Exhibit 4.2
EXECUTION COPY
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FAIRPOINT COMMUNICATIONS, INC.
$200,000,000 12-1/2% Senior Subordinated Notes due 2010
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INDENTURE
Dated as of May 24, 2000
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UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.....................................................................1
SECTION 1.02 Other Definitions..............................................................22
SECTION 1.03 Incorporation by Reference of Trust Indenture Act..............................23
SECTION 1.04 Rules of Construction..........................................................23
ARTICLE II
The Securities
SECTION 2.01 Amount of Securities; Issuable in Series.......................................24
SECTION 2.02 Form and Dating................................................................25
SECTION 2.03 Execution and Authentication...................................................25
SECTION 2.04 Registrar and Paying Agent.....................................................26
SECTION 2.05 Paying Agent to Hold Money in Trust............................................26
SECTION 2.06 Securityholder Lists...........................................................26
SECTION 2.07 Replacement Securities.........................................................27
SECTION 2.08 Outstanding Securities.........................................................27
SECTION 2.09 Temporary Securities...........................................................27
SECTION 2.10 Cancellation...................................................................27
SECTION 2.11 Defaulted Interest.............................................................28
SECTION 2.12 CUSIP Numbers..................................................................28
ARTICLE III
Redemption
SECTION 3.01 Notices to Trustee.............................................................28
SECTION 3.02 Selection of Securities To Be Redeemed.........................................28
SECTION 3.03 Notice of Redemption...........................................................29
SECTION 3.04 Effect of Notice of Redemption.................................................29
SECTION 3.05 Deposit of Redemption Price....................................................29
SECTION 3.06 Securities Redeemed in Part....................................................30
ARTICLE IV
Covenants
SECTION 4.01 Payment of Securities..........................................................30
SECTION 4.02 SEC Reports....................................................................30
SECTION 4.03 Limitation on Debt.............................................................30
SECTION 4.04 Limitation on Restricted Payments..............................................31
SECTION 4.05 Limitation on Liens............................................................34
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SECTION 4.06 Limitation on Issuance or Sale of Capital Stock of Restricted Subsidiaries.....34
SECTION 4.07 Limitation on Asset Sales......................................................34
SECTION 4.08 Limitation on Restrictions on Distributions from Restricted Subsidiaries.......37
SECTION 4.09 Limitation on Transactions with Affiliates.....................................38
SECTION 4.10 Limitation on Layered Debt.....................................................39
SECTION 4.11 Designation of Restricted and Unrestricted Subsidiaries........................39
SECTION 4.12 Limitation on Sale and Leaseback Transactions..................................40
SECTION 4.13 Limitation on Company's Business...............................................40
SECTION 4.14 Change of Control..............................................................40
SECTION 4.15 Compliance Certificate.........................................................41
SECTION 4.16 Further Instruments and Acts...................................................42
ARTICLE V
Merger, Consolidation and Sale of Property
ARTICLE VI
Defaults and Remedies
SECTION 6.01 Events of Default..............................................................43
SECTION 6.02 Acceleration...................................................................44
SECTION 6.03 Other Remedies.................................................................45
SECTION 6.04 Waiver of Past Defaults........................................................45
SECTION 6.05 Control by Majority............................................................45
SECTION 6.06 Limitation on Suits............................................................45
SECTION 6.07 Rights of Holders to Receive Payment...........................................46
SECTION 6.08 Collection Suit by Trustee.....................................................46
SECTION 6.09 Trustee May File Proofs of Claim...............................................46
SECTION 6.10 Priorities.....................................................................46
SECTION 6.11 Undertaking for Costs..........................................................47
SECTION 6.12 Waiver of Stay or Extension Laws...............................................47
ARTICLE VII
Trustee
SECTION 7.01 Duties of Trustee..............................................................47
SECTION 7.02 Rights of Trustee..............................................................48
SECTION 7.03 Individual Rights of Trustee...................................................49
SECTION 7.04 Trustee's Disclaimer...........................................................49
SECTION 7.05 Notice of Defaults.............................................................49
SECTION 7.06 Reports by Trustee to Holders..................................................49
SECTION 7.07 Compensation and Indemnity.....................................................50
SECTION 7.08 Replacement of Trustee.........................................................50
SECTION 7.09 Successor Trustee by Merger....................................................51
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SECTION 7.10 Eligibility; Disqualification..................................................52
SECTION 7.11 Preferential Collection of Claims Against Company..............................52
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance...............................52
SECTION 8.02 Conditions to Defeasance.......................................................53
SECTION 8.03 Application of Trust Money.....................................................54
SECTION 8.04 Repayment to Company...........................................................54
SECTION 8.05 Indemnity for Government Obligations...........................................54
SECTION 8.06 Reinstatement..................................................................54
ARTICLE IX
Amendments
SECTION 9.01 Without Consent of Holders.....................................................55
SECTION 9.02 With Consent of Holders........................................................55
SECTION 9.03 Compliance with Trust Indenture Act............................................57
SECTION 9.04 Revocation and Effect of Consents and Waivers..................................57
SECTION 9.05 Notation on or Exchange of Securities..........................................57
SECTION 9.06 Trustee To Sign Amendments.....................................................57
SECTION 9.07 Payment for Consent............................................................57
ARTICLE X
Subordination
SECTION 10.01 Agreement to Subordinate.......................................................58
SECTION 10.02 Liquidation, Dissolution, Bankruptcy...........................................58
SECTION 10.03 Default on Senior Debt.........................................................58
SECTION 10.04 Acceleration of Payment of Securities..........................................59
SECTION 10.05 When Distribution Must Be Paid Over............................................59
SECTION 10.06 Subrogation....................................................................59
SECTION 10.07 Relative Rights................................................................59
SECTION 10.08 Subordination May Not Be Impaired by Company...................................59
SECTION 10.09 Rights of Trustee and Paying Agent.............................................60
SECTION 10.10 Distribution or Notice to Representative.......................................60
SECTION 10.11 Article X Not to Prevent Events of Default or Limit Right to Accelerate........60
SECTION 10.12 Trust Moneys Not Subordinated..................................................60
SECTION 10.13 Trustee Entitled to Rely.......................................................60
SECTION 10.14 Trustee to Effectuate Subordination............................................61
SECTION 10.15 Trustee Not Fiduciary for Holders of Senior Debt...............................61
SECTION 10.16 Reliance by Holders of Senior Debt on Subordination Provisions.................61
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ARTICLE XI
Miscellaneous
SECTION 11.01 Trust Indenture Act Controls...................................................61
SECTION 11.02 Notices........................................................................61
SECTION 11.03 Communication by Holders with Other Holders....................................62
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.............................62
SECTION 11.05 Statements Required in Certificate or Opinion..................................63
SECTION 11.06 When Securities Disregarded....................................................63
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar...................................63
SECTION 11.08 Legal Holidays.................................................................63
SECTION 11.09 Governing Law..................................................................63
SECTION 11.10 No Recourse Against Others.....................................................63
SECTION 11.11 Successors.....................................................................64
SECTION 11.12 Multiple Originals.............................................................64
SECTION 11.13 Table of Contents; Headings....................................................64
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
310 (a)(1)............................................................... 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... N.A.
(b).................................................................. 7.08; 7.10
(c).................................................................. N.A.
311 (a).................................................................. 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312 (a).................................................................. 2.06
(b).................................................................. 11.03
(c).................................................................. 11.03
313 (a).................................................................. 7.06
(b).................................................................. N.A.
(b)(2)............................................................... 7.06
(c).................................................................. 11.02
(d).................................................................. 7.06
314 (a).................................................................. 4.02; 4.11; 11.02
(b).................................................................. N.A
(c)(1)............................................................... 11.04
(c)(2)............................................................... 11.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 11.05
(f).................................................................. 4.11
315 (a).................................................................. 7.01
(b).................................................................. 7.05; 11.02
(c).................................................................. 7.01
(d).................................................................. 7.01
(e).................................................................. 6.11
316 (a) (last sentence).................................................. 11.06
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.07
317 (a)(1)............................................................... 6.08
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(a)(2)............................................................... 6.09
(b).................................................................. 2.05
318 (a).................................................................. 11.01
N.A. Means Not Applicable.
Note: This Cross-Reference Table shall not, for any purposes, be deemed
to be part of this Indenture.
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INDENTURE dated as of May 24, 2000, between FAIRPOINT COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), and UNITED STATES TRUST COMPANY OF
NEW YORK, a New York banking corporation, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 12-1/2% Senior
Subordinated Notes due 2010 (the "Initial Securities"), to be issued, from time
to time, in one or more series as in this Indenture provided and, if and when
issued pursuant to a registered or private exchange for the Initial Securities,
the Company's 12-1/2% Senior Subordinated Notes due 2010 (the "Exchange
Securities"). (The Initial Securities, together with the Exchange Securities
shall be referred to herein as the "Securities.")
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"ADDITIONAL ASSETS" means (a) any Property (other than cash, cash
equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in a Telecommunications Business; or (b) Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary from any
Person other than an Affiliate of the Company; PROVIDED, HOWEVER, that, in the
case of clause (b), such Restricted Subsidiary is primarily engaged in a
Telecommunications Business.
"AFFILIATE" of any specified Person means (a) any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (b) any other Person who is a director or
officer of (i) such specified Person, (ii) any Subsidiary of such specified
Person or (iii) any Person described in clause (a) above. 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 "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sections 4.07 and 4.09 and the definition of
"Additional Assets" only, "Affiliate" shall also mean any beneficial owner of
shares representing 10.0% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to purchase
such Voting Stock (whether or not currently exercisable) and any Person who
would be an Affiliate of any such beneficial owner pursuant to the first
sentence hereof.
"ASSET SALE" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of (a) any
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares) or (b) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary
(other than, in the case of clauses (a) and (b) above, (i) any disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) for purposes of Section 4.07 only,
(x) any disposition that constitutes a Permitted Investment or Restricted
Payment permitted under Section 4.04 and (y) contemporaneous exchanges by the
Company or any Restricted Subsidiary of Telecommunications Assets for other
Telecommunications Assets in the ordinary course of business; PROVIDED that the
applicable Telecommunications Assets received by the Company or such Restricted
Subsidiary have at least substantially equal Fair Market Value to the Company or
such Restricted Subsidiary (as evidenced by a Resolution of the Board of
Directors of the Company) and (iii) any disposition effected in compliance with
the first paragraph of Article V).
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction
means, at any date of determination, (a) if such Sale and Leaseback Transaction
is a Capital Lease Obligation, the amount of Debt represented thereby according
to the definition of "Capital Lease Obligation" and (b) in all other instances,
the greater of (i) the Fair Market Value of the Property subject to such Sale
and Leaseback Transaction and (ii) the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended).
"AVERAGE LIFE" means, as of any date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of
the product of the numbers of years (rounded to the nearest one-twelfth of one
year) from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Company (or,
in the case of Section 4.09(3), the applicable Restricted Subsidiary) or any
committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.
"BUSINESS DAY" means each day that is not a Legal Holiday.
"CAPITAL LEASE OBLIGATIONS" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.05, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
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"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate cash proceeds
received by the Company from the issuance or sale (other than to a Subsidiary of
the Company or an employee stock ownership plan or trust established by the
Company or any such Subsidiary for the benefit of their employees) by the
Company of its Capital Stock (other than Disqualified Stock) after the Existing
Notes Issue Date, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) prior to the first Public Equity Offering that results in a Public
Market, the Permitted Holders cease to be the "beneficial owners" (as defined in
Rule 13d-3 under the Exchange Act, except that a Person will be deemed to have
"beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of a majority of the total voting power of the
Voting Stock of the Company, whether as a result of the issuance of securities
of the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by the Permitted Holders
or otherwise (for purposes of this clause (a), the Permitted Holders will be
deemed to beneficially own any Voting Stock of a specified corporation held by a
parent corporation so long as the Permitted Holders beneficially own, directly
or indirectly, in the aggregate a majority of the total voting power of the
Voting Stock of such parent corporation); or
(b) on or after the first Public Equity Offering that results in a
Public Market, if any "Person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a Person will be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 35.0%
or more of the total voting power of the Voting Stock of the Company; PROVIDED,
HOWEVER, that the Permitted Holders are the "beneficial owners" (as defined in
Rule 13d3 under the Exchange Act, except that a Person will be deemed to have
"beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, in the aggregate of a lesser percentage of the
total voting power of the Voting Stock of the Company than such other Person or
group (for purposes of this clause (b), such Person or group shall be deemed to
beneficially own any Voting Stock of a corporation (the
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"specified corporation") held by any other corporation (the "parent
corporation") so long as such Person or group beneficially owns, directly or
indirectly, in the aggregate a majority of the total voting power of the Voting
Stock of such parent corporation); or
(c) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
the Company and the Restricted Subsidiaries, considered as a whole (other than a
disposition of such assets as an entirety or virtually as an entirety to a
Wholly Owned Subsidiary or one or more Permitted Holders) shall have occurred,
or the Company merges, consolidates or amalgamates with or into any other Person
(other than one or more Permitted Holders) or any other Person (other than one
or more Permitted Holders) merges, consolidates or amalgamates with or into the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is reclassified into or exchanged for cash,
securities or other Property, other than any such transaction where (i) the
outstanding Voting Stock of the Company is reclassified into or exchanged for
Voting Stock of the surviving corporation and (ii) the holders of the Voting
Stock of the Company immediately prior to such transaction own, directly or
indirectly, not less than a majority of the Voting Stock of the surviving
corporation immediately after such transaction and in substantially the same
proportions as before the transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment or whose nomination for election by
the shareholders of the Company (i) 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 or (ii) was pursuant to agreements among shareholders in effect on the
Issue Date) cease for any reason to constitute a majority of the Board of
Directors then in office; or
(e) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company.
"CLEC SUBSIDIARY" means (i) an Unrestricted Subsidiary engaged
primarily in providing communications services as a competitive local exchange
carrier in areas within the United States where neither the Company nor any of
its other Subsidiaries provides such services as the incumbent local exchange
carrier and (ii) FairPoint Communications Solutions Corp. to the extent it
engages in no business other than the business described in clause (i) and the
ownership of Capital Stock of Unrestricted Subsidiaries described in clause (i).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of a Person,
any forward contract, commodity swap agreement, commodity option agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the
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successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the indenture securities.
