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EXHIBIT 4.2
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PETERSBURG LONG DISTANCE INC.
AS ISSUER
AND
NWE CAPITAL (CYPRUS) LIMITED
PLD ASSET LEASING LIMITED
PLD CAPITAL LIMITED
BALTIC COMMUNICATIONS LIMITED
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
AS GUARANTORS
$26,500,000
9% CONVERTIBLE SUBORDINATED NOTES DUE 2006
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INDENTURE
DATED AS OF MAY 31, 1996
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THE BANK OF NEW YORK,
TRUSTEE
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CROSS REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939,
as amended, and the Indenture, dated as of May 31, 1996
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
Section 310 (a)(1) ....................................... 7.10
(a)(2) ....................................... 7.10
(a)(3) ....................................... N.A.
(a)(4) ....................................... N.A.
(a)(5) ....................................... 7.10
(b) ....................................... 7.8; 7.10
(c) ....................................... N.A.
Section 311 (a) ....................................... 7.11
(b) ....................................... 7.11
(c) ....................................... N.A.
Section 312 (a) ....................................... 7.6(a); 7.6(b)
(b) ....................................... 7.6(c)
(c) ....................................... 7.6(d)
Section 313 (a) ....................................... 7.6(e)
(b) ....................................... N.A.
(c) ....................................... 7.6(e); 7.6(f)
(d) ....................................... 7.6
Section 314 (a) ....................................... 4.20; 4.21
(b) ....................................... 11.2
(c)(1) ....................................... 11.4
(c)(2) ....................................... 11.4
(c)(3) ....................................... N.A.
(d) ....................................... 11.4
(e) ....................................... 11.5
(f) ....................................... N.A
Section 315 (a) ....................................... 7.1(b)
(b) ....................................... 7.5(a)
(c) ....................................... 7.1(a)
(d) ....................................... 7.1(c)
(e) ....................................... 6.10
Section 316 (a) ....................................... 2.8
(a)(1)(A) ....................................... 6.5
(a)(1)(B) ....................................... 6.4
(a)(2) ....................................... N.A.
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(b) ....................................... 6.7
(c) ....................................... 9.5
Section 317 (a)(1) ....................................... N.A.
(a)(2) ....................................... 6.8
(b) ....................................... 2.4
Section 318 (a) ....................................... 11.1
(b) ....................................... N.A
(c) ....................................... 11.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions........................................ 1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.. 23
SECTION 1.3 Rules of Construction.............................. 23
SECTION 1.4 Form of Documents Delivered to Trustee............. 24
SECTION 1.5 Acts of Holders; Record Dates...................... 25
ARTICLE II THE NOTES
SECTION 2.1 Form and Dating.................................... 27
SECTION 2.2 Execution and Authentication....................... 29
SECTION 2.3 Registrar and Paying Agent......................... 30
SECTION 2.4 Paying Agent to Hold Money in Trust................ 31
SECTION 2.5 Global Note........................................ 31
SECTION 2.6 Transfer and Exchange.............................. 32
SECTION 2.7 Replacement Notes.................................. 35
SECTION 2.8 Outstanding Notes.................................. 35
SECTION 2.9 Temporary Notes.................................... 36
SECTION 2.10 Cancellation...................................... 36
SECTION 2.11 Payment of Interest; Interest Rights Preserved.... 36
SECTION 2.12 Authorized Denominations.......................... 38
SECTION 2.13 Computation of Interest, etc...................... 38
SECTION 2.14 Persons Deemed Owners............................. 38
SECTION 2.15 CUSIP Numbers..................................... 39
ARTICLE III REDEMPTION
SECTION 3.1 Notice to Trustee.................................. 39
SECTION 3.2 Selection of Notes to be Redeemed.................. 39
SECTION 3.3 Notice of Redemption............................... 40
SECTION 3.4 Effect of Notice of Redemption..................... 41
SECTION 3.5 Deposit of Redemption Price........................ 41
SECTION 3.6 Notes Redeemed in Part............................. 41
SECTION 3.7 Optional Redemption................................ 42
ARTICLE IV COVENANTS
SECTION 4.1 Payment of Notes................................... 43
SECTION 4.2 Maintenance of Office or Agency.................... 44
SECTION 4.3 Money for the Note Payments to be Held in Trust.... 44
SECTION 4.4 Corporate Existence................................ 45
SECTION 4.5 Maintenance of Property............................ 45
SECTION 4.6 Payment of Taxes and Other Claims.................. 45
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PAGE
SECTION 4.7 Repurchase at the Option of Holders
upon a Change of Control.............. 45
SECTION 4.8 Limitation on Asset Sales.......................... 48
SECTION 4.9 Limitation on Issuances of Guarantees by
Restricted Subsidiaries............... 54
SECTION 4.10 Restricted and Unrestricted Subsidiaries.......... 54
SECTION 4.11 Reports........................................... 55
SECTION 4.12 Compliance Certificate; Notice of Default or
Event of Default...................... 55
SECTION 4.13 Payment of Additional Amounts..................... 56
SECTION 4.14 Repurchase at the Option of Holders upon a
Termination of Trading................ 58
SECTION 4.15 Leasing Companies and NWE Cyprus.................. 60
SECTION 4.16 Technocom......................................... 60
SECTION 4.17 Collateral Agents................................. 60
SECTION 4.18 WTC............................................... 60
ARTICLE V CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Merger, Consolidation, Sale of Assets, Etc......... 61
SECTION 5.2 Successor Corporation Substituted.................. 62
ARTICLE VI DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.................................. 63
SECTION 6.2 Acceleration....................................... 65
SECTION 6.3 Other Remedies..................................... 67
SECTION 6.4 Waiver of Past Defaults............................ 68
SECTION 6.5 Control by Majority................................ 68
SECTION 6.6 Limitation on Suits................................ 68
SECTION 6.7 Rights of Holders to Receive Payment............... 69
SECTION 6.8 Trustee May File Proofs of Claim................... 69
SECTION 6.9 Priorities......................................... 70
SECTION 6.10 Undertaking for Costs............................. 71
SECTION 6.11 Waiver of Stay or Extension Laws.................. 71
SECTION 6.12 Trustee May Enforce Claims Without
Possession of the Notes............... 71
SECTION 6.13 Restoration of Rights and Remedies................ 72
SECTION 6.14 Rights and Remedies Cumulative.................... 72
SECTION 6.15 Delay or Omission Not Waiver...................... 72
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PAGE
ARTICLE VII TRUSTEE
SECTION 7.1 Duties of Trustee.................................. 72
SECTION 7.2 Rights of Trustee.................................. 73
SECTION 7.3 Concerning the Trustee, Collateral Agents, and
Collateral Held by Collateral Agents........... 74
SECTION 7.4 Trustee's Disclaimer............................... 76
SECTION 7.5 Notice of Defaults................................. 76
SECTION 7.6 Preservation of Information; Reports by Trustee
to Holders..................................... 77
SECTION 7.7 Compensation and Indemnity......................... 78
SECTION 7.8 Replacement of Trustee............................. 80
SECTION 7.9 Successor Trustee by Merger........................ 83
SECTION 7.10 Eligibility; Disqualification..................... 83
SECTION 7.11 Preferential Collection of Claims Against Company. 84
ARTICLE VIII DEFEASANCE
SECTION 8.1 Company's Option to Effect Legal Defeasance
or Covenant Defeasance......................... 85
SECTION 8.2 Legal Defeasance and Discharge..................... 85
SECTION 8.3 Covenant Defeasance................................ 86
SECTION 8.4 Conditions to Defeasance or Covenant Defeasance.... 86
SECTION 8.5 Deposited Money and U.S. Government Obligations
to be Held in Trust: Miscellaneous Provisions.. 88
SECTION 8.6 Repayment to Company............................... 89
SECTION 8.7 Reinstatement...................................... 89
ARTICLE IX AMENDMENTS
SECTION 9.1 Without Consent of Holders......................... 89
SECTION 9.2 With Consent of Holders............................ 90
SECTION 9.3 Effect of Supplemental Indentures.................. 92
SECTION 9.4 Compliance with Trust Indenture Act................ 92
SECTION 9.5 Revocation and Effect of Consents and Waivers...... 92
SECTION 9.6 Changed Terms of Notes............................. 92
SECTION 9.7 Trustee to Execute Supplemental Indentures......... 92
SECTION 9.8 Solicitation of Consents........................... 93
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PAGE
ARTICLE X GUARANTEES
SECTION 10.1 Guarantees........................................ 94
SECTION 10.2 Limitation of Guarantor's Liability............... 96
SECTION 10.3 Execution and Delivery of Guarantees.............. 97
SECTION 10.4 When a Guarantor May Merge, etc................... 97
SECTION 10.5 Additional Guarantors............................. 97
SECTION 10.6 Release of a Guarantor............................ 98
ARTICLE XI COLLATERAL AND SECURITY
SECTION 11.1 Collateral Documents.............................. 98
SECTION 11.2 Recording and Opinions............................100
SECTION 11.3 Further Assurances and Security...................100
SECTION 11.4 Possession, Use and Release of Collateral.........101
SECTION 11.5 Certificates of the Company.......................103
SECTION 11.6 Authorization of Actions to be Taken by the
Trustee Under the Collateral Documents.........104
SECTION 11.7 Authorization of Receipt of Funds by the Trustee
Under the Collateral Documents.................104
SECTION 11.8 Possession, Use and Release of
Senior Note Collateral.........................104
ARTICLE XII SUBORDINATION OF NOTES
SECTION 12.1 Notes Subordinated to Senior Indebtedness.........111
SECTION 12.2 Payment Over of Proceeds Upon
Dissolution, Etc...............................112
ARTICLE XIII CONVERSION OF NOTES
SECTION 13.1 Conversion Privilege and Conversion Price;
Reset Penalty..................................118
SECTION 13.2 Exercise of Conversion Privileges.................120
SECTION 13.3 Fractions of Shares...............................121
SECTION 13.4 Adjustment of Conversion Price....................121
SECTION 13.5 Notice of Adjustments of Conversion Price.........129
SECTION 13.6 Notice of Certain Corporate Action................130
SECTION 13.7 Company to Reserve Common Stock...................131
SECTION 13.8 Taxes on Conversions..............................131
SECTION 13.9 Covenant as to Common Stock.......................131
SECTION 13.10 Cancellation of Converted Notes..................131
SECTION 13.11 Provisions as to Consolidation, Merger or
Sale of Assets.................................131
SECTION 13.12 Prohibition upon Conversion in Certain
Circumstances..................................132
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PAGE
ARTICLE XIV SATISFACTION AND DISCHARGE
SECTION 14.1 Satisfaction and Discharge........................133
SECTION 14.2 Application of Trust Money........................134
SECTION 14.3 Repayment to the Company..........................134
SECTION 14.4 Reinstatement.....................................135
ARTICLE XV MISCELLANEOUS
SECTION 15.1 Trust Indenture Act Controls......................135
SECTION 15.2 Notices...........................................135
SECTION 15.3 Communications by Holders with Other Holders......136
SECTION 15.4 Certificate and Opinion as to Conditions Precedent136
SECTION 15.5 Statements Required in Certificate or Opinion.....136
SECTION 15.6 Rules by Trustee, Paying Agent and Registrar......137
SECTION 15.7 Payments on Business Days.........................137
SECTION 15.8 Governing Law; Submission to Jurisdiction.........137
SECTION 15.9 Legal Proceedings.................................137
SECTION 15.10 Service of Process...............................137
SECTION 15.11 Waiver of Immunities.............................138
SECTION 15.12 Judgment Currency; Currency Indemnity............138
SECTION 15.13 No Recourse Against Others.......................139
SECTION 15.14 Successors.......................................139
SECTION 15.15 Counterparts.....................................139
SECTION 15.16 Table of Contents; Headings......................139
SECTION 15.17 Severability.....................................140
SECTION 15.18 Further Instruments and Acts.....................140
EXHIBIT A FORM OF GLOBAL NOTE
EXHIBIT B FORM OF CERTIFICATED NOTE
EXHIBIT C REGISTRATION AGREEMENT
EXHIBIT D COMPANY CONVERTIBLE NOTE ESCROW AGREEMENT
EXHIBIT E COMPANY CONVERTIBLE NOTE SECURITY AGREEMENT
SCHEDULE 1.1(b) SPECIAL PURPOSES PROVISIONS, FOR LEASING
COMPANIES
SCHEDULE 1.1(d) EXISTING LIENS
SCHEDULE A TO THE CONVERTIBLE NOTE INDENTURE
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INDENTURE, dated as of May 31, 1996, between PETERSBURG LONG DISTANCE
INC., an Ontario corporation (the "Company"), as issuer, NWE CAPITAL (CYPRUS)
LIMITED, a Cypriot corporation ("NWE Cyprus"), PLD ASSET LEASING LIMITED, a
Cypriot corporation ("PLD Leasing"), PLD CAPITAL LIMITED, a Cypriot corporation
("PLD Capital"), WIRELESS TECHNOLOGY CORPORATIONS LIMITED, a British Virgin
Islands corporation ("WTC") and BALTIC COMMUNICATIONS LIMITED, a Russian joint
stock company of the closed type ("BCL"), as Guarantors, and THE BANK OF NEW
YORK, a New York banking corporation, as trustee hereunder (the "Trustee").
RECITALS
The Company has duly authorized the creation and issue of its 9%
Convertible Subordinated Notes due 2006 (the "Notes") of substantially the tenor
and amount hereinafter set forth; and to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid instrument of the Company and the Guarantors, in accordance with their
respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Notes by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a Subsidiary
of such specified Person.
"Act" when used with respect to any Holder, has the meaning set forth
in Section 1.5 hereof.
"Additional Amounts" has the meaning set forth in Section 4.13 hereof.
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"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided
that, except for purposes of Sections 2.8, 4.1 and 10.6 hereof, neither the
Company nor any of its Wholly-Owned Restricted Subsidiaries shall be deemed to
be Affiliates of each other. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "under common
control with," and "controlled by"), and as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise; provided,
further, that beneficial ownership of 10% or more of the Voting Stock of a
Person (on a fully diluted basis) shall be deemed to be control.
"Agent Member" has the meaning set forth in Section 2.5(a) hereof.
"Aggregate Unused Proceeds" has the meaning set forth in Section 4.8(d)
hereof.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease, amalgamation or other disposition (including, without
limitation, dispositions pursuant to any consolidation, amalgamation or merger)
by such Person or any of its Restricted Subsidiaries to any Person other than to
such Person or a Restricted Subsidiary of such Person, in one transaction, or a
series of related transactions (each hereinafter referred to as a
"Disposition"), of (a) Capital Stock of or other equity interests in any
Restricted Subsidiary (other than directors' qualifying shares), (b) all or
substantially all of the assets of any division or line of business of such
Person or of any of the Restricted Subsidiaries or (c) Property or assets of
such Person or any of its Restricted Subsidiaries, the Fair Market Value of
which exceeds $1,000,000, other than (i) a Disposition of Property in the
ordinary course of business consistent with industry practice, (ii) a
Disposition of Eligible Cash Equivalents, (iii) a Disposition that constitutes a
Restricted Payment permitted under Section 4.13 of the Senior Note Indenture as
in effect on the Issue Date, (iv) a Disposition by Technocom of all of its
assets and liabilities to a newly-formed corporation organized in a jurisdiction
other than Ireland formed to acquire such assets and owned in a substantially
identical proportion and manner as Technocom is owned (and the preferential
$20,000,000 dividend and liquidation, dissolution or winding-up rights of the
Technocom Preferred Stock on the Issue Date are not changed) immediately prior
to such Disposition and such Disposition does not adversely affect the
perfection or priority of the Liens in the Technocom Preferred Stock, (v) a
Disposition by WTC of its interest in BECET to NWE Cyprus in connection with a
winding up or a liquidation of WTC, and (vi) a Disposition by the Company in
connection with a transaction permitted pursuant to Article V hereof.
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"Asset Sale Offer" has the meaning set forth in Section 4.8(c) hereof.
"Asset Sale Payment Date" has the meaning set forth in Section
4.8(e)(ii) hereof.
"BECET" means BECET International, a Kazak joint stock company of the
closed type.
"Board of Directors" means the Board of Directors of the Company or any
Guarantor or any committee thereof duly authorized to act on behalf of such
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close.
"Cable & Wireless" means Cable and Wireless plc, an English
corporation.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with GAAP
and the stated maturity thereof shall be the date of the last payment of rent or
any amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash or Eligible
Cash Equivalents; provided that with regard to an Asset Sale, any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes, the
Guarantees, the Senior Notes and the guarantees under the Senior Note Indenture)
which are assumed by the transferee of any such assets and from which the
Company and such Restricted Subsidiary are completely released shall be deemed
Cash Proceeds.
"Certificated Notes" means Notes issued in definitive, fully registered
form to beneficial owners of interests in the Global Note pursuant to Section
2.6(b) hereof.
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"Change of Control" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease, whether direct or indirect, of all or
substantially all of the assets of the Company or the Company and the Restricted
Subsidiaries taken as a whole to any "Person" or "group" (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(i) under the Exchange Act) (other than any Wholly-Owned Restricted
Subsidiary of the Company) shall have occurred; (ii) any "Person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(i) under the Exchange Act), other than any Permitted Holder,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 50% of the total voting power of all classes of the Voting Stock of
the Company and/or warrants or options to acquire such Voting Stock, calculated
on a fully diluted basis, and such voting power percentage is greater than or
equal to the total voting power percentage then beneficially owned by the
Permitted Holders in the aggregate; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election or appointment by such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Change of Control Offer" has the meaning set forth in Section 4.7(a)
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
4.7(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in Section
4.7(a) hereof.
"Closing Price" on any Trading Day with respect to the per share price
of any shares of Capital Stock means the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on The Nasdaq
National Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on such automated quotation system but
the issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange
Act) and the principal securities exchange on which such shares are listed or
admitted to trading is a Designated Offshore Securities Market (as defined in
Rule 902(a) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange, or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on such automated quotation system and the issuer and principal securities
exchange do not meet such requirements, the average of the closing bid and asked
prices in the over-the-
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counter market as furnished by any New York Stock Exchange member firm that is
selected from time to time by the Company for that purpose and is reasonably
acceptable to the Trustee.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all "collateral" referred to in the Collateral
Documents and all other Property or assets that become subject to a Lien in
favor of the Trustee or a collateral agent for the benefit of the Trustee and
the holders of the Notes and, if the Senior Notes are outstanding and the Senior
Note Indenture so requires, for the benefit of the Senior Note Trustee and the
Holders of the Senior Notes, but Collateral shall not include Senior Note
Collateral.
"Collateral Documents" means the Company Convertible Note Security
Agreement, the Company Convertible Note Escrow Account Agreement and/or any
other document creating a Lien that secures the Notes or the Guarantees other
than the Senior Note Collateral Documents.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture such commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, the body performing such duties at such time.
"Common Stock" includes any stock of any class of any person which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of such person
and which is not subject to redemption by such person, including, without
limitation, the Company's Common Shares, without par value. However, subject to
the provisions of Section 13.11, shares issuable on conversion of the Notes
shall include only shares of the class designated as Common Shares of the
Company at the date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the party named as such in the preamble to this
Indenture unless and until a successor replaces it pursuant to the applicable
provisions hereof and, thereafter, means such successor.
"Company Convertible Note Escrow Account" means the escrow account
established under the Company Convertible Note Escrow Account Agreement among
the Company, the Trustee, the Senior Note Trustee and the escrow agent named
therein.
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"Company Convertible Note Escrow Agreement" means the Company
Convertible Note Escrow Account Agreement among the Company, the Trustee, the
Senior Note Trustee and the Escrow Agent named therein, in the form attached
hereto as Exhibit D.
"Company Convertible Note Security Agreement" means the Company
Convertible Note Security and Pledge Agreement among the Company, the Trustee,
the Senior Note Trustee and the collateral agent, named herein, in the form
attached hereto as Exhibit E.
"Company Order" means a written order signed in the name of the Company
by (i) its Chairman of the Board, its President, its Chief Executive Officer,
its Chief Operating Officer, a Vice Chairman or a Vice President, and (ii) its
Chief Financial Officer, its Treasurer, and Assistant Treasurer, its Secretary
or an Assistant Secretary.
"Company Senior Note Security Agreement" means the Company Senior Note
Security and Pledge Agreement among the Company, the Senior Note Trustee, the
Trustee and the collateral agent named therein, in the form attached as an
exhibit to the Senior Note Indenture.
"Company Senior Note Escrow Account" means the escrow account
established under the Company Senior Note Escrow Account Agreement.
"Company Senior Note Escrow Account Agreement" means the Company Senior
Note Escrow Account Agreement among the Company, the Senior Note Trustee, the
Trustee and the escrow agent named therein, in the form attached as an exhibit
to the Senior Note Indenture.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.
"Constituent Person" has the meaning set forth in Section 13.11 hereof.
"conversion price" has the meaning set forth in Section 13.1 hereof.
"Conversion Reset" has the meaning set forth in Section 13.1 hereof.
"Conversion Reset Period" has the meaning set forth in Section 13.1
hereof.
"Conversion Reset Price" has the meaning set forth in Section 13.1
hereof.
"Convertible Note Shares Shelf Registration Statement" means the
Convertible Note Shares Shelf Registration Statement of the Company pursuant to
the provisions of the Registration Agreement that covers the issuance, or to the
extent not permitted by applicable law, the resale of all of the shares of
Common Stock issuable upon conversion of the Notes to the extent and in the
manner provided therein on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and
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supplements to such registration statement, including post-effective amendments,
and in each case including the Prospectus contained therein, all-exhibits
thereto and all material incorporated by reference therein.
"Convertible Note Shelf Registration Statement" means the Convertible
Note Shelf Registration Statement of the Company pursuant to the provisions of
the Registration Agreement relating to all Notes and are subject to restrictions
on transfer.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at 000 Xxxxxxx Xxxxxx, Xxxxx 00-X, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust Department.
