Exhibit 4.18
RHYTHMS NETCONNECTIONS INC., as Issuer
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee
INDENTURE
Dated as of February 23, 2000
$300,000,000 principal amount
14% Senior Notes due 2010, Series A
14% Senior Notes due 2010, Series B
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of February 23, 2000
Trust Indenture Indenture
Act Section Section
--------------- ---------
(S) 310 (a) (1) ............................................................................. 6.09
(a) (2) ............................................................................. 6.09
(a) (3) ............................................................................. Not Applicable
(a) (4) ............................................................................. 6.05
(b) ............................................................................. 6.05, 6.08
6.10
(S) 311 (a) ............................................................................. 6.07
(b) ............................................................................. 6.07
(c) ............................................................................. Not Applicable
(S) 312 (a) ............................................................................. 3.05, 7.01
(b) ............................................................................. 7.02
(c) ............................................................................. 7.02
(S) 313 (a) ............................................................................. 7.03
(b) ............................................................................. 7.03
(c) ............................................................................. 7.03
(d) ............................................................................. 7.03
(S) 314 (a) ............................................................................. 10.09
(b) ............................................................................. 10.24
(c) (1) ............................................................................. 1.04, 4.04(10), 10.21,
12.01
(c) (2) ............................................................................. 1.04, 4.04(10), 10.21,
12.01
(c) (3) ............................................................................. Not Applicable
(d) ............................................................................. 10.24
(e) ............................................................................. 1.04
(S) 315 (a) ............................................................................. 6.01(a)
(b) ............................................................................. 6.02
(c) ............................................................................. 6.01(b)
(d) ............................................................................. 6.01(c)
(e) ............................................................................. 5.14
(S) 316 (a) (last sentence) ................................................................. 3.14
(a) (1) (A) ......................................................................... 5.12
(a) (1) (B) ......................................................................... 5.13
(a) (2) ............................................................................. Not Applicable
(b) ............................................................................. 5.08
(c) ............................................................................. Not Applicable
(S) 317 (a) (1) ............................................................................. 5.03
(a) (2) ............................................................................. 5.04
(b) ............................................................................. 10.03
(S) 318 (a) ............................................................................. 1.08
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. 1
Section 1.02. Other Definitions. 18
Section 1.03. Rules of Construction. 18
Section 1.04. Form of Documents Delivered to Trustee. 19
Section 1.05. Acts of Holders. 19
Section 1.06. Notices, etc., to the Trustee and the Company. 20
Section 1.07. Notice to Holders; Waiver. 20
Section 1.08. Conflict with Trust Indenture Act. 20
Section 1.09. Effect of Headings and Table of Contents. 20
Section 1.10. Successors and Assigns. 21
Section 1.11. Separability Clause. 21
Section 1.12. Benefits of Indenture. 21
Section 1.13. Governing Law. 21
Section 1.14. No Recourse Against Others. 21
Section 1.15. Independence of Covenants. 21
Section 1.16. Exhibits and Schedules. 21
Section 1.17. Counterparts. 21
Section 1.18. Duplicate Originals. 22
ARTICLE TWO. FORM OF NOTES
Section 2.01. Form and Dating. 22
ARTICLE THREE. THE NOTES
Section 3.01. Title and Terms. 22
Section 3.02. Registrar and Paying Agent. 23
Section 3.03. Execution and Authentication. 23
Section 3.04. Temporary Notes. 24
Section 3.05. Transfer and Exchange. 25
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes. 25
Section 3.07. Payment of
Interest; Interest Rights Preserved. 26
Section 3.08. Persons Deemed Owners. 27
Section 3.09. Cancellation. 27
Section 3.10. Computation of Interest. 27
Section 3.11. Legal Holidays. 27
Section 3.12. CUSIP and CINS Numbers. 27
Section 3.13. Paying Agent To Hold Money in Trust. 28
Section 3.14. [Intentionally Omitted]. 28
Section 3.15. Deposits of Monies. 28
Section 3.16. Book-Entry Provisions for Global Notes. 28
Section 3.17. Special Transfer Provisions. 29
ARTICLE FOUR. DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance. 31
Section 4.02. Defeasance and Discharge. 32
Section 4.03. Covenant Defeasance. 32
Section 4.04. Conditions to Defeasance or Covenant Defeasance. 32
Section 4.05. Deposited Money and Government Securities To Be
Held in Trust; Other Miscellaneous Provisins 34
Section 4.06. Reinstatement. 34
ARTICLE FIVE. REMEDIES
Section 5.01. Events of Default. 35
Section 5.02. Acceleration of Maturity, Rescission and Annulment. 36
ii
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee. 36
Section 5.04. Trustee May File Proofs of Claims. 37
Section 5.05. Trustee May Enforce Claims Without Possession of Notes. 37
Section 5.06. Application of Money Collected. 38
Section 5.07. Limitation on Suits. 38
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest 39
Section 5.09. Restoration of Rights and Remedies. 39
Section 5.10. Rights and Remedies Cumulative. 39
Section 5.11. Delay or Omission Not Waiver. 39
Section 5.12. Control by Majority. 39
Section 5.13. Waiver of Past Defaults. 40
Section 5.14. Undertaking for Costs. 40
Section 5.15. Waiver of Stay, Extension or Usury Laws. 40
ARTICLE SIX. THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities. 40
Section 6.02. Notice of Defaults. 41
Section 6.03. Certain Rights of Trustee. 41
Section 6.04. Trustee Not Responsible for Recitals, Dispositions
of Notes or Application of Proceeds Thereof 42
Section 6.05. Trustee and Agents May Hold Notes; Collections; Etc. 42
Section 6.06. Money Held in Trust. 43
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim. 43
Section 6.08. Conflicting Interests. 43
Section 6.09. Corporate Trustee Required; Eligibility. 43
Section 6.10. Resignation
and Removal; Appointment of Successor Trustee. 43
Section 6.11. Acceptance of Appointment by Successor. 45
Section 6.12. Merger, Conversion, Amalgamation, Consolidation
or Succession to Business 45
ARTICLE SEVEN. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders 45
Section 7.02. Communications of Holders. 46
Section 7.03. Reports by Trustee. 46
ARTICLE EIGHT. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain Terms. 46
Section 8.02. Successor Substituted. 47
ARTICLE NINE. SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders 47
Section 9.02. Supplemental Indentures, Agreements and Waivers
with Consent of Holders 48
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers. 49
Section 9.04. Effect of Supplemental Indentures. 49
Section 9.05. Conformity with Trust Indenture Act. 49
Section 9.06. Reference in Notes to Supplemental Indentures. 49
Section 9.07. Record Date. 50
Section 9.08. Revocation and Effect of Consents. 50
ARTICLE TEN. COVENANTS
Section 10.01. Payment of Principal, Premium and Interest. 50
Section 10.02. Maintenance of Office or Agency. 50
Section 10.03. Money for Note Payments To Be Held in Trust. 51
Section 10.04. Corporate Existence. 52
Section 10.05. Payment of Taxes and Other Claims. 52
Section 10.06. Maintenance of Properties. 52
Section 10.07. Insurance. 52
Section 10.08. Books and Records. 53
iii
Section 10.09. Provision of Commission Reports. 53
Section 10.10. Change of Control. 53
Section 10.11. Limitation on Additional Indebtedness. 55
Section 10.12. Statement by Officers as to Default. 55
Section 10.13. Limitation on Restricted Payments. 56
Section 10.14. Limitation on Transactions with Affiliates. 58
Section 10.15. Disposition of Proceeds of Asset Sales 59
Section 10.16. Limitation on Liens Securing Certain Indebtedness. 61
Section 10.17. Limitation on Status as Investment Company. 62
Section 10.18. Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries 62
Section 10.19. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries 62
Section 10.20. Limitation on Designations of Unrestricted Subsidiaries 63
Section 10.21. Compliance Certificates and Opinions. 64
Section 10.22. Limitation on Issuances of Guarantees by Restricted
Subsidiaries 64
Section 10.23. Registration Rights 64
Section 10.24. Intentionally Omitted. 65
Section 10.25. Business Activities. 65
Section 10.26. Limitation on Sale/Leaseback Transactions. 65
ARTICLE ELEVEN. SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture. 66
Section 11.02. Application of Trust Money. 66
ARTICLE TWELVE. REDEMPTION
Section 12.01. Notices to the Trustee. 67
Section 12.02. Selection of Notes To Be Redeemed. 67
Section 12.03. Notice of Redemption. 67
Section 12.04. Effect of Notice of Redemption. 68
Section 12.05. Deposit of Redemption Price. 68
Section 12.06. Notes Redeemed or Purchased in Part. 68
EXHIBIT A-1 - Form of Rhythms NetConnections Inc. 14% Senior Notes
due 2010, Series A
EXHIBIT A-2 - Form of Rhythms NetConnections Inc. 14% Senior Notes
due 2010, Series B
EXHIBIT B - Form of Supplemental Indenture
EXHIBIT C - Form of Legend for Book-Entry Securities
EXHIBIT D - Form of Certificate To Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
EXHIBIT E - Form of Certificate To Be Delivered in Connection
with Transfers Pursuant to Regulation S
SCHEDULE A - Existing and Committed Indebtedness
iv
INDENTURE
INDENTURE (this "Indenture"), dated as of February 23, 2000, between RHYTHMS
NETCONNECTIONS INC., a corporation incorporated under the laws of the State of
Delaware, as issuer (the "Company"), and STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., a national banking association, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of (i) 14% Senior
Notes due 2010, Series A, and (ii) 14% Senior Notes due 2010, Series B, to be
issued in exchange for the 14% Senior Notes due 2010, Series A, pursuant to the
Registration Rights Agreement (as hereinafter defined) (collectively, the
"Notes"; such term to include the Initial Notes (as hereinafter defined) and the
Unrestricted Notes (as hereinafter defined), if any, including the Exchange
Notes (as hereinafter defined), if any, treated as a single class of securities
under this Indenture), of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary have been done to make the Notes, when executed by the
Company, and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of each of the Company and the Trustee in accordance with the terms
hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Notes, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"1998 Notes" means the Company's 13 1/2% Senior Discount Notes due 2008.
"1998 Warrants" means the warrants issued in connection with the Company's
1998 Notes.
"1998 Warrant Agreement" means the Warrant Agreement dated May 5, 1998,
between the Company and State Street Bank and Trust Company of California, N.A.
"1999 Notes" means the Company's 12 3/4% Senior Notes due 2009.
"Acquired Indebtedness" means Indebtedness of a Person (i) assumed in
connection with an Asset Acquisition from such Person or (ii) existing at the
time such Person is merged or consolidated with or into the Company or any
Restricted Subsidiary or becomes a Restricted Subsidiary, in each case not
incurred in connection with, or in anticipation of, such Asset Acquisition or
merger or consolidation or such Person becoming a Restricted Subsidiary;
provided that Indebtedness of such Person which is redeemed, defeased, retired
or otherwise repaid at the time of or immediately upon consummation of such
Asset Acquisition or the transactions by which such Person is merged or
consolidated with or into the Company or any Restricted Subsidiary or becomes a
Restricted Subsidiary shall not constitute Acquired Indebtedness.
1
"Affiliate" of any specified Person means (i) any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, the specified Person, (ii) any other Person that
owns, directly or indirectly, 10% or more of the specified Person's Voting Stock
or (iii) any executive officer or director of the specified Person; provided
that Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc. and its Affiliates shall not be deemed
to be Affiliates of the Company solely as a result of such entities holding the
1998 Notes, the 1998 Warrants or the Company's Common Stock (or any security
which is convertible into or exchangeable for any of the foregoing). For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary in any other Person, or any acquisition or purchase of
Capital Stock of any other Person by the Company or any Restricted Subsidiary,
in either case pursuant to which such Person shall (a) become a Restricted
Subsidiary or (b) shall be merged or consolidated with or into the Company or
any Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute substantially
all of an operating unit or line of business of such Person or which is
otherwise outside of the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance, transfer
or lease (that has the effect of a disposition and is not for security purposes)
or other disposition (that is not for security purposes) (including by way of a
Sale/Leaseback Transaction) to any Person other than the Company or a Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Capital Stock of any Restricted Subsidiary, (ii) any assets of the Company or
any Restricted Subsidiary which constitute substantially all of an operating
unit or line of business of the Company and the Restricted Subsidiaries or (iii)
any other property or asset of the Company or any Restricted Subsidiary outside
of the ordinary course of business. For the purposes of this definition, the
term "Asset Sale" shall not include (i) any disposition of properties and assets
of the Company that is governed under Article Eight hereof, (ii) sales of
property or equipment that have become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Company or
any Restricted Subsidiary, as the case may be, and (iii) for purposes of Section
10.15 hereof, (a) sales, conveyances, transfers, leases or other dispositions of
property or assets, whether in one transaction or a series of related
transactions occurring within one year, involving assets with a Fair Market
Value not in excess of $500,000 in any 12 month period and (b) any asset of the
Company or a Restricted Subsidiary that is the subject of a Sale/Leaseback
Transaction with a Person (other than the Company or an Affiliate of the
Company) made in accordance with Section 10.26 hereof and that was acquired by
the Company or such Restricted Subsidiary no more than 120 days prior to the
transfer to a third party in a Sale/Leaseback Transaction.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate implicit in the terms of the lease included in such Sale/Leaseback
Transaction) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years from such date to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness multiplied by
(b) the amount of each such principal payment by (ii) the sum of all such
principal payments; provided that, in the case of any Capitalized Lease
Obligation, all calculations hereunder shall give effect to any applicable
options to renew in favor of the Company or any Restricted Subsidiary.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code or any similar
federal, state or foreign law relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization or relief of debtors.
2
"Bankruptcy Order" means any binding court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
receivership, winding-up, dissolution or reorganization, or appointing a
Custodian of a debtor or of all or any substantial part of a debtor's property,
or providing for the staying, arrangement, adjustment or composition of
indebtedness or other relief of a debtor.
"Board" means the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Borrowing Base" means, as of any date, an amount equal to 85% of the
book value of the accounts, loans and other receivables (before giving effect to
any related allowances and reserves) as shown on the Company's most recent
consolidated balance sheet determined in accordance with GAAP not more than 90
days past due.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
New York, or the city in which the Corporate Trust Office of the Trustee is
located, are authorized or obligated by law, regulation or executive order to
close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of, such Person's capital stock, including
Preferred Stock, whether outstanding on the Issue Date or issued after the Issue
Date, and any and all rights (other than any evidence of Indebtedness), warrants
or options exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed, immovable or movable) that is
required to be classified and accounted for as a capitalized lease obligation
under GAAP, and for the purpose of this Indenture, the amount of such obligation
at any date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness which
matures 365 days or less from the date of purchase or acquisition issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States Government is pledged in support thereof or such Indebtedness
constitutes a general obligation of such country); (ii) deposits, certificates
of deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System, in each case having
combined capital and surplus and undivided profits (or any similar capital
concept) of not less than $500.0 million and whose senior unsecured debt is
rated at least "A-l" by S&P or "P-l" by Xxxxx'x; (iii) commercial paper with a
maturity of 365 days or less issued by a corporation (other than an Affiliate of
the Company) organized under the laws of the United States or any State thereof
and rated at least "A-l" by S&P or "P-1" by Xxxxx'x; (iv) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States Government maturing within 365 days from the date of acquisition; and (v)
money market funds in the United States which invest substantially all of their
assets in securities of the type described in any of the preceding clauses (i)
through (iv).
"Cedel" means Cedel Bank, Societe Anonyme.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d) or
14(d) of the Exchange Act), excluding Permitted Holders, is or
3
becomes the "beneficial owner" (as defined in Rules 13d-3 or 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has or acquires the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total voting power of
all Voting Stock of the Company (except that the person or group shall not be
deemed the "beneficial owner" of shares tendered pursuant to a tender or
exchange offer made by that person or group or any of their Affiliates until the
tendered shares are accepted for purchase or exchange) or has, directly or
indirectly, the right to elect or designate a majority of the Board or (b) the
Company consolidates with, or merges with or into, another person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person, or any person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or its parent corporation and/or (2) cash,
securities and other property in any amount which could be paid by the Company
as a Restricted Payment under this Indenture, (ii) the "beneficial owners" (as
so defined) of the Voting Stock of the Company immediately before such
transaction own, directly or indirectly, immediately after such transaction, at
least a majority of the voting power of all Voting Stock of the surviving or
transferee corporation or its parent corporation immediately after such
transaction, as applicable, or (iii) immediately after such transaction, no
"person" or "group" (as such terms are defined above), excluding the Permitted
Holders, is the "beneficial owner" (as defined above), directly or indirectly,
of more than 50% of the Voting Stock of such surviving or transferee corporation
or its parent corporation, as applicable, or has, directly or indirectly, the
right to elect or designate a majority of the board of directors of the
surviving or transferee corporation or its parent corporation, as applicable, or
(c) during any consecutive two-year period, individuals who at the beginning of
such period constituted the Board (together with any new directors whose
election by the Board or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office. The good faith
determination by the Board, based upon advice of outside counsel, of the
beneficial ownership of securities of the Company within the meaning of Rules
13d-3 or 13d-5 under the Exchange Act shall be conclusive, absent contrary
controlling precedent or contrary written interpretation published by the
Commission. No inference shall be created that officers or employees of the
Company are acting as a "person" or "group" (as such terms are used in Sections
13(d) or 14(d) of the Exchange Act) with the power to designate a majority of
the members of the Board solely because such officers or employees constitute a
majority of the members of the Board.
"Closing Time" has the meaning specified in the Purchase Agreement.
"Commission" means the United States Securities and Exchange
Commission, or any successor agency.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or rights in, or other equivalents (however designated
and whether voting and/or non-voting) of, such Person's common stock and
includes, without limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have replaced such
Person pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice-Chairman, its Chief Executive Officer, its President or a Vice President,
and by its Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and delivered to the Trustee.
4
"Consolidated Income Tax Expense" means, with respect to any period,
the provision for federal, state, local, foreign and other income taxes of the
Company and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period,
without duplication, the sum of (i) the interest expense of the Company and the
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, including, without limitation, (a) any amortization of
debt discount, (b) the net cost under Interest Rate Obligations (including any
amortization of discounts), (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and similar
transactions and (e) all capitalized interest and accrued interest, (ii) the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and the Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP, (iii) the portion of any rental obligation in respect of any
Sale/Leaseback Transaction allocable to interest expense (determined as if such
were treated as a Capital Lease Obligation), and (iv) the amount of dividends
and distributions in respect of Preferred Stock or Disqualified Stock paid by
the Restricted Subsidiaries to a Person other than the Company or a Restricted
Subsidiary or by the Company during such period.
"Consolidated Net Income" means, with respect to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such consolidated net income (or loss), by
excluding, without duplication, (i) all extraordinary, unusual or nonrecurring
gains or losses and all gains or losses from sales or other dispositions of
assets (including Asset Sales) out of the ordinary course of business (net of
taxes, fees and expenses relating to the transaction giving rise thereto) for
such period, (ii) that portion of such net income (or loss) derived from or in
respect of Investments in Persons other than Restricted Subsidiaries, except to
the extent of any cash dividends actually received by the Company or any
Restricted Subsidiary (subject, in the case of any Restricted Subsidiary, to the
provisions of clause (vi) of this definition), (iii) any gain or loss, net of
taxes, realized upon the termination of any employee pension benefit plan during
such period, (iv) that portion of such net income (or loss) allocable to
minority interests in any Restricted Subsidiary for such period, (v) net income
(or loss) of any other Person combined with the Company or any Restricted
Subsidiary on a "pooling of interests" basis attributable to any period prior to
the date of combination and (vi) the net income of any Restricted Subsidiary for
such period to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Worth" means, with respect to any Person, the
consolidated stockholders' or partners' equity of such Person reflected on the
most recent balance sheet of such Person, determined in accordance with GAAP,
less any amounts attributable to redeemable capital stock (as determined under
applicable accounting standards promulgated by the Commission) of such Person.
"Consolidated Operating Cash Flow" means, with respect to any period,
Consolidated Net Income for such period (a) increased (without duplication), to
the extent deducted in arriving at such Consolidated Net Income, by the sum of
(i) Consolidated Income Tax Expense for such period; (ii) Consolidated Interest
Expense for such period; and (iii) depreciation, amortization and any other non-
cash items for such period of the Company and the Restricted Subsidiaries (other
than any non-cash item which requires the accrual of, or a reserve for, cash
charges for any future period), including, without limitation, amortization of
capitalized debt issuance costs for such period, all determined on a
consolidated basis in accordance with GAAP, and (b) decreased by any non-cash
items (including non-recurring gains and non-recurring items of income) to the
extent they increased Consolidated Net Income for such period (including any
partial or complete reversal of reserves taken in a prior period).
