company has provided
appropriate opinions, appoint a Qualified Foreign Collateral Agent (as defined
in subsection (d)) in any such jurisdiction and sign the Foreign Collateral
Documents (as defined herein) specified by the Company. Such Qualified Foreign
Collateral Agent, the Trustee (at its option, or if requested by the Company)
and the owner of each item of Foreign Collateral shall, provided the same are
reasonably acceptable to the Trustee, enter into a collateral assignment, pledge
agreement, mortgage or other security agreement purporting to create a Lien or
security interest in such item of Foreign Collateral (each such assignment or
agreement, a "Foreign Collateral Document") pursuant to which such owner shall
purport to grant to such Qualified Foreign Collateral Agent a Lien or security
interest for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Convertible Note Trustee and the
equal and ratable benefit of the Holders of the Convertible Notes.
(b) The duties and responsibilities, and the rights and immunities, of
the Trustee with respect to a Qualified Foreign Collateral Agent and Foreign
Collateral with respect to which such Qualified Foreign Collateral Agent is
acting shall be limited to those required by this Section 7.3(b) as follows: (i)
both before and after an Event of Default, the Trustee shall have no duty to
supervise or monitor such Qualified Foreign Collateral Agent or its performance,
and no liability for any acts or omissions of such Qualified Foreign Collateral
Agent; provided that (x) if a Trust Officer has actual knowledge of willful
misconduct or gross negligence of such Qualified Foreign Collateral Agent, the
Trustee may replace such Qualified Foreign Collateral Agent with a successor
Qualified Foreign Collateral Agent which it may appoint and (y) the Trustee
shall satisfy itself that any instructions given by the Trustee to such
Qualified Foreign Collateral Agent have been carried out; (ii) the Trustee shall
give to such Qualified Foreign Collateral Agent such instructions to make
effective the Liens granted by the Foreign Collateral Documents as shall be
stated to be necessary in the Opinions of Counsel furnished pursuant to Section
11.2 of this Indenture with respect to the Foreign Collateral with respect to
which any such Qualified Foreign Collateral Agent is acting and the Liens
granted therein; (iii) the Trustee shall give notice to such Qualified Foreign
Collateral Agent of any Event of Default of which a Trust Officer has actual
knowledge; (iv) the Trustee may, but has no obligation to, request information
from such Qualified Foreign Collateral Agent with respect to realization on
Foreign Collateral or an
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alternative course of action after an Event of Default, shall evaluate any such
information supplied by such Qualified Foreign Collateral Agent and in its sole
discretion, subject, however, to the provisions of subsection (f) below relating
to the Trustee's seeking direction from Holders of a majority in principal
amount at Stated Maturity of the Notes or the right of a Holder of Notes to give
directions pursuant to the terms of Section 6.5 of this Indenture, shall
instruct such Qualified Foreign Collateral Agent either to realize on such
Foreign Collateral or to take such alternative course of action; and (v) the
Trustee shall commence an action, or take such other action as it deems
appropriate, in the event any Qualified Foreign Collateral Agent fails to follow
instructions of the Trustee or fails to provide information required to be
provided to the Trustee by such Qualified Foreign Collateral Agent; provided
that, in any circumstance in which this Section 7.3(b) requires that the Trustee
determine that such Qualified Foreign Collateral Agent has complied with
instructions, the Trustee shall be entitled to rely conclusively on a
certificate of an appropriate officer of such Qualified Foreign Collateral
Agreement to such effect.
(c) The Trustee shall not be responsible for, and makes no
representation as to, the effectiveness, perfection or priority of any Lien
which is granted pursuant to any Collateral Document or Convertible Note
Collateral Document. Notwithstanding the foregoing, if a Trust Officer has
actual knowledge of the occurrence and continuance of a Default or an Event of
Default arising under Section 6.1(i) of this Indenture the Trustee shall give
whatever notices and take whatever action it deems appropriate or necessary
under this Indenture as a result the continuance of such Default or Event of
Default.
(d) As used herein a "Qualified Foreign Collateral Agent" shall be a
collateral agent appointed in respect of one or more items of Foreign Collateral
who has signed an agency agreement with the Trustee substantially in the form of
Exhibit K hereto with such changes as may be acceptable to the Trustee.
(e) In exercising its rights and duties under this Section 7.3, the
Trustee shall use the same degree of care and skill as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(f) During the continuance of an Event of Default, the Trustee will
give no instructions to a Qualified Foreign Collateral Agent until the Holders
of a majority in aggregate principal amount at Stated Maturity of the Notes
instruct the Trustee to act or give instructions to such Qualified Foreign
Collateral Agent to act.
(g) In the event holders of a majority in aggregate principal amount at
Stated Maturity of the Notes fail to direct the Trustee to take specific action
within 30 days of a request by the Trustee for direction, the Trustee may retain
such investment banker, broker/dealer, or other expert as the Trustee may
determine, and the advice of such investment banker, broker/dealer or other
expert shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by the Trustee hereunder
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in good faith and in reliance thereon, provided such investment banker,
broker/dealer or other expert was selected by the Trustee with due care.
SECTION 7.4 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Collateral Documents or the Notes, it shall not be accountable
for the Company's use of the proceeds from the Notes, and it shall not be
responsible (a) for any statement of the Company in this Indenture, including
the recitals contained herein, in the Collateral Documents or in any other
document issued in connection with the sale of the Notes or in the Notes other
than the Trustee's certificate of authentication or (b) for compliance by the
Company with the Registration Agreement.
SECTION 7.5 Notice of Defaults. Within 90 calendar days after the
occurrence of any Default or Event of Default hereunder with respect to the
Notes, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Note Register, notice of such Default hereunder actually
known by the Trustee, unless such Default shall have been cured or waived;
provided that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest (including Additional Amounts, if any, or
Special Interest, if any) on any Note, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Trust Officers of the Trustee
in good faith determine that the withholding of such notice is in the interest
of the Holders.
SECTION 7.6 Preservation of Information; Reports by Trustee to Holders.
(a) The Company shall furnish or cause to be furnished to the Trustee:
(i) not less than 10 calendar days prior to each Interest
Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of the Record
Date immediately preceding such Interest Payment Date; and
(ii) at such other times as the Trustee may request in
writing, within 30 calendar days after the receipt by the Company of
any such request, a list of similar form and content as of a date not
more than 15 calendar days prior to the time such list is furnished;
provided, that if and so long as the Trustee shall be the Registrar for the
Notes, no such list need be furnished with respect to the Notes.
(b) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.6(a) hereof and the names
and addresses of Holders received by the Trustee in its capacity as Registrar,
if so acting. The Trustee may destroy
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any list furnished to it as provided in Section 7.6(a) hereof upon receipt of a
new list so furnished.
(c) Holders may communicate as provided by the Trust Indenture Act with
other Holders with respect to their rights under this Indenture, under the
Collateral Documents or under the Notes.
(d) Each Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with this Section 7.6,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under this Section 7.6.
(e) Within 60 calendar days after May 15 of each year commencing with
the year 1997, the Trustee shall transmit by mail to all Holders of Notes, a
brief report dated as of such May 15 if and to the extent required under Section
313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(g) A copy of each report described in Section 7.6(e) hereof shall, at
the time of its transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Notes are then listed, with the Commission and
also with the Company. The Company shall promptly notify the Trustee of any
stock exchange upon which the Notes are listed.
SECTION 7.7 Compensation and Indemnity. The Company and the Guarantors
jointly and severally agree to pay to the Trustee from time to time such
compensation for its services hereunder and under the Collateral Documents as
the Company, the Guarantors and the Trustee may from time to time agree for all
services rendered by the Trustee hereunder and under the Collateral Documents.
The Company and the Guarantors jointly and severally agree to reimburse the
Trustee upon request for all reasonable disbursements, advances and expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee's compensation shall not be limited by any law or
compensation of a trustee of an express trust.
The Company and the Guarantors jointly and severally agree to assume,
and do hereby assume, liability for, and do hereby indemnify and agree to
protect, defend, save and keep harmless each Indemnitee (which term, for the
purposes of this Indenture, shall mean the Trustee (in its individual and trust
capacities) and each Qualified Foreign Collateral Agent) and their respective
Affiliates, agents, successors, permitted assigns, directors, officers
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and servants; a "Related Indemnitee" of an Indemnitee shall mean any Affiliate,
agent, director, officer and servant of such Indemnitee except that no Qualified
Foreign Collateral Agent shall be a Related Indemnitee of the Trustee) from and
against, any and all liabilities, obligations, losses, damages, penalties,
settlements, claims, actions, suits or proceedings of any kind and nature,
costs, expenses (including reasonable attorney's fees) and disbursements
(including, without limitation, any act or omission of any agent appointed by
the Trustee hereunder or by any Qualified Foreign Collateral Agent) of any kind
and nature whatsoever which may be imposed on, incurred by or asserted against
any Indemnitee, (A) in any way relating to or arising out of or incurred by such
Indemnitee in connection with the acceptance or administration of the trust
created by this Indenture or of any Collateral or Convertible Note Collateral
pursuant to the agency agreement pursuant to which any Qualified Foreign
Collateral Agent is appointed (an "Agency Agreement") or any Collateral Document
and the performance of such Indemnitee's duties hereunder and thereunder, or (B)
arising out of any failure by the Company to perform or observe any covenant,
condition or agreement in or the falsity of any representation or warranty of
the Company made in or pursuant to this Indenture, any Agency Agreement or any
Collateral Document or any Convertible Note Collateral Document (all of the
foregoing, including clauses (A) and (B), collectively, "Costs or Expenses");
provided that, except as and to the extent attributable to default by the
Company in performing or observing its obligations hereunder or under any Agency
Agreement, Collateral Document or any Convertible Note Collateral Document or
breach by the Company of any of its representations or warranties herein or
therein, the Company shall not be required to indemnify for any Costs or
Expenses:
(a) imposed on an Indemnitee to the extent that such
Costs or Expenses arise out of or are caused by any act,
misrepresentation or omission of such Indemnitee or any of its
Related Indemnitees where such act, misrepresentation or
omission (x) is in breach of the express obligations or
representations of such Indemnitee or any of its Related
Indemnitees under the Operative Documents or any related
document, (y) constitutes negligence or willful misconduct of
such Indemnitee or any of its Related Indemnitees or (z) is in
violation of any applicable law (unless, in any such instance,
such breach, negligence, willful misconduct or violation
results from any misrepresentation, gross negligence, willful
misconduct or violation of applicable law by the Company or
any of its Affiliates); or
(b) that are taxes on, based on or measured by or
with respect to the gross or net income, gross or net
receipts, minimum or alternative minimum taxable income,
excess profits, personal holdings, tax preferences,
accumulated earnings, capital gains, capital, franchises,
doing business, net worth or conduct of business of such
Indemnitee (excluding taxes in the nature of sales, use,
property or rental taxes and taxes based on doing business or
conduct of business if such taxes are imposed solely as a
result the performance of duties under this Indenture, any
Agency Agreement, any Collateral Document or any Convertible
Note Collateral Document).
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If the Company has knowledge of any claim or liability indemnified
against under this Section 7.7, it shall give prompt written notice thereof to
the applicable Indemnitees, and if any Indemnitee shall have any such knowledge,
it shall give prompt written notice thereof to Company (provided that failure to
give such notice shall not affect the Company's indemnity obligations hereunder
except to the extent that Company is prejudiced thereby). In case any action,
suit or proceeding shall be brought against any Indemnitee for which indemnity
may be sought under this Section 7.7, such Indemnitee shall notify the Company
of the commencement thereof (provided that failure to give such notice shall not
affect the Company's obligations hereunder except to the extent that the Company
is prejudiced thereby), and the Company may, at its expense, participate in and,
to the extent that it shall wish (subject to the following provisions of this
paragraph), assume in good faith in a commercially reasonable manner the defense
thereof, with counsel reasonably satisfactory to such Indemnitee; provided that
the Company shall not admit liability on such Indemnitee's part or settle such
action without the consent of such Indemnitee, which consent shall not be
unreasonably withheld; and provided, further, that no Event of Default shall
have occurred and be continuing and the Company shall have agreed in writing
that the Company is obligated to indemnify such Indemnitee for such Costs and
Expenses hereunder. If the Company assumes the defense of such action, suit or
proceeding, such Indemnitee may participate in such defense at such Indemnitee's
expense. Notwithstanding the foregoing, if and to the extent that (i) in the
written opinion of independent counsel to such Indemnitee an actual or potential
material conflict of interest exists where it is advisable for such Indemnitee
to be represented by separate counsel, (ii) in the reasonable opinion of such
Indemnitee such action, suit or proceeding involves the potential imposition of
criminal liability on such Indemnitee in connection with a claim not excluded by
Section 7.7(a) hereof, or (iii) such proceedings will involve a material risk of
the sale, forfeiture or loss of the Collateral or any part thereof, and such
Indemnitee informs the Company that such Indemnitee desires to be represented by
separate counsel, such Indemnitee shall have the right to control its own
defense of such claim and the Costs and Expenses in connection therewith shall
be borne by the Company. With respect to any amount which the Company is
requested by an Indemnitee to pay by reason of this Section 7.7, the Indemnitee
shall, if requested by the Company and prior to any payment, submit such
additional information to the Company as the Company may reasonably request
properly to substantiate the requested payment. The Company or its insurers
shall have the right to investigate or (provided that the Company or its
insurers shall not reserve the right to dispute liability hereunder or under any
insurance policies pursuant to which coverage is sought), subject to the second
and fourth sentences of this paragraph, defend or compromise any claim for which
indemnification is sought pursuant to this Section 7.7 and each Indemnitee shall
cooperate with the Company or its insurers with respect thereto.
The Company's obligations under the indemnities provided for in this
Indenture (i) are intended for the benefit of, and shall be enforceable by, each
Indemnitee, whether or not such Indemnitee is a party to this Indenture, and
(ii) shall be those of a primary obligor whether or not the Person indemnified
shall also be indemnified with respect to the same matter under the terms of
this Indenture, an Agency Agreement, any Collateral Document
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or any Convertible Note Collateral Document. The Person seeking indemnification
from the Company pursuant to any provision of this Indenture may proceed
directly against the Company without first seeking to enforce any other right of
indemnification. Upon the payment in full by the Company of any indemnity
provided for hereunder, the Company shall be, to the extent permitted by law,
subrogated to any right of the Person indemnified, other than with respect to
any of such Indemnitee's insurance policies.
To secure the Company's and the Guarantors' payment obligations in this
Section 7.7 the Trustee for the benefit of the Indemnitees shall have a Lien
prior to the Notes on all money or Property held or collected by the Trustee
other than money or Property held in trust to pay principal of, premium, if any,
and interest on, particular Notes.
The Company's and the Guarantors' payment obligations pursuant to this
Section 7.7 shall survive the resignation or removal of the Trustee or any
Collateral Agent, the termination of any Agency Agreement or the discharge of
this Indenture, any Collateral Document or any Convertible Note Collateral
Document. Subject to any other rights available to the Trustee under applicable
bankruptcy law, when the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.1(g) or Section 6.1(h) hereof, the expenses are
intended to constitute expenses of administration under bankruptcy law.
Payments by the Company shall be payable in the same currency as the
indemnified liability. Nothing contained herein shall give the Company the right
to waive, amend or otherwise modify any rights of any Indemnitee under this
Indenture except with the written consent of such Indemnitee.
SECTION 7.8 Replacement of Trustee. (a) No resignation or removal of
the Trustee and no appointment of a successor Trustee pursuant to this Article
VII shall become effective until the acceptance of appointment by the successor
Trustee under this Section 7.8.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 60 calendar days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the outstanding Notes, delivered to the Trustee,
to the Company and to the Guarantors.
(d) If at any time;
(i) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request thereof by the Company or
by any Holder who
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has been a bona fide Holder of a Note for at least six months, unless
the Trustee's duty to resign is stayed in accordance with the
provisions of Section 310(b) of the Trust Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any Holder; or
(iii) the Trustee shall become incapable of acting or a decree
or order for relief by a court having jurisdiction in the premises
shall have been entered in respect of the Trustee in an involuntary
case under the United States bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or similar law, or a decree or order by a court having
jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee of its Property
and asset or affairs, or any public officer shall take charge or
control of the Trustee or of its Property and assets or affairs for the
purpose of rehabilitation, conservation, winding-up or liquidation; or
(iv) the Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or similar law
or shall consent to the appointment of or taking possession by a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trustee or its Property and assets or
affairs, or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they
become due, or shall take corporate action in furtherance of any such
action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.10 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Notes.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by the Holders of a majority in principal amount of the outstanding
Notes delivered to the Company and the retiring Trustee, the successor trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with this Section 7.8, become the successor Trustee and to that
extent replace any successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and shall
have accepted appointment in the manner
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hereinafter provided, any Holder that has been a bona fide Holder of a Note for
at least six months may, subject to Section 6.10 hereof, on behalf of himself
and all others similar situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such resignation, removal and appointment by first class mail, postage
prepaid, to the Holders as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee with
respect to the Notes and the address of its Corporate Trust Office.
(g) In the event of an appointment hereunder of a successor Trustee,
each such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company, the Guarantors and the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts, and duties of the retiring Trustee but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trust of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all Property and money held by
such former Trustee hereunder, subject to its Lien, if any, provided for in
Section 7.7 hereof.
(h) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in Section 7.8(g) hereof.
(i) No successor Trustee shall accept its appointment unless at the
time of such acceptance successor Trustee shall be qualified and eligible under
this Article VII and under the Trust Indenture Act.
SECTION 7.9 Successor Trustee by Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be otherwise
qualified and eligible under this Article VII and under the Trust Indenture Act,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes. In the event that
any Notes shall not have been authenticated by such predecessor Trustee, any
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such successor Trustee may authenticate and deliver such Notes, in either its
own name or that of its predecessor Trustee, with the full force and effect
which this Indenture provides for the certificate of authentication of the
Trustee.
SECTION 7.10 Eligibility; Disqualification. There shall at all times be
a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws
of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by federal,
State, Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of such
foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $100,000,000.
If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible pursuant to the provisions of
this Section 7.10, it shall resign immediately in the manner and with the effect
specified in this Article VII.
This Indenture shall always have a Trustee which satisfies the
requirements of Section 310(a)(1), (2) and (5) of the Trust Indenture Act. If
the Trustee has or hereafter acquires any "conflicting interest" within the
meaning of Section 310(b) of the Trustee Indenture Act, the Trustee and the
Company shall in all respects comply with the provision of Section 310(b) of the
Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of
Section 310(b) of the Trust Indenture Act.
Neither the Company, any Guarantor or any Subsidiary thereof, nor any
Affiliate of the Company or any Guarantor shall serve as Trustee hereunder.
SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned
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or been removed shall be subject to Section 311(a) of the Trust Indenture Act to
the extent indicated therein.
SECTION 7.12 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Collateral or the Convertible Note Collateral may at the time be located,
the Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Collateral or the
Convertible Note Collateral, and to vest in such Person or Persons, in such
capacity and for the benefit of the Holders, such interest in the Collateral or
the Convertible Note Collateral, or any part thereof, and subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 7.10, and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 7.8(f) hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of interest in the Collateral or the Convertible
Note Collateral or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the
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estates or property specified in its instrument of appointment, either jointly
with the Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
ARTICLE VIII
DEFEASANCE
SECTION 8.1 Company's Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may elect, at its option, at any time, to have Section
8.2 or Section 8.3 hereof applied to the outstanding Notes (in whole and not in
part) upon compliance with the conditions set forth below in this Article VIII,
such election to be evidenced by a Board Resolution delivered to the Trustee.
SECTION 8.2 Legal Defeasance and Discharge. Upon the Company's exercise
of its option to have this Section 8.2 applied to the outstanding Notes (in
whole and not in part), the Company shall be deemed to have been discharged from
its obligations with respect to such Notes as provided in this Section 8.2 on
and after the date on which the conditions set forth in Section 8.4 hereof are
satisfied (hereinafter called "Defeasance"). For this purpose, Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Notes and the Company and the Guarantors shall
be deemed to have satisfied all of their other obligations under such Notes,
this Indenture, the Guarantees and the Collateral Documents (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the
trust fund described in Section 8.4 hereof and as more fully set forth in
Section 8.4, payments in respect of the principal of and any premium and
interest (and Additional Amounts, if any, and Special Interest, if any) on such
Notes when payments are due,
(b) the Company's obligations with respect to such Notes under Sections
2.6, 2.7, 2.9, 4.2, 4.3 and 4.4 hereof,
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(c) the Company's and the Guarantor's obligations with respect to
Additional Amounts under Section 4.22 hereof,
(d) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(e) Article III hereof, and
(f) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise
its option to have this Section 8.2 applied to the outstanding Notes (in whole
or in part) notwithstanding the prior exercise of its option to have Section 8.3
hereof applied to such Notes.
SECTION 8.3 Covenant Defeasance. Upon the Company's exercise of its
option to have this Section 8.3 applied to the outstanding Notes (in whole and
not in part), (i) the Company and the Guarantors shall be released from their
respective obligations under Section 5.1(c) or (d), Sections 4.5 through 4.20,
inclusive, and any covenant added to this Indenture subsequent to the Issue Date
pursuant to Section 9.1 hereof, and (ii) the occurrence of any event specified
in Section 6.1(c) or 6.1(d) hereof, with respect to any of Section 5.1(c) or
(d), Sections 4.5 through 4.20, inclusive, and any covenant added to this
Indenture subsequent to the Issue Date pursuant to Section 9.1 hereof, shall be
deemed not to be or result in an Event of Default, in each case with respect to
such Notes as provided in this Section 8.3 on and after the date on which the
conditions set forth in Section 8.4 hereof are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, Covenant Defeasance means that, with
respect to such Notes, the Company and the Guarantors may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 6.1(c) and 6.1(d) hereof), whether directly or indirectly by reason of
any reference elsewhere herein to any such Section or by reason of any reference
in any such Section to any other provisions herein or in any other document; but
the remainder of this Indenture, the Guarantees, the Collateral Documents and
such Notes shall be unaffected thereby.
SECTION 8.4 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 8.2 or Section
8.3 hereof to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Notes, (i) money in an amount, or (ii)
U.S. Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination thereof, in each case sufficient, in the opinion of a
nationally
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recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the
principal of and any installment of interest (including Special Interest, if
any, and Additional Amounts, if any, which would be required based on the laws,
regulations or rulings in effect on the date of deposit) on such Notes on the
Stated Maturity thereof, in accordance with the terms of this Indenture and such
Notes.
(b) In the event of an election to have Section 8.2 hereof apply to the
outstanding Notes, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling and the Company has received
from Revenue Canada, Customs, Excise & Taxation an advance income tax ruling or
(ii) since the date of this Indenture, there has been a change in the applicable
United States federal, Canadian federal, Bermuda or United Kingdom income tax
law, in either case (i) or (ii) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Notes will not recognize gain or
loss for United States federal, Canadian federal, Bermuda or United Kingdom
income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Notes and will be subject to United States federal
income tax and Canadian federal, Bermuda or United Kingdom tax, including
Canadian withholding tax, in the same amount, in the same manner and at the same
times as would be the case if such deposit, Defeasance and discharge were not to
occur.
(c) In the event of an election to have Section 8.3 hereof apply to the
outstanding Notes, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Notes will not recognize gain or
loss for United States federal, Canadian federal, Bermuda or United Kingdom
income tax purposes or under the tax laws of any other jurisdiction as a result
of the deposit and Covenant Defeasance to be effected with respect to such Notes
and will be subject to United States federal, Canadian federal, Bermuda or
United Kingdom or any other income tax in the same amount, in the same manner
and at the same times as would be the case if such deposit, Covenant Defeasance
and discharge were not to occur.
(d) No Default or Event of Default with respect to the outstanding
Notes shall have occurred and be continuing at the time of such deposit after
giving effect thereto or and no Default or Event of Default under Section 6.1(g)
or 6.1(h) shall have occurred at any time on or prior to the 91st calendar day
after the date of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until after such
91st calendar day).
(e) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming for the purpose of this clause (e) that all Notes are in default
within the meaning of such Act).
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(f) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company or the Guarantor is a party or by which it is
bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 8.5 Deposited Money and U.S. Government Obligations to be Held
in Trust: Miscellaneous Provisions. Subject to Section 8.6 hereof, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.4 hereof in respect of the outstanding 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
such Paying Agent as the Trustee may determine, to the Holders of such Notes, of
all sums due and to become due thereon in respect of principal and any premium
and interest (including Special Interest, if any, and Additional Amounts, if
any, which would be required based on the laws, regulations and rulings in
effect on the date of deposit pursuant to Section 8.4(a) hereof), but money so
held in trust need not be segregated from other funds except to the extent
required by law. The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than such tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 8.4 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company Order
any money or U.S. Government Obligations held by it as provided in Section 8.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
trustee, are in excess of the amount thereof that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Notes.
SECTION 8.6 Repayment to Company. 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, if any, on any Note and
remaining unclaimed for two years after such principal, premium, if any, or
interest (including Special Interest, if any, and
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Additional Amounts, if any), if any, have become due and payable shall be paid
to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and 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
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.7 Reinstatement. If the Trustee or Paying Agent is unable to
apply any money in accordance with this Article VIII with respect to any Notes
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture, the Guarantees, such Notes and the Collateral
Documents from which the Company or the Guarantors have been discharged or
released pursuant to Section 8.2 or 8.3 hereof shall be revived and reinstated
as though no deposit had occurred pursuant to this Article VIII with respect to
such Notes, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 8.5 hereof with respect to such
Notes in accordance with this Article VIII; provided that if the Company or any
Guarantor makes any payment of principal of, premium, if any, or interest
(including Additional Amounts, if any, and Special Interest, if any) on any such
Note following such reinstatement of its obligations, the Company or such
Guarantor, as the case may be, shall be subrogated to the Holders of such Notes
to receive such payment from the money so held in trust.
ARTICLE IX
AMENDMENTS
SECTION 9.1 Without Consent of Holders. The Company, the Guarantors and
the Trustee may, at any time, and from time to time, without notice to or
consent of any Holder of Notes, enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes.
(a) to evidence the succession of another Person to the Company or the
Guarantors, as applicable, and the assumption by such successor of the covenants
of the Company contained in the Notes, this Indenture, the Collateral Documents
or the Convertible Note Collateral Documents or such Guarantors in the
Guarantees, this Indenture, the Collateral Documents or the Convertible Note
Collateral Documents; or
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(b) to add to the covenants of the Company, for the benefit of the
Holders of all of the Notes, or to surrender any right or power herein conferred
upon the Company or the Guarantors by the Indenture, the Collateral Documents or
the Convertible Note Collateral Documents; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; or
(e) to evidence and provide for the acceptance of appointment hereunder
of a successor Trustee; or
(f) to add additional security for the Notes and/or the Guarantees; or
(g) to cure any ambiguity herein or in the Collateral Documents or the
Convertible Note Collateral Documents, to correct or supplement any provision
hereof or in the Collateral Documents which may be inconsistent with any other
provisions herein or therein or to add any other provisions with respect to
matters or questions arising under this Indenture or the Collateral Documents or
the Convertible Note Collateral Documents; provided that such actions shall not
adversely affect the affect the interests of the Holders of Notes in any
material respect; or
(h) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.2 With Consent of Holders. With the consent of the Holders of
not less than a majority in principal amount at Stated Maturity of the
outstanding Notes, by Act of said Holders delivered to the Company, the
Guarantors and the Trustee, the Company, the Guarantors and the Trustee may
enter into one or more indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture, the Collateral Documents or the Convertible Note Collateral
Documents or of modifying in any manner the rights of the Holders; provided that
no such supplemental indenture shall, without the consent of the Holder of each
outstanding Note:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount (including the Accreted
Value at any time) thereof (or any premium, if any), or the interest (including
Additional Amounts, if any, or Special Interest, if any) thereon, that would be
due and payable upon Maturity thereof, or change the place of payment where, or
in the coin or currency in which, any Note or any premium or interest (including
Additional Amounts, if any) thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity thereof;
or
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(b) reduce the percentage in principal amount of the outstanding Notes,
the consent of whose Holders is required for any such supplemental indenture or
required for any waiver of compliance with the provisions of this Indenture, the
Collateral Documents or the Convertible Note Collateral Documents; or
(c) modify any of the provisions of Section 6.4 hereof, except to
increase the percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be amended or waived without the consent of
the Holder of each outstanding Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate, the
Notes or the Guarantees to any other Indebtedness other than Senior
Indebtedness; or
(e) modify any provision of this Indenture relating to the obligations
of the Company to make offers to purchase Notes upon a Change of Control or from
the proceeds of an Asset Sale; or
(f) modify any of the provisions of this Section 9.2, except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holders of each outstanding Note affected thereby; or
(g) amend, supplement or otherwise modify the provisions of the
Indenture relating to the Guarantees.
It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Notwithstanding the foregoing, so long as the Convertible Notes are outstanding
and the Convertible Note Indenture has not been satisfied and discharged, the
Trustee shall not cause to become effective a supplemental indenture (i)
amending any Collateral Documents or Convertible Note Collateral Documents
unless a supplemental indenture to the Convertible Note Indenture making the
same amendment to such Collateral Document or Convertible Note Collateral
Document becomes simultaneously effective, or (ii) amending either Section 4.8
or Section 11.4 of the Indenture unless a supplemental indenture to the
Convertible Note Indenture making the same amendment to Section 4.8 or Section
11.4 of the Convertible Note Indenture, as the case may be, becomes
simultaneously effective.
SECTION 9.3 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
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SECTION 9.4 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes shall comply with the Trust Indenture
Act as then in effect.
SECTION 9.5 Revocation and Effect of Consents and Waivers. A consent to
an amendment, supplement or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of such Note or portion of such Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on such Note; provided that such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Note or portion of
such Note if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective. After an amendment,
supplement or waiver becomes effective pursuant to this Article IX, it shall
bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
calendar days after such record date.
SECTION 9.6 Changed Terms of Notes. If a supplemental indenture changes
the terms of a Note, the Trustee may require the Holder thereof to deliver such
Note to the Trustee. The Trustee may place an appropriate notation on such Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for such Note
shall issue and the Trustee shall authenticate a new Note (accompanied by a
notation of the Guarantees duly endorsed by the Guarantors) that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment or supplement.
SECTION 9.7 Trustee to Execute Supplemental Indentures. The Trustee
shall execute any supplemental indenture authorized pursuant to this Article IX
if such supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but shall
not be required to, execute such supplemental indenture. In executing any
supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.1
hereof) shall be fully protected in relying upon, an Officers' Certificate
(which need only cover the matters set forth in clause (a) below) and an Opinion
of Counsel provided by the Company stating that:
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(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors have all necessary corporate power
and authority to execute and deliver the supplemental indenture and that the
execution, delivery and performance of such supplemental indenture has been duly
authorized by all necessary corporate action of the Company and the Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or (iii)
any material agreement or instrument to which the Company or any Guarantor is
subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of Counsel,
the execution, delivery and performance of the supplemental indenture do not
conflict with, or result in the breach of any of the terms, conditions or
provisions of (i) any law or regulation applicable to the Company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly executed and
delivered by the Company and the Guarantors, and the Indenture together with
such supplemental indenture constitutes a legal, valid and binding obligations
of the Company and the Guarantors enforceable against the Company and the
Guarantors, as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and
(f) the Indenture together with such amendment or supplement complies
with the Trust Indenture Act.