"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of
determination, the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), after eliminating (a) all
intercompany items between the Company and any Restricted Subsidiary or between
Restricted Subsidiaries and (b) all current maturities of long-term Debt.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, without
duplication, (a) interest expense attributable to leases constituting part of a
Sale and Leaseback Transaction and to capital leases, (b) amortization of debt
discount and debt issuance cost, including commitment fees, (c) capitalized
interest, (d) non-cash interest expenses, (e) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (f) net costs associated with Hedging Obligations (including
amortization of fees), (g) Disqualified Stock Dividends, (h) Preferred Stock
Dividends, (i) interest Incurred in connection with Investments in discontinued
operations, (j) interest accruing on any Debt of any other Person to the extent
such Debt is Guaranteed by the Company or any Restricted Subsidiary and (k) the
lesser of (i) cash contributions to any employee stock ownership plan or similar
trust and (ii) the interest or fees paid by such plan or trust to any Person
(other than the Company) in connection with Debt Incurred by such plan or trust.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss)
of the Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income (a) any net income (loss)
of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that (i) subject to the exclusion contained in clause (d)
below, there shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution, whether
or not reflected on the Company's income statement (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below and excluding any such cash dividends or other
distributions made by Financing Cooperatives that are reinvested in such
Financing Cooperatives) and (ii) the Company's equity in a net loss of any such
Person other than an Unrestricted Subsidiary for such period shall be included
in determining such Consolidated Net Income, (b) for purposes of Section 4.04
only, any net income (loss) of any Person acquired by the Company or any of its
consolidated Subsidiaries in a pooling of interests transaction for any period
prior to the date of such acquisition, (c) any net income (but not loss) of any
Restricted Subsidiary, if such Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions, directly or indirectly, to the Company, except that, subject to
the exclusion contained in clause (d) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate
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amount of cash distributed by such Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary as a dividend or other
distribution, plus the amount of income accrued during such period in excess of
such distributed cash to the extent such excess income could be distributed on
the date of determination (subject, in the case of a dividend or other
distribution to another Restricted Subsidiary, to the limitation contained in
this clause), (d) any gain (but not loss) realized upon the sale or other
disposition of any Property of the Company or any of its consolidated
Subsidiaries (including pursuant to any Sale and Leaseback Transaction) that is
not sold or otherwise disposed of in the ordinary course of business, PROVIDED
that, in the event of such a sale or other disposition of all or a portion of
the Capital Stock of a Financing Cooperative, any gain therefrom shall be
included in Consolidated Net Income in an amount not to exceed the amount of
dividends or other distributions from such Financing Cooperative previously
excluded from Consolidated Net Income pursuant to the parenthetical in clause
(a)(i) above, (e) any extraordinary gain or loss, (f) the cumulative effect of a
change in accounting principles and (g) any non-cash compensation expense
realized for grants of performance shares, stock options or other stock awards
to officers, directors and employees of the Company or any Restricted
Subsidiary. Notwithstanding the foregoing, for purposes of Section 4.04 only,
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
pursuant to Section 4.04(c)(iv).
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries as the
total assets (less accumulated depreciation and amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible
items) of the Company and its Restricted Subsidiaries, after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of (without
duplication): (a) the excess of cost over fair market value of assets or
businesses acquired; (b) any revaluation or other write-up in book value of
assets subsequent to the last day of the fiscal quarter of the Company
immediately preceding the Issue Date as a result of a change in the method of
valuation in accordance with GAAP; (c) unamortized debt discount and expenses
and other unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, licenses, organization or developmental expenses
and other intangible items; (d) minority interests in consolidated Subsidiaries
held by Persons other than the Company or any Restricted Subsidiary; (e)
treasury stock; (f) cash or securities set aside and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement of
Capital Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities; and (g) Investments in and assets of Unrestricted
Subsidiaries.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
the end of the most recent fiscal quarter of the Company ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (a) the par or stated value of all outstanding Capital Stock of
the Company plus (b) paid-in
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capital or capital surplus relating to such Capital Stock plus (c) any retained
earnings or earned surplus less (i) any accumulated deficit and (ii) any amounts
attributable to Disqualified Stock.
"CREDIT FACILITY" means, the credit agreement, dated as of March 30,
1998, among the Company, the lenders party thereto in their capacities as
lenders thereunder, NationsBank of Texas, N.A., as syndication agent and Bankers
Trust Company, as administrative agent, together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended, restated,
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including increasing the amount of available borrowings thereunder, PROVIDED
that such increase in borrowings is permitted by clause (b) of the definition of
"Permitted Debt", or adding Restricted Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the debt under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (a) the principal of and premium (if any) in respect of
(i) debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (b) all Capital Lease Obligations of such
Person and all Attributable Debt in respect of Sale and Leaseback Transactions
entered into by such Person; (c) all obligations of such Person issued or
assumed as the deferred purchase price of Property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (d) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (a) through (c)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (e) the amount of all obligations of such Person with respect
to the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); (f) all obligations of the type referred to in clauses (a) through
(e) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee; (g) all obligations of the type referred to in clauses (a) through
(f) of other Persons secured by any Lien on any Property of such Person (whether
or not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value
7
of such Property or the amount of the obligation so secured; and (h) to the
extent not otherwise included in this definition, Hedging Obligations of such
Person. The amount of Debt 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, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date. The amount of Debt
represented by a Hedging Obligation shall be equal to (i) zero if such Hedging
Obligation has been Incurred pursuant to clause (e) of the definition of
"Permitted Debt" or (ii) the notional amount of such Hedging Obligation if not
Incurred pursuant to such clause.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DESIGNATED SENIOR DEBT" means (a) any Senior Debt that has, at the
time of determination, an aggregate principal amount outstanding of at least
$25.0 million (including the amount of all undrawn commitments and matured and
contingent reimbursement obligations pursuant to letters of credit thereunder)
that is specifically designated in the instrument evidencing such Senior Debt
and is designated in a notice delivered by the Company to the holders or a
Representative of the holders of such Senior Debt and in an Officers'
Certificate delivered to the Trustee as "Designated Senior Debt" of the Company
for purposes of this Indenture and (b) the Credit Facility.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, in either case at the option of the
holder thereof) or otherwise (a) matures or is mandatorily redeemable pursuant
to a sinking fund obligation or otherwise, (b) is or may become redeemable or
repurchaseable at the option of the holder thereof, in whole or in part, or (c)
is convertible or exchangeable at the option of the holder thereof for Debt or
Disqualified Stock, on or prior to, in the case of clause (a), (b) or (c), the
first anniversary of the Stated Maturity of the Securities.
"DISQUALIFIED STOCK DIVIDENDS" means all dividends with respect to
Disqualified Stock of the Company held by Persons other than a Wholly Owned
Subsidiary. The amount of any such dividend shall be equal to the quotient of
such dividend divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the Company.
"EBITDA" means, for any period, an amount equal to, for the Company and
its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net Income
for such period, plus the following to the extent reducing Consolidated Net
Income for such period: (i) the provision for taxes based on income or profits
or utilized in computing net loss, (ii) Consolidated Interest Expense, (iii)
depreciation, (iv) amortization of intangibles and (v) any other non-cash items
(other than any such non-cash item to the extent that it represents an accrual
of or reserve for cash expenditures in any future period) minus (b) all non-cash
items increasing Consolidated Net Income for such period. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the
8
net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its shareholders.
"EQUITY INVESTORS" means Xxxxx Investment Associates V., L.P., Xxxxx
Equity Partners V, L.P. and Xxxxxx X. Xxx Equity Fund IV, LP, and its
Affiliates.
"EQUITY SALE" means (i) a Public Equity Offering following which a
Public Market exists or (ii) a Strategic Equity Investment.
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING NOTES" means the Company's 9-1/2% senior subordinated notes
due 2008 and floating rate callable securities due 2008.
"EXISTING NOTES ISSUE DATE" means May 5, 1998.
"FAIR MARKET VALUE" means, with respect to any Property, the price that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined, except as otherwise provided, (a) if such Property has a Fair Market
Value equal to or less than $5.0 million, by any Officer of the Company or (b)
if such Property has a Fair Market Value in excess of $5.0 million, by a
majority of the Board of Directors and evidenced by a Board Resolution, dated
within 30 days of the relevant transaction, delivered to the Trustee.
"FINANCING COOPERATIVE" means CoBank ACB and Rural Telephone Finance
Cooperative.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and (d)
in the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person
9
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (b) entered into for
the purpose of assuring in any other manner the obligee against loss in respect
thereof (in whole or in part); PROVIDED, HOWEVER, that the term "Guarantee"
shall not include (i) endorsements for collection or deposit in the ordinary
course of business or (ii) a contractual commitment by one Person to invest in
another Person for so long as such Investment is reasonably expected to
constitute a Permitted Investment under clause (c) of the definition of
Permitted Investments. The term "Guarantee" used as a verb has a corresponding
meaning. The term "Guarantor" shall mean any Person Guaranteeing any obligation.
"HEDGING OBLIGATION" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security
is registered on the Security register described in Section 2.04.
"INCUR" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by merger, conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in respect of such Debt or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Debt or obligation on the balance sheet of such Person (and "Incurrence"
and "Incurred" shall have meanings correlative to the foregoing); PROVIDED,
HOWEVER, that a change in GAAP that results in an obligation of such Person that
exists at such time, and is not theretofore classified as Debt, becoming Debt
shall not be deemed an Incurrence of such Debt; PROVIDED FURTHER, HOWEVER, that
solely for purposes of determining compliance with Section 4.03, amortization of
debt discount shall not be deemed to be the Incurrence of Debt, PROVIDED that in
the case of Debt sold at a discount, the amount of such Debt Incurred shall at
all times be the accreted value of such Debt.
"INDENTURE" means this Indenture as amended or supplemented from time
to time.
"INDEPENDENT APPRAISER" means an investment banking firm of national
standing or any third party appraiser of national standing, PROVIDED that such
firm or appraiser is not an Affiliate of the Company.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"INVESTMENT" by any Person means any direct or indirect loan (other
than advances to customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of such Person), advance or other
extension of credit or 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) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. For purposes
of Sections 4.04 and 4.11 and the definition of "Restricted
10
Payment," "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary of an amount (if
positive) equal to (a) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (b) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of such Subsidiary at the time of such redesignation. In determining the amount
of any Investment made by transfer of any Property other than cash, such
Property shall be valued at its Fair Market Value at the time of such
Investment.
"ISSUE DATE" means the date on which the Original Securities are
initially issued.
"LEVERAGE RATIO" means the ratio of (a) the outstanding Debt of the
Company and the Restricted Subsidiaries on a consolidated basis to (b) the Pro
Forma EBITDA for the last four full fiscal quarters preceding the date on which
such calculation is made.
"LIEN" means, with respect to any Property of any Person, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor to the
rating agency business thereof.
"NET AVAILABLE CASH" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of (a) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale, (b) all payments made on any
Debt that is secured by any Property subject to such Asset Sale, in accordance
with the terms of any Lien upon or other security agreement of any kind with
respect to such Property, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, (c) all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale and (d) the deduction of appropriate amounts provided
by the seller as a reserve, in accordance with GAAP,
11
against any liabilities associated with the Property disposed in such Asset Sale
and retained by the Company or any Restricted Subsidiary after such Asset Sale.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale, net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"OFFICER" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Executive Vice President of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"PERMITTED DEBT" means:
(a) Debt of the Company evidenced by the Original Securities;
(b) Debt under the Credit Facility, PROVIDED that the aggregate
principal amount of all such Debt under the Credit Facility at any one time
outstanding shall not exceed $375.0 million, which amount shall be permanently
reduced by the amount of Net Available Cash used to Repay Debt under the Credit
Facility since the Existing Notes Issue Date, and not subsequently reinvested in
Additional Assets or used to purchase Securities or Repay other Debt, pursuant
to Section 4.07;
(c) Debt of the Company or a Restricted Subsidiary in respect of
Capital Lease Obligations and Purchase Money Debt, PROVIDED that (i) the
aggregate principal amount of such Debt does not exceed the Fair Market Value
(on the date of the Incurrence thereof) of the Property acquired, constructed or
leased and (ii) the aggregate principal amount of all Debt Incurred and then
outstanding pursuant to this clause (c) (together with all Permitted Refinancing
Debt Incurred in respect of Debt previously Incurred pursuant to this clause
(c)) does not exceed $30.0 million;
(d) Debt of the Company owing to and held by any Restricted
Subsidiary and Debt of a Restricted Subsidiary owing to and held by the Company
or any Restricted Subsidiary; PROVIDED, HOWEVER, that any subsequent issue or
transfer of Capital Stock or other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Debt (except to the Company or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Debt by the issuer
thereof;
(e) Debt under Interest Rate Agreements entered into by the
Company or a Restricted Subsidiary for the purpose of limiting interest rate
risk in the ordinary course
12
of the financial management of the Company or such Restricted Subsidiary and not
for speculative purposes, PROVIDED that the obligations under such agreements
are directly related to payment obligations on Debt otherwise permitted by the
terms of Section 4.03;
(f) Debt in connection with one or more standby letters of credit
or performance bonds issued by the Company or a Restricted Subsidiary in the
ordinary course of business or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;
(g) Debt outstanding on the Issue Date not otherwise described in
clauses (a) through (f) above;
(h) Debt in an aggregate principal amount outstanding at any one
time not to exceed $10.0 million; and
(i) Permitted Refinancing Debt Incurred in respect of Debt
Incurred pursuant to Section 4.03(a)(i) and clauses (a), (c) and (g) above.
"PERMITTED HOLDERS" means Xxxxxx X. Xxxxxxxxx, XXX Communications
Associates, Inc., Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, X. Xxxxx Xxxxxxx, Xxxxxx X.
Xxxxx, Xx., Xxxx X. Xxxx, Xxxxx Investment Associates V, L.P., Xxxxx Equity
Partners V, L.P. and Xxxxxx X. Xxx Equity Fund IV, LP (and its Affiliates) (or
any successor entity of the Equity Investors controlled by the current
principals of the Equity Investors or any entity controlled by, or under common
control with, the Equity Investors) and their respective estates, spouses,
ancestors and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rule 13d-3 under the Exchange Act),
individually or collectively with any of the foregoing, at least a majority of
the total voting power of the Voting Stock of such Person.