"Corporate Trust Office" means the office of the Trustee at which at
any particular time the trust created by this Indenture shall be principally
administered, which office at the date of execution of this Indenture is
5
located at Library Tower, 000 Xxxx 0xx Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Corporate Trust Department, except for purposes of
Sections 3.02 and 10.02 hereof. For purposes of such Sections, such office is
located at the office of State Street Bank and Trust Company, N.A., 00 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other Person with like powers
whether appointed judicially or out of court and whether pursuant to an interim
or final appointment.
"Debt Securities" means any debt securities issued by the Company in a
public offering or in a private placement to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act).
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Default Amount" means the principal amount of the Notes (and any
applicable premium thereon) and any accrued and unpaid interest thereon.
"Depository" means The Depository Trust Company, its nominees and
their respective successors until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board other than a director who
(i) has any material direct or indirect financial interest in or with respect to
such transaction or series of related transactions or (ii) is an employee or
officer of the Company or an Affiliate that is itself a party to such
transaction or series of transactions or an Affiliate of a party to such
transaction or series of related transactions.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Notes; provided that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require
such Person to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring prior to the final maturity date
of the Notes will not constitute Disqualified Stock so long as the "asset sale"
or "change of control" provisions applicable to such Capital Stock are no more
favorable to the holders thereof than Sections 10.10 and 10.15 hereof and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Sections
10.10 and 10.15 hereof.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"Exchange Notes" means the 14% Senior Notes due 2010, Series B, of the
Company, to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement.
"Exchange Offer" shall have the meaning specified in the Registration
Rights Agreement.
6
"Fair Market Value" means, with respect to any asset or property, the
price (after taking into account any liabilities relating to such asset or
property) that could be negotiated in an arms-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
pressure or compulsion to complete the transaction. Unless otherwise specified
in the Indenture, Fair Market Value shall be determined by the Board acting in
good faith and shall be evidenced by a Board Resolution.
"GAAP" means, as of any date of determination, generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, the Commission or in such other statements by such other entity
as may be approved by a significant segment of the accounting profession of the
United States, which are in effect as of such date of determination and which
are consistently applied for all applicable periods.
"Global Notes" means one or more Regulation S Global Notes and 144A
Global Notes.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged.
"Guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, any
obligation (A) to pay amounts drawn down by letters of credit, (B) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
obligation (whether arising by virtue of partnership arrangement, agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (C) entered into for
purposes of assuring in any other manner the obligee of such obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Holder" means a Person in whose name a Note is registered in the Note
Register.
"Indebtedness" means, with respect to any Person, without duplication
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (i) every liability of such Person,
whether or not contingent, (A) for borrowed money, (B) evidenced by notes,
bonds, debenture or other similar instruments (whether or not negotiable), (C)
for reimbursement of amounts expended under letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (D)
issued or assumed as the deferred purchase price of property or services, (E)
relating to a Capitalized Lease Obligation and all Attributable Debt in respect
of Sale/Leaseback Transactions of such Person and (F) in respect of an Interest
Rate Obligation of such Person; (ii) every liability of others of the kind
described in the preceding clause (i) which such Person has Guaranteed or which
is otherwise its legal liability; or (iii) every obligation secured by a Lien
(other than (x) Permitted Liens of the types described in clauses (b), (d) or
(e) of the definition of Permitted Liens; provided that the obligations secured
would not constitute Indebtedness under clauses (i) or (ii) or (iii) of this
definition, and (y) Liens on Capital Stock or Indebtedness of any Unrestricted
Subsidiary) to which the property or assets of such Person are subject, whether
or not the obligations secured thereby shall have been assumed by or shall
otherwise be such Person's legal liability (the amount of such obligation being
deemed to be the lesser of the Fair Market Value of such property or asset or
the amount of the obligation so secured); (iv) all Disqualified Stock of such
Person, valued at the greater of its voluntary or involuntary maximum fixed
repurchase or redemption price (plus accrued and unpaid dividends to the date of
determination); and (v) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses
7
(i), (ii), (iii) or (iv). In no event shall "Indebtedness" include trade
payables and accrued liabilities that are current liabilities incurred in the
ordinary course of business, excluding the current maturity of any obligation
which would otherwise constitute Indebtedness. For purposes of Section 10.11 and
Section 10.13 hereof and the definition of "Events of Default," in determining
the principal amount of any Indebtedness to be incurred by the Company or a
Restricted Subsidiary or which is outstanding at any date, (A) the principal
amount of any Indebtedness which provides that an amount less than the principal
amount at maturity thereof shall be due upon any declaration of acceleration
thereof shall be the accreted value thereof at the date of determination; (B)
the principal amount of any Indebtedness shall be reduced by any amount of cash,
Government Securities or Cash Equivalent collateral securing on a perfected
basis, and dedicated for disbursement to the payment of principal of or interest
on, such Indebtedness; and (C) the amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any Guarantees at
such date.
"Indebtedness to EBITDA Ratio" means, as at any date of determination
(the "Transaction Date"), the ratio of (i) Total Consolidated Indebtedness as at
the Transaction Date to (ii) two times the Consolidated Operating Cash Flow for
the two full fiscal quarters immediately preceding the Transaction Date for
which financial statements are available (such two full fiscal quarter period
being referred to herein as the "Measurement Period"). For purposes of
calculating Consolidated Operating Cash Flow for the relevant Measurement Period
prior to a Transaction Date, (A) any Person that is a Restricted Subsidiary on
the Transaction Date (or would become a Restricted Subsidiary on such
Transaction Date in connection with the transaction that requires the
calculation of such Consolidated Operating Cash Flow) shall be deemed to have
been a Restricted Subsidiary at all times during the Measurement Period, (B) any
Person that is not a Restricted Subsidiary on such Transaction Date (or would
cease to be a Restricted Subsidiary on such Transaction Date in connection with
the transaction that requires the calculation of Consolidated Operating Cash
Flow) will be deemed not to have been a Restricted Subsidiary at any time during
the Measurement Period, and (C) if the Company or any Restricted Subsidiary
shall have in any manner (x) acquired through an Asset Acquisition or (y)
disposed of (including by way of an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any operating
business during such Measurement Period or after the end of such period and on
or prior to the Transaction Date, such calculation will be made on a pro forma
basis in accordance with GAAP as if, in the case of an Asset Acquisition, such
transaction had been consummated on the first day of the Measurement Period and,
in the case of an Asset Sale or other disposition, termination or discontinuance
of activities constituting such an operating business, such transaction had been
consummated prior to the first day of the Measurement Period; provided, however
that such pro forma adjustment shall not give effect to the operating cash flow
of any Person that would become a Restricted Subsidiary on the Transaction Date
in connection with the transaction that requires the calculation of
Consolidated Operating Cash Flow to the extent that such Person's net income
would be excluded from the calculation of Consolidated Net Income pursuant to
clause (vi) of the definition of Consolidated Net Income.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Notes, to pay principal of,
premium, if any, and interest on the Notes when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Notes and the performance of all other obligations to the
Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 6.07 hereof) and the Holders of the Notes under this Indenture and
the Notes, according to the terms thereof.
"Independent Financial Advisor" means a United States investment
banking firm of national or regional standing in the United States (i) which
does not, and whose directors, officers and employees or Affiliates do not have,
a direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board, is otherwise independent and qualified to perform the
task for which it is to be engaged.
8
"Initial Notes" means the 14% Senior Notes due 2010, Series A, of the
Company.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxxxx Xxxxx Barney Inc., Chase Securities Inc. and Credit Suisse
First Boston Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, when used with respect to any Note, the amount of
all interest accruing on such Note, including all additional interest payable on
the Notes pursuant to the Registration Rights Agreement and all interest
accruing subsequent to the occurrence of any events specified in Sections
5.01(vii), (viii) and (ix) hereof or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means, when used with respect to any Note, the
Stated Maturity of an installment of cash interest on such Note, as set forth in
such Note.
"Interest Rate Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars, forward interest rate agreements and similar
agreements.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, account receivable (other than an account receivable arising in
the ordinary course of business), or other extension of credit (including,
without limitation, by means of any Guarantee) or any capital contribution to
(by means of transfers of cash or other property or assets to others, payments
for property or services for the account or use of others, or otherwise), or any
purchase or acquisition of capital stock, bonds, notes, debentures or other
securities or evidences of Indebtedness of any other Person. The amount of any
Investment shall be the original cost of such Investment, plus the cost of all
additions thereto, and minus the amount of any portion of such Investment repaid
to such Person in cash as a repayment of principal or a return of capital, as
the case may be, but without any other adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
In determining the amount of any Investment involving a transfer of any property
or assets other than cash, such property shall be valued at its Fair Market
Value at the time of transfer.
"Issue Date" means the original date of issuance of the Notes.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). A
Person shall be deemed to own subject to a Lien any property which such Person
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.
"Market Capitalization" of any Person means, as of any day of
determination, the product of (i) the average Closing Price of a share of such
Person's Common Stock over the 20 consecutive trading days immediately preceding
such date and (ii) the number of shares of such Common Stock issued and
outstanding on such date. "Closing Price" on any trading day with respect to
the per share price of any shares of Common Stock means the last reported sale
price regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange or, if such shares of Common Stock are not listed
or admitted to trading on such exchange, on the principal national securities
9
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on The Nasdaq National Market but such
Person is a "Foreign Issuer" (as defined in Rule 3b-4(b) under the Exchange Act)
and the principal securities exchange on which such shares are listed or
admitted to trading is a "designated offshore securities market" (as defined in
Rule 902(b) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on the Nasdaq National Market and such Person and any securities markets in
which such Person's Common Stock trades does not meet any of the foregoing such
requirements, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm that is
selected from time to time by the Company for the purpose and is reasonably
acceptable to the Trustee.
"Maturity Date" means, with respect to any Note, the date specified in
such Note as the fixed date on which the principal of such Note is due and
payable.
"Moody's" means Xxxxx'x Investors Service, Inc. (and any successor).
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof received by the Company or any Restricted Subsidiary in the
form of cash (including assumed Indebtedness (other than Subordinated
Indebtedness) and other items deemed to be cash under the proviso to the first
sentence of Section 10.15 hereof) or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) net of (i)
brokerage commissions and other fees, costs and expenses (including fees and
expenses of legal counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes paid or payable as a result of such Asset Sale,
(iii) amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in or having a Lien on the
assets subject to the Asset Sale, (iv) with respect to Asset Sales by Restricted
Subsidiaries, the portion of such cash and Cash Equivalents attributable to any
Persons holding a minority interest in such Restricted Subsidiary and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee.
"Non-U.S. Person" means any Person that is not a U.S. Person, as such
term is defined in Regulation S.
"Notes" shall have the meaning specified in the recitals of this
Indenture.
"Offering Memorandum" means the Offering Memorandum of the Company,
dated February 16, 2000, pursuant to which the Initial Notes were offered, and
any supplement thereto.
"Officer" means, with respect to the Company, the Chairman of the
Board, a Vice Chairman, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by the Chairman of the Board, a Vice Chairman, the President
or a Vice President, and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer, of the Company and delivered to the Trustee.
"144A Global Note" means a permanent global note in registered form
representing the aggregate principal amount of Notes sold in reliance on Rule
144A.
10
"Opinion of Counsel" means a written opinion of legal counsel who may
be counsel for the Company, the Trustee or any Subsidiary Guarantor, as
applicable, and who shall be reasonably acceptable to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company or any Affiliate thereof) in trust or
set aside and segregated in trust by the Company or any Affiliate thereof (if
the Company or such Affiliate shall act as Paying Agent) for the Holders of such
Notes; provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Notes with respect to which the Company has effected defeasance
or covenant defeasance as provided in Article Four, to the extent provided in
Sections 4.02 and 4.03 hereof; and
(iv) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in whose
hands the Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any other obligor upon the Notes or any Affiliate of the Company or
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. The Company shall notify the Trustee, in writing, when it
purchases or otherwise acquires Notes, of the aggregate principal amount of such
Notes so purchased or otherwise acquired; provided that any failure on the part
of the Company to provide the aforesaid notice to the Trustee shall not
constitute a Default under this Indenture. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or such other obligor. If the Paying
Agent holds, in its capacity as such, on any Maturity Date or on any optional
redemption date money sufficient to pay all accrued interest and principal with
respect to such Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be Outstanding and interest on them
ceases to accrue. Notes may also cease to be outstanding to the extent
expressly provided in Article Four.
"Permitted Business" means any of the following: (i) transmitting,
providing services relating to or developing network and software applications
for the transmission and management of voice, data, video or other information
through owned or leased wireline or wireless transmission facilities or over the
internet; (ii) creating, developing, constructing, installing, integrating,
repairing, maintaining or marketing communications-related systems, network
equipment and wireless and wireline transmission facilities, software and other
related products; and (iii) evaluating, owning, operating, participating in or
pursuing any other business that is primarily related to those identified in the
foregoing clauses (i) and (ii).
"Permitted Business Investments" means an Investment in any Person the
primary business of which consists of a Permitted Business.
11
"Permitted Credit Facility" means any senior secured or unsecured
commercial term loan and/or revolving credit facilities (including any letter of
credit subfacility) entered into principally with commercial banks and/or other
financial institutions.
"Permitted Holders" means Brentwood Venture Capital, Enterprise
Partners, Xxxxxxx Xxxxxxx Xxxxxxxxx & Xxxxx, The Sprout Group and Xxxxxxxxx X.
Xxxxx, and their respective Affiliates.
"Permitted Indebtedness" means the following Indebtedness (each of
which shall be given independent effect):
(a) Indebtedness under the Notes and the Indenture;
(b) Indebtedness (including Disqualified Stock) of the Company and/or
any Restricted Subsidiary outstanding, or committed but undrawn, on the
Issue Date and identified on Schedule A to this Indenture (including any
increase in the accreted value thereof after the Issue Date pursuant to the
terms of the instrument governing such Indebtedness as of the Issue Date);
(c) (i) Indebtedness of any Restricted Subsidiary owed to and held by
the Company or a Wholly Owned Restricted Subsidiary and (ii) Indebtedness
of the Company, which is not secured by any Lien and is subordinated to the
Company's obligations with respect to the Notes, owed to and held by any
Restricted Subsidiary; provided that an incurrence of Indebtedness shall be
deemed to have occurred upon (x) any sale or other disposition of any
Indebtedness of the Company or a Restricted Subsidiary referred to in this
clause (c) to a Person other than the Company or a Restricted Subsidiary,
(y) any sale or other disposition of Capital Stock of a Restricted
Subsidiary which holds Indebtedness of the Company or another Restricted
Subsidiary such that such Restricted Subsidiary ceases to be a Restricted
Subsidiary or (z) the Designation of a Restricted Subsidiary which holds
Indebtedness of the Company or another Restricted Subsidiary as an
Unrestricted Subsidiary;
(d) Interest Rate Obligations of the Company and/or any Restricted
Subsidiary relating to Indebtedness of the Company and/or such Restricted
Subsidiary, as the case may be (which Indebtedness (i) bears interest at
fluctuating interest rates and (ii) is otherwise permitted to be incurred
under Section 10.11 hereof), but only to the extent that the notional
amount of such Interest Rate Obligations does not exceed the principal
amount of the Indebtedness (and/or Indebtedness subject to commitments) to
which such Interest Rate Obligations relate;
(e) Indebtedness of the Company and/or any Restricted Subsidiary in
respect of performance bonds of the Company or any Restricted Subsidiary or
surety bonds provided by the Company or any Restricted Subsidiary, in each
case incurred in the ordinary course of business;
(f) Indebtedness of the Company and/or any Restricted Subsidiary to
the extent it represents a replacement, renewal, refinancing or extension
(a "refinancing") of the Notes (during the periods for which redemption is
permitted under the terms of the Indenture) or other outstanding
Indebtedness of the Company and/or of any Restricted Subsidiary incurred or
outstanding pursuant to clause (a), (b), (g) or (h) of this definition or
the proviso in the first paragraph of Section 10.11 hereof; provided that
(i) no Restricted Subsidiary may incur Indebtedness to refinance
Indebtedness of the Company (except for Guarantees issued in accordance
with Section 10.22 hereof); (ii) if such Indebtedness being refinanced has
an Average Life to Stated Maturity equal to or longer than the Average Life
to Stated Maturity of the Notes, any such refinancing shall have an Average
Life to Stated Maturity longer than the Average Life to Stated Maturity of
the Notes and a final stated maturity for the payment of principal thereof
later than the final stated maturity of the Notes; (iii) if such
Indebtedness being refinanced has an Average Life to Stated Maturity
shorter than the Average Life to Stated Maturity of the Notes, any such
refinancing shall have an Average Life to Stated Maturity longer than, and
a final stated maturity later than, the Indebtedness being
12
refinanced; (iv) any such refinancing shall not exceed the sum of the
principal amount (or, if such Indebtedness provides for a lesser amount to
be due and payable upon a declaration of acceleration thereof, an amount no
greater than such lesser amount) of the Indebtedness being refinanced, plus
the amount of accrued and unpaid interest thereon, plus the amount of any
reasonably determined prepayment premium necessary to accomplish such
refinancing and such reasonable fees and expenses incurred in connection
therewith; (v) the Notes and Indebtedness that ranks pari passu with the
Notes may be refinanced only with Indebtedness that is made pari passu with
or subordinate in right of payment to the Notes, and Subordinated
Indebtedness may only be refinanced with Subordinated Indebtedness; and
(vi) the refinancing Indebtedness shall be incurred by the obligor of the
Indebtedness being refinanced or by the Company;
(g) Indebtedness of the Company such that, after giving effect to the
incurrence thereof, the total aggregate principal amount of Indebtedness
incurred under this clause (g) and any refinancings thereof otherwise
incurred in compliance with this Indenture would not exceed 250% of Total
Incremental Equity;
(h) Indebtedness of the Company or any Restricted Subsidiary incurred
under any Permitted Credit Facility, and any refinancings of the foregoing
otherwise incurred in compliance with this Indenture, in an aggregate
principal amount not to exceed the greater of $200.0 million or the
Borrowing Base determined as of the date such Indebtedness is incurred, at
any time outstanding;
(i) Indebtedness of the Company or any Restricted Subsidiary that is
Purchase Money Indebtedness;
(j) Indebtedness in respect of (i) letters of credit, bankers'
acceptances or other similar instruments or obligations, issued in
connection with liabilities incurred in the ordinary course of business or
(ii) surety, judgment, appeal, performance and other similar bonds,
instruments or obligations provided in the ordinary course of business; and
(k) in addition to the items referred to in clauses (a) through (j)
above, Indebtedness of the Company having an aggregate principal amount not
to exceed $50 million at any time outstanding.
"Permitted Investments" means (a) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company or in a Person as a result
of which such Person becomes a Wholly Owned Restricted Subsidiary; (b)
Investments constituting Permitted Business Investments, the sum of which does
not exceed the greater of $40 million or 10% of the Company's Market
Capitalization, at any one time outstanding; (c) Cash Equivalents; (d)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (e) Interest Rate Obligations incurred in compliance with Section
10.11 hereof; (f) loans and advances to employees made in the ordinary course
of business not to exceed $500,000 in the aggregate at any one time outstanding;
(g) bonds, notes, debentures or other securities (other than Capital Stock of
any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary)
received as a result of Asset Sales permitted under Section 10.15 hereof; (h)
any Investment to the extent that the consideration therefor consists of Capital
Stock (other than Disqualified Stock) of the Company; and (i) the extension by
the Company of (x) trade credit to Subsidiaries of the Company represented by
accounts receivable, extended on usual and customary terms in the ordinary
course of business or (y) Guarantees of commitments for the purchase of goods or
services incurred in the ordinary course of business so long as such Guarantees,
to the extent constituting Indebtedness, are permitted to be incurred under
Section 10.11 hereof.