SECTION 9.8 Solicitation of Consents. Neither the Company nor any of
its Subsidiaries nor any of their Affiliates shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holders of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture, the
Collateral Documents, the Convertible Note Documents or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
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ARTICLE X
GUARANTEES
SECTION 10.1 Guarantees. (a) For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Guarantors, together with each Restricted Subsidiary of the Company which in
accordance with Section 4.10 is required in the future to guarantee the
obligations of the Company and the Guarantors under the Notes, the Guarantees,
the Collateral Documents and the Convertible Note Collateral Documents upon
execution of a supplemental indenture, hereby jointly and severally, irrevocably
and unconditionally guarantees to the Trustee and to each Holder of a Note
authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Notes, or any of the Collateral Documents
or the Convertible Note Collateral Documents or the obligations of the Company
and the Guarantors, under this Indenture, that: (i) the principal of, premium,
if any, and any interest, Additional Amounts, if any, and Special Interest, if
any, on the Notes (including, without limitation, any interest that accrues
after the filing of a proceeding of the type described in Sections 6.1(g) and
(h)) and any fees, expenses and other amounts owing under this Indenture and the
Collateral Documents will be duly and punctually paid in full when due, whether
at Stated Maturity, by acceleration, call for redemption, upon a Change of
Control Offer, Asset Sale Offer, purchase or otherwise, and interest on the
overdue principal and (to the extent permitted by law) interest, if any,
Additional Amounts, if any, and Special Interest, if any, on the Notes and any
other amounts due in respect of the Notes, if lawful, and all other obligations
of the Company and the Guarantors to the Holders of the Notes under this
Indenture, the Notes, the Collateral Documents and the Convertible Note
Collateral Documents, whether now or hereafter existing, will be promptly paid
in full or performed, all strictly in accordance with the terms hereof, of the
Notes, the Collateral Documents and the Convertible Note Collateral Documents;
and (ii) 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
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration, call for redemption, upon a Change of
Control Offer, Asset Sale Offer, purchase or otherwise. If payment is not made
when due of any amount so guaranteed for whatever reason, each Guarantor shall
be jointly and severally obligated to pay the same individually whether or not
such failure to pay has become an Event of Default which could cause
acceleration pursuant to Section 6.2. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection. An Event of Default
under this Indenture, any Collateral Document, the Convertible Note Collateral
Documents or the Notes shall constitute an Event of Default under this
Guarantee, and shall entitle the Holders to accelerate the obligations of each
Guarantor hereunder in the same manner and to the same extent as the obligations
of the Company. This Guarantee is intended to be superior to or pari passu in
right of payment with all Indebtedness of the Guarantors and each Guarantor's
obligations are independent of any obligation of the Company or any other
Guarantor.
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(b) Each Guarantor hereby agrees that its obligations hereunder shall
be joint and several, absolute, irrevocable and unconditional, irrespective of
the validity, regularity or enforceability of the Notes, any Collateral
Document, any Convertible Note Document, this Indenture or any other document
relating thereto, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, any
release or non-perfection of Collateral, any release of any other Guarantor, any
delays in obtaining or realizing upon failure to obtain or realize upon or
application of Collateral, the recovery of any judgment against the Company or
any other Person, any action to enforce the same or any other circumstance
(including, without limitation, any statute of limitations) which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives promptness, diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company or any other Person, any right to require a proceeding first
against the Company or any other Person, protest, notice and all demands
whatsoever and covenants that its Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture,
the Collateral Documents, the Convertible Note Documents and this Guarantee. If
any Holder or the Trustee is required by any court or otherwise to return to the
Company or to any Guarantor, or any receiver, trustee, assignee, liquidator or
similar official under any applicable bankruptcy or insolvency or other similar
law any amount paid by the Company or such Guarantor to the Trustee or such
Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
(c) Until such time as the Notes and the other obligations of the
Company guaranteed hereby have been satisfied in full, each Guarantor hereby
irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holders or the Trustee against the
Company or any other Guarantor or any Collateral or Convertible Note Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company or any other Guarantor, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to such
Guarantor in violation of the preceding sentence at any time prior to the later
of the payments in full of the Notes and all other amounts payable under this
Indenture, this Guarantee, the Collateral Documents, the Convertible Note
Collateral Documents and the Stated Maturity of the Notes, such amount shall be
held in trust for the benefit of the Holders and the Trustee and shall forthwith
be paid to the Trustee to be credited and applied to the Notes and all other
amounts payable under this Guarantee, whether matured or unmatured, in
accordance with the terms of this Indenture, or to be held as Collateral for any
obligations or other amounts payable under this Guarantee thereafter arising.
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(d) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 10.1(d) is knowingly made in
contemplation of such benefits. Each Guarantor further agrees that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
subject to this Article X, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article VI for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations guaranteed hereby as provided in
Article VI, such obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of this Guarantee.
(e) A Guarantor that makes a distribution or payment under a Guarantee
shall be entitled to contribution from each other Guarantor in a pro rata amount
based on the Adjusted Net Assets of each such other Guarantor for all payments,
damages and expenses incurred by that Guarantor in discharging the Company's
obligations with respect to the Notes, this Indenture, the Collateral Documents
and the Convertible Note Collateral Documents or any other Guarantor with
respect to its Guarantee, the Collateral Documents and the Convertible Note
Collateral Documents, so long as the exercise of such right does not impair the
rights of the Holders of the Notes under the Guarantees, any Collateral Document
or any Convertible Note Collateral Document.
SECTION 10.2 Limitation of Guarantor's Liability. Each Guarantor and,
by its acceptance hereof, each beneficiary hereof, hereby confirms that it is
its intention that the Guarantee by such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of the United States Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, the
Companies Creditors' Arrangement Act (Canada), the Bankruptcy and Insolvency Act
(Canada) or any other bankruptcy, receivership, insolvency, liquidation or other
similar legislation or legal principles under any applicable foreign law to the
extent applicable to any Guarantees. To effectuate the foregoing intention, each
such Guarantor hereby irrevocably agrees that the obligation of such Guarantor
under its Guarantee under this Article X shall be limited to the lesser of (a)
an amount equal to such Guarantor's Adjusted Net Assets as of the date such
Guarantee is executed and delivered or (b) the maximum amount as will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, (including, if
applicable, its obligations under the Convertible Notes) and after giving effect
to any collections from, rights to receive contribution from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article X result in the obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent conveyance or
fraudulent transfer or not otherwise being void, voidable or unenforceable under
any bankruptcy, reorganization, receivership, insolvency, liquidation or other
similar legislation or legal principles under any applicable foreign law.
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SECTION 10.3 Execution and Delivery of Guarantees. To further evidence
its Guarantee set forth in Section 10.1 hereof, each Guarantor hereby agrees
that notation of such Guarantee shall be endorsed on each Note authenticated and
delivered by the Trustee and executed by either manual or facsimile signature of
an authorized officer of such Guarantor. Each Guarantor hereby agrees that its
Guarantee set forth in Section 10.1 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee. If an officer of a Guarantor whose signature is on this Indenture or
a Note no longer holds that office at the time the Trustee authenticates such
Note or at any time thereafter, such Guarantor's Guarantee of such Note shall be
valid nevertheless. The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of the Guarantor.
SECTION 10.4 When a Guarantor May Merge, etc.. No Guarantor shall
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person) another corporation, Person or entity whether or not
affiliated with such Guarantor (but excluding any consolidation, amalgamation or
merger if the surviving corporation is no longer a Subsidiary) unless (i)
subject to the provisions of Section 10.6 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture and appropriate Collateral Documents and Convertible Note Collateral
Documents in form reasonably satisfactory to the Trustee under the Notes, this
Indenture and the Collateral Documents and Convertible Note Collateral
Documents; (ii) in the case of a Leasing Company, such Guarantor or the Person
formed by or surviving any such consolidation or merger is a separate,
special-purpose, Wholly-Owned Restricted Subsidiary constituting a Leasing
Company; (iii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iv) such Guarantor, or any Person formed by or
surviving any such consolidation or merger, (A) will have Consolidated Net Worth
(immediately after giving effect to such transaction but prior to any purchase
accounting adjustments resulting from the transaction), equal to or greater than
the Consolidated Net Worth of such Guarantor immediately preceding the
transaction and (B) will be permitted by virtue of the Company's Indebtedness to
Operating Cash Flow Ratio to incur, immediately after giving effect to such
transaction, at least $1.00 of additional Indebtedness pursuant to the terms of
Section 4.9(a) hereof. In connection with any such consolidation or merger, the
Trustee shall be entitled to receive an Officers' Certificate and an Opinion of
Counsel stating that such consolidation or merger is permitted by this Section
10.4.
SECTION 10.5 Additional Guarantors (a) The Company shall cause each
Subsidiary which, after the date of this Indenture, is required pursuant to
Section 4.10(a) hereof to become a Guarantor to (a) execute and deliver to the
Trustee a supplemental indenture in form and substance reasonably satisfactory
to the Trustee which subjects such Restricted Subsidiary to the provisions of
this Indenture as a Guarantor, (b) execute and deliver to the Trustee,
simultaneous with its execution and delivery to the Trustee of a supplemental
indenture and any applicable Collateral Documents and Convertible Note
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Collateral Documents; and (c) deliver to the Trustee an Opinion of Counsel to
the effect that such supplemental indenture has been duly authorized and
executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning debtor's rights and equitable principles as may be acceptable to the
Trustee in its reasonable discretion) and containing such other matters as the
Trustee may reasonably request.
(b) Any Person that was not a Guarantor on the Issue Date may become a
Guarantor by executing and delivering to the Trustee (a) a supplemental
Indenture in form and substance reasonably satisfactory to the Trustee and any
applicable Collateral Documents and Convertible Note Collateral Documents and
(b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Person and constitutes the legal,
valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors' rights and equitable principles as
may be acceptable to the Trustee in its reasonable discretion) and containing
such other matters as the Trustee may reasonably request.
SECTION 10.6 Release of a Guarantor. (a) Upon the sale or other
transfer of all of the Capital Stock of a Guarantor, other than a Leasing
Company or NWE Cyprus, to any Person that is not an Affiliate of the Company in
compliance with the terms of this Indenture (including, without limitation,
Section 4.8 hereof), such Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under this
Indenture and any Collateral Document or any Convertible Note Collateral
Document to which it is a party without any further action required on the part
of the Trustee or any Holder; provided that the Net Cash Proceeds of such sale
or other disposition are applied in accordance with Section 4.8 of this
Indenture as if such sale or disposition were an Asset Sale and in accordance
with the applicable provisions of this Indenture. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section 10.6(a) and the other
applicable provisions of this Indenture.
(b) Notwithstanding the foregoing, any Guarantee by a Restricted
Subsidiary other than NWE Cyprus, a Leasing Company, BCL, WTC or a future
Wholly-Owned Subsidiary of the Company shall be automatically and
unconditionally released and discharged upon the release or discharge of the
guarantee of Guaranteed Indebtedness which resulted in the creation of such
Guarantee pursuant to Section 4.10 hereof, except a discharge or release by, or
as a result of, payment under such guarantee. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to compliance with this Section 10.6(b) and the other
applicable provisions of this Indenture.
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ARTICLE XI
COLLATERAL AND SECURITY
SECTION 11.1 Collateral Documents. The due and punctual payment of the
principal of, premium, if any, interest (including Additional Amounts, if any,
and Special Interest, if any) on, and any other amounts due in respect of, the
Notes when and as the same shall be due and payable, whether on an Interest
Payment Date, at Stated Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise, and interest
on the overdue principal of and interest (including Additional Amounts, if any,
and Special Interest, if any) (to the extent permitted by law), on the Notes and
performance of all other obligations of the Company and any Guarantor to the
Holders of the Notes or the Trustee under this Indenture, the Notes, the
Guarantees, the Collateral Documents, and the Convertible Note Collateral
Documents, according to the terms hereunder or thereunder, shall be secured (i)
as provided in the Collateral Documents, (ii) as provided in the Convertible
Note Collateral Documents, (iii) by a pledge by any future Guarantor of the
Capital Stock of any Wholly-Owned Subsidiary (whether now owned or hereafter
acquired) of such future Guarantor and any and all dividends, distributions and
proceeds thereof, and (iv) by a pledge by all Wholly-Owned Subsidiaries of all
Intercompany Notes owned by such WhollyOwned Restricted Subsidiaries from a
Restricted Subsidiary (other than any Intercompany Notes made with the
dividends, distributions, payments and proceeds of Technocom Preferred Stock or
other Convertible Note Collateral or otherwise constituting Convertible Note
Collateral). The Company will cause such future Guarantors and Wholly-Owned
Subsidiaries to xxxxx x Xxxx and security interest pursuant to Collateral
Documents substantially similar to the Company Senior Note Security Agreement,
and any other additional Collateral Documents as may be necessary or appropriate
to create or make effective such Lien and security interest, such Lien and
security interest to be for the benefit of the Trustee and the Holders of the
Notes to secure the Notes, the Guarantees and the other obligations of the
Company and the Guarantors under this Indenture, the other Collateral Documents
and the Convertible Note Collateral Documents. Each Holder, by its acceptance of
a Note, consents and agrees to the terms of the Collateral Documents and the
Convertible Note Collateral Documents (including, without limitation, the
provisions providing for foreclosure and release of Collateral and Convertible
Note Collateral, as applicable) as the same may be in effect or may be amended
from time to time in accordance with the terms thereof and hereof and authorizes
and directs the Trustee to enter into each of the Collateral Documents and the
Convertible Note Collateral Documents and to perform its respective obligations
and exercise its respective rights thereunder in accordance therewith. The
Company and each Guarantor will do or cause to be done all such acts and things
as may be necessary or proper, or as may be required by the provisions of the
Collateral Documents and the Convertible Note Collateral Documents to which it
is a party, to assure and confirm to the collateral agent and the Trustee the
Liens in the Collateral and the Convertible Note Collateral contemplated hereby
and by the Collateral Documents and the Convertible Note Collateral Documents to
which it is a party, as from time to time constituted, so as to render the same
available
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to the fullest extent permitted by law for the security and benefit of this
Indenture and of the Notes and the Guarantees secured thereby, according to the
intent and purposes herein expressed. The Company and each Guarantor shall to
the fullest extent permitted by law take, upon request of the Trustee, any and
all actions reasonably required to cause the Collateral Documents and the
Convertible Note Collateral Documents to which it is a party to create and
maintain, as security for the obligations of the Company and the Guarantors
under this Indenture, the Notes, the Guarantees, the Collateral Documents and
the Convertible Note Collateral Documents, valid and enforceable, perfected
(except as expressly provided therein), Liens in and on all the Collateral and
the Convertible Note Collateral, in favor of the Trustee or a collateral agent
for the benefit of the Trustee and for the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Convertible Note Trustee and the
equal and ratable benefit of the Holders of the Convertible Notes so long as the
Convertible Notes remain outstanding without preference, priority or distinction
of any thereof over any other by reason of difference in time of issuance, sale
or otherwise, superior to and prior to the rights of all third persons except,
with respect to the Convertible Note Collateral, the Convertible Note Trustee
and the Holders of the Convertible Notes, and subject to no other Liens, other
than as provided herein and therein.
SECTION 11.2 Recording and Opinions. (a) Each of the Company and the
Guarantors represents that it has caused or will promptly cause to be executed
and delivered, filed and recorded and covenants that it will promptly cause to
be executed and delivered and filed and recorded, all instruments and documents,
and represents that it has done and will do or will cause to be done all such
acts and other things, at the Company's or the Guarantor's expense, as
applicable, as are necessary to subject the Collateral and the Convertible Note
Collateral to valid Liens and to perfect those Liens, all to the fullest extent
permitted by law. Each of the Company and the Guarantors shall, as promptly as
practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the Liens under the Collateral Documents and the
Convertible Note Collateral Documents (except as otherwise expressly provided
herein and therein), all to the fullest extent permitted by law.
(b) The Company shall furnish to the Trustee promptly after the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments or otherwise necessary to make effective the
Liens intended to be created by the Collateral Documents and the Convertible
Note Collateral Documents, and reciting the details of such action, or (ii)
stating that, in the opinion of such counsel, no such action is necessary to
make such Lien effective. Such opinion of counsel shall cover the necessity for
recordings, registrations and filings required in all relevant jurisdictions.
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(c) The Company shall furnish to the Trustee within 3 months after each
anniversary of the Issue Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has been
taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance or
otherwise as is necessary to maintain the effectiveness of the Liens intended to
be created by the Collateral Documents and by the Convertible Note Collateral
Documents and reciting the details of such action or (ii) in the opinion of such
counsel, no such action is necessary to maintain the effectiveness of such
Liens. Such opinion of counsel shall cover the necessity of recordings,
registrations, filings, re-recordings, re-registrations and refilings in all
relevant jurisdictions.
(d) The Company shall otherwise comply with the provisions of Section
314(b) of the Trust Indenture Act.
SECTION 11.3 Further Assurances and Security. The Company and each
Guarantor will execute, acknowledge and deliver to the Trustee, at the Company's
and/or such Guarantor's expense, at any time and from time to time such further
assignments, transfers, assurances or other instruments as may be reasonably
required to effectuate the terms of this Indenture, the Collateral Documents and
the Convertible Note Collateral Documents, and will at any time and from time to
time do or cause to be done all such acts and things as may be necessary or
proper, or as may be reasonably required by the Trustee, to assure and confirm
to the Trustee the Liens in the Collateral and the Convertible Note Collateral
contemplated hereby and by the Collateral Documents and the Convertible Note
Collateral Documents, all to the fullest extent permitted by law. The Trustee
shall have no duty to determine whether any filing or recording is necessary
hereunder or under any Collateral Document.
SECTION 11.4 Possession, Use and Release of Collateral.
(a) $46,000,000 of net proceeds of the Notes shall be deposited in the
Company Senior Note Escrow Account and shall be subject to a first priority
Lien. All funds deposited in the Company Senior Note Escrow Account representing
net proceeds of the Notes constitute Collateral and will, at the direction of
the Company except during the continuance of a Default or an Event of Default
and at the direction of the Trustee during the continuance of a Default or an
Event of Default, be invested in Eligible Cash Equivalents in the manner
provided for in the Company Senior Note Escrow Account Agreement. No funds shall
be released from the Company Senior Note Escrow Account except as provided
herein and in the Company Senior Note Escrow Account Agreement.
(b) Subject to the provisions of subsections (k) and (l) of this
Section 11.4, up to $9,000,000 of the net proceeds of the Notes may be withdrawn
from the Company Senior Note Escrow Account and utilized by the Company to make
Qualified Investments if, in
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respect of each such Qualified Investment, the following conditions are
satisfied, and the Trustee shall have received an Officers' Certificate of the
Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing, or will occur as a result thereof;
(ii) a Lien on the Qualified Investment is granted to the
Trustee or a collateral agent for the benefit of the Trustee and the
equal and ratable benefit of the Holders and the benefit of the
Convertible Note Trustee and the equal and ratable benefit of the
Holders of the Convertible Notes so long as the Convertible Notes
remain outstanding to secure the Notes, the Guarantees and the other
obligations of the Company and the Guarantors under this Indenture and
the other Collateral Documents and to secure the Convertible Notes and
the other obligations of the Company and the Guarantors under the
Convertible Notes, the Convertible Note Indenture and the Convertible
Note Collateral Documents;
(iii) the entity in which such Qualified Investment is made
has all licenses, registrations and permits necessary to operate the
Telecommunications Business in which it is engaging or proposes to
engage on the date of such Qualified Investment;
(iv) all licenses, registrations and permits required for such
Qualified Investment and such Liens have been obtained; and
(v) appropriate Collateral Documents have been executed and
delivered and properly recorded, registered and filed to the extent
necessary to make effective the Liens intended to be created therein.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (v) above and (y) such other documents as may be required by the
Collateral Documents to be delivered by the Company to a collateral agent or the
Trustee.
(c) Subject to the provisions of subsections (k) and (l) of this
Section 11.4, the net proceeds of the Notes (including any portion of $9,000,000
of net proceeds of the Notes not used as provided in subsection (b) above)
retained in the Company Senior Note Escrow Account may be withdrawn from the
Company Senior Note Escrow Account and utilized by the Company to purchase
Capital Stock of the Leasing Companies or to make intercompany loans to the
Leasing Companies evidenced by Intercompany Notes, each of which will constitute
Collateral, by transferring such funds to the applicable Leasing Company Escrow
Accounts of such Leasing Companies, if the following conditions are satisfied,
and the Trustee shall have received an Officers' Certificate of the Company and
the applicable Leasing Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing or will occur as a result thereof;
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(ii) the applicable Leasing Company utilizes such funds
(except for funds to be utilized for Qualified Investments to the
extent permitted by this Indenture) to purchase Telecommunications
Assets contemporaneously with such purchase of Capital Stock or
intercompany loan, as applicable, from a supplier located in the United
States, Canada, Western Europe (including Scandinavia), Israel, Japan,
Taiwan and South Korea;
(iii) the applicable Leasing Company contemporaneously enters
into a Telecommunications Asset Lease covering such Telecommunications
Assets with a Restricted Subsidiary or a Qualified Joint Venture;
(iv) Liens on such Telecommunications Asset Lease are granted
to the Trustee or a collateral agent for the benefit of the Trustee and
the equal and ratable benefit of the Holders to secure the Notes, the
Guarantees and the other obligations of the Company and the Guarantors
under this Indenture and the other Collateral Documents and to secure
any applicable Intercompany Note and, so long as the Convertible Notes
remain outstanding for the benefit of the Convertible Note Trustee and
the Holders of the Convertible Notes, to secure the Convertible Notes
and the guarantees under the Convertible Note Indenture and the other
obligations of the Company or the Guarantors under the Convertible Note
Indenture and the Convertible Note Collateral Documents;
(v) the Restricted Subsidiary or Qualified Joint Venture that
will be the lessee under the applicable Telecommunications Asset Lease
has or has applied for all licenses, registrations and permits
necessary to operate the Telecommunications Assets subject to such
Telecommunications Asset Lease and the Telecommunications Business for
which such Telecommunications Assets are intended to be utilized;
(vi) if a Qualified Investment is to be made by a Leasing
Company with that portion of the $9,000,000 of net proceeds of the
Notes not utilized by the Company for Qualified Investments pursuant to
subsection (b) of this Section 11.4, (x) the Leasing Company has
granted a Lien on such Qualified Investment to the Trustee or a
collateral agent for the benefit of the Trustee and the equal and
ratable benefit of the Holders to secure the Notes, the Guarantees and
the other obligations of the Company and the Guarantors under this
Indenture and the other Collateral Documents and to secure any
applicable Intercompany Note and, so long as the Convertible Notes
remain outstanding for the benefit of the Convertible Note Trustee and
the Holders of the Convertible Notes, to secure the Convertible Notes
and the guarantees under the Convertible Note Indenture and the other
obligations of the Company or the Guarantors under the Convertible Note
Indenture and the Convertible Note Collateral Documents, and (y) all
licenses, registrations and permits required for such Qualified
Investment and such Lien have been obtained; and
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(vii) appropriate Collateral Documents have been executed and
delivered and properly recorded, registered and filed to the extent
necessary to make effective the Lien intended to be created therein and
have been delivered to the Trustee or the collateral agent.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (vii) above in form and substance reasonably satisfactory to the Trustee
and (y) such other documents as may be required by the Collateral Documents to
be delivered to the Trustee or a collateral agent by the Company or the
applicable Leasing Company. If the foregoing conditions are satisfied, the funds
representing the net proceeds of the Notes in the applicable Leasing Company
Escrow Account derived from the Investment in the Capital Stock of the
applicable Leasing Company or the intercompany loan evidenced by an Intercompany
Note may be withdrawn and utilized by such Leasing Company to purchase the
applicable Telecommunications Assets or make the applicable Qualified
Investments.
(d) All payments made to the Company in respect of any Qualified
Investments or Intercompany Notes evidencing loans of the net proceeds of the
Notes to the Leasing Companies held by the Company or any Pledged Stock of the
Leasing Companies shall be promptly deposited, without commingling prior to such
deposit, in the Company Senior Note Escrow Account and will also constitute
Collateral and be subject to a first priority perfected Lien in favor of a
collateral agent or the Trustee for the benefit of the Trustee and the equal and
ratable benefit of the Holders of the Notes and for the benefit of the
Convertible Note Trustee and the equal and ratable benefit of the Holders of the
Convertible Notes; and unless and until an Event of Default has occurred and is
continuing, the Company and/or the Leasing Companies and/or the Restricted
Subsidiaries will be entitled to receive and retain, free from the Liens of the
Collateral Documents, payments made under any Intercompany Notes not evidencing
loans to Leasing Companies and any instruments not constituting Pledged Stock of
the Leasing Companies or Qualified Investments.
(e) All payments made by an investee, an obligor or a lessee to any
Leasing Company in respect of any Qualified Investments or Intercompany Notes
held by such Leasing Company or any Telecommunications Asset Lease shall be
promptly deposited, without commingling prior to such deposit, in the applicable
Leasing Company Escrow Account and will also constitute Collateral and be
subject to a first priority perfected Lien in favor of the Trustee or a
collateral agent and subject to subsections (k) and (l) of this Section 11.4 may
be utilized
(x) to purchase additional Telecommunications Assets for
additional Telecommunications Asset Leases if the following conditions are
satisfied, and the Trustee shall have received an Officer's Certificate of the
Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing or will occur as a result thereof;
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(ii) the applicable Leasing Company utilized such funds to
purchase such Telecommunications Assets from a supplier located in the
United States, Canada, Western Europe (including Scandinavia), Israel,
Japan, Taiwan and South Korea;
(iii) the applicable Leasing Company contemporaneously enters
into a Telecommunications Asset Lease covering such Telecommunications
Assets with a Restricted Subsidiary or a Qualified Joint Venture;
(iv) Liens on such Telecommunications Asset Lease are granted
to the Trustee or a collateral agent for the benefit of the Trustee and
the equal and ratable benefit of the Holders to secure the Notes, the
Guarantees and the other obligations of the Company and the Guarantors
under this Indenture and the other Collateral Documents and to secure
any applicable Intercompany Note;
(v) the Restricted Subsidiary or Qualified Joint Venture that
will be the lessee under the applicable Telecommunications Asset Lease
has or has applied for all licenses, registrations and permits
necessary to operate the Telecommunications Assets subject to such
Telecommunications Asset Lease; and
(vi) appropriate Collateral Documents have been executed and
delivered and properly recorded, registered or filed to the extent
necessary to make effective to the fullest extent permitted by law the
Lien intended to be created therein;
provided that the Leasing Company shall also deliver (x) an Opinion of Counsel
covering clause (vi) above and in form and substance reasonably satisfactory to
the Trustee and (y) such other documents as may be required by the Collateral
Documents to be delivered to the Trustee or a collateral agent by the Company or
the Leasing Company.
(y) to pay when due the Accreted Value, premium, if any, on
and interest (including Additional Amounts, if any, and Special Interest, if
any) on the Notes; and
(z) provided that an aggregate amount equal to the interest
due on the Senior Notes in the next succeeding 12 months (the "Minimum Amount")
exclusive of amounts constituting the net proceeds of the Notes or the Net Cash
Proceeds of any Asset Sale (whether or not constituting Excess Proceeds or
Aggregate Unused Proceeds) is in the Company Senior Note Escrow Account and the
Leasing Company Escrow Accounts, which Minimum Amount may be utilized only for
the purposes set forth in clauses (x) and (y) above, any amount in excess of
such Minimum Amount may be invested by the Leasing Companies or the Company in
Qualified Investments to the extent permitted by this Indenture if, in respect
of each such Qualified Investment, the following conditions are satisfied and
the Trustee shall have received an Officers' Certificate to such effect:
(i) no Default or Event of Default under this Indenture has
occurred and is continuing or will occur as a result thereof;
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(ii) a Lien on the Qualified Investment is granted to the
Trustee or a collateral agent for the benefit of the Trustee and the
equal and ratable benefit of the Holders to secure the Notes and the
Guarantees and to secure any applicable Intercompany Note;
(iii) the entity in which such Qualified Investment is made
has all licenses, registrations and permits necessary to operate the
Telecommunications Business in which it is engaging or proposes to
engage on the date of such Qualified Investment;
(iv) all licenses, registrations and permits required for such
Qualified Investment and such Lien have been obtained; and
(v) appropriate Collateral Documents have been executed and
delivered and properly recorded, registered or filed to the extent
necessary to make effective to the fullest extent permitted by law the
Lien intended to be created therein.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (v) above and (y) such other documents as may be required by the
Collateral Documents to be delivered by the Company to the Trustee or the
collateral agent.
(f) Although all Pledged Stock, all Intercompany Notes and all other
instruments included in the Collateral, including those representing Qualified
Investments, will be delivered to and held by the Trustee, the Convertible Note
Trustee or a collateral agent, unless and until an Event of Default has occurred
and is continuing, the Company and/or the Leasing Companies and/or other
Restricted Subsidiaries, as applicable, shall be entitled to exercise any voting
and consensual rights with respect to such Collateral.
(g) Any Telecommunications Assets purchased with the net proceeds of
the Notes that are subject to a Telecommunications Asset Lease or a series of
related Telecommunications Asset Leases may not be transferred or shipped to the
lessee under the applicable Telecommunications Asset Lease or Leases or to a
jurisdiction other than the United States, Canada, Western Europe (including
Scandinavia), Israel, Japan, Taiwan and South Korea unless the applicable lessee
has all licenses, registrations and permits necessary to operate such
Telecommunications Assets and the Telecommunications Business for which such
Telecommunications Assets are intended and the Company delivers to the Trustee a
favorable Opinion of Counsel to such effect. With respect to any
Telecommunications Assets not purchased with the net proceeds of the Notes, up
to $5,000,000 of such Telecommunications Assets may be shipped or transferred to
such lessee at any time without such Opinion of Counsel being required but
thereafter, on each occasion when $5,000,000 in the aggregate of such
Telecommunications Assets shall have been shipped or transferred, such Opinion
of Counsel shall be delivered before any additional Telecommunications Assets
may be shipped or transferred.
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(h) If no Default or Event of Default has occurred and is continuing,
funds or Eligible Cash Equivalents held in any Leasing Company Escrow Account
may be loaned or advanced to any other Leasing Company Escrow Account or
transferred to the Company Senior Note Escrow Account and, subject to the
provisions of this Indenture with respect to Investments of funds from the
Company Senior Note Escrow Account to a Leasing Company Escrow Account, funds or
Eligible Cash Equivalents in the Company Senior Note Escrow Account may be
transferred from the Company Escrow Account to any Leasing Company Escrow
Account.
(i) Subject to subsections (k) and (l) of this Section 11.4, Collateral
may be released from the Liens created by the Collateral Documents (a) upon
payment in full of the Notes in accordance with the terms of the Notes and this
Indenture and the other obligations then due and owing under the Notes, this
Indenture and the Collateral Documents; (b) with respect to inventory, upon the
sale of such inventory in the ordinary course of business; (c) with respect to
Collateral sold or disposed of in an Asset Sale if such sale or other
disposition is not prohibited under this Indenture and if the Net Cash Proceeds
of such sale or other disposition are applied as provided in Section 4.8 hereof;
(d) to the extent that a Lien is granted on such Collateral pursuant to
subsection (iv) of the definition of "Permitted Liens" set forth in Section 1.1
hereof; (e) with respect to amounts in the Company Senior Note Escrow Account
and the Leasing Company Escrow Accounts consisting of Net Cash Proceeds of Asset
Sales, upon the expenditure of such cash if such expenditure is made in
accordance with this Indenture; (f) with respect to amounts in the Company
Senior Note Escrow Account and the Leasing Company Escrow Accounts constituting
net proceeds of the Notes if the procedures described in subsections (a), (b) or
(c) above are complied with; (g) with respect to other amounts in the Company
Senior Note Escrow Account and the Leasing Company Escrow Accounts other than
the Net Cash Proceeds of any Asset Sale, including payments received on Pledged
Stock, Telecommunications Asset Leases and Qualified Investments, if the
procedures described in this Section 11.4 are complied with; (h) with respect to
Collateral that is Capital Stock of a Guarantor, if such Guarantor is released
pursuant to Section 10.6 of this Indenture; and (i) with respect to any
Intercompany Note not evidencing a loan of net proceeds of the Notes to the
Leasing Companies, upon the repayment, forgiveness or other termination of such
Intercompany Note; provided that all such releases described above are in
compliance with the Trust Indenture Act.