"PERMITTED INVESTMENT" means any Investment by the Company or a
Restricted Subsidiary in: (a) any Restricted Subsidiary or any Person that will,
upon the making of such Investment, become a Restricted Subsidiary, PROVIDED
that the primary business of such Restricted Subsidiary is a Telecommunications
Business; (b) a CLEC Subsidiary in an aggregate amount, together with the
aggregate amount of all other such Investments made in CLEC Subsidiaries
pursuant to this clause (b) from and after the Issue Date not to exceed $15.0
million in any fiscal year nor $75.0 million in the aggregate (each such
Investment a "Permitted CLEC Investment," and each such amount a "Permitted CLEC
Investment Amount"); provided, HOWEVER, that any excess Permitted CLEC
Investment Amount over the total Permitted CLEC Investments made in any given
year may be added to the Permitted CLEC Investment Amount for any subsequent
year; (c) any Person if as a result of such Investment such Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
Property to, the Company or a Restricted Subsidiary, PROVIDED that such Person's
primary business is a Telecommunications Business; (d) Temporary Cash
Investments; (e) receivables owing to the Company or a Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
13
PROVIDED, HOWEVER, that such trade terms may include such concessionary trade
terms as the Company or such Restricted Subsidiary deems reasonable under the
circumstances; (f) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(g) loans and advances to employees made in the ordinary course of business
consistent with past practices of the Company or a Restricted Subsidiary, as the
case may be, PROVIDED that such loans and advances do not exceed $1.0 million at
any one time outstanding, when taken together with all other such loans and
advances made pursuant to this clause (g) since the Existing Notes Issue Date;
(h) stock, obligations or other securities received in settlement of debts
created in the ordinary course of business and owing to the Company or a
Restricted Subsidiary or in satisfaction of judgments; (i) Capital Stock of a
Financing Cooperative made through the reinvestment of dividends or other
distributions received from such Financing Cooperative; (j) any Person to the
extent such Investment represents the non-cash portion of the consideration
received in connection with an Asset Sale consummated in compliance with Section
4.07; and (k) other Investments made for Fair Market Value that do not exceed
$5.0 million outstanding at any one time in the aggregate, when taken together
with all other Investments made pursuant to this clause (k) since the Existing
Notes Issue Date.
"PERMITTED LIENS" means:
(a) Liens to secure Debt permitted to be Incurred under clause (b)
of the definition of "Permitted Debt";
(b) Liens to secure Debt permitted to be Incurred under clause (c)
of the definition of "Permitted Debt", provided that any such Lien may not
extend to any Property of the Company or any Restricted Subsidiary, other than
the Property acquired, constructed or leased with the proceeds of such Debt and
any improvements or accessions to such Property;
(c) Liens for taxes, assessments or governmental charges or levies
on the Property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings promptly instituted
and diligently concluded, PROVIDED that any reserve or other appropriate
provision that shall be required in conformity with GAAP shall have been made
therefor;
(d) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens, on the Property of the Company or any
Restricted Subsidiary arising in the ordinary course of business and securing
payment of obligations that are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;
(e) Liens on the Property of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements, performance or
return-of-money bonds, surety bonds or other obligations of a like nature and
Incurred in a manner consistent with
14
industry practice, in each case which are not Incurred in connection with the
borrowing of money, the obtaining of advances or credit or the payment of the
deferred purchase price of Property and which do not in the aggregate impair in
any material respect the use of Property in the operation of the business of the
Company and the Restricted Subsidiaries taken as a whole;
(f) Liens on Property at the time the Company or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted Subsidiary;
PROVIDED, HOWEVER, that any such Lien may not extend to any other Property of
the Company or any Restricted Subsidiary; PROVIDED FURTHER, HOWEVER, that such
Liens shall not have been Incurred in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Property was
acquired by the Company or any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; PROVIDED, HOWEVER, that any such Lien may not
extend to any other Property of the Company or any other Restricted Subsidiary
that is not a direct Subsidiary of such Person; PROVIDED FURTHER, HOWEVER, that
any such Lien was not Incurred in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Person became a
Restricted Subsidiary;
(h) pledges or deposits by the Company or any Restricted
Subsidiary 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 Debt) or leases to which the Company or
any Restricted Subsidiary is party, or deposits to secure public or statutory
obligations of the Company, or deposits for the payment of rent, in each case
Incurred in the ordinary course of business;
(i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(j) Liens existing on the Issue Date not otherwise described in
clauses (a) through (i) above;
(k) Liens on the Property of the Company or any Restricted
Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured
by Liens referred to in clause (b), (f), (g) or (j) above; PROVIDED, HOWEVER,
that any such Lien shall be limited to all or part of the same Property that
secured the original Lien (together with improvements and accessions to such
Property) and the aggregate principal amount of Debt that is secured by such
Lien shall not be increased to an amount greater than the sum of (i) the
outstanding principal amount, or, if greater, the committed amount, of the Debt
secured by Liens described under clause (b), (f), (g) or (j) above, as the case
may be, at the time the original Lien became a Permitted Lien under this
Indenture and (ii) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, incurred by the Company or such Restricted
Subsidiary in connection with such Refinancing; and
15
(l) Liens not otherwise permitted by clauses (a) through (k) above
encumbering assets having an aggregate Fair Market Value not in excess of 5.0%
of Consolidated Net Tangible Assets, as determined based on the consolidated
balance sheet of the Company as of the end of the most recent fiscal quarter
ending at least 45 days prior to the date any such Lien shall be Incurred.
"PERMITTED REFINANCING DEBT" means any Debt that Refinances any other
Debt, including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced; PROVIDED, HOWEVER, that Permitted Refinancing
Debt shall not include (x) Debt of a Subsidiary that Refinances Debt of the
Company or (y) Debt of the Company or a Restricted Subsidiary that Refinances
Debt of an Unrestricted Subsidiary.
"PERSON" means any individual, corporation, company (including any
limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"PREFERRED STOCK DIVIDENDS" means all dividends with respect to
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Subsidiary. The amount of any such dividend shall be
equal to the quotient of such dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Preferred Stock.
"PRINCIPAL" of any Indebtedness (including the Securities) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"PRO FORMA" means, with respect to any calculation made or required to
be made pursuant to the terms hereof, a calculation performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of the Company, as the case may be.
16
"PRO FORMA EBITDA" means, for any period, the EBITDA of the Company and
its consolidated Restricted Subsidiaries, after giving effect to the following:
if (a) since the beginning of such period, the Company or any Restricted
Subsidiary shall have made any Asset Sale, Investment (by merger or otherwise)
in any Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary) or an acquisition of Property, (b) the transaction giving rise to
the need to calculate Pro Forma EBITDA is such an Asset Sale, Investment or
acquisition or (c) since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made such an Asset Sale, Investment or acquisition, EBITDA for such period
shall be calculated after giving pro forma effect to such Asset Sale, Investment
or acquisition as if such Asset Sale, Investment or acquisition occurred on the
first day of such period.
For purposes of this definition, notwithstanding the definition of "pro
forma," EBITDA shall be calculated on a pro forma basis after giving effect to
cost savings resulting from employee terminations, facilities consolidations and
closings, standardization of employee benefits and compensation practices,
consolidation of property, casualty and other insurance coverage and policies,
standardization of sales representation commissions and other contract rates,
and reductions in taxes other than income taxes (collectively, "Cost Savings
Measures"), which cost savings the Company reasonably believes in good faith
would have been achieved during the period for which such calculation is being
made as a result of acquisitions of Property (regardless of whether such Cost
Savings Measures could then be reflected in pro forma financial statements under
GAAP, Regulation S-X promulgated by the SEC or any other regulation or policy of
the SEC), PROVIDED that both (i) such cost savings and Cost Savings Measures
were identified and such cost savings were quantified in an Officers'
Certificate delivered to the Trustee at the time of the consummation of an
acquisition of Property and such Officers' Certificate states that such officers
believe in good faith that actions will be commenced or initiated within 90 days
of such acquisition of Property to effect such Cost Savings Measures and (ii)
with respect to each acquisition of Property completed prior to the 90th day
preceding such date of determination, actions were commenced or initiated by the
Company or any of its Restricted Subsidiaries within 90 days of such acquisition
of Property to effect the Cost Savings Measures identified in such Officers'
Certificate (regardless, however, of whether the corresponding cost savings have
been achieved).
"PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"PUBLIC MARKET" means any time after (a) a Public Equity Offering has
been consummated and (b) at least 15.0% of the total issued and outstanding
common stock of
17
the Company has been distributed by means of an effective registration statement
under the Securities Act or sales pursuant to Rule 144 under the Securities Act.
"PURCHASE MONEY DEBT" means Debt (a) consisting of the deferred
purchase price of property, conditional sale obligations, obligations under any
title retention agreement, other purchase money obligations and obligations in
respect of industrial revenue bonds, in each case where the maturity of such
Debt does not exceed the anticipated useful life of the Property being financed,
and (b) Incurred to finance the acquisition, construction or lease by the
Company or a Restricted Subsidiary of such Property, including additions and
improvements thereto; PROVIDED, HOWEVER, that such Debt is Incurred within 180
days after the acquisition, construction or lease of such Property by the
Company or such Restricted Subsidiary.
"REFINANCE" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other
Debt, in exchange or replacement for, such Debt. "Refinanced" and "Refinancing"
shall have correlative meanings.
"REPAY" means, in respect of any Debt, to repay, prepay, repurchase,
redeem, legally defease or otherwise retire such Debt. "Repayment" and "Repaid"
shall have correlative meanings. For purposes of Section 4.07 and clause (b) of
the definition of "Permitted Debt", Debt shall be considered to have been Repaid
only to the extent the related loan commitment, if any, shall have been
permanently reduced in connection therewith, without the right on the part of
the Company or any of its Subsidiaries, pursuant to an agreement in effect at
the time of such Repayment, to cause such commitment to be reinstated or
replaced with a substantially similar commitment.
"REPRESENTATIVE" means the trustee, agent or representative expressly
authorized to act in such capacity, if any, for an issue of Senior Debt.
"RESTRICTED PAYMENT" means: (a) any dividend or distribution (whether
made in cash, securities or other Property) declared or paid on or with respect
to any shares of Capital Stock of the Company or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Company or any Restricted Subsidiary), except for any dividend or
distribution that is made solely to the Company or a Restricted Subsidiary (and,
if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
shareholders of such Restricted Subsidiary on a pro rata basis or on a basis
that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a pro rata
basis) or any dividend or distribution payable solely in shares of Capital Stock
(other than Disqualified Stock) of the Company; (b) the purchase, repurchase,
redemption, acquisition or retirement for value of any Capital Stock of the
Company or any Affiliate of the Company (other than from the Company or a
Restricted Subsidiary) or any securities exchangeable for or convertible into
any such Capital Stock, including the exercise of any option to exchange any
Capital Stock (other than for or into Capital Stock of the Company that is not
Disqualified Stock); (c) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity, sinking fund
or amortization or other installment payment, of any Subordinated Obligation
(other
18
than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a scheduled maturity, sinking
fund or amortization or other installment obligation, in each case due within
one year of the date of acquisition); (d) any Investment (other than Permitted
Investments) in any Person; or (e) the issuance, sale or other disposition of
Capital Stock of any Restricted Subsidiary to a Person other than the Company or
another Restricted Subsidiary if the result thereof is that such Restricted
Subsidiary shall cease to be a Restricted Subsidiary, in which event the amount
of such "Restricted Payment" shall be the Fair Market Value of the remaining
interest, if any, in such former Restricted Subsidiary held by the Company and
the other Restricted Subsidiaries.
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company unless
such Subsidiary shall have been designated an Unrestricted Subsidiary as
permitted or required pursuant to Section 4.11 and (b) an Unrestricted
Subsidiary that is redesignated as a Restricted Subsidiary as permitted pursuant
to Section 4.11.
"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement relating to
Property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such Property to another Person and the Company or a
Restricted Subsidiary, within two years of such transfer, leases it from such
Person.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (a) all obligations consisting of the principal,
premium, if any, and accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not post-filing interest is allowed in such
proceeding) in respect of (i) Debt of the Company for borrowed money (including
all monetary obligations of the Company under the Credit Facility) and (ii) Debt
of the Company evidenced by notes, debentures, bonds or other similar
instruments permitted under this Indenture for the payment of which the Company
is responsible or liable; (b) all Capital Lease Obligations of the Company and
all Attributable Debt in respect of Sale and Leaseback Transactions entered into
by the Company; (c) all obligations of the Company (i) for the reimbursement of
any obligor on any letter of credit, bankers' acceptance or similar credit
transaction, (ii) under Hedging Obligations or (iii) issued or assumed as the
deferred purchase price of Property and all conditional sale obligations of the
Company and all obligations under any title retention agreement permitted under
this Indenture; and (d) all obligations of other Persons of the type referred to
in clauses (a), (b) and (c) for the payment of which the Company is responsible
or liable as Guarantor; PROVIDED, HOWEVER, that Senior Debt shall not include
(A) Debt of the Company that is by its terms expressly subordinate or PARI PASSU
in right of payment to the Securities, including any Senior Subordinated Debt or
any Subordinated Obligations; (B) any Debt Incurred in violation of the
provisions of this Indenture (but, as to any such obligation, no such violation
shall be deemed to exist for
19
purposes of this clause (B) if the holders of such obligation or their
Representative and the Trustee shall have received an Officers' Certificate of
the Company to the effect that the Incurrence of such Debt does not (or, in the
case of revolving credit indebtedness (including revolving credit indebtedness
under the Acquisition Facility), that the Incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture; (C) accounts payable or
any other obligations of the Company to trade creditors created or assumed by
the Company in the ordinary course of business in connection with the obtaining
of materials or services (including Guarantees thereof or instruments evidencing
such liabilities); (D) any liability for Federal, state, local or other taxes
owed or owing by the Company; (E) any obligation of the Company to any
Subsidiary; or (F) any obligations with respect to any Capital Stock of the
Company.
"SENIOR SUBORDINATED DEBT" means the Securities and any other
subordinated Debt of the Company that specifically provides that such Debt is to
rank PARI PASSU with the Securities and is not subordinated by its terms to any
other subordinated Debt or other obligation of the Company which is not Senior
Debt.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"STRATEGIC EQUITY INVESTMENT" means an equity investment made by a
Strategic Investor in the Company in an aggregate amount of at least $25.0
million and that results in such Strategic Investor becoming the owner of at
least 15.0% of the total issued and outstanding common stock of the Company.
"STRATEGIC INVESTOR" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80.0% or more
of the Voting Stock of which is owned by a Person that has, an equity market
capitalization, at the time of its initial investment in the Company, in excess
of $2.0 billion.
"SUBORDINATED OBLIGATION" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) that is subordinate or
junior in right of payment to the Securities pursuant to a written agreement to
that effect (which shall include the subordination section of any document
governing such Debt).
"SUBSIDIARY" means, in respect of any Person, any corporation, company
(including any limited liability company), association, partnership, joint
venture or other business entity of which a majority of the total voting power
of the Voting Stock is at the time owned or controlled, directly or indirectly,
by (a) such Person, (b) such Person and one or more Subsidiaries of such Person
or (c) one or more Subsidiaries of such Person.