"Permitted Liens" means (a) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary or becomes a Restricted Subsidiary; provided that such
Liens were in existence prior to the contemplation of such merger, consolidation
or acquisition and do not secure any property or assets of the Company or any
Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger or consolidation or acquisition; (b) Liens imposed by law,
such as
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carriers', warehousemen's and mechanics' Liens and other similar Liens arising
in the ordinary course of business that secure payment of obligations not more
than 60 days past due or that are being contested in good faith and by
appropriate proceedings; (c) Liens existing on the Issue Date (including Liens
securing Indebtedness permitted under clause (b) of the definition of Permitted
Indebtedness); (d) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted; provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (e) easements, rights of
way, restrictions and other similar easements, licenses, restrictions on the use
of properties, or minor imperfections of title that, in the aggregate, are not
material in amount and do not in any case materially detract from the properties
subject thereto or interfere with the ordinary conduct of the business of the
Company or the Restricted Subsidiaries; (f) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (g) Liens securing
Indebtedness incurred under a Permitted Credit Facility; provided, however, that
the incurrence of such Indebtedness is permitted by Section 10.11 hereof; (h)
Liens to secure any refinancing of any Indebtedness secured by Liens permitted
by this Indenture, but only to the extent that such Liens do not extend to any
other property or assets (other than improvements thereto); (i) Liens to secure
the Notes and Liens created under this Indenture; (j) Liens securing Purchase
Money Indebtedness; (k) Liens on and pledges of Capital Stock of any
Unrestricted Subsidiary securing any Indebtedness of such Unrestricted
Subsidiary; (l) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (m) Liens to secure Capitalized
Lease Obligations permitted to be incurred under the Indenture; (n) Liens that
do not materially detract from the value of the property subject to such Liens,
that do not materially interfere with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries, and that are made on
customary and usual terms applicable to similar assets; (o) pledges or deposits
by a Person under workmen's compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such
Person, or deposits or cash or United States government bonds to secure surety
or appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case
incurred in the ordinary course of business; (p) Liens customary in the industry
and incurred in the ordinary course of business securing Interest Rate
Obligations so long as the related Indebtedness is, and is permitted to be under
the Indenture, secured by a Lien on the same property securing such Interest
Rate Obligations; and (q) Liens held by the Company on the assets or property of
a Restricted Subsidiary of the Company to secure Indebtedness of such Restricted
Subsidiary owing to and held by the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 hereof in exchange for a
mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock whether now outstanding or issued
after the Issue Date, and including, without limitation, all classes and series
of preferred or preference stock of such Person.
"Private Placement Legend" shall mean the first paragraph of the
legend initially set forth in the Initial Notes in the form set forth on Exhibit
A-1.
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"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company for cash pursuant to an effective registration
statement filed under the Securities Act.
"Purchase Agreement" means the Purchase Agreement, dated as of
February 16, 2000, by and among the Company and the Initial Purchasers, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary (including Acquired Indebtedness and Indebtedness
represented by Capitalized Lease Obligations, Attributable Debt in respect of
Sale/Leaseback Transactions, mortgage financings and purchase money
obligations), including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as the same may be
amended, supplemented, modified or restated from time to time, incurred at any
time for the purpose of financing all or any part of the cost of the
development, construction, expansion, installation, acquisition, lease or
improvement by the Company or any Restricted Subsidiary of any Permitted
Business Assets or not less than 66 2/3 percent of the outstanding Voting Stock
of a Person that becomes a Restricted Subsidiary the assets of which consist
primarily of Permitted Business Assets.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A.
"Redemption Date" means, with respect to any Note to be redeemed, the
date fixed by the Company for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price" means, with respect to any Note to be redeemed, the
price fixed for such redemption pursuant to the terms of this Indenture and the
Notes.
"refinancing" has the meaning set forth in clause (f) of the
definition of "Permitted Indebtedness."
"Registrable Securities" means Transfer Restricted Notes, as defined
in the Registration Rights Agreement.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement, dated as of February 23, 2000, between the Company and the Initial
Purchasers, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date specified in the
Notes.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent global note in registered
form representing the aggregate principal amount of Notes sold in reliance on
Regulation S.
"Responsible Officer" means, with respect to the Trustee, any officer
in the Corporate Trust Office of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer of the Trustee to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Note" means a Note that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
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"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution on any Capital Stock of the
Company or any Restricted Subsidiary or any other payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or any Restricted Subsidiary (other than any dividends, distributions or
payments made to the Company or any Restricted Subsidiary and dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) of
the Company or in options, warrants or other rights to purchase Capital Stock
(other than Disqualified Stock) of the Company); (ii) the purchase, redemption
or other acquisition or retirement for value of any Capital Stock of the Company
or any Restricted Subsidiary (other than any such Capital Stock owned by the
Company or a Restricted Subsidiary); (iii) the purchase, redemption, defeasance
or other acquisition or retirement for value, or the making of any principal
payment on, prior to any scheduled repayment, scheduled sinking fund payment or
scheduled maturity, of any Subordinated Indebtedness (other than any
Subordinated Indebtedness held by a Wholly Owned Restricted Subsidiary); or (iv)
the making by the Company or any Restricted Subsidiary of any Investment (other
than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board, by a Board Resolution delivered to the
Trustee, as an Unrestricted Subsidiary pursuant to and in compliance with
Section 10.20 hereof. Any such designation may be revoked by a Board Resolution
delivered to the Trustee, subject to the provisions of such covenant.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies (and any successor).
"Sale/Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or assets of such Person which
has been or is being sold or transferred by such Person after its acquisition
thereof or the completion of construction or commencement of operations thereof
to such lender or investor or to any other Person to whom funds have been or are
to be advanced by such lender or investor on the security of such property or
asset.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"Shelf Registration Statement" shall have the meaning specified in the
Registration Rights Agreement.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Note or any installment
of interest thereon, the dates specified in such Note as the fixed date on which
the principal of such Note or such installment of interest is due and payable
and, when used with respect to any other Indebtedness, means the date specified
in the instrument governing such Indebtedness as the fixed date on which the
principal of such Indebtedness, or any installment of interest, is due and
payable.
"Strategic Equity Investor" means any Person that, as of the date of
determination, has a Market Capitalization or Consolidated Net Worth of at
least $2.0 billion and derives a substantial portion of its revenues from a
business related to the Permitted Business.
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to any other Indebtedness of
the Company.
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"Subsidiary" means, with respect to any Person, (a) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such Person, or (b) any other Person of which at
least a majority of voting interest is at the time, directly or indirectly,
owned by such Person.
"Subsidiary Guarantor" means each Restricted Subsidiary that becomes
a guarantor of the Notes pursuant to the provisions of Section 10.22 hereof, in
each case until it is released from its Subsidiary Guarantee pursuant to the
terms thereof.
"Total Consolidated Indebtedness" means, at any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
the Restricted Subsidiaries outstanding as of such date of determination.
"Total Incremental Equity" means, at any time of determination, the
sum of, without duplication, (a) the aggregate net cash proceeds received by the
Company from capital contributions in respect of existing Capital Stock (other
than Disqualified Stock) or the issuance and sale of Capital Stock (other than
Disqualified Stock but including Capital Stock issued upon the conversion of
convertible Indebtedness or from the exercise of options, warrants or rights to
purchase Capital Stock (other than Disqualified Stock)) subsequent to May 5,
1998, other than to a Subsidiary of the Company, plus (b) 80 percent of the Fair
Market Value of property (other than cash and Cash Equivalents) received by the
Company after May 5, 1998 as a contribution of capital or from the sale of its
Capital Stock (other than Disqualified Stock) to a Person that is not a
Subsidiary of the Company, minus (c) any amounts included in clause (a) above to
the extent used to make a Restricted Payment pursuant to clauses (2) or
(3)(A)(x) of Section 10.13 hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed,
except as provided in Section 9.05 hereof; provided, however, that in the event
the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture
Act" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Person shall have replaced such
Person pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Person.
"Unrestricted Notes" means one or more Notes that do not and are not
required to bear the Private Placement Legend in the form set forth in Exhibit
A, including, without limitation, the Exchange Notes.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 10.20 hereof. Any
such designation may be revoked by a Board Resolution delivered to the Trustee,
subject to the provisions of such covenant.
"Voting Stock" means, with respect to any Person, the Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors or other members of the governing body of such Person.
"voting power" means, with respect to the Capital Stock of any Person,
the relative voting power in any general election of directors or other members
of the governing body of such Person.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
of which 100% of the outstanding Capital Stock is owned by the Company or
another Wholly Owned Restricted Subsidiary. For the purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Restricted Subsidiary.
17
Section 1.02. Other Definitions.
Defined in
Term Section
---- ------------
"Act" 1.05
"Additional Interest" 10.23
"Additional Interest Payment Date" 10.23
"Affiliate Transaction" 10.14
"Agent" 3.02
"Agent Members" 3.16
"Asset Sale Offer" 10.15
"Asset Sale Offer Purchase Date" 10.15
"Assumed Indebtedness" 10.15
"assumed liabilities" 10.15
"Change of Control Date" 10.10
"Change of Control Offer" 10.10
"Change of Control Payment Date" 10.10
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Notes" 4.01
"Designation" 10.20
"Designation Amount" 10.20
"Event of Default" 5.01
"incur" 10.11
"Investment Company Act" 4.04
"Note Amount" 10.15
"Note Pro Rate Share of Unutilized
Net Cash Proceeds" 10.15
"Note Register" 3.05
"Other Indebtedness" 10.15
"Paying Agent" 3.02
"Permitted Business Assets" 10.15
"Physical Notes" 2.01
"Registrar" 3.02
"Registration Default" 10.23
"Restricted Period" 3.17
"Revocation" 10.20
"Subsidiary Guarantee" 10.22
"surviving entity" 8.01
"Unutilized Net Cash Proceeds" 10.15
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article (including terms referred to in
Section 1.02 hereof) have the meanings assigned to them in this Article, and
include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
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(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP as in effect on the Issue
Date;
(d) the words "herein" "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" refer to the lawful currency of
the United States of America; and
(f) the words "include," "included" and "including" as used herein are
deemed in each case to be followed by the phrase "without limitation."
Section 1.04. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers of the Company, stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution (as provided below in this Section 1.05) of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01 hereof)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind every future Holder of the
same Note or the Holder of every Note issued upon the
19
transfer thereof or in exchange therefor or in lieu thereof to the same extent
as the original Holder, in respect of anything done, suffered or omitted to be
done by the Trustee, any Paying Agent, the Company or any other obligor upon the
Notes in reliance thereon, whether or not notation of such action is made upon
such Note.
Section 1.06. Notices, etc., to the Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver
or other action of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in writing, to
or with the Trustee at: State Street Bank and Trust Company of California, N.A.,
Library Tower, 000 Xxxx 0xx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Corporate Trust Department (Rhythms NetConnections Inc. 14% Senior
Notes due 2010), or at any other address previously furnished in writing to the
Holders and the Company by the Trustee; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise expressly provided herein) hereunder if
in writing and mailed, first-class postage prepaid, to the Company addressed to
it at Rhythms NetConnections Inc., 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer, or at any other address
previously furnished in writing to the Trustee by the Company.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise expressly provided herein)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Note Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
Section 1.09. Effect of Headings and Table of Contents.
20
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Notes issued
pursuant hereto shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Notes issued pursuant hereto,
express or implied, shall give to any Person (other than the parties hereto and
their successors hereunder, any Paying Agent and the Holders) any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 1.13. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND EACH SUBSIDIARY GUARANTEE, IF ANY,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of
the Company or such Subsidiary Guarantor under the Notes, any Subsidiary
Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
Except as otherwise expressly provided herein, all covenants and
agreements in this Indenture shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default if
such action is taken or condition exists.
Section 1.16. Exhibits and Schedules.
All exhibits and schedules attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
This Indenture may be executed in any number of counterparts and by
telecopier, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
21
Section 1.18. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
FORM OF NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication with respect
thereto shall be as required by Section 3.03 hereof.
The definitive Notes shall be printed, typewritten, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the Officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its issuance and shall show the
date of its authentication.
Notes offered and sold in reliance on Rule 144A and Notes offered and
sold in reliance on Regulation S shall be issued initially in the form of one or
more Global Notes, substantially in the form set forth in Exhibit A-1, deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit C. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes issued in exchange for interests in a Global Note pursuant to
Section 3.17 hereof may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A-1 with respect
to the Initial Notes and Exhibit A-2 with respect to Exchange Notes (in each
case, the "Physical Notes").
The Notes shall have notated thereon evidence of each Subsidiary
Guarantee, if any, in the form set forth in Annex A to Exhibit B; provided,
however, that the failure of any Note to include such notation shall not affect
the validity or enforceability of such Subsidiary Guarantee or such Note against
any Subsidiary Guarantor.
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $300,000,000 in aggregate principal
amount of Notes, except for Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Section 3.03, 3.04, 3.05, 3.06, 9.06, 10.10 or 10.15 hereof or the optional
redemption provisions of the Notes.
The Stated Maturity of the principal of the Notes shall be February
15, 2010. Cash interest on the Notes shall accrue at the rate of 14% per annum
from February 23, 2000 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable semi-annually on February
15 and August 15, in each year, commencing on August 15, 2000, to the registered
Holders at the close of business on the February 1 or
22
August 1, respectively, immediately preceding such Interest Payment Dates, until
the principal thereof is paid or duly provided for.
At the election of the Company, the entire Indebtedness on the Notes
or certain of the Company's obligations and covenants and certain Events of
Default thereunder may be defeased as provided in Article Four.
Section 3.02. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in The City of New York, State of New York) where
Notes may be presented or surrendered for registration of transfer or for
exchange (the "Registrar"), an office or agency (which shall be located in the
Borough of Manhattan in The City of New York, State of New York) where Notes may
be presented or surrendered for payment (the "Paying Agent" or "Agent") and an
office or agency where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Registrar and any co-Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" or "Agent" includes any additional paying
agent. The Company may act as its own Paying Agent. The Company may change the
Paying Agent or Registrar without notice to any Holder.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar and Paying
Agent and agent for service of notices and demands in connection with the Notes,
until such time as the Trustee has resigned or a successor has been appointed.
Section 3.03. Execution and Authentication.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 hereto, and the Exchange Notes
and the Trustee's certificate of authentication relating thereto shall be
substantially in the form of Exhibit A-2 hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
permitted or required by this Indenture. The Notes may have such letters,
numbers or other marks of identification and such notations, legends or
endorsements required by law, stock exchange rule, rule of the Depository or any
clearing agency or usage. The Company shall approve the form of the Notes and
any notation, legend or endorsement thereon. Each Note shall be dated the date
of issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes annexed hereto as
Exhibit A-1 and Exhibit A-2 shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Two Officers, or an Officer and an Assistant Secretary, of the Company
shall sign, or one Officer of the Company shall sign, and one Officer or an
Assistant Secretary of the Company (each of whom shall, in each case, have been
duly authorized by all requisite corporate actions) shall attest to, the Notes
for the Company by manual or facsimile signature and may be imprinted or
otherwise reproduced.
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An officer of a Subsidiary Guarantor (who shall have been duly
authorized by all requisite corporate actions) shall sign by manual or facsimile
signature, which may be imprinted or otherwise reproduced, a notation, in the
form of Annex A to Exhibit B, in respect of the Subsidiary Guarantee of such
Subsidiary Guarantor, on the Notes transferred and exchanged subsequent to the
issuance of such Subsidiary Guarantee for so long as it remains outstanding.
If an Officer or Assistant Secretary of the Company or an officer of a
Subsidiary Guarantor whose signature is on a Note or a notation, as the case may
be, was an officer or (in the case of the Company) Officer or Assistant
Secretary at the time of such execution but no longer holds that office or
position at the time the Trustee authenticates the Note, then the Note, the
Subsidiary Guarantee, if any, and any notation thereon shall nevertheless be
valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature of
such representative of the Trustee shall be conclusive evidence that the Note
has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
an aggregate principal amount not to exceed $300,000,000 and (ii) Unrestricted
Notes from time to time only in exchange for a like principal amount of Initial
Notes, upon a written order of the Company in the form of an Officers'
Certificate of the Company. Each such written order shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes or Unrestricted Notes
and whether (subject to Section 2.01 and this Section 3.03) the Notes are to be
issued as Physical Notes or Global Notes and such other information as the
Trustee may reasonably request. The aggregate principal amount of Notes
Outstanding at any time may not exceed $300,000,000, except as provided in
Section 3.06 hereof.
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters (as to which any of such Notes
may vote or consent) as one class and no series of Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
Section 3.04. Temporary Notes.
Until definitive Notes are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Notes. The Company Order shall specify the amount of
temporary Notes to be authenticated and the date on which the temporary Notes
are to be authenticated. Temporary Notes shall be substantially in the form of
definitive Notes, in any authorized denominations, but may have variations that
the Company reasonably considers appropriate for temporary Notes as conclusively
evidenced by the Company's execution of such temporary Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay but in no event later than the date
that the Exchange Offer is consummated. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 10.02 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Notes,
the
24
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of like tenor and of
authorized denominations. Until so exchanged the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
Section 3.05. Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 hereof being sometimes
referred to herein as the "Note Register") in which, subject to such reasonable
regulations as the Registrar may prescribe, the Company shall provide for the
registration of Notes and of transfers and exchanges of Notes. The Trustee is
hereby initially appointed Registrar for the purpose of registering Notes and
transfers of Notes as herein provided.
Subject to Sections 3.16 and 3.17, when Notes are presented to the
Registrar or a co-Registrar with a request from the Holder of such Notes to
register the transfer or exchange for an equal principal amount of Notes of
other authorized denominations, such Registrar or co-Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that every Note presented or surrendered
for registration of transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer or exchange in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. Whenever any Notes are so
presented for exchange, at the Registrar's or co-Registrar's written request,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Notes which the Holder making the exchange is entitled to receive, and each
Subsidiary Guarantor, if any, shall execute a notation on such Notes with
respect to its Subsidiary Guarantee. No service charge shall be made to the
Holder for any registration of transfer or exchange. The Company may require
from the Holder payment of a sum sufficient to cover any transfer taxes or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to Section 10.10,
10.15 or 9.06 hereof (in which events the Company will be responsible for the
payment of all such taxes which arise solely as a result of the transfer or
exchange and do not depend on the tax status of the Holder). The Trustee shall
not be required to exchange or register the transfer of any Note for a period of
15 days immediately preceding the first mailing of notice of redemption of Notes
to be redeemed or of any Note selected, called or being called for redemption
except, in the case of any Note where public notice has been given that such
Note is to be redeemed in part, the portion thereof not to be redeemed.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company and each Subsidiary
Guarantor, if any, evidencing the same Indebtedness, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Notes may be effected only through a book-entry system
maintained by the Holder of such Global Note (or its agent), and that ownership
of a beneficial interest in the Note shall be required to be reflected in a
book-entry system.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note of any series claims that the Note has been lost, destroyed or stolen,
the Company and each Subsidiary Guarantor, if any, shall execute and upon a
Company Order, the Trustee shall authenticate and deliver a replacement Note of
like tenor and principal amount, bearing a number not contemporaneously
outstanding if the Holder of such Note furnishes to the Company, each Subsidiary
Guarantor, if any, and to the Trustee evidence reasonably acceptable to them of
the ownership and the destruction, loss or theft of such Note and an indemnity
bond shall be posted by such Holder, sufficient in the judgment of the Company
or the Trustee, as the case may be, to protect the Company, each Subsidiary
Guarantor, if any, the Trustee or any Agent from any loss that any of them may
suffer if such Note is replaced. The Company
25
may charge such Holder for the Company's expenses in replacing such Note
(including (i) expenses of the Trustee charged to the Company and (ii) any tax
or other governmental charge that may be imposed) and the Trustee may charge the
Company for the Trustee's expenses in replacing such Note.
Every replacement Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and each Subsidiary Guarantor, if any,
whether or not the destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Notes, to
the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
provided in this subsection (a). Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company in writing of
such Special Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at its address as it appears in the Note Register, not less than
10 days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Notes (or their respective Predecessor Notes) are registered on such Special
Record Date and shall no longer be payable pursuant to the following subsection
(b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or market on which the Notes may be listed, and upon such notice as may
be required by such exchange or market, if, after written notice given by the
Company to the Trustee of the proposed payment pursuant to this subsection (b),
such payment shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Note is registered in the Note Register
as the owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.07 hereof) interest on such Note and
for all other purposes whatsoever, whether or not such Note shall be overdue,
and none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.09. Cancellation.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Company may at any time deliver
to the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. The Registrar,
any co-Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer or exchange, redemption or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation. No
Notes shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section 3.09, except as expressly permitted by this Indenture.
All canceled Notes held by the Trustee shall be destroyed and certification of
their destruction delivered to the Company unless by a Company Order the Company
shall direct that the canceled Notes be returned to it. The Trustee shall
provide the Company a list of all Notes that have been canceled from time to
time as requested by the Company.
Section 3.10. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months and, in the case of a partial month, the actual number
of days elapsed.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any Note
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal, premium, if any, or interest
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date, date established for the payment of Defaulted Interest or at
the Stated Maturity, as the case may be. In such event, no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date, date established for the payment of Defaulted
Interest or Stated Maturity, as the case may be, to the next succeeding Business
Day and, with respect to any Interest Payment Date, interest for the period from
and after such Interest Payment Date shall accrue with respect to the next
succeeding Interest Payment Date.
Section 3.12. CUSIP and CINS Numbers.