"Covenant Defeasance" has the meaning set forth in Section 8.3 hereof.
"Current Market Price" has the meaning set forth in Section 13.4(f)
hereof.
"Default" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"Default Amount" has the meaning set forth in Section 6.2 hereof.
"Defaulted Interest" has the meaning set forth in Section 2.11 hereof.
"Defeasance" has the meaning set forth in Section 8.2 hereof.
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors.
"Disposition" has the meaning set forth in the definition of "Asset
Sale" in this Section 1.1.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the date on which
the Notes mature.
"Dominion Resources" means Dominion Resources Inc.
"Eligible Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii)
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time deposits, certificates of deposit, or Eurodollar deposits of any commercial
bank organized in the United States having capital and surplus in excess of
$500,000,000 or a commercial bank organized under the laws of any other country
that is a member of the Organization for Economic Cooperation and Development
("OECD") and has total assets in excess of $500,000,000 with a maturity date not
more than one year from the date of acquisition, (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing, or subject to tender
at the option of the holder thereof, within ninety days after the date of
acquisition thereof and, at the time of acquisition having a rating of A or
better from Standard & Poor's or A-2 or better from Moody's, (v) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $500,000,000 or a
commercial bank organized under the laws of any other country that is a member
of the OECD and has total assets in excess of $500,000,000 and commercial paper
issued by non-bank issuers rated A-1 by Standard & Poor's or P-1 by Moody's and
in each case maturing within 270 days after the date of acquisition, (vi)
overnight bank deposits and bankers' acceptances at any commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000 or a commercial bank organized under the laws of any other country
that is a member of the OECD and has total assets in excess of $500,000,000,
(vii) deposits available for withdrawal on demand with a commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000 or a commercial bank organized under the laws of any other country
that is a member of the OECD and has total assets in excess of $500,000,000,
(viii) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (i) through (vi), and (ix)
with respect to a Restricted Subsidiary conducting operations in the Russian
Federation or Kazakstan, demand deposits, certificates of deposit and bank
promissory notes denominated in Russian Roubles or Kazak Tenge, as the case may
be, and used for ordinary course of business operations by such Restricted
Subsidiary solely in the jurisdiction where such Restricted Subsidiary does
business.
"Event of Default" has the meaning set forth in Section 6.1 hereof.
"Excess Proceeds" has the meaning set forth in Section 4.8(b) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Rate Obligation" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates.
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"Excluded Holder" has the meaning set forth in Section 4.13 hereof.
"'ex' date," (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing Prices
were obtained without the right to receive such issuance or distribution, (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades regular way
on such exchange or in such market after the last time that tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended).
"Expiration Time" shall have the meaning set forth in Section 13.4(f)
hereof.
"Extraordinary Cash Dividend" shall have the meaning set forth in
Section 13.4(d) hereof.
"Fair Market Value" means, with respect to any asset or Property, the
net sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors of the Company or a Restricted Subsidiary, as applicable.
"Final Memorandum" means the final Offering Memorandum, dated May 24,
1996, used in connection with the Initial Placement, as supplemented on June 6,
1996.
"Five Year Date" means the fifth anniversary of the Issue Date.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided, all
calculations made for purposes of determining compliance with the terms of the
provisions of the Indenture shall utilize GAAP as in effect on the Issue Date.
"Global Note" has the meaning set forth in Section 2.1(c) hereof.
"guarantee" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person
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in any manner (and "guaranteed", "guaranteeing" and "guarantor" shall have
meanings correlative to the foregoing).
"Guarantee" means a guarantee of a Guarantor pursuant to Article X.
"Guaranteed Indebtedness" has the meaning set forth in Section 4.9
hereof.
"Guarantor" means NWE Cyprus, PLD Leasing, PLD Capital, WTC and BCL,
any other Leasing Company, any Person that becomes a Wholly-Owned Subsidiary of
the Company after the Issue Date and any other Subsidiaries that guarantee any
Indebtedness of an Obligor.
"Holder" means (i) in the case of any Certificated Note, the Person in
whose name such Certificated Note is registered in the Note Register, (ii) in
the case of any Global Note, the Depositary and (iii) in the case of the Senior
Notes any Person constituting a Holder (as such term is defined in the Senior
Note Indenture).
"Indebtedness" means at any time (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and, to the extent held by other Persons, the maximum fixed
redemption or repurchase price of Disqualified Stock of such Person's Restricted
Subsidiaries, at the time of determination, (vii) the notional amount of any
Interest Hedging Obligations or Exchange Rate Obligations of such Person at the
time of determination, (viii) any Attributable Indebtedness with respect to any
Sale and Leaseback Transaction to which such Person is a party and (ix) any
obligation of the type referred to in clauses (i) through (viii) of this
definition of another Person and all dividends and distributions of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise.
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture, and any such supplemental indenture,
respectively.
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"Independent Financial Expert" shall have the meaning set forth in
Section 13.4(i) hereof.
"Initial Placement" means the initial sales of the Notes by the Initial
Purchaser.
"Initial Purchaser" means the Initial Purchaser, as such term is
defined in the Purchase Agreement.
"Intercompany Notes" means a promissory note representing Indebtedness
of a Restricted Subsidiary owing to the Company or a Restricted Subsidiary
provided that all of the proceeds of any intercompany loan made to a Leasing
Company with Collateral shall be utilized by such Leasing Company to make a
Qualified Investment.
"Interest Hedging Obligation" means, with respect to any Person, an
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"International Vendor Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary other than the Leasing Companies or NWE Cyprus
incurred or assumed in connection with the purchase within 180 days of such
incurrence or assumption of Property or assets to be used in the business of
such Person or any of its Restricted Subsidiaries in the Russian Federation or
Kazakstan; provided that the net cash proceeds from the issuance of such
Indebtedness do not exceed 100% of the lesser of the cost or Fair Market Value
of the Property or assets constructed or acquired.
"Inventory" means, with respect to any Person, all present or future
inventory in which a Person has any interest, including goods, wares and
merchandise held for sale or lease or leased or furnished or to be leased or
furnished under a contract of service and all of a Person's present and future
raw materials, work in process, finished goods, parts, components, assemblies,
and packing and shipping materials, wherever located, and documents of title
representing any of the above.
"Investment" in any Person means any direct, indirect or contingent (i)
advance or loan to, guarantee of any Indebtedness of, or extension of credit or
capital contribution to, such Person, (ii) acquisition of any shares of Capital
Stock, bonds, notes, debentures or other securities of such Person, or (iii)
acquisition, by purchase or otherwise, of all or substantially all of the
business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude accounts receivable and other
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices. The amount of an Investment shall be the original cost
of such Investment, plus the cost of all additions thereto and minus the amount
of any portion of such Investment repaid to such Person in cash as a
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repayment of principal or a return of capital, as the case may be, but without
any other adjustments for increases or decrease in value, or write-ups,
write-downs or write-offs with respect to such Investment. In determining the
amount of any Investment involving a transfer of any Property other than cash,
such Property shall be valued at its Fair Market Value at the time of such
transfer.
"Issue Date" means the date on which the Notes are first authenticated
and delivered under this Indenture, being June 12, 1996.
"Joint Venture" means a Telecommunications Company of which less than
50 percent of the Voting Stock is held by the Company, provided that the
Telecommunications Business of such Person is principally conducted in the
Russian Federation and/or Kazakstan.
"junior securities" has the meaning set forth in Section 12.15 hereof.
"Leasing Company" means a special purpose Cypriot corporation which is
a Guarantor and a Wholly-Owned Restricted Subsidiary organized for the limited
purpose of acquiring Telecommunications Assets and leasing such
Telecommunications Assets to Restricted Subsidiaries pursuant to
Telecommunications Asset Leases and/or making Qualified Investments permitted by
this Indenture. Each Leasing Company will have corporate organizational
documents containing the provisions set forth on Schedule 1.1(b) attached
hereto. Each Leasing Company must execute a Leasing Company Security Agreement
and a Leasing Company Escrow Account Agreement.
"Leasing Company Escrow Account" means an escrow account established
pursuant to a Leasing Company Escrow Account Agreement.
"Leasing Company Escrow Account Agreement" means a Leasing Company
Escrow Account Agreement among the Leasing Company party thereto, the Senior
Note Trustee, the Trustee and the escrow agent named therein in the form
attached as an exhibit to the Senior Note Indenture.
"Leasing Company Security Agreement" means a Leasing Company Security
and Pledge Agreement among the Leasing Company party thereto, the Senior Note
Trustee, the Trustee and the collateral agent named therein, in the form
attached as an exhibit to the Senior Note Indenture.
"Lien" means, with respect to any Property or other asset, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien (statutory or other), charge, easement, encumbrance,
preference, priority or other security or similar agreement or preferential
arrangement of any nature whatsoever on or with respect to such Property or
other asset (including, without limitation, any conditional sale or title
retention agreement having substantially the same economic effect as any of the
foregoing).
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"Maturity" means, when used with respect to a Note, the date on which
the principal of such Note becomes due and payable as provided therein or in
this Indenture, whether at Stated Maturity, on the Change of Control Payment
Date or purchase date established pursuant to the terms of the Indenture with
regard to a Change of Control Offer, an Asset Sale Offer or an offer to
repurchase upon a Termination of Trading of the Common Stock of the Company, as
applicable, or by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc., or, if Xxxxx'x
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor Person; provided that if Xxxxx'x Investors
Service, Inc. ceases rating the specified debt securities and its ratings
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is Standard & Poor's, then "Moody's" shall mean
any other nationally recognized rating agency (other than Standard & Poor's)
that rates the specified debt securities selected by the Trustee.
"NASD" means the National Association of Securities Dealers, Inc.
"Navona" means Navona Communications Corporation, Ltd., a wholly-owned
indirect Subsidiary of Cable & Wireless.
"Net Cash Proceeds" means, with respect to the sale of any Property or
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds (other
than any liabilities assumed by the transferee constituting Cash Proceeds
referred to in the proviso contained in the definition of "Cash Proceeds" set
forth in this Section 1.1) received, net of (i) all reasonable out-of-pocket
expenses of such Person or such Restricted Subsidiary incurred in connection
with such sale, including, without limitation, all legal, title and recording
tax expenses, commissions and other fees and expenses incurred (but excluding
any finder's fee or broker's fee payable to any Affiliate of such Person) and
all federal, state, foreign and local taxes arising in connection with such sale
that are paid or required to be accrued as a liability under GAAP by such Person
or its Restricted Subsidiaries, (ii) all payments made or required to be made by
such Person or its Restricted Subsidiaries on any Indebtedness which is secured
by such Properties or other assets in accordance with the terms of any Lien upon
or with respect to such Properties or other assets or which must, by the terms
of such Lien, or in order to obtain a necessary consent to such transaction or
by applicable law, be repaid in connection with such sale and (iii) all
contractually required distributions and other payments made to minority
interest holders (but excluding distributions and payments to Affiliates of such
Person) in Restricted Subsidiaries of such Person as a result of such
transaction; provided that, in the event that any consideration for a
transaction (which would otherwise constitute Net Cash Proceeds) is required to
be held in escrow pending determination of whether a purchase price adjustment
will be made, such consideration (or any portion thereof) shall become Net Cash
Proceeds only at such time as it is released to such Person or its Restricted
Subsidiaries from escrow; provided, further, that any non-cash consideration
received in connection with any transaction, which is subsequently converted to
cash, shall be deemed to be Net Cash Proceeds at such time, and shall thereafter
be applied in accordance with this Indenture.
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"nonelecting share" shall have the meaning set forth in Section 13.11.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.3 hereto.
"Notes" has the meaning set forth in the Recitals to this Indenture and
more particularly means any of the Notes authenticated and delivered under this
Indenture.
"NWE Cyprus" means NWE Capital (Cyprus) Limited, a Cypriot corporation
and Wholly- Owned Subsidiary of the Company.
"NWE Cyprus Senior Note Security and Pledge Agreement" means the NWE
Cyprus Senior Note Security and Pledge Agreement among NWE Cyprus, the Senior
Note Trustee, the Trustee and the collateral agent named therein in the form
attached as an exhibit to the Senior Note, Indenture.
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means any of the Obligors, singly.
"Offer Purchase Price" has the meaning set forth in Section 4.8(c)
hereof.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, its Chief Executive Officer, its Chief
Operating Officer, the President or a Vice President, and by the Chief Financial
Officer, its Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, a Guarantor or a Restricted Subsidiary, as applicable,
and delivered to the Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or a Guarantor (including inside counsel of the Company
or a Guarantor), and who shall be acceptable to the Trustee.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any), interest (including Additional Amounts, if
any, and Special Interest, if any) on, or other amounts in respect of, any Notes
on behalf of the Company.
"Permitted Holders" means Cable & Wireless, Navona and Dominion
Resources and their respective Affiliates (other than the Company and the
Restricted Subsidiaries).
"Permitted Liens" means (i) Liens created by this Indenture and the
Collateral Documents or that otherwise secure the payment of the Notes, the
Guarantees and the other obligations under this Indenture and the Collateral
Documents, and liens created by the Senior Note Indenture or the Senior Note
Collateral Documents or which otherwise secure the payment of the Senior Notes
and the other obligations under the Senior Note Indenture, the guarantees
contained therein and the Senior Note Collateral Documents; (ii) Liens on
Property or assets of
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a Person existing at the time such Person is merged into or consolidated with
the Company or any Restricted Subsidiary of the Company or becomes a Restricted
Subsidiary of the Company, provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not secure any Property
or assets of the Company or any of its Restricted Subsidiaries other than the
Property or assets subject to the Liens prior to such merger or consolidation;
(iii) Liens on Property or assets existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary, provided that such Liens were not
given in contemplation of such acquisition; (iv) Liens to secure the payment of
all or a part of the purchase price or construction cost of Property or assets
acquired or constructed in the ordinary course of business after the Issue Date,
provided that the Indebtedness secured by such Liens shall not exceed the lesser
of 80% of the cost or Fair Market Value of the Property or assets acquired or
constructed and such Liens shall not extend to any other Property or assets; (v)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases not constituting Capitalized Lease Obligations, statutory or regulatory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business consistent with industry
practice; (vi) Liens existing as of the Issue Date and disclosed in Schedule
1.1(d) to the Senior Note Indenture; (vii) Liens on Receivables and Inventory of
the Company and its Restricted Subsidiaries provided so long as the Senior Note
Indenture is not satisfied and discharged, such Liens secure Indebtedness
permitted to be incurred under the Senior Note Indenture; (viii) any Lien on
Property of the Company in favor of the United States of America or any state
thereof, or any instrumentality of either, to secure certain payments pursuant
to any contract or statute; (ix) any Lien for taxes or assessments or other
governmental charges or levies not then due and payable (or which, if due and
payable, are being contested in good faith and for which adequate reserves are
being maintained, to the extent required by GAAP); (x) easements, rights-of-way,
licenses and other similar restrictions on the use of Properties or minor
imperfections of title that, in the aggregate, are not material in amount and do
not in any case materially detract from the Properties subject thereto or
interfere with the ordinary conduct of the business of the Company or its
Restricted Subsidiaries; (xi) any Lien to secure obligations under workmen's
compensation laws or similar legislation, including any Lien with respect to
judgments which are not currently dischargeable; (xii) any statutory
warehousemen's, materialmen's or other similar Liens for sums not then due and
payable (or which, if due and payable, are being contested in good faith and
with respect to which adequate reserves are being maintained, to the extent
required by GAAP); (xiii) Liens to secure any International Vendor Indebtedness,
provided that such Liens do not extend to any Property or assets other than the
Property or assets the acquisition of which was financed by such Indebtedness;
(xiv) Liens in favor of the Company or any Wholly-Owned Restricted Subsidiary,
including Liens securing the Intercompany Notes and the Telecommunications Asset
Leases; (xv) Liens in favor of Technocom securing any leases by Technocom of
Telecommunications Assets to its Restricted Subsidiaries; (xvi) Liens in favor
of a Restricted Subsidiary which is a lessee under a Telecommunications Asset
Lease securing a sublease of such Telecommunications Assets to its Restricted
Subsidiary; (xvii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other Property relating to such
letters of credit and the products and proceeds thereof; and (xviii) Liens to
secure any permitted extension, renewal, refinancing or refunding (or successive
extensions, renewals, refinancings or refundings), in
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whole or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (ii) and (iii), provided that such Liens do not extend to any
other Property or assets and the principal amount of the Indebtedness secured by
such Liens is not increased.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Pledged Stock" means all of the Capital Stock of each of the Leasing
Companies, BCL, NWE Cyprus, WTC and any other future Wholly-Owned Subsidiary of
the Company or future Guarantor, and any and all dividends, distributions,
payments and proceeds thereof.
"Predecessor Security" means, with respect to any particular Security,
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.7 in exchange for a
mutilated Security or in lieu of a lost, destroyed or stolen Security shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Security.
"Preferred Stock" means, as applied to the Capital Stock of any person,
Capital Stock of such person of any class or classes (however designated) that
ranks prior as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
person, to shares of Capital Stock of any other class of such person.
"Private Placement Legend" means the legend in the form set forth in
Section 2.1(d)(i) hereof.
"Process Agent" has the meaning set forth in Section 15.10 hereof.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
"Purchase Agreement" means the Purchase Agreement relating to the Notes
and Units described therein, dated May 24, 1996, between the Company and the
Initial Purchaser.
"Purchased Shares" shall have the meaning set forth in Section 13.4(f)
hereof.
"Qualified Investment" means an Investment in a Telecommunications
Company primarily engaged or proposing to engage in the Telecommunications
Business in the Russian Federation or Kazakstan.
"Qualified Joint Venture" means a Joint Venture in which the Company
owns directly or indirectly Voting Stock thereof on the Issue Date, and any
future Joint Venture in which the Company owns 20% or more of the Voting Stock
thereof.
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"Qualified Stock" of any Person means a class of Capital Stock other
than Disqualified Stock.
"Receivables" means, with respect to any Person, all of the following
Property and interests in Property of such Person, whether now existing or
existing in the future or hereafter acquired or arising: (i) accounts, (ii)
accounts receivable, including, without limitation, all rights to payment
created by or arising from sales of goods, leases of goods or the rendition of
services no matter how evidenced, whether or not earned by performance, (iii)
all unpaid seller's or lessor's rights including, without limitation,
rescission, replevin, reclamation and stoppage in transit, relating to any of
the foregoing or arising therefrom, (iv) all rights to any goods or merchandise
represented by any of the foregoing after creation of the foregoing, including,
without limitation, returned or repossessed goods, (v) all reserves and credit
balances with respect to any such accounts receivable or account debtors, (vi)
all letters of credit, security or guarantees for any of the foregoing, (vii)
all insurance policies or reports relating to any of the foregoing, (viii) all
collection or deposit accounts relating to any of the foregoing, (ix) all
proceeds of any of the foregoing, and (x) all books and records relating to any
of the foregoing.
"Record Date" means, for the interest payable on any Interest Payment
Date, the date specified in Section 2.11 hereof.
"Record Expiration Date" has the meaning set forth in Section 1.5
hereof.
"Redemption Date" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the date fixed for redemption of such Notes
pursuant to the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the price fixed for redemption of such Note
pursuant to the terms of the Notes and this Indenture, plus accrued and unpaid
interest thereon, if any (including Additional Amounts, if any, and Special
Interest, if any), to the Redemption Date.
"Registrable Securities" shall mean the Notes and the Common Stock
issuable upon the conversion thereof; provided that the Notes and such Common
Stock shall cease to be Registrable Securities when (i) in the case of the
Notes, a Note Shelf Registration Statement with respect to the Notes shall have
been declared effective under the Securities Act and the Notes shall have been
disposed of pursuant to such Note Shelf Registration Statement, (ii) (A) in the
case of the Common Stock, except as otherwise provided in clause (ii)(B), a
Convertible Note Shelf Registration Statement with respect to such Common Stock
shall have been declared effective under the Securities Act and such Common
Stock shall have been disposed of pursuant to such Convertible Note Shelf
Registration Statement, or (B) in the case of any Common Stock actually issued
upon conversion of Notes, a Convertible Note Shelf Registration Statement with
respect to the issuance of such Common Stock shall have been declared effective
under the Securities Act and, following the issuance thereof, such Common Stock
is not subject to restrictions on transfer pursuant to the Securities Act, (iii)
the Notes or such Common Stock may
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be distributed to the public pursuant to Rule 144(k) (or any similar provision
then in force, but not Rule 144A under the Securities Act) under the Securities
Act or (iv) the Notes or such Common Stock shall have ceased to be outstanding.
"Registrar" has the meaning set forth in Section 2.3 hereof.
"Registration Agreement" means the Registration Rights Agreement
relating to the Notes, dated as of May 31, 1996, between the Company and the
Initial Purchaser, substantially in the form attached hereto as Exhibit C.
"Related Proceeding" has the meaning set forth in Section 15.9 hereof.
"Required Filing Date" has the meaning set forth in Section 4.11
hereof.
"Repurchase Date" has the meaning set forth in Section 4.14(a) hereof.
"Repurchase Price" has the meaning set forth in Section 4.14(a) hereof.
"Replacement Assets" has the meaning set forth in Section 4.8(b)
hereof.
"Replacement Telecommunication Assets" has the meaning set forth in
Section 4.8(b) hereof.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been classified as an "Unrestricted Subsidiary."
"Revolving Credit Facilities" means revolving credit agreements to
which the Company and the Restricted Subsidiaries are or become parties, and all
related amendments, notes, collateral documents, guarantees, instruments and
other agreements executed in connection therewith, as the same may be amended,
modified, supplemented, restated, renewed, extended, refinanced, substituted or
replaced from time to time.
"Rule 144" means Rule 144 under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Indebtedness" means all obligations of the Company under the
Senior Notes, the Senior Note Indenture, the guarantees contained in the Senior
Note Indenture and the Senior Note Collateral Documents.
"Senior Note Asset Sale Offer" has the meaning set forth in Section
4.8(b)(iv) hereof.