20
"TELECOMMUNICATIONS ASSETS" means any Property, including licenses and
applications, bids and agreements to acquire licenses, or other authority to
provide telecommunications services, previously granted, or to be granted, by
the Federal Communications Commission, used or intended for use primarily in
connection with a Telecommunications Business.
"TELECOMMUNICATIONS BUSINESS" means any business substantially all the
revenues of which are derived from (a) transmitting, or providing services
relating to the transmission of, voice, video or data through owned or leased
wireline or wireless facilities, (b) the sale or provision of phone cards, "800"
services, voice mail, switching, enhanced telecommunications services, telephone
directory or telephone number information services or telecommunications network
intelligence or (c) any business ancillary or directly related to the businesses
referred to in clause (a) or (b), PROVIDED that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors.
"TEMPORARY CASH INVESTMENTS" means any of the following: (a)
Investments in U.S. Government Obligations maturing within one year of such
Investment; (b) Investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company organized under the laws of the United
States of America or any State thereof having capital, surplus and undivided
profits aggregating in excess of $500.0 million and whose long-term debt is
rated "A3" or "A-" or higher according to Xxxxx'x or S&P (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)); (c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) entered into with a bank meeting the
qualifications described in clause (b) above; (d) Investments in commercial
paper, maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to Xxxxx'x
or "A-1" (or higher) according to S&P (or such similar equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)); and (e) direct obligations (or certificates
representing an ownership interest in such obligations) of any State of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of such State is pledged and
which are not callable or redeemable at the issuer's option, PROVIDED that (i)
the long-term debt of such State is rated "A3" or "A-"or higher according to
Xxxxx'x or S&P (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)) and (ii) such obligations mature within 180 days of the date of
acquisition thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture; PROVIDED, HOWEVER,
that, in the event the TIA is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendments, the Trust Indenture Act of
1939 as so amended.
21
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" means any officer within the Corporate Trust
Administration department of the Trustee (or any successor group of the trustee)
with direct responsibility for the administration of this Indenture and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as
in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (a) FairPoint Communications Solutions
Corp.; (b) any Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary
of the Company that is designated after the Issue Date as an Unrestricted
Subsidiary as permitted or required pursuant to Section 4.11 and not thereafter
redesignated as a Restricted Subsidiary as permitted pursuant thereto.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"VOTING STOCK" of any Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Restricted Subsidiary
all the Voting Stock of which (except directors' qualifying shares) is at such
time owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.
SECTION 1.02 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Affiliate Transaction"..................................... 4.09
"Bankruptcy Law"............................................ 6.01
"Change of Control Offer"................................... 4.14
"Change of Control Payment Date"............................ 4.14
"Change of Control Purchase Price".......................... 4.14
"covenant defeasance option"................................ 8.01
"Custodian"................................................. 6.01
"Event of Default".......................................... 6.01
"Exchange Security"......................................... Appendix A
"Global Security"........................................... Appendix A
"legal defeasance option"................................... 8.01
"Legal Holiday"............................................. 11.08
"Offer Amount".............................................. 4.07
22
TERM DEFINED IN SECTION
---- ------------------
"Offer Period".............................................. 4.07
"OID"....................................................... 2.01
"Original Securities"....................................... 2.01
"pay the Securities"........................................ 10.03
"Paying Agent".............................................. 2.04
"Payment Blockage Notice"................................... 10.03
"Payment Blockage Period"................................... 10.03
"Prepayment Offer".......................................... 4.07
"Prepayment Offer Notice"................................... 4.07
"Purchase Date"............................................. 4.07
"Registered Exchange Offer"................................. Appendix A
"Registrar"................................................. 2.04
"Shelf Registration Statement".............................. Appendix A
"Securities Custodian"...................................... Appendix A
"Surviving Person".......................................... Article V
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This Indenture
is subject to the mandatory provisions of the TIA which are incorporated by
reference in and made a part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
23
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock
or (ii) the maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock.
ARTICLE II
THE SECURITIES
SECTION 2.01 AMOUNT OF SECURITIES; ISSUABLE IN SERIES. The aggregate
principal amount of Securities that may be authenticated and delivered under
this Indenture is $300,000,000. The Securities may be issued in one or more
series; PROVIDED, HOWEVER, that any Securities issued with original issue
discount ("OID") for Federal income tax purposes shall not be issued as part of
the same series as any Securities that are issued with a different amount of OID
or are not issued with OID.
Subject to Section 2.03, the Trustee shall authenticate Securities for
original issue on the Issue Date in the aggregate principal amount of
$200,000,000 (the "Original Securities"). With respect to any Securities issued
after the Issue Date (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, Original
Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix A), there
shall be established in or pursuant to a resolution of the Board of Directors,
and subject to Section 2.03, set forth, or determined in the manner provided in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of such Securities:
(1) whether such Securities shall be issued as part of a new or
existing series of Securities and the title of such Securities (which
shall distinguish the Securities of the series from Securities of any
other series);
(2) the aggregate principal amount of such Securities that may
be authenticated and delivered under this Indenture;
(3) the issue price and issuance date of such Securities,
including the date from which interest on such Securities shall
accrue;
(4) if applicable, that such Securities shall be issuable in
whole or in part in the form of one or more Global Securities and, in
such case, the respective
24
depositories for such Global Securities, the form of any legend or
legends that shall be borne by any such Global Security in addition to
or in lieu of that set forth in Exhibit 1 to Appendix A and any
circumstances in addition to or in lieu of those set forth in Section
2.3 of Appendix A in which any such Global Security may be exchanged
in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the
name or names of Persons other than the depository for such Global
Security or a nominee thereof; and
(5) if applicable, that such Securities shall not be issued in
the form of Initial Securities subject to Appendix A, but shall be
issued in the form of Exchange Securities as set forth in Exhibit A.
If any of the terms of any series are established by action taken
pursuant to a resolution of the Board of Directors, a copy of an appropriate
record of such action shall be certified by the Secretary or any Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate or the trust indenture supplementary
hereto setting forth the terms of the series.
SECTION 2.02 FORM AND DATING. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in Appendix A, which is
hereby incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage, PROVIDED that any such notation,
legend or endorsement is in a form reasonably acceptable to the Company. Each
Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of the
terms of this Indenture.
SECTION 2.03 EXECUTION AND AUTHENTICATION. Two Officers shall sign the
Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company in the form of an Officers' Certificate for the authentication and
delivery of such Securities, and the Trustee in accordance with such written
order of the Company shall authenticate and deliver such Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
25
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities 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 any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.04 REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"), one of which offices will be
maintained for such purpose in The City of New York. The Registrar shall keep a
register of the Securities 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" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. 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, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST. Prior to 12:00 p.m.,
New York City time, on each due date of the principal and interest on any
Security, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal and interest when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or a Wholly Owned Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06 SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and
26
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.
SECTION 2.07 REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss that any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08 OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09 TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10 CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation in accordance with its normal procedures unless the Company directs
the Trustee to deliver canceled Securities to the Company.
27
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.11 DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Securities, the Company shall pay defaulted interest in any
lawful manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12 CUSIP NUMBERS. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that neither the Company nor the Trustee shall have any responsibility
for any defect in the "CUSIP" number that appears on any Security, check, advice
of payment or redemption notice, and any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE III
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and that such redemption is being made pursuant to paragraph 5 of
the Securities.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED. If fewer than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
28
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section at least 45 days before the redemption date.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date that is on or prior to the date of
redemption). Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date that is on or prior to the date of
redemption) on all Securities to be redeemed on that date other
29
than Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06 SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES. The Company shall promptly pay in
immediately available funds the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and in this Indenture.
Principal and interest shall be considered paid on the date due if on such date
the Trustee or the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the rate borne by the Securities to the extent
lawful.
SECTION 4.02 SEC REPORTS. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC and provide the Trustee and Holders of
Securities with such annual reports and such information, documents and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and reports to be so filed and provided at the times specified for the
filing of such information, documents and reports under such Sections; PROVIDED,
HOWEVER, that the Company shall not be so obligated to file such information,
documents and reports with the SEC if the SEC does not permit such filings. The
Company also shall comply with the other provisions of TIA Section 314(a). So
long as any of the Securities are "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities Act, the Company will, during any period in
which it is not subject to or in compliance with Section 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
SECTION 4.03 LIMITATION ON DEBT.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Debt unless, after giving
effect to the application of the proceeds thereof, no Default or Event of
Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and either (i) after giving effect to
30
the Incurrence of such Debt and the receipt and application of the proceeds
thereof, the Leverage Ratio of the Company and the Restricted Subsidiaries (on a
consolidated basis) would not exceed (x) 7.0 to 1.0 for Debt Incurred on or
before May 1, 2003 or (y) 6.5 to 1.0 for Debt Incurred thereafter or (ii) such
Debt is Permitted Debt.
(b) Notwithstanding the foregoing, (i) the Company shall not Incur
any Debt pursuant to this Section 4.03 if the proceeds thereof are used,
directly or indirectly, to Refinance (A) any Subordinated Obligations unless
such Debt shall be subordinated to the Securities to at least the same extent as
such Subordinated Obligations or (B) any Senior Subordinated Debt unless such
Debt shall be Senior Subordinated Debt or shall be subordinated to the
Securities, and (ii) the Company shall not permit any Restricted Subsidiary to
Incur any Debt pursuant to this Section 4.03 if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations or Senior
Subordinated Debt of the Company.
(c) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Debt (including Debt issued by the Company to
the lenders that are party to the Credit Facility) meets the criteria of more
than one of the types of Debt described in Section 4.03(a)(i) and in the
definition of "Permitted Debt", the Company, in its sole discretion, will
classify such item of Debt and only be required to include the amount and type
of such Debt in either Section 4.03(a)(i) or in one of the clauses in the
definition of "Permitted Debt" and (ii) an item of Debt (including Debt issued
by the Company to the lenders that are party to the Credit Facility) may be
divided and classified in more than one of the types of Debt described in the
definition of "Permitted Debt" and Section 4.03(a)(i).
SECTION 4.04 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not
make, and shall not permit any Restricted Subsidiary to make, directly or
indirectly, any Restricted Payment if at the time of, and after giving effect
to, such proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be
continuing,
(b) the Company could not Incur at least $1.00 of additional Debt
pursuant to Section 4.03(a)(i) or
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Existing Notes Issue Date (the
amount of any Restricted Payment, if made other than in cash, to be based upon
Fair Market Value) would exceed an amount equal to the sum of:
(i) 50.0% of the aggregate amount of Consolidated Net Income
accrued during the period (treated as one accounting period) from the
beginning of the fiscal quarter during which the Existing Notes Issue
Date occurred to the end of the most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment (or if the
aggregate amount of Consolidated Net Income for such period shall be a
deficit, minus 100.0% of such deficit),
(ii) Capital Stock Sale Proceeds,
31
(iii) the sum of (A) the aggregate net cash proceeds received by
the Company or any Restricted Subsidiary from the issuance or sale
after the Existing Notes Issue Date of convertible or exchangeable
Debt that has been converted into or exchanged for Capital Stock
(other than Disqualified Stock) of the Company and (B) the aggregate
amount by which Debt (other than Subordinated Obligations) of the
Company or any Restricted Subsidiary is reduced on the Company's
consolidated balance sheet on or after the Existing Notes Issue Date
upon the conversion or exchange of any Debt issued or sold on or prior
to the Existing Notes Issue Date that is convertible or exchangeable
for Capital Stock (other than Disqualified Stock) of the Company
(excluding, in the case of clause (A) or (B), (x) any such Debt issued
or sold to the Company or a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any such
Subsidiary for the benefit of their employees and (y) the aggregate
amount of any cash or other Property distributed by the Company or any
Restricted Subsidiary upon any such conversion or exchange),
(iv) an amount equal to the sum of (A) the net reduction in
Investments in any Person other than the Company or a Restricted
Subsidiary resulting from dividends, repayments of loans or advances
or other transfers of Property, in each case to the Company or any
Restricted Subsidiary from such Person, and (B) the portion
(proportionate to the Company's equity interest in an Unrestricted
Subsidiary) of the Fair Market Value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; PROVIDED, HOWEVER, that the
foregoing sum shall not exceed, in the case of any Person, the amount
of Investments previously made (and treated as a Restricted Payment)
by the Company or any Restricted Subsidiary in such Person, and
(v) $20.0 million.
Notwithstanding the foregoing limitation, the Company may:
(1) pay dividends on its Capital Stock within 60 days of
the declaration thereof if, on said declaration date, such
dividends could have been paid in compliance with this Indenture;
PROVIDED, HOWEVER, that at the time of such payment of such
dividend, no other Default or Event of Default shall have
occurred and be continuing (or result therefrom); PROVIDED
FURTHER, HOWEVER, that such dividend shall be included in the
calculation of the amount of Restricted Payments;
(2) purchase, repurchase, redeem, legally defease, acquire
or retire for value Capital Stock of the Company or Subordinated
Obligations in exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any
such Subsidiary for the benefit of their employees); PROVIDED,
HOWEVER, that (i) such purchase, repurchase, redemption, legal
defeasance, acquisition or
32
retirement shall be excluded in the calculation of the amount of
Restricted Payments and (ii) the Capital Stock Sale Proceeds from
such exchange or sale shall be excluded from the calculation
pursuant to clause (c)(ii) above;
(3) purchase, repurchase, redeem, legally defease, acquire
or retire for value any Subordinated Obligations in exchange for,
or out of the proceeds of the substantially concurrent sale of,
Permitted Refinancing Debt; PROVIDED, HOWEVER, that such
purchase, repurchase, redemption, legal defeasance, acquisition
or retirement shall be excluded in the calculation of the amount
of Restricted Payments;
(4) repurchase shares of, or options to purchase shares of,
common stock of the Company or any of its Subsidiaries from
current or former officers, directors or employees of the Company
or any of its Subsidiaries (or permitted transferees of such
current or former officers, directors or employees), pursuant to
the terms of agreements (including employment agreements) or
plans (or amendments thereto) approved by the Board of Directors
under which such individuals purchase or sell, or are granted the
option to purchase or sell, shares of such common stock;
PROVIDED, HOWEVER, that (i) the aggregate amount of such
repurchases shall not exceed $5.0 million in any fiscal year,
PROVIDED, that any excess permitted amount over the actual amount
of repurchases in any given year may be added to the permitted
amount for any subsequent year, (ii) such repurchases shall be
included in the calculation of the amount of Restricted Payments
and (iii) at the time of any such repurchase, no other Default or
Event of Default shall have occurred and be continuing (or result
therefrom);
(5) pay the fees and expenses described in Section 4.09(5),
PROVIDED, HOWEVER, that any such fees or expenses paid in excess
of $1.0 million per fiscal year shall be included in the
calculation of the amount of Restricted Payments; and
(6) following the first Public Equity Offering that results
in a Public Market, pay dividends on the common stock of the
Company of up to 6.0% per annum of the cash proceeds (net of
underwriters' fees, discounts or commissions) of such first
Public Equity Offering; PROVIDED, HOWEVER, that (i) such
dividends shall be (x) paid pro rata to the holders of all
classes of common stock of the Company and (y) included in the
calculation of the amount of Restricted Payments and (ii) at the
time of payment of any such dividend, no other Default or Event
of Default shall have occurred and be continuing (or result
therefrom).