(j) In the event of any Asset Sale, the Company or the relevant
Restricted Subsidiary shall cause the Net Cash Proceeds derived or resulting
from any Asset Sale that involves any Collateral or involves Telecommunications
Assets subject to a Telecommunications Asset Lease to be deposited in the
Company Senior Note Escrow Account or the applicable Leasing Company Escrow
Account, as applicable, on or before the fifth Business Day following the
Business Day on which such Net Cash Proceeds are received by the Company or such
Restricted Subsidiary. In the event that the Company or the relevant Restricted
Subsidiary engages in an Asset Sale with respect to Collateral which is
permitted by this Indenture and the Collateral Documents (or the Company
designates
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a Guarantor to be an Unrestricted Subsidiary in accordance with the Indenture),
the Trustee shall execute and deliver such documents as requested by the Company
to evidence the release of the Liens of the Collateral Documents on the assets
subject to the Asset Sale or on the assets owned by such Unrestricted
Subsidiary, as applicable. The proceeds of such Collateral or such
Telecommunications Assets (including any earnings thereon) may be released from
the Company Senior Note Escrow Account or the applicable Leasing Company Escrow
Account, in order to, and in only such amount as is required to, (a) pay the
principal amount of the Notes or Convertible Notes tendered pursuant to an Asset
Sale Offer, or (b) purchase Replacement Assets or Replacement Telecommunications
Assets, as applicable, to the extent permitted by Section 4.8 hereof, in which
case the proceeds of such Collateral may be released to the Company, the
Guarantor or Restricted Subsidiary, as applicable, if such proceeds are to be
used in accordance with this Indenture; provided that upon consummation of such
Investment or purchase the Trustee or a collateral agent shall have received
first priority fully perfected Liens, subject to Permitted Liens and the
interest of the Convertible Note Trustee and the Holders of Convertible Notes,
in the Property or assets acquired by the Company or any of its Restricted
Subsidiaries in connection therewith or in the case of Replacement
Telecommunications Assets, in the relevant Telecommunications Asset Lease.
(k) Notwithstanding any provision of Section 11.5 to the contrary, the
disposition of inventory in the ordinary course of the Company's and Guarantors'
businesses, as applicable, may be made without delivery to the Trustee of
certificates required by the Trust Indenture Act. However, in lieu thereof, the
Company will be required to deliver semi-annual Officers' Certificates to the
effect that all such dispositions have been made in the ordinary course of the
applicable Company's or Guarantors' business and that the proceeds therefrom
have been applied in a manner permitted by this Indenture. The Trustee shall, in
the absence of negligence or bad faith on its part, be entitled to rely on such
Officers' Certificates and Opinions of Counsel with respect to the Company's and
the Guarantors' compliance with the collateral release provisions of this
Indenture.
(l) The release of any Collateral from the terms of the Collateral
Documents, or the release, in whole or in part, of the Liens created by the
Collateral Documents, will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof and of the Collateral
Documents if and to the extent that the Collateral is released pursuant to this
Indenture and the Collateral Documents. In connection with the release of
Collateral, the Trustee shall determine whether it has received all
documentation required by Section 314(d) of the Trust Indenture Act to permit
such release.
(m) Notwithstanding anything elsewhere contained in this Section 11.4,
at all times on or after November 30, 1998, the Company will be required to have
funds or Eligible Cash Equivalents in the Company Senior Note Escrow Account
and/or the Leasing Company Escrow Accounts in an aggregate amount not less than
an amount necessary to pay on the next succeeding Interest Payment Date the
interest, including Additional Interest, if any, and Special Interest, if any,
on the Notes then outstanding.
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(n) The Company and the Leasing Companies may utilize at the Company's
option any funds in the Company Senior Note Escrow Account or the Leasing
Company Escrow Accounts to pay when due the Accreted Value, the premium, if any,
on, and any interest (including Additional Amounts, if any, and Special
Interest, if any) on the Notes, provided, that after giving effect to any such
withdrawal there remains in the Company Senior Note Escrow Account and/or the
Leasing Company Escrow Accounts funds and/or Eligible Cash Equivalents required
by Section 11.4(m) to be so retained.
SECTION 11.5 Certificates of the Company. The Company will furnish to
the Trustee prior to each proposed release of Collateral pursuant to the
Collateral Documents other than by reason of transactions referred to in Section
11.4(k) above, all documents required by Section 314(d) of the Trust Indenture
Act. The Trustee may, to the extent permitted by Sections 7.1 and 7.2 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such instruments. Any certificate or opinion
required by Section 314(d) of the Trust Indenture Act may be made by an Officer
of the Company or a Guarantor, as the case may be, except in cases where Section
314(d) of the Trust Indenture Act requires that such certificate or opinion be
made by an independent engineer, appraiser or other expert within the meaning of
Section 314(d) of the Trust Indenture Act.
SECTION 11.6 Authorization of Actions to be Taken by the Trustee Under
the Collateral Documents. The Trustee may, in its sole discretion and without
the consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of the
Collateral Documents and (b) collect and receive any and all amounts payable in
respect of the obligations of the Company and the Guarantors hereunder. The
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Collateral Documents, or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
government enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or of the Trustee).
SECTION 11.7 Authorization of Receipt of Funds by the Trustee Under the
Collateral Documents. The Trustee is authorized to receive any funds for the
benefit of the Holders distributed under the Collateral Documents, and to make
further distributions of such funds to the Holders according to the provisions
of this Indenture and the Collateral Documents.
SECTION 11.8 Possession, Use and Release of Convertible Note
Collateral.
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(a) All payments received on any Convertible Note Collateral, including
on the Technocom Preferred Stock or in respect of any Qualified Investments or
Intercompany Notes that constitute Convertible Note Collateral, shall be
promptly deposited, without commingling prior to such deposit, in the Company
Convertible Note Escrow Account and will also constitute Convertible Note
Collateral and be subject to a first priority perfected lien in favor of a
collateral agent for the benefit of the Convertible Note Trustee and the equal
and ratable benefit of the Holders of the Convertible Notes and for the benefit
of the Trustee and the equal and ratable benefit of the Holders of the Notes.
All funds deposited in the Company Convertible Note Escrow Account shall be
invested in Eligible Cash Equivalents pursuant to the terms and conditions of,
and in the manner provided for in, the Company Convertible Note Escrow Account
Agreement.
(b) Funds or Eligible Cash Equivalents in the Company Convertible Note
Escrow Account may, subject to Sections 11.8(f) below and Section 11.4(k) above,
be utilized
(i) to pay when due principal of, premium, if any, interest
(including Additional Amounts, if any, and Special Interest, if any)
on, and any other amounts due in respect of, the Convertible Notes; or
(ii) to make Qualified Investments if such Qualified
Investment is made in a manner which complies with subsection (c)
below; or
(iii) to make an intercompany loan to a Leasing Company
evidenced by an Intercompany Note (which will constitute Convertible
Note Collateral), so long as such Leasing Company thereafter utilizes
the funds received to make Qualified Investments in a manner which
complies with subsection (c) below.
(c) A Qualified Investment shall be deemed to have been made in
compliance with this subsection (c) if, in respect of such Qualified Investment,
THE FOLLOWING CONDITIONS ARE SATISFIED AND the Trustee shall have received an
Officer's Certificate of the Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing, or will occur as a result thereof;
(ii) a Lien on the Qualified Investment is granted to the
Trustee or a collateral agent for the benefit of the Trustee and the
equal and ratable benefit of the Holders to secure the Notes, the
Guarantees and the other obligations of the Company and the Guarantors
under this Indenture and the other Collateral Documents and, on a
junior basis, to secure any applicable Intercompany Note;
(iii) the entity in which such Qualified Investment is made
has all licenses, registrations and permits necessary to operate the
Telecommunications Business in which it is engaging or proposes to
engage on the date of such Qualified Investment;
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(iv) all licenses, registrations and permits required for such
Qualified Investment and such Liens have been obtained;
(v) appropriate Convertible Note Collateral Documents have
been executed and delivered and properly recorded, registered and filed
to the extent necessary to make effective the Liens intended to be
created therein.
The Company shall also deliver (x) an Opinion of Counsel covering
clause (v) above in the form and substance reasonably satisfactory to the
Trustee, and (y) such other documents as may be required by the Convertible Note
Collateral Documents.
(d) Subject to Section 11.8(f) below and Section 11.4(k) above,
Convertible Note Collateral may be released from the Liens created by the
Convertible Note Collateral Documents to the extent that such Liens secure the
obligations of the Company and the Guarantors under the Notes, this Indenture,
and the Collateral Documents (a) upon payment in full of the Notes in accordance
with the terms of the Notes and this Indenture and the other obligations then
due and owing under the Notes, this Indenture and the Collateral Documents; (b)
with respect to inventory, upon the sale of such inventory in the ordinary
course of business; (c) with respect to Convertible Note Collateral sold or
disposed of in an Asset Sale, if such sale or other disposition is not
prohibited under this Indenture and if the Net Cash Proceeds of such sale or
other disposition are applied as provided in Section 4.8 hereof; (d) with
respect to amounts in the Company Convertible Note Escrow Account consisting of
Net Cash Proceeds of Asset Sales, upon the expenditure of such cash if such
expenditure is made in accordance with the Convertible Note Indenture; and (e)
with respect to other amounts in the Company Convertible Note Escrow Account
other than the Net Cash Proceeds of any Asset Sale, including payments received
on the Technocom Preferred Stock, Qualified Investments or Intercompany Notes
that constitute Convertible Note Collateral, if the procedures described in this
Section 11.8 are complied with; provided that all such releases described above
are in compliance with the Trust Indenture Act.
(e) In the event of any Asset Sale, the Company or the relevant
Restricted Subsidiary shall cause the Net Cash Proceeds derived or resulting
from any Asset Sale that involves any Convertible Note Collateral to be
deposited in the Company Convertible Note Escrow Account (or if the Convertible
Notes are no longer outstanding and the Convertible Note Indenture has been
satisfied and discharged, then in the Company Senior Note Escrow Account) on or
before the fifth Business Day following the Business Day on which such Net Cash
Proceeds are received by the Company or such Restricted Subsidiary. In the event
that the Company or the relevant Restricted Subsidiary engages in an Asset Sale
with respect to Convertible Note Collateral which is permitted by this Indenture
and the Convertible Note Collateral Documents (or the Company designates a
Guarantor to be an Unrestricted Subsidiary in accordance with this Indenture),
the Trustee shall execute and deliver such documents as requested by the Company
to evidence the release of the Liens of the Convertible Note Collateral
Documents on the assets subject to the Asset Sale or on the assets owned by such
Unrestricted Subsidiary, as applicable. The proceeds of such
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Convertible Note Collateral (including any earnings thereon) may be released
from the Company Convertible Note Escrow Account in order to, and in only such
amount as is required to, (a) pay the principal amount of the Notes tendered
pursuant to an Asset Sale Offer, or (b) purchase Replacement Assets to the
extent permitted by Section 4.8 hereof, in which case the proceeds of such
Convertible Note Collateral may be released to the Company, if such proceeds are
to be used in accordance with this Indenture; provided that upon consummation of
such Investment or purchase the Trustee or a collateral agent shall have
received a first priority fully perfected Lien, subject to Permitted Liens and
the interest of the Convertible Note Trustee and the Holders of the Convertible
Notes in the Property or assets acquired by the Company.
(f) The release of any Convertible Note Collateral from the terms of
the Convertible Note Collateral Documents, or the release, in whole or in part,
of the Liens created by the Convertible Note Collateral Documents, will not be
deemed to impair the security under this Indenture in contravention of the
provisions hereof and of the Convertible Note Collateral Documents if and to the
extent that the Collateral is released pursuant to this Indenture and the
Convertible Note Collateral Documents. In connection with the release of
Collateral, the Trustee shall determine whether it has received all
documentation required by Section 314(d) of the Trust Indenture Act to permit
such release.
(g) The Company will furnish to the Trustee prior to each proposed
release of Convertible Note Collateral pursuant to the Convertible Note
Collateral Documents other than by reason of transactions referred to in Section
11.4(k) above, all documents required by Section 314(d) of the Trust Indenture
Act. The Trustee may, to the extent permitted by Sections 7.1 and 7.2 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such instruments. Any certificate or opinion
required by Section 314(d) of the Trust Indenture Act may be made by an Officer
of the Company or a Guarantor, as the case may be, except in cases where Section
314(d) of the Trust Indenture Act requires that such certificate or opinion be
made by an independent engineer, appraiser or other expert within the meaning of
Section 314(d) of the Trust Indenture Act.
(h) The Trustee may, in its sole discretion and without the consent of
the Holders of the Notes, on behalf of the Holders of the Notes, take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Convertible Note Collateral Documents and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company and the
Guarantors hereunder. The Trustee shall have the power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Convertible Note Collateral by any acts that may be unlawful
or in violation of the Convertible Note Collateral Documents, or this Indenture,
and such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders of the Notes in the
Convertible Note Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other government enactment, rule or order that may be
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unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders of the Notes or of the Trustee).
(i) The Trustee is authorized to receive for the benefit of the Holders
of the Notes any funds distributed under the Convertible Note Collateral
Documents, and to make further distributions of such funds to such Holders
according to the provisions of this Indenture and the Convertible Note
Collateral Documents.
ARTICLE XII
SATISFACTION AND DISCHARGE
SECTION 12.1 Satisfaction and Discharge. This Indenture and the
Collateral Documents shall upon the request of the Company cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Notes herein expressly provided for, the Company's obligations under
Sections 4.22, 7.7 and 12.4 hereof, and the Company's, the Trustee's and the
Paying Agent's obligations under Section 12.3 hereof) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture and releasing all Liens in the
Collateral when
(a) either
(i) 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 2.7 and (B) Notes for
whose payment money has been deposited in trust with the Trustee or any
Paying Agent and thereafter paid to the Company or discharged from such
trust) have been delivered to the Trustee for cancellation; or
(ii) all such Notes not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable, or
(B) will become due and payable at their stated
maturity within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of clause (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such
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purpose money or U.S. Government Obligations in an amount sufficient
(as certified by an independent public accountant designated by the
Company) to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest and Special Interest, if any, to the
date of such deposit (in the case of Notes which have become due and
payable) or the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums then due
and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit and after giving effect
to such deposit; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 4.22, 7.7, 7.8,
12.2, 12.3 and 12.4, and the Trustee's and Paying Agent's obligations in Section
12.3 shall survive until the Notes are no longer outstanding. Thereafter, only
the Company's obligations in Sections 4.22, 7.7, 12.3 and 12.4 and the Trustee's
and Paying Agent's obligations in Section 12.3 shall survive.
In order to have money available on a payment date to pay principal or
interest on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
SECTION 12.2 Application of Trust Money. All money deposited with the
Trustee pursuant to Section 12.1 shall be held in trust and, at the written
direction of the Company, be invested prior to maturity in U.S. Government
Obligations, and applied by the Trustee in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest (including Special Interest, if
any) for the payment of which money has been deposited with the Trustee; but
such money need not be segregated from other funds except to the extent required
by law.
SECTION 12.3 Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for
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two years after the date upon which such payment shall have become due;
provided, however, that the Company shall have either caused notice of such
payment to be mailed to each Securityholder entitled thereto no less than 30
days prior to such repayment or within such period shall have published such
notice in a financial newspaper of widespread circulation published in The City
of New York, including, without limitation, The Wall Street Journal. After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 12.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 12.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and Guarantors' obligations under this Indenture, the Notes, the
Guarantees and the Collateral Documents shall be revived and reinstated as
through no deposit has occurred pursuant to Section 12.1 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 12.2; provided, however, that if the
Company or the Guarantors have made any payment of interest on or principal of
any Notes because of the reinstatement of their Obligations, the Company or such
Guarantors shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provisions (an "incorporated provision") included in
this Indenture by operation of, Section 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control.
SECTION 13.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows or by facsimile transmission: if to the Company: Petersburg
Long Distance Inc.: 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0; if to
NWE Cyprus: c/o Phoebus, Xxxxxxxx Xxxxxxxx, N. Pirilides & Associates, Nicosia
Office, Stassinos Court, Corner of Stassinos Avenue & Xxxxx Xxxxxx 0, 0xx Xxxxx,
X. O. Xxx 0000,
000
000
Xxxxxxx, Xxxxxx, Tel. 00-000000, fax: 00-000000; if to the Leasing Companies:
c/o Phoebus, Xxxxxxxx Xxxxxxxx, N. Pirilides & Associates, Nicosia office,
Stassinos Avenue & Xxxxx Xxxxxx 0, 0xx Xxxxx, X. X. Xxx 0000, Xxxxxxx, Xxxxxx,
Tel. 00-000000, fax: 00-000000; if to BCL: Baltic Communications Limited, Baltic
Communications Limited, c/o Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attn: E. Xxxxx Xxxxxxxx, Esquire, Tel.
000-000-0000, fax: 000-000-0000; if to WTC: Wireless Technology Corporations
Limited, c/o Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, Attn: E. Xxxxx Xxxxxxxx, Esquire, Tel. 000-000-0000,
fax: 000-000-0000; if to the Trustee: The Bank of New York, 000 Xxxxxxx Xxxxxx,
Xxxxx 21 West, New York, New York 10286, Attn: Corporate Trust Department, Fax:
(000) 000-0000 or 5917.
The Company, the Guarantors or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication mailed to a Holder shall be sent to
the Holder by first class mail, postage prepaid, at the Holder's address as it
appears in the Note Register and shall be given if so sent within the time
prescribed. Failure to mail a notice or communications to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed or faxed to the Company, the Guarantors, the
Trustee or a Holder in the manner provided above, it is duly given, whether or
not the addressee receives it but shall not be effective unless in the case of
the Company, the Guarantors or the Trustee actually received. In case by reason
of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give notice by mail to Holders, then such notification
as shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 13.3 Communications by Holders with Other Holders. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the Trust Indenture Act.
SECTION 13.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company or the Guarantors to the Trustee to
take or refrain from taking any action under this Indenture or the Collateral
Documents (other than a certificate provided pursuant to Section 314(a)(4) of
the Trust Indenture Act), the Trustee may require, and in such event the Company
or the Guarantors, as applicable, shall furnish to the Trustee: (a) an Officers'
Certificate in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 13.5, if applicable) stating
that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture and the Collateral Documents relating to the
proposed action have been complied with; and (b) an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
SECTION 13.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture and the Collateral Documents (other than a
certificate provided pursuant to
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Section 314(a)(4) of the Trust Indenture Act) shall include: (a) a statement
that the individual making such certificate or opinion has read such covenant or
condition; (b) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinions contained in such
certificate or opinion are based; (c) a statement that, in the opinion of such
individual, such person has made such examination or investigation as is
necessary to enable such person to express an informed opinion as to whether or
not such covenant or condition has been complied with; and (d) a statement as to
whether or not, in the opinion of such person, such covenant or condition has
been complied with; provided that with respect to matters of fact, an Opinion of
Counsel may rely upon Officers' Certificates or certificates of public
officials.
SECTION 13.6 Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Holders, and any
Registrar and Paying Agent may make reasonable rules for their functions;
provided that no such rule shall conflict with terms of this Indenture or the
Trust Indenture Act.
SECTION 13.7 Payments on Business Days. If a payment hereunder is
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding day that is a Business Day, and no interest shall accrue
with respect to that payment during the intervening period. If a regular record
date is a date that is not a Business Day, such record date shall not be
affected.
SECTION 13.8 Governing Law; Submission to Jurisdiction. (a) THIS
INDENTURE, THE GUARANTEES, EACH NOTE AND EACH COLLATERAL DOCUMENT (EXCEPT TO THE
EXTENT EXPRESSLY PROVIDED FOR OTHERWISE) SHALL EACH BE DEEMED TO BE A CONTRACT
UNDER THE LAW OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF SAID STATE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS MAY
OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS OF LAW AND WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(b) Any suit, action or proceeding against the Company or any Guarantor
or their respective Properties, assets or revenues with respect to this
Indenture, the Guarantees, a Note or a Collateral Document (a "Related
Proceeding") may be brought in any federal or state court located in the State
of New York, County of New York. Each of the Company and the Guarantors hereby
irrevocably consents to the jurisdiction of each such court for the purposes of
any Related Proceeding, and irrevocably waives, to the fullest extent it may
effectively and lawfully do so, any objection to the laying of venue of any
Related Proceeding in any such court and the defense of an inconvenient forum to
the maintenance of any Related Proceeding in any such court. Each of the Company
and the Guarantors further submits to the jurisdiction of the courts of its own
corporate domicile in any Related Proceeding.
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(c) Each of the Company and the Guarantors hereby agrees that service
of all writs, process and summonses in any Related Proceeding brought against it
in the State of New York may be made upon CT Corporation System in The City of
New York, presently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Process Agent"), and each of the Company and the Guarantors have irrevocably
appointed the Process Agent as its agent and true and lawful attorney-in-fact in
its name, place and stead to accept such service of any and all such writs,
process and summonses. Each of the Company and the Guarantors agrees that
service of process on the Process Agent in such instances shall be deemed in
every respect effective service of process upon it in any such Related
Proceeding and further agrees that the failure of the Process Agent to give any
notice to it of any such service of process shall not impair or affect the
validity of such service or of any judgment based thereon. Each of the Company
and the Guarantors agrees to maintain at all times an agent with an office in
New York to act as Process Agent as aforesaid. Each of the Company and the
Guarantors agrees to take any and all actions as may be necessary to maintain
such designation and appointment of such Process Agent in full force and effect.
Nothing herein shall in any way be deemed to limit the ability to serve any such
writs, process and summonses in any other manner permitted by applicable law.
(d) To the extent that the Company, the Guarantors or any of their
respective revenues, assets or Properties shall be entitled, with respect to any
Related Proceeding at any time brought against the Company, the Guarantor or any
of their respective revenues, assets or Properties in the courts identified
above, to any immunity from suit, from attachment prior to judgment, from
attachment in aid of execution of judgment, or from any other legal or judicial
remedy, and to the extent that in any such jurisdiction there shall be
attributed such an immunity, each of the Company and the Guarantors hereby
irrevocably agrees not to claim and irrevocably waives such immunity, and any
defense based on such immunity, to the extent permitted by law in respect of its
obligations under (i) this Indenture, (ii) the Guarantees, (iii) any Note or
(iv) any Collateral Document. Without limiting the foregoing, each of the
Company and the Guarantors hereby, to the fullest extent permitted by applicable
law, expressly and irrevocably waives any defense of sovereign immunity from
jurisdiction, attachment in aid of execution and execution to which it might
otherwise be entitled in any Related Proceeding; provided that each of the
Company and the Guarantors here by expressly reserves its rights, if any, to
claim immunity from attachment prior to judgment to which it may now or
hereafter be entitled. Each of the Company and the Guarantors agrees that final
judgment in any such Related Proceeding brought in such a court will be
conclusive and binding on it and may be enforced in other jurisdictions by suit
on the judgment or in any other matter provided by law, provided that service of
process is effected upon the Company or any Guarantors, as the case may be, in
the manner specified in Section 13.8(c) above or as otherwise permitted by law.
SECTION 13.9 Judgment Currency; Currency Indemnity. If for the purposes
of obtaining judgment in any court it is necessary to convert a sum due from the
Company or any Guarantor hereunder or under any Guarantee, any of the Notes or
any of the Collateral Documents in U.S. Dollars into another currency, the
parties hereto agree, to the fullest
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extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Trustee could
purchase U.S. Dollars with such other currency at the Trustee's New York office
on the Business Day preceding that on which final judgment is given. Any amount
received or recovered in a currency other than U.S. Dollars (whether as a result
of a judgment or order of a court of any jurisdiction, or the enforcement
thereof, in the winding-up or dissolution of the Company or any Guarantor or
otherwise) by the Trustee or any Holder in respect of any sum expressed to be
due to it from the Company or such Guarantor shall only constitute discharge of
the Company or such Guarantor to the extent of the U.S. Dollar amount which the
recipient is able to purchase with the amount so received or recovered in such
other currency on the date of such receipt or recovery; provided that if it is
not practicable to make such purchase on such date, such purchase shall be made
on the first date on which is practicable to do so. If the amount of U.S.
Dollars so purchased is less than the U.S. Dollar amount expressed to be due to
such recipient hereunder or under the Guarantees, any Note or any Collateral
Document, to the extent permitted by applicable law the Company or the
Guarantors, as applicable, shall indemnify such recipient against any loss
sustained by it as a result and, in any event, the Company or the Guarantors
shall indemnify such recipient against the cost of making any such purchase. For
the purposes of this Section 13.9, it shall be sufficient for any such recipient
to certify that it would have suffered a loss had an actual purchase of U.S.
Dollars been made with the amount so received in such other currency on the date
of receipt or recovery (or, if a purchase of Dollars on such date had not been
practicable, on the first date on which it would have been practicable). To the
extent permitted by applicable law, the indemnities granted by this Section 13.9
constitute a separate and independent obligation from the other obligations of
the Company hereunder and the Guarantors hereunder and shall give rise to a
separate and independent cause of action in favor of the Trustee or any Holder,
as the case may be.
SECTION 13.10 No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or of any Guarantor, as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Notes, the Guarantees or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation,
solely by reason of his or her status as a director, officer, employee,
incorporator or stockholder of the Company or of any Guarantor. By accepting a
Note, each Holder waives and releases all such liability (but only such
liability) as part of the consideration for issuance of such Note to such
Holder.
SECTION 13.11 Successors. All agreements of the Company and the
Guarantor in this Indenture, the Notes and the Collateral Documents shall bind
its successors and assigns whether so expressed or not, unless it is
specifically and expressly provided otherwise in this Indenture. All agreements
of the Trustee in this Indenture shall bind its successors and assigns whether
so expressed or not.
SECTION 13.12 Counterparts. This Indenture may be executed in any
number of counterparts and by the parties thereto in separate counterparts, each
of which when so
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executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 13.13 Table of Contents; Headings. The table of contents,
cross-reference table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.14 Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 13.15 Further Instruments and Acts. Upon request of the
Trustee, the Company and the Guarantors will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.
SECTION 13.16 Final Expression. This Indenture, together with the
related Collateral Documents, is intended by the parties as a final, complete
and exclusive statement of the agreement of the parties on the subject hereof
and thereof.
SECTION 13.17 Independent Covenants. Each covenant contained in this
Indenture and the Collateral Documents is intended by the parties to be a
separate and independent covenant, the compliance or non-compliance with which
is to be determined independently and without regard to whether the Company, a
Guarantor or a Restricted Subsidiary is in compliance with another covenant
contained in this Indenture or the Collateral Documents.
ARTICLE XIV
SUBORDINATION OF NOTES
SECTION 14.1 Notes Subordinated to Senior Indebtedness. The Company and
the Guarantor covenant and agree, and each Holder of a Note, by acceptance
thereof, likewise covenants and agrees, that, to the limited extent and in the
manner hereinafter set forth and except as otherwise set forth in this Article,
the indebtedness represented by the Notes and this Indenture (including the
Guarantees) and the payment of the principal of and premium, if any, and
interest (including Additional Amounts, if any, and Special Interest, if any) on
each and all of the Notes of any amounts due in respect of any Notes and this
Indenture (including the Guarantees) (and any payment thereon made or to be made
by a Guarantor under its Guarantee), are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness as to all assets of the Company or the Guarantors constituting
Convertible Note Collateral (but not otherwise), whether or not
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the Liens purporting to secure such Convertible Note Collateral are valid and
effective (hereinafter called "assets constituting Convertible Note
Collateral").
SECTION 14.2 Payment Over of Proceeds Upon Dissolution, Etc. Except as
otherwise provided in Section 14.15, in the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding, relative to the Company or other Obligor or
to its creditors, as such, or to a substantial part of its assets, or (b) any
proceeding for the liquidation, dissolution or other winding-up of the Company
or any other Obligor, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company or
any other Obligor, then and in any such event the holders of Senior Indebtedness
shall be entitled to receive payment in full of all amounts due or to become due
on or in respect of all Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holders of the Notes are entitled
to receive any payment or distribution of any kind or character, whether in
cash, property or securities, on account of principal of or premium, if any, or
interest (including Additional Amounts, if any, and Special Interest, if any) on
the Notes and on account of any amounts due in respect of any Notes and any
payment thereon made or to be made by a Guarantor under its Guarantee, from or
with respect to the assets constituting Convertible Note Collateral (but not
otherwise), and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character from or with respect to the assets constituting
Convertible Note Collateral (but not otherwise), whether in cash, property or
securities, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company or
any other Obligor being subordinated to the payment of the Notes, which may be
payable or deliverable in respect of the Notes in any such case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company, from or
with respect to the assets constituting Convertible Note Collateral (but not
otherwise).
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Note shall have received any payment
or distribution of assets constituting Convertible Note Collateral (but not
otherwise) of the Company or any other Obligor of any kind or character, whether
in cash, property or securities, prohibited by the foregoing, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company or of a Guarantor being
subordinated to the payment of the Notes or A Guarantee, as applicable, before
all Senior Indebtedness is paid in full or payment thereof provided for, and if
such fact shall, at or prior to the time of such payment or distribution, have
been made known to a Trust Officer of the Trustee in writing or such Holder, as
the case may be, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other person making payment
or distribution of assets of the Company or any other Guarantor for application
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to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company as
reorganized or readjusted, or securities of the Company or any other Guarantor
or any other corporation provided for by a plan of reorganization or
readjustment which are subordinated in right of payment to all Senior
Indebtedness which may at the time be outstanding to substantially the same
extent as, or to a greater extent than, the Notes or the Guarantees are so
subordinated as provided in this Article. The consolidation or amalgamation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another person upon
the terms and conditions set forth in Article V shall not be deemed a
dissolution, winding-up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the person formed by such consolidation or into
which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article V. Similarly, the consolidation or amalgamation
of a Guarantor with, or the merger of a Guarantor into, another PERSON or the
liquidation or dissolution of a Guarantor to the extent permitted by this
Indenture shall NOT be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of a Guarantor for the purposes of this Section.
SECTION 14.3 Prior Payment to Senior Indebtedness upon Acceleration of
Notes. In the event that any Notes are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Notes so become due and payable shall be entitled
to receive payment in full of all amounts due on or in respect of such Senior
Indebtedness from or with respect to the assets constituting Convertible Note
Collateral (but not otherwise) before the Holders of the Notes are entitled to
receive any payment (including any payment which may be payable by reason of the
payment of any other indebtedness of the Company or any other Obligor being
subordinated to the payment of the Notes or the Guarantees, as applicable) by
the Company or any other Obligor on account of the principal of or premium, if
any, or interest on or other amounts due in respect of, the Notes or the
Guarantees, as applicable, or on account of the purchase or other acquisition of
Notes from or with respect to assets constituting Convertible Note Collateral.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Note prohibited by the
foregoing provisions of this Section from or with respect to the assets
constituting Convertible Note Collateral (but not otherwise), and if such fact
shall, at or prior to the time of such payment, have
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been made known to a Trust Officer of the Trustee in writing, or such Holder, as
the case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
SECTION 14.4 No Payment When Senior Indebtedness in Default.
(a) In the event (i) that any default in the payment of principal of,
premium, if any, on, interest, if any (including Additional Amounts, if any, and
Special Interest, if any), on, or other amounts due in respect of, any Senior
Indebtedness, whether at the date of a required payment, maturity, upon
mandatory prepayment, redemption or otherwise, shall have occurred and be
continuing or (ii) that any event of default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall have resulted in
such Senior Indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable unless and until
such event of default shall have been cured or waived in writing or shall have
ceased to exist and such acceleration shall have been rescinded or annulled or
if any judicial proceeding is pending with respect to such event of default with
respect to the Senior Indebtedness, then no payment (including any payment which
may be payable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Notes) shall be made by the Company on
account of the principal of, premium, if any, on, interest on, or other amounts
due in respect of, the Notes or on account of the purchase, redemption or other
acquisition of Notes from or with respect to assets constituting Convertible
Note Collateral (but not otherwise).