"Senior Note Collateral" means all "collateral" referred to in the
Senior Note Collateral Documents and all other Property or assets that become
subject to a Lien in favor of the Senior Note Trustee or a collateral agent for
the benefit of the Senior Trustee and the holders of the Senior Notes and, if
the Senior Notes are outstanding and the Senior Note Indenture so requires, for
the benefit of the Senior Note Trustee and the equal and ratable benefit of the
Holders of Senior Notes, but Senior Note Collateral shall not include the
Collateral.
"Senior Note Collateral Documents" means the Company Senior Note
Security Agreement, the Company Senior Note Escrow Account Agreement, the
Leasing Company Security Agreements, the Leasing Company Escrow Agreements, the
NWE Cyprus Senior Note Security and Pledge Agreement and/or any other document
creating a Lien that secures the Senior Notes or the guarantees contained in the
Senior Note Indenture other than the Collateral Documents, all as such documents
are defined or otherwise described in the Senior Note Indenture.
"Senior Note Indenture" means the Indenture, dated the date hereof,
among the Company, the Guarantors and The Bank of New York, as trustee
thereunder, relating to the Senior Notes, as amended and supplemented from time
to time.
"Senior Note Trustee" means The Bank of New York, as trustee under the
Senior Note Indenture and any successor appointed in accordance with the terms
thereof.
"Senior Notes" means the 14% Senior Discount Notes due 2004 of the
Company to be issued pursuant to the Senior Note Indenture.
"Significant Restricted Subsidiary" means a Restricted Subsidiary that
is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Interest" means (a) such additional interest as is specified
as such in paragraph 4(a) of each Note and the Registration Agreement, and/or
(b) such additional interest as is specified as such in paragraph 4(b) of each
Note and Schedule A to this Indenture.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.11 for the payment of Defaulted Interest.
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"Standard & Poor's" means Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc., or if Standard & Poor's Ratings Group shall cease rating
the specified debt securities and such ratings ceases with respect thereto shall
have been transferred to a successor Person, such successor Person, provided
that if Standard & Poor's Ratings Group ceases rating the specified debt
securities and its ratings business with respect thereto shall not have been
transferred to any successor Person or such successor Person is Xxxxx'x, then
"Standard & Poor's" shall mean any other materially recognized rating agency
selected by the Trustee.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding shares of Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which are owned,
directly or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, or (iii) any limited partnership of which such Person or any Subsidiary
of such Person is a general partner, and (iv) with respect to the Company or any
Restricted Subsidiary, BECET, provided that the Company owns directly or
indirectly 50% of the then outstanding shares of Voting Stock of BECET.
"Surviving Entity" has the meaning set forth in Section 5.1 hereof.
"Suspension Event" means any event which makes any statement made in
the Note Shelf Registration Statement or the related prospectus untrue in any
material respect or which requires the making of any changes in the Note Shelf
Registration Statement or prospectus in order to make the statements therein not
misleading.
"Technocom" means Technocom Limited, an Irish corporation and a
Restricted Subsidiary, including any transferee in a Disposition contemplated by
clause (iv) of the definition of "Asset Sale" set forth in this Section 1.1.
"Technocom Preferred Stock" means all Preferred Stock of Technocom
owned directly or indirectly by the Company.
"Telecommunications Asset Lease" means a lease by a Leasing Company of
Telecommunications Assets to Restricted Subsidiaries and Qualified Joint
Ventures in the Russian Federation and Kazakstan.
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"Telecommunications Assets" means, with respect to any Person, assets
(including, without limitation, rights of way, trademarks and licenses to use
copyrighted material), that are utilized by such Person, directly or indirectly,
in a Telecommunications Business. For purposes of determining a
Telecommunications Company, but not for purposes of determining whether Property
or assets may be subject to a Telecommunications Asset Lease, Telecommunications
Assets shall also include stock, joint venture or partnership interests in
another Person, provided that substantially all of the assets of such other
Person consist of Telecommunications Assets, and provided, further, that if such
stock, joint venture or partnership interests are held by the Company or a
Restricted Subsidiary, such other Person either is, or immediately following the
relevant transaction shall become, a Restricted Subsidiary of the Company
pursuant to this Indenture. The determination of what constitutes
Telecommunication Assets shall be made by the Board of Directors of the Company
and evidenced by a Board Resolution delivered to the Trustee.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in (i) above or (iii) evaluating, participating or pursuing any other
activity or opportunity that is related to those specified in (i) or (ii) above
and includes, without limitation, any business which the Company and its
Restricted Subsidiaries are currently engaged on the Issue Date.
"Telecommunications Company" means any Person substantially all of the
assets of which consist of Telecommunications Assets.
"Temporary Notes" has the meaning set forth in Section 2.9 hereof.
"Termination of Trading" has the meaning set forth in Section 4.14
hereof.
"Total Common Equity" of any person means, as of any day of
determination, the product of (a) the aggregate number of outstanding primary
shares of Common Stock of such person on such day (which shall not include any
options or warrants on, or securities convertible or exchangeable into, shares
of Common Stock of such person) and (b) the average Closing Price of such Common
Stock over the 20 consecutive Trading Days immediately preceding such day. If no
such Closing Price exists with respect to shares of any such class, the value of
such shares for purposes of clause (b) of the preceding sentence shall be
determined by the Board of Directors in good faith and evidenced by a written
opinion as to such value issued by an investment banking firm of recognized
national standing.
"Total Market Capitalization" of any person means, as of any day of
determination, the sum of (a) the consolidated indebtedness of such person and
its Subsidiaries on such day, plus (b) the product of (i) the aggregate number
of outstanding primary shares of Common Stock of such person on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of such person other than, in the case
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of the Company, any shares of Preferred Stock of the Company, that, as of the
day of determination, cannot, pursuant to the terms thereof as in effect on the
date of this Indenture, be required to be redeemed by the Company in cash, and
(ii) the average Closing Price of such Common Stock over the 20 consecutive
Trading Days immediately preceding such day, plus (c) the liquidation value of
any outstanding shares of Preferred Stock of such person on such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (b) for the preceding sentence shall be determined
by the Company's Board of Directors in good faith and evidenced by a written
opinion as to such value issued by an investment banking firm of recognized
national standing.
"Trading Day" means, with respect to a securities exchange or automated
quotation system, a day on which such exchange or system is open for a full day
of trading.
"Trigger Event" shall have the meaning set forth in Section 13.4(g)
hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Section Section 77aaa-77bbbb) as in effect on the date of this Indenture except
as required by Section 9.4 hereof, provided that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939,
as so amended.
"Trust Officer" means any Vice President, Assistant Vice President,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of the Trustee
assigned by the Trustee to administer this Indenture or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means such successor.
"U.S. Government Obligations" means (x) securities that are (i) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which in either case are not callable or redeemable at the
option of the issuer thereon, and (y) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (x) above and held
by such bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the
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specific payment of principal or interest of the U.S. Government Obligation
evidenced by such depository receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company that the
Company has classified as an "Unrestricted Subsidiary," and that has not been
reclassified as a Restricted Subsidiary, pursuant to the terms of this
Indenture.
"Voting Stock" means, with respect to any Person, any class or classes
of Capital Stock in such Person entitling the holders thereof (whether at all
times or at the times that such class of Capital Stock has voting power by
reason of the happening of any contingency) to vote in the election of members
of the board of directors or comparable body of such Person.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the outstanding Capital Stock (other than directors' qualifying shares)
of which are owned, directly or indirectly, by the Company.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms incorporated by reference in
this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other
obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference
in this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
SECTION 1.3 Rules of Construction. Unless context otherwise requires:
(a) the words "herein," "hereof" and "hereunder," and other
words of similar import, refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(b) "or" is not exclusive;
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(c) a term has the meaning assigned to it;
(d) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(e) words in the singular include the plural, and words in the
plural includes the singular;
(f) provisions apply to successive events and transactions;
(g) the principal amount of any non-interest bearing or other
discount security (other than the Senior Notes), at any date shall be
the principal amount thereof that would be shown on a balance sheet of
the issuer dated such date prepared in accordance with GAAP;
(h) when used with respect to the Senior Notes, the term
"principal amount" shall mean the principal amount thereof at the
Stated Maturity of such principal amount; and
(i) unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred
Stock.
SECTION 1.4 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or a Guarantor stating
that the information with respect to such factual matters is in the possession
of the Company or such Guarantor, as applicable, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.5 Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantors. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.1) conclusive in favor of
the Trustee, the Company and the Guarantors, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
an acknowledgment of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of the signer's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company or the Guarantors
in reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of outstanding Notes entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Notes, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
outstanding Notes on such record date, and no other Holders, shall be entitled
to take the relevant actions whether or not such Holders remain
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Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of outstanding Notes on such record
date; and provided, further, that for the purpose of determining whether Holders
of the requisite principal amount of such Notes have taken such action, no Note
shall be deemed to have been outstanding on such record date unless it is also
outstanding on the date such action is to become effective. Nothing in this
paragraph shall prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action taken by Holders of
the requisite principal amount of outstanding Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company at its own expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Record Expiration Date to be given to the
Trustee in writing and to each Holder of Notes in the manner set forth in
Section 15.2 hereof.
The Trustee may set any day as a record date for the purpose of
determining the Holders of outstanding Notes entitled to join in the giving or
making of (i) any notice of Default under Section 6.1(d) or (i) hereof, (ii) any
declaration of acceleration referred to in Section 6.2 hereof, (iii) any request
to institute proceedings referred to in Section 6.6 hereof or (iv) any direction
referred to in Section 6.5 hereof. If any record date is set pursuant to this
paragraph, the Holders of outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Record Expiration Date by Holders of the requisite
principal amount of outstanding Notes on such record date; and provided,
further, that for the purpose of determining whether Holders of the requisite
principal amount of such Notes have taken such action, no Security shall be
deemed to have been outstanding on such record date unless it is also
outstanding on the date such action is to become effective. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record
date for any action (whereupon the record date previously set shall
automatically and without any action by any Person be cancelled and of no
effect), nor shall anything in this paragraph be construed to render ineffective
any action taken by Holders of the requisite principal amount of outstanding
Notes on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the matter(s) to be submitted for potential action
by Holders and the applicable Record Expiration Date to be given to the Company
in writing and to each Holder of Notes in the manner set forth in Section 15.2
hereof.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Notes in the manner set forth in
Section 15.2 hereof, on or before the existing Record Expiration Date. If a
Record Expiration Date is not
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designated with respect to any record date set pursuant to this Section, the
party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Record Expiration Date
with respect thereto, subject to its right to change the Record Expiration Date
as provided in this paragraph. Notwithstanding the foregoing, no Record
Expiration Date shall be later than the 180th day after the applicable record
date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Note may do so with regard to all
or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
ARTICLE II
THE NOTES
SECTION 2.1 Form and Dating.
(a) The Notes, with the notation of the Guarantees endorsed thereon and
the certificate of authentication of the Trustee thereon, shall be substantially
in the form of Exhibit A or Exhibit B hereto, as applicable, which are hereby
incorporated in and expressly made a part of this Indenture.
(b) The Notes may have such letters, numbers or other marks of
identification and such legends and endorsements, stamped, printed, lithographed
or engraved thereon, (i) as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, (ii) as may be required to
comply with this Indenture, any law or any rule of any securities exchange on
which the Notes may be listed and (iii) as may be necessary to conform to
customary usage. Each Note shall be dated the date of its authentication by the
Trustee.
(c) The Notes, with the notation of the Guarantees endorsed thereon,
shall be issued initially in the form of a permanent, global note in definitive,
fully registered form, without coupons, substantially in the form of Exhibit A
hereto (the "Global Note"). Upon issuance, such Global Note shall be duly
executed by the Company, with the endorsement of Guarantees thereon executed by
the Guarantors, and authenticated by the Trustee as hereinafter provided and
deposited with the Trustee as custodian for the Depositary. Any Certificated
Note that may be issued pursuant to Section 2.6(b) hereof, shall be issued in
the form of a note in definitive, fully registered form, without coupons,
substantially in the form set forth in Exhibit B hereof. Upon issuance, any such
Certificated Note shall be duly executed by the Company, with the endorsement of
Guarantees therein executed by the Guarantors, and authenticated by the Trustee
as hereinafter provided.
(d) The following legends shall appear on each Global Note and each
Certificated Note as indicated below:
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(i) Except as provided in Section 2.6(a)(iii) hereof, each
Global Note and Certificated Note shall bear the following legend on
the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT ("RULE 144A") IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND THE PROVINCES OF CANADA.
(ii) Each Global Note shall bear the following legend on the
face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO
PETERSBURG LONG DISTANCE INC. OR THE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS HAS BEEN
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.6 OF THE INDENTURE, DATED AS OF MAY 31,
1996, AMONG PETERSBURG LONG DISTANCE INC., CERTAIN
CORPORATIONS ACTING AS GUARANTORS AND
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NAMED THEREIN AND THE TRUSTEE NAMED THEREIN, PURSUANT TO WHICH
THIS NOTE WAS ISSUED.
(e) Definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of such methods or produced in any other manner
permitted by the rules of any securities exchange on which such Notes may be
listed, all as determined by the officers of the Company executing such Notes,
as evidenced by their execution of such Notes.
SECTION 2.2 Execution and Authentication. The Notes shall be issued in
a single series. The aggregate principal amount of Notes outstanding at any time
shall not exceed $26,500,000 except as provided in Section 2.7 hereof. The Notes
shall be executed by manual or facsimile signature on behalf of the Company by
its Chief Executive Officer, its Chief Operating Officer, its President or any
Vice President or either its Secretary or any Assistant Secretary (but not
both). The Company's corporate seal shall be reproduced or imprinted on the
Notes by facsimile or otherwise, and shall be attested by the Company's
Secretary or one of its Assistant Secretaries, in each case by manual or
facsimile signature. The Notes shall have the notation relating to the
Guarantees executed by each Guarantor in the manner provided for in Section 10.3
hereof and endorsed thereon.
In case any officer of the Company whose signature shall have been
placed upon any of the Notes shall cease to be such officer of the Company
before authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such officer of the Company.
Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Notes only upon receipt by the Trustee of an Officers'
Certificate and Opinion of Counsel complying with Sections 15.4 and 15.5 hereof
with respect to satisfaction of all conditions precedent contained in this
Indenture to authentication and delivery of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate Notes for original issuance in an aggregate principal
amount not to exceed $26,500,000 in the form of the Global Note. Such Company
Order shall specify the amount of Notes to be authenticated and the date on
which the Notes are to be authenticated and shall further provide instructions
concerning registration, amounts for each Holder and delivery.
Upon the occurrence of any event specified in Section 2.6(b) hereof and
compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph, the Company shall execute and the Trustee shall
authenticate and deliver to each beneficial owner identified by the Depositary,
in exchange for such beneficial owner's interest in the Global Note,
Certificated Notes representing Notes theretofore represented by the Global
Note.
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A Note shall not be valid or entitled to any benefit under this
Indenture or obligatory for any purpose unless appropriately executed by the
Company and the Guarantors and authenticated by the manual signature of the
Trustee as provided herein. The signature of an authorized officer of the
Trustee shall be conclusive evidence, and the only evidence, that such Note has
been authenticated and delivered under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference to this Indenture to authentication by the Trustee
includes authentication by such agent. Any authenticating agent of the Trustee
shall have the same rights hereunder as any Registrar or Paying Agent.
SECTION 2.3 Registrar and Paying Agent. The Company shall maintain,
pursuant to Section 4.2 hereof, an office or agency where the Notes may be
presented for payment, for registration of transfer or for exchange. The Company
shall cause to be kept at such office a register (the register maintained in
such office being herein sometimes referred to as the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes entitled to be
registered or transferred as provided herein. The Trustee, at its Corporate
Trust Office, is initially appointed "Registrar" for the purpose of registering
Notes and transfers of Notes as herein provided, and as "Paying Agent" for the
payment of principal of (and premium if any), interest (including Additional
Amounts, if any, and Special Interest, if any) on, or other amounts due in
respect of the Notes as provided herein. The Company may, upon written notice to
the Trustee, change the designation of the Trustee as Registrar or Paying Agent
and appoint another Person to act as Registrar for purposes of this Indenture
except that, for the purposes of Article III, Article XIV and Sections 4.7, 4.8
and 4.14, none of the Company, any Guarantor, any Restricted Subsidiary or any
Affiliate of the Company or of any Guarantor shall act as Paying Agent. If any
Person other than the Trustee acts as Registrar, the Trustee shall have the
right at any time, upon reasonable notice, to inspect or examine the Note
Register and to make such inquiries of the Registrar as the Trustee shall in its
discretion deem necessary or desirable in performing its duties hereunder.
The Company shall enter into an appropriate agreement with any Person
designated by the Company as Registrar or Paying Agent that is not a party to
this Indenture, which agreement shall incorporate the provisions of the Trust
Indenture Act and shall implement the provisions of this Indenture that relate
to such Registrar or Paying Agent. Prior to the designation of any such Person,
the Company shall, by written notice (which notice shall include the name and
address of such Person), inform the Trustee of such designation. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such.
Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more
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new Notes of any authorized denomination or denominations, of like tenor and
aggregate principal amount, all as requested by the transferor.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Registrar) be
duly endorsed, or be accompanied by a duly executed instrument of transfer in
form satisfactory to the Company, the Trustee and the Registrar, by the Holder
thereof or such Holder's attorney duly authorized in writing.
SECTION 2.4 Paying Agent to Hold Money in Trust. On or prior to each
due date of the principal, premium, or any payment of interest or any other
amount due with respect to any Note, the Company shall deposit with the Paying
Agent a sum sufficient to pay such principal, premium, interest or other amount
when so becoming due.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that such Paying Agent (i) shall hold in trust for the benefit
of Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, interest (including Additional Amounts, if any, and Special
Interest, if any) or other amount due with respect to the Notes (whether such
money has been distributed to it by the Company, a Guarantor or any other
Obligor), (ii) shall notify the Trustee of any default by the Company in making
any such payment and (iii) at any time during the continuance of any such
default, upon the written request of the Trustee, shall forthwith pay to the
Trustee all sums held in trust by such Paying Agent.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section 2.4, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.5 Global Note.
(a) So long as the Global Note is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under this Indenture with respect to the
Global Note held on their behalf by the Depositary or the Trustee as its
custodian, and the Depositary may be treated by the Company, the Guarantors, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes. Notwithstanding the foregoing, nothing herein
shall (i) prevent the Company, the Guarantors, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or (ii) impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of Notes.
(b) The Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in such Global Note
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through Agent Members, to take any action which a Holder of Notes is entitled to
take under this Indenture or the Notes.
(c) Whenever, as a result of an optional redemption of Notes by the
Company, a Change of Control Offer, an Asset Sale Offer, a repurchase upon a
Termination of Trading pursuant to Section 4.14 hereof, or an exchange pursuant
to the second sentence of Section 2.6(b) hereof, a Global Note is redeemed,
repurchased or exchanged in part, such Global Note shall be surrendered by the
Holder thereof to the Trustee who shall cause an adjustment to be made to
Schedule A thereof so that the principal amount of such Global Note will be
equal to the portion of such Global Note not redeemed, repurchased or exchanged
and shall thereafter return such Global Note to such Holder, provided that each
such Global Note shall be in a principal amount of $1,000 or an integral
multiple thereof.
SECTION 2.6 Transfer and Exchange.
(a) With respect to the Notes:
(i) By its acceptance of any Note represented by a certificate
bearing the Private Placement Legend, each Holder of, and beneficial
owner of an interest in, such Note acknowledges the restrictions on
transfer of such Note set forth in the Private Placement Legend and
under the heading "Transfer Restrictions" in the Final Memorandum and
agrees that it will transfer such Note only in accordance with the
Private Placement Legend and the restrictions set forth under the
heading "Transfer Restrictions" in the Final Memorandum.
(ii) In connection with any transfer of a Note bearing the
Private Placement Legend, each Holder agrees to deliver to the Company
such satisfactory evidence, which may include an opinion of independent
counsel licensed to practice law in the State of New York, as
reasonably may be requested by the Company or by the Trustee to confirm
that such transfer is being made in accordance with the limitations set
forth in the Private Placement Legend. In the event the Company
determines that any such transfer is not in accordance with the Private
Placement Legend, the Company shall so inform the Registrar which shall
not register such transfer; provided that the Registrar shall not be
required to determine (but may rely on a determination made by the
Company with respect to) the sufficiency of any such evidence.
(iii) Upon the registration of transfer, exchange or
replacement of a Note not bearing the Private Placement Legend, the
Trustee shall deliver a Note or Notes that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of a Note
bearing the Private Placement Legend, the Trustee shall deliver a Note
or Notes bearing the Private Placement Legend, unless such legend may
be removed from such Note as provided in the next sentence. The Private
Placement Legend may be removed from a Note if there is delivered to
the Company and the Trustee such satisfactory evidence, which may
include an opinion of independent counsel licensed to practice law
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in the State of New York, as reasonably may be requested by the Company
to confirm that neither such legend nor the restrictions on transfer
set forth therein are required to ensure that transfers of such Note
will not violate the registration and prospectus delivery requirements
of the Securities Act and, if the transferee is a resident of Canada,
the securities laws of the applicable province of Canada; provided that
the Trustee shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of
any such evidence. Upon provision of such evidence, the Trustee shall
authenticate and deliver in exchange for such Note, a Note or Notes
(representing the same aggregate principal amount of the Note or Notes
being exchanged) without such legend. If the Private Placement Legend
has been removed from a Note, as provided above, no other Note issued
in exchange for all or any part of such Note shall bear such legend,
unless the Company has reasonable cause to believe that such other Note
represents a "restricted security" within the meaning of Rule 144 and
instructs the Trustee in writing to cause a legend to appear thereon.
(iv) The Company shall deliver to the Trustee, and the Trustee
shall retain for two years, copies of all documents received pursuant
to this Section 2.6(a). The Company shall have the right to inspect and
make copies of all such documents at any reasonable time upon the
giving of reasonable written notice to the Trustee.