The Company in issuing the Notes may use "CUSIP" and "CINS" numbers
(if then generally in use), and, if so, the Trustee shall use the CUSIP or CINS
numbers, as the case may be, in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP or CINS
number, as the case may be, printed in the notice or on
27
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 in
writing of any change in the CUSIP or CINS number of any series of Notes.
Section 3.13. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all money held by the Paying Agent for the payment of principal
of, premium, if any, or interest on the Notes, and shall notify the Trustee of
any default by the Company in making any such payment. Money held in trust by
the Paying Agent need not be segregated except as required by law, and in no
event shall the Paying Agent be liable for any interest on any money received by
it hereunder. The Company at any time may require the Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any time during the continuance of any Event of Default, upon a
Company Order to the Paying Agent, require such Paying Agent to pay forthwith
all money so held by it to the Trustee and to account for any funds disbursed.
Upon making such payment, the Paying Agent shall have no further liability for
the money delivered to the Trustee.
Section 3.14. Intentionally Omitted.
Section 3.15. Deposits of Monies.
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
maturity date, Redemption Date, Change of Control Payment Date, date for the
payment of Defaulted Interest and Asset Sale Offer Purchase Date, the Company
shall have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
maturity date, Redemption Date, Change of Control Payment Date, date for the
payment of Defaulted Interest or Asset Sale Offer Purchase Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, maturity date, Redemption Date, Change of
Control Payment Date, date for the payment of Defaulted Interest or Asset Sale
Offer Purchase Date, as the case may be.
Section 3.16. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit C.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository and the provisions of Sections 3.03 and 3.17 hereof. In addition,
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for any Global
Note, or that it will cease to be a "Clearing Agency" under the Exchange Act,
and in either case a successor Depository is not appointed by the Company within
90 days
28
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar or co-Registrar has received a written request from the Depository
to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b) of this Section 3.16, the Registrar or co-Registrar shall (if one
or more Physical Notes are to be issued) reflect on its books and records the
date and a decrease in the principal amount of the Global Note in an amount
equal to the principal amount of the beneficial interest in the Global Note to
be transferred, and the Company shall execute, and upon receipt of a Company
Order the Trustee shall authenticate and deliver, one or more Physical Notes of
like tenor and principal amount of authorized denominations, and each Subsidiary
Guarantor, if any, shall execute a notation thereon in respect of its Subsidiary
Guarantee.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b) of this Section 3.16, the Global
Notes shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Physical Notes of like tenor of authorized denominations,
and each Subsidiary Guarantor, if any, shall execute a notation thereon in
respect of its Subsidiary Guarantee.
(e) Any Physical Note constituting a Restricted Note delivered in
exchange for an interest in a Global Note pursuant to subparagraph (b), (c) or
(d) of this Section 3.16 shall, except as otherwise provided by Section 3.17
hereof, bear the Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 3.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following additional provisions shall apply with respect to the registration of
any proposed transfer of an Initial Note to any Institutional Accredited
Investor which is not a QIB:
(i) the Registrar or co-Registrar shall register the transfer of
any Initial Note, whether or not such Note bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the Company has
held any beneficial interest in such Note, or portion thereof, at any time on or
prior to the second anniversary of the Issue Date and such transfer can
otherwise be lawfully made under the Securities Act without registering such
Initial Notes thereunder or (y) the proposed transferee has delivered to the
Registrar or co-Registrar a certificate substantially in the form of Exhibit D
hereto and any legal opinions and certifications required thereby;
(ii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a Global Note, upon receipt by the Registrar or co-
Registrar of (x) written instructions given in accordance with the Depository's
and the Registrar's or co-Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above, together
with any required legal opinions and certifications, the Registrar or co-
Registrar shall register the transfer and reflect on its books and records the
date and a decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the principal amount of
the Notes to be transferred and the Company shall execute, each Subsidiary
Guarantor, if any, shall execute a notation on and, upon a Company Order, the
Trustee shall authenticate Physical Notes in a principal amount equal to the
principal amount of the Global Note to be transferred.
29
(b) Transfers to Non-U.S. Persons. The following additional
provisions shall apply with respect to the registration of any proposed transfer
of an Initial Note to any Non-U.S. Person:
(i) the Registrar or co-Registrar shall register the transfer of
any Initial Note, whether or not such Note bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the Company has
held any beneficial interest in such Note, or portion thereof, at any time on or
prior to the second anniversary of the Issue Date and such transfer can
otherwise be lawfully made under the Securities Act without registering such
Initial Notes thereunder or (y) the proposed transferor has delivered to the
Registrar or co-Registrar a certificate substantially in the form of Exhibit E
hereto;
(ii) if the proposed transferee is an Agent Member and the Notes
to be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Regulation S Global Note, upon receipt by the
Registrar or co-Registrar of (x) written instructions given in accordance with
the Depository's and the Registrar's or co-Registrar's procedures and (y) the
appropriate certificate, if any, required by clause (y) of paragraph (i) above,
together with any required legal opinions and certifications, the Registrar or
co-Registrar shall register the transfer and reflect on its books and records
the date and an increase in the principal amount of the Regulation S Global Note
in an amount equal to the principal amount of Physical Notes to be transferred,
and the Trustee shall cancel the Physical Notes so transferred;
(iii) if the proposed transferor is an Agent Member seeking to
transfer an interest in the 144A Global Note, upon receipt by the Registrar or
co-Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's or co-Registrar's procedures and (y) the
appropriate certificate, if any, required by clause (y) of paragraph (i) above,
together with any required legal opinions and certifications, the Registrar or
co-Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the 144A Global Note from
which such interests are to be transferred in an amount equal to the principal
amount of the Notes to be transferred and (B) an increase in the principal
amount of the Regulation S Global Note in an amount equal to the principal
amount of the 144A Global Note to be transferred; and
(iv) until the 41st day after the Issue Date (the "Restricted
Period"), an owner of a beneficial interest in the Regulation S Global Note may
not transfer such interest to a transferee that is a U.S. Person or for the
account or benefit of a U.S. Person within the meaning of Rule 902(k) of the
Securities Act. During the Restricted Period, all beneficial interests in the
Regulation S Global Note shall be transferred only through Cedel or Euroclear,
either directly if the transferor and transferee are participants in such
systems, or indirectly through organizations that are participants.
(c) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of an Initial Note to
a QIB (excluding Non-U.S. Persons):
(i) the Registrar or co-Registrar shall register the transfer of
any Initial Note, whether or not such Note bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the Company has
held any beneficial interest in such Note, or portion thereof, at any time on or
prior to the second anniversary of the Issue Date and such transfer can
otherwise be lawfully made under the Securities Act without registering such
Initial Note thereunder or (y) such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Note stating, or
has otherwise advised the Company and the Registrar or co-Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar or co-Registrar
in writing, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is
30
aware that the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A;
(ii) if the proposed transferee is an Agent Member and the Notes
to be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the Registrar
or co-Registrar of written instructions given in accordance with the
Depository's and the Registrar's or co-Registrar's procedures, the Registrar or
co-Registrar shall register the transfer and reflect on its book and records the
date and an increase in the principal amount of the 144A Global Note in an
amount equal to the principal amount of Physical Notes to be transferred, and
the Trustee shall cancel the Physical Note so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to
transfer an interest in the Regulation S Global Note following the expiration of
the Restricted Period, upon receipt by the Registrar or co-Registrar of written
instructions given in accordance with the Depository's and the Registrar's or
co-Registrar's procedures, the Registrar or co-Registrar shall register the
transfer and reflect on its books and records the date and (A) a decrease in the
principal amount of the Regulation S Global Note in an amount equal to the
principal amount of the Notes to be transferred and (B) an increase in the
principal amount of the 144A Global Note in an amount equal to the principal
amount of the Regulation S Global Note to be transferred.
(d) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Notes that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or replacement of
Notes bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Notes that bear the Private Placement Legend unless (i) the
circumstances contemplated by paragraph (a)(i)(x) of this Section 3.17 exist,
(ii) there is delivered to the Registrar or co-Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (iii)
such Note has been sold pursuant to an effective registration statement under
the Securities Act.
(e) Other Transfers. If a Holder proposes to transfer a Note
constituting a Restricted Note pursuant to any exemption from the registration
requirements of the Securities Act other than as provided for by Section
3.17(a), (b) and (c) hereof, the Registrar or co-Registrar shall only register
such transfer or exchange if such transferor delivers an Opinion of Counsel
satisfactory to the Company and the Registrar or co-Registrar that such transfer
is in compliance with the Securities Act and the terms of this Indenture;
provided, however, that the Company may, based upon the opinion of its counsel,
instruct the Registrar or co-Registrar by a Company Order not to register such
transfer in any case where the proposed transferee is not a QIB, Non-U.S. Person
or Institutional Accredited Investor.
(f) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar and each co-Registrar shall retain copies of all
letters, notices and other written communications received pursuant to Section
3.16 hereof or this Section 3.17. The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable prior written notice to the
Registrar or co-Registrar.
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance.
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The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 4.02 or Section 4.03 hereof
be applied to all of the Outstanding Notes (the "Defeased Notes"), upon
compliance with the conditions set forth below in this Article Four.
Section 4.02. Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 hereof of the option
applicable to the Defeased Notes pursuant to this Section 4.02, the Company
shall be deemed to have been discharged from its obligations with respect to the
Defeased Notes on the date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Defeased Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 4.05 and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging the same), except for
the following, which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Notes to receive, solely from
the trust fund described in Section 4.04 hereof and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (b) the Company's obligations
with respect to such Defeased Notes under Sections 3.04, 3.05, 3.06, 10.02 and
10.03 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 6.07 hereof, and (d) this Article Four. Subject to compliance with this
Article Four, the Company may exercise its option applicable to this Section
4.02 notwithstanding the prior exercise of its option applicable to Section
4.03 hereof with respect to the Notes.
Section 4.03. Covenant Defeasance.
Upon the Company's exercise under Section 4.01 hereof of the option
applicable to the Defeased Notes pursuant to this Section 4.03, the Company
shall be released from its obligations under any covenant or provision contained
in Sections 10.06 through 10.22, 10.25 and 10.26 hereof and the provisions of
Article Eight shall not apply, with respect to the Defeased Notes, on and after
the date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Defeased Notes shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Defeased Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Sections or Article, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in
any such Section or Article to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 5.01(iii) or (iv) hereof, but, except as specified
above, the remainder of this Indenture and such Defeased Notes shall be
unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
4.02 or Section 4.03 hereof to the Defeased Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 hereof who shall agree to comply with the provisions of
this Article Four applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (a) cash (in
United States dollars) in an amount, or (b) Government Securities
(denominated in United States dollars) which through the scheduled payment
of principal, premium, if any, and interest in
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respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (c) a
combination thereof, in any such case, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
interest on the Defeased Notes at the Stated Maturity of such principal or
installment of principal, premium, if any, or interest; provided, however,
that the Trustee shall have been irrevocably instructed to apply such cash
or the proceeds of such Government Securities to said payments with respect
to the Notes;
(2) No Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default with respect to this
Indenture resulting from the incurrence of Indebtedness all or a portion of
which will be used to defease the Notes concurrently with such incurrence)
or, insofar as Section 5.01(vii), (viii) or (ix) hereof is concerned, at
any time during the period ending on the ninety-first day after the date of
such deposit;
(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of such deposit;
(4) Such defeasance or covenant defeasance shall not cause the Trustee
for the Notes to have a conflicting interest in violation of Section 6.08
hereof and for purposes of the Trust Indenture Act with respect to any
securities of the Company;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture
(other than as permitted by clause (2) above) or any other material
agreement or instrument to which the Company is a party or by which it is
bound;
(6) In the case of an election under Section 4.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) In the case of an election under Section 4.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(8) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, immediately following the ninety-first day
after the deposit, the trust funds established pursuant to this Article
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. Federal or state law;
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election applicable to Section 4.02 or 4.03 hereof was not made by the
Company with the intent of preferring the Holders over the other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
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(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all conditions
precedent (other than conditions requiring the passage of time) provided
for relating to either the defeasance under Section 4.02 or the covenant
defeasance under Section 4.03 (as the case may be) have been complied with
as contemplated by this Section 4.04 and (ii) if any other Indebtedness of
the Company shall then be outstanding or committed, such defeasance or
covenant defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness; and
(11) Such defeasance or covenant defeasance shall not result in a
trust arising from such deposit constituting an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
Opinions required to be delivered under this Section may have such
qualifications as are customary for opinions of the type required and reasonably
acceptable to the Trustee.
Section 4.05. Deposited Money and Government Securities To Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the last paragraph of Section 10.03, all money and
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
4.05, the "Trustee") pursuant to Section 4.04 in respect of the Defeased Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company) as the Trustee may determine,
to the Holders of such Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee and hold it harmless
against any tax, fee or other charge imposed on or assessed against the
Government Securities deposited pursuant to Section 4.04 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Defeased Notes.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it as provided in Section
4.04 which, in the opinion of an internationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
Section 4.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 4.02 or 4.03 hereof, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations of the Company under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
4.02 or 4.03 hereof, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money and Government Securities in
accordance with Section 4.02 or 4.03 hereof, as the case may be; provided,
however, that if the Company makes any payment of principal, premium, if any, or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the
34
Holders of such Notes to receive such payment from the money and Government
Securities held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of interest on the Notes when it becomes
due and payable and continuance of such default for a period of 30 days or
more; or
(ii) default in the payment of the principal of, or premium, if any,
on the Notes when due at maturity, upon redemption or otherwise; or
(iii) default in the performance, or breach, of any covenant
described under Section 10.10, Section 10.15 or Article Eight; or
(iv) default in the performance, or breach, of any covenant in the
Notes, this Indenture (other than defaults specified in clause (i), (ii) or
(iii) above), and continuance of such default or breach for a period of 30
days or more after written notice to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the outstanding Notes (in each case, when such notice
is deemed given in accordance with this Indenture); or
(v) (a) failure to pay, following any applicable grace period, any
installment of principal due (whether at maturity or otherwise) under one
or more classes or issues of Indebtedness in an aggregate principal amount
of $7.5 million or more under which the Company or any Restricted
Subsidiary is obligated or (b) failure by the Company or any Restricted
Subsidiary to perform any other term, covenant, condition or provision of
one or more classes or issues of Indebtedness in an aggregate principal
amount of $7.5 million or more under which the Company or such Restricted
Subsidiary is obligated and, in the case of this clause (b), such failure
results in an acceleration of the maturity thereof; or
(vi) one or more judgments, orders or decrees for the payment of
money of $7.5 million or more, either individually or in the aggregate,
shall be entered against the Company or any Restricted Subsidiary or any of
their respective properties and shall not be discharged and there shall
have been a period of 60 consecutive days or more during which a stay of
enforcement of such judgment or order, by reason of pending appeal or
otherwise, shall not be in effect; or
(vii) the Company or any Restricted Subsidiary pursuant to or under
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case against
it;
35
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files an answer or consent seeking reorganization or relief;
(F) shall admit in writing its inability to pay its debts
generally; or
(G) consents to the filing of a petition in bankruptcy; or
(viii) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company or any Restricted
Subsidiary, and such Bankruptcy Order remains unstayed and in effect for 60
consecutive days; or
(ix) a Custodian shall be appointed out of court with respect to
the Company or any Restricted Subsidiary with respect to all or any
substantial part of the assets or properties of the Company or any
Restricted Subsidiary; or
(x) this Indenture or the Registration Rights Agreement ceases to
be in force and effect in all material respects (other than with respect to
the invalidity or alleged invalidity of any provision in the Registration
Rights Agreement regarding indemnification for matters arising under the
federal securities laws) or is declared null and void or the Company denies
that it has any further obligation or liability thereunder or gives notice
to that effect (other than by reason of termination or release in
accordance with the terms thereof).
Section 5.02. Acceleration of Maturity, Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
clause (vi), (vii), or (viii) of Section 5.01 hereof with respect to the Company
or any Restricted Subsidiary) occurs and is continuing, then the Trustee or the
holders of at least 25% in principal amount of the then Outstanding Notes may,
by written notice, and the Trustee upon the request of the holders of not less
than 25% in principal amount of the then Outstanding Notes shall, declare the
Default Amount of all Outstanding Notes to be immediately due and payable and
upon any such declaration such amount shall become immediately due and payable.
If an Event of Default specified in clause (vi), (vii), or (viii) above with
respect to the Company or any Restricted Subsidiary occurs and is continuing,
then the Default Amount of all outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder.
After a declaration of acceleration, the holders of a majority in
aggregate principal amount of the then Outstanding Notes may, by notice to the
Trustee, rescind such declaration of acceleration if all existing Events of
Default, other than nonpayment of the Default Amount of the Notes that has
become due solely as a result of such acceleration, have been cured or waived
and if the rescission of acceleration would not conflict with any judgment or
decree.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that, if an Event of Default specified in
Section 5.01(i) or 5.01(ii) shall have occurred and be continuing, then the
Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of
the Holders of such Notes, the whole amount then due and payable on such Notes
for principal, premium, if any, and interest, with interest upon the overdue
principal, premium, if any, and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest, at the rate
then borne by the Notes; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection,
36
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may, but is not
obligated under this paragraph to, institute a judicial proceeding for the
collection of the sums so due and unpaid and may, but is not obligated under
this paragraph to, prosecute such proceeding to judgment or final decree, and
may, but is not obligated under this paragraph to, enforce the same against the
Company, any Subsidiary Guarantor or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company, any Subsidiary Guarantor or any other
obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion, but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture by such appropriate private or judicial proceedings as the Trustee
shall deem most effectual to protect and enforce such rights, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted herein or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, any Subsidiary Guarantor or any
other obligor upon the Notes or the property of the Company, any Subsidiary
Guarantor or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company or any Subsidiary Guarantor for the
payment of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, fees, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any Custodian, in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an
37
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: to Holders for principal and premium, if any, amounts owing
under the Notes, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
premium, if any; and
Fourth: the balance, if any, to the Company or any other obligor on
the Notes, as their interests may appear, or as a court of competent
jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
5.06.
Section 5.07. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount of
the then Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request which is satisfactory to the Trustee;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the then Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, any Note or any Subsidiary Guarantee to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other
38
Holders or to enforce any right under this Indenture, any Note or any Subsidiary
Guarantee, except in the manner provided in this Indenture and for the equal and
ratable benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
cash payment of the principal of, premium, if any, and (subject to Section 3.07
hereof) interest on such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the respective Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, each
Subsidiary Guarantor, if any, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Majority.
The Holders of a majority in aggregate principal amount of the then
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Note or expose the Trustee to personal liability;
(b) such direction shall not be unduly prejudicial to the rights of
another Holder; and
(c) the Trustee may take any other action deemed proper by the
Trustee, in its discretion, which is not inconsistent with such direction.
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Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the then Outstanding Notes by notice to the Trustee may on behalf of the
Holders of all the Notes waive any past Default or Event of Default hereunder
and its consequences, except a Default or Event of Default
(a) in the payment of the principal of, premium, if any, or interest
on any Note, or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected thereby.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the then
Outstanding Notes, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of, premium, if any, or interest on any Note on
or after the respective Stated Maturities expressed in such Note (or, in the
case of redemption, on or after the respective Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the principal
of, premium, if any, or interest on the Notes contemplated herein or in the
Notes or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and the TIA, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) During the continuance of an Event of Default, the Trustee is
required to exercise such rights and powers vested in it under this Indenture
and use the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.01.
Section 6.02. Notice of Defaults.
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the Note
Register, notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on any Note or in respect of Article Eight hereof,
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) the Trustee may request that any request or direction of the
Company mentioned herein be sufficiently evidenced by a Company Request or
Company Order and that any resolution of the Board be sufficiently evidenced by
a Board Resolution thereof;
(c) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders
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shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by the Trustee in
compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of its own negligence;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, other evidence of
indebtedness or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Notes then Outstanding; provided, however, that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the Company or,
if paid by the Trustee or any predecessor Trustee, shall be repaid by the
Company upon demand; provided, further, the Trustee in its discretion may make
such further inquiry or investigation into such facts or matters as it may deem
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) except with respect to Section 10.01, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article Ten.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default hereunder except (i) any Event of Default occurring pursuant to
Sections 5.01(i), 5.01(ii) or 10.01 or (ii) any Default or Event of Default of
which a Responsible Officer shall have received written notification or obtained
actual knowledge.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Notes or Application of Proceeds Thereof.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Notes, except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder and that the statements to be made by it in any Statement
of Eligibility and Qualification on Form T-1 supplied to the Company will be
true and accurate subject to the qualifications set forth therein. The Trustee
shall not be accountable for the use or application by the Company of Notes or
the proceeds thereof.
Section 6.05. Trustee and Agents May Hold Notes; Collections; Etc.