(b) In the event that, notwithstanding the foregoing, the Company shall
make any payment from assets constituting Convertible Note Collateral (but not
otherwise) to the Trustee or the Holder of any Note prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known to a Trust Officer of the Trustee in writing
or to such Holder, as the case may be, then and in such event such payment shall
be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
SECTION 14.5 Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Notes shall prevent (a)
the Company or THE Guarantors, at any time except during the pendency of any
case, proceeding, dissolution, liquidation, or other winding-up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 14.2 or under the conditions described in Section
14.3 or 14.4, from making payments from assets constituting Convertible Note
Collateral (but not otherwise) at any time of principal of and premium, if any,
or
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interest (including Additional Amounts, if any, and Special Interest, if any) on
the Notes or the Guarantees as applicable, or (b) the application by the Trustee
of any money deposited with it hereunder from assets constituting Convertible
Note Collateral (but not otherwise) to the payment of or on account of the
principal of, premium, if any, on, interest, if any (including Additional
Amounts, if any, and Special Interest, if any), on, or other amounts due in
respect of, the Notes or retention of such payment by the Holders, if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.
SECTION 14.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the prior payment in full of all amounts due on or in respect of
Senior Indebtedness from assets constituting Convertible Note Collateral of the
Company and the Guarantors (but not otherwise), with respect to which the
Holders of the Notes rank senior in right of payment to the Senior Indebtedness,
the Holders of the Notes shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities from assets constituting Convertible Note Collateral applicable to
the Senior Indebtedness until the principal of, premium, if any, on, interest
(including Additional Amounts, if any, and Special Interest, if any) on, and any
other amounts due in respect of, the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article, and no payments made pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Notes or the Trustee, shall, as
among the Company and any Guarantor, as the case may be, its respective
creditors other than holders of Senior Indebtedness and the Holders of the
Notes, be deemed to be a payment or distribution by the Company or any
Guarantor, as applicable, to or on account of the Senior Indebtedness.
SECTION 14.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
(a) impair, as among the Company or any Guarantor, its respective creditors
other than holders of Senior Indebtedness and the Holders of the Notes, the
obligation of the Company or such Guarantor, which is absolute and
unconditional, to pay to the Holders of the Notes, the principal of, premium, if
any, on, interest (including Additional Amounts, if any, and Special Interest,
if any) on, and any other amounts due in respect of, the Notes or in respect of
the Guarantees, as applicable, as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Notes and creditors of the Company other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Notes from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior
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Indebtedness to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 14.8 Trustee to Effectuate Subordination. Each Holder of a Note
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 14.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company or any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with. No provision of the subordination provisions contained
in this Article may be amended without the consent of a majority in principal
amount of Senior Indebtedness in the manner provided for in the Convertible Note
Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Notes,
without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Notes to be holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment, of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness except
as otherwise expressly provided in the Collateral Documents; (iii) release any
person liable in any manner for the collection of Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company or any
Guarantor and any other Person.
SECTION 14.10 Notice to Trustee. The Company and each Guarantor shall
give prompt written notice to the Trustee of any fact known to the Company or
such Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of the Notes or the Guarantees, as applicable.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Notes or the Guarantees unless and until a Trust Officer of the
Trustee shall have received written notice thereof from the Company , any
Guarantor or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1, shall be entitled
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in all respects to assume that no such facts exist; provided, however, that if a
Trust Officer of the Trustee shall not have received the notice provided for in
this Section at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest
(including Additional Amounts, if any, and Special Interest, if any) on, and any
other amounts due in respect of any Note), then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such person to furnish evidence to the
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 14.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered in writing
to the Trustee or to the Holders of Notes, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article.
SECTION 14.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Notes or to the
Company or to any other person cash, property or securities from assets
constituting Convertible Note Collateral to which holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
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SECTION 14.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payment to, the
Trustee under or pursuant to Section 7.7.
SECTION 14.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 14.13 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
SECTION 14.15 Rights in Respect of Collateral. Notwithstanding any
other provision of this Article, the Notes are entitled to receive free of the
rights of the holders of Senior Indebtedness, payment of principal of, premium,
if any, on, interest (including Additional Amounts, if any, and Special
Interest, if any) on, and any other amounts due in respect of, the Notes from
the proceeds of the Collateral and all other assets of the Company and the
Guarantors, other than the assets constituting Convertible Note Collateral, and
as to the Collateral and all other assets of the Company and Guarantors, other
than assets constituting Convertible Note Collateral, the Notes and the
Guarantees, as applicable rank senior in right of payment to the Senior
Indebtedness as a result of the subordination provisions contained in the
Convertible Note Indenture and the Senior Note Collateral Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PETERSBURG LONG DISTANCE INC.
By: /s/ Xxxxx Haat
------------------------------
Name: Xxxxx Xxxx
Title: Chairman
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
[Corporate Seal]
NWE CAPITAL (CYPRUS) LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
[Corporate Seal]
Attest:
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxx,
to me known, who, being by me duly sworn, did depose and say that he is Chairman
of Petersburg Long Distance Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxxxxx,
to me known, who, being by me duly sworn, did depose and say that he is Chief
Financial Officer of Petersburg Long Distance Inc., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Xxxxx Extract
--------------------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires:
March 30, 0000
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
of NWE Capital (Cyprus) Limited, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
156
PLD ASSET LEASING LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
[Corporate Seal]
Attest:
PLD CAPITAL LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
[Corporate Seal]
Attest:
BALTIC COMMUNICATIONS LIMITED
Guarantor
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title:
[Corporate Seal]
Attest: /s/ Xxxxx Xxxx
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
Director of PLD Asset Leasing Limited, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
Director of PLD Capital Limited, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxxxxx,
to me known, who, being by me duly sworn, did depose and say that he is
of Baltic Communications Limited, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
160
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
Guarantor
By: /s/ Xxxxx Xxxx
------------------------------
Name: Xxxxx Xxxx
Title:
[Corporate Seal]
Attest: /s/ Xxxxx Xxxxxxx
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxx,
to me known, who, being by me duly sworn, did depose and say that he is
of wireless Technology Corporations Limited, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
000
XXX XXXX XX XXX XXXX,
as Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
[Corporate Seal]
Attest: /s/ Xxxxxxxx Xxxxx
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxx X.
Xxxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is Assistant Treasurer of The Bank of New York, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Notary Public, State of New York
[Seal] My Commission Expires:
/s/ Xxxxx Extract
March 30, 1997
164
EXHIBIT B
165
EXHIBIT B
FORM OF FACE OF INITIAL CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
CUSIP NO. 00000XXX0
No. ______ 14% SENIOR DISCOUNT NOTES DUE 2004
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND THE PROVINCES OF
CANADA.
THE NOTES EVIDENCED HEREBY WERE INITIALLY ISSUED AS PART OF AN ISSUANCE OF
UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF 14% SENIOR
DISCOUNT NOTES DUE 2004 OF PETERSBURG LONG DISTANCE INC. (THE "NOTES") AND
ONE WARRANT (A "WARRANT") ENTITLING THE HOLDER THEREOF TO PURCHASE 34
COMMON SHARES WITHOUT NOMINAL OR PAR VALUE OF PETERSBURG LONG DISTANCE
INC. PRIOR TO THE EARLIEST OF (A) 180 DAYS AFTER THE DATE OF ORIGINAL
ISSUANCE OF THE UNITS, (B) THE COMMENCEMENT OF A REGISTERED EXCHANGE OFFER
FOR THE NOTES, (C) SUCH DATE AS THE INITIAL PURCHASER MAY DETERMINE AND
(D) IN THE EVENT OF A CHANGE OF CONTROL, THE DATE ON WHICH THE COMPANY
MAILS NOTICE THEREOF TO THE HOLDERS OF THE NOTES, THE NOTES EVIDENCED
HEREBY MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE WARRANTS.
FOR THE PURPOSES OF THE INTEREST ACT (CANADA) AND DISCLOSURE THEREUNDER,
WHENEVER INTEREST, ADDITIONAL AMOUNTS, SPECIAL INTEREST, OR DEFAULTED
INTEREST OR INTEREST ON DEFAULTED INTEREST RELATING TO THIS NOTE, IS TO BE
CALCULATED ON THE BASIS OF A YEAR OF 360 DAYS OR ANY OTHER PERIOD OF TIME
THAT IS LESS THAN A CALENDAR YEAR, THE YEARLY RATE OF INTEREST TO WHICH
THE RATE DETERMINED PURSUANT TO SUCH CALCULATION IS EQUIVALENT IS THE RATE
SO DETERMINED MULTIPLIED BY THE ACTUAL NUMBER OF DAYS IN THE CALENDAR YEAR
IN WHICH THE SAME IS TO BE ASCERTAINED AND DIVIDED BY EITHER 360 OR SUCH
OTHER PERIOD OF TIME, AS THE CASE MAY BE. THE RATE ACCRUING ON THE NOTES
FOR PAYMENT PURPOSES SHALL BE DETERMINED AS SET FORTH ON THE REVERSE
HEREOF.
166
Petersburg Long Distance Inc., an Ontario corporation (the
"Company"), for value received, hereby promises to pay to ______________, or
its registered assigns, the principal amount of ____________________ on June
1, 2004.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
Dated: ______________
PETERSBURG LONG DISTANCE INC.
By:________________________________
Name:
Title:
[Corporate Seal]
By: _______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By: ________________________
Authorized Signatory
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167
FORM OF REVERSE SIDE OF INITIAL CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
14% SENIOR DISCOUNT NOTES DUE 2004
1. Indenture.
This Note is one of a duly authorized issue of debt securities of
Petersburg Long Distance Inc., an Ontario corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), designated as its "14% Senior Discount Notes due 2004"
(herein called the "Notes") limited in aggregate principal amount of Stated
Maturity to $123,000,000, issued under an indenture dated as of May 31, 1996 (as
amended or supplemented from time to time, the "Indenture") among the Company,
the corporations acting as guarantors and named therein (the "Guarantors") and
The Bank of New York, as trustee (the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Guarantors, the Trustee and each
Holder of Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The summary of the terms of this Note contained
herein does not purport to be complete and is qualified by reference to the
Indenture. All terms used in this Note which are not defined herein shall have
the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into or permit certain transactions
with Affiliates, create Liens, enter into or permit certain Sale and Leaseback
Transactions, make Asset Sales and engage in businesses other than the
Telecommunications Business. The Indenture also imposes limitations on the
ability of the Company to consolidate or merge with or into any other Person or
permit any other Person to merge with or into the Company, or sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of the
Property of the Company to any other Person. In addition, the Indenture imposes
limitations on the ability of Restricted Subsidiaries to issue guarantees and
Preferred Shares and to create consensual restrictions upon their ability to pay
dividends and make certain other payments to the Company.
2. Principal and Interest.
The Company promises to pay the principal amount set forth on the
face hereof to the Holder hereof on June 1, 2004.
The Notes have been issued at a discounted principal value of
$87,697,300. The Notes will accrete interest from the Issue Date at a rate
computed as if the Notes had been issued bearing interest at the rate of 14% per
annum on May 31, 1996 (being a rate of 14.9445% per annum for the period from
the Issue Date through November 30, 1996), compounded semiannually, to an
aggregate principal amount of $123,000,000 by December 1, 1998. The principal
amount at Stated Maturity of this Note is set forth on the face hereof.
Commencing December 1, 1998, interest on this Note, like the other Notes, will
accrue at the rate of 14% per annum, and will be payable in cash semi-annually
on June 1 and December 1 of each year, commencing June 1, 1999, until the
principal amount hereof is paid or
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168
made available for payment. The effect of the foregoing is that this Note will
bear interest at the rate of 14.9445% per annum from the Issue Date through
November 30, 1996 and 14% per annum thereafter. The payment of interest on this
Note in respect of the period from the Issue Date to December 1, 1998, however,
will effectively be deferred until Maturity and such deferred interest will be
compounded semi-annually and added to the outstanding principal amount of this
Note. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. If the Company has not received, on or before May 31,
1998, $20,000,000 in Cash Proceeds from a sale or sales of Qualified Stock of
the Company occurring subsequent to the Issue Date (other than Qualified Stock
issued upon the exercise of Warrants or upon conversion of the Convertible
Notes), this Note will bear interest at the rate of 14.5% per annum commencing
on June 1, 1998 until any Interest Payment Date prior to which the Company shall
have received such $20,000,000 in Cash Proceeds from such a sale of Qualified
Stock. Commencing on any such Interest Payment Date, this Note will again bear
interest at the rate of 14% per annum. For purposes of this interest rate
adjustment provision, the Company will be deemed to have received such
$20,000,000 in Cash Proceeds if a Change of Control has occurred. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions provided in the Indenture, be paid to
the Person in whose name this Note (or the Note in exchange or substitution for
which this Note was issued) is registered at the close of business on the Record
Date for interest payable on such Interest Payment Date. The Record Date for any
Interest Payment Date is the close of business on May 15 or November 15, as the
case may be, whether or not a Business Day, immediately preceding the Interest
Payment Date on which such interest is payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") shall forthwith
cease to be payable to the Holder on such Record Date and shall be paid as
provided in Section 2.11 of the Indenture.
Each payment of interest in respect of an Interest Payment Date will
include interest (including Additional Amounts (as hereinafter defined), if any,
and Special Interest (as hereinafter defined), if any), accrued through the day
before such Interest Payment Date. If an Interest Payment Date falls on a day
that is not a Business Day, the interest payment to be made on such Interest
Payment Date will be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date, and no additional
interest will accrue as a result of such delayed payment.
If an Exchange Note is substituted for this Note in a Registered
Exchange Offer prior to the Record Date for the first Interest Payment Date
following such substitution, accrued and unpaid interest, if any, on this Note,
up to but not including the date of issuance of the Exchange Note or Exchange
Notes issued in substitution for this Note, shall be paid on the first Interest
Payment Date for such Exchange Note or Exchange Notes to the Holder or Holders
of such Exchange Note or Exchange Notes on the first Record Date with respect to
such Exchange Note or Exchange Notes. If this Note is exchanged in a Registered
Exchange Offer subsequent to the Record Date for the first Interest Payment Date
following such substitution but on or prior to such Interest Payment Date, then
any such accrued and unpaid interest with respect to this Note and any accrued
and unpaid interest on the Exchange Note or Exchange Notes issued in
substitution for this Note, including Additional Amounts, if any, and Special
Interest, if any, through the day before such Interest Payment Date, shall be
paid on such Interest Payment Date to the Holder of this Note on such Record
Date. Any accretion of value with respect to this Note up to but including the
date of issuance of the Exchange Note or Exchange Notes issued in substitution
for this Note shall be included as Accreted Value with respect to such Exchange
Note or Exchange Notes.
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To the extent lawful, the Company shall pay interest on (i) if prior
to December 1, 1998, any overdue Accreted Value of (and premium, if any, on)
this Note, or if on or after December 1, 1998 any overdue principal of (and
premium, if any, on) this Note, at the interest rate borne on this Note, plus 1%
per annum, and (ii) Defaulted Interest (without regard to any applicable grace
period), including Additional Amounts, if any, and Special Interest, if any, at
the same rate. The Company's obligation pursuant to the previous sentence shall
apply whether such overdue amount is due at its Stated Maturity, as a result of
the Company's obligations pursuant to Section 3.6, Section 4.7 or Section 4.8 of
the Indenture, or otherwise.
3. Additional Amounts.
Except to the extent required by law, any and all payments of, or in
respect of, this Note shall be made free and clear of and without deduction for
or on account of any and all present or future taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto
imposed by Canada, the Russian Federation, Cyprus or any other jurisdiction with
which the Company or any Guarantor has some connection (including any
jurisdiction (other than the United States of America) from or through which
payments under the Notes are made) or any political subdivision of or any taxing
authority in any such jurisdiction ("Canadian Taxes," "Russian Taxes," "Cypriot
Taxes" or "Other Taxes," respectively). If the Company or any Guarantor shall be
required by law to withhold or deduct any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes from or in respect of any sum payable under this Note or
pursuant to a Guarantee, the sum payable by the Company or such Guarantor, as
the case may be, thereunder shall be increased by the amount ("Additional
Amounts") necessary so that after making all required withholdings and
deductions, the Holder of this Note shall receive an amount equal to the sum
that it would have received had no such withholdings and deductions been made;
provided that any such sum shall not be paid in respect of any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes to the Holder of this Note (an
"Excluded Holder") (i) resulting from the beneficial owner of this Note carrying
on business or being deemed to carry on business in or through a permanent
establishment or fixed base in the relevant taxing jurisdiction or any political
subdivision thereof or having any other connection with the relevant taxing
jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of this Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of this Note
or the Guarantees or the enforcement of this Note or the Guarantees, (ii)
resulting from the Company or any Guarantor not dealing at arm's length (within
the meaning of the Income Tax Act (Canada)), with the Holder of this Note at the
time of such payment or at the time the amount of such payment is deemed to have
been paid or credited or (iii) that would not have been imposed but for the
presentation (where presentation is required) of this Note for payment more than
180 days after the date such payment became due and payable or was duly provided
for, whichever occurs later. The Company or the Guarantors, as applicable, will
also (i) make such withholding or deduction and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law, and, in any such case, the Company will furnish to each Holder on whose
behalf an amount was so remitted, within 30 calendar days after the date the
payment of any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes is
due pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company or the Guarantors, as applicable. The Company will, upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to such Notes, and (ii) any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes so levied or imposed with respect to
any reimbursement under the foregoing clause (i) so that the net amount received
by such Holder (net of payments made under or with respect to the Notes or the
Guarantees) after such
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reimbursement will not be less than the net amount the Holder hereof would have
received if Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes on such
reimbursement had not been imposed.
In addition, the Company or the Guarantors will pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties, in respect of the creation, issue and offering of the
Notes payable in Canada, the United States, the Russian Federation or Cyprus or
any political subdivision thereof or taxing authority of or in the foregoing.
The Company and the Guarantors will also pay and indemnify the Holders from and
against all court fees and taxes or other taxes and duties, including interest
and penalties, paid by any of them in any jurisdiction in connection with any
action permitted to be taken by the Trustee or the Holders to create the Liens
on the Collateral and the Convertible Note Collateral and to enforce the
obligations of the Company or the Guarantors under the Notes, the Indenture, the
Guarantees, the Collateral Documents or the Convertible Note Collateral
Documents.
4. Special Interest.
Special interest means such additional interest as is set forth in
subparagraphs (a) or (b) below.
(a) The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of May 31, 1996, between the Company and
the Initial Purchaser (the "Registration Agreement"), which agreement is
attached to the Indenture as Exhibit E thereto. In the event that (a) the
Exchange Offer Registration Statement (as such term is defined in the
Registration Agreement) is not filed with the Securities and Exchange Commission
(the "Commission") on or prior to the 45th day following the Issue Date, (b) the
Exchange Offer Registration Statement is not declared effective by the
Commission on or prior to the 120th day following the Issue Date, (c) the
Exchange Offer (as such term is defined in the Registration Agreement) is not
consummated on or prior to the 180th day following the Issue Date and in such a
case the Note Shelf Registration Statement (as such term is defined in the
Registration Agreement) is not filed with the Commission on or prior to 60 days
thereafter and such Note Shelf Registration Statement has not been declared
effective on or prior to 120 days thereafter or (d) any such Registration
Statement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose, without being succeeded
immediately by a post-effective amendment to such Registration Statement that
cures such failure and that is itself declared effective, for a period of more
than 30 consecutive days, interest shall accrue on this Note (in addition to any
accretion in value of, or accrual of stated interest on, this Note) from and
including the next day following each of (i) such 45-day period in the case of
clause (a) above, (ii) such 150-day period in the case of clause (b) above,
(iii) such 180-day period for the Exchange Offer Registration Statement, such
60-day period or 120-day period for the Note Shelf Registration Statement, as
applicable, in the case of clause (c) above and (iv) such 30-day period in the
case of clause (d) above (each such event referred to in clauses (i) through
(iv), a "Registration Default"). In each case following the occurrence of a
Registration Default, such additional interest (the "Special Interest") will be
payable to the Holder hereof during the first 90-day period immediately
following the occurrence of such Registration Default in cash semi-annually in
arrears on each Interest Record Date at a rate equal to $0.01 per week per
$1,000 of the Accreted Value of this Note (determined daily) to the Holder
hereof. The Special Interest payable to the Holder of this Note shall increase
by an additional $0.01 per week per $1,000 of the Accreted Value of this Note
for each 90-day period up to a maximum of $0.50 per week per $1,000 of the
Accreted Value of this Note (determined daily). Upon (w) the filing of the
Exchange Offer Registration Statement or a Note Shelf Registration Statement
after the 45-day period described in clause (a) above, (x) the effectiveness of
the
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Exchange Offer Registration Statement or a Note Shelf Registration Statement
after the 120-day period described in clause (b) above, (y) the consummation of
the Exchange Offer after the applicable time period described in clause (c)
above, or (z) the effectiveness of an applicable Registration Statement after
the 30-day period described in clause (d) above, the Special Interest payable on
this Note, with respect to such clause (a), (b), (c) or (d), as the case may be,
from the date of such filing, effectiveness or consummation, as the case may be,
shall cease to accrue and all accrued and unpaid Special Interest as of the
occurrence of (w), (x), (y) or (z) shall be paid to the Holder hereof on the
next Interest Payment Date with respect thereto. Following the occurrence of
(w), (x), (y) and (z) above, the interest terms of this Note shall revert to the
original terms set forth above, subject to paragraph 4(b) below.
(b) In the event of the failure of the Company to procure, on or
before July 12, 1996, a recognized financial institution with capital of not
less than $10,000,000 organized under the laws of the Republic of Ireland which
the Convertible Note Trustee may lawfully appoint as a Qualified Foreign
Collateral Agent (as defined in Section 7.3 of the Indenture) (the
"Procurement") with respect to Technocom Preferred Stock, any payments thereon
and any property substituted therefor (the "Subject Collateral") pursuant to an
agreement under which such Qualified Foreign Collateral Agent will agree not to
resign without the contemporaneous appointment of a successor Qualified Foreign
Collateral Agent (the "Prescribed Agreement"), then, commencing on July 12,
1996, the Company shall pay to each Holder of the Notes additional Special
Interest in an amount equal to 1% per annum on the principal amount at Stated
Maturity of such Holder's Notes, accruing for each day until the Procurement is
made or Technocom or a successor is reorganized under the laws of Cyprus and a
successor Qualified Foreign Collateral Agent has been appointed in respect of
the Subject Collateral (the "Reorganization") under a Prescribed Agreement. Such
Special Interest shall be payable in cash semi-annually in arrears at the times
and in the manner provided for in the Indenture, provided that for this purpose,
Section 2.11 of the Indenture shall be read to include as Interest Payment
Dates, as applicable, June 1 and December 1 of each year, commencing December 1,
1996. Such Special Interest shall cease to accrue upon the Procurement or the
Reorganization taking place and all accrued and unpaid Special Interest shall be
paid to each Holder of the Notes on the next Interest Payment Date with respect
thereto. Any Special Interest payable pursuant to this paragraph 4(b) shall be
in addition to any Special Interest that may be payable pursuant to paragraph
4(a) above.
Except as expressly provided in this paragraph 4, Special Interest
shall be treated as interest and any date on which Special Interest is due and
payable shall be treated as an Interest Payment Date, for all purposes under
this Note and the Indenture.
5. Method of Payment.
The Company, through the Paying Agent, shall pay interest on this
Note to the registered Holder of this Note, as provided above. The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States of America that at
the time of payment is legal tender for payment of all debts public and private.
Principal and interest will be payable at the office of the Paying Agent but, at
the option of the Company, interest may be paid by check mailed to the
registered Holders at their registered addresses.
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6. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar under
the Indenture. The Company may, upon written notice to the Trustee, appoint and
change any Paying Agent or Registrar. The Company or any of its subsidiaries may
act as Paying Agent or Registrar.
7. Optional Redemption.
Except as set forth in the following paragraph, the Notes may not be
redeemed prior to June 13, 2001. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 calendar days' nor more than 60 calendar days' notice, at the prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon (if any), Additional Amounts (if any) and Special
Interest (if any) to the applicable Redemption Date, if redeemed during the
period from June 13, 2001 through May 31, 2002 at a percentage of 108.000% and
thereafter during the twelve-month period beginning June 1 of the years
indicated below:
Year Percentage
---- ----------
2002 104,000%
2003 and thereafter 100.000%
The Notes may be redeemed, at the option of the Company, in whole
but not in part, upon not less than 30 or more than 60 days' notice to the
Holders in accordance with the terms of the Indenture, at a redemption price
equal to the Accreted Value thereof, plus accrued and unpaid interest, if any
(including Additional Amounts, if any, and Special Interest, if any), to the
applicable Redemption Date (subject to the right of Holders of record on the
relevant Record Date to receive interest (including Additional Amounts, if any,
and Special Interest, if any) due on the Interest Payment Date that is on or
prior to the Redemption Date) if, as a result of any change in or amendment to
the laws or the regulations or rulings promulgated thereunder of Canada, Cyprus,
the Russian Federation or any other jurisdiction with which the Company or any
Guarantor has any connection (other than a connection arising as a result of a
continuance or a merger or consolidation of the Company with or into a newly
formed corporation solely for the purpose of moving the Company's domicile out
of Canada) or any political subdivision thereof or any authority thereof or
having power to tax therein, or any change in the application or official
interpretation of such laws or regulations, or any change in administrative
policy or assessing practice of the applicable taxing authority, which change or
amendment becomes effective on or after May 24, 1996, the Company or the
Guarantors (if the Guarantees are called) are or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts with respect to the
Initial Notes, the Exchange Notes or the Guarantees and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Company or the Guarantors, as the case may be. The Company will
also pay to the Holders on the Redemption Date any Additional Amounts payable in
respect of the period ending on the Redemption Date. Prior to the publication of
any notice of redemption pursuant to this provision, which in no event will be
given earlier than 90 days prior to the earliest date on which the Company or
the Guarantors, as the case may be, would be required to pay such Additional
Amounts were a payment in respect of the Notes then due, the Company shall
deliver to the Trustee (i) an Officers' Certificate stating that the obligation
to pay such Additional Amounts cannot be avoided by the Company or the
Guarantors, as the case may be, taking reasonable measures and (ii) an Opinion
of Counsel, independent of the Company and the Guarantors and approved by the
Trustee, to the effect that the Company or the Guarantors have or will become
obligated to pay such Additional Amounts as a result of such change or
amendment. Such notice, once delivered by the Company to the
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Trustee, will be irrevocable. The Trustee shall accept such Officers'
Certificate and Opinion of Counsel as sufficient evidence of the satisfaction of
the condition precedent set forth in clauses (i) and (ii) above, in which event
it shall be conclusive and binding on the Holders.
8. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before
a Redemption Date, the Company will send a notice of redemption, first class
mail, postage prepaid, to Holders of Notes to be redeemed at the addresses of
such Holders as they appear in the Note Register.
If less than all of the Notes are to be redeemed at any time, the
Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest (including Additional Amounts, if any,
and Special Interest, if any) will be paid on such Interest Payment Date to the
Holder of the Note on such Record Date. If money in an amount sufficient to pay
the Redemption Price of all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent on or before the applicable
Redemption Date and certain other conditions are satisfied, interest (including
Additional Amounts, if any, and Special Interest, if any) on the Notes to be
redeemed on the applicable Redemption Date will cease to accrue.
The Notes are not subject to any sinking fund.
9. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole or in part in a principal amount that is an integral multiple of $1,000,
pursuant to a Change of Control Offer, at a purchase price in cash equal to 101%
of the Accreted Value thereof on any Change of Control Payment Date, plus
accrued and unpaid interest, if any, Additional Amounts, if any, and Special
Interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Notes. The Holder of
this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest, Additional Amounts, if any, and Special Interest, if any, from
and after the Change of Control Payment Date.
10. Repurchase at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the next following
paragraph, if at any time the Company or any Restricted Subsidiary engages in
any Asset Sale, as a result of which the aggregate amount of Excess Proceeds
exceeds $5,000,000, the Company shall, within 30 calendar days of the date the
amount of Excess Proceeds exceeds $5,000,000, use the then-existing Excess
Proceeds to make an
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offer to purchase from all Holders, on a pro rata basis, Notes in an aggregate
principal amount equal to the maximum principal amount that may be purchased out
of the then-existing Excess Proceeds, at a purchase price in cash equal to 100%
of the Accreted Value thereof on any Asset Sale Payment Date, plus accrued and
unpaid interest thereon, if any, Additional Amounts, if any, and Special
Interest, if any, to the Asset Sale Payment Date, provided that Excess Proceeds
attributable to an Asset Sale of Convertible Note Collateral (as defined in the
Indenture) must be used first to make an "asset sale offer" pursuant to the
Convertible Note Indenture (as defined in the Indenture). Upon completion of an
Asset Sale Offer (including payment of the Asset Sale Purchase Price for
accepted Notes), any surplus Excess Proceeds that were the subject of such offer
shall cease to be Excess Proceeds, and the Company may then use such amounts for
general corporate purposes, including the making of an "asset sale offer"
pursuant to the Convertible Note Indenture.
Notwithstanding the paragraph above, the Company will not be
obligated to repurchase Notes in connection with an Asset Sale Offer
representing in aggregate more than 25% of the original aggregate principal
amount of the Notes (which original aggregate principal amount shall for these
purposes be the aggregate amount originally allocated to the Notes, net of any
amounts allocated to the Warrants, without any adjustment whatsoever) prior to
the date following the Five Year Date, and the original aggregate principal
amount of Notes repurchased in connection with any Asset Sale Offer having a
purchase date prior to the date following the Five Year Date shall represent no
more than 25% of the original aggregate principal amount of the Notes less the
original aggregate principal amount of Notes purchased pursuant to Asset Sale
Offers relating to all prior Asset Sales. To the extent that the amount of
Excess Proceeds exceeds the amount of Notes purchased because of the limitation
imposed by the immediately preceding sentence (the amount of such excess being
the "Aggregate Unused Proceeds"), such Aggregate Unused Proceeds shall
constitute Excess Proceeds for purposes of the first Asset Sale Offer that is
made after the Five Year Date and, in the event the amount of the Aggregate
Unused Proceeds exceeds $5,000,000, promptly after the Five Year Date, the
Company shall commence an Asset Sale Offer on a pro rata basis for an aggregate
principal amount of Notes equal to the Aggregate Unused Proceeds (and any other
Excess Proceeds that arise between the Five Year Date and such Asset Sale Offer)
at a purchase price equal to 100% of the Accreted Value of the Notes, plus
accrued interest, if any, Special Interest, if any, and Additional Amounts, if
any, to the date of purchase.
Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $5,000,000, the Company shall send, or cause to be sent, by first class
mail, postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Notes. The Holder of this Note may elect to have this Note or a portion hereof
in an authorized denomination purchased by completing the form entitled "Option
of Holder to Require Purchase" appearing below and tendering this Note pursuant
to the Asset Sale Offer. Unless the Company defaults in the payment of the Offer
Purchase Price with respect thereto, all Notes or portions thereof selected for
payment pursuant to the Asset Sale Offer will cease to accrue interest,
Additional Amounts, if any, and Special Interest, if any, from and after the
Asset Sale Payment Date.
11. The Registered Exchange Offer.
Any Initial Notes (including this Note) which are presented to the
Registrar for exchange pursuant to the Registered Exchange Offer (as defined in
the Registration Agreement) shall be replaced by Exchange Notes of equal
principal amount upon surrender of such Notes to the Registrar in accordance
with the terms of the Registered Exchange Offer and the Indenture.
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00. Transfer and Exchange.
By its acceptance of any Note represented by a certificate bearing
the Private Placement Legend, each Holder of, and beneficial owner of an
interest in, such Note acknowledges the restrictions on transfer of such Note
set forth on the face hereof and agrees that it will transfer such Note only in
accordance with the restrictions on the face hereof and the restrictions set
forth under the heading "Transfer Restrictions" under the Final Memorandum.
In connection with any transfer of a Note bearing the Private
Placement Legend, each Holder agrees to deliver to the Company such satisfactory
evidence, which may include an opinion of independent counsel licensed to
practice law in the State of New York, as reasonably may be requested by the
Company to confirm that such transfer is being made in accordance with the
limitations set forth in the Private Placement Legend. In the event the Company
determines that any such transfer is not in accordance with the Private
Placement Legend, the Company shall so inform the Registrar which shall not
register such transfer; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such evidence.