(b) The Global Note shall be exchanged by the Company for one or more
Certificated Notes if (x) the Depositary (i) has notified the Company that it is
unwilling or unable to continue as, or ceases to be, a "Clearing Agency"
registered under Section 17A of the Exchange Act and (ii) a successor to the
Depositary registered as a "Clearing Agency" under Section 17A of the Exchange
Act is not appointed by the Company within 90 calendar days or (y) the
Depositary is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not appointed by the Company within 90 calendar
days. If an Event of Default occurs and is continuing, the Company shall, at the
request of the Holder thereof, exchange all or part of the Global Note for one
or more Certificated Notes provided that the principal amount of each of such
Certificated Notes and the Global Note, after such exchange, shall be $1,000 or
an integral multiple thereof. Whenever the Global Note is exchanged as a whole
for one or more Certificated Notes, it shall be surrendered by the Holder
thereof to the Trustee for cancellation. Whenever the Global Note is exchanged
in part for one or more Certificated Notes, it shall be surrendered by the
Holder thereof to the Trustee and the Trustee shall make the appropriate
adjustments to Schedule A thereof pursuant to Section 2.5(c) hereof. All
Certificated Notes issued in exchange for the Global Note or any portion thereof
shall be registered in such names, and delivered, as the Depositary shall
instruct the Trustee. Any Certificated Notes issued pursuant to this Section
2.6(b) shall include the Private Placement Legend, except as set forth in
Section 2.6(a)(iii) hereof. Interests in the Global Note may not be exchanged
for Certificated Notes other than as provided in this Section 2.6(b).
(c) A Holder may transfer a Note only upon the surrender of such Note
for registration of transfer. No such transfer shall be effected until, and the
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer in the Note
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Register by the Registrar. When Notes are presented to the Registrar with a
request to register the transfer of, or to exchange, such Notes, the Registrar
shall register the transfer or make such exchange as requested if its
requirements for such transactions and any applicable requirements hereunder are
satisfied. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Certificated Notes at the Registrar's
request.
(d) The Company shall not be required to make and the Registrar need
not register transfers or exchanges of (i) Certificated Notes selected for
redemption (except, in the case of Certificated Notes to be redeemed in part,
the portion thereof not to be redeemed), or (ii) any Certificated Note for a
period of 15 calendar days before a selection of Certificated Notes to be
redeemed or the mailing of a notice of a Change of Control Offer pursuant to
Section 4.7 hereof, an Asset Sale Offer pursuant to Section 4.8 hereof, or an
offer to repurchase upon a Termination of Trading pursuant to Section 4.14
hereof, and ending on the close of business on the day of such mailing.
(e) No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer of Notes (other than in respect of exchanges
or transfers pursuant to Sections 2.9, 3.6, 4.7, 4.8, 4.14 and 9.6).
(f) All Notes issued upon any registration of transfer, exchange or
substitution pursuant to the terms of this Indenture will evidence the same debt
and will be entitled to the same benefits under this Indenture as the Notes
surrendered for such registration of transfer or exchange.
(g) Prior to the effectiveness under the Securities Act of a
Convertible Note Shelf Registration Statement, or at any time during the
suspension or following the termination thereof, Holders of Notes (or holders of
interests therein) and prospective purchasers designated by such Holders of
Notes (or such holders of interests therein) shall have the right to obtain from
the Company upon request by such Holders (or such holders of interests) or
prospective purchasers, during any period in which the Company is not subject to
Section 13 or Section 15(d) of the Exchange Act, or is exempt from reporting
pursuant to 12g3-2(b) under the Exchange Act, the information required by
paragraph (d)(4)(i) of Rule 144A in connection with any transfer or proposed
transfer of such Notes or interests.
(h) Any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Notes represented hereby shall be required to be reflected in book entry form.
Transfers of a Global Note shall be limited to transfers in whole and not in
part, to the Depositary, its successors, and their respective nominees.
Interests of beneficial owners in a Global Note may be transferred in accordance
with the rules and procedures of the Depositary (or its successors).
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SECTION 2.7 Replacement Notes. If any mutilated Note is surrendered to
the Trustee, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Note, a new
Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to save either of them and
any agent of each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note, provided that such payment is
either not made prior to the day following the Five Year Date or is made only
following the occurrence of an Event of Default.
Upon the issuance of any new Note under this Section 2.7, the Company
may require the payment by the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.7 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost of stolen Notes.
SECTION 2.8 Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.8 as not
outstanding. A Note does not cease to be outstanding because the Company, a
Guarantor or an Affiliate of the Company or a Guarantor holds such Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that such replaced Note is held by a bona fide purchaser. A mutilated Note
ceases to be outstanding upon surrender of such Note and replacement thereof
pursuant to Section 2.7.
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If the Paying Agent (other than the Company, a Guarantor or an
Affiliate of the Company or a Guarantor) segregates and holds in trust, in
accordance with this Indenture, on a Redemption Date or Maturity date money
sufficient to pay all principal, premium, if any, and interest (including
Additional Amounts, if any, and Special Interest, if any) and any other amounts
payable on that date with respect to the Notes (or portions thereof) to be
redeemed or maturing, as the case may be, then on and after that date such Notes
(or such portions thereof) shall cease to be outstanding and interest on them
shall cease to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent or any amendment,
modification or other change to this Indenture, Notes held or beneficially owned
by the Company or Guarantor or an Affiliate of the Company or a Guarantor of the
Company or by agents of any of the foregoing shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Notes which a Trust Officer knows are so
owned shall be so disregarded. Notes so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction of
the Trustee such pledgee's right so to act with respect to the Notes and that
the pledgee is not the Company, a Guarantor or an Affiliate of the Company or of
a Guarantor or any of their agents.
SECTION 2.9 Temporary Notes. Pending the preparation of definitive
Notes, the Company may execute, the Guarantors shall endorse and the Trustee
shall authenticate, temporary notes ("Temporary Notes") which are printed,
lithographed, or otherwise produced, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations.
If Temporary Notes are issued, the Company shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the Temporary Notes shall be exchangeable for definitive Notes upon
surrender of the Temporary Notes to the Trustee, without charge to the Holder.
Until so exchanged, Temporary Notes will evidence the same debt and will be
entitled to the same benefits under this Indenture as the definitive Notes in
lieu of which they have been issued.
SECTION 2.10 Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange, purchase, payment or conversion. The Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, purchase, payment,
cancellation or conversion and shall dispose of such Notes in accordance with
the Trustee's policy of disposal; provided, however, that the Trustee shall not
be required to destroy such canceled Notes. The Company may not issue new Notes
to replace Notes it has redeemed or paid or that have been delivered to the
Trustee for cancellation.
SECTION 2.11 Payment of Interest; Interest Rights Preserved. Interest
(including Additional Amounts, if any, and Special Interest, if any) on any Note
and any other amounts
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which are payable, and are punctually paid or duly provided for, on any Interest
Payment Date, which shall be June 1 or December 1, commencing on December 1,
1996, shall be paid to the Person in whose name such Note is registered at the
close of business on the Record Date for such interest payment, which shall be
May 15 or November 15 (whether or not a Business Day) immediately preceding such
Interest Payment Date.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Record Date, and, except as hereinafter provided, such Defaulted
Interest, together with any interest payable on such Defaulted Interest may be
paid by the Company, at its election, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the
Persons in whose names the Notes are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on the Notes and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest (including Additional Amounts, if
any, and Special Interest, if any) or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided
in this clause (a). Thereupon the Trustee shall fix a Special Record
Date for the payment of such Default Interest which shall be not more
than 15 calendar days and not less than 10 calendar days prior to the
date of the proposed payment and not less than 10 calendar days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be sent, first class mail, postage prepaid, to
each Holder at such Holder's address as it appears in the Security
Register, not less than 10 calendar days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Notes are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause
(b).
(b) The Company may make payment of any Defaulted Interest,
(including Additional Amounts, if any, and Special Interest, if any)
and any interest payable on such Defaulted Interest, on the Notes in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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Subject to the foregoing provisions of this Section 2.11, each Note
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Note, shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note.
SECTION 2.12 Authorized Denominations. The Notes shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.13 Computation of Interest, etc.
(a) Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months. The Notes will commence to accrue
interest from the Issue Date, at a rate computed as if the Notes had
been issued bearing interest at the rate of 9% per annum on May 31,
1996 (being the rate of 9.5858% per annum from the Issue Date through
November 30, 1996), and the Notes shall bear interest at the rate of 9%
per annum from December 1, 1996.
(b) For the purposes of the Interest Act (Canada) and
disclosure thereunder, whenever interest, Additional Amounts, Special
Interest, or Defaulted Interest or interest on Defaulted Interest
relating to the Notes, is to be calculated on the basis of a year of
360 days or any other period of time that is less than a calendar year,
the yearly rate of interest to which the rate determined pursuant to
such calculation is equivalent is the rate so determined multiplied by
the actual number of days in the calendar year in which the same is to
be ascertained and divided by either 360 or such other period of time,
as the case may be. The rate accruing on the Notes for payment purposes
shall be determined in accordance with Subsection 2.13(a) hereof, and
for greater certainty for purposes of the Interest Act (Canada), for
the period from the Issue Date through November 30, 1996 the interest
rate hereunder shall be 9.5858% per annum, subject to the initial
sentence of this Section 2.13(b).
(c) Notwithstanding any other term of this Indenture, the
Company shall not be obliged to pay any interest or other amounts under
or in connection with this Indenture in excess of the amount or rate
permitted under or consistent with applicable law. In particular, the
Company shall not be obliged to pay any interest or other amounts which
would result in the receipt by the Holders of interest on credit
advanced at a rate in excess of the rate permitted under the Criminal
Code (Canada).
SECTION 2.14 Persons Deemed Owners. Prior to the due presentation for
registration of transfer of any Notes, the Company, the Guarantors, the Trustee,
the Paying Agent, the Registrar and any co-Registrar may deem and treat the
person in whose name a Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of, premium, if any, and interest
(including Special Interest, if any, but excluding Additional Amounts, if any,
which shall be determined by the beneficial ownership of such Note) on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
none of
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the Company, the Guarantors, the Trustee, the Paying Agent, the Registrar or any
co-Registrar shall be affected by notice to the contrary.
SECTION 2.15 CUSIP Numbers. The Company, in issuing the Notes, may use
a "CUSIP" number for each series of Notes and, if so, the Trustee shall use the
relevant CUSIP number in any notices to Holders as a convenience to such
Holders; provided, that any such notice may state that no representation is made
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee of
any change in any CUSIP number used.
ARTICLE III
REDEMPTION
SECTION 3.1 Notice to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.7 and the Notes, it
shall furnish an Officers' Certificate to the Trustee setting forth the
Redemption Date, the principal amount of Notes to be redeemed and the Redemption
Price. The Company shall give each such notice to the Trustee at least 60
calendar days prior to the Redemption Date unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers' Certificate and
an Opinion of Counsel from the Company to the effect that such redemption will
comply with any conditions to such redemption set forth herein and in the Notes.
SECTION 3.2 Selection of Notes to be Redeemed. If less than all the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed on a pro rata basis, or by any other method which the Trustee shall
determine to be fair and appropriate and which complies with any stock exchange
and other applicable requirements, provided that the Trustee may select for
redemption in part only Notes in denominations larger than $1,000. In selecting
Notes to be redeemed pursuant to this Section 3.2, the Trustee shall make such
adjustments, reallocations and eliminations as it shall deem proper so that the
principal amount of each Note to be redeemed shall be $1,000 or an integral
multiple thereof, by increasing, decreasing or eliminating any amount less than
$1,000 which would be allocable to any Holder. If the Notes to be redeemed are
Certificated Notes, the Certificated Notes to be redeemed shall be selected by
the Trustee by prorating, as nearly as may be, or by any other method which the
Trustee shall determine to be fair and appropriate and which complies with any
stock exchange and other applicable requirements, the principal amount of
Certificated Notes to be redeemed among the Holders of Certificated Notes
registered in their respective names. The Trustee in its discretion may
determine the particular Notes (if there are more than one) registered in the
name of any Holder which are to be redeemed, in whole or in part. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed.
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SECTION 3.3 Notice of Redemption. At least 30 calendar days but not
more than 60 calendar days before a Redemption Date, the Company shall send a
notice of redemption, first class mail, postage prepaid, to Holders of Notes to
be redeemed at the addresses of such Holders as they appear in the Note
Register.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid interest to
be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(e) if any Global Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, the Global Note, with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unredeemed portion, will be returned
to the Holder thereof;
(f) if any Certificated Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the Redemption
Date, a new Certificated Note or Certificated Notes in principal amount equal to
the unredeemed portion will be issued;
(g) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be redeemed;
(h) the conversion price, the date on which the right to convert the
Notes will terminate and the place or places where such Notes may be surrendered
for conversion;
(i) that, unless the Company defaults in making the redemption payment,
interest (including Additional Amounts, if any, and Special Interest, if any)
on, and any other amounts due in respect of the Notes (or portions thereof)
called for redemption shall cease to accrue and such Notes (or portions thereof)
shall cease to accrue such interest on and after the Redemption Date;
(j) the paragraph of the Notes and the Section of the Indenture
pursuant to which the Notes are being called for redemption; and
(k) any other information necessary to enable Holders to comply with
the notice of redemption.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.3 in a timely manner, provided that the Company shall give the Trustee
not less than 45 calendar days notice of such election prior to the Redemption
Date, unless the Trustee consents to a shorter period.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 3.3 hereof, Notes called for redemption
shall become due and payable on the Redemption Date and at the Redemption Price
stated in such notice, including interest, Additional Amounts and Special
Interest, if any, and any other amounts due and unpaid on the Redemption Date
(but for greater certainty, not including any amount on account of any Reset
Penalty); provided that if the Redemption Date is after a regular Record Date
and on or prior to the Interest Payment Date, the accrued interest (including
Additional Amounts, if any, and Special Interest, if any) and any other amounts
payable shall be payable to the Holder of the redeemed Note on the relevant
Record Date; and provided, further, that if a Redemption Date is not a Business
Day, payment shall be made on the next succeeding Business Day and no interest
shall accrue for the period from such Redemption Date to such succeeding
Business Day. Upon surrender to the Paying Agent, such Notes shall be paid at
the Redemption Price stated in such notice. Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
SECTION 3.5 Deposit of Redemption Price. On or prior to 10:00 a.m., New
York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent money, in federal or other immediately available funds, sufficient
to pay the Redemption Price on all Notes to be redeemed on that date other than
Notes or portions of Notes called for redemption on such date which have been
delivered by the Company to the Trustee for cancellation and other than any
Notes or portions of Notes called for redemption on such date which have been
converted prior to such date.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article III, interest (and Additional Amounts and
Special Interest, if any) on and any other amounts due in respect of the Notes
to be redeemed on the applicable Redemption Date shall cease to accrue from and
after such date and such Notes or portions thereof shall be deemed not to be
entitled to any benefit under this Indenture except to receive payment of the
Redemption Price on the Redemption Date. If any Note called for redemption shall
not be so paid upon surrender for redemption, then, from the Redemption Date
until such principal is paid, interest (and Additional Amounts and Special
Interest, if any) shall be paid on the unpaid principal and, to the extent
permitted by law, on any accrued but unpaid interest thereon and on any other
amounts due in respect of the Notes, in each case at the rate prescribed
therefor by such Notes.
SECTION 3.6 Notes Redeemed in Part. Upon surrender and cancellation of
a Certificated Note that is redeemed in part, the Company shall issue and the
Trustee shall authenticate and deliver to the surrendering Holder (at the
Company's expense) a new
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Certificated Note equal in principal amount to the unredeemed portion of the
Certificated Note surrendered and canceled, provided that each such Certificated
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is redeemed in part, the Paying
Agent shall forward such Global Note to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount of such Global Note to an
amount equal to the unredeemed portion of such Global Note, as provided in
Section 2.5(c) hereof.
SECTION 3.7 Optional Redemption. (a) Except as set forth in subsection
(c) of this Section 3.7, the Company shall not have the option to redeem the
Notes pursuant to this Section 3.7 prior to June 1, 2000. During the period from
June 1, 2000 to May 31, 2002, the Company may redeem all but not less than all
of the Notes pursuant to subsection (b) of this Section 3.7. Thereafter, the
Company shall have the option to redeem the Notes, in whole or in part upon not
less than 30 calendar days' nor more than 60 calendar days' notice, at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, Additional Amounts, if any, and Special Interest, if
any, to the applicable Redemption Date, and any other amounts due in respect
thereof (but, for greater certainty, not including any amount on account of any
Reset Penalty).
(b) During the period from June 1, 2000 to May 31, 2002, the Company
shall have the option to redeem all, but not less than all, of the then
outstanding Notes, upon not less than 30 or more than 60 days notice, if the
Closing Price of the Common Stock equals or exceeds 150% of the conversion price
for a period of thirty (30) consecutive days, at a redemption price equal to
100% of the principal thereof, plus accrued and unpaid interest, if any,
Additional Amounts, if any, and Special Interest, if any, to the applicable
Redemption Date, and other amounts due in respect thereof (but, for greater
certainty, not including any amount on account of any Reset Penalty). If the
Company determines to exercise its option to redeem the Notes pursuant to this
Section 3.7(b), the Company shall cause to be filed at each office or agency
maintained pursuant to Section 4.2 and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Note Register a notice
notifying such Holders that the Company has exercised its redemption right
pursuant to this Section 3.7(b).
(c) The Notes may be redeemed, at the option of the Company, in whole
but not in part, upon not less than 30 or more than 60 days' notice to the
Holders in accordance with Section 15.2 hereof, at a Redemption Price equal to
the principal amount thereof, plus accrued and unpaid interest, if any
(including Additional Amounts, if any, and Special Interest, if any), to the
Redemption Date fixed therefor (subject to the right of Holders of record on the
relevant Record Date to receive interest (including Additional Amounts, if any,
and Special Interest, if any) due on the Interest Payment Date that is on or
prior to the Redemption Date) and any other amounts due in respect of the Notes
if, as a result of any change in or amendment to the laws or the regulations or
rulings promulgated thereunder of Canada, Cyprus, the Russian Federation or any
other jurisdiction with which the Company or any Guarantor has any connection
(other than a connection arising as a result of a continuance or a merger or
consolidation of the
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Company with or into a newly formed corporation solely for the purpose of moving
the Company's domicile out of Canada) or any political subdivision thereof or
any authority thereof or having power to tax therein, or any change in the
application or official interpretation of such laws or regulations, or any
change in administrative policy or assessing practice of the applicable taxing
authority, which change or amendment becomes effective on or after May 24, 1996,
the Company or the Guarantors (if the Guarantees are called) are or would be
required on the next succeeding Interest Payment Date to pay Additional Amounts
with respect to the Notes or under the Guarantees and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Company or the Guarantors, as the case may be. The Company will
also pay to holders on the Redemption Date any Additional Amounts payable with
respect to that period ending on the Redemption Date. Prior to the publication
of any notice of redemption pursuant to this provision, which in no event will
be given earlier than 90 days prior to the earliest date on which the Company or
the Guarantors, as the case may be, would be required to pay such Additional
Amounts were a payment in respect of the Notes then due, the Company shall
deliver to the Trustee (i) an Officers' Certificate stating that the obligation
to pay such Additional Amounts cannot be avoided by the Company or the
Guarantors, as the case may be, taking reasonable measures and (ii) an Opinion
of Counsel, independent of the Company and the Guarantors and approved by the
Trustee, to the effect that the Company or the Guarantors have or will become
obligated to pay such Additional Amounts as a result of such change or
amendment. Such notice, once delivered by the Company to the Trustee, will be
irrevocable. The Trustee shall accept such Officers' Certificate and Opinion of
Counsel as sufficient evidence of the satisfaction of the condition precedent
set forth in clauses (i) and (ii) above, in which event it shall be conclusive
and binding on the Holders. For greater certainty, any requirement to pay
Additional Amounts in respect of any Reset Penalty will not entitle the Company
to redeem the Notes under this Section 3.7(c).
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Notes. The Company shall promptly pay the
principal of, premium, if any, and interest (including Additional Amounts, if
any, and Special Interest, if any) on, and any other amounts due in respect of,
the Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal, premium, interest and such other amounts shall be
considered paid on the date due if, on or before 10:00 a.m., New York City time,
on such date, the Trustee or the Paying Agent, other than the Company or a
Guarantor or an Affiliate of the Company or a Guarantor, holds in accordance
with this Indenture money to pay all principal, premium, interest (including
Additional Amounts, if any, and Special Interest, if any) or other amounts then
due.
To the extent lawful, the Company shall pay interest on (i) any overdue
principal of (and premium, if any, on) the Notes, at the interest rate borne on
the Notes plus 1% per annum and (ii) Defaulted Interest (without regard to any
applicable grace period), and (iii) any Reset Penalty
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that has not been paid when due, at the same rate. The Company's obligation
pursuant to the previous sentence shall apply whether such overdue amount is due
at its Stated Maturity, as a result of the Company's obligations pursuant to
Section 3.7, Section 4.7, Section 4.8 or Section 4.14 hereof, or otherwise.
SECTION 4.2 Maintenance of Office or Agency. The Company shall maintain in
the Borough of Manhattan, The City of New York, an office or agency where Notes
may be presented or surrendered for payment or for conversion, where Notes may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all of such purposes, and may from time to
time rescind such designations; provided that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation and any change in
the location of any such other office or agency.
SECTION 4.3 Money for the Note Payments to be Held in Trust. If the
Company, any Guarantor, any Restricted Subsidiary, or any of their respective
Affiliates shall at any time act as Paying Agent with respect to the Notes, such
Paying Agent shall, on or before each due date of the principal of (and premium,
if any), interest on or other amounts in respect of any of the Notes, segregate
and hold in trust for the benefit of the Persons entitled thereto money
sufficient to pay the principal (and premium, if any), interest (including
Additional Amounts, if any and Special Interest, if any) or other amounts so
becoming due until such money shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to the Notes, it shall, prior to or on each due date of the principal of (and
premium, if any), interest on or other amounts in respect of any of the Notes,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any), interest (including Additional Amounts, if any and Special Interest, if
any) or other amounts so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium, if any, or interest
(including Additional Amounts, if any and Special Interest, if any) or other
amounts, and (unless such Paying Agent is the Trustee) the Paying Agent shall
promptly notify the Trustee of the Company's action or failure so to act.