The Trustee, any Paying Agent, Registrar or co-Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Notes, with the same rights it would have if it were not the
Trustee, Paying Agent, Registrar or co-Registrar or such other agent and,
subject to Section 6.08 hereof and Sections 310 and 311 of the Trust Indenture
Act, may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Registrar or co-Registrar or such other agent.
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Section 6.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder.
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.
The Company covenants and agrees: (a) to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust); (b) to
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, fees, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation, fees, and the expenses and disbursements
of its counsel and of all agents and other Persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from its
negligence or bad faith; and (c) to indemnify the Trustee and each predecessor
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts
hereunder and its duties hereunder, including enforcement of this Section 6.07.
The obligations of the Company under this Section to compensate and indemnify
the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, fees, disbursements and advances shall
constitute an additional obligation hereunder and shall survive the satisfaction
and discharge of this Indenture. To secure the obligations of the Company to
the Trustee under this Section 6.07, the Trustee shall have a prior Lien upon
all property and funds held or collected by the Trustee as such, except funds
and property paid by the Company and held in trust for the benefit of the
Holders of particular Notes.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Sections 310(a)(1) and (2)
and which shall have (or, in the case of a Trustee that is an Affiliate of a
bank holding company, its Affiliated bank holding company shall have) a combined
capital and surplus of at least $25,000,000 and a corporate trust office or
agency in the Borough of Manhattan in The City of New York, State of New York.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of any Federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
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(b) The Trustee, or any trustee or trustees hereinafter appointed, may
at any time resign by giving written notice thereof to the Company at least 20
Business Days prior to the date of such proposed resignation. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board, a copy of
which shall be delivered to the resigning Trustee and a copy to the successor
Trustee. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 20 Business Days after the giving of such
notice of resignation, the resigning Trustee may, or (if an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 Business Days after the giving of such notice of resignation) any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of
a majority in aggregate principal amount of the then Outstanding Notes,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act in accordance with Section 6.08 hereof
after written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Note who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the then Outstanding
Notes delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee appointed by the
Company. If no successor Trustee shall have been so appointed by the Company or
the Holders of the Notes and accepted appointment in the manner hereinafter
provided, the Holder of any Note who has been a bona fide Holder for at least
six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, or the resigning Trustee may, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Notes as their names and addresses appear in the Note Register. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
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Section 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee as if originally named as Trustee hereunder;
but, nevertheless, on the written request of the Company or the successor
Trustee, upon payment of amounts due it pursuant to Section 6.07, such retiring
Trustee shall duly assign, transfer and deliver to the successor Trustee all
moneys and property at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers, duties and obligations of the retiring Trustee. Upon request of any
such successor Trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all
such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain
a prior claim upon all property or funds held or collected by such Trustee to
secure any amounts then due it pursuant to the provisions of Section 6.07.
No successor Trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided in
this Section 6.11, the successor shall give notice thereof to the Holders of the
Notes, by mailing such notice to such Holders at their addresses as they shall
appear on the Note Register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 6.10.
If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Company.
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee (including the trust created by this
Indenture), shall be the successor of the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided such corporation shall be eligible under this Article
Six to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee
and deliver such Notes so authenticated; and, in case at that time any of the
Notes shall not have been authenticated, any successor to the Trustee under this
Section 6.12 may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have been
authenticated.
ARTICLE SEVEN'
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish Trustee
Names and Addresses of Holders.
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(a) The Trustee shall preserve the names and addresses of the Holders
and otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar or co-Registrar, the Company shall furnish or cause the Registrar or
co-Registrar to furnish to the Trustee before each Interest Payment Date, and at
such other times as the Trustee may reasonably request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders. Neither the Company nor the Trustee shall be
under any responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar or
co-Registrar, no such list need be furnished pursuant to this Subsection
7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Notes pursuant to Section 312(b) of the
Trust Indenture Act. The Company and the Trustee and any and all other Persons
benefited by this Indenture shall have the protection afforded by Section 312(c)
of the Trust Indenture Act.
Section 7.03. Reports by Trustee.
Within 60 days after February 15th of each year commencing with the
first February 15th following the date of this Indenture, the Trustee shall mail
to all Holders, as their names and addresses appear in the Note Register, a
brief report dated as of such February 15th, in accordance with and to the
extent required under Section 313 of the Trust Indenture Act. At the time of
its mailing to Holders, a copy of each such report shall be filed by the Trustee
with the Company, the Commission and, if required by the rules of any such stock
exchange or market, with each stock exchange or market on which the Notes are
listed. The Company shall notify the Trustee when the Notes are listed on any
stock exchange or market.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain Terms.
The Company will not (i) consolidate or combine with or merge with or
into or, directly or indirectly, sell, assign, convey, lease, transfer or
otherwise dispose of all or substantially all of its properties and assets to
any Person or Persons in a single transaction or through a series of
transactions, or (ii) permit any of the Restricted Subsidiaries to enter into
any such transaction or series of transactions if it would result in the
disposition of all or substantially all of the properties or assets of the
Company and the Restricted Subsidiaries on a consolidated basis, unless, in the
case of either (i) or (ii), (a) the Company shall be the continuing Person or,
if the Company is not the continuing Person, the resulting, surviving or
transferee Person (the "surviving entity") shall be a company organized and
existing under the laws of the United States or any State or territory thereof;
(b) the surviving entity (if other than the Company) shall expressly assume all
of the obligations of the Company under the Notes and this
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Indenture, and shall execute a supplemental indenture to effect such assumption
which supplemental indenture shall be delivered to the Trustee and shall be in
form and substance reasonably satisfactory to the Trustee; (c) immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series of
transactions), (I) the Company or the surviving entity (assuming such surviving
entity's assumption of the Company's obligations under the Notes and this
Indenture), as the case may be, would be able to incur $1.00 of Indebtedness
(other than Permitted Indebtedness) under the proviso of Section 10.11, and (II)
the Company or the surviving entity, as the case may be, would have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction or series of transactions; (d)
immediately after giving effect to such transaction or series of transactions on
a pro forma basis (including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such transaction
or series of transactions), no Default shall have occurred and be continuing;
and (e) the Company or the surviving entity, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating that such transaction or series of transactions, and, if a supplemental
indenture is required in connection with such transaction or series of
transactions to effectuate such assumption, such supplemental indenture,
complies with this covenant and that all conditions precedent in this Indenture
relating to the transaction or series of transactions have been satisfied.
Section 8.02. Successor Substituted.
Upon any consolidation or merger or any sale, assignment, conveyance,
lease, transfer or other disposition of all or substantially all of the assets
of the Company in accordance with the foregoing in which the Company or the
Restricted Subsidiary, as the case may be, is not the continuing corporation,
then the successor corporation formed by such a consolidation or into which the
Company or such Restricted Subsidiary is merged or to which such transfer is
made, will succeed to, and be substituted for, and may exercise every right and
power of, the Company or such Restricted Subsidiary, as the case may be, under
this Indenture and the Notes with the same effect as if such successor
corporation had been named as the Company or such Restricted Subsidiary therein;
and thereafter, except in the case of (i) any lease or (ii) any sale,
assignment, conveyance, transfer, lease or other disposition to a Restricted
Subsidiary of the Company, the Company shall be discharged from all obligations
and covenants under this Indenture and the Notes.
For all purposes of this Indenture (including the provisions of this
Article Eight and Sections 10.11, 10.13 and 10.16 hereof) and the Notes,
Subsidiaries of any surviving entity will, upon such transaction or series of
related transactions, become Restricted Subsidiaries or Unrestricted
Subsidiaries as provided pursuant to Section 10.20 hereof, and all Indebtedness,
and all Liens on property or assets, of the surviving entity and the Restricted
Subsidiaries (except Indebtedness, or Liens on property or assets of the Company
and the Restricted Subsidiaries in existence immediately prior to such
transaction or series of related transactions) shall be deemed to have been
incurred upon such transaction or series of related transactions.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers Without
Consent of Holders.
Without the consent of any Holders, the Company and any Subsidiary
Guarantor, when authorized by a Board Resolution, and the Trustee, together, at
any time and from time to time, may amend, waive, modify or supplement this
Indenture or the Notes for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company in the
Notes and this Indenture;
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(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company in
the Notes or this Indenture;
(c) to cure any ambiguity, or to correct or supplement any provision
in this Indenture or in the Notes which may be defective or inconsistent with
any other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture or the Notes; provided,
however, that, in each case, such provisions shall not adversely affect the
legal rights of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder;
(f) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the Holders as
security for the payment and performance of the Indenture Obligations;
(g) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will be
modified or eliminated, as appropriate), and which will be treated together with
any outstanding Initial Notes, as a single issue of securities;
(h) to add or release a Subsidiary Guarantor in compliance with the
provisions of Section 10.22 hereof; or
(i) to make any other change that does not adversely affect in any
material respect the legal rights of any Holder;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change, agreement or waiver complies with the
provisions of this Section 9.01.
Section 9.02. Supplemental Indentures, Agreements and Waivers with
Consent of Holders.
With the written consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, together with
the Trustee, may amend, waive, modify or supplement any other provision of this
Indenture or the Notes; provided, however, that no such amendment, waiver,
modification or supplement may, without the written consent of the Holder of
each Outstanding Note affected thereby:
(i) reduce the principal amount of, change the fixed maturity
of, or alter the redemption provisions of, the Notes,
(ii) change the currency in which any Notes or amounts owing
thereon is payable,
(iii) reduce the percentage of the aggregate principal amount
Outstanding of Notes which must consent to an amendment, supplement or
waiver or consent to take any action under this Indenture or the Notes,
(iv) impair the right to institute suit for the enforcement of
any payment on or with respect to the Notes,
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(v) waive a Default in payment with respect to the Notes, other
than a waiver consisting of the rescission of any declaration of
acceleration with respect to the Notes effected in compliance with Section
5.02,
(vi) reduce the rate or change the time for payment of interest
on the Notes,
(vii) following the occurrence of a Change of Control or an Asset
Sale, alter the Company's obligation to purchase the Notes in accordance
with this Indenture or waive any Default in the performance thereof, or
(viii) affect the ranking of the Notes in a manner adverse to the
Holders of the Notes.
Upon the written request of the Company accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture or other
agreement, instrument or waiver, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture or other agreement,
instrument or waiver.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements and
Waivers.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Notes entering into such
supplemental indenture, agreement, instrument or waiver, each stating that the
execution of such supplemental indenture, agreement, instrument or waiver (a) is
authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company or any other Subsidiary of the Company. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture, agreement,
instrument or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture, the Notes or otherwise.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture and/or the Notes, if applicable, shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture and/or the Notes, if applicable, as the case may be, for all purposes;
and every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article, may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Board, to any such supplemental indenture may be prepared and
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executed by the Company and authenticated and delivered by the Trustee upon a
Company Order in exchange for Outstanding Notes.
In addition, Notes authenticated and delivered after the execution of
any supplemental indenture in compliance with Section 10.22 and this Article
shall, if required by the Trustee, bear a notation substantially in the form
annexed hereto as Annex A to Exhibit B, and new Notes bearing such notation
shall be prepared and executed by the Company, with such notation executed by
the Subsidiary Guarantors, if any . The Trustee, upon a Company Order, shall
thereafter authenticate and deliver such Notes in exchange for Outstanding
Notes.
Section 9.07. Record Date.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any supplemental
indenture, agreement or instrument or any waiver, and shall promptly notify the
Trustee of any such record date. If a record date is fixed those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such supplemental indenture,
agreement or instrument or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 90 days after such record
date.
Section 9.08. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if a notation of the consent is not made on any
Note. However, any such Holder, or subsequent Holder, may revoke the consent as
to his Note or portion of a Note if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. An
amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of, premium, if
any, and interest on the Notes in accordance with the terms of the Notes, this
Indenture and the Registration Rights Agreement.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal, premium or interest payments hereunder.
Section 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan in The City of
New York, State of New York, an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The office of State
Street Bank and Trust Company, N.A., an Affiliate of the Trustee, at its
Corporate Trust Office will be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company will give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the
50
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Notes may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, State of New
York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
Section 10.03. Money for Note Payments To Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Notes, segregate and hold in trust for the benefit of the Holders
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, prior
to 11:00 a.m. New York City time, on or before each due date of the principal
of, premium, if any, or interest on, any Notes, deposit with a Paying Agent a
sum in same day funds sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the benefit of the
Holders entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of the Holders
entitled thereto until such sums shall be paid to such Holders or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal of,
premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such payment Default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company upon
51
receipt of a Company Request therefor, or (if then held by the Company) will be
discharged from such trust; and the Holder of such Note will thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, will thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, at the option of the Company in the New York Times or the
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.
Section 10.04. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; provided, however, that the
Company will not be required to preserve any such right, license or franchise if
the Board shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and the Restricted Subsidiaries
as a whole and that the loss thereof is not adverse in any material respect to
the Holders; provided, further, that the foregoing will not prohibit a sale,
transfer or conveyance of a Restricted Subsidiary of the Company or any of its
assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of the
Restricted Subsidiaries or (ii) upon the income, profits or property of the
Company or any of the Restricted Subsidiaries and (b) all material lawful claims
for labor, materials and supplies, which, if unpaid, could reasonably be
expected to become a Lien upon the property of the Company or any of the
Restricted Subsidiaries; provided, however, that the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (x) whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted or (y) if the failure to so pay, discharge or cause to be
paid or discharged could not reasonably be expected to have a Material Adverse
Effect (as such term is defined in the Purchase Agreement).
Section 10.06. Maintenance of Properties.
The Company will cause all material properties owned by the Company or
any of the Restricted Subsidiaries that are used or held for use in the conduct
of their respective businesses to be maintained and kept in good condition,
repair and working order (subject to ordinary wear and tear) and supplied with
all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 10.06 will prevent the Company
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any of the Restricted Subsidiaries and is not
disadvantageous in any material respect to the Holders.
Section 10.07. Insurance.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers
(including appropriate self-insurance), believed by the Company in good faith
to be financially sound and responsible, against loss or damage to the extent
that, in the good faith judgment of the Board, property of similar character is
usually and customarily so insured by corporations similarly situated and owning
like properties.
52
Section 10.08. Books and Records.
The Company will keep proper books of record and account, in which
full and correct entries will be made of all financial transactions and the
assets and business of the Company and each Restricted Subsidiary of the Company
in compliance with GAAP.
Section 10.09. Provision of Commission Reports.
Whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act or any successor provision of law, the Company shall furnish
without cost to each Holder, and file with the Trustee, (i) within 135 days
after the end of each fiscal year of the Company, financial information with
respect to the Company that would be required to be contained in an Annual
Report on Form 10-K for such year filed by the Company with the Commission
(whether or not the Company is then required to file such Form with the
Commission), including (x) audited financial statements of the Company,
including the report of the Company's independent auditors thereon, and (y) a
discussion of the Company's financial condition and results of operations that
complies with Item 303 of Regulation S-K of the Commission, (ii) within 60 days
after the end of each of the first three fiscal quarters of each fiscal year of
the Company, financial information with respect to the Company that would be
required to be contained in a Quarterly Report on Form 10-Q filed by the Company
with the Commission (whether or not the Company is then required to file such
Form with the Commission), including a discussion of the Company's financial
condition and results of operations that complies with Item 303 of Regulation S-
K of the Commission and (iii) on a timely basis, any information concerning the
Company or any Restricted Subsidiary required to be contained in a Current
Report on Form 8-K (whether or not the Company is then required to file such
Form with the Commission), and, unless such information is included or
incorporated in a Form 10-K, Form 10-Q or Form 8-K filed by the Company with the
Commission, the Company shall file a copy of all such information described in
clauses (i), (ii) and (iii) above with the Commission (if permitted by
Commission practice and applicable law and regulations).
For so long as any Notes remain Outstanding, the Company shall furnish
to securities analysts and prospective investors, upon their request,
information of the type required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, and, to any beneficial holder of Notes, if not
obtainable from the Commission, information of the type that would be filed with
the Commission pursuant to the foregoing provisions, upon the request of any
such Holder.
Delivery of the foregoing reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of the Trustee of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
The Company will also comply with the other provisions of Section
314(a) of the Trust Indenture Act.
Section 10.10. Change of Control.
Upon the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall make an offer
to purchase (the "Change of Control Offer"), on a Business Day (the "Change of
Control Payment Date") not later than 60 days following the Change of Control
Date, all Notes then outstanding at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to,
such Change of Control Payment Date. Notice of a Change of Control Offer shall
be mailed to holders of Notes not less than 30 days nor more than 60 days before
the Change of Control Payment Date.
53
Notice of a Change of Control Offer shall be mailed by the Company to
the Holders at their last registered addresses with a copy to the Trustee and
the Paying Agent. The Change of Control Offer shall remain open from the time
of mailing for at least 20 Business Days and until 5:00 p.m., New York City
time, on the Change of Control Payment Date. The notice, which shall govern the
terms of the Change of Control Offer, shall include such disclosures as are
required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 10.10 and that all Notes validly tendered into the Change of Control
Offer and not withdrawn will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Note, the Change of Control Payment Date and the date on which the
Change of Control Offer expires;
(c) that any Note not tendered for payment will remain Outstanding and
continue to accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Note accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Payment Date;
(e) that Holders electing to have Notes purchased pursuant to a Change
of Control Offer will be required to surrender their Notes to the Paying Agent
at the address specified in the notice prior to 5:00 p.m., New York City time,
on the Change of Control Payment Date and must complete any form letter of
transmittal proposed by the Company and acceptable to the Trustee and the Paying
Agent;
(f) that a Holder that tenders a Note pursuant to a Change of
Control Offer will be entitled to withdraw such Note if the Paying Agent
receives, not later than 5:00 p.m., New York City time, on the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Note the Holder tendered for purchase, the Note
certificate number (if any) and a statement that such Holder is withdrawing his
election to have such Note purchased;
(g) that a Holder may tender all or any portion of a Note owned by
such Holder pursuant to the Change of Control Offer, subject to the requirement
that any portion of a Note tendered must be tendered in an integral multiple of
$1,000 in principal amount, and that any Holder that tenders a portion of a Note
will be issued a Note of like tenor equal in principal amount to the portion of
the Note not tendered;
(h) the instructions that Holders must follow in order to tender their
Notes; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the Commission
pursuant to the Exchange Act (or, if the Company is not required to file any
such reports with the Commission at that time, the comparable information
prepared pursuant to Section 10.09), a description of material developments in
the Company's business and such other information concerning the circumstances
and relevant facts regarding such Change of Control and Change of Control Offer
(including, without limitation, pro forma financial information giving effect to
such Change of Control) as would, in the good faith judgment of the Company, be
material to a Holder in connection with the decision of such Holder as to
whether or not it should tender Notes pursuant to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall (i) accept
for payment all Notes, or portions thereof, validly tendered and not withdrawn
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money, in immediately available funds, sufficient to pay the purchase price of
all Notes, or portions thereof, so tendered and accepted and (iii) deliver to
the Trustee the Notes so accepted together with an Officers' Certificate setting
forth the registered numbers of such Notes. The Paying Agent shall, with the
funds so deposited with it by the Company, promptly mail or deliver to each
Holder that validly tendered and did not withdraw Notes,
54
or any portion thereof, an amount equal to the purchase price for the portion so
tendered, and the Trustee shall promptly authenticate and mail or deliver to
such Holder a new Note of like tenor equal in principal amount to that portion,
if any, of any Note surrendered by such Holder but not tendered pursuant to the
Change of Control Offer. The Company will publicly announce or otherwise notify
the Holders of the results of the Change of Control Offer as soon as practicable
following the Change of Control Payment Date. The Company shall not be required
to make a Change of Control Offer following a Change of Control if a third party
makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements applicable to a Change of Control Offer
otherwise required to be made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
If the Company is required to make a Change of Control Offer, the
Company (or any such third party) shall comply with all applicable tender offer
laws and regulations, including, to the extent applicable, Section 14(e) and
Rule 14e-1 under the Exchange Act, and any other applicable securities laws and
regulations. To the extent that the provisions of any such securities laws or
regulations conflict with the provisions of this Section 10.10, the Company will
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 10.10 solely by
virtue of such compliance.
Section 10.11. Limitation on Additional Indebtedness.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume, issue, Guarantee or in any
manner become directly or indirectly liable for or with respect to, contingently
or otherwise, the payment of (collectively, to "incur") any Indebtedness
(including any Acquired Indebtedness), except for Permitted Indebtedness
(including Acquired Indebtedness to the extent it would constitute Permitted
Indebtedness); provided, that (i) the Company will be permitted to incur
Indebtedness (including Acquired Indebtedness) and (ii) a Restricted Subsidiary
will be permitted to incur Acquired Indebtedness, if, in either case, after
giving pro forma effect to such incurrence (including the application of the net
proceeds therefrom), the Indebtedness to EBITDA Ratio would be less than or
equal to 6 to 1.