Upon the registration of transfer, exchange or replacement of a Note
not bearing the Private Placement Legend, the Trustee shall deliver a Note that
does not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of a Note bearing the Private Placement Legend, the Trustee shall
deliver a Note bearing the Private Placement Legend, unless such legend may be
removed from such Note as provided in the next sentence. The Private Placement
Legend may be removed from a Note if there is delivered to the Company such
satisfactory evidence, which may include an opinion of independent counsel
licensed to practice law in the State of New York, as reasonably may be
requested by the Company to confirm that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
of such Note will not violate the registration and prospectus delivery
requirements of the Securities Act and, if the transferee is a resident of
Canada, the securities laws of the applicable provisions of Canada; provided
that the Trustee shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
evidence. Upon provision of such evidence, the Trustee shall authenticate and
deliver in exchange for such Note, a Note or Notes (representing the same
aggregate principal amount of the Note being exchanged) without such legend. If
the Private Placement Legend has been removed from a Note, as provided above, no
other Note issued in exchange for all or any part of such Note shall bear such
legend, unless the Company has reasonable cause to believe that such other Note
represents a "restricted security" within the meaning of Rule 144 and instructs
the Trustee to cause a legend to appear thereon.
This Note initially was issued as part of the issuance of Units,
each of which consists of $1,000 principal amount of Stated Maturity of Notes
and one Warrant. Prior to the date specified in the Final Memorandum and the
Unit Legend, Notes will not be transferable except as part of a transfer of
Units and prior to such date, the Registrar shall not register the transfer of
any Note unless the Company receives evidence reasonably satisfactory to it that
such transfer is part of a transfer of a Unit or Units; provided that the
Registrar shall not be required to determine (but may rely on the determination
made by the Company with respect to) the sufficiency of any such evidence.
A Holder may transfer a Note only upon the surrender of such Note
for registration of transfer. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer in the Note Register by the Registrar. When
Notes are presented to the Registrar with a request to register the transfer of,
or to exchange, such
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Notes, the Registrar shall register the transfer or make such exchange as
requested if its requirements for such transactions and any applicable
requirements hereunder are satisfied.
Prior to the effectiveness of a Shelf Registration Statement or
following the suspension or termination thereof, the Holder of this Note (or
holders of interests therein) and prospective purchasers designated by such
Holder (or such holders of interests therein) shall have the right to obtain
from the Company upon request by such Holder (or such holders of interests) or
prospective purchasers, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, or exempt from reporting pursuant to
12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144 in connection with any transfer or proposed transfer of
such Note or interest.
13. Denominations.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 of principal amount at Stated Maturity and integral
multiples thereof.
14. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
15. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may terminate
some or all of its and the Guarantors' obligations under the Notes, the
Guarantees, the Indenture and the Collateral Documents and the Convertible Note
Collateral Documents if the Company irrevocably deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on the
Notes to redemption or maturity, as the case may be.
16. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Notes, the Collateral Documents and the Convertible Note
Collateral Documents may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
past Default and its consequences may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Without the consent of any Holder of Notes, the Company, the Guarantors and the
Notes, the Trustee may amend the Indenture, the Notes, the Collateral Documents
and the Convertible Note Collateral Documents (i) to evidence the succession of
another Person to the Company or the Guarantors, as applicable, and the
assumption by such successor of the covenants of the Company or the Guarantors
under the Indenture, the Collateral Documents and the Convertible Note
Collateral Documents; (ii) to add additional covenants or to surrender rights
and powers conferred on the Company or the Guarantors by the Indenture, the
Collateral Documents and the Convertible Note Collateral Documents; (iii) to add
any additional Events of Default; (iv) to provide for uncertificated Notes in
addition to or in place of Certificated Notes; (v) to evidence and provide for
the acceptance of appointment under the Indenture of a successor Trustee;
(vi) to add additional security for the Notes
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and/or the Guarantees; (vii) to cure any ambiguity in the Indenture, the
Collateral Documents or the Convertible Note Collateral Documents, to correct or
supplement any provision in the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents, provided that such actions shall not
adversely affect the interests of the Holders in any material respect; or
(viii) to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
17. Defaults and Remedies.
Events of Default under the Indenture include in summary form:
default in payment of interest, including Additional Amounts, if any, or Special
Interest, if any, on the Notes for 30 days; default in payment of principal on
the Notes; failure to comply with certain of the covenants in the Indenture,
including the Change of Control covenant, the Asset Sale covenant or the
Restricted Payments covenant; failure by the Company to comply with certain of
its other agreements in the Indenture, the Note, any Collateral Document or any
Convertible Note Collateral Document or a breach of a representation or warranty
in any Collateral Document or any Convertible Note Collateral Document and the
continuance of such default or breach for 45 days after notice; expropriation of
assets of the Company or any of its Restricted Subsidiaries having a book value,
less the book value of the expropriation proceeds, constituting more than 15% of
the book value, on a consolidated basis, of the Company's assets minus current
assets; defaults in the payment of certain other Indebtedness, or defaults,
other than such payment defaults, which result in the acceleration prior to
express maturity of certain other Indebtedness or which consist of the failure
to pay at maturity; certain final judgments which remain undischarged, unwaived,
unappealed, unbonded, unstayed or unsatisfied; certain events of bankruptcy or
insolvency; failure of a Guarantee, a Collateral Document or a Convertible Note
Collateral Document to be in effect, the denial of obligations under a
Guarantee, a Collateral Document, a Convertible Note Collateral Document or the
Notes by the Company or the Guarantors party thereto or the failure of the Notes
and the Guarantees to be secured by the theretofore perfected Liens and security
interests in the Collateral or the Convertible Note Collateral (except as
permitted by the Indenture, the Collateral Documents or the Convertible Note
Collateral Documents), which in each circumstance continues for 30 days after
notice. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of Stated Maturity of the Notes,
subject to certain limitations, may declare all the Notes to be immediately due
and payable. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Notes being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Notes may not enforce the Indenture, the Guarantees, the
Notes, the Collateral Documents or the Convertible Note Collateral Documents
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture, the Notes, the Guarantees, the Collateral Documents or the
Convertible Note Collateral Documents unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of Stated Maturity of the Notes may direct the Trustee in its exercise of
any trust or power under the Indenture, the Collateral Documents and the
Convertible Note Collateral Documents. The Holders of a majority in principal
amount of the outstanding Notes, by written notice to the Company and the
Trustee, may rescind any declaration of acceleration and its consequences if the
rescission would not conflict with any judgment or decree, and if all Events of
Default have been cured or waived except nonpayment of principal and interest
(including Additional Amounts, if any, and Special Interest, if any) that has
become due solely because of the acceleration.
X-00
000
00. Collateral Documents.
As provided in the Indenture, the Collateral Documents and the
Convertible Note Collateral Document and subject to certain limitations set
forth therein, the Obligations of the Company and the Guarantors under the
Indenture, the Collateral Documents and the Convertible Note Collateral
Documents are secured by the Collateral as provided in the Collateral Documents
and the Convertible Note Collateral Document. Each Holder, by accepting a Note,
agrees to be bound to all terms and provisions of the Collateral Documents and
the Convertible Note Collateral Documents, as the same may be amended from time
to time. The Liens created under the Collateral Documents and the Convertible
Note Collateral Documents shall be released upon the terms and subject to the
conditions set forth in the Indenture, the Collateral Documents and the
Convertible Note Collateral Documents.
19. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee or any Paying Agent or Registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company, the Guarantors, its Restricted Subsidiaries or its Affiliates with
the same rights it would have if it were not Trustee, Paying Agent or Registrar,
as the case may be, under the Indenture.
20. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, the Guarantees or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of his or her status as a
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor. By accepting a Note, each Holder waives and releases all such
liability (but only such liability) as part of the consideration for issuance of
such Note to such Holder.
21. Governing Law.
THE INDENTURE, THE GUARANTEES AND THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
22. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and have
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directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
24. Subordination.
The indebtedness evidence by this Note is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Note is issues subject to the
provision of the Indenture with respect thereto. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
The Company will furnish to any Holder of Notes upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Note. Requests may be made to:
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in this Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest (including Additional
Amounts, if any, and Special Interest, if any) on the Notes, whether of Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest (including Additional Amounts,
if any, and Special Interest, if any) on the Notes, if any, to the extent
lawful, (c) the due and punctual performance of all other obligations of the
Company and the Guarantors to the Holders under the Indenture, the Notes, the
Collateral Documents and the Convertible Note Collateral Documents, and (d) 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 or performed
in accordance with the terms of the extension or renewal, whether of Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise. Capitalized terms used herein shall
have the same meanings assigned to them in the Indenture unless otherwise
indicated.
Payment on each Note is guaranteed jointly and severally, by the
Guarantors pursuant to Article X of the Indenture and reference is made to such
Indenture for the precise terms of the Guarantees.
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The obligations of each Guarantor are limited to the lesser of (a)
an amount equal to such Guarantor's Adjusted Net Assets as of the date of the
Guarantee and (b) the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
(including, if applicable, its obligations under the Convertible Notes), and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law or not
otherwise being void, voidable or unenforceable under any similar other
bankruptcy, receivership, insolvency, liquidation or other similar legislation
or legal principles under applicable foreign law. Each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a contribution
from each other Guarantor in a pro rata amount based on the Adjusted Net Assets
of each Guarantor.
Certain of the Guarantors may be released from their Guarantees upon
the terms and subject to the conditions provided in the Indenture.
The Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
NWE CAPITAL (CYPRUS) LIMITED
By: ____________________________________
PLD ASSET LEASING LIMITED
By: ____________________________________
PLD CAPITAL LIMITED
By: ____________________________________
BALTIC COMMUNICATIONS LIMITED
By: ____________________________________
181
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
By: ____________________________________
182
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED ____________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
______________________________________
(Please print name and address of transferee)
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ________________________ Attorney to transfer
this Note on the Security Register, with full power of substitution.
Dated: _________________
_________________________ ___________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, in
which requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as
may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
183
OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to Section
4.7 of the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $ __________ ($1,000 in principal amount of Stated Maturity or an
integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or __________ an amount in cash
equal to 101% of the Accreted Value for the principal amount of
Stated Maturity indicated in the preceding sentence plus accrued and
unpaid interest thereon, if any, Additional Amounts, if any, and
Special Interest, if any, to the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section 4.8 of
the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $ __________ ($1,000 in principal amount of Stated Maturity or an
integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or __________ an amount in cash
equal to 100% of the Accreted Value of the principal amount of
Stated Maturity indicated in the preceding sentence, as the case may
be, plus accrued and unpaid interest thereon, if any, Additional
Amounts, if any, and Special Interest, if any, to the Asset Sale
Payment Date.
Dated: __________
_______________________ ________________________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, in
which requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as
may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
NOTICE: The signature to the foregoing must correspond to the Name as written
upon the face of this Note in every particular, without alteration or any change
whatsoever.
184
EXHIBIT C
185
EXHIBIT C
FORM OF FACE OF EXCHANGE GLOBAL NOTE
PETERSBURG LONG DISTANCE INC.
CUSIP NO. 00000XXX0
14% SENIOR DISCOUNT NOTE DUE 2004
No. ______
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO AMERICAN COMMUNICATIONS SERVICES, INC. OR
THE REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER ENTITY AS
HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[IF ISSUED PRIOR TO SEPTEMBER 1, 1996, THIS NOTE SHALL BEAR THE
FOLLOWING LEGEND: "TRANSFERS OR OTHER DISPOSITIONS OF THIS NOTE OR
BENEFICIAL INTERESTS THEREIN TO RESIDENTS IN CANADA MAY NOT BE EFFECTED
PRIOR TO SEPTEMBER 1, 1996 UNLESS IN COMPLIANCE WITH APPLICABLE
CANADIAN PROVINCIAL SECURITIES LAWS."]
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE
INDENTURE, DATED AS OF MAY 31, 1996, BETWEEN PETERSBURG LONG DISTANCE
INC., CERTAIN CORPORATIONS ACTING AS GUARANTORS AND NAMED THEREIN, AND
THE TRUSTEE NAMED THEREIN, PURSUANT TO WHICH THIS NOTE WAS ISSUED.
FOR THE PURPOSES OF THE INTEREST ACT (CANADA) AND DISCLOSURE
THEREUNDER, WHENEVER INTEREST, ADDITIONAL AMOUNTS, SPECIAL INTERESTS,
OR DEFAULTED INTEREST OR INTEREST ON DEFAULTED INTEREST RELATING TO
THIS NOTE, IS TO BE CALCULATED ON THE BASIS OF A YEAR OF 360 DAYS OR
ANY OTHER PERIOD OF TIME THAT IS LESS THAN A CALENDAR YEAR, THE YEARLY
RATE OF INTEREST TO WHICH THE RATE DETERMINED PURSUANT
186
TO SUCH CALCULATION IS EQUIVALENT IS THE RATE SO DETERMINED MULTIPLIED
BY THE ACTUAL NUMBER OF DAYS IN THE CALENDAR YEAR IN WHICH THE SAME IS
TO BE ASCERTAINED AND DIVIDED BY EITHER 360 OR SUCH OTHER PERIOD OF
TIME, AS THE CASE MAY BE. THE RATE ACCRUING ON THIS NOTE FOR PAYMENT
PURPOSES SHALL BE DETERMINED AS SET FORTH ON THE REVERSE HEREOF.
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187
Petersburg Long Distance Inc., an Ontario corporation (the "Company"),
for value received, hereby promises to pay to CEDE & CO., or its registered
assigns, the principal sum indicated on Schedule A hereof, on June 1, 2004.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purposes.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
Dated:
PETERSBURG LONG DISTANCE INC.
By:_________________________________
Name:
Title:
(Corporate Seal)
By:_________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:__________________________
Authorized Signatory
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FORM OF REVERSE SIDE OF EXCHANGE GLOBAL NOTE
PETERSBURG LONG DISTANCE INC.
GLOBAL NOTE
REPRESENTING 14% SENIOR DISCOUNT NOTES DUE 2004
1. Indenture.
This Note is one of a duly authorized issue of debt securities
of Petersburg Long Distance Inc., an Ontario corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), designated as its "14% Senior Discount Notes due
2004" (herein called the "Notes") limited in aggregate principal amount at
Stated Maturity to $123,000,000, issued under an indenture dated as of May 31,
1996 (as amended or supplemented from time to time, the "Indenture") among the
Company, the corporations acting as guarantors and named therein (the
"Guarantors") and The Bank of New York, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and each Holder of Notes and of the terms upon which the Notes are, and
are to be, authenticated and delivered. The summary of the terms of this Note
contained herein does not purport to be complete and is qualified by reference
to the Indenture. All terms used in this Note which are not defined herein shall
have the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into or permit certain transactions
with Affiliates, create Liens, enter into or permit certain Sale and Leaseback
Transactions, make Asset Sales and engage in businesses other than the
Telecommunications Business. The Indenture also imposes limitations on the
ability of the Company to consolidate or merge with or into any other Person or
permit any other Person to merge with or into the Company, or sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of the
Property of the Company to any other Person. In addition, the Indenture imposes
limitations on the ability of Restricted Subsidiaries to issue guaranties and
Preferred Shares and to create consensual restrictions upon their ability to pay
dividends and make certain other payments to the Company.
2. Principal and Interest.
The Company promises to pay the principal amount set forth on
Schedule A of this Note to the Holder hereof on June 1, 2004.
This Note is issued at a discounted principal value of
$87,697,300. This Note will accrete interest at a rate computed as if this Note
had been issued bearing interest at the rate of 14% per annum on May 31, 1996
(being a rate of 14.9445% per annum for the period from the Issue Date through
November 30, 1996), compounded semi-annually, to an aggregate principal amount
of $123,000,000 by December 1, 1998. Thereafter interest on this Note will
accrue at the rate of 14% per annum and will be payable in cash semi-annually on
June 1 and December 1 of each year, commencing June 1, 1999, until the principal
amount hereof is paid or made available for payment. The effect of the
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foregoing is that this Note will bear interest at the rate of 14.9445% per annum
from the Issue Date through November 30, 1996 and 14% per annum thereafter. The
payment of interest on this Note in respect of the period from the Issue Date to
December 1, 1998, however, will effectively be deferred until Maturity and such
deferred interest will be compounded semi-annually and added to the outstanding
principal amount of this Note. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. If the Company has not received
on or before May 31, 1998, $20,000,000 in Cash Proceeds from a sale or sales of
Qualified Stock of the Company occurring subsequent to the Issue Date (other
than Qualified Stock issued upon the exercise of Warrants or upon conversion of
the Convertible Notes), this Note will bear interest at the rate of 14.5% per
annum commencing on June 1, 1998 until any Interest Payment Date prior to which
the Company shall have received such $20,000,000 in Cash Proceeds from such a
sale of Qualified Stock. Commencing on such Interest Payment Date, this Note
will again bear interest at the rate of 14% per annum. For purposes of this
interest rate adjustment provision, the Company will be deemed to have received
such $20,000,000 in Cash Proceeds if a Change of Control has occurred. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions provided in the Indenture, be
paid to the Person in whose name this Note (or the Note in exchange or
substitution for which this Note was issued) is registered at the close of
business on the Record Date for interest payable on such Interest Payment Date.
The Record Date for any Interest Payment Date is the close of business on May 15
or November 15, as the case may be, whether or not a Business Day, immediately
preceding the Interest Payment Date on which such interest is payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest")
shall forthwith cease to be payable to the Holder on such Record Date and shall
be paid as provided in Section 2.11 of the Indenture.
Each payment of interest in respect of an Interest Payment
Date will include interest (including Additional Amounts (as hereinafter
defined), if any, and Special Interest (as defined in the Indenture, if any)
accrued through the day before such Interest Payment Date. If an Interest
Payment Date falls on a day that is not a Business Day, the interest payment to
be made on such Interest Payment Date will be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date, and no additional interest will accrue as a result of such delayed
payment.
If this Note was issued in substitution for an Initial Note
pursuant to a Registered Exchange Offer on or prior to the Record Date for the
first Interest Payment Date following such substitution, accrued and unpaid
interest, if any, on the equivalent principal amount of the Initial Note in
substitution for which this Note was issued, up to but not including the date of
issuance of this Note, shall be paid on the first Interest Payment Date for this
Note to the Holder of this Note on the first Record Date with respect to this
Note. If this Note was issued in substitution for an Initial Note pursuant to a
Registered Exchange Offer subsequent to the Record Date for the first Interest
Payment Date following such substitution but on or prior to such Interest
Payment Date, then any accrued and unpaid interest with respect to the
equivalent principal amount of the Initial Note in substitution for which this
Note was issued and any accrued and unpaid interest on this Note, including
Additional Amounts, if any, and Special Interest, if any, through the day before
such Interest Payment Date shall be paid on such Interest Payment Date to the
Holder of such Initial Note on such Record Date. Any accretion of value with
respect to the principal amount at Stated Maturity of the Initial Note for which
this Note was issued up to but including the date of issuance of this Note shall
be included as Accreted Value with respect to this Note.
To the extent lawful, the Company shall pay interest on (i) if
prior to December 1, 1998, any overdue Accreted Value of (and premium, if any,
on) this Note, or if on or after December 1, 1998,
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any overdue principal of (and premium, if any, on) this Note, at the interest
rate borne on this Note, plus 1% per annum, and (ii) Defaulted Interest (without
regard to any applicable grace period), including Additional Amounts, if any,
and Special Interest, if any, at the same rate. The Company's obligation
pursuant to the previous sentence shall apply whether such overdue amount is due
at its Stated Maturity, as a result of the Company's obligations pursuant to
Section 3.6, Section 4.7 or Section 4.8 of the Indenture, or otherwise.
3. Additional Amounts.
Except to the extent required by law, any and all payments of,
or in respect of, this Note shall be made free and clear of and without
deduction for or on account of any and all present or future taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect
thereto imposed by Canada, the Russian Federation, Cyprus or any other
jurisdiction with which the Company or any Guarantor has some connection
(including any jurisdiction (other than the United States of America) from or
through which payments under the Notes are made) or any political subdivision of
or any taxing authority in any such jurisdiction ("Canadian Taxes," "Russian
Taxes," "Cypriot Taxes" or "Other Taxes," respectively). If the Company or any
Guarantor shall be required by law to withhold or deduct any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes from or in respect of any sum
payable under this Note or pursuant to a Guarantee, the sum payable by the
Company or such Guarantor, as the case may be, thereunder shall be increased by
the amount ("Additional Amounts") necessary so that after making all required
withholdings and deductions, the Holder of this Note shall receive an amount
equal to the sum that it would have received had no such withholdings and
deductions been made; provided that any such sum shall not be paid in respect of
any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes to the Holder of
this Note (an "Excluded Holder") (i) resulting from the beneficial owner of this
Note carrying on business or being deemed to carry on business in or through a
permanent establishment or fixed base in the relevant taxing jurisdiction or any
political subdivision thereof or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of this Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of this Note
or the Guarantees or the enforcement of this Note or the Guarantees, (ii)
resulting from the Company or any Guarantor not dealing at arm's length (within
the meaning of the Income Tax Act (Canada)) with the Holder of this Note at the
time of such payment or at the time the amount of such payment is deemed to have
been paid or credited or (iii) that would not have been imposed but for the
presentation (where presentation is required) of this Note for payment more than
180 days after the date such payment became due and payable or was duly provided
for, whichever occurs later. The Company or the Guarantors, as applicable, will
also (i) make such withholding or deduction and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law, and, in any such case, the Company will furnish to each Holder on whose
behalf an amount was so remitted, within 30 calendar days after the date the
payment of any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes is
due pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company or the Guarantors, as applicable. The Company will, upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Notes, and (ii) any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes so levied or imposed with respect to
any reimbursement under the foregoing clause (i) so that the net amount received
by such Holder (net of payments made under or with respect to such Notes or the
Guarantees) after such reimbursement will not be less than the net amount the
Holder hereof would have received if Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes on such reimbursement had not been imposed.
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In addition, the Company or the Guarantors will pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties, in respect of the creation, issue and offering of the
Notes payable in Canada, the United States, the Russian Federation or Cyprus or
any political subdivision thereof or taxing authority of or in the foregoing.
The Company and the Guarantors will also pay and indemnify the Holders from and
against all court fees and taxes or other taxes and duties, including interest
and penalties, paid by any of them in any jurisdiction in connection with any
action permitted to be taken by the Trustee or the Holders to create the Liens
on the Collateral and the Convertible Note Collateral and to enforce the
obligations of the Company or the Guarantors under the Notes, the Indenture, the
Guarantees, the Collateral Documents or the Convertible Note Collateral
Documents.
4. Special Interest.
In the event of the failure of the Company to procure, on or
before July 12, 1996, a recognized financial institution with capital of not
less than $10,000,000 organized under the laws of the Republic of Ireland which
the Convertible Note Trustee may lawfully appoint as a Qualified Foreign
Collateral Agent (as defined in Section 7.3 of the Indenture) (the
"Procurement") with respect to Technocom Preferred Stock, any payments thereon
and any property substituted therefor (the "Subject Collateral") pursuant to an
agreement under which such Qualified Foreign Collateral Agent will agree not to
resign without the contemporaneous appointment of a successor Qualified Foreign
Collateral Agent (the "Prescribed Agreement"), then, commencing on July 12,
1996, the Company shall pay to each Holder of the Notes Special Interest in an
amount equal to 1% per annum on the principal amount at Stated Maturity of such
Holder's Notes, accruing for each day until the Procurement is made or Technocom
or a successor is reorganized under the laws of Cyprus and a successor Qualified
Foreign Collateral Agent has been appointed in respect of the Subject Collateral
(the "Reorganization") under a Prescribed Agreement. Such Special Interest shall
be payable in cash semi-annually in arrears at the times and in the manner
provided for in the Indenture, provided that for this purpose, Section 2.11 of
the Indenture shall be read to include as Interest Payment Dates, as applicable,
December 1, 1996 and June 1 and December 1 of each year commencing December 1,
1996. Such Special Interest shall cease to accrue upon the Procurement or the
Reorganization taking place and all accrued and unpaid Special Interest shall be
paid to each Holder of the Notes on the next Interest Payment Date with respect
thereto. Special Interest, as defined in the Indenture, may include Special
Interest arising as a result of the occurrence of a "Registration Default" under
the Registration Agreement (as defined in the Indenture).
Except as expressly provided in this paragraph 4, Special
Interest shall be treated as interest and any date on which Special Interest is
due and payable shall be treated as an Interest Payment Date, for all purposes
under this Note and the Indenture.
5. Method of Payment.
The Company, through the Paying Agent, shall pay interest on
this Note to the registered Holder of this Note, as provided above. The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of all debts public and
private. Principal and interest will be payable at the office of the Paying
Agent but, at the option of the Company, interest may be paid by check mailed to
the registered Holders at their registered addresses.
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0. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar
under the Indenture. The Company may, upon written notice to the Trustee,
appoint and change any Paying Agent or Registrar. The Company or any of its
subsidiaries may act as Paying Agent or Registrar.
7. Optional Redemption.
Except as set forth in the following paragraph, the Notes may
not be redeemed prior to June 13, 2001. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 calendar days' nor more than 60 calendar days' notice, at the prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon (if any), Additional Amounts (if any) and Special
Interest (if any) to the applicable Redemption Date, if redeemed during the
period from June 13, 2001 through May 31, 2002 at a percentage of 108.000% and
thereafter during the twelve-month period beginning June 1 of the years
indicated below:
Year Percentage
---- ----------
2002 104.000%
2003 and thereafter 100.000%
The Notes may be redeemed, at the option of the Company, in whole but
not in part, upon not less than 30 or more than 60 days' notice to the Holders
in accordance with the terms of the Indenture, at a redemption price equal to
the Accreted Value thereof, plus accrued and unpaid interest, if any, (including
Additional Amounts, if any, and Special Interest, if any) to the applicable
Redemption Date (subject to the right of Holders of record on the relevant
Record Date to receive interest (including Additional Amounts, if any, and
Special Interest, if any) due on the Interest Payment Date that is on or prior
to the Redemption Date) if, as a result of any change in or amendment to the
laws or the regulations or rulings promulgated thereunder of Canada, Cyprus, the
Russian Federation or any other jurisdiction with which the Company or any
Guarantor has any connection (other than as a result of a merger or
consolidation of the Company with or into a newly formed corporation solely for
the purpose of moving the Company's domicile out of Canada) or any political
subdivision thereof or any authority thereof or having power to tax therein, or
any change in the application or official interpretation of such laws or
regulations, or any change in administrative policy or assessing practice of the
applicable taxing authority, which change or amendment becomes effective on or
after May 24, 1996, the Company or the Guarantors (if the Guarantees are called)
are or would be required on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to the Notes or the Guarantees and the payment
of such Additional Amounts cannot be avoided by the use of any reasonable
measures available to the Company or the Guarantors, as the case may be. The
Company will also pay to the Holders on the Redemption Date any Additional
Amounts payable in respect of the period ending on the Redemption Date. Prior to
the publication of any notice of redemption pursuant to this provision, which in
no event will be given earlier than 90 days prior to the earliest date on which
the Company or the Guarantors, as the case may be, would be required to pay such
Additional Amounts were a payment in respect of the Notes then due, the Company
shall deliver to the Trustee (i) an Officers' Certificate stating that the
obligation to pay such Additional Amounts cannot be avoided by the Company or
the Guarantors, as the case may be, taking reasonable measures and (ii) an
Opinion of Counsel, independent of the Company and the Guarantors and approved
by the Trustee, to the effect that the Company or the Guarantors have or will
become obligated to pay such Additional Amounts as a result of such change or
amendment. Such notice, once delivered by the Company to the Trustee, will be
irrevocable. The Trustee shall accept such Officers' Certificate
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and Opinion of Counsel as sufficient evidence of the satisfaction of the
condition precedent set forth in clauses (i) and (ii) above, in which event it
shall be conclusive and binding on the Holders.
8. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days
before a Redemption Date, the Company will send a notice of redemption, first
class mail, postage prepaid, to Holders of Notes to be redeemed at the addresses
of such Holders as they appear in the Note Register.
If less than all of the Notes are to be redeemed at any time,
the Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest (including Additional Amounts, if any,
and Special Interest, if any) will be paid on such Interest Payment Date to the
Holder of the Note at the close of business on such Record Date. If money in an
amount sufficient to pay the Redemption Price of all Notes (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent on or
before the applicable Redemption Date and certain other conditions are
satisfied, interest (including Additional Amounts, if any, and Special Interest,
if any) on the Notes to be redeemed on the applicable Redemption Date will cease
to accrue.
The Notes are not subject to any sinking fund.
9. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to purchase such Holder's
Notes, in whole or in part in a principal amount that is an integral multiple of
$1,000, pursuant to a Change of Control Offer, at a purchase price in cash equal
to 101% of the Accreted Value thereof on any Change of Control Payment Date,
plus accrued and unpaid interest, if any, Additional Amounts, if any, and
Special Interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the
Company shall send, or cause to be sent, by first class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The Holder
of this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest, Additional Amounts, if any, and Special Interest, if any, from
and after the Change of Control Payment Date.
10. Repurchase at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the next following
paragraph, if at any time the Company or any Restricted Subsidiary engages in
any Asset Sale, as a result of which the aggregate amount of Excess Proceeds
exceeds $5,000,000, the Company shall, within 30 calendar days of the date the
amount of Excess Proceeds exceeds $5,000,000, use the then-existing Excess
Proceeds to make an offer to purchase from all Holders, on a pro rata basis,
Notes in an aggregate principal amount equal to
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the maximum principal amount that may be purchased out of the then-existing
Excess Proceeds, at a purchase price in cash equal to 100% of the Accreted Value
thereof on any Asset Sale Payment Date plus accrued and unpaid interest thereon,
if any, Additional Amounts, if any, and Special Interest, if any, to the Asset
Sale Payment Date, provided that Excess Proceeds attributed to an Asset Sale of
Convertible Note Collateral (as defined on the Indenture) must be used first to
make an "Asset Sale Offer" pursuant to the Convertible Note Indenture (as
defined in the Indenture). Upon completion of an Asset Sale Offer (including
payment of the Asset Sale Purchase Price for accepted Notes), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes,
including the making of an "Asset Sale Offer" pursuant to the Convertible Note
Indenture.
Notwithstanding the paragraph above, the Company will not be
obligated to repurchase Notes in connection with an Asset Sale Offer
representing in aggregate more than 25% of the original aggregate principal
amount of the Notes (which original aggregate principal amount shall for these
purposes be the aggregate amount originally allocated to the Notes, net of any
amounts allocated to the Warrants, without any adjustment whatsoever) prior to
the date following the Five Year Date, and the original aggregate principal
amount of Notes repurchased in connection with any Asset Sale Offer having a
purchase date prior to the date following the Five Year Date shall represent no
more than 25% of the original aggregate principal amount of the Notes less the
original aggregate principal amount of Notes purchased pursuant to Asset Sale
Offers relating to all prior Asset Sales. To the extent that the amount of
Excess Proceeds exceeds the amount of Notes purchased because of the limitation
imposed by the immediately preceding sentence (the amount of such excess being
the "Aggregate Unused Proceeds"), such Aggregate Unused Proceeds shall
constitute Excess Proceeds for purposes of the first Asset Sale Offer that is
made after the Five Year Date and, in the event the amount of the Aggregate
Unused Proceeds exceeds $5,000,000, promptly after the Five Year Date, the
Company shall commence an Asset Sale Offer on a pro rata basis for an aggregate
principal amount of Notes equal to the Aggregate Unused Proceeds (and any other
Excess Proceeds that arise between the Five Year Date and such Asset Sale Offer)
at a purchase price equal to 100% of the Accreted Value of the Notes, plus
accrued interest, if any, Additional Amounts, if any, and Special Interest, if
any, to the date of purchase.
Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $5,000,000, the Company shall send, or cause to be sent, by
first class mail, postage prepaid, a notice regarding the Asset Sale Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Require Purchase" appearing below and tendering
this Note pursuant to the Asset Sale Offer. Unless the Company defaults in the
payment of the Offer Purchase Price with respect thereto, all Notes or portions
thereof selected for payment pursuant to the Asset Sale Offer will cease to
accrue interest, Additional Amounts, if any, and Special Interest, if any, from
and after the Asset Sale Payment Date.