In addition, notwithstanding the foregoing, payments made by the
Company to purchase up to 12,500 shares of ST Enterprises, Ltd. and 7.69 shares
of Xxxxxx Telephone Company shall not be included in the calculation of the
amount of Restricted Payments, to the extent such payments have been reflected
in the Company's Consolidated Net Income.
33
In computing Consolidated Net Income of the Company under clauses (a),
(b) and (c) above, (x) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (y) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment that, at the time of
the making of such Restricted Payment, would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 4.05 LIMITATION ON LIENS. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to
exist, any Lien (other than Permitted Liens or Liens securing Senior Debt) upon
any of its Property (including Capital Stock of a Restricted Subsidiary),
whether owned at the Issue Date or thereafter acquired, or any interest therein
or any income or profits therefrom, unless (a) if such Lien secures Senior
Subordinated Debt, the Securities are secured on an equal and ratable basis with
such Debt and (b) if such Lien secures Subordinated Obligations, such Lien shall
be subordinated to a Lien securing the Securities in the same Property as that
securing such Subordinated Obligations to the same extent as such Subordinated
Obligations are subordinated to the Securities.
SECTION 4.06 LIMITATION ON ISSUANCE OR SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not (a) sell, pledge, hypothecate or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary or
(b) permit any Restricted Subsidiary to, directly or indirectly, issue or sell
or otherwise dispose of any shares of its Capital Stock, other than (i)
directors' qualifying shares, (ii) to the Company or a Wholly Owned Subsidiary,
or (iii) if, immediately after giving effect to such disposition, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary;
PROVIDED, HOWEVER, that, in the case of this clause (iii), such issuance, sale
or disposition is effected in compliance with Section 4.07.
SECTION 4.07 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale unless (i) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the Property subject to
such Asset Sale; (ii) at least 75.0% of the consideration paid to the Company or
such Restricted Subsidiary in connection with such Asset Sale is in the form of
cash or cash equivalents or the assumption by the purchaser of liabilities of
the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Securities) as a result of which the Company and
the Restricted Subsidiaries are no longer obligated with respect to such
liabilities; and (iii) the Company delivers an Officers' Certificate to the
Trustee certifying that such Asset Sale complies with the foregoing clauses (i)
and (ii).
34
(b) The Net Available Cash (or any portion thereof) from Asset Sales
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt): (a) to Repay Senior Debt of the Company or Debt of any Restricted
Subsidiary (excluding any Debt owed to the Company or an Affiliate of the
Company); or (b) subject to Section 4.04, to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another Restricted
Subsidiary). Pending such application, and subject in all respects to the
procedures set forth below, the Company may, to the extent such use would not
constitute a Repayment, use such Net Available Cash to temporarily reduce Debt.
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 270 days from the date of the
receipt of such Net Available Cash or that is not (to the extent not used to
temporarily reduce Debt without reducing related loan commitments) segregated
from the general funds of the Company for investment in identified Additional
Assets in respect of a project that shall have been commenced, and for which
binding contractual commitments have been entered into, prior to the end of such
270-day period and that shall not have been completed or abandoned shall
constitute "Excess Proceeds"; PROVIDED, HOWEVER, that the amount of any Net
Available Cash that ceases to be so segregated as contemplated above and any Net
Available Cash that is segregated in respect of a project that is abandoned or
completed shall also constitute "Excess Proceeds" at the time any such Net
Available Cash ceases to be so segregated or at the time the relevant project is
so abandoned or completed, as applicable. When the aggregate amount of Excess
Proceeds exceeds $5.0 million (taking into account income earned on such Excess
Proceeds, if any), the Company will be required to make an offer to purchase
(the "Prepayment Offer") the Securities which offer shall be in the amount of
the Allocable Excess Proceeds, on a pro rata basis according to principal
amount, at a purchase price equal to 100.0% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the purchase date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), in accordance with the procedures
(including prorating in the event of oversubscription) set forth herein. To the
extent that any portion of the amount of Net Available Cash remains after
compliance with the preceding sentence and provided that all Holders of
Securities have been given the opportunity to tender their Securities for
purchase in accordance with Section 4.07(d), the Company or such Restricted
Subsidiary may use such remaining amount for any purpose permitted by this
Indenture and the amount of Excess Proceeds will be reset to zero. The term
"Allocable Excess Proceeds" will mean the product of (i) the Excess Proceeds and
(ii) a fraction, the numerator of which is the aggregate principal amount of the
Securities outstanding on the date of the Prepayment Offer and the denominator
of which is the sum of the aggregate principal amount of the Securities
outstanding on the date of the Prepayment Offer and the aggregate principal
amount of other Debt of the Company outstanding on the date of the Prepayment
Offer that is PARI PASSU in right of payment with the Securities and subject to
terms and conditions in respect of Asset Sales similar in all material respects
to this Section and requiring the Company to make an offer to purchase such Debt
at substantially the same time as the Prepayment Offer.
35
(d) (i) Within five Business Days after the Company is obligated to
make a Prepayment Offer as described in Section 4.07(c), the Company shall send
a written notice, by first-class mail, to the Holders of Securities, accompanied
by such information regarding the Company and its Subsidiaries as the Company in
good faith believes will enable such Holders to make an informed decision with
respect to such Prepayment Offer. Such notice shall state, among other things,
the purchase price and the purchase date, which shall be, subject to any
contrary requirements of applicable law, a Business Day no earlier than 30 days
nor later than 60 days from the date such notice is mailed (the "Purchase
Date").
(ii) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above,
the Company shall deliver to the Trustee an Officers' Certificate
as to (i) the amount of the Prepayment Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the
Asset Sales pursuant to which such Prepayment Offer is being made
and (iii) the compliance of such allocation with the provisions
of Section 4.07(b). On or before the Purchase Date, the Company
shall also irrevocably deposit with the Trustee or with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is
the Paying Agent, shall segregate and hold in trust) in Temporary
Cash Investments (other than in those enumerated in clause (b) of
the definition of Temporary Cash Investments), maturing on the
last day prior to the Purchase Date or on the Purchase Date if
funds are immediately available by open of business, an amount
equal to the Offer Amount to be held for payment in accordance
with the provisions of this Section. Upon the expiration of the
period for which the Prepayment Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for
cancellation the Securities or portions thereof that have been
properly tendered to and are to be accepted by the Company. The
Trustee or the Paying Agent shall, on the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the
purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less
than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with
this Section.
(iii) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly
completed, to the Company or its agent at the address specified
in the notice at least three Business Days prior to the Purchase
Date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Security that was delivered for purchase
by the Holder and a statement that such Holder is withdrawing its
election to have such Security purchased. If at the expiration of
the Offer Period the aggregate principal amount of Securities
surrendered by
36
Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on pro rata basis for all Securities
(with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part shall be issued new
Securities equal in principal amount to the unpurchased portion
of the Securities surrendered.
(iv) At the time the Company delivers Securities to the
Trustee that are to be accepted for purchase, the Company shall
also deliver an Officers' Certificate stating that such
Securities are to be accepted by the Company pursuant to and in
accordance with the terms of this Section. A Security shall be
deemed to have been accepted for purchase at the time the Trustee
or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.08 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distributions on or
in respect of its Capital Stock, or pay any Debt or other obligation owed, to
the Company or any other Restricted Subsidiary, (b) make any loans or advances
to the Company or any other Restricted Subsidiary or (c) transfer any of its
Property to the Company or any other Restricted Subsidiary. The foregoing
limitations will not apply (i) with respect to clauses (a), (b) and (c), to
restrictions (A) arising under agreements that were in effect on the Issue Date,
(B) relating to Debt of a Restricted Subsidiary and existing at the time it
became a Restricted Subsidiary if such restriction was not created in connection
with or in anticipation of the transaction or series of transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or was acquired
by the Company or another Restricted Subsidiary, or (C) that result from the
Refinancing of Debt Incurred pursuant to an agreement referred to in clause
(i)(A) or (B) above or in clause (ii)(A) or (B) below, PROVIDED such restriction
is no more restrictive than those under the agreement evidencing the Debt so
Refinanced, and (ii) with respect to clause (c) only, to restrictions (A)
relating to Debt that is permitted to be Incurred and secured without also
securing the Securities pursuant to Sections 4.03 and 4.05 that limit the right
of the debtor to dispose of the Property securing such Debt, (B) encumbering
Property at the time such Property was acquired by the Company or any Restricted
Subsidiary, so long as such restriction relates solely to the Property so
acquired and was not created in connection with or in anticipation of such
acquisition, (C) resulting from customary provisions restricting subletting or
assignment of leases or customary provisions in other agreements that
37
restrict assignment of such agreements or rights thereunder or (D) customary
restrictions contained in asset sale agreements limiting the transfer of such
Property pending the closing of such sale.
SECTION 4.09 LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction"), unless (a) the terms of such Affiliate Transaction are
(i) set forth in writing, (ii) in the best interest of the Company or such
Restricted Subsidiary, as the case may be, and (iii) no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained in a comparable arm's-length transaction with a Person that is not
an Affiliate of the Company, (b) if such Affiliate Transaction involves
aggregate payments or value in excess of $1.0 million, two Officers of the
Company approve such Affiliate Transaction, and in the good faith judgment of
such Officers, believe that such Affiliate Transaction complies with clauses
(a)(ii) and (iii) of this paragraph as evidenced by an Officers' Certificate
promptly delivered to the Trustee, (c) if such Affiliate Transaction involves
aggregate payments or value in excess of $5.0 million, the Board of Directors
(including a majority of the disinterested members of the Board of Directors)
approves such Affiliate Transaction, and in its good faith judgment, believes
that such Affiliate Transaction complies with clauses (a)(ii) and (iii) of this
paragraph as evidenced by a Board Resolution promptly delivered to the Trustee
and (d) if such Affiliate Transaction involves aggregate payments or value in
excess of $10.0 million, the Company obtains a written opinion from an
Independent Appraiser to the effect that the consideration to be paid or
received in connection with such Affiliate Transaction is fair, from a financial
point of view, to the Company or such Restricted Subsidiary, as the case may be.
Notwithstanding the foregoing limitation, the Company or any Restricted
Subsidiary may enter into or suffer to exist the following:
(1) any transaction or series of transactions between the Company
and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries, PROVIDED that no more than 5.0% of the total
voting power of the Voting Stock (on a fully diluted basis) of any such
Restricted Subsidiary is owned by an Affiliate of the Company (other
than a Restricted Subsidiary);
(2) any Restricted Payment permitted to be made pursuant to
Section 4.04;
(3) the payment of compensation (including amounts paid pursuant
to employee benefit plans) for the personal services of officers,
directors and employees of the Company or any of the Restricted
Subsidiaries, so long as such payments are pursuant to a policy (i)
established by the Board of Directors in good faith and (ii) evidenced
by a resolution of the Board of Directors that establishes standards to
ensure that the terms of such compensation and the
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services theretofore or thereafter to be performed for such
compensation will be fair consideration therefor;
(4) loans and advances to employees made in the ordinary course
of business and consistent with the past practices of the Company or
such Restricted Subsidiary, as the case may be, PROVIDED that such
loans and advances do not exceed $1.0 million in the aggregate at any
one time outstanding;
(5) the payment, in compliance with clause (a) of this Section
4.09, of fees and expenses to the Equity Investors during any fiscal
year not in excess of 1.0% of EBITDA for such year, PROVIDED that no
Default or Event of Default exists at the time of such payment;
(6) any sale or other issuance of Capital Stock (other than
Disqualified Stock) of the Company;
(7) the payment of customary legal fees and expenses to Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP; or
(8) any transaction or series of transactions, in the ordinary
course of business for a Person engaged in the CLEC business, with a
CLEC Subsidiary, PROVIDED that any such transaction is undertaken
pursuant to a policy adopted by the Board of Directors, which policy
shall be evidenced by a Board Resolution delivered to the Trustee, that
establishes adequate procedures to insure that any such transaction is
effected in accordance with clauses (a)(ii) and (a)(iii) of this
Section 4.09.
SECTION 4.10 LIMITATION ON LAYERED DEBT. The Company shall not Incur,
directly or indirectly, any Debt that is subordinate or junior in right of
payment to any Senior Debt unless such Debt is Senior Subordinated Debt or is
expressly subordinated in right of payment to Senior Subordinated Debt.
SECTION 4.11 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Subsidiary of the Company to be an
Unrestricted Subsidiary if (a) the Subsidiary to be so designated does not own
any Capital Stock or Debt of, or own or hold any Lien on any Property of, the
Company or any other Restricted Subsidiary, (b) the Subsidiary to be so
designated is not obligated under any Debt, Lien or other obligation that, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Debt of the Company or of any Restricted Subsidiary and (c)
either (i) the Subsidiary to be so designated has total assets of $1,000 or less
or (ii) such designation is effective immediately upon such entity becoming a
Subsidiary of the Company. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company will be classified as a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Subsidiary shall not be
designated a Restricted Subsidiary and shall be automatically classified as an
Unrestricted Subsidiary if either of the requirements set forth in clauses (x)
and (y) of the immediately following paragraph will not be satisfied after
giving pro forma effect to such classification. Except as provided in the first
sentence of this paragraph, no Restricted Subsidiary may be redesignated as an
Unrestricted Subsidiary.
39
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Company could Incur at least $1.00 of additional Debt
pursuant to Section 4.03(a)(i) and (y) no Default or Event of Default shall have
occurred and be continuing or would result therefrom.
Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Company in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Company's fiscal year, within 90 days
after the end of such fiscal year).
SECTION 4.12 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale and Leaseback Transaction with respect to any Property unless (a) the
Company or such Restricted Subsidiary would be entitled to (i) Incur Debt in an
amount equal to the Attributable Debt with respect to such Sale and Leaseback
Transaction pursuant to Section 4.03 and (ii) create a Lien on such Property
securing such Attributable Debt without also securing the Securities pursuant to
Section 4.05 and (b) such Sale and Leaseback Transaction is effected in
compliance with Section 4.07.