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SECTION 4.4 Corporate Existence. Subject to the provisions of Article V
hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company and any such Restricted Subsidiary other
than the Leasing Companies and NWE Cyprus shall not be required to preserve the
corporate existence of any such Restricted Subsidiary other than the Leasing
Companies and NWE Cyprus or any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders of Notes.
SECTION 4.5 Maintenance of Property. The Company shall cause all Property
used in the conduct of its business or the business of any of its Restricted
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as, in the judgment of
the Company, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section 4.5 shall prevent the Company from discontinuing
the operation or maintenance of any of such Property if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any of its Restricted Subsidiaries and not disadvantageous in any
material respect to the Holders of the Notes.
SECTION 4.6 Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the Property of the Company or any of its
Restricted Subsidiaries; provided that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.7 Repurchase at the Option of Holders upon a Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Company to purchase such Holder's Notes, in whole
or in part in a principal amount that is an integral multiple of $1,000,
pursuant to an irrevocable and unconditional offer described in Section 4.7(b)
hereof (the "Change of Control Offer"), at a purchase price (the "Change of
Control Purchase Price") in cash equal to 101 percent of the principal amount of
such Notes (or portions thereof) on any Change of Control Payment Date plus
accrued and unpaid interest, if any, and Additional Amounts, if any, and Special
Interest, if any, to the Change of Control Payment Date.
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(b) Within 30 calendar days of the date of any Change of Control, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made pursuant to this Section 4.7, and that all Notes
properly tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Notes are to
be purchased pursuant to the Change of Control Offer (the "Change of
Control Payment Date"), which date shall be a date occurring no earlier
than 30 calendar days nor later than 40 calendar days subsequent to the
date such notice is mailed;
(iii) that any Notes or portions thereof not properly tendered will
continue to accrue interest and Additional Amounts and Special Interest,
if applicable and will continue to have conversion rights and rights to
receive Reset Penalties, if any;
(iv) that, unless the Company defaults in the payment of the Change
of Control Purchase Price with respect thereto, all Notes or portions
thereof accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest and Additional Amounts and Special Interest, if
applicable, from and after the Change of Control Payment Date and will
cease to have any conversion rights and rights to receive Reset Penalties,
if any;
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a Change of Control Offer will be required to
surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of such Notes completed, to the Paying Agent at
the address specified in the notice, prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter, setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election to have
such Notes or portions thereof purchased pursuant to the Change of Control
Offer;
(vii) that any Holder electing to have Notes purchased pursuant to
the Change of Control Offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to Section
2.6(b), that any Holder of Certificated Notes whose Certificated Notes are
being purchased only in part will be issued new Certificated Notes equal
in principal amount to the unpurchased
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portion of the Certificated Note or Notes surrendered, which unpurchased
portion will be equal in principal amount to $1,000 or an integral
multiple thereof;
(ix) that the Trustee will return to the Holder of a Global Note
that is being purchased in part, such Global Note with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to
the unpurchased portion of such Global Note; and
(x) the instructions and any other information necessary to enable
any Holder to accept a Change of Control Offer or effect withdrawal of
such acceptance.
(c) On or before the Change of Control Payment Date, the Company shall (i)
accept for payment any Notes or portions thereof properly tendered pursuant to
the Change of Control Offer; (ii) irrevocably deposit with the Paying Agent, by
10:00 a.m., New York City time, on such date, in immediately available funds, an
amount equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so accepted, including interest, Additional Amounts and Special
Interest, if applicable; and (iii) deliver, or cause to be delivered, to the
Trustee the Notes so accepted together with an Officers' Certificate listing the
Notes or portions thereof tendered to the Company and accepted for payment. The
Paying Agent shall promptly send by first class mail, postage prepaid, to each
Holder of Notes or portions thereof so accepted for payment, payment in an
amount equal to the Change of Control Purchase Price for such Notes or portions
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 4.7, the Trustee shall act as the Paying
Agent.
(d) Upon surrender and cancellation of a Certificated Note that is
purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Note, a new Certificated Note equal in
principal amount to the unpurchased portion of such surrendered Certificated
Note; provided that each such new Certificated Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant to a
Change of Control Offer, the Paying Agent shall forward such Global Note to the
Trustee who shall make a notation on Schedule A thereof to reduce the principal
amount of such Global Note to an amount equal to the unpurchased portion of such
Global Note, as provided in Section 2.5(c) hereof.
(e) The Company shall comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws or regulations, to the extent
such laws and regulations are applicable, in connection with the purchase of
Notes pursuant to a Change of Control Offer.
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SECTION 4.8 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly to, consummate any Asset Sale, unless:
(i) no Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof;
(ii) the Company or such Restricted Subsidiary, as the case may be,
receives net consideration at the time of such Asset Sale at least equal
to the Fair Market Value (as evidenced by a Board Resolution delivered to
the Trustee) of the Property or assets sold or otherwise disposed of;
(iii) at least 75 percent of the consideration received in respect
of such Asset Sale by the Company or such Restricted Subsidiary, as the
case may be, for such Property or assets consists of Cash Proceeds; and
(iv) the Company or such Restricted Subsidiary, as the case may be,
uses the Net Cash Proceeds from such Asset Sale in the manner set forth in
Section 4.8(b) hereof.
To the extent that the assets which are the subject of any Asset
Sale constitute Collateral, all proceeds thereof shall, to the extent permitted
by law, be subject to a perfected Lien in favor of the Trustee or a collateral
agent for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Senior Note Trustee and the
equal and ratable benefit of the Holders of the Senior Notes, which Lien shall
have the same priority as the Lien on the Collateral which was the subject of
such Asset Sale, and all Net Cash Proceeds from such an Asset Sale shall be
deposited in the Company Convertible Note Escrow Account. To the extent that the
assets which are the subject of any Asset Sale constitute Senior Note
Collateral, all proceeds thereof shall, to the extent permitted by law, be
subject to a perfected Lien in favor of the Senior Note Trustee or a collateral
agent for the benefit of the Senior Note Trustee and the equal and ratable
benefit of the Holders of Senior Notes and for the benefit of the Convertible
Note Trustee and the equal and ratable benefit of the Holders of Convertible
Notes, which Lien shall have the same priority as the Lien on the Senior Note
Collateral which was the subject of such Asset Sale, and all Net Cash Proceeds
from such an Asset Sale shall be deposited in the Company Senior Note Escrow
Account or a Leasing Company Escrow Account, if applicable, unless the Senior
Notes are not outstanding and the Senior Note Indenture has been satisfied and
discharged, in which case such deposit shall be made in the Company Convertible
Note Escrow Account. To the extent that assets which are the subject of any
Asset Sale constitute Telecommunications Assets subject to a Telecommunications
Assets Lease which is Senior Note Collateral, all proceeds thereof shall, to the
extent permitted by applicable law, be subject to a perfected Lien in favor of
the Senior Note Trustee or a collateral agent for the benefit of the Senior Note
Trustee and the equal and ratable benefit of the Holders of Senior Notes and for
the benefit of the Convertible Note Trustee and the equal and ratable benefit of
the Holders of Convertible Notes, which Lien shall
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have the same priority as the Lien on such Telecommunications Asset Leases
governing the Telecommunications Assets which were the subject of such Asset
Sale, and all Net Cash Proceeds from such an Asset Sale of Telecommunications
Assets must be deposited in the applicable Leasing Company Escrow Account unless
the Senior Notes are not outstanding and the Senior Note Indenture has been
satisfied and discharged, in which case such deposit shall be made in the
Company Convertible Note Escrow Account.
(b) (i) To the extent that assets subject to an Asset Sale consist
of Collateral, the Company shall have the option, within 365 days of such
Asset Sale, to reinvest the Net Cash Proceeds (or any portion thereof)
from such Asset Sale in another asset or business in the same or similar
lines of business as the Company and its Restricted Subsidiaries (the
"Replacement Assets") (or enter into a binding agreement to reinvest such
Net Cash Proceeds (or any portion thereof) prior to the end of such
365-day period, provided that such reinvestment is completed within 90
days after the end of such 365-day period); provided that such Replacement
Assets are subject to a Lien in favor of the Trustee or a collateral agent
for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Senior Note Trustee and
the equal and ratable benefit of the Holders of the Senior Notes, which
Lien has the same priority as had the Lien on such Collateral which was
the subject of such Asset Sale.
(ii) To the extent that assets subject to an Asset Sale consist of
Senior Note Collateral other than a Telecommunications Asset Lease, the
Company shall have the option, within 365 days of such Asset Sale, to
reinvest the Net Cash Proceeds (or any portion thereof) from such Asset
Sale in Replacement Assets (or enter into a binding agreement to reinvest
such Net Cash Proceeds (or any portion thereof) prior to the end of such
365-day period, provided that such reinvestment is completed within 90
days after the end of such 365-day period); provided that such Replacement
Assets are subject to a Lien in favor of the Senior Note Trustee or a
collateral agent for the benefit of the Senior Note Trustee and for the
equal and ratable benefit of the Holders of Senior Notes and for the
benefit of the Trustee and the equal and ratable benefit of Holders of
Notes, which Lien has the same priority as had the Lien on such Senior
Note Collateral which was the subject of such Asset Sale.
(iii) To the extent that assets subject to an Asset Sale constitute
Telecommunications Assets subject to a Telecommunications Asset Lease, the
Company shall have the option, within 365 days of such Asset Sale, to
cause the applicable Leasing Company to reinvest the Net Cash Proceeds
from such Asset Sale (or any portion thereof) in Telecommunications Assets
to be leased pursuant to a new Telecommunications Asset Lease
("Replacement Telecommunication Assets") (or enter into, or cause the
applicable Leasing Company to enter into, a binding agreement to reinvest
such Net Cash Proceeds (or any portion thereof) prior to the end of such
365-day period, provided that such reinvestment is completed within 90
days after the end of such 365-day period), and with respect to any
proceeds of insurance paid on account of the loss of or damage to any such
Telecommunications Assets, or compensation or other
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proceeds for any such Telecommunications Assets taken by condemnation,
eminent domain or similar proceedings, such Net Cash Proceeds are applied
as provided above or applied to reimburse the applicable Leasing Company
for expenditures made, and costs incurred, to repair, rebuild, replace or
restore the Telecommunications Assets subject to such loss, damage or
taking.
(iv) To the extent that assets subject to an Asset Sale do not
constitute Collateral, Senior Note Collateral or Telecommunications Assets
subject to a Telecommunications Asset Lease, the Company shall have the
option within 365 days of such Asset Sale (x) to reinvest (or enter into a
binding agreement to reinvest prior to the end of such 365-day period,
provided that such reinvestment is completed within 90 days after the end
of such 365-day period) an amount equal to the Net Cash Proceeds (or any
portion thereof) from such Asset Sale in Replacement Assets, and/or (y)
apply an amount equal to such Net Cash Proceeds (or remaining Net Cash
Proceeds) to the permanent reduction of Indebtedness of the Company (other
than Indebtedness to a Restricted Subsidiary) that is pari passu in right
of payment with the Notes or to the permanent reduction of Indebtedness of
any Restricted Subsidiary that is pari passu in right of payment with the
Guarantees, if applicable (other than Indebtedness owed to, or Preferred
Stock owned by, the Company or a Restricted Subsidiary of the Company)
and/or (z) repurchase Senior Notes pursuant to a "Senior Note Asset Sale
Offer" (pursuant to and as defined in the Senior Note Indenture for the
purposes thereof as an "Asset Sale Offer") within 545 days of such Asset
Sale.
(v) Any Net Cash Proceeds from any Asset Sale that are not used to
reinvest in Replacement Assets or Replacement Telecommunication Assets
and/or to reduce pari passu Indebtedness of the Company or the Guarantors
to the extent permitted by this Section 4.8(b) shall constitute "Excess
Proceeds"; provided that, with respect to any Asset Sale by a Person which
is not a Wholly-Owned Restricted Subsidiary, the amount of unused Net Cash
Proceeds which shall constitute Excess Proceeds to be used to make an
Asset Sale Offer (as defined in Section 4.8(c) below) shall be limited to
the percentage of such unused Net Cash Proceeds received by such Person
equal to a percentage determined by dividing the direct or indirect
interest of the Company in the Capital Stock of such Person by the total
then outstanding Capital Stock of such Person determined as of the date of
such Asset Sale.
(c) Subject to the limitations set out in Section 4.8(d) below, if at any
time the aggregate amount of Excess Proceeds exceeds $5,000,000, the Company
shall, within 30 days thereafter, use such Excess Proceeds to make an offer to
purchase Notes (an "Asset Sale Offer") on a pro rata basis from all Holders of
Notes in an aggregate principal amount equal to the maximum principal amount
that may be purchased out of Excess Proceeds, at a purchase price (the "Offer
Purchase Price") in cash equal to 100% of the principal amount thereof on any
purchase date, plus accrued and unpaid interest, if any, Additional Amounts, if
any, Special Interest, if any, and other amounts due with respect to the Notes
to the Asset Sale Payment Date, in accordance with the procedures set forth in
this Section 4.8; provided that, if any such
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assets subject to such Asset Sale constitute Senior Note Collateral or
Telecommunication Assets subject to a Telecommunications Asset Lease, the
Company shall be required to apply that portion of such Excess Proceeds
attributable to such Asset Sale of Senior Note Collateral, as is permitted to be
so applied under Section 4.8(d) of the Senior Note Indenture (the "Permitted
Portion"), first, to a Senior Note Asset Sale Offer unless the Senior Notes are
no longer outstanding and the Senior Note Indenture has been satisfied and
discharged and, to the extent that the aggregate amount paid pursuant to the
Senior Note Asset Sale Offer is less than such Permitted Portion, then to an
Asset Sale Offer; and provided further that if such assets subject to such Asset
Sale are subject to a Lien which is and is permitted to be pari passu with the
Lien in favor of the Trustee or a collateral agent, the Company shall only be
required to apply a pro rata portion of such Excess Proceeds to the Asset Sale
Offer. To the extent that assets subject to an Asset Sale are not and are not
required to be subject to a Lien in favor of the Trustee or the Senior Note
Trustee, the Company may apply 100% of the Excess Proceeds thereof to the
prepayment of obligations outstanding in respect of Indebtedness that is pari
passu to the Notes or the Guarantees to the extent required thereunder; provided
that no such Excess Proceeds may be applied to the prepayment of the Senior
Notes except pursuant to a Senior Note Asset Sale Offer. If (x) no obligations
are outstanding in respect of or under such pari passu Indebtedness or (y) the
holders of such pari passu Indebtedness entitled to receive payment elect not to
receive the payments provided for in the previous sentence, or (z) the
application of such Net Cash Proceeds results in the complete prepayment of all
such Indebtedness, then such Excess Proceeds or any remaining portion thereof
will be required to be applied by the Company to an Asset Sale Offer subject to
the limitations of Section 4.8(d) below. Subject to the Company's complying with
the provisions of the Senior Note Indenture and to the limitations set out in
Section 4.8(d) below, the Company may at any time by delivering an Officers'
Certificate and Board Resolution to the Trustee waive its reinvestment options
and proceed to make an Asset Sale Offer, notwithstanding that any applicable
period for reinvestment shall not have expired.
(d) Notwithstanding Section 4.8(c) above and Section 4.8(e) below, the
Company will not be obligated to repurchase Notes in connection with an Asset
Sale Offer representing in the aggregate more than 25% of the original aggregate
principal amount of the Notes (which original aggregate principal amount shall
for these purposes be $26,500,000, without any adjustment whatsoever) prior to
the date following the Five Year Date, and the original aggregate principal
amount of Notes repurchased in connection with any Asset Sale Offer having a
purchase date prior to the date following the Five Year Date shall represent no
more than 25% of the original aggregate principal amount of the Notes less the
aggregate principal amount of Notes purchased pursuant to Asset Sale Offers
relating to all prior Asset Sales. To the extent that the amount of Excess
Proceeds exceeds the amount of Notes purchased because of the limitation imposed
by the immediately preceding sentence (the amount of such excess being the
"Aggregate Unused Proceeds"), such Aggregate Unused Proceeds shall constitute
Excess Proceeds for purposes of the first Asset Sale Offer that is made after
the Five Year Date and, in the event the amount of the Aggregate Unused Proceeds
exceeds $5,000,000, promptly after the Five Year Date, the Company shall
commence an Asset Sale Offer on a pro rata basis for an aggregate principal
amount of Notes equal to the Aggregate Unused Proceeds (and any other Excess
Proceeds that arise between the Five Year Date and such Asset Sale Offer) at a
purchase price equal to 100%
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of the principal amount of the Notes, plus accrued interest, if any, Special
Interest, if any, Additional Amounts, if any, and other amounts due with respect
thereto (but, for greater certainty, not including any amount on account of any
Reset Penalty), to the date of purchase.
(e) Subject to the provisions of Section 4.8(d) above, within 30 calendar
days of the date the amount of Excess Proceeds exceeds $5,000,000, the Company,
or the Trustee at the request and expense of the Company, shall send to each
Holder by first class mail, postage prepaid, a notice prepared by the Company
stating:
(i) that an Asset Sale Offer is being made pursuant to this Section
4.8, and that all Notes properly tendered will be accepted for payment,
subject to proration in the event the amount of Excess Proceeds is less
than the aggregate Offer Purchase Price of all Notes properly tendered
pursuant to the Asset Sale Offer;
(ii) the Asset Sale Purchase Price, the amount of Excess Proceeds
that are available to be applied to purchase tendered Notes, and the date
Notes are to be purchased pursuant to the Asset Sale Offer (the "Asset
Sale Payment Date"), which date shall be a date no earlier than 30
calendar days and not later than 40 calendar days subsequent to the date
such notice is mailed;
(iii) that any Notes or portions thereof not properly tendered or
accepted for payment will continue to accrue interest and Additional
Amounts, if any, and Special Interest, if any, and will continue to have
conversion rights and the right, if any, to receive Reset Penalties;
(iv) that, unless the Company defaults in the payment of the Offer
Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest and Additional Amounts, if any, and Special Interest, if
any, from and after the Asset Sale Payment Date and will cease to have any
conversion rights and the right, if any, to receive Reset Penalties;
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to the Asset Sale Holder will be required to surrender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice, prior to the close of business on the third
Business Day preceding the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale Payment Date, a telegram,
telex, facsimile transmission or letter, setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election to have
such Notes or portions thereof purchased pursuant to the Asset Sale Offer;
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(vii) that any Holder electing to have Notes purchased pursuant to
the Asset Sale Offer must specify the principal amount that is being
tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to Section
2.6(b), that any Holder of Certificated Notes whose Certificated Notes are
being purchased only in part will be issued new Certificated Notes equal
in principal amount to the unpurchased portion of the Certificated Note or
Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global Note
that is being purchased in part, such Global Note with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to
the unpurchased portion of such Global Note; and
(x) the instructions and any other information necessary to enable
any Holder to tender Notes and to have such Notes purchased, or to
withdraw such tender, pursuant to this Section 4.8.
(f) If the aggregate Asset Sale Purchase Price of the Notes surrendered by
Holders exceeds the amount of Excess Proceeds that may, under Section 4.8(d)
hereof be applied to the Asset Sale Offer, as indicated in the notice required
by Section 4.8(e) hereof, the Trustee shall select the Notes to be purchased on
a pro rata basis based on the principal amount of the Notes tendered, with such
adjustments as may be deemed appropriate by the Trustee to be fair and
appropriate and to comply with any stock exchange and other applicable
requirements, so that only Notes in denominations of $1,000 or integral
multiples thereof shall be purchased.
(g) On or before the Asset Sale Payment Date, the Company shall (i) accept
for payment any Notes or portions thereof properly tendered and selected for
purchase pursuant to the Asset Sale Offer and Section 4.8(f) hereof; (ii)
irrevocably deposit with the Paying Agent, by 10:00 a.m., New York City time, on
such date, in immediately available funds, an amount equal to the Asset Sale
Purchase Price in respect of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee the Notes so accepted
together with an Officers' Certificate listing the Notes or portions thereof
tendered to the Company and accepted for payment. The Paying Agent shall
promptly send by first class mail, postage prepaid, to each Holder of Notes or
portions thereof so accepted for payment, payment in an amount equal to the
Asset Sale Purchase Price for such Notes or portions thereof. The Company shall
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Payment Date. For purposes of this Section 4.8,
the Trustee shall act as the Paying Agent.
(h) Upon surrender and cancellation of a Certificated Note that is
purchased in part, the Company shall promptly issue and the Trustee shall
authenticate and deliver to the surrendering Holder of such Certificated Note a
new Certificated Note equal in principal amount to the unpurchased portion of
such surrendered Certificated Note; provided that each such new Certificated
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
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Upon surrender of a Global Note that is purchased in part pursuant to an
Asset Sale Offer, the Paying Agent shall forward such Global Note to the Trustee
who shall make a notation on Schedule A thereof to reduce the principal amount
of such Global Note to an amount equal to the unpurchased portion of such Global
Note, as provided in Section 2.5(c) hereof.
(i) Upon completion of an Asset Sale Offer (including payment of the Asset
Sale Purchase Price for accepted Notes), any surplus Excess Proceeds that were
subject to such offer shall cease to be Excess Proceeds, and the Company may
then use such amounts for general corporate purposes. For greater certainty,
such Excess Proceeds do not include any Aggregate Unused Proceeds until such
Aggregate Unused Proceeds become Excess Proceeds pursuant to Section 4.8(d)
hereof.
(j) The Company shall comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws or regulations, to the extent
such laws and regulations are applicable, in connection with the purchase of
Notes pursuant to an Asset Sale Offer.