11. The Global Note.
So long as this Global Note is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under the Indenture with respect to this
Global Note held on their behalf by the Depositary or the Trustee as its
custodian, and the Depositary may be treated by the Company, the Guarantors, the
Trustee and any agent of the Company, the Guarantors or the Trustee as the
absolute owner of this Global Note for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Guarantors, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other
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authorization furnished by the Depositary or (ii) impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of Notes.
The Holder of this Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under the Indenture or the Notes.
Whenever, as a result of an optional redemption of Notes by
the Company, a Change of Control Offer, an Asset Sale Offer or an exchange for
Certificated Notes, this Global Note is redeemed, repurchased or exchanged in
part, this Global Note shall be surrendered by the Holder thereof to the Trustee
who shall cause an adjustment to be made to Schedule A hereof so that the
principal amount of this Global Note will be equal to the portion not redeemed,
repurchased or exchanged and shall thereafter return this Global Note to such
Holder; provided that this Global Note shall be in a principal amount at Stated
Maturity of $1,000 or an integral multiple of $1,000.
12. Transfer and Exchange.
The Holder of this Global Note shall, by its acceptance of
this Global Note, agree that transfers of beneficial interests in this Global
Note may be effected only through a book entry system maintained by such Holder
(or its agent), and that ownership of a beneficial interest in the Notes
represented thereby shall be required to be reflected in book entry form.
Transfers of this Global Note shall be limited to transfers in
whole, and not in part, to the Depositary, its successors and their respective
nominees. Interests of beneficial owners in this Global Note may be transferred
in accordance with the rules and procedures of the Depositary (or its
successors).
This Global Note will be exchanged by the Company for one or
more Certificated Notes if (a) the Depositary (i) has notified the Company that
it is unwilling or unable to continue as, or ceases to be, a "Clearing Agency"
registered under Section 17A of the Exchange Act and (ii) a successor to the
Depositary registered as a "Clearing Agency" under Section 17A of the Exchange
Act is not appointed by the Company within 90 calendar days or (b) the
Depositary is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not able to be appointed by the Company within 90
calendar days. If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder hereof, exchange all or part of this Global
Note for one or more Certificated Notes; provided that the principal amount at
Stated Maturity of each of such Certificated Notes and this Global Note, after
such exchange, shall be $1,000 or an integral multiple thereof. Whenever this
Global Note is exchanged as a whole for one or more Certificated Notes, it shall
be surrendered by the Holder to the Trustee for cancellation. Whenever this
Global Note is exchanged in part for one or more Certificated Notes, it shall be
surrendered by the Holder to the Trustee and the Trustee shall make the
appropriate notations thereon pursuant to Section 2.5(c) of the Indenture. All
Certificated Notes issued in exchange for this Global Note or any portion hereof
shall be registered in such names as the Depositary shall instruct the Trustee.
Any Certificated Notes issued in exchange for this Global Note shall include the
Unit Legend except as set forth in Section 2.6(j) of the Indenture. Interests in
this Global Note may not be exchanged for Certificated Notes other than as
provided in this paragraph.
Following the suspension or termination of a Shelf
Registration Statement, the Holder of this Note (or holders of interests
therein) and prospective purchasers designated by such Holder (or such holders
of interests therein) shall have the right to obtain from the Company upon
request by such Holder
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(or such holders of interests) or prospective purchasers, during any period in
which the Company is not subject to Section 13 or 15(d) of the Exchange Act, or
exempt from reporting pursuant to 12g3-2(b) under the Exchange Act, the
information required by paragraph (d)(4)(i) of Rule 144 in connection with any
transfer or proposed transfer of such Note or interest.
13. Denominations.
The Notes are issuable only in registered form without coupons
in denominations of $1,000 of principal amount at Stated Maturity and integral
multiples thereof.
14. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
15. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some or all of its and the Guarantors' obligations under the Notes,
the Guarantees, the Indenture, the Collateral Documents and the Convertible Note
Collateral Documents if the Company irrevocably deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on the
Notes to redemption or maturity, as the case may be.
16. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, the Notes, the Collateral Documents and the Convertible Note
Collateral Documents may be amended with the written consent of the Holders of
at least a majority in principal amount at Stated Maturity of the outstanding
Notes and (ii) any past Default and its consequences may be waived with the
written consent of the Holders of at least a majority in principal amount at
Stated Maturity of the outstanding Notes. Without the consent of any Holder of
Notes, the Company, the Guarantors and the Trustee may amend the Indenture, the
Notes, the Collateral Documents and the Convertible Note Collateral Document (i)
to evidence the succession of another Person to the Company or the Guarantors,
as applicable, and the assumption by such successor of the covenants of the
Company or the Guarantors under the Notes, the Indenture, the Collateral
Documents or the Convertible Note Collateral Documents; (ii) to add additional
covenants or to surrender rights and powers conferred on the Company or the
Guarantors by the Indenture, the Collateral Documents and the Convertible Note
Collateral Documents; (iii) to add any additional Events of Default; (iv) to
provide for uncertificated Notes in addition to or in place of Certificated
Notes; (v) to evidence and provide for the acceptance of appointment under the
Indenture of a successor Trustee; (vi) to add additional security for the Notes
and/or the Guarantees; (vii) to cure any ambiguity in the Indenture, the
Collateral Documents or the Convertible Note Collateral Documents, to correct or
supplement any provision in the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents, provided that such actions shall not
adversely affect the
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interests of the Holders in any material respect; or (viii) to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
17. Defaults and Remedies.
Events of Default under the Indenture include in summary form:
default in payment of interest, including Additional Amounts, if any, or Special
Interest, if any, on the Notes for 30 days; default in payment of principal on
the Notes; failure to comply with certain of the covenants in the Indenture,
including the Change of Control covenant, the Asset Sale covenant or the
Restrictive Payments covenant; failure by the Company to comply with certain of
its other agreements in the Indenture or the Notes or any Collateral Document or
any Convertible Note Collateral Document or a breach of a representation or
warranty in any Collateral Document or any Convertible Note Collateral Document
and the continuance of such default or breach for 45 days after notice;
expropriation of assets of the Company or any of its Restricted Subsidiaries
having a book value, less the book value of the expropriation proceeds,
constituting more than 15% of the book value, on a consolidated basis, of the
Company's assets minus current assets; defaults in the payment of certain other
Indebtedness, or defaults, other than such payment defaults, which result in the
acceleration prior to express maturity of certain other Indebtedness or which
consist of the failure to pay at maturity; certain final judgments which remain
undischarged, unwaived, unappealed, unbonded, unstayed or unsatisfied; certain
events of bankruptcy or insolvency; failure of a Guarantee, a Collateral
Document or any Convertible Note Collateral Document to be in effect, the denial
of obligations under a Guarantee, a Collateral Document, a Convertible Note
Collateral Document or the Notes by the Company or the Guarantors party thereto
or the failure of the Notes and the Guarantees to be secured by the theretofore
perfected security interests in the Collateral or the Convertible Note
Collateral (except as permitted by the Indenture, the Collateral Documents or
the Convertible Note Collateral Documents), which in each circumstance continues
for 30 days after notice. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount at Stated Maturity of
the Notes, subject to certain limitations, may declare all the Notes to be
immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Notes being immediately due and
payable upon the occurrence of such Events of Default without any further act of
the Trustee or any Holder.
Holders of Notes may not enforce the Indenture, the
Guarantees, the Notes, the Collateral Documents or the Convertible Note
Collateral Documents except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture, the Notes, the Guarantees, the Collateral Documents or
the Convertible Note Collateral Documents unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a Majority in
principal amount at Stated Maturity of the Notes may direct the Trustee in its
exercise of any trust or power under the Indenture, the Collateral Documents and
the Convertible Note Collateral Documents. The Holders of a majority in
principal amount at Stated Maturity of the outstanding Notes, by written notice
to the Company and the Trustee, may rescind any declaration of acceleration and
its consequences if the rescission would not conflict with any judgment or
decree, and if all Events of Default have been cured or waived except nonpayment
of principal and interest (including Additional Amounts, if any, and Special
Interest, if any) that has become due solely because of the acceleration.
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00. Collateral Documents.
As provided in the Indenture, the Collateral Documents and the
Convertible Note Collateral Documents and subject to certain limitations set
forth therein, the obligations of the Company and the Guarantors under the
Indenture, the Collateral Documents and the Convertible Note Collateral
Documents are secured by the Collateral and the Convertible Note Collateral as
provided in the Collateral Documents and the Convertible Note Collateral
Documents. Each Holder, by accepting a Note, agrees to be bound to all terms and
provisions of the Collateral Documents and the Convertible Note Collateral
Documents, as the same may be amended from time to time. The Liens created under
the Collateral Documents shall be released upon the terms and subject to the
conditions set forth in the Indenture, the Collateral Documents and the
Convertible Note Collateral Documents.
19. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture
Act, the Trustee or any Paying Agent or Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company, the Guarantors, its Restricted Subsidiaries or its Affiliates
with the same rights it would have if it were not Trustee, Paying Agent or
Registrar, as the case may be, under the Indenture.
20. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, the Guarantees or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of his or her status as a
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor. By accepting a Note, each Holder waives and releases all such
liability (but only such liability) as part of the consideration for issuance of
such Note to such Holder.
21. Governing Law.
THE INDENTURE, THE GUARANTEES AND THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
22. Abbreviations.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
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00. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
24. Subordination.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Note is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided, and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
The Company will furnish to any Holder of Notes upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Note. Requests may be made to:
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in this Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have, jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest (including Additional
Amounts, if any, and Special Interest, if any) on the Notes, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest (including Additional Amounts,
if any, and Special Interest, if any) on the Notes, if any, to the extent
lawful, (c) the due and punctual performance of all other obligations of the
Company and the Guarantors to the Holders under the Indenture, the Notes, the
Collateral Documents and the Convertible Note Collateral Documents and (d) 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 or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise. Capitalized terms used herein shall
have the same meanings assigned to them in the Indenture unless otherwise
indicated.
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Payment on each Note is guaranteed jointly and severally, by
the Guarantors pursuant to Article X of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The obligations of each Guarantor are limited to the lesser of
(a) an amount equal to such Guarantor's Adjusted Net Assets as of the date of
the Guarantee and (b) the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
(including, if applicable, its obligations under the Convertible Notes), and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent conveyance or fraudulent transfer under
federal or state law or not otherwise being void, voidable or unenforceable
under any similar other bankruptcy, receivership, insolvency, liquidation or
other similar legislation or legal principles under applicable foreign law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their
Guarantees upon the terms and subject to the conditions provided in the
Indenture.
The Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof and in the Indenture.
NWE CAPITAL (CYPRUS) LIMITED
By: _____________________________________
PLD ASSET LEASING LIMITED
By: _____________________________________
PLD CAPITAL LIMITED
By: _____________________________________
BALTIC COMMUNICATIONS LIMITED
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201
By: _____________________________________
WIRELESS TECHNOLOGY CORPORATIONS
LIMITED
By: _____________________________________
202
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount at Stated Maturity of this Note shall be $________.
The following decreases/increase in the principal amount at maturity of this
Note have been made:
TOTAL PRINCIPAL
AMOUNT AT NOTATION
DECREASE IN INCREASE IN MATURITY MADE BY
DATE OF PRINCIPAL PRINCIPAL FOLLOWING SUCH OR ON
DECREASE/ AMOUNT AT AMOUNT AT DECREASE/ BEHALF OF
INCREASE MATURITY MATURITY INCREASE TRUSTEE
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
____________ ____________ ____________ ____________ ____________
203
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
____________________________________
____________________________________
(Please print name and address of transferee)
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ________________________ Attorney to transfer
this Note on the Security Register, with full power of substitution.
Dated:_________________
____________________________________ ____________________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, in which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
204
OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to Section
4.7 of the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $_____________($1,000 in principal amount at Stated Maturity
or an integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or __________________ an
amount in cash equal to 101% of the Accreted Value of this
Note, plus accrued and unpaid interest thereon, if any, and
Additional Amounts, if any, and Special Interest, if any, to
the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section 4.8 of
the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $_____________($1,000 in principal amount at Stated Maturity
or an integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or __________________ an
amount in cash equal to 100% of the Accreted Value of this
Note, plus accrued and unpaid interest thereon, if any, and
Additional Amounts, if any, and Special Interest, if any, to
the Asset Sale Payment Date.
Dated:_____________
____________________________________ ____________________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, in which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing must correspond to the Name as written
upon the face of this Note in every particular, without alteration or any change
whatsoever.
205
EXHIBIT D
206
EXHIBIT D
FORM OF FACE OF EXCHANGE CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
No. _____ CUSIP No. 00000XXX0
14% SENIOR DISCOUNT NOTE DUE 2004
[IF ISSUED PRIOR TO SEPTEMBER 1, 1996, THIS NOTE SHALL BEAR THE FOLLOWING
LEGEND: "TRANSFERS OR OTHER DISPOSITIONS OF THIS NOTE TO RESIDENTS OF CANADA MAY
NOT BE EFFECTED PRIOR TO SEPTEMBER 1, 1996 UNLESS IN COMPLIANCE WITH APPLICABLE
CANADIAN PROVINCIAL SECURITIES LAWS."]
FOR THE PURPOSES OF THE INTEREST ACT (CANADA) AND DISCLOSURE THEREUNDER,
WHENEVER INTEREST, ADDITIONAL AMOUNTS, SPECIAL INTEREST, OR DEFAULTED INTEREST
OR INTEREST ON DEFAULTED INTEREST RELATING TO THIS NOTE, IS TO BE CALCULATED ON
THE BASIS OF A YEAR OF 360 DAYS OR ANY OTHER PERIOD OF TIME THAT IS LESS THAN A
CALENDAR YEAR, THE YEARLY RATE OF INTEREST TO WHICH THE RATE DETERMINED PURSUANT
TO SUCH CALCULATION IS EQUIVALENT IS THE RATE SO DETERMINED MULTIPLIED BY THE
ACTUAL NUMBER OF DAYS IN THE CALENDAR YEAR IN WHICH THE SAME IS TO BE
ASCERTAINED AND DIVIDED BY EITHER 360 OR SUCH OTHER PERIOD OF TIME, AS THE CASE
MAY BE. THE RATE ACCRUING ON THE NOTES FOR PAYMENT PURPOSES SHALL BE DETERMINED
AS SET FORTH ON THE REVERSE HEREOF.
Petersburg Long Distance Inc., an Ontario corporation, (the "Company"),
for value received, hereby promises to pay to _________________, or its
registered assigns, the principal sum of ___________________________, on June 1,
2004.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.
207
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 the Indenture or be valid
or obligatory for any purposes.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
Dated:
PETERSBURG LONG DISTANCE INC.
By:_________________________________
Name:
Title:
[Corporate Seal]
By:_________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:____________________________________
Authorized Signatory
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FORM OF REVERSE SIDE OF EXCHANGE CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
14% SENIOR DISCOUNT NOTE DUE 2004
1. Indenture.
This Note is one of a duly authorized issue of debt securities
of Petersburg Long Distance Inc., an Ontario corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), designated as its "14% Senior Discount Notes due
2004" (herein called the "Notes") limited in aggregate principal amount at
Stated Maturity to $123,000,000, issued under an indenture dated as of May 31,
1996 (as amended or supplemented from time to time, the "Indenture") among the
Company, the corporations acting as guarantors and named therein (the
"Guarantors") and The Bank of New York, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and each Holder of Notes and of the terms upon which the Notes are, and
are to be, authenticated and delivered. The summary of the terms of this Note
contained herein does not purport to be complete and is qualified by reference
to the Indenture. All terms used in this Note which are not defined herein shall
have the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into or permit certain transactions
with Affiliates, create Liens, enter into or permit certain Sale and Leaseback
Transactions, make Asset Sales and engage in businesses other than the
Telecommunications Business. The Indenture also imposes limitations on the
ability of the Company to consolidate or merge with or into any other Person or
permit any other Person to merge with or into the Company, or sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of the
Property of the Company to any other Person. In addition, the Indenture imposes
limitations on the ability of Restricted Subsidiaries to issue guarantees and
Preferred Shares and to create consensual restrictions upon their ability to pay
dividends and make certain other payments to the Company.
2. Principal and Interest.
The Company promises to pay the principal amount set forth on
the face hereof to the Holder hereof on June 1, 2004.
The Notes have been issued at a discounted principal value of
$87,697,300. The Notes will accrete interest from the Issue Date at a rate
computed as if the Notes had been issued bearing interest at the rate of 14% per
annum on May 31, 1996 (being a rate of 14.9445% per annum for the period from
the Issue Date through November 30, 1996), compounded semiannually, to an
aggregate principal amount of $123,000,000 by December 1, 1998. The principal
amount at Stated Maturity of this Note is set forth on the face hereof.
Commencing December 1, 1998, interest on this Note, like the other Notes, will
accrue at the rate of 14% per annum, and will be payable in cash semi-annually
on June 1 and December 1 of each year, commencing June 1, 1999, until the
principal amount hereof is paid or
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made available for payment. The effect of the foregoing is that this Note will
bear interest at the rate of 14.9445% per annum from the Issue Date through
November 30, 1996 and 14% per annum thereafter. The payment of interest on this
Note in respect of the period from the Issue Date to December 1, 1998, however,
will effectively be deferred until Maturity and such deferred interest will be
compounded semi-annually and added to the outstanding principal amount of this
Note. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. If the Company has not received, on or before May 31,
1998, $20,000,000 in Cash Proceeds from a sale or sales of Qualified Stock of
the Company occurring subsequent to the Issue Date (other than Qualified Stock
issued upon the exercise of Warrants or upon conversion of the Convertible
Notes), this Note will bear interest at the rate of 14.5% per annum commencing
on June 1, 1998 until any Interest Payment Date prior to which the Company shall
have received such $20,000,000 in Cash Proceeds from such a sale of Qualified
Stock. Commencing on any such Interest Payment Date, this Note will again bear
interest at the rate of 14% per annum. For purposes of this interest rate
adjustment provision, the Company will be deemed to have received such
$20,000,000 in Cash Proceeds if a Change of Control has occurred. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions provided in the Indenture, be paid to
the Person in whose name this Note (or the Note in exchange or substitution for
which this Note was issued) is registered at the close of business on the Record
Date for interest payable on such Interest Payment Date. The Record Date for any
Interest Payment Date is the close of business on May 15 or November 15, as the
case may be, whether or not a Business Day, immediately preceding the Interest
Payment Date on which such interest is payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") shall forthwith
cease to be payable to the Holder on such Record Date and shall be paid as
provided in Section 2.11 of the Indenture.
Each payment of interest in respect of an Interest Payment
Date will include interest (including Additional Amounts (as hereinafter
defined), if any, and Special Interest (as hereinafter defined), if any) accrued
through the day before such Interest Payment Date. If an Interest Payment Date
falls on a day that is not a Business Day, the interest payment to be made on
such Interest Payment Date will be made on the next succeeding Business Day with
the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment.
If this Note was issued, pursuant to a Registered Exchange
Offer prior to the Record Date for the first Interest Payment Date following
such substitution, accrued and unpaid interest, if any, on this Note, up to but
not including the date of issuance of this Note, shall be paid on the first
Interest Payment Date for this Note to the Holder of this Note or on the first
Record Date with respect to this Note. If this Note was issued in a Registered
Exchange Offer subsequent to the Record Date for the first Interest Payment Date
following such substitution but on or prior to such Interest Payment Date, then
any such accrued and unpaid interest with respect to this Note and any accrued
and unpaid interest with respect to the equivalent principal amount at Stated
Maturity of the Initial Note in substitution for which this Note was issued,
including Additional Amounts, if any, and Special Interest, if any, through the
day before such Interest Payment Date, shall be paid on such Interest Payment
Date to the Holder of this Note on such Record Date. Any accretion of value with
respect to the equivalent principal amount and Stated Maturity of the Initial
Note for which this Note, up to but including the date of issuance of this Note
shall be included as Accreted Value with respect to this Note.
To the extent lawful, the Company shall pay interest on (i) if
prior to December 1, 1998, any overdue Accreted Value of (and premium, if any,
on) this Note, or if on or after December 1, 1998, any overdue principal of (and
premium, if any, on) this Note, at the interest rate borne on this Note, plus
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1% per annum, and (ii) Defaulted Interest (without regard to any applicable
grace period), including Additional Amounts, if any, and Special Interest, if
any, at the same rate. The Company's obligation pursuant to the previous
sentence shall apply whether such overdue amount is due at its Stated Maturity,
as a result of the Company's obligations pursuant to Section 3.6, Section 4.7 or
Section 4.8 of the Indenture, or otherwise.
3. Additional Amounts.
Except to the extent required by law, any and all payments of,
or in respect of, this Note shall be made free and clear of and without
deduction for or on account of any and all present or future taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect
thereto imposed by Canada, the Russian Federation, Cyprus or any other
jurisdiction with which the Company or any Guarantor has some connection
(including any jurisdiction (other than the United States of America) from or
through which payments under the Notes are made) or any political subdivision of
or any taxing authority in any such jurisdiction ("Canadian Taxes," "Russian
Taxes," "Cypriot Taxes" or "Other Taxes," respectively). If the Company or any
Guarantor shall be required by law to withhold or deduct any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes from or in respect of any sum
payable under this Note or pursuant to a Guarantee, the sum payable by the
Company or such Guarantor, as the case may be, thereunder shall be increased by
the amount ("Additional Amounts") necessary so that after making all required
withholdings and deductions, the Holder of this Note shall receive an amount
equal to the sum that it would have received had no such withholdings and
deductions been made; provided that any such sum shall not be paid in respect of
any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes to the Holder of
this Note (an "Excluded Holder") (i) resulting from the beneficial owner of this
Note carrying on business or being deemed to carry on business in or through a
permanent establishment or fixed base in the relevant taxing jurisdiction or any
political subdivision thereof or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of this Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of this Note
or the Guarantees or the enforcement of this Note or the Guarantees, (ii)
resulting from the Company or any Guarantor not dealing at arm's length (within
the meaning of the Income Tax Act (Canada)), with the Holder of this Note at the
time of such payment or at the time the amount of such payment is deemed to have
been paid or credited or (iii) that would not have been imposed but for the
presentation (where presentation is required) of this Note for payment more than
180 days after the date such payment became due and payable or was duly provided
for, whichever occurs later. The Company or the Guarantors, as applicable, will
also (i) make such withholding or deduction and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law, and, in any such case, the Company will furnish to each Holder on whose
behalf an amount was so remitted, within 30 calendar days after the date the
payment of any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes is
due pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company or the Guarantors, as applicable. The Company will upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Notes, and (ii) any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes so levied or imposed with respect to
any reimbursement under the foregoing clause (i) so that the net amount received
by such Holder (net of payments made under or with respect to such Notes or the
Guarantees) after such reimbursement will not be less than the net amount the
Holder hereof would have received if Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes on such reimbursement had not been imposed.
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In addition, the Company or the Guarantors will pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties, in respect of the creation, issue and offering of the
Notes payable in Canada, the United States, the Russian Federation or Cyprus or
any political subdivision thereof or taxing authority of or in the foregoing.
The Company and the Guarantors will also pay and indemnify the Holders from and
against all court fees and taxes or other taxes and duties, including interest
and penalties, paid by any of them in any jurisdiction in connection with any
action permitted to be taken by the Trustees or the Holders to create the Liens
on the Collateral and the Convertible Note Collateral and to enforce the
obligations of the Company or the Guarantors under the Notes, the Indenture, the
Guarantees or the Collateral Documents or the Convertible Note Collateral
Documents.
4. Special Interest.
In the event of the failure of the Company to procure, on or
before July 12, 1996, a recognized financial institution with capital of not
less than $10,000,000 organized under the laws of the Republic of Ireland which
the Convertible Note Trustee may lawfully appoint as a Qualified Foreign
Collateral Agent (as defined in Section 7.3 of the Indenture) (the
"Procurement") with respect to Technocom Preferred Stock, any payments thereon
and any property substituted therefor (the "Subject Collateral") pursuant to an
agreement under which such Qualified Foreign Collateral Agent will agree not to
resign without the contemporaneous appointment of a successor Qualified Foreign
Collateral Agent (the "Prescribed Agreement"), then, commencing on July 12,
1996, the Company shall pay to each Holder of the Notes Special Interest in an
amount equal to 1% per annum on the principal amount at Stated Maturity of such
Holder's Notes, accruing for each day until the Procurement is made or Technocom
or a successor is reorganized under the laws of Cyprus and a successor Qualified
Foreign Collateral Agent has been appointed in respect of the Subject Collateral
(the "Reorganization") under a Prescribed Agreement. Such Special Interest shall
be payable in cash semi-annually in arrears at the times and in the manner
provided for in the Indenture, provided that for this purpose, Section 2.11 of
the Indenture shall be read to include as Interest Payment Dates, as applicable,
June 1 and December 1 of each year, commencing December 1, 1996. Such Special
Interest shall cease to accrue upon the Procurement or the Reorganization taking
place and all accrued and unpaid Special Interest shall be paid to each Holder
of the Notes on the next Interest Payment Date with respect thereto. Special
Interest, as defined in the Indenture, may include Special Interest arising as a
result of the occurrence of a "Registration Default" under the Registration
Agreement (as defined in the Indenture).
Except as expressly provided in this paragraph 4, Special
Interest shall be treated as interest and any date on which Special Interest is
due and payable shall be treated as an Interest Payment Date, for all purposes
under this Note and the Indenture.
5. Method of Payment.
The Company, through the Paying Agent, shall pay interest on
this Note to the registered Holder of this Note, as provided above. The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of all debts public and
private. Principal and interest will be payable at the office of the Paying
Agent but, at the option of the Company, interest may be paid by check mailed to
the registered Holders at their registered addresses.
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6. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar
under the Indenture. The Company may, upon written notice to the Trustee,
appoint and change any Paying Agent or Registrar. The Company or any of its
subsidiaries may act as Paying Agent or Registrar.
7. Optional Redemption.
Except as set forth in the following paragraph, the Notes may
not be redeemed prior to June 13, 2001. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 calendar days' nor more than 60 calendar days' notice, at the prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon (if any), Additional Amounts (if any) to the and Special
Interest (if any) to the applicable Redemption Date, if redeemed during the
period from June 13, 2001 through May 31, 2002 at a percentage of 108.000% and
thereafter during the twelve-month period beginning June 1 of the years
indicated below:
Year Percentage
---- ----------
2002 104.000%
2003 and thereafter 100.000%
The Notes may be redeemed, at the option of the Company, in
whole but not in part, upon not less than 30 or more than 60 days' notice to the
Holders in accordance with the terms of the Indenture, at a redemption price
equal to the Accreted Value thereof, plus accrued and unpaid interest, if any,
(including Additional Amounts, if any, and Special Interest, if any) to the
applicable Redemption Date (subject to the right of Holders of record on the
relevant Record Date to receive interest (including Additional Amounts and
Special Interest if any) due on the Interest Payment Date that is on or prior to
the Redemption Date) if, as a result of any change in or amendment to the laws
or the regulations or rulings promulgated thereunder of Canada, Cyprus, the
Russian Federation or any other jurisdiction with which the Company or any
Guarantor has any connection (other than as a result of a merger or
consolidation of the Company with or into a newly formed corporation solely for
the purpose of moving the Company's domicile out of Canada) or any political
subdivision thereof or any authority thereof or having power to tax therein, or
any change in the application or official interpretation of such laws or
regulations, or any change in administrative policy or assessing practice of the
applicable taxing authority, which change or amendment becomes effective on or
after May 24, 1996, the Company or the Guarantors (if the Guarantees are called)
are or would be required on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to the Initial Notes, the Exchange Notes or the
Guarantees and the payment of such Additional Amounts cannot be avoided by the
use of any reasonable measures available to the Company or the Guarantors, as
the case may be. The Company will also pay to the Holders on the Redemption Date
any Additional Amounts payable in respect of the period ending on the Redemption
Date. Prior to the publication of any notice of redemption pursuant to this
provision, which in no event will be given earlier than 90 days prior to the
earliest date on which the Company or the Guarantors, as the case may be, would
be required to pay such Additional Amounts were a payment in respect of the
Notes then due, the Company shall deliver to the Trustee (i) an Officers'
Certificate stating that the obligation to pay such Additional Amounts cannot be
avoided by the Company or the Guarantors, as the case may be, taking reasonable
measures and (ii) an Opinion of Counsel, independent of the Company and the
Guarantors and approved by the Trustee, to the effect that the Company or the
Guarantors have or will become obligated to pay such Additional Amounts as a
result of such change or amendment. Such
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notice, once delivered by the Company to the Trustee, will be irrevocable. The
Trustee shall accept such Officers' Certificate and Opinion of Counsel as
sufficient evidence of the satisfaction of the condition precedent set forth in
clauses (i) and (ii) above, in which event it shall be conclusive and binding on
the Holders.
8. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days
before a Redemption Date, the Company will send a notice of redemption, first
class mail, postage prepaid, to Holders of Notes to be redeemed at the addresses
of such Holders as they appear in the Note Register.
If less than all of the Notes are to be redeemed at any time,
the Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest (including Additional Amounts, if any,
and Special Interest, if any) will be paid on such Interest Payment Date to the
Holder of the Note at the close of business on such Record Date. If money in an
amount sufficient to pay the Redemption Price of all Notes (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent on or
before the applicable Redemption Date and certain other conditions are
satisfied, interest (including Additional Amounts, if any, and Special Interest,
if any) on the Notes to be redeemed on the applicable Redemption Date will cease
to accrue.
The Notes are not subject to any sinking fund.
9. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to purchase such Holder's
Notes, in whole or in part in a principal amount that is an integral multiple of
$1,000, pursuant to a Change of Control Offer, at a purchase price in cash equal
to 101% of the Accreted Value thereof on any Change of Control Payment Date,
plus accrued and unpaid interest, if any, Additional Amounts, if any, and
Special Interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the
Company shall send, or cause to be sent, by first-class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The Holder
of this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest, Additional Amounts, if any, and Special Interest, if any, from
and after the Change of Control Payment Date.
X-0
000
00. Xxxxxxxxxx at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the next following
paragraph, if at any time the Company or any Restricted Subsidiary engages in
any Asset Sale, as a result of which the aggregate amount of Excess Proceeds
exceeds $5,000,000, the Company shall, within 30 calendar days of the date the
amount of Excess Proceeds exceeds $5,000,000, use the then-existing Excess
Proceeds to make an offer to purchase from all Holders, on a pro rata basis,
Notes in an aggregate principal amount equal to the maximum principal amount
that may be purchased out of the then-existing Excess Proceeds, at a purchase
price in cash equal to 100% of the Accreted Value thereof on any Asset Sale
Payment Date, plus accrued and unpaid interest thereon, if any, Additional
Amounts, if any, and Special Interest, if any, to the Asset Sale Payment Date,
provided that Excess Proceeds attributable to an Asset Sale of Convertible Note
Collateral (as defined in the Indenture) must be used first to make an "Asset
Sale Offer" pursuant to the Convertible Note Indenture (as defined in the
Indenture). Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Purchase Price for accepted Notes), any surplus Excess Proceeds that
were the subject of such offer shall cease to be Excess Proceeds, and the
Company may then use such amounts for general corporate purposes, including the
making of an "Asset Sale Offer" pursuant to the Convertible Note Indenture.