SECTION 4.13 LIMITATION ON COMPANY'S BUSINESS. The Company shall not,
and shall not permit any Restricted Subsidiary, to, directly or indirectly,
engage in any business other than the Telecommunications Business.
SECTION 4.14 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Company to repurchase all or any
part of such Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at a purchase price (the "Change of Control Purchase
Price") equal to 101.0% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).
(b) Within 30 days following any Change of Control, the Company shall
(i) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Xxxxx News Service or similar business news service in the United States
and (ii) send, by first-class mail, with a copy to the Trustee, to each Holder
of Securities, at such Holder's address appearing in the Security Register, a
notice stating: (A) that a Change of Control Offer is being made pursuant to
this Section 4.14 and that all Securities timely tendered will be accepted for
payment; (B) the Change of Control Purchase Price and the purchase date, which
shall be, subject to any contrary requirements of applicable law, a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed (the
40
"Change of Control Payment Date"); (C) the circumstances and relevant facts
regarding the Change of Control (including known information known by the
Company, if any, with respect to pro forma historical income, cash flow and
capitalization after giving effect to the Change of Control); and (D) the
procedures that Holders of Securities must follow in order to tender their
Securities (or portions thereof) for payment, and the procedures that Holders of
Securities must follow in order to withdraw an election to tender Securities (or
portions thereof) for payment.
(c) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
or its agent at the address specified in the notice at least three Business Days
prior to the Change of Control Payment Date. Holders shall be entitled to
withdraw their election if the Trustee or the Company receives not later than
one Business Day prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security that was delivered for purchase by the Holder
and a statement that such Holder is withdrawing its election to have such
Security purchased.
(d) On or prior to the Change of Control Payment Date, the Company
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Purchase Price payable to the Holders entitled thereto, to be held for payment
in accordance with the provisions of this Section. On the Change of Control
Payment Date, the Company shall deliver to the Trustee the Securities or
portions thereof that have been properly tendered to and are to be accepted by
the Company for payment. The Trustee or the Paying Agent shall, on the Change of
Control Payment Date, mail or deliver payment to each tendering Holder of the
Change of Control Purchase Price. In the event that the aggregate Change of
Control Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Change of
Control Payment Date.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.15 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers they would normally have knowledge of any
Default and whether or not the signers know of any Default that occurred during
such period. If they do, the certificate shall describe the Default, its status
and what action the Company is taking or proposes to take with respect thereto.
The Company also shall comply with TIA Section 314(a)(4).
41
SECTION 4.16 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE V
MERGER, CONSOLIDATION AND SALE OF PROPERTY
The Company shall not merge, consolidate or amalgamate with or into any
other Person (other than a merger of a Wholly Owned Subsidiary into the Company)
or sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless: (a) the Company shall be the surviving Person (the "Surviving Person")
or the Surviving Person (if other than the Company) formed by such merger,
consolidation or amalgamation or to which such sale, transfer, assignment,
lease, conveyance or disposition is made shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia; (b) the Surviving Person (if other than the Company)
expressly assumes, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such Surviving Person, the due
and punctual payment of the principal of, and premium, if any, and interest on,
all the Securities, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be performed by the Company; (c) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all the Property
of the Company, such Property shall have been transferred as an entirety or
virtually as an entirety to one Person; (d) immediately before and after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (d) and clauses (e) and (f) below, any
Debt that becomes, or is anticipated to become, an obligation of the Surviving
Person or any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person or such Restricted
Subsidiary at the time of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be continuing; (e)
immediately after giving effect to such transaction or series of transactions on
a pro forma basis, the Company or the Surviving Person, as the case may be,
would be able to Incur at least $1.00 of additional Debt under Section
4.03(a)(i); (f) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Surviving Person shall have a
Consolidated Net Worth in an amount that is not less than the Consolidated Net
Worth of the Company immediately prior to such transaction or series of
transactions; and (g) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture, if any, in respect thereto comply
with this Article V and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
The Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of the Company under this Indenture, but the
predecessor company in the case of a sale, transfer, assignment, lease,
conveyance or other disposition shall not be released from its obligations under
this Indenture and the Securities (except the
42
predecessor company shall be so released in the case of the sale, transfer,
assignment, conveyance or other disposition, but not the lease, of the assets as
an entirety or virtually as an entirety).
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT. The following events shall be "Events
of Default":
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article X, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of, or
premium, if any, on any Security when the same becomes due and payable
at its Stated Maturity, upon acceleration, redemption, optional
redemption, required repurchase or otherwise, whether or not such
payment shall be prohibited by Article X;
(3) the Company fails to comply with Article V;
(4) the Company fails to comply with any other covenant or
agreement in the Securities or in this Indenture (other than a failure
that is the subject of the foregoing clause (1), (2) or (3)) and such
failure continues for 30 days after written notice is given to the
Company as specified below;
(5) a default by the Company or any Restricted Subsidiary under
any Debt of the Company or any Restricted Subsidiary that results in
acceleration of the maturity of such Debt, or the failure to pay any
such Debt at maturity, in an aggregate amount in excess of $5,000,000
or its foreign currency equivalent at the time;
(6) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws
relating to insolvency;
43
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or
any Significant Subsidiary; or
(D) grants any similar relief under any foreign laws;
and in each such case the order or decree remains unstayed and in
effect for 30 days; or
(8) any judgment or judgments for the payment of money in an
unsecured aggregate amount in excess of $5,000,000 or its foreign
currency equivalent at the time is entered against the Company or any
Restricted Subsidiary and shall not be waived, satisfied or discharged
for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
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.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the Trustee
or the Holders of at least 25.0% in aggregate principal amount of the Securities
then outstanding notify the Company (and in the case of such notice by Holders,
the Trustee) of the Default and the Company does not cure such Default within
the time specified after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".
The Company shall deliver to the Trustee promptly, and in any event,
within 10 days after the occurrence thereof, written notice in the form of an
Officers' Certificate of any Event of Default and any event that with the giving
of notice or the lapse of time would become an Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto.
SECTION 6.02 ACCELERATION. If an Event of Default (other than an Event
of Default specified in Section 6.01(6) or (7) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in aggregate principal amount of the Securities then
outstanding, by notice to the Company
44
and the Trustee, may declare the principal of and accrued and unpaid interest to
the date of acceleration on all the Securities to be due and payable. Upon such
a declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(6) or (7) with respect to the
Company occurs, the principal of and accrued and unpaid interest to the date of
acceleration on all the Securities shall, automatically and without any action
by the Trustee or any Holder, become immediately due and payable. After any such
acceleration but before a judgment or decree based on acceleration is obtained
by the Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Securities by notice to the Trustee and the Company may rescind and
annul any declaration of acceleration if all existing Events of Default have
been cured or waived, except nonpayment of principal, premium or interest that
has become due solely because of the acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 WAIVER OF PAST DEFAULTS. Subject to Section 6.02, the
Holders of a majority in aggregate principal amount of the Securities by notice
to the Trustee may waive an existing Default and its consequences except (i) a
Default in the payment of the principal of or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05 CONTROL BY MAJORITY. The Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee with
respect to the Securities. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; PROVIDED,
HOWEVER, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to reasonable indemnification against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06 LIMITATION ON SUITS. A Security holder may not pursue any
remedy with respect to this Indenture or the Securities unless:
45
(1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding shall have made a written request, and
such Holder or Holders shall have offered reasonable indemnity, to the
Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has
not received from the Holders of at least a majority in aggregate
principal amount of the Securities outstanding a direction inconsistent
with such request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of, and premium, if any, or
interest on such Security on or after the applicable due date specified in such
Security. A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in this Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make 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 to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10 PRIORITIES. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
46
SECOND: to holders of Senior Debt to the extent required by Article X;
THIRD: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in aggregate principal amount of the Securities.
SECTION 6.12 WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that 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 shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
47
(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 or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers.
(h) 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 and to the provisions of the TIA and
the provisions of this Article VII shall apply to the Trustee in its role as
Registrar, Paying Agent and Securities Custodian.
(i) The Trustee shall not be deemed to have notice of a Default or an
Event of Default unless (a) the Trustee has received written notice thereof from
the Company or any Holder or (b) a Trust Officer shall have actual knowledge
thereof.
SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document. The Trustee may, however,
in its discretion make such further inquiry or investigation into such facts or
matters as it may see fit and,
48
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.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty unless so specified herein.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co
registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity, priority or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05 NOTICE OF DEFAULTS. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder notice of the Default or Event of Default within 90
days after it is known to a Trust Officer or written notice of it is received by
the Trustee. Except in the case of a Default or Event of Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. As promptly as practicable
after each May 15 beginning with May 15, 2001, and in any event prior to July 15
in each year, the Trustee shall mail to each Securityholder a brief report dated
as of May 15 each
49
year as and if required by TIA Section 313(a) if and to the extent required by
such subsection. The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the acceptance and administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld. All indemnifications and releases from liability
granted hereunder to the Trustee shall extend to its officers, directors,
employees, agents, successors and assigns.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the resignation or removal of the Trustee and the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(6) or (7) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
The provisions of this Section 7.07 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.
SECTION 7.08 REPLACEMENT OF TRUSTEE. The Trustee may resign at any time
by so notifying the Company. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
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(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in aggregate principal amount of the Securities then outstanding and
such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in aggregate principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
who has been a bona fide Holder of a Security for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities 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 Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
such successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the
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successor to the Trustee; and in all such cases such certificates shall have the
full force that it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have
(or, in the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 as set forth in its (or its related bank holding company's)
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b), subject to the penultimate paragraph thereof; PROVIDED,
HOWEVER, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article III and the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.14 the operation
of Sections 6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of Sections
6.01(6) and (7), with respect only to Restricted Subsidiaries) and the
limitations contained in clauses (e) and (f) of Article V ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its
52
covenant defeasance option, payment of the Securities may not be accelerated
because of an Event of Default specified in Sections 6.01(4) (with respect to
the covenants of Article IV identified in the immediately preceding paragraph),
6.01(5), 6.01(6), 6.01(7) and 6.01(8) (with respect only to Restricted
Subsidiaries in the case of Sections 6.01(6) and 6.01(7)) or because of the
failure of the Company to comply with the limitations contained in clauses (e)
and (f) of Article V.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 shall
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02 CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent certified public accountants
expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay
principal and interest when due on all the Securities to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(6) or (7) with
respect to the Company occurs that is continuing at the end of the
period;
(4) no Default or Event of Default has occurred and is continuing
on the date of such deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from the Internal Revenue Service a ruling, or
(ii) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in
53
either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Securityholders 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;
(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders 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; and
(9) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Securities have been complied
with as required by this Indenture.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article III.
SECTION 8.03 APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article X.
SECTION 8.04 REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look solely to the
Company for payment as general creditors.
SECTION 8.05 INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.06 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article
VIII by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VIII until such time
54
as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article VIII; PROVIDED, HOWEVER,
that, if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may amend
this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article X that would limit or terminate
the benefits available to any holder of Senior Debt (or Representatives
therefor) under Article X;
(5) to add Guarantees with respect to the Securities or to secure
the Securities;
(6) 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;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under
the TIA; or
(8) to make any change that does not adversely affect the rights
of any Securityholder.
Notwithstanding the foregoing, no amendment may be made to Article X
that adversely affects the rights of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or their Representative) consent to such
change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
55
SECTION 9.02 WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without notice to any Securityholder but
with the written consent (including consents obtained in connection with a
tender offer or exchange offer for the Securities) of the Holders of at least a
majority in aggregate principal amount of the Securities outstanding. However,
without the consent of each Securityholder affected thereby, an amendment may
not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest
on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(5) (i) reduce the amount payable upon the redemption or
repurchase of any Security under Article III or Section 4.07 or 4.14,
(ii) change the time at which any Security may be redeemed in
accordance with Article III or (iii) at any time after a Change of
Control has occurred or at any time after the Company is obligated to
make a Prepayment Offer with the Excess Proceeds from Asset Sales,
change the time at which any Change of Control Offer or Prepayment
Offer must be made or at which the Securities must be repurchased
pursuant to such Change of Control Offer or Prepayment Offer.
(6) make any Security payable in money other than that stated in
the Security;
(7) make any change in Article X that would adversely affect the
Securityholders;
(8) release any security interest that may have been granted in
favor of the Holders; or
(9) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
Notwithstanding the foregoing, no amendment may be made to Article X
that adversely affects the rights of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or their Representative) consent to such
change.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
56
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver becomes effective upon the execution of such amendment or waiver by the
Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver such Security to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return such
Security to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07 PAYMENT FOR CONSENT. Neither the Company nor any Affiliate
of the Company shall, directly or indirectly, pay or cause to be paid any
consideration,
57
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid to all Holders that so consent, waive or agree to amend in the time frame
set forth in solicitation documents relating to such consent, waiver or
agreement.
ARTICLE X
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Debt evidenced by the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article X, to the payment when due of all Senior Debt and that
the subordination is for the benefit of and enforceable by the holders of Senior
Debt. The Securities shall in all respects rank PARI passu with the Existing
Notes and any future Senior Subordinated Debt and senior to all existing and
future Subordinated Obligations of the Company, and only Senior Debt shall rank
senior to the Securities in accordance with the provisions set forth herein. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02 LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment or
distribution of the assets of the Company upon a total or partial liquidation,
dissolution or winding up of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
Property:
(a) the holders of Senior Debt will be entitled to receive payment in
full in cash before the Holders of the Securities are entitled to receive any
payment of principal of or interest on the Securities, except that Holders of
Securities may receive and retain shares of stock and any debt securities that
are subordinated to Senior Debt to at least the same extent as the Securities;
and
(b) until the Senior Debt is paid in full in cash, any distribution to
which Holders of the Securities would be entitled but for this Article X will be
made to holders of the Senior Debt as their interests may appear.