Indebtedness of any Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
with the Company or any Restricted Subsidiary) shall be deemed incurred at the
time such Person becomes a Restricted Subsidiary or merges into or consolidates
with the Company or any Restricted Subsidiary.
For purposes of determining compliance with this Section 10.11, in the
event that an item of Indebtedness may be incurred by meeting the criteria of
one or more items of Permitted Indebtedness, the Company may, in its sole
discretion, classify and divide such item of Indebtedness among more than one of
such items of Permitted Indebtedness.
Accrual of interest, accretion or amortization of original issue
discount and reductions in any collateral described in clause (B) of the
definition of "Indebtedness" by reason of payments of interest on the
Indebtedness secured by such collateral will not be deemed to be an incurrence
of Indebtedness for purposes of this Section 10.11.
Section 10.12. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a written
statement signed by the chairman or the chief executive officer and by the
principal financial officer or principal accounting officer of the Company,
stating (i) that a review of the activities of the Company during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations
55
under this Indenture, and (ii) that, to the knowledge of each Officer signing
such certificate, the Company has kept, observed, performed and fulfilled in all
material respects each and every covenant and condition contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions, conditions and covenants hereof (or, if a Default shall have
occurred, describing all such Defaults of which such Officers have knowledge,
their status and what action the Company is taking or proposes to take with
respect thereto). When any Default under this Indenture has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Restricted Subsidiary
gives any notice or takes any other action with respect to a claimed Default
(other than with respect to Indebtedness (other than Indebtedness evidenced by
the Notes) in the principal amount of less than $5 million), the Company will
promptly notify the Trustee of such Default, notice or action and will deliver
to the Trustee by registered or certified mail or by telegram, or facsimile
transmission followed by hard copy by registered or certified mail an Officers'
Certificate specifying such event, notice or other action within five Business
Days after the Company becomes aware of such occurrence and what action the
Company is taking or proposes to take with respect thereto.
Section 10.13. Limitation on Restricted Payments.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, make, directly or indirectly, any Restricted Payment unless:
(i) no Default shall have occurred and be continuing at the time
of or upon giving effect to such Restricted Payment;
(ii) immediately after giving effect to such Restricted Payment,
the Company would be able to incur $1.00 of Indebtedness under the proviso
of Section 10.11 hereof; and
(iii) immediately after giving effect to such Restricted Payment,
the aggregate amount of all Restricted Payments declared or made on or
after the Issue Date does not exceed an amount equal to the sum of, without
duplication, (a) 50% of Consolidated Net Income accrued on a cumulative
basis during the period beginning on the first day of the first fiscal
quarter immediately subsequent to the Issue Date and ending on the last day
of the fiscal quarter of the Company immediately preceding the date of such
proposed Restricted Payment (or, if such cumulative Consolidated Net Income
of the Company for such period is a deficit, minus 100% of such deficit)
for which financial statements are available, in any event determined by
excluding income resulting from transfers of assets by the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary, plus (b) the aggregate
net cash proceeds received by the Company either (x) as capital
contributions to the Company after May 5, 1998 or (y) from the issuance and
sale of its Capital Stock (other than Disqualified Stock) or options,
warrants or other rights to acquire its Capital Stock (other than
Disqualified Stock), in each case on or after May 5, 1998 to a Person who
is not a Subsidiary of the Company, plus (c) the aggregate net proceeds
received by the Company from the issuance (other than to a Subsidiary of
the Company) on or after May 5, 1998 of its Capital Stock (other than
Disqualified Stock) upon the conversion of, or in exchange for,
Indebtedness of the Company or upon the exercise of options, warrants or
other rights of the Company, plus (d) in the case of the disposition or
repayment (in whole or in part) of any Investment constituting a Restricted
Payment made after the Issue Date, an amount equal to the lesser of the
return of capital with respect to the applicable portion of such Investment
and the cost of the applicable portion of such Investment, in either case,
less the cost of the disposition of such Investment, plus (e) in the case
of any Revocation with respect to a Subsidiary of the Company that was made
subject to a Designation after the Issue Date, an amount equal to the
lesser of the Designation Amount with respect to such Subsidiary or the
Fair Market Value of the Investment of the Company and the Restricted
Subsidiaries in such Subsidiary at the time of Revocation. For purposes of
the preceding clauses (b) (y) and (c), as applicable, (A) the value of the
aggregate net proceeds received by the Company upon the issuance of Capital
Stock either upon the conversion of convertible Indebtedness or in exchange
for outstanding Indebtedness or upon the exercise of options, warrants or
rights will be the net cash proceeds received upon the issuance of such
Indebtedness, options, warrants or rights plus the
56
incremental amount received, if any, by the Company upon the conversion,
exchange or exercise thereof, (B) there shall be excluded in all cases any
issuance and sale of Capital Stock financed, directly or indirectly, using
funds (I) borrowed from the Company or any Subsidiary until and to the
extent such borrowing is repaid or (II) contributed, extended, Guaranteed
or advanced by the Company or any Subsidiary (including, without
limitation, direct contributions by the Company in respect of any employee
stock ownership or benefit plan) and (C) there shall be excluded in all
cases any issuance and sale of Capital Stock in one or more Public Equity
Offerings or to Strategic Equity Investors to the extent the net cash
proceeds are used, prior to February 15, 2003, to redeem Notes as permitted
under the optional redemption provisions of the Notes. The Company may not
redeem Notes pursuant to the optional redemption provisions of the Notes
referred to in the immediately preceding sentence from net cash proceeds
received by the Company from the issuance on or after the Issue Date of its
Capital Stock if such net cash proceeds have ever been included in a
determination of the amount of Restricted Payments that may be made by the
Company pursuant to this Section 10.13, unless the Company would have been
able to make such Restricted Payment without including such net cash
proceeds in such determination.
For purposes of determining the amount expended for Restricted
Payments, cash distributed shall be valued at the face amount thereof and
property other than cash shall be valued at its Fair Market Value.
The provisions of this Section 10.13 shall not prohibit the following
(each of which shall be given independent effect):
(1) the payment of any dividend or other distribution within 60 days
after the date of declaration thereof if at such date of declaration such
payment would be permitted by the provisions of this Indenture;
(2) the purchase, redemption, retirement or other acquisition of any
shares of Capital Stock of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of, shares of Capital Stock of the Company (other
than Disqualified Stock); provided that any such net cash proceeds are excluded
from clause (iii)(b) above;
(3) so long as no Default shall have occurred and be continuing, the
purchase, redemption, retirement, defeasance or other acquisition of
Subordinated Indebtedness (A) made by exchange for, or out of the net cash
proceeds of, a substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of (x) Capital Stock (other than Disqualified Stock)
of the Company, provided that any such net cash proceeds are excluded from
clause (iii) (b) above; or (y) other Subordinated Indebtedness to the extent
that (I) its stated maturity for the payment of principal thereof is not prior
to the 91st day after the final Stated Maturity of the Notes, (II) its principal
amount does not exceed the principal amount (or, if such Subordinated
Indebtedness being refinanced provides for an amount less than the principal
amount thereof to be due and payable upon an acceleration thereof, such lesser
amount) of the Subordinated Indebtedness being refinanced, plus any premium
required to be paid in connection with such refinancing pursuant to the terms of
such Subordinated Indebtedness being refinanced, plus the amount of expenses of
the Company incurred in connection with such refinancing, and (III) such new
Subordinated Indebtedness is subordinated to the Notes to the same extent as the
Subordinated Indebtedness being refinanced, or (B) with Unutilized Cash Proceeds
remaining after completion of an Asset Sale pursuant to the fifth paragraph of
Section 10.15 hereof;
(4) so long as no Default shall have occurred and be continuing,
purchases or redemptions of Capital Stock (including cash settlements of stock
options) held by employees, officers or directors upon or following termination
(whether by reason of death, disability or otherwise) of their employment with
the Company or one of its Subsidiaries; provided that payments shall not exceed
$500,000 in any fiscal year in the aggregate;
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(5) payments or distributions to dissenting stockholders pursuant to
applicable law, pursuant to or in contemplation of merger, consolidation or
transfer of assets that complies with the provisions of the Indenture relating
to mergers, consolidations or transfers of substantially all of the assets of
the Company;
(6) any purchase of any fractional share of Common Stock of the
Company in connection with an exercise of the 1998 Warrants and any repurchase
of 1998 Warrants pursuant to a Repurchase Offer (as defined in the 1998 Warrant
Agreement); and
(7) Restricted Payments in addition to those otherwise permitted
pursuant to this Section 10.13 in an aggregate amount not to exceed $10.0
million.
In determining the amount of Restricted Payments permissible under
this Section 10.13, amounts expended pursuant to clauses (1), (4) and (7) above
shall be included, without duplication, as Restricted Payments.
Section 10.14. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit, cause or suffer any
Restricted Subsidiary to, directly or indirectly, conduct any business, sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into any contract, agreement,
loan, advance or Guarantee or engage in any other transaction (or series of
related transactions which are similar or part of a common plan) with or for the
benefit of any of their respective Affiliates or any beneficial owner of 10% or
more of the Common Stock of the Company or any officer or director of the
Company or any Subsidiary (each, an "Affiliate Transaction"), unless the terms
of the Affiliate Transaction are set forth in writing and are no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction with an unaffiliated third party. Each
Affiliate Transaction (or series of related Affiliate Transactions) involving
aggregate payments and/or other consideration having Fair Market Value (i) in
excess of $1 million shall be approved by a majority of the Board, such approval
to be evidenced by a Board Resolution stating that the Board has determined that
such transaction or transactions comply with the foregoing provisions, (ii) in
excess of $5 million shall further require the approval of a majority of the
Disinterested Directors and (iii) in excess of $10 million shall further require
that the Company obtain a written opinion from an Independent Financial Advisor
stating that the terms of such Affiliate Transaction (or series of related
Affiliate Transactions) are fair to the Company or the Restricted Subsidiary, as
the case may be, from a financial point of view; provided, that this clause
(iii) shall not apply to purchases of goods and/or services in the ordinary
course of the Company's business, and on terms no less favorable to the Company
than those customarily granted to purchasers of such goods and/or services, from
Paradyne Corporation or Xylan Corporation. For purposes of this Section 10.14,
any Affiliate Transaction approved by a majority of the Disinterested Directors
or as to which a written opinion has been obtained from an Independent Financial
Advisor, on the basis set forth in the preceding sentence, shall be deemed to be
on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction with an unaffiliated third party and, therefore, shall be permitted
under this Section 10.14.
Notwithstanding the foregoing, the restrictions set forth in this
Section 10.14 shall not apply to (i) transactions with or among, or solely for
the benefit of, the Company and/or any of the Restricted Subsidiaries, provided
that in any such case, no officer, director or beneficial owner of 10% or more
of any class of Capital Stock of the Company shall beneficially own any Capital
Stock of any such Restricted Subsidiary, (ii) transactions pursuant to
agreements and arrangements existing on the Issue Date and specified on a
schedule to the Indenture, (iii) any Restricted Payment made in compliance with
Section 10.13, (iv) the payment of reasonable and customary regular fees to
directors of the Company or any Restricted Subsidiary who are not employees of
the Company or any Restricted Subsidiary, (v) employment agreements, stock
option agreements and indemnification arrangements entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with industry practice, (vi) the granting and performance of
registration rights for securities of the Company, (vii) loans and advances to
officers, directors and employees of the Company or any Restricted Subsidiary
for travel,
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entertainment, moving and other relocation expenses, in each case made in the
ordinary course of business and consistent with industry practice, and (viii)
any Permitted Investment.
Section 10.15. Disposition of Proceeds of Asset Sales
The Company will not, and will not permit any Restricted Subsidiary
to, make any Asset Sale unless (a) the Company or such Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold or otherwise
disposed of and (b) at least 75% of such consideration consists of cash or Cash
Equivalents; provided that the following shall be treated as cash for purposes
of this Section 10.15: (x) the amount of any Indebtedness (other than
Subordinated Indebtedness) of the Company or any Restricted Subsidiary that is
actually assumed by the transferee of assets disposed of in such Asset Sale
pursuant to an agreement that fully and unconditionally releases the Company or
such Restricted Subsidiary from further liability ("Assumed Indebtedness") and
(y) the amount of any notes or other obligations that within 30 days of receipt
are converted into cash (to the extent of the cash (after payment of any costs
of disposition) so received). Notwithstanding the immediately preceding
sentence, the Company and its Restricted Subsidiaries may consummate an Asset
Sale without complying with clause (b) of the immediately preceding sentence if
at least 75% of the consideration for such Asset Sale consists of any
combination of cash, Cash Equivalents and Permitted Business Assets (or in
Capital Stock of any Person that will become a Restricted Subsidiary as a result
of such investment if all or substantially all of the properties and assets of
such Person are Permitted Business Assets); provided that any non-cash
consideration (other than Permitted Business Assets received by the Company or
any of its Restricted Subsidiaries in connection with such Asset Sale) that is
converted into or sold or otherwise disposed of for cash or Cash Equivalents
within 365 days after such Asset Sale and any Permitted Business Assets
constituting cash or Cash Equivalents received by the Company or any Restricted
Subsidiary shall constitute Net Cash Proceeds subject to the provisions of this
Section 10.15. The Company or the applicable Restricted Subsidiary, as the case
may be, may (i) apply the Net Cash Proceeds from such Asset Sale, within 365
days of the receipt thereof, to the permanent reduction (whether by means of
repayment, release pursuant to clause (x) of the first sentence of this Section
10.15 or otherwise) of (A) Indebtedness of any Restricted Subsidiary and/or (B)
Indebtedness of the Company ranking senior to or pari passu with the Notes, and,
in each case, permanently reduce the amount of the commitments thereunder by the
amount of the Indebtedness so repaid, and/or (ii) apply such Net Cash Proceeds,
within 365 days of the receipt thereof, to an investment in properties and
assets (including leases of such properties or assets) that will be used or are
usable in the same or a related line of business as that being conducted by the
Company or any Restricted Subsidiary at the time of such Asset Sale or such
investment therein (collectively, "Permitted Business Assets") (or in Capital
Stock of any Person that will become a Restricted Subsidiary as a result of such
investment if all or substantially all of the properties and assets of such
Person are Permitted Business Assets).
To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied within 365 days of such Asset Sale as described in clause (i) or
(ii) of the preceding paragraph (such Net Cash Proceeds, the "Unutilized Net
Cash Proceeds"), the Company shall, within 20 Business Days after such 365th
day, make an offer to purchase (an "Asset Sale Offer") all outstanding Notes up
to a maximum principal amount (expressed as a multiple of $1,000) equal to the
Note Pro Rata Share of Unutilized Net Cash Proceeds, at a purchase price in cash
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, to such purchase date; provided, however, that an Asset Sale Offer may
be deferred by the Company until there are Unutilized Net Cash Proceeds equal to
at least $5.0 million, at which time the entire amount of such Unutilized Net
Cash Proceeds (and not just the amount in excess of $5.0 million) shall be
applied as required pursuant to this paragraph and the next following paragraph.
If any other Indebtedness of the Company which ranks pari passu with
the Notes (the "Other Indebtedness"), including the 1998 Notes and the 1999
Notes, requires that an offer to repurchase such Indebtedness be made upon the
consummation of an Asset Sale, then the Company may apply the Unutilized Net
Cash Proceeds otherwise required to be applied to an Asset Sale Offer to offer
to purchase such Other Indebtedness and to an Asset Sale Offer so long as the
amount of such Unutilized Net Cash Proceeds applied to repurchase the Notes is
not less
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than the Note Pro Rata Share of Unutilized Net Cash Proceeds. Any offer to
purchase such Other Indebtedness shall be made at the same time as the Asset
Sale Offer, and the purchase date in respect of any such offer to purchase and
the Asset Sale Offer shall occur on the same day.
For purposes of this Section 10.15, "Note Pro Rata Share of Unutilized
Net Cash Proceeds" means the amount of the Unutilized Net Cash Proceeds equal to
the product of (x) the Unutilized Net Cash Proceeds and (y) a fraction, the
numerator of which is the aggregate principal amount of, and all accrued
interest thereon to the purchase date on, all Notes (or portions thereof)
validly tendered and not withdrawn pursuant to an Asset Sale Offer related to
such Unutilized Net Cash Proceeds (the "Note Amount") and the denominator of
which is the sum of the Note Amount and the lesser of (i) the aggregate
principal face amount, and all accrued interest thereon to the purchase date, or
(ii) the accreted value as of the purchase date of all Other Indebtedness (or
portions thereof) validly tendered and not withdrawn pursuant to a concurrent
offer to purchase such Other Indebtedness made at the time of such Asset Sale
Offer.
Each Asset Sale Offer shall remain open for a period of 20 Business
Days or such longer period as may be required by law. To the extent that the
principal amount, plus accrued interest thereon, if any, to the payment date, of
Notes validly tendered and not withdrawn pursuant to an Asset Sale Offer is less
than the Unutilized Net Cash Proceeds or the Note Pro Rata Share of Unutilized
Net Cash Proceeds, as the case may be, the Company or any Restricted Subsidiary
may use such excess for general corporate purposes, including the repayment or
repurchase of Indebtedness. If the principal amount, plus accrued interest
thereon, if any, to the payment date, of Notes validly tendered and not
withdrawn by holders thereof exceeds the amount of Notes which can be purchased
with the Unutilized Net Cash Proceeds or the Note Pro Rata Share of Unutilized
Net Cash Proceeds, as the case may be, then the Notes to be purchased will be
selected on a pro rata basis. Upon completion of such Asset Sale Offer and
offer for any Other Indebtedness, the amount of Unutilized Net Cash Proceeds
shall be reset to zero.
Notice of an Asset Sale Offer shall be mailed by the Company not more
than 20 Business Days after the obligation to make such Asset Sale Offer arises
to the Holders of Notes at their last registered addresses with a copy to the
Trustee and the Paying Agent. The Asset Sale Offer shall remain open from the
time of mailing for at least 20 Business Days and until 5:00 p.m., New York City
time, on the date fixed for purchase of Notes validly tendered and not
withdrawn, which date shall be not later than the 30th Business Day following
the mailing of such Asset Sale Offer (the "Asset Sale Offer Purchase Date").
The notice, which shall govern the terms of the Asset Sale Offer, shall include
such disclosures as are required by law and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
10.15 and that all Notes validly tendered into the Asset Sale Offer and not
withdrawn will be accepted for payment; provided, however, that if the
aggregate principal amount of Notes tendered in an Asset Sale Offer, plus
accrued interest, if any, thereon to the Asset Sale Offer Purchase Date of
such offer exceeds the aggregate amount of the Note Pro Rata Share of
Unutilized Net Cash Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000 or
multiples thereof shall be purchased);
(b) the purchase price (including the amount of accrued interest, if
any) for each Note, the Asset Sale Offer Purchase Date and the date on
which the Asset Sale Offer expires;
(c) that any Note not tendered for payment will remain Outstanding and
continue to accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Asset Sale Offer Purchase
Date;
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(e) that Holders electing to have Notes purchased pursuant to the
Asset Sale Offer will be required to surrender their Notes to the Paying
Agent at the address specified in the notice prior to 5:00 p.m., New York
City time, on the Asset Sale Offer Purchase Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(f) that a Holder of Notes will be entitled to withdraw its Notes from
the Asset Sale Offer if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Asset Sale Offer Purchase Date, a
facsimile transmission or letter setting forth the name of such Holder, the
principal amount of each Note such Holder delivered for purchase that such
Holder elects to withdraw, the Note certificate number (if any) and a
statement that such Holder is withdrawing his election to have such Notes
(or a specified portion thereof) purchased;
(g) that Holders whose Notes are purchased only in part will be issued
Notes of like tenor equal in principal amount to the unpurchased portion of
the Notes surrendered;
(h) the instructions that Holders must follow in order to validly
tender their Notes; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not required
to file any such reports with the Commission at that time, the comparable
information prepared pursuant to Section 10.09), a description of material
developments in the Company's business, and such other information
concerning the circumstances and relevant facts regarding such Asset Sale
(including, without limitation, pro forma financial information giving
effect to such Asset Sale) and Asset Sale Offer as would, in the good faith
judgment of the Company, be material to a Holder of Notes in connection
with the decision of such Holder as to whether or not it should tender
Notes pursuant to the Asset Sale Offer.