Notwithstanding the paragraph above, the Company will not be
obligated to repurchase Notes in connection with an Asset Sale Offer
representing in aggregate more than 25% of the original aggregate principal
amount of the Notes (which original aggregate principal amount shall for these
purposes be the aggregate amount originally allocated to the Notes, net of any
amounts allocated to the Warrants, without any adjustment whatsoever) prior to
the date following the Five Year Date, and the original aggregate principal
amount of Notes repurchased in connection with any Asset Sale Offer having a
purchase date prior to the date following the Five Year Date shall represent no
more than 25% of the original aggregate principal amount of the Notes less the
original aggregate principal amount of Notes purchased pursuant to Asset Sale
Offers relating to all prior Asset Sales. To the extent that the amount of
Excess Proceeds exceeds the amount of Notes purchased because of the limitation
imposed by the immediately preceding sentence (the amount of such excess being
the "Aggregate Unused Proceeds"), such Aggregate Unused Proceeds shall
constitute Excess Proceeds for purposes of the first Asset Sale Offer that is
made after the Five Year Date and, in the event the amount of the Aggregate
Unused Proceeds exceeds $5,000,000, promptly after the Five Year Date, the
Company shall commence an Asset Sale Offer on a pro rata basis for an aggregate
principal amount of Notes equal to the Aggregate Unused Proceeds (and any other
Excess Proceeds that arise between the Five Year Date and such Asset Sale Offer)
at a purchase price equal to 100% of the Accreted Value of the Notes, plus
accrued interest, if any, Special Interest, if any, and Additional Amounts, if
any, to the date of purchase.
Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $5,000,000, the Company shall send, or cause to be sent, by
first-class mail, postage prepaid, a notice regarding the Asset Sale Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Require Purchase" appearing below and tendering
this Note pursuant to the Asset Sale Offer. Unless the Company defaults in the
payment of the Asset Sale Purchase Price with respect thereto, all Notes or
portions thereof selected for payment pursuant to the Asset Sale Offer will
cease to accrue interest, Additional Amounts, if any, and Special Interest, if
any, from and after the Asset Sale Payment Date.
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11. Transfer and Exchange.
A Holder may transfer a Note only upon the surrender of such
Note for registration of transfer. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer in the Security Register by the
Registrar. When Notes are presented to the Registrar with a request to register
the transfer of, or to exchange, such Notes, the Registrar shall register the
transfer or make such exchange as requested if its requirements for such
transactions and any applicable requirements hereunder are satisfied.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Notes (other than in respect of
a Registered Exchange Offer, except as provided in the Registration Agreement).
Following the suspension or termination of a Shelf
Registration Statement, the Holder of this Note (or holders of interests herein)
and prospective purchasers designated by such Holder shall have the right to
obtain from the Company upon request by such Holder (or holders of interests
herein) or prospective purchasers, during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, or exempt from reporting
pursuant to 12g3-2(b) under the Exchange Act, the information required by
paragraph (d)(4)(i) of Rule 144 in connection with any transfer or proposed
transfer of such Note or interest.
12. Denominations.
The Notes are issuable only in registered form without coupons
in denominations of $1,000 of principal amount at Stated Maturity and integral
multiples thereof.
13. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
14. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some or all of its and the Guarantors' obligations under the Notes,
the Guarantees, the Indenture and the Collateral Documents and the Convertible
Note Collateral Documents if the Company irrevocably deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Notes to redemption or maturity, as the case may be.
X-00
000
00. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, the Notes, the Collateral Documents and the Convertible Note
Collateral Documents may be amended with the written consent of the Holders of
at least a majority in principal amount at Stated Maturity of the outstanding
Notes and (ii) any past Default and its consequences may be waived with the
written consent of the Holders of at least a majority in principal amount at
Stated Maturity of the outstanding Notes. Without the consent of any Holder of
Notes, the Company, the Guarantors and the Trustee may amend the Indenture, the
Notes, the Collateral Documents and the Convertible Note Collateral Documents
(i) to evidence the succession of another Person to the Company or the
Guarantors, as applicable, and the assumption by such successor of the covenants
of the Company or the Guarantors under the Notes, the Indenture, the Collateral
Documents and the Convertible Note Collateral Documents; (ii) to add additional
covenants or to surrender rights and powers conferred on the Company or the
Guarantors by the Indenture, the Collateral Documents and the Convertible Note
Collateral Documents; (iii) to add any additional Events of Default; (iv) to
provide for uncertificated Notes in addition to or in place of Certificated
Notes; (v) to evidence and provide for the acceptance of appointment under the
Indenture of a successor Trustee; (vi) to add additional security for the Notes
and/or the Guarantees; (vii) to cure any ambiguity in the Indenture, the
Collateral Documents or the Convertible Note Collateral Documents to correct or
supplement any provision in the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, the Collateral Documents or the
Convertible Note Collateral Documents, provided that such actions shall not
adversely affect the interests of the Holders in any material respect; or (viii)
to comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
16. Defaults and Remedies.
Events of Default under the Indenture include in summary form:
default in payment of interest, including Additional Amounts, if any, or Special
Interest, if any, on the Notes for 30 days; default in payment of principal on
the Notes; failure to comply with certain of the covenants in the Indenture,
including the Change of Control covenant the Asset Sale covenant or the
Restrictive Payments covenant, failure by the Company to comply with certain of
its other agreements in the Indenture or the Notes or any Collateral Document or
any Convertible Note Collateral Document or a breach of a representation or
warranty in any Collateral Document or any Convertible Note Collateral Document
and the continuance of such default or breach for 45 days after notice;
expropriation of assets of the Company or any of its Restricted Subsidiaries
having a book value, less the book value of the expropriation proceeds,
constituting more than 15% of the book value, on a consolidated basis, of the
Company's assets minus current assets; defaults in the payment of certain other
Indebtedness, or defaults, other than such payment defaults, which result in the
acceleration prior to express maturity of certain other Indebtedness or which
consist of the failure to pay at maturity; certain final judgments which remain
undischarged, unwaived, unappealed, unbonded, unstayed or unsatisfied; certain
events of bankruptcy or insolvency; failure of a Guarantee, a Collateral
Document or a Convertible Note Collateral Document to be in effect, the denial
of obligations under a Guarantee, a Collateral Document, a Convertible Note
Collateral Document or the Notes by the Company or the Guarantors party thereto
or the failure of the Notes and the Guarantees to be secured by the theretofore
perfected Liens and security interests in the Collateral or the Convertible Note
Collateral (except as permitted by the Indenture, the Collateral Documents or
the Convertible Note Collateral Documents), which in each circumstance continues
for 30 days after
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notice. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes, subject to certain
limitations, may declare all the Notes to be immediately due and payable.
Certain events of bankruptcy or insolvency are Events of Default and shall
result in the Notes being immediately due and payable upon the occurrence of
such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture, the
Guarantees, the Notes, the Collateral Documents or the Convertible Note
Collateral Documents except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture, the Notes, the Guarantees, the Collateral Documents or
the Convertible Note Collateral Documents unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in
principal amount at Stated Maturity of the Notes may direct the Trustee in its
exercise of any trust or power under the Indenture, the Collateral Documents and
the Convertible Note Collateral Documents. The Holders of a majority in
principal amount at Stated Maturity of the outstanding Notes, by written notice
to the Company and the Trustee, may rescind any declaration of acceleration and
its consequences if the rescission would not conflict with any judgment or
decree, and if all Events of Default have been cured or waived except nonpayment
of principal and interest (including Additional Amounts, if any, and Special
Interest, if any) that has become due solely because of the acceleration.
17. Collateral Documents.
As provided in the Indenture, the Collateral Documents and the
Convertible Note Collateral Documents and subject to certain limitations set
forth therein, the obligations of the Company and the Guarantors under the
Indenture, the Collateral Documents and the Convertible Note Collateral
Documents are secured by the Collateral and the Convertible Note Collateral as
provided in the Collateral Documents and the Convertible Note Collateral
Documents. Each Holder, by accepting a Note, agrees to be bound to all terms and
provisions of the Collateral Documents and the Convertible Note Collateral
Documents, as the same may be amended from time to time. The Liens created under
the Collateral Documents and the Convertible Note Collateral Documents shall be
released upon the terms and subject to the conditions set forth in the Indenture
and the Collateral Documents and the Convertible Note Collateral Documents.
18. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture
Act, the Trustee or any Paying Agent or Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company, the Guarantors, its Restricted Subsidiaries or its Affiliates
with the same rights it would have if it were not Trustee, Paying Agent or
Registrar, as the case may be, under the Indenture.
19. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, the Guarantees or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of his or her status as a
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor. By accepting a Note, each Holder waives
D-12
218
and releases all such liability (but only such liability) as part of the
consideration for issuance of such Note to such Holder.
20. Governing Law.
THE INDENTURE, THE GUARANTEES AND THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
21. Abbreviations.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
23. Subordination.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Note is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided, and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
The Company will furnish to any Holder of Notes upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Note. Requests may be made to:
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
SUBSIDIARY GUARANTEE
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Subject to the limitations set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in this Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have, jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest (including Additional
Amounts, if any, and Special Interest, if any) on the Notes, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest (including Additional Amounts,
if any, and Special Interest, if any) on the Notes, if any, to the extent
lawful, (c) the due and punctual performance of all other obligations of the
Company and the Guarantors to the Holders under the Indenture, the Notes, the
Collateral Documents and the Convertible Note Collateral Documents and (d) 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 or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise. Capitalized terms used herein shall
have the same meanings assigned to them in the Indenture unless otherwise
indicated.
Payment on each Note is guaranteed on a senior basis, jointly
and severally, by the Guarantors pursuant to Article X of the Indenture and
reference is made to such Indenture for the precise terms of the Guarantees.
The obligations of each Guarantor are limited to the lesser of
(a) an amount equal to such Guarantor's Adjusted Net Assets as of the date of
the Guarantee and (b) the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
(including, if applicable, its obligations under the Convertible Notes) and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law or not
otherwise being void, voidable or unenforceable under any similar other
bankruptcy, receivership, insolvency, liquidation or other similar legislation
or legal principles under applicable foreign law. Each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a contribution
from each other Guarantor in a pro rata amount based on the Adjusted Net Assets
of each Guarantor.
Certain of the Guarantors may be released from their
Guarantees upon the terms and subject to the conditions provided in the
Indenture.
The Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Trustee and the
holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
NWE CAPITAL (CYPRUS) LIMITED
By:______________________________________
X-00
000
XXX XXXXX LEASING LIMITED
By:______________________________________
PLD CAPITAL LIMITED
By:______________________________________
BALTIC COMMUNICATIONS LIMITED
By:______________________________________
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
By:______________________________________
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221
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
____________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ___________________ Attorney to transfer this
Note on the Security Register, with full power of substitution.
Dated:__________________
______________________________ ______________________________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
// In connection with the Change of Control Offer made pursuant to Section
4.7 of the Indenture, the undersigned hereby elects to have
// the entire principal amount
// $______________ ($1,000 in principal amount at Stated Maturity
or an integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or _______ an amount in
cash equal to 101% of the Accreted Value of this Note plus
accrued and unpaid interest thereon, if any, Additional
Amounts, if any, and Special Interest, if any, to the Change
of Control Payment Date.
// In connection with the Asset Sale Offer made pursuant to Section 4.8 of
the Indenture, the undersigned hereby elects to have
// the entire principal amount
// $______________ ($1,000 in principal amount at Stated Maturity
or an integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or _______ an amount in
cash equal to 100% of the Accreted Value of this Note as the
case may be, plus accrued and unpaid interest thereon, if any,
Additional Amounts, if any, and Special Interest, if any, to
the Asset Sale Payment Date.
Dated:______________
______________________________ ______________________________________________
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing must correspond to the Name as written
upon the face of this Note in every particular, without alteration or any change
whatsoever.
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223
EXHIBIT K
224
AGENCY AGREEMENT
THIS AGENCY AGREEMENT (this "Agency Agreement") is made and entered
into as of June 12, 1996 by and among THE BANK OF NEW YORK, a New York banking
corporation, in its capacity as trustee under the Senior Note Indenture (as
defined herein) and as trustee under the Convertible Note Indenture (as defined
herein) (the "Trustee"), and AOZT INTERNATIONALE NEDERLANDEN BANK EURASIA, as
Russian collateral agent (the "Collateral Agent") and, but only for the purposes
of Sections 4 and 5, PETERSBURG LONG DISTANCE INC. (the "Company").
RECITALS
A. The Company, as issuer, the Trustee, and NWE Capital (Cyprus)
Limited, a Cypriot corporation ("NWE Cyprus"), PLD Asset Leasing Limited, a
Cypriot corporation ("PLD Leasing"), PLD Capital Limited, a Cypriot corporation
("PLD Capital", together with PLD Leasing, the "Leasing Companies"), Wireless
Technology Corporations Limited, a British Virgin Islands company ("WTC"), and
Baltic Communications Limited, a Russian joint stock company of the closed type
("BCL"), as Senior Note Guarantors, have entered into an indenture dated as of
May 31, 1996 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Senior Note Indenture") pursuant to which the
Company is issuing $123,000,000 in aggregate principal amount at maturity of its
14% Senior Discount Notes due 2004 (the "Senior Notes"); and
B. The Company, as issuer, the Trustee, and NWE Cyprus, the Leasing
Companies, WTC and BCL, as Convertible Note Guarantors, have entered into an
indenture dated as of May 31, 1996 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Convertible Note
Indenture") pursuant to which the Company is issuing $26,500,000 in aggregate
principal amount of its 9% Convertible Subordinated Notes due 2006 (the
"Convertible Notes"); and
C. To secure its obligations under the Senior Note Indenture, the
Senior Notes, the Convertible Note Indenture and the Convertible Notes, the
Company has agreed, among other things, to execute and deliver the Pledge
Agreement (as defined below) in order to implement and more fully secure the
payment and performance by the Company of the Obligations (as defined in the
Pledge Agreement); and
D. The Company has selected and desires the Trustee to appoint the
Collateral Agent, and the Collateral Agent desires to act, as the pledgee under
the agreement attached hereto as Exhibit A (the "Pledge Agreement") and, subject
to the agreement of the Collateral Agent at such time, such other agreements as
may be entered into from time to time with respect to collateral located in the
Russian Federation (collectively, the "Foreign Collateral Documents").
225
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Senior Note
Indenture.
SECTION 2. APPOINTMENT OF COLLATERAL AGENT; SUCCESSOR COLLATERAL AGENT.
(a) The Trustee hereby appoints the Collateral Agent, and the
Collateral Agent accepts its appointment, in accordance with the terms of this
Agency Agreement, to act as collateral agent for the Trustee (acting in its
capacity as trustee under the Senior Note Indenture and the Convertible Note
Indenture) in respect of the Foreign Collateral Documents. The Collateral Agent
shall be permitted to exercise such rights, powers and discretions as are
reasonably necessary or incidental to its obligations as Collateral Agent under
this Agency Agreement and the Foreign Collateral Documents.
(b) The Collateral Agent may resign at any time by giving written
notice thereof to the Trustee and may be removed at any time with or without
cause upon the Trustee giving 30 days prior written notice. Prior to the
effectiveness of any such resignation or removal, the Trustee shall have the
right to appoint a successor Collateral Agent which shall be a commercial bank
organized or chartered under the laws of the Russian Federation having combined
capital and surplus of at least $50,000,000. If no successor Collateral Agent
shall have been so appointed by the Trustee, and shall have accepted such
appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation, then the retiring Collateral Agent shall, prior to the
effectiveness of its resignation, on behalf of the Senior Note Trustee, the
Holders of the Senior Notes, the Convertible Note Trustee and the Holders of the
Convertible Notes, appoint a successor Collateral Agent, which shall be a
commercial bank organized under the laws of the Russian Federation having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall be discharged from its duties and
obligations under this Agency Agreement. After any retiring Collateral Agent's
resignation or removal hereunder as Collateral Agent, the provisions of this
Agency Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Collateral Agent under this Agency Agreement and
the other relevant documents (including, for the avoidance of doubt, the Pledge
Agreement). Any corporation into which the Collateral Agent may be merged, or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Collateral Agent shall be a party, shall be the
Collateral Agent under this Agency Agreement without the execution or filing of
any paper or any further act on the part of the parties hereto.
2
226
SECTION 3. RESPONSIBILITIES OF COLLATERAL AGENT. The obligations of the
Collateral Agent under this Agency Agreement shall be to:
(a) execute the Pledge Agreement as Russian collateral agent
for the Trustee;
(b) inspect upon request of the Trustee extracts from the
Register of Shareholders and the Pledge Book of BCL to ascertain to its
satisfaction that the Pledge has been properly entered in the Register of
Shareholders and the Pledge Book of BCL;
(c) receive and maintain in safe-keeping copies of extracts
from the Register of Shareholders of BCL provided in accordance with the Pledge
Agreement and provide the Trustee with copies of such extracts;
(d) upon the occurrence of an Event of Default, take such
action as may be requested by the Trustee, provided such action does not
contradict Applicable Legislation (as defined herein);
(e) remit any proceeds recovered from enforcement of the
Foreign Collateral Documents;
(f) subject to the provision of Section 4(c) of this Agency
Agreement, receive and maintain in safe-keeping any share certificates of BCL
provided pursuant to the Pledge Agreement; and
(g) take such other actions as may be mutually agreed between
the Trustee and the Collateral Agent.
For the avoidance of doubt, the Collateral Agent shall be under no
obligation to take any action under the Foreign Collateral Documents save and to
the extent that it has received directions (together with any necessary
information in connection therewith) from the Trustee.
The Collateral Agent shall be entitled to rely upon the instructions of
the Trustee and shall be entitled to assume that such instructions have been
issued in compliance with the terms of the Senior Note Indenture, the
Convertible Note Indenture and other agreements relating to the issue of the
Senior Notes and the Convertible Notes.
The Collateral Agent shall not be required to investigate and shall
have no liability with respect to the form, validity or enforceability of any
Foreign Collateral Documents unless it expressly undertakes such role in
writing.
SECTION 4. FEES.
The Company shall pay the Collateral Agent the following fees:
3
227
(a) an agency fee in the amount of US$25,000 payable upon
execution of this Agency Agreement;
(b) maintenance fees in the amount of US$30,000 payable
quarterly in advance. The maintenance fee may be reviewed annually by the
Collateral Agent in line with its then current fee schedule for the provision of
services equivalent to those provided under this Agency Agreement.
(c) custody fees in respect of safe-keeping of paper form
share certificates and related activities payable quarterly in advance, should
the Collateral Agent be required to keep custody of share certificates provided
pursuant to the Pledge Agreement. The custody fee shall be determined, and may
be reviewed annually by the Collateral Agent in line with its then current fee
schedule for depository and custody services;
(d) transactional fees in respect of payment of dividends or
other distributions received on any Collateral; and
(e) such other fees as may be mutually agreed between the
Collateral Agent and the Company with respect to actions relating to this Agency
Agreement and the Foreign Collateral Documents.
SECTION 5. INDEMNIFICATION; WAIVER OF DAMAGES.
(a) The Company shall be liable for and shall reimburse and
indemnify the Collateral Agent and hold the Collateral Agent harmless from and
against any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively, "Losses")
arising from or in connection with or related to this Agreement or being
Collateral Agent hereunder (including but not limited to Losses incurred by the
Collateral Agent in connection with its successful defense, in whole or in part,
of any claim of negligence or willful misconduct on its part), provided,
however, that nothing contained herein shall require the Collateral Agent to be
indemnified for Losses caused by its gross negligence or willful misconduct.
(b) The Collateral Agent shall be under no obligation to act
in pursuance of the directions of the Trustee unless and until the Collateral
Agent shall have received, in a form and substance satisfactory to it, security
(including indemnities) from the Company or any other person or persons in
respect of any Losses which may be incurred by the Collateral Agent in respect
of such action. For the avoidance of doubt, the Collateral Agent shall have no
obligation to act in accordance with the direction of any person save, subject
to terms of this Agency Agreement, the Trustee. The Collateral Agent shall owe
no duty of care to any person in respect of the taking or refraining from taking
any action relating to the Foreign Collateral Documents, save to the extent as
expressly undertaken in this Agency Agreement.
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(c) THE TRUSTEE AND THE COMPANY AGREE THAT THE COLLATERAL
AGENT SHALL HAVE NO LIABILITY TO THE TRUSTEE OR THE COMPANY (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE TRUSTEE OR THE COMPANY
IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGENCY AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE COLLATERAL AGENT THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON
THE PART OF THE COLLATERAL AGENT CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(d) WITHOUT PREJUDICE TO ANY SECURITY ARRANGEMENTS
CONTEMPLATED BY SECTION 5(b), THE COLLATERAL AGENT AND THE COMPANY AGREE THAT
THE TRUSTEE SHALL HAVE NO LIABILITY TO THE COLLATERAL AGENT OR THE COMPANY
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
COLLATERAL AGENT OR THE COMPANY IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED
BY THIS AGENCY AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A
COURT THAT IS BINDING ON THE TRUSTEE THAT SUCH LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS ON THE PART OF THE TRUSTEE CONSTITUTING NEGLIGENCE OR WILLFUL
MISCONDUCT. THE COLLATERAL AGENT AND THE COMPANY FURTHER AGREE THAT THE TRUSTEE
SHALL HAVE NO LIABILITY HEREUNDER EXCEPT IN ITS CAPACITY AS TRUSTEE AND,
FURTHER, THAT ANY LIABILITY SHALL BE LIMITED TO THE AMOUNTS RECOVERABLE FROM THE
TRUST ESTATE.
SECTION 6. ILLEGALITY.
Nothing in this Agreement or in the Foreign Collateral Documents shall
require or shall operate so as to require the Collateral Agent to take any
action that may be inconsistent with, or in violation of, Applicable
Legislation. For the purposes of this Agency Agreement, "Applicable Legislation"
shall mean any and all legislation of the Russian Federation, including, for the
avoidance of doubt, all laws, statutes, decrees, orders, instructions,
regulations, letters, directions of agencies of state power and any other
normative acts of the Russian Federation.
SECTION 7. MISCELLANEOUS PROVISIONS.
(a) Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in writing and
delivered in person or mailed by first class mail, postage prepaid, addressed as
follows, or by facsimile transmission:
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if to the Trustee,
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Fax: (000) 000-0000 or 5917
if to the Collateral Agent,
Leningradsky Prospect 80
125178 Moscow, Russia
Attention: Xxxxxxxxx Xxxxxxxxxx
Fax: (0000) 000-0000
and, if to the Company:
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Secretary
Fax: (000) 000-0000
(b) Severability. The provisions of this Agency Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agency Agreement in any jurisdiction.
(c) Termination. Termination of this Agency Agreement shall be
without prejudice to any liability with respect to fees or indemnities owed to
any party after (and arising either before or after) the date of such
termination.
(d) Headings. The headings in this Agency Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
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(e) Counterpart Originals. This Agency Agreement may be signed
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same agreement.
(f) Amendments. This Agency Agreement may be changed, waived,
discharged or terminated only by an instrument in writing signed by each of the
parties hereto.
(g) Final Expression. This Agency Agreement is intended by the
parties as a final expression of this Agency Agreement and is intended as a
complete and exclusive statement of the terms and conditions hereof.
(h) Governing Law. THIS AGENCY AGREEMENT SHALL BE GOVERNED BY
AND INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THE TRUSTEE AND THE COLLATERAL AGENT IN CONNECTION WITH THIS
AGENCY AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(i) Submission to Jurisdiction. Any suit, action or proceeding
against the Trustee, the Company or the Collateral Agent or their respective
Properties, assets or revenues with respect to this Agency Agreement (a "Related
Proceeding") may be brought in any federal or state court located in the State
of New York, County of New York. Each of the Company, the Trustee and the
Collateral Agent hereby irrevocably consents to the jurisdiction of each such
court for the purposes of any Related Proceeding, and irrevocably waives, to the
fullest extent it may effectively and lawfully do so, any objection to the
laying of venue of any Related Proceeding in any such court and the defense of
an inconvenient forum to the maintenance of any Related Proceeding in any such
court. Each of the Company, the Trustee and the Collateral Agent further submits
to the jurisdiction of the courts of its own corporate domicile in any Related
Proceeding.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agency
Agreement to be duly executed and delivered as of the day and year first above
written.
THE BANK OF NEW YORK, as Trustees
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
AOZT INTERNATIONALE NEDERLANDEN BANK
EURASIA, as Collateral Agent
By: /s/ XXXXXXXXX XXXXXXXXXX
-------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Risk Manager
By: /s/ XXXXXX X. XXXXXXX [SEAL]
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant General Manager
PETERSBURG LONG DISTANCE INC.
By: /s/ XXXXX XXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxx
Title: CFO
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EXHIBIT A
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 12, 1996, by and between
PETERSBURG LONG DISTANCE INC., a corporation organized under the laws of the
Province of Ontario, Canada (the "Pledgor"), and AOZT INTERNATIONALE NEDERLANDEN
BANK EURASIA, in its capacity as Russian collateral agent for the trustee under
the Senior Note Indenture (as hereinafter defined) and as Russian collateral
agent for such trustee and the collateral agent acting under the Senior Note
Security Agreement (as hereinafter defined), and as Russian collateral agent for
the trustee under the Convertible Note Indenture (as hereinafter defined) (the
"Pledgee").
RECITALS
A. The Pledgor is the owner of certain outstanding shares of
capital stock issued by Baltic Communications Limited, a closed joint stock
company organized under the laws of the Russian Federation ("BCL").
B. The Pledgor, The Bank of New York, as trustee (in such
capacity, the "Senior Note Trustee"), BCL, NWE Capital (Cyprus) Limited, a
Cypriot corporation, PLD Asset Leasing Limited, a Cypriot corporation, PLD
Capital Limited, a Cypriot corporation, and Wireless Technology Corporations
Limited, a British Virgin Islands corporation, as guarantors (collectively, the
"Guarantors"), have entered into an indenture dated as of May 31, 1996 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Senior Note Indenture") pursuant to which the Company is issuing
U.S.$123,000,000 in aggregate principal amount at maturity of its 14% Senior
Discount Notes due 2004 (the "Senior Notes").
C. To secure its obligations under the Senior Note Indenture and
the Senior Notes and the other Collateral Documents referred to in the Senior
Note Indenture (together with the Guarantors' obligations under the Senior Note
Indenture and such other Collateral Documents, the "Senior Note Obligations"),
the Pledgor entered into that certain Company Senior Note Security and Pledge
Agreement dated as of May 31, 1996 (the "Senior Note Security Agreement") with
the Senior Note Trustee, The Bank of New York as collateral agent (in such
capacity, the "Collateral Agent") and the Convertible Note Trustee (as
hereinafter defined), in which the Company has agreed (i) to grant to the
Collateral Agent for the benefit of the Senior Note Trustee and the equal and
ratable benefit of the holders of the Senior Notes liens and security interests
in and to certain collateral specified therein, including but not limited to the
Collateral (as defined herein) and (ii) to execute and deliver this Pledge
Agreement in order to implement and more fully secure the payment and
performance by the Company of the Senior Note Obligations.
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D. The Pledgor, The Bank of New York, as trustee (in such
capacity, the "Convertible Note Trustee") and the Guarantors, as guarantors,
have entered into an indenture dated as of May 31, 1996 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Convertible
Note Indenture") pursuant to which the Company is issuing U.S.$26,500,000 in
aggregate principal amount of its 9% Convertible Subordinated Notes due 2006
(the "Convertible Notes").
E. To secure its obligations under the Convertible Note
Indenture and the Convertible Notes and the other Collateral Documents referred
to in the Convertible Note Indenture (together with the Guarantors' obligations
under the Convertible Note Indenture and such other Collateral Obligations, the
"Convertible Note Obligations"), the Pledgor entered into the Senior Note
Security Agreement in which the Pledgor has agreed to grant to the Collateral
Agent for the benefit of the Convertible Note Trustee and the equal and ratable
benefit of the holders of the Convertible Notes liens and security interests in
and to certain collateral specified therein, including but not limited to the
Collateral (as defined herein) (but subordinated to the liens and security
interests of the Collateral Agent therein) and (ii) to execute and deliver this
Pledge Agreement in order to implement and more fully secure the payment and
performance by the Company of the Convertible Note Obligations.
F. The Senior Note Obligations and the Convertible Note
Obligations are hereinafter referred to as the "Obligations", the Senior Notes
and the Convertible Notes are hereinafter referred to as the "Notes", the Senior
Note Trustee and the Convertible Note Trustee are hereinafter referred to as the
"Trustees", the Senior Note Indenture and the Convertible Note Indenture are
hereinafter referred to as the "Indentures" and the Senior Note Collateral
Documents and the Convertible Note Collateral Documents are hereinafter referred
to as the "Collateral Documents".
NOW THEREFORE, in consideration of the premises and in order
to induce the holders of the notes to purchase the Notes, the Pledgor hereby
makes the following representations and warranties to the Pledgee and hereby
covenants and agrees with the Pledgee as follows:
1. DEFINITIONS. Unless otherwise defined herein, the following terms shall
have the meanings listed below:
"Applicable Legislation" shall mean applicable legislation of the
Russian Federation (including, for the avoidance of doubt, all laws,
statutes, decrees, orders, regulations, letters, directions of agencies
of state power and any other normative acts of the Russian Federation).
"Collateral" shall mean the Pledged Stock together with any
certificates representing the Pledged Stock and, except as otherwise
provided in Section 4 or elsewhere herein, all products and proceeds of
any of the Pledged Stock, including, without limitation, all dividends,
cash, options, warrants, rights, instruments, subscriptions and other
property
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or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Stock; and all additional shares of, and all securities convertible
into, and warrants, options or other rights to purchase, stock of, or
equity interest in, BCL from time to time acquired by the Pledgor in
any manner, and the certificates representing such additional shares
(any such additional shares shall constitute part of the Pledged Stock
under and as defined in this Pledge Agreement), and, except as
otherwise provided in Section 4 or elsewhere herein, all products and
proceeds of any of such additional Pledged Stock, including, without
limitation, all dividends, cash, options, warrants, rights,
instruments, subscriptions, and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional Pledged Stock including all
proceeds received or receivable by the Pledgor from any
recapitalization, reclassification, merger, dissolution, liquidation or
other termination of the existence of BCL.
"Pledged Stock" shall mean the shares of Stock listed in Annex A
attached hereto and all other Stock, whether now owned or hereafter
acquired, pledged or required to be pledged under this Agreement.
"Stock" shall mean stock of, or other equity interest in, BCL of any
class or classes, whether certificated or uncertificated.
2. SECURITY FOR OBLIGATIONS. This Agreement is for the benefit of the
Pledgee in its capacity as collateral agent for the Trustees to secure
the payment and performance by the Pledgor of the Obligations. As
specified by Article 339(1) of the Civil Code of the Russian
Federation, the parties hereto acknowledge and agree that the
Obligations secured hereunder are (1) the repayment by the Pledgor to
the Senior Note Trustee on or before May 31, 2004 of U.S.$123,000,000,
together with interest thereon and the other amounts due in respect
thereof as described in the Senior Note Indenture, and the repayment by
the Pledgor to the Convertible Note Trustee on or before May 31, 2006
of U.S.$26,500,000, together with interest thereon and the other
amounts due in respect thereof as described in the Convertible Note
Indenture, and (2) the performance by the Pledgor and the Guarantors of
various other obligations which relate to and serve to secure and
assure the payment of the sums described above.
The parties hereto hereby agree that, as of the date hereof, the value
of the Collateral is U.S.$5,000,000 being the total consideration paid
by the Pledgor for the acquisition of the Pledged Stock in March 1996.
The foregoing statement is being made solely in order to comply with
Article 339(1) of the Civil Code, and is not intended to, and shall not
in any way limit the amount of the Obligations intended to be secured
by, or which may be recovered in respect of any realization on the
Collateral.
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0. PLEDGE OF STOCK
3.01 Pledge. To secure the Obligations and for the purposes set
forth in Section 2, the Pledgor hereby pledges to the
Pledgee all of the Pledgor's right, title and interest in
and to the Pledged Stock (and in and to any certificates
or instruments evidencing the Pledged Stock), to be held
by the Pledgee upon the terms and conditions set forth in
this Agreement.
3.02 Registration of Pledge. Contemporaneously with the
execution and delivery of this Agreement, Pledgor shall
direct BCL to (i) register the pledge of the Collateral
pursuant to this Agreement on the BCL share register
promptly after execution of this Agreement, and (ii)
provide the Pledgee, within thirty (30) days of any
written request therefor, with an extract from the share
register of BCL, evidencing the Pledgor's continued
ownership of the Pledged Stock and the registration of the
pledge under this Agreement.