SECTION 10.03 DEFAULT ON SENIOR DEBT. The Company may not pay principal
of, or premium, if any, or interest on, the Securities, or make any deposit
pursuant to Article VIII, and may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities"), if (a) any principal, premium
or interest in respect of any Senior Debt is not paid within any applicable
grace period (including at maturity) or (b) any other default on Senior Debt
occurs and the maturity of such Senior Debt is accelerated in accordance with
its terms unless, in either case, (i) the default has been cured or waived and
any such acceleration has been rescinded or (ii) such Senior Debt has been paid
in full in cash; PROVIDED, HOWEVER, that the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of such issue of Senior
Debt. During the continuance of any default (other than a default described in
clause (a) or (b) of the preceding sentence) with respect to any Designated
Senior Debt pursuant to which
58
the maturity thereof may be accelerated immediately without further notice
(except any notice required to effect the acceleration) or the expiration of any
applicable grace period, the Company may not pay the Securities for a period (a
"Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default from the Representative of the holders
of such Designated Senior Debt specifying an election to effect a Payment
Blockage Period (a "Payment Blockage Notice") and ending 179 days thereafter
(unless such Payment Blockage Period is earlier terminated (x) by written notice
to the Trustee and the Company from the Representative that gave such Payment
Blockage Notice, (y) because such default is no longer continuing or (z) because
such Designated Senior Debt has been repaid in full in cash). Unless the holders
of such Designated Senior Debt or the Representative of such holders have
accelerated the maturity of such Designated Senior Debt and not rescinded such
acceleration, the Company may (unless otherwise prohibited as described in the
first sentence of this paragraph) resume payments on the Securities after the
end of such Payment Blockage Period. Not more than one Payment Blockage Notice
with respect to all issues of Designated Senior Debt may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to one or more issues of Designated Senior Debt during such period.
SECTION 10.04 ACCELERATION OF PAYMENT OF SECURITIES. If payment of the
Securities is accelerated when any Designated Senior Debt is outstanding, the
Company may not pay the Securities until three Business Days after the
Representatives of all issues of Designated Senior Debt receive notice of such
acceleration and, thereafter, may pay the Securities only if this Indenture
otherwise permits payment at that time.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution is
made to Securityholders that because of this Article X should not have been made
to them, the Securityholders who receive the distribution shall hold it in trust
for holders of Senior Debt and pay it over to them as their interests may
appear.
SECTION 10.06 SUBROGATION. After all Senior Debt is paid in full and
until the Securities are paid in full, Securityholders shall be subrogated to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt. A distribution made under this Article X to holders of Senior Debt
that otherwise would have been made to Securityholders is not, as between the
Company and Securityholders, a payment by the Company on such Senior Debt.
SECTION 10.07 RELATIVE RIGHTS. This Article X defines the relative
rights of Securityholders and holders of Senior Debt. Nothing in this Indenture
shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional,
to pay principal of and interest on the Securities in accordance
with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or an Event of Default, subject
to the rights of holders of Senior Debt to receive distributions
otherwise payable to Securityholders.
59
SECTION 10.08 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of
any holder of Senior Debt of the Company to enforce the subordination of the
Debt evidenced by the Securities shall be impaired by any act or failure to act
by the Company or by its failure to comply with this Indenture.
SECTION 10.09 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer receives notice
satisfactory to it that payments may not be made under this Article X. The
Company, the Registrar or coregistrar, the Paying Agent, a Representative or a
holder of Senior Debt may give the notice; PROVIDED, HOWEVER, that, if an issue
of Senior Debt has a Representative, only the Representative may give the
notice.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. The Registrar
and coregistrar and the Paying Agent may do the same with like rights. The
Trustee shall be entitled to all the rights set forth in this Article X with
respect to any Senior Debt that may at any time be held by it, to the same
extent as any other holder of such Senior Debt; and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
X shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative (if any).
SECTION 10.11 ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT
TO ACCELERATE. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article X shall not be construed as preventing
the occurrence of a Default. Nothing in this Article X shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.
SECTION 10.12 TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article VIII by the Trustee for the
payment of principal of and interest on the Securities shall not be subordinated
to the prior payment of any Senior Debt or subject to the restrictions set forth
in this Article X, and none of the Securityholders shall be obligated to pay
over any such amount to the Company or any holder of Senior Debt or any other
creditor of the Company.
SECTION 10.13 TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of
60
Senior Debt for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Debt and other Debt of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
X. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article X, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article X, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article X.
SECTION 10.14 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Securityholder
by accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt as
provided in this Article X and appoints the Trustee as attorney in-fact for any
and all such purposes.
SECTION 10.15 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if it shall mistakenly pay over
or distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt shall be entitled by virtue of this
Article X or otherwise.
SECTION 10.16 RELIANCE BY HOLDERS OF SENIOR DEBT ON SUBORDINATION
PROVISIONS. Each Securityholder by accepting a Security acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt and such holder of such Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision that is required
to be included in this Indenture by the TIA, the required provision shall
control.
SECTION 11.02 NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed by first class mail or sent by facsimile (with
a hard copy delivered in person or by mail promptly thereafter) and addressed as
follows:
61
if to the Company:
FairPoint Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
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SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06 WHEN SECURITIES DISREGARDED. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee
may make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent or coregistrar may make reasonable rules for
their functions.
SECTION 11.08 LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 11.09 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. No director, officer,
employee or stockholder, as such, of the Company shall have any liability for
any obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or
63
by reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.11 SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12 MULTIPLE 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. One signed copy is sufficient to prove
this Indenture.
SECTION 11.13 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
FAIRPOINT COMMUNICATIONS, INC.,
by /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Sr. Vice President, Chief
Financial Officer & Secretary
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee,
by /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
65
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT
TO RULE 144A, TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS
IN RELIANCE ON REGULATION S AND, SUBJECT TO THE APPLICABLE
PURCHASE AGREEMENT, TO INSTITUTIONAL ACCREDITED INVESTORS.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream International, S.A., or any successor
securities clearing agency.
"Definitive Security" means a certificated Initial Security or Exchange
Security bearing, if required, the restricted securities legend set forth in
Section 2.3(d).
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Offer Registration Statement" means a registration statement
of the Company on an appropriate form under the Securities Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
66
"Exchange Securities" means the 12-1/2% Senior Subordinated Notes due
2010 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer or a Private Exchange pursuant to a Registration Rights
Agreement.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Xxxxxxx Xxxxx Xxxxxx Inc., Deutsche Bank
Securities Inc., Banc of America Securities LLC, Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and First Union Securities, Inc.
"Initial Securities" means the 12-1/2% Senior Subordinated Notes due
2010, to be issued from time to time, in one or more series as provided for in
this Indenture.
"Original Securities" means Initial Securities in the aggregate
principal amount of $200,000,000 issued on May 24, 2000.
"Private Exchange" means the offer by the Company, pursuant to Section
2 of the Registration Rights Agreement dated May 19, 2000, or pursuant to any
similar provision of any other Registration Rights Agreement, to issue and
deliver to certain purchasers, in exchange for the Initial Securities held by
such purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 12-1/2% Senior Subordinated
Notes due 2010 to be issued pursuant to this Indenture in connection with a
Private Exchange pursuant to a Registration Rights Agreement.
"Purchase Agreement" means the Purchase Agreement dated May 19, 2000,
between the Company and the Initial Purchasers relating to the Original
Securities, or any similar agreement relating to any future sale of Initial
Securities by the Company.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to
a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights Agreement
dated May 19, 2000, between the Company and the Initial Purchasers relating to
the Original Securities, or any similar agreement relating to any additional
Initial Securities.
"Securities" means the Initial Securities and the Exchange Securities,
treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
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"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement issued by
the Company in connection with the offer and sale of Initial Securities or
Exchange Securities pursuant to a Registration Rights Agreement.
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the legend set forth in
Section 2.3(e) hereto.
1.2 Other Definitions
Term Defined in Section
"Agent Members"........................................... 2.1(b)
"Global Security"......................................... 2.1(a)
"Regulation S"............................................ 2.1
"Rule 144A"............................................... 2.1
"Temporary Regulation S Global Security".................. 2.1(b)
2. THE SECURITIES
2.1 FORM AND DATING
The Initial Securities will be offered and sold by the Company, from
time to time, pursuant to one or more Purchase Agreements. The Initial
Securities will be resold, initially only to QIBs in reliance on Rule 144A under
the Securities Act ("Rule 144A") and in reliance on Regulation S under the
Securities Act ("Regulation S"). Initial Securities may thereafter be
transferred to, among others, QIBs, purchasers in reliance on Regulation S and
IAIs under Rule 501(a)(1),(2),(3) or (7) under the Securities Act.
(a) GLOBAL SECURITIES. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (the "Rule 144A Global Security") and Regulation S
Securities shall be issued initially in the form of one or more temporary global
Securities (collectively, the "Temporary Regulation S Global Security"), in each
case without interest coupons and with the global securities legend and
restricted securities legend set forth in Exhibit 1 hereto, which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Securities Custodian, and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture. Beneficial ownership
interests in the Temporary Regulation S Global Security will not be exchangeable
for interests in the Rule 144A Global Security, a permanent global security (the
"Permanent Regulation S Global Security"), or any other security without a
legend containing restrictions on transfer of such Security prior to the
expiration of the Restricted Period and then only upon certification in form
reasonably satisfactory to the Trustee that beneficial ownership interests in
such Temporary Regulation S Global
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Security are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the
Securities Act. The Rule 144A Global Securities, Temporary Regulation S Global
Security and Permanent Regulation S Global Security are collectively referred to
herein as "Global Securities." The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to
a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b) and pursuant to an order of the Company, authenticate and
deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depository for such Global Security or Global Securities or the
nominee of such Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or held by the Trustee
as Securities Custodian.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as Securities Custodian or
under such Global Security, 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
such Global Security 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 of such
Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) DEFINITIVE SECURITIES. Except as provided in Section 2.3 or
2.4, owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver:
(1) Original Securities for original issue in an aggregate principal amount of
$200,000,000 and (2) Exchange Securities for issue only in a Registered Exchange
Offer or a Private Exchange pursuant to a Registration Rights Agreement, for a
like principal amount of Initial Securities, upon a written order of the Company
signed by two officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities or Exchange Securities. The aggregate principal amount of Securities
outstanding at any time may not exceed $300,000,000, except as provided in
Section 2.08 of this Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive
Securities; or
69
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for registration
of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act, pursuant to
Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and documents, as
applicable:
(A) if such Definitive Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Definitive Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act, (i) a
certification to that effect and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the legend set forth in Section 2.3(e)(i).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
co-registrar, together with:
(i) certification that such Definitive Security is being
transferred (A) to a QIB in accordance with Rule 144A, (B) to an IAI
that has furnished to the Trustee a signed letter or (C) outside the
United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act;
and
(ii) written instructions directing the Trustee to make,
or to direct the Securities Custodian to make, an adjustment on its
books and records with respect to such Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such
increase,
70
the Trustee shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged pursuant to Section 2.4, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate principal
amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of beneficial interest in
Global Securities shall be effected through the Depository, in
accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
therefor. A transferor of a beneficial interest in a Global Security
shall deliver a written order given in accordance with the Depository's
procedures containing information regarding the participant account of
the Depository to be credited with a beneficial interest in the Global
Security and such account shall be credited in accordance with such
instructions with a beneficial interest in the Global Security and the
account of the Person making the transfer shall be debited by an amount
equal to the beneficial interest in the Global Security being
transferred. In the case of a transfer of a beneficial interest in a
Global Security to an IAI, the transferee must furnish a signed letter
to the Trustee containing certain representations and agreements (the
form of which letter can be obtained from the Trustee or the Company).
(ii) If the proposed transfer is a transfer of a
beneficial interest in one Global Security to a beneficial interest in
another Global Security, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global
Security to which such interest is being transferred in an amount equal
to the principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of Global Security from
which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
A (other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except 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 or by the Depository or
any such nominee to a successor Depository or a nominee of such
Successor Depository.
(iv) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 prior
to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement
71
with respect to such Securities, such Securities may be exchanged only
in accordance with such procedures as are substantially consistent with
the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A,
Regulation S or such other applicable exemption from registration under
the Securities Act, as the case may be) and such other procedures as
may from time to time be adopted by the Company.
(d) RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S GLOBAL
SECURITIES. During the Restricted Period, beneficial ownership interests in
Temporary Regulation S Global Securities may only be sold, pledged or
transferred through Euroclear or Clearstream in accordance with the Applicable
Procedures and only (i) to the Company, (ii) so long as such security is
eligible for resale pursuant to Rule 144A under the Securities Act ("Rule
144A"), to a person whom the selling holder reasonably believes is a "qualified
institutional buyer" ("QIB") as defined in Rule 144A that purchases for its own
account or for the account of a QIB to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S, (iv) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act, or (v) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States. During the Restricted Period, interests
in the Temporary Regulation S Global Security may not be transferred to
institutions that are "Accredited Investors" (but not QIBs) as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii),
(iii), (iv) and (vi), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR
SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
72
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS NOTE COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS NOTE FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR
(3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
(OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE
902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act:
73
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security that
does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted
Security,
in either case, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on
Rule 144 (such certification to be in the form set forth on the reverse
of the Initial Security).
(iii) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring that any such Initial Security be issued in global form will
cease to apply, and an Initial Security in certificated or global form
without legends will be available to the transferee of the Holder of
such Initial Securities upon exchange of such transferring Holder's
certificated Initial Security. Upon the occurrence of any of the
circumstances described in this paragraph, the Company will deliver an
Officers' Certificate to the Trustee instructing the Trustee to issue
Securities without legends.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities pursuant to which certain
Holders of such Initial Securities are offered Exchange Securities in
exchange for their Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities be issued in global
form will cease to apply, and certificated Initial Securities with the
restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer. Upon the occurrence of
any of the circumstances described in this paragraph, the Company will
deliver an Officers, Certificate to the Trustee instructing the Trustee
to issue Securities without legends.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Private Exchange Securities in exchange
for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will continue to apply, and Private Exchange
Securities in global form will be available to Holders that exchange
such Initial Securities in such Private Exchange.
74
(vi) Upon a sale or transfer of any Initial Security
acquired pursuant to Regulation S, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring any such Initial Security be issued in global form will cease
to apply, and an Initial Security in certificated or global form
without the Restricted Security Legend will be available to the
transferee of the Holder of such Initial Securities.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depository to-the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate
certificated Securities, Definitive Securities and Global Securities at
the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Section 3.06, 4.07, 4.14 and 9.05
of this Indenture).
(iii) The Registrar or co-registrar shall not be required
to register the transfer or exchange of any Security for a period
beginning 15 days before the mailing of a notice of redemption or an
repurchase Securities or 15 days before an interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Indenture shall
evidence the same debt and shall be entitled to the same benefits under
this Indenture as the Securities surrendered upon such registration of
transfer or exchange.
75
(h) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global
Security, a member of, or a participant in the
Depository or any other Person with respect to the
accuracy of the records of the Depository or its
nominee or of any participant or member thereof, with
respect to any ownership interest in the Securities
or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than
the Depository) of any notice (including any notice
of redemption or repurchase) or the payment of any
amount, under or with respect to such Securities. All
notices and communications to be given to the Holders
and all payments to be made to Holders under the
Securities shall be given or made only to the
registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security
shall be exercised only through the Depository
subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by
the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any
transfer of any interest in any Security (including
any transfers between or among Depository
participants, members or beneficial owners in any
Global Security) other than to require delivery of
such certificates and other documentation or evidence
as are expressly required by, and to do so if and
when expressly required by, the terms of this
Indenture, and to examine the same to determine
substantial compliance as to form with the express
requirements hereof.