On the Asset Sale Offer Purchase Date, the Company shall (i) accept
for payment Notes or portions thereof validly tendered and not withdrawn
pursuant to the Asset Sale Offer, subject to pro ration under the circumstances
and in the manner described in clause (a) of the preceding paragraph, (ii)
deposit with the Paying Agent money, in immediately available funds, sufficient
to pay the purchase price of all Notes or portions thereof so accepted by the
Company and (iii) deliver to the Trustee the Notes so accepted (in whole or in
part) together with an Officers' Certificate setting forth the registered
numbers of such Notes. The Paying Agent shall, with the funds so deposited with
it by the Company, promptly mail or deliver to the Holders of Notes so accepted
payment in an amount equal to the purchase price therefor, and the Trustee shall
promptly authenticate and mail or deliver to such Holders new Notes of like
tenor equal in principal amount to the unpurchased portion of the Notes
surrendered in the Asset Sale Offer and not purchased by the Company. The
Company will publicly announce or otherwise notify the Holders of the results of
the Asset Sale Offer as promptly as practicable following the Asset Sale Offer
Purchase Date.
If the Company is required to make an Asset Sale Offer, the Company
shall comply with all applicable tender offer rules, including to the extent
applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any other
applicable securities laws and regulations. To the extent that the provisions
of any such securities laws or regulations conflict with the provisions of this
Section 10.15, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 10.15 solely by virtue of such compliance.
Section 10.16. Limitation on Liens Securing Certain Indebtedness.
The Company will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Liens of any kind against or
upon any of the property or assets of the Company or any Restricted Subsidiary,
whether now owned or hereafter acquired, or any proceeds therefrom, which secure
either (x)
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Subordinated Indebtedness, unless the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to the Liens securing
such Subordinated Indebtedness, or (y) Indebtedness of (A) the Company that is
not Subordinated Indebtedness, or (B) any Restricted Subsidiary, unless in each
case the Notes are equally and ratably secured with the Liens securing such
other Indebtedness, except, in the case of clauses (x) and (y), for Permitted
Liens and for Liens to secure Debt Securities on cash representing the proceeds
of such Debt Securities or on Government Securities acquired with such cash and
pledged for the purpose of providing for the payment of principal of, and/or
interest on, such Debt Securities.
Section 10.17. Limitation on Status as Investment Company.
The Company will not, and will not permit any of its Subsidiaries or
Affiliates to, conduct its business in a fashion that would cause the Company to
be required to register as an "investment company" (as that term is defined in
the Investment Company Act), or otherwise become subject to regulation under the
Investment Company Act. For purposes of establishing the Company's compliance
with this provision, any exemption that is or would become available under
Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act will be
disregarded.
Section 10.18. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell any shares of Capital Stock
(or any options, warrants or other rights to purchase such Capital Stock) of a
Restricted Subsidiary, except (i) any sale or issuance of Capital Stock to the
Company or a Wholly Owned Restricted Subsidiary, (ii) any sale or issuance of
Common Stock to directors as director qualifying shares, but only to the extent
required under applicable law, (iii) any sale or other disposition of all, but
not less than all, of the issued and outstanding Capital Stock of any Restricted
Subsidiary owned by the Company and the Restricted Subsidiaries or (iv) any sale
or issuance of Capital Stock of a Restricted Subsidiary (other than pursuant to
clauses (i) or (ii)) if such Restricted Subsidiary would no longer be a
Restricted Subsidiary immediately after such transaction and any Investment in
such Person remaining after giving effect to such sale or issuance would have
been permitted to be made under Section 10.13 hereof, and, in the case of both
(iii) and (iv), in compliance with Section 10.15 hereof.
Section 10.19. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise enter into or cause to become
effective any encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make any
other distributions on its Capital Stock or any other interest or participation
in, or measured by, its profits to the extent owned by the Company or any
Restricted Subsidiary, (b) pay any Indebtedness owed to the Company or any
Restricted Subsidiary, (c) make any Investment in the Company or any Restricted
Subsidiary or (d) transfer any of its properties or assets to the Company or to
any Restricted Subsidiary, except for (i) any encumbrance or restriction in
existence on the Issue Date, (ii) customary non-assignment provisions, (iii) any
encumbrances or restriction pertaining to an asset subject to a Lien to the
extent set forth in the security documentation governing such Lien, (iv) any
encumbrance or restriction applicable to a Restricted Subsidiary at the time
that it becomes a Restricted Subsidiary that is not created in contemplation
thereof, (v) any encumbrance or restriction existing under any agreement that
refinances or replaces an agreement containing a restriction permitted by clause
(iv) above; provided that the terms and conditions of any such encumbrance or
restriction are not materially less favorable to the holders of Notes than those
under or pursuant to the agreement being replaced or the agreement evidencing
the Indebtedness refinanced, (vi) any encumbrance or restriction imposed upon a
Restricted Subsidiary pursuant to an agreement which has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Restricted Subsidiary or any Asset Sale to the extent limited to
the Capital Stock or assets in question, and (vii) any customary encumbrance or
restriction applicable to a Restricted Subsidiary that is contained in an
agreement or instrument
62
governing or relating to Permitted Indebtedness contained in any Debt Securities
or Permitted Credit Facility; provided that the terms and conditions of any such
encumbrance or restriction contained in any Debt Securities are no more
restrictive than those contained in this Indenture; provided, further, that
(subject to customary net worth, leverage, invested capital and other financial
covenants and the absence of default under such agreement or instrument) the
provisions of such agreement or instrument permit the payment of interest and
principal and mandatory repurchases pursuant to the terms of this Indenture and
the Notes and other Indebtedness (other than Subordinated Indebtedness) that is
solely an obligation of the Company; and provided, further, that such agreement
or instrument may contain customary covenants regarding the merger of or sale of
all or any substantial part of the assets of the Company or any Restricted
Subsidiary, customary restrictions on transactions with affiliates and customary
subordination provisions governing indebtedness owed to the Company or any
Restricted Subsidiary.
Section 10.20. Limitation on Designations of Unrestricted
Subsidiaries.
The Company will not designate any Subsidiary of the Company (other
than a newly created Subsidiary in which the Company has made an Investment of
$1,000 or less) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") unless:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(b) the Company would be permitted under this Indenture to make an
Investment at the time of such Designation (assuming the effectiveness of
such Designation) in an amount (the "Designation Amount") equal to the Fair
Market Value of the interest of the Company and its Restricted Subsidiaries
in such Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
10.13 hereof for all purposes of this Indenture in an amount equal to the
Designation Amount. Neither the Company nor any Restricted Subsidiary shall at
any time (x) provide a Guarantee of, or similar credit support for, or subject
any of its properties or assets (other than the Capital Stock of any
Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness), (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly
liable for any other Indebtedness which provides that the holder thereof may
(upon notice, lapse of time or both) declare a default thereon (or cause the
payment thereof to be accelerated or payable prior to its final scheduled
maturity) upon the occurrence of a default with respect to any other
Indebtedness that is Indebtedness of an Unrestricted Subsidiary (including any
corresponding right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (x) or (y) to the extent otherwise
permitted under this Indenture, including without limitation under Section 10.13
hereof.
The Company will not revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") unless:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions and Officers' Certificates delivered to the Trustee certifying
compliance with the foregoing provisions.
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Section 10.21. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company, each Subsidiary
Guarantor, if any, and any other obligor on the Notes will furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenants compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with, and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents, certificates and/or opinions is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture will
include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.22. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.
The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee the payment of any other Indebtedness of the Company
unless such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to the Indenture providing for the Guarantee of the
payment of the Notes by such Restricted Subsidiary (a "Subsidiary Guarantee"),
which Subsidiary Guarantee shall be senior to or pari passu with such Restricted
Subsidiary's Guarantee of such other Indebtedness; provided that this paragraph
shall not apply to any Guarantee of Indebtedness described in clause (h) of the
definition of "Permitted Indebtedness." Notwithstanding the foregoing, any such
Subsidiary Guarantee shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
stock in, or all or substantially all the assets of, such Restricted Subsidiary,
which sale, exchange or transfer is made in compliance with the applicable
provisions of the Indenture, (ii) the Designation of such Restricted Subsidiary
as an Unrestricted Subsidiary in compliance with Section 10.20 hereof or (iii)
the release of such Restricted Subsidiary from all of its obligations under all
of its Guarantees of Indebtedness of the Company. A form of such Subsidiary
Guarantee is set forth as Exhibit B hereto.
At the time of the delivery to the Trustee of a Subsidiary Guarantee
by a Restricted Subsidiary pursuant to this Section 10.22, such Restricted
Subsidiary shall also deliver to the Trustee an Opinion of Counsel and Officers'
Certificate to the effect that such Subsidiary Guarantee has been duly
authorized and executed by such Restricted Subsidiary and constitutes the legal,
valid, binding and enforceable obligations of such Restricted Subsidiary
(subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally).
Section 10.23. Registration Rights
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(a) Simultaneously with the execution and delivery of this Indenture,
the Company shall enter into the Registration Rights Agreement.
(b) In the event that (a) the Exchange Offer Registration Statement is
not filed with the Commission on or prior to the 90th calendar day following the
Closing Time, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the 150th calendar day following the Closing Time, (c)
the Exchange Offer is not consummated on or prior to the 30th calendar day after
the date on which the Exchange Offer Registration Statement is declared
effective, (d) if required under the Registration Rights Agreement, a Shelf
Registration Statement with respect to the Notes is not declared effective on or
prior to the 60th calendar day following the date on which the obligation to
file such registration statement arises or (e) the Exchange Offer Registration
Statement or the Shelf Registration Statement is declared effective but
thereafter ceases to be effective or usable except in accordance with Section
2(d)(iii) of the Registration Rights Agreement (each such event referred to in
clauses (a) through (e) above, a "Registration Default"), then the Company shall
pay as liquidated damages interest ("Additional Interest") on the Restricted
Notes as to which the Registration Default exists. If a Registration Default
exists with respect to Restricted Notes, the Company will, with respect to the
first 90-day period (or portion thereof) while such Registration Default is
continuing immediately following the occurrence of such Registration Default,
make cash payments at a rate of 0.50% per annum multiplied by the principal
amount of the Restricted Notes as of the date such payment is required to be
made. The rate of such cash payment shall increase by an additional 0.50% per
annum at the beginning of each subsequent 90-day period (or portion thereof)
while such Registration Default is continuing until such Registration Default is
cured, up to a maximum rate of 1.5% per annum. Upon the cure of a Registration
Default in accordance with Section 2(e) of the Registration Rights Agreement,
the accrual of Additional Interest on the Restricted Notes with respect to such
Registration Default will cease.
Additional Interest shall be computed based on the actual number of
days elapsed in each 90-day period in which Additional Interest accrues on the
Notes.
The Company shall notify the Trustee within three Business Days after
the occurrence of each Registration Default. Additional Interest payable with
respect to any Restricted Note shall be due and payable on each February 15 and
August 15 (each an "Additional Interest Payment Date") if Additional Interest
has accrued on such Restricted Note during the semi-annual period immediately
preceding such Additional Interest Payment Date, to the Person in whose name
such Restricted Note (or one or more Predecessor Notes) is registered at the
close of business on the February 1 or August 1, whether or not a Business Day,
next preceding such Additional Interest Payment Date. Each obligation to pay
Additional Interest shall be deemed to accrue from and including the day
following the occurrence of the applicable Registration Default. Additional
Interest shall be paid by depositing with the Trustee, in trust for the benefit
of the Holders of Notes, prior to 11:00 a.m. New York City time on the
applicable Additional Interest Payment Date, immediately available funds
sufficient to pay the Additional Interest then due.
Section 10.24. Intentionally Omitted.
Section 10.25. Business Activities.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than the Permitted Business.
Section 10.26. Limitation on Sale/Leaseback Transactions.
The Company shall not, and shall not permit its Restricted
Subsidiaries to, directly or indirectly, enter into, assume, Guarantee or
otherwise become liable with respect to any Sale/Leaseback Transaction.
However, the Company or any Restricted Subsidiary may enter into any such
transaction if (i) the Company or such Restricted Subsidiary would be permitted
under Sections 10.11 and 10.16 hereof to incur secured Indebtedness in an
65
amount equal to the Attributable Debt with respect to such transaction; (ii) the
consideration received by the Company or such Restricted Subsidiary from such
transaction is at least equal to the Fair Market Value of the property being
transferred; and (iii) to the extent that such transaction constitutes an Asset
Sale, the Net Cash Proceeds received by the Company or such Restricted
Subsidiary from such transaction are applied in accordance with Section 10.15
hereof.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture.
This Indenture shall be discharged and will cease to be of further
effect (except as to surviving rights or registration of transfer or exchange of
Notes herein expressly provided for) as to all outstanding Notes and the
Trustee, on written demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when either
(a) all Notes theretofore authenticated and delivered (other than (A)
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06 hereof and (B) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have been
delivered to the Trustee for cancellation; or
(b) (i) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee in trust an amount of
money in dollars sufficient to pay and discharge the entire Indebtedness on
such Notes not theretofore delivered to the Trustee for cancellation, for
the principal of, premium, if any, and interest to the date of such
deposit;
(ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee (A) irrevocable
instructions to apply the deposited money toward payment of the Notes at
the Stated Maturities and the Redemption Dates thereof, and (B) an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (b)(ii) of this
Section 11.01, the obligations of the Trustee under Section 11.02 and the last
paragraph of Section 10.03, shall survive.
Section 11.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, on and interest on the Notes for whose payment such money has been
deposited with the Trustee.
66
ARTICLE TWELVE
REDEMPTION
Section 12.01. Notices to the Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 3 of the
reverse side of the Initial Notes or Paragraph 2 of the reverse side of the
Exchange Notes, it shall notify the Trustee of the Redemption Date, the
Redemption Price and the principal amount of Notes to be redeemed.
The Company shall notify the Trustee of any redemption at least 45
days before the Redemption Date (or such shorter time as may be acceptable to
the Trustee) by an Officers' Certificate, stating that such redemption will
comply with the provisions hereof and of the Notes; provided that, if the Notes
and the 1998 Notes and/or the 1999 Notes are to be redeemed simultaneously, any
notice given in compliance with the indenture governing the 1998 Notes and/or
the 1999 Notes shall be acceptable to the Trustee.
Section 12.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes for redemption will be made by the Trustee in
compliance with any applicable requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not then
listed on a national securities exchange (or if the Notes are so listed but the
exchange does not impose requirements with respect to the selection of debt
securities for redemption), by such method as the Trustee in its sole discretion
shall deem fair and appropriate; provided, however, that any redemption pursuant
to the provisions relating to redemptions from the proceeds of (a) one or more
Public Equity Offerings and/or (b) the sale of Capital Stock (other than
Disqualified Stock) to Strategic Equity Investors shall be made on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the
Depository's procedures). No Notes of a principal amount of $1,000 or less
shall be redeemed in part.
The Trustee shall promptly notify the Company and the Registrar and
each co-Registrar in writing of the Notes selected for redemption and, in the
case of any Notes selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
Section 12.03. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed, at the address of such Holder
appearing in the Note Register maintained by the Registrar or co-Registrar.
All notices of redemption shall identify the Notes to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) that, unless the Company defaults in paying the Redemption Price,
any Note called for redemption shall cease to accrue interest on and after
the Redemption Date, and the only remaining right of
67
the Holders of such Notes is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Notes redeemed;
(d) if any Note is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Note to be redeemed and that on and after the Redemption Date, upon
surrender for cancellation of such Note to the Paying Agent, a new Note or
Notes in the aggregate principal amount equal to the unredeemed portion
thereof will be issued without charge to the Holder;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price and the name and address of the
Paying Agent; and
(f) the CUSIP or CINS number, if any, relating to such Notes.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request given
with sufficient advance notice to permit the Trustee to adequately respond, by
the Trustee in the name and at the expense of the Company.
Section 12.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Notes called for redemption shall be paid at
the Redemption Price (including accrued interest, if any, to the Redemption
Date), but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable on the relevant Interest Payment Dates to the
Holders of record at the close of business on the relevant Regular Record Dates
referred to in the Notes.
Section 12.05. Deposit of Redemption Price.
On or prior to 11:00 a.m. New York City time on any Redemption Date,
the Company shall deposit with the Paying Agent an amount of money in same day
funds sufficient to pay the Redemption Price of all the Notes or portions
thereof which are to be redeemed on that date (including any accrued interest to
the Redemption Date), other than Notes or portions thereof called for redemption
on that date which have been delivered by the Company to the Trustee for
cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, any Note called for
redemption shall cease to accrue interest on and after the applicable Redemption
Date, whether or not such notes are presented for payment, and the only
remaining right of the Holders of such Notes is to receive payment of the
Redemption Price upon surrender to the Paying Agent of the Notes. If any Note
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, and, to the extent lawful, accrued
interest thereon shall, until paid, bear interest from the Redemption Date at
the rate provided in the Notes.
Section 12.06. Notes Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Note which is to be redeemed
in part, the Company shall execute and upon Company Order the Trustee shall
authenticate and deliver to the Holder of such Note, without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the unredeemed portion
of the principal amount of the Note so surrendered that is not redeemed.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
68
RHYTHMS NETCONNECTIONS INC., as Issuer
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
69
EXHIBIT A-1
-----------
[FORM OF NOTE]
[FACE OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON,
IS NOT ACQUIRING THESE SECURITIES FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) TAKING INTO ACCOUNT THE PROVISIONS OF
RULE 144(d), IF APPLICABLE, UNDER THE SECURITIES ACT (THE "RESALE RESTRICTION
TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO RHYTHMS
NETCONNECTIONS INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY AND THE
TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
70
RHYTHMS NETCONNECTIONS INC.
GLOBAL NOTE
14% SENIOR NOTES DUE 2010, SERIES A
CUSIP No. 762430 AF3 $ 300,000,000
REGISTERED No.
RHYTHMS NETCONNECTIONS INC., a corporation incorporated under the laws
of the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ___________, or registered assigns, the
principal sum of Three Hundred Million Dollars ($300,000,000) on February 15,
2010, at the office or agency of the Company referred to below, and to pay
interest thereon on February 15 and August 15 (each an "Interest Payment Date"),
of each year, commencing on August 15, 2000, accruing from February 23, 2000 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, at the rate of 14% per annum, until the principal hereof is
paid or duly provided for. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the February 1 or
August 1 (each a "Regular Record Date"), whether or not a Business Day, as the
case may be, next preceding such Interest Payment Date. Any such interest not
so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange or
market on which the Notes may be listed, and upon such notice as may be required
by such exchange or market, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register. However, payment by wire transfer of immediately
available funds to an account within the United States of America will be
required with respect to payments in respect of all Global Notes and to all
other holders which shall have provided written wire instructions to the Company
or Paying Agent by the record date preceding the payment date.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under this Indenture, or be valid or
obligatory for any purpose.
71
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: February 23, 0000 XXXXXXX XXXXXXXXXXXXXX INC.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 14% Senior Notes due 2010, Series A, referred to in
the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:
----------------------------------------
Authorized Signatory
72
[REVERSE OF NOTE]
1. Indenture. This Note is one of a duly authorized issue of Notes of
the Company designated as its 14% Senior Notes due 2010, Series A (herein called
the "Initial Notes"). The Notes are limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $300,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of February 23, 2000, by and between the Company and State Street Bank and Trust
Company of California, N.A., as trustee (herein called the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and of the
terms upon which the Notes are, and are to be, authenticated and delivered. The
Notes include the Initial Notes and the Unrestricted Notes (including the
Exchange Notes referred to below), issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement. The Initial Notes and the
Unrestricted Notes, including the Exchange Notes, are treated as a single class
of securities under the Indenture.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Registration Rights. The Holder of this Note is entitled to the
benefits of a Registration Rights Agreement, dated February 23, 2000, between
the Company and the Initial Purchasers (as amended from time to time, the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Company is obligated to consummate an exchange offer pursuant to which the
Holders of Initial Notes shall have the right to exchange the Initial Notes for
14% Senior Notes due 2010, Series B, of the Company (herein called the "Exchange
Notes"), which will have been registered under the Securities Act, in like
principal amount and having identical terms as the Initial Notes (other than as
set forth in this paragraph). The Holders of Initial Notes shall be entitled to
receive, as liquidated damages, certain additional interest payments in the
event such exchange offer is not consummated within a specified period and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement and the Indenture.