3.03 Certificates. Currently, there are no certificates for the
Pledged Stock. In the event that the Pledged Stock becomes
certificated, the Pledgor will deliver all certificates
representing the Pledged Stock to the Pledgee in pledge
hereunder. The Pledgee will continue to hold such
certificates unless and until requested by the Collateral
Agent to deliver the same, subject always to the
requirements of Applicable Legislation, to the Collection
Agent or its designee to be also held pursuant to the
Senior Note Security Agreement. If the Pledgor shall
acquire (by stock dividend or otherwise) any additional
Stock at any time or from time to time after the date
hereof, the Pledgor shall forthwith pledge and deposit
such Stock with the Pledgee as security and deliver to the
Pledgee any certificates therefor (if such Stock has been
certificated), and promptly thereafter deliver to the
Pledgee a certificate of the Pledgor describing such Stock
and certifying that the same has been duly pledged with
the Pledgee hereunder. The Pledgee will also continue to
hold any such Certificates unless and until directed
otherwise by the Collateral Agent, subject always to the
requirements of Applicable Legislation.
3.04 No Liability. The pledge granted hereby is granted as
security only and shall not subject the Pledgee, the
Trustees, the Collateral Agent or the holders of the Notes
to, or transfer or in any way affect or modify any
obligation or liability of the Pledgor with respect to any
of the Collateral or any transaction in connection
therewith.
3.05 Standard of Care. Beyond the exercise of reasonable care
in the custody of certificated shares in accordance with
Section 3.03, the Pledgee, the Trustees and the Collateral
Agent shall have no duty as to any Collateral in its
possession or control or in the possession or control of
any agent or nominee of any of them or any income or any
other rights pertaining thereto. The
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Pledgee, the Trustees and the Collateral Agent shall each be
deemed to have exercised reasonable care in the custody and
preservation of the certificated shares in its possession if
the certificated shares is accorded treatment substantially
equal to that which it accords its own property.
Notwithstanding the foregoing, nothing contained herein shall
be construed to require insurance of the Collateral by the
Pledgee, the Trustees or the Collateral Agent.
4. DIVIDENDS AND OTHER DISTRIBUTIONS. So long as no Event of Default (as
defined in the Indenture) shall have occurred and be continuing, and subject to
the other terms and conditions hereof, of the Senior Note Security Agreement and
of the Indentures, the Company shall be entitled to receive, and to utilize free
and clear of the pledge created by this Agreement, all dividends and
distributions paid from time to time in respect of the Pledged Stock other than
dividends and distributions in the form of additional shares of Stock to BCL.
Upon the occurrence and during the continuance of an Event of Default (as
defined in the Indentures), all dividends and distributions paid from time to
time in respect of the Pledged Stock shall constitute Collateral and shall be
paid to the Pledgee as collateral agent for the Senior Note Trustee, who shall
thereupon pay the amount to the Collateral Agent (or as the Trustees shall
otherwise jointly direct), and the Pledgor's right to receive such payments
pursuant to the first sentence of this Section 4 shall immediately cease and all
such payments shall be deposited in the Company Senior Note Escrow Account (as
defined in the Senior Note Indenture) or in the Company Convertible Note Escrow
Account (as defined in the Convertible Note Indenture).
5. RIGHTS OF PLEDGEE IN RESPECT OF COLLATERAL.
5.01 Exercise of Shareholder Rights to Pledge Stock. So long as no
Event of Default shall have occurred and be continuing, the
Company shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Stock or any
part thereof for any purpose not inconsistent with the terms
of this Agreement, the Indentures or any other Collateral
Documents (including the Senior Note Security Agreement);
provided that the Company shall not exercise or shall refrain
from exercising any such right if such action would be
inconsistent with or violate any provisions of this Agreement,
the Indenture or any other Collateral Documents (including the
Senior Note Security Agreement).
5.02 Levy of Execution Upon Collateral. Upon the occurrence of an
Event of Default and a judgment by a court of competent
jurisdiction (or other procedures stipulated by Applicable
Legislation), the Pledgee shall be entitled to satisfy all or
any portion of the Obligations by selling, assigning and
delivering, or granting options to purchase, all or any part
of the Collateral, or any interest therein, at any sale in
accordance with the requirements of Applicable Legislation.
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6. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee upon any
sale or other disposition of the Collateral, together with all other moneys
received by the Pledgee in respect of the Collateral, shall be paid to the
Collateral Agent (or as the Trustees shall otherwise jointly direct).
7. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral hereunder,
the receipt of the Pledgee or any duly authorized third party making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Pledgee or such
third party or be answerable in any way for the misapplication or
non-application thereof.
8. FURTHER ASSURANCES. The Pledgor shall cooperate with the Pledgee, the
Trustees and the Collateral Agent (and shall direct BCL so to cooperate) in any
and all registrations of such pledge as the Pledgee, the Trustees or the
Collateral Agent may deem necessary or desirable and which shall be possible
under existing and future registration systems or procedures under Applicable
Legislation to perfect and preserve the Pledgee's rights in the Collateral.
Additionally, the Pledgor agrees to do such further acts and to execute and
deliver to the Pledgee such additional powers of attorney, conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
9. CONCERNING THE PLEDGEE. The Pledgee shall hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement.
It is expressly understood and agreed that the obligations of the Pledgee as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement (and the agreement relating to its
appointment as collateral agent for the Trustees). In particular, but without
limiting the generality of the foregoing, the Pledgee shall not be charged with
knowledge of the terms of the Indentures, the Notes, the Senior Note Security
Agreement or any other Collateral Documents, nor shall the Pledgee have any
responsibility for monitoring or ensuring the Pledgor's compliance with such
terms, whether required or contemplated under this Agreement or otherwise.
10. TRANSFER BY THE PLEDGOR. Except as permitted by the Indentures, the
Pledgor shall not (and shall not enter into any agreement to) sell, lease,
exchange, assign or otherwise dispose of, grant any option with respect to, or
create, incur, assume or suffer to exist any encumbrance (except the encumbrance
created by this Agreement and the Senior Note Security Agreement and the other
Collateral Documents) on any portion of the Collateral. Notwithstanding the
foregoing, with the prior written consent of the Pledgee, the Pledgor may, or
may enter into an agreement to, sell all or any portion of the Collateral in a
transaction the proceeds of which will be promptly transferred to the Pledgee
and applied in accordance with the provisions of Article 6 hereof.
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00. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR. The
Pledgor represents and warrants that:
(a) it is legal, registered and beneficial owner of, and
has good and marketable title to the shares of Stock
described in Annex A, subject to no encumbrances or
restrictions on transfer (except such encumbrances
and restrictions on transfer created by this
Agreement, the Senior Note Security Agreement and the
other Collateral Documents);
(b) the shares of Stock described in Annex A hereto
constitute one hundred (100%) percent of the
authorized, issued and outstanding shares of Stock of
BCL;
(c) it has full power, authority and legal right to
pledge of all such Stock pursuant to this Agreement;
(d) all the shares of such Stock have been duly and
validly issued, and are fully paid and nonassessable;
(e) there are no restrictions on the pledge of the
Pledged Stock under the terms of the foundation
documents of BCL;
(f) this Agreement together with the Senior Note Security
Agreement create, as security for the Obligations, a
valid and enforceable first priority security
interest in and lien on all of the Collateral, in
favor of the Pledgee and for the benefit of the
Pledgee, provided, that the Pledgee's security
interest may be subordinated to the claims of higher
priority non-secured creditors in certain
circumstances under Applicable Legislation; and
(g) there are no certificates representing the Pledged
Stock.
The Pledgor covenants and agrees that:
(a) it shall defend the Pledgee's right, title and
security interest in and to the Collateral against
the claim and demands of all persons; and
(b) it shall have like title to and right to pledge any
other property at any time hereafter pledged to the
Pledgee as Collateral hereunder.
12. PLEDGOR'S OBLIGATIONS ABSOLUTE. The obligations of the Pledgor under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation:
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(a) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of this
Agreement or any exercise or non-exercise of any
right, power or privilege under or in respect of this
Agreement;
(b) any furnishing of any additional security to the
Pledgee or any acceptance thereof or any sale,
exchange, release, surrender or realization of or
upon any security to the Pledgee or any acceptance
thereof or upon any security by the Pledgee;
(c) any invalidity, irregularity or unenforceability of
all or part of the Obligations or of any security
therefor;
(d) any change in the time, manner or place of payment
of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or
any consent to any departure from the Indentures or
any other Collateral Documents;
(e) any exchange, surrender, release or non-perfection of
any liens on any other collateral, or any release or
amendment or waiver of or consent to departure from
any guarantee for all or any of the Obligations; or
(f) any other circumstance which might otherwise
constitute a defense available to, or a discharge of,
the Pledgor in respect of the Obligations or of this
Agreement.
13. ILLEGALITY. Nothing in this Agreement shall require or shall
operate so as to require the Pledgee to take any action that may be
inconsistent with, or in violation of, Applicable Legislation.
14. TERMINATION; RELEASE; REINSTATEMENT.
14.01 Subject to the provisions of Section 14.03 hereof,
this Agreement shall terminate upon payment in full
of (A) the Notes under the terms of the Indentures
and (B) all Obligations then due and owing under the
Indentures, the Notes and the other Collateral
Documents.
14.02 Upon any termination of this Agreement or release of
any Collateral as permitted by the Indenture, the
Pledgee, the Trustees and the Collateral Agent will,
at the expense of the Pledgor, execute and deliver to
the Pledgor such documents and take such other
actions as the Pledgor shall reasonably request to
evidence the termination of this Agreement or the
release of such Collateral, as the case may be. Any
such action taken by the Pledgee, the Trustees and
the Collateral Agents shall be without warranty by or
recourse to the Pledgee, except as to the absence of
any prior unauthorized assignments by the Pledgee
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of its interests in the Collateral, and shall be at
the expense of the Pledgor. The Pledgee may
conclusively rely on any certificate delivered to it
by the Pledgor stating that the execution of such
documents and release of the Collateral is in
accordance with and permitted by the terms of this
Agreement, the Senior Note Security Agreement and the
Indentures.
14.03 This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any
amount received by any of the Trustees, the
Collateral Agents or the holders of the Notes in
respect of the Obligations is rescinded or must
otherwise be restored or returned by such party upon
the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Pledgor or upon the
appointment of any receiver, intervenor, conservator,
trustee or similar official for the Pledgor or any
substantial part of its assets, or otherwise, all as
though such payments had not been made.
15. NOTICES. All notices, approvals, consents or other communications
required or desired to be given hereunder shall be in writing and
delivered in person or mailed by first class mail, postage prepaid,
addressed as follows, or by facsimile transmission:
if to the Pledgor,
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Chairman
Fax: (000) 000-0000
and if to the Pledgee,
AZOT Internationale Nederlanden Bank Eurasia
Leningradsky Prospect 80
125178 Moscow, Russia
Attention: Xxxxxxxxx Xxxxxxxxxx
Fax: (0000) 000-0000
16. EXPENSES
16.01 Expenses. The Pledgor agrees that it will promptly
upon demand pay to the Pledgee:
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(a) the amount of any taxes which the Pledgee, or any
of the Trustees or the Collateral Agent may have
been required to pay by reason of the pledge
created hereby, other than taxes based upon the
overall net income of the Pledgee, or such Trustee
or Collateral Agent or to free any of the
Collateral from any encumbrance thereon; and
(b) the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and
disbursements of legal counsel and of any agents or
other experts, which the Pledgee, the Trustees or
the Collateral Agent may incur in connection with
(i) the administration (out of the ordinary course)
of this Agreement, (ii) the collection, sale or
other disposition of any of the Collateral, or
(iii) the exercise by the Pledgee, the Trustees or
the Collateral Agent of any of the rights conferred
upon it hereunder.
16.02 Payment of Expenses. All sums so paid or incurred by the
Pledgee, the Trustees or the Collateral Agent for any of
the foregoing and any and all other sums for which the
Pledgee may become liable hereunder and all costs and
expenses (including reasonable attorney's fees, legal
expenses and court costs) reasonably incurred by the
Pledgee, the Trustees or the Collateral Agent in enforcing
or protecting the pledge created hereby or any of the
rights or remedies under this Agreement, together with
interest thereon until paid at such rate per annum, shall
be additional Obligations.
17. MISCELLANEOUS
17.01 Complete Agreement. Subject to the final sentence of
Section 9 hereof, this Agreement, the Senior Note Security
Agreement, the Indentures, the Notes, the agreement
relating to the appointment of the Pledgee as collateral
agent for the Trustees and the other Collateral Documents
contain the complete agreement of the parties with respect
to the matters covered hereby and supersede any previous
written or oral agreements between the parties.
17.02 Successors. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective
legal successors and assigns of the parties hereto.
17.03 Modification. This Agreement may be changed, waived,
discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.
17.04 Severability. Any provision of this Agreement which may be
determined by competent authority to be prohibited or
unenforceable shall be ineffective only to the extent of
such prohibition or unenforceability and shall not
invalidate the remaining provisions thereof.
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242
17.05 Governing Law. This Agreement shall be governed by the law of
the Russian Federation, without regard to the choice of law or
conflict of laws principles thereof.
17.06 Arbitration. Any dispute, controversy or claim arising out of
or relating to this contract, or the breach, termination or
invalidity thereof, shall be settled by arbitration in
accordance with the UNCITRAL Arbitration Rules as at present
in force. The place of arbitration shall be London, England.
The number of arbitrators shall be one and such arbitrator
shall be appointed by the President for the time being of the
Law Society of England and Wales. The language of arbitration
shall be English.
17.07 Headings. The headings of the several sections and subsections
in this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any
provision of this Agreement.
17.08 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered
shall constitute one and the same instrument.
17.9 Languages. This Agreement may be executed in both the English
and Russian languages and, in the event of any conflict
between the English and Russian language versions, the English
version shall prevail.
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* * * * *
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
PETERSBURG LONG DISTANCE INC.
as Pledgor:
By /s/ XXXXX XXXX
---------------------------------
Name: Xxxxx Xxxx
Title: Chairman
AOZT INTERNATIONALE NEDERLANDEN BANK EURASIA
as Pledgee:
By /s/ ALEXANDER CHISTAKOV
---------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx [SEAL]
Title:Risk Manager
By:/s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant General Manager
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ANNEX A
PLEDGED STOCK
72,540 Shares with a
Nominal Value of 100 rubles
X-00
000
Xxxxxxxxxx Xxxxxxxxx to
Indenture
14% Senior Discount Notes Due 2004
Dated as of May 31, 1996
Any item disclosed on one Schedule included herein shall also be deemed
to be disclosed on all other relevant Schedules on which such item should be
disclosed and qualifies all relevant representations set forth in the Indenture.
246
SCHEDULE 1.1(a)
EXISTING INDEBTEDNESS
1. All intercompany indebtedness existing on the Issue Date, including
intercompany indebtedness in existence as of March 31, 1996, as shown
on the consolidation working schedules used in production of the
consolidated accounts of the Company for the three months ended March
31, 1996. There has been no material increase in this amount since
March 31, 1996, except as described in this Schedule 1.1(a).
2. The Company has advanced to Technocom approximately $1,100,000 since
March 31, 1996.
3. Under the Technocom subscription agreement, the Company has an
obligation to purchase Technocom Preferred Stock in an amount of
$20,000,000, which amount will be paid in full with the net proceeds of
the Convertible Notes.
4. As of March 31, 1996, Technocom owed approximately $8,100,000 to
certain banks. There has been no material increase in this amount since
March 31, 1996.
5. In connection with the Company's acquisition of BCL, the Company has
agreed to an additional capital commitment to BCL of up to $1,500,000,
to the extent such obligation constitutes Indebtedness.
6. In connection with the Company's acquisition of BCL, the Company has an
obligation to pay approximately $2,000,000 representing deferred
consideration to the former shareholders of BCL.
7. Intercompany indebtedness of approximately $5,500,000 from BCL to NWE
Cyprus, acquired in connection with the Company's acquisition of BCL.
8. The Company owes an aggregate amount to Cable & Wireless, as of
December 31, 1995, of approximately $1.8 million under arrangements
whereby Cable & Wireless has provided services to, and met certain
liabilities of, the Company.
247
SCHEDULE 1.1(b)
SPECIAL PURPOSES PROVISIONS FOR LEASING COMPANIES
"1. Notwithstanding any other provision of this Memorandum of
Association, the Articles of Association or any provision of law that otherwise
so empowers the company, the company shall not, (i) without the prior written
consent of the trustee from time to time ("the Trustee") under any indenture or
similar agreement among Petersburg Long Distance Inc., an Ontario corporation
(together with its successors and assigns, "PLD"), the company, certain other
guarantors and a financial institution acting as a trustee (the "Indenture") or
any related guarantee, collateral documents or similar agreements, if any,
pursuant to which PLD shall issue notes, debentures or bonds and (ii) without
each rating agency then rating the notes, debentures or bonds affirming in
writing that the rating of such notes, debentures or bonds will not be adversely
effective by such action, do any of the following:
(a) engage in any business or activity other than in
connection with or relating to facilitating the issuance of such notes,
debentures or bonds of PLD and other than acquiring Telecommunications Assets
and leasing such Telecommunications Assets to Restricted Subsidiaries or
Qualified Joint Ventures in Russia or Kazakstan pursuant to Telecommunications
Asset Leases and making Qualified Investments in entities primarily engaged in,
or proposing to engage in, the Telecommunications Business in Russia and
Kazakstan;
(b) incur any Indebtedness, or assume or guaranty any
Indebtedness or any other entity, other than in connection with a guarantee (the
"Guarantee") of the notes issued by PLD pursuant to the Indenture and other than
indebtedness evidenced by Intercompany Notes owing to PLD or a special-purpose
corporation constituting a Restricted Subsidiary and a "Leasing Company" (as
such may be defined in the Indenture) which is also a guarantor of the notes
under such Indenture;
(c) commingle its assets with those of any other Person;
(d) dissolve or liquidate, in whole or in part;
(e) consolidate or merge with or into any other entity or
convey or transfer its properties and assets substantially as an entirety to any
other entity, unless:
(i) the entity (if other than the company) formed or
surviving the consolidation or merger or which acquires the
properties and assets of the company is organized and existing
under the laws of Cyprus, Canada or any province or any
subdivision thereof, the United States, any political
subdivision thereof, any state
248
thereof or the District of Columbia, United Kingdom or
Bermuda, expressly assumes the due and punctual payment of,
and all obligations of the company in connection with
indebtedness of the company, and has Articles of
incorporation, corporate charter or other organizational
documents containing provisions identical to the provisions of
this Paragraph 2 and Paragraph 3; and
(ii) immediately after giving effect to the
transaction, no default or event of default has occurred and
is continuing under any indebtedness of the company or any
agreements relating to such indebtedness; or
(f) without the affirmative vote of 100% of the members of the
Board of Directors of the company, institute proceedings to wind up, liquidate
or be adjudicated a bankrupt or insolvent, or Consent to the institution of
winding up, liquidation, bankruptcy or insolvency proceedings against it, or
file a petition seeking or consent to reorganization or relief under any
applicable law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the company or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts generally as they become due, or take any corporate action in
furtherance of any such action.
2. Notwithstanding any other provision of this Memorandum of
Association, the Articles of Association or any provision of law that otherwise
so empowers the company, the company shall, unless first (i) having received the
prior written consent of each Trustee under any Indenture or any related
guarantee, collateral documents or similar agreements, if any, pursuant to which
PLD shall issue notes, debentures or bonds and (ii) obtaining from each rating
agency then rating the notes, debentures or bonds affirmation in writing that
the rating of such notes, debentures or bonds will not be adversely effective by
such action, do each of the following:
(a) maintain its own bank accounts, payroll and separate books
of account; and
(b) identify itself in all dealings with the public under its
own name and as a separate and distinct entity and not identify itself as being
a division or part of any other Person.
3. At least one director of the company (an "Independent Director")
shall be none of (i) a Director, officer, employee or 10% beneficial owner of
the outstanding common stock, of any Affiliate or other person or entity owning
beneficially more than 10% of the outstanding shares of capital stock of the
company (an "Affiliated Entity") or (ii) a director, officer, employee or 5%
beneficial owner of the outstanding common stock, of any such Affiliated
Entity's subsidiaries or affiliates (other than the company).
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249
4. The company shall not, without the prior written consent of each
Trustee under any Indenture and of each nationally recognized rating agency
which has rated the Certificates issued pursuant to an Agreement, amend, alter,
change or repeal Paragraphs 1, 2, 4 or this Paragraph 3 of this [Memorandum of
Association].
4. For the purposes of this [Memorandum of Association], the following
terms are defined as follows:
"Affiliate means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling" "under common
control with", and "controlled by"), and as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise, provided,
further, that beneficial ownership of 10% or more of the Voting Stock of a
Person (on a fully diluted basis) shall be deemed to be control.
"Capital Lease Obligation" of any Person means the obligation
to pay rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" in any Person means any and all shares,
interests, participation or other equivalents in the equity interest (however
designated) in such Person and any rights (other than Indebtedness convertible
into an equity interest), warrants or options to acquire an equity interest in
such Person.
"Disqualified Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, or otherwise matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the date on which
the notes issued pursuant to the Indenture mature.
"Indebtedness" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with acquisition of
Property, assets or businesses, excluding trade accounts payable made in the,
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or
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250
similar facilities issued for the account of such Person, (iv) any obligation of
such Person issued or assumed as the deferred purchase price of Property of
services (but excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business, which in either case are not more than 60 days
overdue or which are being contested in good faith), (v) any Capital Lease
Obligation of such Person, (vi) the maximum fixed redemption or repurchase price
of Disqualified Stock of such Person and (vii) any obligation of the type
referred to in clauses (i) through (vi) of this definition of another Person and
all dividends and distributions of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise.
"Intercompany Notes" means a promissory note representing
Indebtedness of the company owing to PLD or a Restricted Subsidiary, which, if
representing a loan of net proceeds of the notes issued by PLD pursuant to the
Indenture to the company, shall have substantially the same Maturity as the
Notes and substantially same interest payments dates, the same interest rate and
substantially the same covenants as are contained in the Indenture and the
related collateral documents and shall be secured by the applicable
Telecommunications Asset Leases and by the applicable Qualified Investments.
"Investment" in any Person means any direct, indirect or
continent (i) advance or loan to, guarantee of any Indebtedness of, extension of
credit or capital contribution to such Person, (ii) the acquisition of any
shares of Capital Stock, bonds, notes, debentures or other securities of such
Person, or (iii) the acquisition, by purchase or otherwise, of all or
substantially all of the business, assets or stock or other evidence of
beneficial ownership of such Person; provided that Investments shall exclude
accounts receivable and other extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices.
"Joint Venture" means a Telecommunications Company of which
less than 50% of the Voting Stock is held by PLD; provided that the
Telecommunications Business of such Person is principally conducted in Russia
and Kazakstan.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Qualified Investment" means an Investment in a
Telecommunications Company primarily engaged or proposing to engage in the
Telecommunications Business in Russia or Kazakstan.
"Qualified Joint Venture" means a Joint Venture in which PLD
owns directly or indirectly Voting Stock thereof an the Issue Date, which Joint
Ventures are disclosed in a schedule to the indenture, and any further joint
Venture in which PLD owns 20% or more of the Voting Stock thereof.
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251
"Restricted Subsidiary" means any Subsidiary of PLD that has
not been classified as an "Unrestricted Subsidiary".
"Subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person, (ii) any general partnership, joint venture or
similar entity, more than 50% of the outstanding partnership or similar
interests of which are owned, directly or indirectly, by such Person, or by one
or more other Subsidiaries of such Person, or by such Person and one or more
other Subsidiaries of such Person, (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner and (iv) BECET
International, provided that PLD owns directly or indirectly 50% of the then
outstanding shares of Voting Stock of BECET International.
"Telecommunications Asset Lease" means a lease by the company
y of Telecommunications Assets to Restricted Subsidiaries and Qualified Joint
Venture in Russian and Kazakstan.
"Telecommunications Assets" means, with respect to any Person,
assets (including, without limitation, rights of way, trademarks and licenses to
use copyrighted material), that are utilized by such Person, directly or
indirectly, in a Telecommunications Business. For purposes of determining a
Telecommunications Company but not for purposes of determining whether property
or assets may be subject to a Telecommunications Asset Lease, Telecommunications
Assets shall also include stock, joint venture or partnership interests in
another Person, provided that substantially all of the assets of such other
Person consist of Telecommunications Assets, and provided, further, that if such
stock, joint venture or partnership interests are held by PLD or a restricted
Subsidiary, such other Person either is, or immediately following the relevant
transaction shall become, a Restricted Subsidiary of PLD pursuant to the
Indenture.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii) creating,
developing or marketing communications related network equipment, software and
other devices for use in (i) above or (iii) evaluating, participating or
pursuing any other activity or opportunity that is related to those specified in
(i) or (ii) above and includes, without limitation, any business which PLD and
its Restricted Subsidiaries are currently engaged on the Issue Date.
"Telecommunications Company" means any Person substantially
all of the assets of which consist of Telecommunications Assets.
"Unrestricted Subsidiary" means any Subsidiary of PLD that PLD
has classified as an "Unrestricted Subsidiary," and that has not been
reclassified as a Restricted Subsidiary, pursuant to the terms of the Indenture.
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252
"Voting Stock" means, with respect to any Person, securities
of any class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or it the times that such class of Capital Stock
has voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such
Person."
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253
SCHEDULE 1.1(c)
EXISTING AGREEMENTS TO MAKE INVESTMENTS
1. Under the Technocom subscription agreement, the Company has an
obligation to purchase Technocom Preferred Stock in an amount of
$20,000,000, which amount will be paid in full with the net proceeds of
the Convertible Notes.
2. In connection with the Company's acquisition of BCL, the Company has
agreed to an additional capital commitment to BCL of up to $1,500,000.
3. Technocom has expended approximately $2,400,000 in acquiring telephone
lines in Moscow which it will contribute to MTR-Sviaz.
254
SCHEDULE 1.1(d)
EXISTING LIENS
None.
255
SCHEDULE 1.1(e)
EXISTING QUALIFIED JOINT VENTURES
1. The Company owns a 10.4% equity interest (effectively a 13.8% voting
interest) in St. Petersburg Intercity & International Telephone
("SPMMTS").
2. Technocom holds a 41.83% interest in Teleport-TP, 38.5% directly and
3.33% indirectly through its 66.67% beneficial interest in Roscomm
Limited, a Guernsey company.
3. Technocom holds a 49% beneficial interest in MTR-Sviaz, a joint venture
between Technocom and AO Mosenergo, the Moscow city power utility.
Technocom holds 40% of this interest through its wholly-owned
subsidiary, Rosh Communications.
256
SCHEDULE 4.14
EXISTING DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES
(a) Unanimous shareholder approval of Technocom is required to effect major
dispositions of assets of Technocom. Ordinary share transfers are
subject to approval of 75% of the shareholders and a right of first
refusal of the non-transferring shareholders, except for transfers to a
"holding company" (as defined therein), a subsidiary of a shareholder
or any subsidiary of such holding company.
(b) Pursuant to the Subscription and Shareholder Agreement Relating to
Technocom Limited, the approval of Elite International Limited and
Plicom Limited is required before Technocom may make any distribution
or pay any dividend other than dividends payable to holders of
Technocom Preferred Stock.
(c) The BECET joint venture agreement provides that a joint venture partner
may not sell, assign, pledge or otherwise transfer its shares without
the written consent of the other partner prior to February 4, 1999.
After February 4, 1999, such interest may be transferred provided that
the transferee agrees to be bound by the terms of the joint venture
agreement creating BECET. The BECET charter provides for similar
restrictions, but requires the approval of 75% of the holders of shares
in the joint venture.
(d) The BECET charter provides that dividends may be established at a
meeting of the General Assembly (as defined therein). To the extent
that WTC owns a 50 percent equity interest in BECET, its ability to
cause BECET to declare dividends may be restricted.
(e) The BECET charter provides a right of first refusal for newly issued
shares.
(f) The PeterStar charter and foundation agreement provide a right of first
refusal on newly issued shares and a right of first refusal in the
event of a transfer of shares.
257
SCHEDULE 4.16
EXISTING CONTRACTS WITH AFFILIATES
1. Cable & Wireless has provided services to, and met certain liabilities
of, the Company. The aggregate amount owing to Cable & Wireless under
these arrangements, as of December 31, 1995, was approximately $1.8
million, which will be repaid under an agreed repayment schedule.
2. Cable & Wireless has guaranteed a revolving credit facility of the
Company with CIBC, a Canadian chartered bank. The facility totals $22.5
million and is being returned on the Issue Date. This guarantee expires
July 31, 1996.
3. Cable & Wireless provides a variety of insurance coverage for the
Company, its Subsidiaries and certain Affiliates of the Company and its
Subsidiaries.
4. The Company has granted certain demand and piggy-back registration
rights for the registration of the Company's Common Shares to Cable &
Wireless and Dominion Capital Inc.
5. Teleport-TP leases the AT&T Intelsat earth stations and 5ESS switching
equipment and certain ancillary equipment from Technocom pursuant to
ten-year leases.
6. Teleport-TP leases equipment related to the Eutelsat ground station,
purchased by Technocom from Xxxxxx Network Systems, Inc., from
Technocom pursuant to an eight year lease.
7. Teleport-TP has agreed to lease certain equipment, to be purchased by
Technocom from Scientific-Atlanta, from Technocom.
8. MTR-Sviaz has entered into lease agreements with Technocom to lease
switching equipment installed by MTR-Sviaz.
9. By agreement with SPMMTS, PeterStar acts as a transmission mechanism
for incoming and outgoing traffic between the SPMMTS long distance and
international gateway and the local public network of Petersburg
Telephone System ("PTS").
10. PeterStar has an agreement with SPMMTS under which PeterStar provides
operator assistance services and SPMMTS provides PeterStar with access
to SPMMTS "07" (long distance) operators.
258
11. PeterStar has several interconnect agreements with PTS governing the
interconnection between the PeterStar network and the PTS public
network.
12. BECET has several interconnect agreements with Kazaktelekom governing
the interconnection between the BECET network and the Kazaktelekom
public network.
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SCHEDULE A TO THE SENIOR NOTE INDENTURE
"Special Interest" shall include the amount of interest
payable pursuant to this paragraph in the event of the failure of the Company to
procure, on or before July 12, 1996, a recognized financial institution with
capital of not less than $10,000,000 organized under the laws of the Republic of
Ireland which the Convertible Note Trustee may lawfully appoint as a Qualified
Foreign Collateral Agent (as defined in Section 7.3 of this Indenture) (the
"Procurement") with respect to Technocom Preferred Stock, any payments thereon
and any property substituted therefor (the "Subject Collateral") pursuant to an
agreement under which such Qualified Foreign Collateral Agent will agree not to
resign without the contemporaneous appointment of a successor Qualified Foreign
Collateral Agent (the "Prescribed Agreement"). Commencing on July 12, 1996, if
the Company has failed to make the Procurement, the Company agrees to pay to
each Holder of the Notes additional interest in an amount equal to 1% per annum
on the principal amount at Stated Maturity of such Holder's Notes, accruing for
each day until the Procurement is made or Technocom or a successor is
reorganized under the laws of Cyprus and a successor Qualified Foreign
Collateral Agent has been appointed in respect of the Subject Collateral (the
"Reorganization") under a Prescribed Agreement. Such Special Interest on the
Notes shall be payable in cash semi-annually in arrears at the times and in the
manner provided for in the Indenture, provided that for this purpose, Section
2.11 of the Indenture shall be read to include as Interest Payment Dates, as
applicable, June 1 and December 1 of each year, commencing December 1, 1996.
Such Special Interest shall cease to accrue upon the Procurement or the
Reorganization taking place and all accrued and unpaid Special Interest shall be
paid to each Holder of the Notes on the next Interest Payment Date with respect
thereto. Any Special Interest payable pursuant to this Schedule shall be in
addition to any Special Interest that may be payable pursuant to paragraph (a)
of the definition of Special Interest contained in Section 1.1 of this
Indenture.
Schedule A - 1