SECTION 4.9 Limitation on Issuances of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary which is
not a Guarantor on the Issue Date to guarantee, directly or indirectly, any
Indebtedness of the Company ("Guaranteed Indebtedness") unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guarantee. If the Guaranteed Indebtedness is pari passu
with the Notes or a Guarantee, then the guarantee of such Guaranteed
Indebtedness shall be pari passu with or subordinated to such Guarantee; and if
the Guaranteed Indebtedness is subordinated to the Notes or a Guarantee, then
the guarantee of such Guaranteed Indebtedness shall be subordinated to the
Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes or such Guarantee.
(b) Notwithstanding the provisions of Section 4.10(a) hereof, any
Guarantee by a Restricted Subsidiary other than a Leasing Company, NWE Cyprus,
WTC, BCL or a future Wholly-Owned Restricted Subsidiary of the Company shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon the release or discharge of the guarantee which resulted in
the creation of such Restricted Subsidiary's Guarantee, except a discharge or
release by, or as a result of, payment under such guarantee.
SECTION 4.10 Restricted and Unrestricted Subsidiaries. (a) The Company may
designate a Subsidiary (including a newly formed or newly acquired Subsidiary)
of the Company or any of its Restricted Subsidiaries, other than the Leasing
Companies, NWE Cyprus, WTC and Technocom, as an Unrestricted Subsidiary,
provided that (i) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (x) is guaranteed by the
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Company or any Restricted Subsidiary, (y) is recourse to or obligates the
Company or any Restricted Subsidiary in any way or (z) subjects any Property or
assets of the Company or any Restricted Subsidiary, directly or indirectly,
contingent or otherwise, to the satisfaction thereof, (ii) such Subsidiary does
not have any obligations which, if in default, would result in a cross default
on Indebtedness of the Company or a Restricted Subsidiary (other than
Indebtedness to the Company or a Restricted Subsidiary) and (iii) such
Subsidiary has total assets of $50,000 or less or such designation is effective
immediately upon such Person's becoming a Subsidiary. Notwithstanding the
foregoing, no Subsidiary may be designated an Unrestricted Subsidiary if such
Subsidiary, directly or indirectly, held Capital Stock of a Restricted
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or any of its Restricted Subsidiaries shall
be classified as a Restricted Subsidiary thereof. Except for Restricted
Subsidiaries having total assets of $50,000 or less, no Restricted Subsidiary
may be redesignated as an Unrestricted Subsidiary.
(b) An Unrestricted Subsidiary may be redesignated as a Restricted
Subsidiary. The designation of a Subsidiary as an Unrestricted Subsidiary or the
designation of an Unrestricted Subsidiary as a Restricted Subsidiary shall be
made by the Board of Directors pursuant to a Board Resolution delivered to the
Trustee and shall be effective as of the date specified in such Board
Resolution, which shall not be prior to the date such Board Resolution is
delivered to the Trustee.
SECTION 4.11 Reports. Whether or not the Company is subject to Section
13(a) or 15(d) of the Exchange Act, or any successor provision thereto, the
Company shall file with the Commission the annual or other reports, and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Company were subject thereto, such documents to be filed with the Commission
on or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also (whether
or not it is required to file reports with the Commission), within 30 days of
each Required Filing Date, (i) transmit by mail to all Holders, as their names
and addresses appear in the Note Register and to any Persons that request such
reports in writing, without cost to such Holders or Persons, and (ii) file with
the Trustee, copies of the annual or other reports, and other documents (without
exhibits) which the Company has filed or would have filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act, any successor provisions
thereto or this Section 4.20. The Company shall not be required to file any
report with the Commission if the Commission does not permit such filing.
SECTION 4.12 Compliance Certificate; Notice of Default or Event of
Default.
(a) The Company shall deliver to the Trustee within 120 calendar days
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate (which shall be signed by officers satisfying the
requirements of Section 314(a)(4) of the Trust Indenture Act) stating whether or
not, to the best knowledge of such officers, the Company has complied with all
conditions and covenants under this Indenture and the Collateral Documents, and,
if the
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Company shall be in Default, specifying all such Defaults and the nature thereof
of which such officer may have knowledge.
(b) The year-end financial statements delivered pursuant to Section 4.11
above shall be accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established national reputation
reasonably satisfactory to the Trustee) that in making the examination necessary
for certification of such financial statements nothing has come to their
attention which would lead them to believe that the Company or any of its
Restricted Subsidiaries has violated any provisions of Section 4.1, 4.6, 4.7,
4.8, 4.9, 4.14 hereof, or of Article V of this Indenture, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any person for any failure to obtain knowledge of any such violation, and it
being further understood that such statement may not be provided to the extent
contrary to the then current recommendation of the accountant's governing body.
In the event that, if the Company remains incorporated in Canada and the
Canadian Institute of Chartered Accountants provides recommendations regarding
the basis on which Canadian accountants can make all or part of the statement
referred to above, such statement shall be provided to the Trustee following the
next fiscal year end of the Company.
(c) The Company will, so long as any of the Notes are outstanding, deliver
to the Trustee, within 5 calendar days of any Officer becoming aware of (i) any
Default or Event of Default, (ii) any event of default under the Senior Note
Indenture has occurred and is continuing or (iii) any event of default under any
other mortgage, indenture or instrument referred to in Section 6.1(f), an
Officers' Certificate specifying such Default, Event of Default or other event
of default and what action the Company or applicable Restricted Subsidiary is
taking or proposes to take with respect thereto.
(d) For the purposes of this Section 4.12, compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
(e) So long as either (i) The Company has not procured or caused to be
procured a recognized financial institution with capital of not less than
$10,000,000 as collateral agent in the British Virgin Islands which the Trustee
or the Senior Note Trustee may lawfully appoint in respect of Collateral or
Senior Note Collateral, or (ii) WTC has not consolidated with or merged with NWE
Cyprus or transferred all or substantially all of its assets to NWE Cyprus in
connection with a winding-up or liquidation of WTC, the Company shall deliver,
on or before the last Business Day of the month following the Issue Date and
each month thereafter, a certificate to the Trustee stating what steps have been
taken to fulfill the Company's best efforts undertaking to the Holders of the
Notes and of the Senior Notes to give effect to (i) or (ii) above and what steps
will be taken in the month immediately succeeding the month for which such
certificate is delivered.
SECTION 4.13 Payment of Additional Amounts. (a) Except to the extent
required by law, any and all payments of, or in respect of, any Note shall be
made free and clear of and
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without deduction for or on account of any and all present or future taxes,
levies, imposts, deductions, charges or withholdings and all liabilities with
respect thereto imposed by Canada, the Russian Federation, Cyprus or any other
jurisdiction with which the Company or any Guarantor has some connection
(including any jurisdiction (other than the United States of America) from or
through which payments under the Notes or the Guarantees are made) or any
political subdivision of or any taxing authority in any such jurisdiction
("Canadian Taxes," "Russian Taxes," "Cypriot Taxes" or "Other Taxes,"
respectively). If the Company or any Guarantor shall be required by law to
withhold or deduct any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other
Taxes from or in respect of any sum payable under a Note or pursuant to a
Guarantee, the sum payable by the Company or such Guarantor, as the case may be,
thereunder shall be increased by the amount ("Additional Amounts") necessary so
that after making all required withholdings and deductions, the Holder shall
receive an amount equal to the sum that it would have received had no such
withholdings and deductions been made; provided that any such sum shall not be
paid in respect of any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other
Taxes to a Holder (an "Excluded Holder") of a Note (i) resulting from the
beneficial owner of such Note carrying on business or being deemed to carry on
business in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or any political subdivision thereof or having any other
connection with the relevant taxing jurisdiction or any political subdivision
thereof or any taxing authority therein other than the mere holding or owning of
such Note, being a beneficiary of the Guarantees, the receipt of any income or
payments in respect of such Note or the Guarantees or the enforcement of such
Note or the Guarantees, (ii) resulting from the Company or any Guarantor not
dealing at arm's length (within the meaning of the Income Tax Act (Canada)) with
such Holder at the time of such payment or at the time the amount of such
payment is deemed to have been paid or credited or (iii) that would not have
been imposed but for the presentation (where presentation is required) of such
Note for payment more than 180 days after the date such payment became due and
payable or was duly provided for, whichever occurs later. The Company or the
Guarantors, as applicable, will also (i) make such withholding or deduction and
(ii) remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law, and, in any such case, the Company will furnish
to each Holder on whose behalf an amount was so remitted, within 30 calendar
days after the date the payment of any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by the Company or the Guarantors, as
applicable. The Company will, upon written request of each Holder (other than an
Excluded Holder), reimburse each such Holder for the amount of (i) any Canadian
Taxes, Russian Taxes, Cypriot Taxes or Other Taxes so levied or imposed and paid
by such holder as a result of payments made under or with respect to any Notes,
and (ii) any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes so
levied or imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments made under
or with respect to such Notes or the Guarantees) after such reimbursement will
not be less than the net amount which the Holder would have received if Canadian
Taxes, Russian Taxes, Cypriot Taxes or Other Taxes on such reimbursement had not
been imposed.
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(b) At least 30 calendar days prior to each date on which any payment
under or with respect to the Notes is due and payable, if the Company or the
Guarantors, as applicable, will be obligated to pay Additional Amounts with
respect to such payment, the Company or the Guarantors, as applicable, will
deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
(c) The Company or the Guarantors will pay any stamp, issue, registration,
documentary or other similar taxes and duties, including interest and penalties,
in respect of the creation, issue and offering of the Notes payable in Canada,
the United States, the Russian Federation or Cyprus or any political subdivision
thereof or taxing authority of or in the foregoing. The Company and the
Guarantors will also pay and indemnify the Holders and the Trustee from and
against all court fees and taxes or other taxes and duties, including interest
and penalties, paid by any of them in any jurisdiction in connection with any
action permitted to be taken by the Trustee or the Holders to create the Liens
on the Collateral and to enforce the obligations of the Company or the
Guarantors under the Notes, the Indenture, the Guarantees or the Collateral
Documents or the Senior Note Collateral Documents.
SECTION 4.14 Repurchase at the Option of Holders upon a Termination of
Trading.
(a) In the event of any Termination of Trading (as defined below)
occurring after the Issue Date and on or prior to Maturity, each Holder of Notes
will have the right commencing on the date following the Five Year Date, at such
Holder's option, to require the Company to repurchase all or any part of such
Holder's Notes on the date (the "Repurchase Date") that is 30 days after the
date the Company gives notice of the Termination of Trading as described below
at a price (the "Repurchase Price") equal to 100% of the principal amount
thereof, together with accrued and unpaid interest, if any, Additional Amounts,
if any, and Special Interest, if any, thereon to the Repurchase Date. On or
prior to 10:00 a.m., New York City time on the Repurchase Date, the Company
shall irrevocably deposit with the Trustee or a Paying Agent an amount of money
sufficient to pay the Repurchase Price of the Notes which are to be repaid on or
promptly following the Repurchase Date.
(b) On or before the 15th day after the occurrence of a Termination of
Trading (unless such Termination of Trading occurs prior to the Five Year Date,
then on or before the 15th day after the Five Year Date), the Company, or the
Trustee at the request and expense of the Company, shall send to each Holder by
first class mail, postage prepaid, a notice prepared by the Company stating:
(i) that a Termination of Trading has occurred and that each Holder
has the right to require a repurchase of such Holder's Notes, which
repurchase right is made pursuant to this Section 4.14, and that all Notes
properly tendered will be repurchased;
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(ii) the Repurchase Price, and the date Notes are to be repurchased,
which date shall be a date occurring no earlier than 30 calendar days nor
later than 40 calendar days subsequent to the date such notice is mailed;
(iii) that any Notes or portions thereof not properly tendered will
continue to accrue interest and Additional Amounts and Special Interest,
if applicable, and will continue to have conversion rights and rights, if
any, to Reset Penalties.
(iv) that, unless the Company defaults in the payment of the
Repurchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the exercise of such repurchase right
shall cease to accrue interest and Additional Amounts and Special
Interest, if applicable, from and after the Repurchase Date and will cease
to have any conversion rights and rights, if any, to Reset Penalties.
(v) that any Holder electing to have any Notes or portions thereof
repurchased pursuant to the exercise of such repurchase right will be
required to surrender such Notes, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of such Notes completed, to the Paying
Agent at the address specified in the notice, prior to the close of
business on the first Business Day preceding the Repurchase Date;
(vi) that any Holder electing to have Notes purchased pursuant to
such repurchase right must specify the principal amount that is being
tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(vii) if Certificated Notes have been issued pursuant to Section
2.6(b), that any Holder of Certificated Notes whose Certificated Notes are
being purchased only in part will be issued new Certificated Notes equal
in principal amount to the unpurchased portion of the Certificated Note or
Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof;
(viii) that the Trustee will return to the Holder of a Global Note
that is being purchased in part, such Global Note with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to
the unpurchased portion of such Global Note; and
(ix) the instructions and any other information necessary to enable
any Holder to exercise such repurchase right or effect withdrawal of such
exercise.
(c) To exercise the repurchase right, the Holder of a Note must deliver,
on or before the close of business on the Repurchase Date, irrevocable written
notice to the Company (or an agent designated by the Company for such purpose)
and to the Trustee of the Holder's exercise of such right, together with the
certificates evidencing the Notes with respect to which the right is being
exercised, duly endorsed for transfer. Such written notice is irrevocable. The
Company or the Trustee shall promptly send by first class mail, postage prepaid,
to each Holder of Notes or portions thereof so accepted for payment, payment in
an amount equal to the
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Repurchase Price for such Notes or portions thereof. The Company shall publicly
announce the results of the exercises of repurchase rights upon a Termination of
Trading on or as soon as practicable after the Repurchase Date. For purposes of
this Section 4.14, the Trustee shall act as the Paying Agent.
(d) A "Termination of Trading," shall occur if the Common Stock of the
Company (or other common stock into which the Notes are then convertible) is
neither listed for trading on a U.S. national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
United States.
(e) The Company will comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws or regulations to the extent such
laws and regulations are applicable, in connection with the repurchase of the
Notes pursuant to an offer to repurchase upon a Termination of Trading.
SECTION 4.15 Leasing Companies and NWE Cyprus. (a) Each Leasing Company
shall at all times remain a special purpose Cypriot corporation which is a
Guarantor and a Wholly-Owned Restricted Subsidiary with corporate organizational
documents containing the provisions set forth in Schedule 1.1(b) attached
hereto.
(b) NWE Cyprus shall at all times remain a Cypriot corporation and a
Wholly-Owned Subsidiary.
SECTION 4.16 Technocom. Technocom may not, in any transaction or series of
related transactions, consolidate with or merge with or into, any other Person
or otherwise change its domicile into any other jurisdiction (through a sale of
assets) unless Technocom or such Person, as the case may be, continues to be
owned in a substantially identical proportion and manner as Technocom is owned
immediately prior to such consolidation or merger or change of domicile, the
preferential $20,000,000 dividend and liquidation, dissolution or winding-up
rights of the Technocom Preferred Stock are not changed and there is no class of
Capital Stock authorized having rights superior to the Technocom Preferred Stock
after giving effect to such transaction or transactions, and such consolidation
or merger or other change of domicile does not adversely affect the perfection
or priority of the Liens in the Technocom Preferred Stock.
SECTION 4.17 Collateral Agents. In the event that any collateral agent
appointed on or before the Issue Date or thereafter in respect of one or more
jurisdictions resigns or is terminated without the contemporaneous appointment
of a new collateral agent in such jurisdiction or jurisdictions, the Company
shall procure or cause to be procured, within 45 days after the Trustee has
given notice to the Company of such resignation or termination, a recognized
financial institution, with capital of not less than $10,000,000, in such
jurisdiction or jurisdictions, which the Trustee or the Convertible Note Trustee
may lawfully appoint as a collateral agent in respect of Collateral or Senior
Note Collateral.
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SECTION 4.18 WTC. Provided no Default or Event of Default has occurred and
is continuing or would occur as a result of the following transaction, WTC may
consolidate or merge with NWE Cyprus or transfer all or substantially all of its
assets to NWE Cyprus in connection with a winding-up or liquidation of WTC.
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Merger, Consolidation, Sale of Assets, Etc. The Company shall
not, in any transaction or series of related transactions, consolidate with, or
merge with or into, any other Person or permit any other Person to merge with or
into the Company (other than a merger of a Restricted Subsidiary of the Company
into the Company in which the Company is the continuing corporation), or sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
of the Property and assets of the Company and its Restricted Subsidiaries taken
as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation or (ii) the
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged, or the Person which acquires, by sale, assignment,
conveyance, transfer, lease or disposition, all or substantially all of the
Property and assets of the Company and its Restricted Subsidiaries taken as a
whole (any such corporation or Person being the "Surviving Entity") shall be a
corporation organized and validly existing under the laws of Canada or any
province or political subdivision thereof or the United States of America, any
political subdivision thereof, any state thereof or the District of Columbia, or
the United Kingdom or Bermuda and shall expressly assume, by an indenture
supplemental hereto and other appropriate Collateral Documents in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest and Additional Amounts, if any,
and Special Interest, if any, on all the Notes and the performance of every
covenant and obligation in this Indenture and the Collateral Documents on the
part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of related transactions), no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;
(c) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Company (or the
Surviving Entity, if the Company is not continuing) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
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(d) the Company (or the Surviving Entity, if the Company is not
continuing) would not be subject to any materially adverse tax effect as a
result of such transaction or series of transactions;
provided that, notwithstanding any other provision of this Article V, the
Company shall not engage in any amalgamation, consolidation, merger, sale or
transfer on or prior to the Five Year Date which would result in the Holder of a
Note not being entitled to convert such Note into any "Substituted Properties"
as a result of the provision contained in Section 13.12;
The provisions of clauses (c) and (d) shall not apply to any merger or
consolidation into or with, or any such transfer of all or substantially all of
the Property and assets of the Company and the Restricted Subsidiaries, taken as
a whole, to a newly formed corporation solely for the purpose of moving the
Company's domicile out of Canada; provided that the Company shall have certified
to the Trustee in writing to such effect; and provided, further, that in no case
shall the adverse tax effect to the Company (or the Surviving Entity, if the
Company is not continuing) of such merger or consolidation or such transfer be
$7,500,000 or more; and provided, further, that the Company shall not engage in
any such merger or consolidation or such transaction for the purpose of moving
the Company's domicile out of Canada to the United Kingdom if following such
transaction, either the Trustee or any Holder of a Note would be considered to
be a "control person" either in such new jurisdiction or the jurisdiction of the
Trustee or such Holder.
In connection with any consolidation, merger, conveyance, lease or other
disposition contemplated by this Section 5.1, the Company shall deliver, or
cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, lease or disposition and any
supplemental indenture in respect thereto comply with this Article V and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.2 Successor Corporation Substituted. Upon any consolidation
with, or merger by the Company with or into, any other corporation, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the Property and assets of the Company and its Restricted
Subsidiaries taken as a whole in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation or into which the Company is
merged, or the Person to which such sale, conveyance, assignment, transfer,
lease, conveyance or other disposition is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company herein; and thereafter except in the case of a lease the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Notes, except for the obligation to pay the principal of
(and premium, if any) and interest (including Additional Amounts, if any, and
Special Interest, if any) on the Notes.
If such Surviving Entity shall have succeeded to and been substituted
for the Company, such Surviving Entity may cause to be signed, and may issue
either in its own name or in the
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name of the Company prior to such succession any or all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such Surviving Entity, instead
of the Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Notes which such Surviving
Entity thereafter shall cause to be signed and delivered to the Trustee for that
purpose (in each instance with endorsements of Guarantees thereon by the
Guarantors). All of the Notes so issued and so endorsed shall in all respects
have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued and endorsed in accordance with the terms of
this Indenture and the Guarantee as though all of such Notes had been issued and
endorsed at the date of the execution hereof.
In case of any such consolidation, merger, sale, transfer, conveyance or
other disposal, such changes in phraseology and form (but not in substance) may
be made in the Notes thereafter to be issued or the Guarantees to be endorsed
thereon as may be appropriate.