3. Redemption. The Notes will be redeemable, at the option of the
Company, in whole or in part, on or after February 15, 2005 upon not less than
30 nor more than 60 days' written notice at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on February 15 of each of the years indicated
below:
Year Percentage
---- ----------
2005................................... 107.000%
2006................................... 104.666%
2007................................... 102.333%
2008 and thereafter.................... 100.000%
73
In addition, at any time on or prior to February 15, 2003, the Company may,
other than in any circumstances resulting in a Change of Control, redeem, at
its option, up to a maximum of 35% of the originally-issued aggregate principal
amount of Notes at a redemption price (determined as of the applicable
redemption date) equal to 114% of the principal amount of the Notes so redeemed
plus accrued and unpaid interest, if any, and liquidated damages, if any, with
the net cash proceeds of (a) one or more Public Equity Offerings and/or (b) the
sale, subsequent to the Issue Date, of Capital Stock (other than Disqualified
Stock) in one or more transactions not constituting a Public Equity Offering to
Strategic Equity Investors, resulting in gross cash proceeds to the Company of
at least $25 million in the aggregate; provided that not less than 65% of the
originally-issued aggregate principal amount of Notes is outstanding immediately
following such redemption. Any such redemption must be effected upon not less
than 30 nor more than 60 days' notice given within 30 days after the
consummation of a Public Equity Offering or sale to one or more Strategic Equity
Investors the net proceeds from which, together with any net proceeds from any
prior Public Equity Offerings or sales to Strategic Equity Investors, are to be
used to effect an optional redemption in accordance with this paragraph.
4. Offers to Purchase. Sections 10.10 and 10.15 of the Indenture provide
that upon the occurrence of a Change of Control and following certain Asset
Sales, and subject to certain conditions and limitations contained therein, the
Company shall make an offer to purchase all or a portion of the Notes at the
purchase prices and in accordance with the procedures set forth in the
Indenture.
5. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Default Amount of all outstanding Notes may be declared due and
payable in the manner and with the effect provided in this Indenture.
6. Defeasance. The Indenture contains provisions (which provisions apply
to this Note) for defeasance at any time of (a) the entire indebtedness of the
Company on this Note and (b) certain restrictive covenants and related Defaults
and Events of Default, in each case upon compliance by the Company with certain
conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Notes at
the time Outstanding, on behalf of the Holders of all the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past Defaults under the Indenture and this Note and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
8. Denominations, Transfer and Exchange. The Notes are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in the Borough of Manhattan
in The City of New York, State of New York, or at such other office or agency of
the Company as may be maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new Notes,
74
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
9. Persons Deemed Owners. Prior to and at the time of due presentment of
this Note for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Company, the Trustee nor any agent shall be affected
by notice to the contrary.
10. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH SUBSIDIARY GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture and the Registration Rights Agreement
unless the same is publicly available from the Commission. Requests may be made
to: Rhythms NetConnections Inc., 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx
00000; Attention: Secretary.
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
(Print or type assignee's name and address (including zip code) and social
security or tax ID number)
and irrevocably appoint
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the date two years (or such shorter period of time as
permitted by Rule 144 under the Securities Act or any successor provision
thereunder) after the later of the original issuance date appearing on the face
of this Note (or any Predecessor Note) or the last date on which the Company or
any Affiliate of the Company was the owner of this Note (or any Predecessor
Note), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that:
75
[Check One]
---------
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act provided
by Rule 144A thereunder.
or
--
[ ] (b) this Note is being transferred other than in accordance with
(a) above and documents, including (i) a transferee
certificate substantially in the form of Exhibit D to the
Indenture in the case of a transfer to non-QIB Accredited
Investors or (ii) a transferor certificate substantially in
the form of Exhibit E to the Indenture in the case of a
transfer pursuant to Regulation S, are being furnished which
comply with the conditions of transfer set forth in this Note
and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar or co-Registrar shall not be obligated to register this
Note in the name of any Person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Sections
3.16 and 3.17 of the Indenture shall have been satisfied.
--------------------------------------------------------------------------------
Date: Your signature:
--------------------------------------------------------------------------------
(Sign exactly as your name appears
on the other side of this Note)
--------------------------------------------------------------------------------
By:
--------------------------------------------------------------------------------
NOTICE: To be executed by an
executive officer
--------------------------------------------------------------------------------
Signature Guarantee:
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A (including the information
specified in Rule 144A(d)(4)) or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned's
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Dated:____________________ Name of
Purchaser:
NOTICE: To be executed by an executive officer
76
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.10 or 10.15 of the Indenture, check the appropriate box:
Section 10.10 [ ] Section 10.15 [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.10 or 10.15 of the Indenture, state the percentage of
principal amount:
$_________________ or ___%
Date: Your signature:
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the
other side of this Note)
--------------------------------------------------------------------------------
By:
--------------------------------------------------------------------------------
NOTICE: To be executed by an executive
officer
--------------------------------------------------------------------------------
Signature Guarantee:
--------------------------------------------------------------------------------
77
EXHIBIT A-2
-----------
RHYTHMS NETCONNECTIONS INC.
GLOBAL NOTE
14% SENIOR NOTES DUE 2010, SERIES B
CUSIP No. $300,000,000
REGISTERED No.
RHYTHMS NETCONNECTIONS INC., a corporation incorporated under the laws
of the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of Three Hundred Million_ ($300,000,000_) on February 15, 2010, at
the office or agency of the Company referred to below, and to pay interest
thereon on February 15 and August 15 (each an "Interest Payment Date"), of each
year, commencing on August 15, 2000, accruing from February 23, 2000 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, at the rate of 14% per annum, until the principal hereof is paid
or duly provided for. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the February 1 or
August 1 (each a "Regular Record Date"), whether or not a Business Day, as the
case may be, next preceding such Interest Payment Date. Any such interest not
so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange or
market on which the Notes may be listed, and upon such notice as may be required
by such exchange or market, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register. However, payment by wire transfer of immediately
available funds to an account within the United States of America will be
required with respect to payments in respect of all Global Notes and to all
other holders which shall have provided written wire instructions to the Company
or Paying Agent by the record date preceding the payment date.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under this Indenture, or be valid or
obligatory for any purpose.
78
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: RHYTHMS NETCONNECTIONS INC.
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 14% Senior Notes due 2010, Series B, referred to in
the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
By:
----------------------------------------------
Authorized Signatory
79
[REVERSE OF NOTE]
1. Indenture. This Note is one of a duly authorized issue of Notes of the
Company designated as its 14% Senior Notes due 2010, Series B (herein called the
"Exchange Notes"). The Notes are limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $300,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of February 23, 2000, by and between the Company and State Street Bank and Trust
Company of California, N.A., as trustee (herein called the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and of the
terms upon which the Notes are, and are to be, authenticated and delivered. The
Notes include the Initial Notes and the Unrestricted Notes (including the
Exchange Notes), issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement. The Initial Notes and the Unrestricted Notes,
including the Exchange Notes, are treated as a single class of securities under
the Indenture.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Redemption. The Notes will be redeemable, at the option of the
Company, in whole or in part, on or after February 15, 2005 upon not less than
30 nor more than 60 days' written notice at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on February 15 of each of the years indicated
below:
Year Percentage
---- ----------
2005............................... 107.000%
2006............................... 104.666%
2007............................... 102.333%
2008 and thereafter................ 100.000%
In addition, at any time on or prior to February 15, 2003, the Company may,
other than in any circumstances resulting in a Change of Control, redeem, at its
option, up to a maximum of 35% of the originally-issued aggregate principal
amount of Notes at a redemption price (determined as of the applicable
redemption date) equal to 114% of the principal amount of the Notes so redeemed
plus accrued and unpaid interest, if any, and liquidated damages, if any, with
the net cash proceeds of (a) one or more Public Equity Offerings and/or (b) the
sale, subsequent to the Issue Date, of Capital Stock (other than Disqualified
Stock) in one or more transactions not constituting a Public Equity Offering to
Strategic Equity Investors, resulting in gross cash proceeds to the Company of
at least $25 million in the aggregate;
80
provided that not less than 65% of the originally-issued aggregate principal
amount of Notes is outstanding immediately following such redemption. Any such
redemption must be effected upon not less than 30 nor more than 60 days' notice
given within 30 days after the consummation of a Public Equity Offering or sale
to one or more Strategic Equity Investors the net proceeds from which, together
with any net proceeds from any prior Public Equity Offerings or sales to
Strategic Equity Investors, are to be used to effect an optional redemption in
accordance with this paragraph.
3. Offers to Purchase. Sections 10.10 and 10.15 of the Indenture provide
that upon the occurrence of a Change of Control and following certain Asset
Sales, and subject to certain conditions and limitations contained therein, the
Company shall make an offer to purchase all or a portion of the Notes at the
purchase prices and in accordance with the procedures set forth in the
Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Default Amount of all outstanding Notes may be declared due and
payable in the manner and with the effect provided in this Indenture.
5. Defeasance. The Indenture contains provisions (which provisions apply
to this Note) for defeasance at any time of (a) the entire indebtedness of the
Company on this Note and (b) certain restrictive covenants and related Defaults
and Events of Default, in each case upon compliance by the Company with certain
conditions set forth therein.
6. Amendments and Waivers. The Indenture permits, with certain exceptions
as provided therein, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of the Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes at the time
Outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company with certain provisions of the Indenture and certain past Defaults
under the Indenture and this Note and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
7. Denominations, Transfer and Exchange. The Notes are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in the Borough of Manhattan
in The City of New York, State of New York, or at such other office or agency of
the Company as may be maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
8. Persons Deemed Owners. Prior to and at the time of due presentment of
this Note for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
81
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
9. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH SUBSIDIARY
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture unless the same is publicly available
from the Commission. Requests may be made to: Rhythms NetConnections Inc., 0000
Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; Attention: Secretary.
82
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
(Print or type assignee's name and address (including zip code) and social
security or tax ID number)
and irrevocably appoint
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
83
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.10 or 10.15 of the Indenture, check the appropriate box:
Section 10.10 [ ] Section 10.15 [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.10 or 10.15 of the Indenture, state the percentage of
principal amount:
$_________________ or ___%
--------------------------------------------------------------------------------
Date: Your signature:
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the
other side of this Note)
--------------------------------------------------------------------------------
By:
--------------------------------------------------------------------------------
NOTICE: To be executed by an executive
officer
--------------------------------------------------------------------------------
Signature Guarantee:
--------------------------------------------------------------------------------
84
EXHIBIT B
---------
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED
BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of _____
between __________ (the "Subsidiary Guarantor"), a subsidiary of Rhythms
NetConnections Inc. (or its successor), a company incorporated under the laws of
the State of Delaware (the "Company"), and State Street Bank and Trust Company
of California, N.A.,as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of February 23, 2000, providing for the
issuance of an aggregate principal amount of $300,000,000 of 14% Senior Notes
due 2010 (the "Notes");
WHEREAS, Section 10.22 of the Indenture provides that, under certain
circumstances, the Company is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Indenture Provision Pursuant to Which Guarantee Is Given. This
Supplemental Indenture is being executed and delivered pursuant to Section 10.22
of the Indenture.
3. Agreements to Guarantee. The Subsidiary Guarantor hereby agrees as
follows:
(a) The Subsidiary Guarantor, jointly and severally with all other
Subsidiary Guarantors, if any, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, regardless of the validity and enforceability of the
Indenture, the Notes and the obligations of the Company under the Indenture and
the Notes, that:
(i) the principal of, premium, if any, on and interest on the Notes
shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of, premium, if any, and interest on the Notes, to the extent
lawful, and all other obligations of the Company to the Holders or the
Trustee thereunder shall be promptly paid in full, all in accordance with
the terms thereof; and
(ii) in case of any extension of time for payment or renewal of any
Notes or any of such other obligations, that the same shall be promptly
paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
(b) Notwithstanding the foregoing, in the event that this Subsidiary
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
85
Subsidiary Guarantor under this Supplemental Indenture and its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance.
4. Execution and Delivery of Subsidiary Guarantees.
(a) To evidence its Subsidiary Guarantee set forth in this Supplemental
Indenture, the Subsidiary Guarantor hereby agrees that a notation of such
Subsidiary Guarantee substantially in the form of Annex A hereto shall be
endorsed by an officer of such Subsidiary Guarantor on each Note authenticated
and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor hereby agrees
that its Subsidiary Guarantee set forth herein shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental Indenture or on
the Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of the Note by the Trustee, after the authentication
thereof under the Indenture, shall constitute due delivery of the Subsidiary
Guarantee set forth in this Supplemental Indenture on behalf of the Subsidiary
Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its obligations hereof
shall be unconditional, regardless of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
(f) The Subsidiary Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Subsidiary Guarantee made pursuant to this Supplemental Indenture will not be
discharged except by complete performance of the obligations contained in the
Notes and the Indenture or pursuant to Section 5(b) of this Supplemental
Indenture.
(g) If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Supplemental Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Subsidiary Guarantor, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereof and thereafter all rights and remedies of the Subsidiary Guarantor, the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
(h) The Subsidiary Guarantor hereby waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary Guarantor as a result of any payment by such Subsidiary
Guarantor under its Subsidiary Guarantee. The Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand:
(i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Five of the Indenture for the purposes
of the Subsidiary Guarantee made pursuant to this Supplemental Indenture,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby; and
86
(ii) in the event of any declaration of acceleration of such
obligations as provided in Article Five of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by
the Subsidiary Guarantor for the purpose of the Subsidiary Guarantee made
pursuant to this Supplemental Indenture.
(i) The Subsidiary Guarantor shall have the right to seek contribution
from any other non-paying Subsidiary Guarantor, if any, so long as the exercise
of such right does not impair the rights of the Holders under the Subsidiary
Guarantee made pursuant to this Supplemental Indenture.
(j) The Subsidiary Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Indenture or this Subsidiary
Guarantee; and the Subsidiary Guarantor (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
5. Subsidiary Guarantor May Consolidate, Etc. on Certain Terms.
(a) Except as set forth in Articles Eight and Ten of the Indenture, nothing
contained in the Indenture, this Supplemental Indenture or in the Notes shall
prevent any consolidation or merger of the Subsidiary Guarantor with or into the
Company or any other Subsidiary Guarantor or shall prevent any transfer, sale or
conveyance of the property of the Subsidiary Guarantor as an entirety or
substantially as an entirety, to the Company or any other Subsidiary Guarantor.
(b) Except as set forth in Articles Eight and Ten of the Indenture, upon
the sale, exchange or transfer, to any Person not an Affiliate of the Company,
of all of the Capital Stock of the Subsidiary Guarantor held by the Company and
its Subsidiaries, or of all or substantially all of the assets of the Subsidiary
Guarantor, whether by way of merger, consolidation or otherwise, which sale,
exchange or transfer is made in compliance with all applicable provisions of the
Indenture, then such Subsidiary Guarantor (in the event of a sale, exchange or
transfer of all the Capital Stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale, exchange or transfer
of all or substantially all of the assets of such Subsidiary Guarantor) will be
released and relieved of any obligation under its Subsidiary Guarantee; provided
that the Net Cash Proceeds of such sale, exchange or transfer are applied in
accordance with Section 10.15 of the Indenture. Except with respect to
transactions set forth in the preceding sentence, the Company and the Subsidiary
Guarantor covenant and agree that upon any such merger, consolidation or sale,
the performance of all covenants and conditions of this Supplemental Indenture
to be performed by such Subsidiary Guarantor shall be expressly assumed by
supplemental indenture satisfactory in form to the Trustee, by the corporation
formed by such consolidation, or into which the Subsidiary Guarantor shall have
merged, or by the corporation which shall have acquired such property. Upon
receipt of an Officers' Certificate of the Company or the Subsidiary Guarantor,
as the case may be, to the effect that the Company or such Subsidiary Guarantor
has complied with the first sentence of this Section 5(b), the Trustee shall
execute any documents reasonably requested by the Company or the Subsidiary
Guarantor, at the cost of the Company or such Subsidiary Guarantor, as the case
may be, in order to evidence the release of such Subsidiary Guarantor from its
obligations under its Guarantee endorsed on the Notes and under the Indenture
and this Supplemental Indenture.
6. Releases upon Release of Guarantee of Guaranteed Indebtedness.
Concurrently with the release or discharge of all of the Subsidiary Guarantor's
Guarantees of the payment of Indebtedness of the Company (other than a release
or discharge by or as a result of payment under such Guarantee of Indebtedness),
the Subsidiary Guarantor shall be automatically and unconditionally released and
relieved of its obligations under this Supplemental Indenture and its Subsidiary
Guarantee made pursuant to Section 4 of this Supplemental Indenture. Upon
delivery by the Company to the Trustee of an Officer's Certificate to the effect
that such release or discharge has occurred, the Trustee shall execute any
documents reasonably required in order to evidence the release of the Subsidiary
Guarantor
87
from its obligations under this Supplemental Indenture and its Subsidiary
Guarantee made pursuant hereto; provided such documents shall not affect or
impair the rights of the Trustee and Paying Agent under Section 6.07 of the
Indenture.
7. Releases upon Designation as an Unrestricted Subsidiary. Upon the
Designation of the Subsidiary Guarantor as an Unrestricted Subsidiary in
compliance with Section 10.20 of the Indenture, the Subsidiary Guarantor shall
be automatically and unconditionally released and relieved of its obligations
under this Supplemental Indenture and its Subsidiary Guarantee made pursuant to
Section 4 of this Supplemental Indenture. Upon delivery by the Company to the
Trustee of an Officer's Certificate to the effect that such Designation has
occurred in compliance with Section 10.20 of the Indenture, the Trustee shall
execute any documents reasonably required in order to evidence the release of
the Subsidiary Guarantor from its obligations under this Supplemental Indenture
and its Subsidiary Guarantee made pursuant hereto; provided such documents shall
not affect or impair the rights of the Trustee and Paying Agent under Section
6.07 of the Indenture.
8. NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction hereof.
11. Ranking. [Ranking terms to be provided as required by Section 10.22
of the Indenture.]
[Signatures on following page]
88
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: __________ __, ____ [Subsidiary Guarantor]
By: ___________________________
Name:
Title:
Dated: ___________ __, ____ State Street Bank and Trust Company of
California, N.A., as Trustee
By: ___________________________
Name:
Title:
89
ANNEX A TO SUPPLEMENTAL INDENTURE
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes, whether at stated
maturity or an Interest Payment Date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue principal
and premium of, if any, and interest, to the extent lawful, on the Notes and (c)
that in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, the same will be promptly paid in full when due in
accordance with the terms of the extension of renewal, whether at Stated
Maturity, by acceleration or otherwise. Notwithstanding the foregoing, in the
event that the Subsidiary Guarantee would constitute or result in a violation of
any applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the Subsidiary Guarantor under its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance. The Subsidiary
Guarantee shall not be valid or obligatory for any purpose until the certificate
of authentication on the Note upon which the Subsidiary Guarantee is noted shall
have been executed by the Trustee under the Indenture by the manual or facsimile
signature of one of its authorized officers. [Ranking terms to be provided as
required by Section 10.22 of the Indenture.]
Dated: __________ __, ____ [Subsidiary Guarantor]
By: ___________________________
Name:
Title:
90
EXHIBIT C
---------
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF
THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
91
EXHIBIT D
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional (non-QIB) Accredited Investors
__________, ____
State Street Bank and Trust Company
of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Department
Re: Rhythms NetConnections Inc.(the "Company")
Indenture (the "Indenture") relating to
14% Senior Notes due 2010
-------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 14% Senior Notes due 2010
(the "Notes") of the Company we confirm that:
1. We have received such information as we deem necessary in order to
make our investment decision.
2. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold within the United States or to, or for the account or benefit of,
U.S. persons except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes, we will do so only
(A) to the Company, (B) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee a signed letter substantially in the form hereof, (D) outside the
United States in accordance with Regulation S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
4. We understand that, on any proposed resale of Notes, we will be
required to furnish to the Trustee and the Company such certification,
legal opinion and other information as the Trustee and the
92
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
6. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company and your and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Proposed Transferee]
By: ______________________________
[Authorized Signature]
Signature Guarantee: _____________________
93
EXHIBIT E
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
___________________________, _____
State Street Bank and Trust Company
of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Department
Re: Rhythms NetConnections Inc. (the "Company")
14% Senior Notes due 2010
Ladies and Gentlemen:
In connection with our proposed sale of 14% Senior Notes due 2010 (the
"Notes") of the Company, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes;
(6) if the circumstances set forth in Rule 904(b) under the Securities
Act are applicable, we have complied with the additional conditions
therein, including (if applicable) sending a confirmation or other notice
stating that the Notes may be offered and sold during the distribution
compliance period specified in Rule 903(b)(3), as applicable, in accordance
with the provisions of Regulation S; pursuant to registration of the
Securities under the Securities Act; or pursuant to an available exemption
from the registration requirements under the Securities Act;
(7) if the sale is made during a distribution compliance period and
the provisions of Rule 903(b)(3) are applicable thereto, we confirm that
such sale has been made in accordance with such provisions; and
94
(8) if the provisions of Rule 144 under the Securities Act are
applicable, we have complied with the terms and conditions thereof.
You and the Company and your and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-----------------------------------------
Authorized Signature
Signature Guarantee: ____________________
95
SCHEDULE A
INDEBTEDNESS OF THE COMPANY OR RESTRICTED SUBSIDIARIES
THAT IS OUTSTANDING OR COMMITTED BUT UNDRAWN
96