2.4 CERTIFICATED SECURITIES
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of certificated Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as a Depository for such Global Security or if
at any time the Depository ceases to be a "clearing agency" registered under the
Exchange Act, and a successor depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing or (iii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of certificated Securities under
this Indenture.
(b) Any Global Security that may be exchanged for certificated
registered Securities in the names of or is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee, to be so exchanged, in whole or from time to time in
part, without charge, and the Trustee shall authenticate and deliver, upon such
exchange of each portion of such Global Security, an
76
equal aggregate principal amount of certificated Securities of authorized
denominations. Any portion of a Global Security exchanged pursuant to this
Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depository shall direct. Any certificated Initial Security delivered in exchange
for an interest in the Global Security shall, except as otherwise provided by
Section 2.3(e), bear the restricted securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified
in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
77
EXHIBIT 1
To APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE
HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
78
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS NOTE), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY
AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY
IT OF THIS NOTE COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT
IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2)
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS NOTE FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
[Temporary Regulation S Global Security Legend]
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A GLOBAL NOTE OR THE
PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN
THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING
RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY DISTRIBUTION
COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903 OF REGULATION S UNDER THE
SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY
TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S.
PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID
NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH THE
EUROCLEAR SYSTEM OR CLEARSTREAM INTERNATIONAL, S.A. AND ONLY (A) TO THE ISSUER,
79
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, OTHER THAN IN CANADA OR TO OR FOR THE BENEFIT OF A RESIDENT OF
CANADA PURSUANT TO A PROSPECTUS QUALIFYING THE NOTES FOR SALE UNDER THE
SECURITIES LAW IN ANY PROVINCE OR TERRITORY OF CANADA IN WHICH THE PURCHASER
RESIDES OR PURSUANT TO AN EXEMPTION FROM THE PROSPECTUS REQUIREMENTS OF SUCH
LAWS, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE
PERIOD, INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY NOT BE
TRANSFERRED TO INSTITUTIONS THAT ARE "ACCREDITED INVESTORS" AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT BUT NOT QUALIFIED
INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT. HOLDERS
OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY
PURCHASER OF SUCH RESALE RESTRICTIONS, IF THEN APPLICABLE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
80
[FORM OF FACE OF INITIAL SECURITY]
No. 1 $200,000,000
12-1/2% Senior Subordinated Note due 2010
CUSIP No. 305560 AA 2
FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, on May 1, 2010, the principal sum as set
forth on the Schedule of Increases and Decreases annexed hereto.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
81
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
Dated: May 24, 2000
FAIRPOINT COMMUNICATIONS, INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
[CORPORATE SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By: ______________________________
Authorized Signatory
82
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12-1/2% Senior Subordinated Note due 2010
1. INTEREST
(a) FairPoint Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semi-annually on May 1 and November 1 of each year commencing
November 1, 2000. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
24, 2000. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the rate borne by the Securities to the extent
lawful.
(b) Additional Interest. The holder of this Security is entitled
to the benefits of a Registration Rights Agreement, dated May 19, 2000, among
the Company and the Initial Purchasers named therein (the "Registration Rights
Agreement"). Capitalized terms used in this paragraph (b) but not defined herein
have the meanings assigned to them in the Registration Rights Agreement. In the
event that (i) neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been filed with the Commission on or prior to the
90th day following the date of the original issuance of the Securities, (ii) the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 150th day following the date of the original issuance of the
Securities, (iii) neither the Registered Exchange Offer has been consummated nor
the Shelf Registration Statement has been declared effective on or prior to the
180th day following the date of the original issuance of the Securities, or (iv)
after either the Exchange Offer Registration Statement or the Shelf Registration
Statement has been declared effective, such Registration Statement thereafter
ceases to be effective or usable (subject to certain exceptions) in connection
with resales of the Securities at any time that the Company is obligated to
maintain the effectiveness thereof pursuant to the Registration Rights Agreement
(each such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), interest (the "Additional Interest") shall
accrue (in addition to stated interest on the Securities) from and including the
date on which the first such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured, at a rate per annum
equal to 0.50% of the principal amount of the Securities; provided, however,
that such rate per annum shall increase by 0.25% per annum from and including
the 91st day after the first such Registration Default (and each successive 91st
day thereafter) unless and until all Registration Defaults have been cured;
provided further, however, that in no event shall the Additional Interest accrue
at a rate in excess of 1.50% per annum. The Additional Interest will be payable
in cash semi-annually in arrears each May 1 and November 1.
83
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the Persons who are
registered holders of Securities at the close of business on the April 15 or
October 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Defaulted interest will be paid in the manner set forth in the Indenture.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States of America that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR.
Initially, United States Trust Company of New York (the "Trustee") will
act as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture dated as of May
24, 2000 (the "Indenture") between the Company and the Trustee. The terms of the
Securities 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.
Sections77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior subordinated, unsecured obligations of the
Company limited to $300,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This Security
is one of the Initial Securities referred to in the Indenture issued in an
aggregate principal amount of $200,000,000. The Securities include the Original
Securities up to an aggregate principal amount of $200,000,000, additional
Initial Securities issued under the Indenture up to an aggregate principal
amount of $100,000,000, and any Exchange Securities issued in exchange for
84
the Initial Securities. The Original Securities, the additional Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Debt, enter into consensual restrictions upon the payment
of certain dividends and distributions by such Restricted Subsidiaries, issue or
sell shares of capital stock of such Restricted Subsidiaries, enter into or
permit certain transactions with Affiliates, create or incur Liens, make Asset
Sales and enter into lines of business other than the Telecommunications
Business. The Indenture also imposes limitations on the ability of the Company
to consolidate or merge with or into any other Person or sell, transfer, assign,
lease, convey or otherwise dispose of all or substantially all of the Property
of the Company.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Securities may not be redeemed prior to
May 1, 2005. On and after that date, the Company may redeem the Securities, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
in percentages of principal amount), plus accrued and unpaid interest, if any,
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of redemption), if redeemed during the
12-month period beginning on May 1 of the years set forth below:
YEAR PRICE
2005 106.250%
2006 104.167%
2007 102.083%
2008 and thereafter 100.000%
Notwithstanding the foregoing, on or prior to May 1, 2003, the Company
may redeem up to 35% of the aggregate principal amount of all Securities
theretofore issued, with proceeds of an Equity Sale, at a redemption price of
112.5% of the principal amount thereof plus accrued and unpaid interest, if any,
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of redemption), PROVIDED, HOWEVER, that at
least 65% of the aggregate principal amount of the Original Securities remain
outstanding after the occurrence of such redemption and PROVIDED, FURTHER, that
such redemption shall be made within 75 days of such Equity Sale upon not less
than 30 nor more than 60 days' notice.
6. SINKING FUND.
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be
85
redeemed at his or her registered address. Securities in denominations larger
than $1,000 may be redeemed in part but only in whole multiples of $1,000. If
money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
8. SUBORDINATION.
The Securities will be senior subordinated, unsecured obligations of
the Company. The payment of principal of, and premium, if any, and interest on,
the Securities, will be subordinated in right of payment to the payment when due
of all Senior Debt of the Company. The Securities will rank PARI PASSU in right
of payment with the Existing Notes and any future Senior Subordinated Debt and
senior to all existing and future Subordinated Obligations of the Company. The
Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
9. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF
CONTROL.
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest, if any, to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date that is on or prior to the date of
purchase) as provided in, and subject to the terms of, the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
11. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of
it for all purposes.
86
12. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE.
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. AMENDMENT, WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company and the
Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article V of the
Indenture; (iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; (iv) to make certain changes in the
subordination provisions; (v) to add Guarantees with respect to the Securities;
(vi) to secure the Securities; (vii) to add additional covenants or to surrender
rights and powers conferred on the Company; (viii) to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA; or (ix) to make any change that does not adversely
affect the rights of any Securityholder.
15. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding, subject to certain limitations, may declare all the Securities to
be immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Securities being immediately due and
payable upon the occurrence of such Events of Default without any further act of
the Trustee or any Holder. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Trustee and the Company, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all existing Events of
87
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration.
16. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may other wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. AUTHENTICATION.
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice
88
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
89
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
____________________________________________________________________
(Print or type assignee's name, address and zip code)
____________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________________________________as agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him or her.
Date: _________________________
Your Signature:
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933 after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) to the Company; or
(2) pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is being
made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or
(4) outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933; or
(5) to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has
furnished to the Trustee a
90
signed letter containing certain representations and agreements (the
form of which letter can be obtained from the Trustee or the Company);
or
(6) pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4), (5) or (6) is checked, the Trustee may require, prior
to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
________________________________
Your Signature
Signature Guarantee:
Date: __________________ ________________________________
Signature of Signature Guarantee
Signature must be guaranteed by a participant in a Guarantee recognized
signature guaranty medallion program or other signature guarantor acceptable to
the Trustee
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Date: __________________ ____________________________
NOTICE: To be executed by an
executive officer
91
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $___________. The
following increases or decreases in this Global Security have been made:
Signature of
Principal Amount of authorized
Amount of decrease Amount of increase this Global signatory of
in Principal Amount in Principal Security following Trustee or
of this Global Amount of this such decrease or Securities
Date of Exchange Security Global Security increase Custodian
92
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.07 or 4.14 of the Indenture, check the box: /_/
If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.07 or 4.14 of the Indenture, state the amount:
$__________________
Date: __________________
Your Signature: _______________________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
93
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY]
No. $200,000,000
12-1/2% Senior Subordinated Note due 2010
CUSIP No.
FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay
to ________________, or registered assigns, on May 1, 2010, the principal sum as
set forth on the Schedule of Increases and Decreases annexed hereto.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
94
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
Dated: __________, 2000
FAIRPOINT COMMUNICATIONS, INC.
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
[CORPORATE SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By: _________________________
Authorized Signatory
*/ If the Security is to be issued in global form, add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
95
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
12-1/2% Senior Subordinated Note due 2010
1. INTEREST.
FairPoint Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semi-annually on May 1 and November 1 of each year commencing
November 1, 2000. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
24, 2000. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the rate borne by the Securities to the extent
lawful.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the Persons who are
registered holders of Securities at the close of business on the April 15 or
October 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Defaulted interest will be paid in the manner set forth in the Indenture.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States of America that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR.
Initially, United States Trust Company of New York (the "Trustee") will
act as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
96
4. INDENTURE.
The Company issued the Securities under an Indenture dated as of May
24, 2000 (the "Indenture") between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior subordinated, unsecured obligations of the
Company limited to $300,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This Security
is one of the Exchange Securities referred to in the Indenture, [and is one of
the Original Securities issued in an aggregate principal amount of $200,000,000.
The Securities include the Original Securities up to an aggregate principal
amount of $200,000,000, additional Initial Securities issued under the Indenture
up to an aggregate principal amount of $100,000,000 and any Exchange Securities
issued in exchange for the Initial Securities.] [and is one of the additional
Exchange Securities, which along with any other additional Exchange Securities,
may be issued in an aggregate principal amount of up to $100,000,000. The
Securities include additional Initial Securities, the Original Securities in an
aggregate principal amount of $200,000,000 previously issued and any of such
Exchange Securities issued in exchange for Initial Securities.] The Original
Securities, the additional Initial Securities and the Exchange Securities are
treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Debt, enter
into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of such Restricted Subsidiaries, enter into or permit certain transactions
with Affiliates, create or incur Liens, make Asset Sales and enter into lines of
business other than the Telecommunications Business. The Indenture also imposes
limitations on the ability of the Company to consolidate or merge with or into
any other Person or sell, transfer, assign, lease, convey or otherwise dispose
of all or substantially all of the Property of the Company.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Securities may not be redeemed prior to
May 1, 2005. On and after that date, the Company may redeem the Securities, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
in percentages of principal amount), plus accrued and unpaid interest, if any,
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of redemption), if redeemed during the
12-month period beginning on May 1 of the years set forth below:
97
YEAR PRICE
---- -----
2005 106.250%
2006 104.167%
2007 102.083%
2008 and thereafter________ 100.000%
Notwithstanding the foregoing, on or prior to May 1, 2003, the Company
may redeem up to 35% of the aggregate principal amount of all Securities
theretofore issued, with proceeds of an Equity Sale, at a redemption price of
112.5% of the principal amount thereof plus accrued and unpaid interest, if any,
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of redemption), PROVIDED, HOWEVER, that at
least 65% of the aggregate principal amount of the Original Securities remain
outstanding after the occurrence of such redemption and PROVIDED, FURTHER, that
such redemption shall be made within 75 days of such Equity Sale upon not less
than 30 nor more than 60 days' notice.
6. SINKING FUND.
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. SUBORDINATION.
The Securities will be senior subordinated, unsecured obligations of
the Company. The payment of principal of, and premium, if any, and interest on,
the Securities, will be subordinated in right of payment to the payment when due
of all Senior Debt of the Company. The Securities will rank PARI PASSU in right
of payment with the Existing Notes and any future Senior Subordinated Debt and
senior to all existing and future Subordinated Obligations of the Company. The
Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
9. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF
CONTROL.
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101% of the
98
principal amount of the Securities to be repurchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of purchase) as provided
in, and subject to the terms of, the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
11. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE.
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. AMENDMENT, WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company and the
Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article V of the
Indenture; (iii) to provide for
99
uncertificated Securities in addition to or in place of certificated Securities;
(iv) to make certain changes in the subordination provisions; (v) to add
Guarantees with respect to the Securities; (vi) to secure the Securities; (vii)
to add additional covenants or to surrender rights and powers conferred on the
Company; (viii) to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA; or (ix) to make any
change that does not adversely affect the rights of any Securityholder.
15. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding, subject to certain limitations, may declare all the Securities to
be immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Securities being immediately due and
payable upon the occurrence of such Events of Default without any further act of
the Trustee or any Holder. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Trustee and the Company, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration.
16. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may other wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. AUTHENTICATION.
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
100
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
101
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________
(Print or type assignee's name, address and zip code)
_____________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ______________________________________ as agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date: ____________________
Your Signature: ________________________________________________
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
102
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.07 or 4.14 of the Indenture, check the box: [_]
If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.07 or 4.14 of the Indenture, state the amount:
$__________________
Date: __________________
Your Signature: _______________________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
103