For all purposes of this Indenture and the Notes, Subsidiaries of any
Surviving Entity will, upon such transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to
this Indenture.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. "Event of Default" wherever used herein
with respect to the Notes means any one of the following events (whatever the
reason for such event, and whether it shall be voluntary or involuntary, or be
effected by operation of law, pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of interest (or Additional Amounts and Special
Interest, if any) on any Note or any other amount due in respect of the Note
when the same becomes due and payable, and the continuance of such Default for a
period of 30 calendar days; or
(b) default in the payment of the principal of (or premium, if any, on)
any Note when the same becomes due and payable whether upon Maturity, optional
redemption, required repurchase (including pursuant to a Change of Control
Offer, an Asset Sale Offer or a repurchase offer upon a Termination of Trading)
or otherwise, or the failure to make an offer to purchase any Note as herein
required; or
(c) default in the performance, or breach, of any covenant or agreement
contained in Section 4.7, Section 4.8, Section 4.14, Section 4.17 or Article V
hereof; or
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(d) default in the performance, or breach, of any covenant or warranty of
the Company contained in this Indenture or the Notes (other than a covenant or
warranty addressed in Section 6.1(a), Section 6.1(b) or Section 6.1(c) hereof)
or any Collateral Document or any Senior Note Collateral Document, and the
continuance of such Default or breach for a period of 45 calendar days after
written notice thereof has been given to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25 percent of the aggregate
principal amount at Stated Maturity of the outstanding Notes; or
(e) the occurrence and continuance of an "Event of Default" under the
Senior Note Indenture for a period of 15 days after written notice of the
occurrence of such Event of Default has been given to the Company by the Trustee
or a Holder or Holders of the Notes, which notice states that such event
constitutes a Default hereunder; or
(f) Indebtedness of the Company or any Restricted Subsidiary is not paid
when due within the applicable grace period, if any, or is accelerated by the
holders thereof and, in either case, the principal amount of such unpaid or
accelerated Indebtedness exceeds $10,000,000; or
(g) the entry by a court of competent jurisdiction of one or more final
judgments against the Company or any Restricted Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 which is not discharged,
waived, appealed, stayed, bonded or satisfied for a period of 60 consecutive
calendar days; or
(h) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Restricted Subsidiary of the Company in an involuntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Restricted Subsidiary of the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of, or in respect of, the Company or any Significant Restricted
Subsidiary of the Company under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law, including the Companies Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Restricted Subsidiary
of the Company or of any substantial part of the Property or assets of the
Company or any Significant Restricted Subsidiary of the Company, or ordering the
winding-up or liquidation of the affairs of the Company or any Significant
Restricted Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive calendar days; or
(i) (i) the commencement by the Company or any Significant Restricted
Subsidiary of the Company of a voluntary case or proceeding under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal, state or foreign
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bankruptcy, insolvency or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent; or (ii) the consent by the Company or
any Significant Restricted Subsidiary of the Company to the entry of a decree or
order for relief in respect of the Company or any Significant Restricted
Subsidiary of the Company in an involuntary case or proceeding under United
States bankruptcy laws, as now or hereafter constituted, or any other applicable
federal, state, or foreign bankruptcy, insolvency, or other similar law,
including the Companies Creditors' Arrangement Act (Canada) and the Bankruptcy
and Insolvency Act (Canada), or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company or any Significant Restricted
Subsidiary of the Company; or (iii) the filing by the Company or any Significant
Restricted Subsidiary of the Company of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law; or (iv) the consent by the Company
or any Significant Restricted Subsidiary of the Company to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company
or any Significant Restricted Subsidiary of the Company or of any substantial
part of the Property or assets of the Company or any Significant Restricted
Subsidiary of the Company, or the making by the Company or any Significant
Restricted Subsidiary of the Company of an assignment for the benefit of
creditors; or (v) the admission by the Company or any Significant Restricted
Subsidiary of the Company in writing of its inability to pay its debts generally
as they become due; or (vi) the taking of corporate action by the Company or any
Significant Restricted Subsidiary of the Company in furtherance of any such
action;
(j) any Guarantee, Collateral Document or Senior Note Collateral Document
ceases to be in effect (except as otherwise permitted by this Indenture, the
Collateral Documents or the Senior Note Collateral Documents), or the Company or
any Guarantor shall deny or disaffirm its obligations under its Guarantee, any
Collateral Document, the Notes or any Senior Note Collateral Document, or the
Notes and/or the Guarantees fail to be secured by any theretofore perfected
security interests or Liens in the Collateral or the Senior Note Collateral
(except as permitted by this Indenture, the Collateral Documents or the Senior
Note Collateral Documents), which in each circumstance continues for a period of
30 days after receipt of a written notice thereof from the Trustee to the
Company, or from Holders of at least 25% of the aggregate principal amount of
the Notes then outstanding to the Company and the Trustee;
(k) a Change of Control described in any of clauses (i), (ii) or (iii) of
the definition of "Change of Control" set forth in Section 1.1 hereof occurs; or
(l) if any assets of the Company or any of its Restricted Subsidiaries
shall be nationalized, expropriated, declared forfeit or otherwise permanently
taken by governmental action (the "Seized Assets"), and the book value of such
Seized Assets (less the book value of the expropriation proceeds) shall
constitute more than 15% of the book value, on a consolidated basis, of all of
the Company's assets minus currents assets as they are reported on the Company's
most recent quarterly consolidated balance sheet.
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SECTION 6.2 Acceleration. If any Event of Default (other than an Event of
Default specified in Section 6.1(h) or Section 6.1(i) hereof) occurs and is
continuing, or if an Event of Default specified in Section 6.1(k) above occurs
and is continuing and the Company fails to make the Change of Control Offer
required pursuant to Section 4.7 hereof, then and in every such case the Trustee
or the holders of not less than 25% of the outstanding aggregate principal
amount at Stated Maturity of the Notes may declare the Default Amount of,
premium, if any, any accrued and unpaid interest (and Additional Amounts, if
any, and Special Interest, if any) on and any other amounts then due in respect
of all Notes then outstanding to be immediately due and payable by a notice in
writing to the Company (and to the Trustee if given by the Holders of the
Notes), and upon any such declaration, all amounts payable in respect of the
Notes will become and be immediately due and payable. If any Event of Default
specified in Section 6.1(h) or Section 6.1(i) hereof occurs, the Default Amount
of, premium, if any and any accrued and unpaid interest (and Additional Amounts,
if any, and Special Interest, if any) on, and any other amounts then due in
respect of, the Notes then outstanding shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder of
Notes. In the event of a declaration of acceleration because an Event of Default
set forth in Section 6.1(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled (A) if
the Senior Notes have been repaid, (B) if the "Event of Default" under the
Senior Note Indenture triggering such Event of Default pursuant to clause (e)
above shall be remedied or cured, or waived by the Holders of the Senior Notes,
or (C) if the Senior Notes have been accelerated, the acceleration of the Senior
Notes shall have been rescinded within 60 days of the occurrence of such "Event
of Default" under the Senior Note Indenture, and, in the case of clauses (A),
(B) or (C) above, the Senior Note Trustee so certifies to the Convertible Note
Trustee; provided that any such event described in clause (A), (B) or (C) above
must occur prior to the commencement of foreclosure proceedings or other
enforcement proceedings with respect to this Indenture or any of the Collateral
Documents. In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(f) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.1(f)
hereof shall be remedied, or cured, or waived by the holders of the relevant
Indebtedness, within 60 calendar days after such event of default; provided that
no judgment or decree for the payment of the money due on the Notes has been
obtained by the Trustee as hereinafter provided in this Article VI. The "Default
Amount" in respect of any particular Note as of any particular date shall equal
100% of the principal amount payable in respect of the Note at the Stated
Maturity thereof.
At any time after a declaration of acceleration with respect to the Notes
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter provided in this Article VI, the
Holders of a majority in principal amount at Stated Maturity of the outstanding
Notes, by written notice of the Company and the Trustee, may rescind and annul
such declaration and its consequences if,
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay
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(i) all overdue installments of interest (including Additional
Amounts, if any, and Special Interest, if any), on, and any other amounts
then due in respect of all Notes,
(ii) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in the Notes and this
Indenture,
(iii) to the extent that payment of such interest is lawful,
interest (including Additional Amounts, if any and Special Interest, if
any), and any other amounts then due in respect of the Defaulted Interest
at the rate or rates prescribed therefor in the Notes and this Indenture,
and
(iv) all moneys paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.7 hereof; and
(b) all Events of Default with respect to the Notes, other than the
non-payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived by the Holders as
provided herein.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 6.3 Other Remedies. The Company covenants that if an Event of
Default specified in Section 6.1(a) or Section 6.1(b) occurs, the Company shall,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders,
the whole amount then due and payable on the Notes for principal (and premium,
if any) and interest (including Additional Amounts, if any, and Special
Interest, if any) and any other amounts then due in respect of the Notes, and,
to the extent that payment of such interest shall be legally enforceable,
interest upon the overdue principal (and premium, if any) and upon Defaulted
Interest, at the rate or rates prescribed therefor in the Notes and this
Indenture; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and all other amounts due to the Trustee pursuant to Section 7.7
hereof.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of, or pursue any available remedy (under
this Indenture, the Collateral Documents, the Senior Note Collateral Documents
or otherwise) to collect, the sums so due and unpaid, and may prosecute any such
proceeding to judgment or final decree, and may enforce the same against the
Company, the Guarantors or any other Obligor upon such Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the Property and assets of the Company, any Guarantor or any other Obligor upon
such Notes, wherever situated.
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If an Event of Default with respect to the Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or the Collateral Documents or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy.
SECTION 6.4 Waiver of Past Defaults. The Holders of not less than a
majority in principal amount at Stated Maturity of the outstanding Notes may, on
behalf of the Holders of all the Notes, waive any past Default and its
consequences under this Article VI, except Default (a) in the payment of the
principal of (or premium, if any) or interest on, any Note, or (b) in respect of
a covenant or provision hereof which under Section 9.2 hereof cannot be modified
or amended without the consent of the Holder of each outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture and the Collateral Documents; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.5 Control by Majority. The Holders of not less than a majority
in principal amount at Stated Maturity of the outstanding Notes shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; provided that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture, the Collateral Documents or the Senior Note Collateral Documents
or unduly prejudicial to the right of other Holders and would not subject the
Trustee to personal liability, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.6 Limitation on Suits. No Holder of Notes shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Collateral Documents, or for the appointment of a receiver or
trustee, or for any other remedy hereunder or thereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes;
(b) the Holders of not less than 25 percent in principal amount at Stated
Maturity of the outstanding Notes shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its capacity as
Trustee hereunder;
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(c) such Holders or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee in its reasonable discretion against the
costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 calendar days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount at Stated Maturity of the outstanding Notes;
in any event, it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture, the Collateral Documents or the Senior Note
Collateral Documents to affect, disturb or prejudice the rights of any Holders
of Notes, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, the
Collateral Documents or the Senior Note Collateral Documents, except in the
manner herein provided and for the equal and ratable benefit of all Holders of
Notes.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provisions of this Indenture, the right of any Holder to receive payment
of principal of (and premium, if any), interest (including Additional Amounts,
if any, and Special Interest, if any) on, and any other amounts due in respect
of the Notes held by such Holder, on or after the respective due dates expressed
in the Notes or the redemption dates or purchase dates provided for therein, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall be absolute and unconditional and shall not be impaired
or affected without the consent of such Holder; except that no Holder shall have
the right to institute any such suit, if and to the extent that the institution
or prosecution thereof or the entry of judgment therein would under applicable
law result in the surrender, impairment, waiver, or loss of the Liens of the
Collateral Documents upon any Property or assets subject to the Liens.
SECTION 6.8 Trustee May File Proofs of Claim. The Trustee shall be
entitled and empowered, without regard to whether the Trustee or any Holder
shall have made any demand or performed any other act pursuant to the provisions
of this Article and without regard to whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise, by
intervention in any proceedings relative to the Issuer or other Obligor upon the
Notes, or to the creditors or Property of the Company, any Guarantor or any
other Obligor or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be entitled and
empowered in such instances:
(a) to file and prove a claim or claims for the whole amount of principal
(and premium, if any), interest (including Additional Amounts, if any, and
Special Interest, if any) and any other amounts owing and unpaid in respect of
the Notes, and to file such other papers
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or documents as may be necessary or advisable in order to have the claims of the
Trustee (including all amounts owing to the Trustee and each predecessor Trustee
pursuant to Section 7.7 hereof) and of the Holders allowed in any judicial
proceedings relative to the Company or other obligor upon the Notes, or to the
creditors or property of the Company, any Guarantor, or any such other Obligor,
(b) unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of the Notes in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings,
and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf; and any
trustee, receiver, or liquidator, custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to cover all
amounts owing to the Trustee and each predecessor Trustee pursuant to Section
7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
SECTION 6.9 Priorities. Any money collected by the Trustee (including
funds received from collateral agents and escrow agents from the Collateral
Documents and the Senior Note Collateral Documents) pursuant to this Article VI
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(premium, if any) or interest, upon presentation of the Notes and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
7.7 hereof including payment of all compensation, expense, liabilities
incurred, and all advances made, by the Trustee and the costs and expenses
of collection;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any), interest (including Additional
Amounts, if any, and Special Interest, if any) on, and any other amounts
due in respect of, the Notes, ratably, without
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preference or priority of any kind, according to the amounts due and
payable on such Notes for principal (and premium, if any) and interest
(including Additional Amounts, if any, and Special Interest, if any), and
any other amounts due in respect hereof, respectively; and
THIRD: To the Company, the Guarantors or to such party as is
entitled to be paid pursuant to the terms of the Collateral Documents or
the Senior Note Collateral Documents or as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.9. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states such record date, the payment date and amount to be paid. The Trustee may
mail such notice in the name and at the expense of the Company.
SECTION 6.10 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, the Collateral
Documents and the Senior Note Collateral Documents, or in any suit against the
Trustee for any action taken, suffered or omitted to be taken by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merit and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10 percent in principal amount at
Stated Maturity of the outstanding Notes, or to any suit instituted by any
Holder for the enforcement of the payment of the principal (or premium, if any)
or interest on any Note on or after its Stated Maturity.
SECTION 6.11 Waiver of Stay or Extension Laws. The Company and each of the
Guarantors (to the extent they may lawfully do so) shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture, the Collateral Documents or the Senior Note Collateral Documents; and
the Company and each of the Guarantors (to the extent that they may lawfully do
so) hereby expressly waive all benefit or advantage of any such law, and shall
not hinder, delay or impede the execution of any power granted herein, in the
Collateral Documents or in the Senior Note Collateral Documents to the Trustee,
but shall suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 6.12 Trustee May Enforce Claims Without Possession of the Notes.
All rights of action and claims under this Indenture, the Collateral Documents,
the Convertible Note Collateral Documents or the Notes may be prosecuted and
enforced by the Trustee without the
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possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name, as trustee of an express trust, and any recovery of
judgment shall be applied in accordance with Section 6.9.
SECTION 6.13 Restoration of Rights and Remedies. If the Trustee or any
Holder of Notes has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.
SECTION 6.14 Rights and Remedies Cumulative. Except as otherwise provided
in Section 2.7 hereof, no right or remedy conferred herein, in the Collateral
Documents or the Convertible Note Collateral Documents upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.15 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article VI by the Collateral Documents or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. (a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and shall use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default: (i) the Trustee
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and (ii) in the absence of bad faith on
its part, the Trustee may conclusively rely, as to the truth of the
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statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that in the case of any such
certificates or opinions that by any provision of this Indenture are
specifically required to be furnished to the Trustee, the Trustee shall examine
such certificate and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not investigate or confirm the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, provided
that: (i) this paragraph (c) shall not limit the effect of paragraph (b) of this
Section 7.1; (ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not
be liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5 hereof.
(d) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(f) No provision of this Indenture, the Collateral Documents or the
Convertible Note Collateral Documents shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk of liability is not reasonably assured
to it.
(g) Every provision of this Indenture relating to the conduct or affecting
the liability or of affording protection to the Trustee shall be subject to the
provisions of this Article VII and to the provisions of the Trust Indenture Act.
SECTION 7.2 Rights of Trustee. (a) Subject to the provisions of Section
7.1(a) hereof, the Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any such agent; provided that
such agent was appointed with due care by the Trustee. No collateral agent shall
be deemed to be an agent of the Trustee.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
misconduct or negligence or, subject to Section 7.3 hereof, was selected by the
Company.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default under Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(h),
6.1(i), 6.1(j) or 6.1(k) hereof, of the identity of any Restricted Subsidiary or
of the existence of any Change of Control, Asset Sale or Termination of Trading
unless either (i) a Trust Officer shall have actual knowledge thereof, or (ii)
the Trustee shall have received notice thereof in accordance with Section 4.12
and 15.2 hereof from the Company or in accordance with Section 15.2 hereof from
any Holder of Notes; provided that the Trustee shall comply with the "automatic
stay" provisions contained in United States bankruptcy laws, if applicable.
(f) The Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it hereunder
in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion may make such
further inquiry or investigation into such fact or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(h) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
SECTION 7.3 Concerning the Trustee, Collateral Agents, and Collateral Held
by Collateral Agents.
(a) The Trustee shall have no duty to act outside of the United States in
respect of any Collateral and Senior Note Collateral located in a jurisdiction
other than the United States ("Foreign Collateral") but shall, at the specific
request of the Company and, provided that the Company has provided appropriate
opinions, appoint a Qualified Foreign Collateral Agent (as defined in subsection
(d)) in any such jurisdiction and sign the Foreign Collateral Documents (as
defined herein) specified by the Company. Such Qualified Foreign Collateral
Agent, the Trustee (at its option, or if requested by the Company), and the
owner of each item of Foreign Collateral shall, provided the same are reasonably
acceptable to the Trustee, enter into a collateral
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assignment, pledge agreement, mortgage or other security agreement purporting to
create a Lien or security interest in such item of Foreign Collateral (each such
assignment or agreement, a "Foreign Collateral Document") pursuant to which such
owner shall purport to grant to such Qualified Foreign Collateral Agent a Lien
or security agreement for the benefit of the Trustee and the equal and ratable
benefit of the Holders of the Notes and for the benefit of the Senior Note
Trustee and the equal and ratable benefit of the Holders of the Senior Notes.
(b) The duties and responsibilities, and the rights and immunities, of the
Trustee with respect to a Qualified Foreign Collateral Agent and Foreign
Collateral with respect to which such Qualified Foreign Collateral Agent is
acting shall be limited to those required by this Section 7.3(b) as follows: (i)
both before and after an Event of Default, the Trustee shall have no duty to
supervise or monitor such Qualified Foreign Collateral Agent or its performance,
and no liability for any acts or omissions of such Qualified Foreign Collateral
Agent; provided that (x) if a Trust Officer has actual knowledge of willful
misconduct or gross negligence of such Qualified Foreign Collateral Agent, the
Trustee may replace such Qualified Foreign Collateral Agent with a successor
Qualified Foreign Collateral Agent which it may appoint and (y) the Trustee
shall satisfy itself that any instructions given by the Trustee to such
Qualified Foreign Collateral Agent have been carried out; (ii) the Trustee shall
give to such Qualified Foreign Collateral Agent such instructions to make
effective the Liens granted by the Foreign Collateral Documents as shall be
stated to be necessary in the Opinions of Counsel furnished pursuant to Section
11.2 of this Indenture with respect to the Foreign collateral with respect to
which any such Qualified Foreign Collateral Agent is acting and the Liens
granted therein; (iii) the Trustee shall give notice to such Qualified Foreign
Collateral Agent of any Event of Default of which a Trust Officer has actual
knowledge; (iv) the Trustee may, but has no obligation to, request information
from such Qualified Foreign Collateral Agent with respect to realization on
Foreign Collateral or an alternative course of action after an Event of Default,
shall evaluate any such information supplied by such Qualified Foreign
Collateral Agent and in its sole discretion, subject, however, to the provisions
of subsection (f) below relating to the Trustee's seeking direction from Holders
of a majority in principal amount of the Notes or the right of a Holder of Notes
to give directions pursuant to the terms of Section 6.5 of this Indenture, shall
instruct such Qualified Foreign Collateral Agent either to realize on such
Foreign collateral or to take such alternative course of action; and (v) the
Trustee shall commence an action, or take such other action as it deems
appropriate, in the event any Qualified Foreign Collateral Agent fails to follow
instructions of the Trustee or fails to provide information required to be
provided to the Trustee by such Qualified Foreign Collateral Agent; provided
that, in any circumstance in which this Section 7.3(b) requires that the Trustee
determine that such Qualified Foreign Collateral Agent has complied with
instructions, the Trustee shall be entitled to rely conclusively on a
certificate of an appropriate officer of such Qualified Foreign Collateral
Agreement to such effect.
(c) The Trustee shall not be responsible for, and makes no representation
as to, the effectiveness, perfection or priority of any Lien which is granted
pursuant to any Collateral Document or Convertible Note Collateral Document.
Notwithstanding the foregoing, if a Trust officer has actual knowledge of the
occurrence and continuance of a Default or an Event of
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Default arising under Section 6.1(i) of this Indenture the Trustee shall give
whatever notices and take whatever action it deems appropriate or necessary
under this Indenture as a result the continuance of such Default or Event of
Default.
(d) As used herein a "Qualified Foreign Collateral Agent" shall be a
collateral agent appointed in respect of one or more items of Foreign Collateral
who has signed an agency agreement with the Trustee substantially in the form of
Exhibit F hereto with such changes as may be acceptable to the Trustee.
(e) In exercising its rights and duties under this Section 7.3, the
Trustee shall use the same degree of care and skill as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(f) During the continuance of an Event of Default, the Trustee will give
no instructions to a Qualified Foreign Collateral Agent until the Holders of a
majority in aggregate principal amount of the Notes instruct the Trustee to act
or give instructions to such Qualified Foreign Collateral Agent to act.
(g) In the event Holders of a majority in aggregate principal amount of
the Notes fail to direct the Trustee to take specific action within 30 days of a
request by the Trustee for direction, the Trustee may retain such investment
banker, broker/dealer, or other expert as the Trustee may determine, and the
advice of such investment banker, broker/dealer or other expert shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by the Trustee hereunder in good faith and in reliance
thereon, provided such investment banker, broker/dealer or other expert was
selected by the Trustee with due care.
SECTION 7.4 Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture,
the Collateral Documents or the Notes, it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
(a) for any statement of the Company in this Indenture, including the recitals
contained herein, in the Collateral Documents or in any other document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication or (b) for compliance by the Company with the
Registration Agreement.
SECTION 7.5 Notice of Defaults. Within 90 calendar days after the
occurrence of any Default or Event of Default hereunder with respect to the
Notes, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Note Register, notice of such Default hereunder actually
known by the Trustee, unless such Default shall have been cured or waived;
provided that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest (including Additional Amounts, if any, or
Special Interest, if any) on any Note, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Trust Officers of the Trustee
in good faith determine that the withholding of such notice is in the interest
of the Holders.
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SECTION 7.6 Preservation of Information; Reports by Trustee to Holders.
(a) The Company shall furnish or cause to be furnished to the Trustee:
(i) not less than 10 calendar days prior to each Interest Payment
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of the Record Date immediately
preceding such Interest Payment Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 calendar days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
calendar days prior to the time such list is furnished;
provided, that if and so long as the Trustee shall be the Registrar for the
Notes, no such list need be furnished with respect to the Notes.
(b) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.6(a) hereof and the names
and addresses of Holders received by the Trustee in its capacity as Registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 7.6(a) hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided by the Trust Indenture Act with
other Holders with respect to their rights under this Indenture, under the
Collateral Documents or under the Notes.
(d) Each Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with this Section 7.6,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under this Section 7.6.
(e) Within 60 calendar days after May 15 of each year commencing with the
year 1997, the Trustee shall transmit by mail to all Holders of Notes, a brief
report dated as of such May 15 if and to the extent required under Section
313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the Trust
Indenture Act.
(g) A copy of each report described in Section 7.6(e) hereof shall, at the
time of its transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Notes are then listed, with the Commission and
also with the Company. The Company shall promptly notify the Trustee of any
stock exchange upon which the Notes are listed.
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SECTION 7.7 Compensation and Indemnity. The Company and the Guarantors
jointly and severally agree to pay to the Trustee from time to time such
compensation for its services hereunder and under the Collateral Documents as
the Company, the Guarantors and the Trustee may from time to time agree for all
services rendered by the Trustee hereunder and under the Collateral Documents.
The Company and the Guarantors jointly and severally agree to reimburse the
Trustee upon request for all reasonable disbursements, advances and expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee's compensation shall not be limited by any law or
compensation of a trustee of an express trust.
The Company and the Guarantors jointly and severally agree to assume, and
do hereby assume, liability for, and do hereby indemnify and agree to protect,
defend, save and keep harmless each Indemnitee (which term, for the purposes of
this Indenture, shall mean the Trustee (in its individual and trust capacities)
and each Qualified Foreign Collateral Agent) and their respective Affiliates,
agents, successors, permitted assigns, directors, officers and servants; a
"Related Indemnitee" of an Indemnitee shall mean any Affiliate, agent, director,
officer and servant of such Indemnitee except that no Qualified Foreign
Collateral Agent shall be a Related Indemnitee of the Trustee) from and against,
any and all liabilities, obligations, losses, damages, penalties, settlements,
claims, actions, suits or proceedings of any kind and nature, costs, expenses
(including reasonable attorney's fees) and disbursements (including, without
limitation, any act or omission of any agent appointed by the Trustee hereunder
or by any Qualified Foreign Collateral Agent) of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against any Indemnitee, (A) in
any way relating to or arising out of or incurred by such Indemnitee in
connection with the acceptance or administration of the trust created by this
Indenture or of any Collateral or Senior Note Collateral pursuant to the agency
agreement pursuant to which any Qualified Foreign Collateral Agent is appointed
(an "Agency Agreement") or any Collateral Document and the performance of such
Indemnitee's duties hereunder and thereunder, or (B) arising out of any failure
by the Company to perform or observe any covenant, condition or agreement in or
the falsity of any representation or warranty of the Company made in or pursuant
to this Indenture, any Agency Agreement or any Collateral Document or any Senior
Note Collateral Document (all of the foregoing, including clauses (A) and (B),
collectively, "Costs or Expenses"); provided that, except as and to the extent
attributable to default by the Company in performing or observing its
obligations hereunder or under any Agency Agreement, Collateral Document or any
Senior Note Collateral Document or breach by the Company of any of its
representations or warranties herein or therein, the Company shall not be
required to indemnify for any Costs or Expenses:
(a) imposed on an Indemnitee to the extent that such Costs or
Expenses arise out of or are caused by any act, misrepresentation or
omission of such Indemnitee or any of its Related Indemnitees where such
act, misrepresentation or omission (x) is in breach of the express
obligations or representations of such Indemnitee or any of its Related
Indemnitees under the Operative Documents or any related document, (y)
constitutes negligence or willful misconduct of such
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Indemnitee or any of its Related Indemnitees or (z) is in violation of any
applicable law (unless, in any such instance, such breach, negligence,
willful misconduct or violation results from any misrepresentation, gross
negligence, willful misconduct or violation of applicable law by the
Company or any of its Affiliates); or
(b) that are taxes on, based on or measured by or with respect to
the gross or net income, gross or net receipts, minimum or alternative
minimum taxable income, excess profits, personal holdings, tax
preferences, accumulated earnings, capital gains, capital, franchises,
doing business, net worth or conduct of business of such Indemnitee
(excluding taxes in the nature of sales, use, property or rental taxes and
taxes based on doing business or conduct of business if such taxes are
imposed solely as a result the performance of duties under this Indenture,
any Agency Agreement, any Collateral Document or any Senior Note
Collateral Document).
If the Company has knowledge of any claim or liability indemnified against
under this Section 7.7, it shall give prompt written notice thereof to the
applicable Indemnitees, and if any Indemnitee shall have any such knowledge, it
shall give prompt written notice thereof to Company (provided that failure to
give such notice shall not affect the Company's indemnity obligations hereunder
except to the extent that Company is prejudiced thereby). In case any action,
suit or proceeding shall be brought against any Indemnitee for which indemnity
may be sought under this Section 7.7, such Indemnitee shall notify the Company
of the commencement thereof (provided that failure to give such notice shall not
affect the Company's obligations hereunder except to the extent that the Company
is prejudiced thereby), and the Company may, at its expense, participate in and,
to the extent that it shall wish (subject to the following provisions of this
paragraph), assume in good faith in a commercially reasonable manner the defense
thereof, with counsel reasonably satisfactory to such Indemnitee; provided that
the Company shall not admit liability on such Indemnitee's part or settle such
action without the consent of such Indemnitee, which consent shall not be
unreasonably withheld; and provided, further, that no Event of Default shall
have occurred and be continuing and the Company shall have agreed in writing
that the Company is obligated to indemnify such Indemnitee for such Costs and
Expenses hereunder. If the Company assumes the defense of such action, suit or
proceeding, such Indemnitee may participate in such defense at such Indemnitee's
expense. Notwithstanding the foregoing, if and to the extent that (i) in the
written opinion of independent counsel to such Indemnitee an actual or potential
material conflict of interest exists where it is advisable for such Indemnitee
to be represented by separate counsel, (ii) in the reasonable opinion of such
Indemnitee such action, suit or proceeding involves the potential imposition of
criminal liability on such Indemnitee in connection with a claim not excluded by
Section 7.7(a) hereof, or (iii) such proceedings will involve a material risk of
the sale, forfeiture or loss of the Collateral or any part thereof, and such
Indemnitee informs the Company that such Indemnitee desires to be represented by
separate counsel, such Indemnitee shall have the right to control its own
defense of such claim and the Costs and Expenses in connection therewith shall
be borne by the Company. With respect to any amount which the Company is
requested by an Indemnitee
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to pay by reason of this Section 7.7, the Indemnitee shall, if requested by the
Company and prior to any payment, submit such additional information to the
Company as the Company may reasonably request properly to substantiate the
requested payment. The Company or its insurers shall have the right to
investigate or (provided that the Company or its insurers shall not reserve the
right to dispute liability hereunder or under any insurance policies pursuant to
which coverage is sought), subject to the second and fourth sentences of this
paragraph, defend or compromise any claim for which indemnification is sought
pursuant to this Section 7.7 and each Indemnitee shall cooperate with the
Company or its insurers with respect thereto.
The Company's obligations under the indemnities provided for in this
Indenture (i) are intended for the benefit of, and shall be enforceable by, each
Indemnitee, whether or not such Indemnitee is a party to this Indenture, and
(ii) shall be those of a primary obligor whether or not the Person indemnified
shall also be indemnified with respect to the same matter under the terms of
this Indenture, an Agency Agreement, any Collateral Document or any Senior Note
Collateral Document. The Person seeking indemnification from the Company
pursuant to any provision of this Indenture may proceed directly against the
Company without first seeking to enforce any other right of indemnification.
Upon the payment in full by the Company of any indemnity provided for hereunder,
the Company shall be, to the extent permitted by law, subrogated to any right of
the Person indemnified, other than with respect to any of such Indemnitee's
insurance policies.
To secure the Company's and the Guarantors' payment obligations in this
Section 7.7 the Trustee for the benefit of the Indemnitees shall have a Lien
prior to the Notes on all money or Property held or collected by the Trustee
other than money or Property held in trust to pay principal of, premium, if any,
and interest on, particular Notes.
The Company's and the Guarantors' payment obligations pursuant to this
Section 7.7 shall survive the resignation or removal of the Trustee or any
Collateral Agent, the termination of any Agency Agreement or the discharge of
this Indenture, any Collateral Document or any Senior Note Collateral Document.
Subject to any other rights available to the Trustee under applicable bankruptcy
law, when the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(g) or Section 6.1(h) hereof, the expenses are intended
to constitute expenses of administration under bankruptcy law.
Payments by the Company shall be payable in the same currency as the
indemnified liability. Nothing contained herein shall give the Company the right
to waive, amend or otherwise modify any rights of any Indemnitee under this
Indenture except with the written consent of such Indemnitee.
SECTION 7.8 Replacement of Trustee. (a) No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to this Article VII
shall become effective until the acceptance of appointment by the successor
Trustee under this Section 7.8.
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(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 60 calendar days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the outstanding Notes, delivered to the Trustee,
to the Company and to the Guarantors.
(d) If at any time;
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request thereof by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
unless the Trustee's duty to resign is stayed in accordance with the
provisions of Section 310(b) of the Trust Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any Holder; or
(iii) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Trustee in an involuntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or similar law,
or a decree or order by a court having jurisdiction in the premises shall
have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Trustee of its Property and asset or affairs, or any public officer
shall take charge or control of the Trustee or of its Property and assets
or affairs for the purpose of rehabilitation, conservation, winding up or
liquidation; or
(iv) the Trustee shall commence a voluntary case under the United
States bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or similar law or shall
consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or its Property and assets or affairs, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.10 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly
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situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee for the Notes.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by or pursuant to a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by the
Holders of a majority in principal amount of the outstanding Notes delivered to
the Company and the retiring Trustee, the successor trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with this
Section 7.8, become the successor Trustee and to that extent replace any
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and shall have accepted
appointment in the manner hereinafter provided, any Holder that has been a bona
fide Holder of a Note for at least six months may, subject to Section 6.10
hereof, on behalf of himself and all others similar situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such resignation, removal and appointment by first class mail, postage
prepaid, to the Holders as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee with
respect to the Notes and the address of its Corporate Trust Office.
(g) In the event of an appointment hereunder of a successor Trustee, each
such successor Trustee so appointed shall execute, acknowledge and deliver to
the Company, the Guarantors and the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts, and duties of the retiring Trustee but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trust of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all Property and money held by
such former Trustee hereunder, subject to its Lien, if any, provided for in
Section 7.7 hereof.
(h) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
Section 7.8(g) hereof.
(i) No successor Trustee shall accept its appointment unless at the time
of such acceptance successor Trustee shall be qualified and eligible under this
Article VII and under the Trust Indenture Act.
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SECTION 7.9 Successor Trustee by Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be otherwise
qualified and eligible under this Article VII and under the Trust Indenture Act,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes. In the event that
any Notes shall not have been authenticated by such predecessor Trustee, any
such successor Trustee may authenticate and deliver such Notes, in either its
own name or that of its predecessor Trustee, with the full force and effect
which this Indenture provides for the certificate of authentication of the
Trustee.
SECTION 7.10 Eligibility; Disqualification. There shall at all times be a
Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws of the
United States of America, any State or Territory thereof or the District
of Columbia, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by federal, State,
Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized
under such laws to exercise corporate trust powers, and subject to
supervision or examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees,
in either case having a combined capital and surplus of at least $100,000,000.
If such Person publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible pursuant to the provisions of
this Section 7.10, it shall resign immediately in the manner and with the effect
specified in this Article VII.
This Indenture shall always have a Trustee which satisfies the
requirements of Section 310(a)(1), (2) and (5) of the Trust Indenture Act. If
the Trustee has or hereafter acquires any "conflicting interest" within the
meaning of Section 310(b) of the Trustee Indenture Act, the Trustee and the
Company shall in all respects comply with the provision of Section 310(b) of the
Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with
the
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Commission the application referred to in the penultimate paragraph of Section
310(b) of the Trust Indenture Act. Neither the Company, any Guarantor or any
Subsidiary thereof, nor any Affiliate of the Company or any Guarantor shall
serve as Trustee hereunder.
SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
SECTION 7.12 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Collateral or the Senior Note Collateral may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Collateral or the Senior
Note Collateral, and to vest in such Person or Persons, in such capacity and for
the benefit of the Holders, such interest in the Collateral or the Senior Note
Collateral, or any part thereof, and subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 7.10, and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 7.8(f) hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
interest in the Collateral or the Senior Note Collateral or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
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(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
ARTICLE VIII
DEFEASANCE
SECTION 8.1 Company's Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may elect, at its option, at any time, to have Section
8.2 or Section 8.3 hereof applied to the outstanding Notes (in whole and not in
part) upon compliance with the conditions set forth below in this Article VIII,
such election to be evidenced by a Board Resolution delivered to the Trustee.
SECTION 8.2 Legal Defeasance and Discharge. Upon the Company's exercise of
its option to have this Section 8.2 applied to the outstanding Notes (in whole
and not in part), the Company shall be deemed to have been discharged from its
obligations with respect to such Notes as provided in this Section 8.2 on and
after the date on which the conditions set forth in Section 8.4 hereof are
satisfied (hereinafter called "Defeasance"). For this purpose, Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Notes and the Company and the Guarantors shall
be deemed to have satisfied all of their other obligations under such Notes,
this Indenture, the Guarantees and the Collateral Documents (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the trust
fund described in Section 8.4 hereof and as more fully set forth in Section 8.4,
payments in respect of the principal of and any premium and interest (and
Additional Amounts, if any, and Special Interest,
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if any) on such Notes when payments are due, and any other amounts due in
respect of the Notes,
(b) the Company's obligations with respect to such Notes under Sections
2.6, 2.7, 2.9, 4.2, 4.3 and 4.4 hereof,
(c) the Company's and the Guarantor's obligations with respect to
Additional Amounts under Section 4.13 hereof,
(d) the rights, powers, trusts, duties and immunities of the Trustee under
this Indenture,
(e) Article III hereof,
(f) this Article VIII, and
(g) Article XIII hereof.
Subject to compliance with this Article VIII, the Company may exercise its
option to have this Section 8.2 applied to the outstanding Notes (in whole or in
part) notwithstanding the prior exercise of its option to have Section 8.3
hereof applied to such Notes.
SECTION 8.3 Covenant Defeasance. Upon the Company's exercise of its option
to have this Section 8.3 applied to the outstanding Notes (in whole and not in
part), (i) the Company and the Guarantors shall be released from their
respective obligations under Section 5.1(c), Sections 4.5 through 4.11,
inclusive, Section 4.14 and any covenant added to this Indenture subsequent to
the Issue Date pursuant to Section 9.1 hereof, and (ii) the occurrence of any
event specified in Section 6.1(c) or 6.1(d) hereof, with respect to any of
Section 5.1(c), Sections 4.5 through 4.11, inclusive, Section 4.14 and any
covenant added to this Indenture subsequent to the Issue Date pursuant to
Section 9.1 hereof, shall be deemed not to be or result in an Event of Default,
in each case with respect to such Notes as provided in this Section 8.3 on and
after the date on which the conditions set forth in Section 8.4 hereof are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, Covenant
Defeasance means that, with respect to such Notes, the Company and the
Guarantors may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such specified Section (to the
extent so specified in the case of Section 6.1(c) and 6.1(d) hereof), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other
provisions herein or in any other document; but the remainder of this Indenture,
the Guarantees, the Collateral Documents and such Notes shall be unaffected
thereby.
SECTION 8.4 Conditions to Defeasance or Covenant Defeasance. The following
shall be the conditions to the application of Section 8.2 or Section 8.3 hereof
to the outstanding Notes:
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(a) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to the
benefits of the Holders of such Notes, (i) money in an amount, or (ii) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge the
principal of and any installment of interest (including Special Interest, if
any, and Additional Amounts, if any, which would be required based on the laws,
regulations or rulings in effect on the date of deposit) on, and any Reset
Penalties in respect of, such Notes on the respective Stated Maturities thereof,
in accordance with the terms of this Indenture and such Notes.
(b) In the event of an election to have Section 8.2 hereof apply to the
outstanding Notes, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or the Company has received
from Revenue Canada, Customs, Excise & Taxation an advance income tax ruling or
(ii) since the date of this Indenture, there has been a change in the applicable
United States federal, Canadian federal, Bermuda or United Kingdom income tax
law, in either case (i) or (ii) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Notes will not recognize gain or
loss for United States federal, Canadian federal, Bermuda or United Kingdom
income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Notes and will be subject to United States federal
income tax, Canadian federal, Bermuda or United Kingdom income tax, including
Canadian withholding tax, in the same amount, in the same manner and at the same
times as would be the case if such deposit, Defeasance and discharge were not to
occur.
(c) In the event of an election to have Section 8.3 hereof apply to the
outstanding Notes, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Notes will not recognize gain or
loss for United States federal, Canadian federal, Bermuda or United Kingdom
income tax purposes or under the tax laws of any other jurisdiction as a result
of the deposit and Covenant Defeasance to be effected with respect to such Notes
and will be subject to United States federal, Canadian federal, Bermuda or
United Kingdom or any other income tax in the same amount, in the same manner
and at the same times as would be the case if such deposit, Covenant Defeasance
and discharge were not to occur.
(d) No Default or Event of Default with respect to the outstanding Notes
shall have occurred and be continuing at the time of such deposit after giving
effect thereto and no Default or Event of Default under Section 6.1(h) or 6.1(i)
shall have occurred at any time on or prior to the 91st calendar day after the
date of such deposit and be continuing on such 91st day (it being understood
that this condition shall not be deemed satisfied until after such 91st calendar
day).
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(e) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming for the purpose of this clause (e) that all Notes are in default
within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company or the Guarantor is a party or by which it is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act of 1940, as amended, unless such trust shall be
registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 8.5 Deposited Money and U.S. Government Obligations to be Held in
Trust: Miscellaneous Provisions. Subject to Section 8.6 hereof, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.4 hereof in respect of the outstanding Notes shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Notes and this Indenture, to the payment, either directly or through any
such Paying Agent as the Trustee may determine, to the Holders of such Notes, of
all sums due and to become due thereon in respect of principal and any premium
and interest (including Additional Amounts, if any (which would be required
based on the laws, regulations and rulings in effect on the date of deposit
pursuant to Section 8.4(a) hereof), and Special Interest, if any) and other
amounts due in respect of the Notes, but money so held in trust need not be
segregated from other funds except to the extent required by law. The Company
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 8.4 hereof or the principal and interest received in respect thereof
other than such tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Order any
money or U.S. Government Obligations held by it as provided in Section 8.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Notes.
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SECTION 8.6 Repayment to Company. Any money deposited with the Trustee or
any Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, or Reset Penalties, if any, or interest
(including Special Interest, if any, and Additional Amounts, if any), if any, on
any Note and remaining unclaimed for two years after such principal, premium, if
any, or interest, if any, or Reset Penalties, if any, have become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.7 Reinstatement. If the Trustee or Paying Agent is unable to
apply any money in accordance with this Article VIII with respect to any Notes
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture, the Guarantees, such Notes and the Collateral
Documents from which the Company or the Guarantors have been discharged or
released pursuant to Section 8.2 or 8.3 hereof shall be revived and reinstated
as though no deposit had occurred pursuant to this Article VIII with respect to
such Notes, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 8.5 hereof with respect to such
Notes in accordance with this Article VIII; provided that if the Company or any
Guarantor makes any payment of principal of, premium, if any, or interest on, or
Reset Penalty in respect of, any such Note following such reinstatement of its
obligations, the Company or such Guarantor, as the case may be, shall be
subrogated to the Holders of such Notes to receive such payment from the money
so held in trust.
ARTICLE IX
AMENDMENTS
SECTION 9.1 Without Consent of Holders. The Company, the Guarantors and
the Trustee may, at any time, and from time to time, without notice to or
consent of any Holder of Notes, enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes.
(a) to evidence the succession of another Person to the Company or the
Guarantors, as applicable, and the assumption by such successor of the covenants
of the Company contained in the Notes, this Indenture, the Collateral Documents
or the Senior Note Collateral Documents
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or such Guarantors in the Guarantees, this Indenture, the Collateral Documents
or the Senior Note Collateral Documents; or
(b) to add to the covenants of the Company, for the benefit of the Holders
of all of the Notes, or to surrender any right or power herein conferred upon
the Company or the Guarantors by the Indenture, the Collateral Documents or the
Senior Note Collateral Documents; or
(c) to add any additional Events of Default, provided that no Event of
Default shall be added if it could result in interest paid or credited on the
Notes to Persons not constituting Excluded Holders being subject to Canadian
withholding tax; or
(d) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; or
(e) to evidence and provide for the acceptance of appointment hereunder of
a successor Trustee; or
(f) to add additional security for the Notes and/or the Guarantees; or
(g) to make provisions with respect to the conversion rights of Holders
pursuant to the requirements of Section 13.4 hereof; or
(h) to cure any ambiguity herein, in the Collateral Documents or the
Senior Note Collateral Documents, to correct or supplement any provision hereof,
in the Collateral Documents or the Senior Note Collateral Documents which may be
inconsistent with any other provisions herein or therein or to add any other
provisions with respect to matters or questions arising under this Indenture,
the Collateral Documents or the Senior Note Collateral Documents; provided that
such actions shall not adversely affect the affect the interests of the Holders
of Notes in any material respect; or
(i) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act.
SECTION 9.2 With Consent of Holders. With the consent of the Holders of
not less than a majority in principal amount at Stated Maturity of the
outstanding Notes, by Act of said Holders delivered to the Company, the
Guarantors and the Trustee, the Company, the Guarantors and the Trustee may
enter into one or more indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture, the Collateral Documents or the Senior Note Collateral
Documents or of modifying in any manner the rights of the Holders; provided that
no such supplemental indenture shall, without the consent of the Holder of each
outstanding Note:
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(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Note, or reduce the principal amount thereof (or any premium,
if any), or the interest (including Additional Amounts, if any, or Special
Interest, if any) thereon or any other amounts in respect thereof, that would be
due and payable upon Maturity thereof, or change the place of payment where, or
in the coin or currency in which, any Note or any premium or interest (including
Additional Amounts, if any) thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity thereof;
or
(b) reduce the percentage in principal amount of the outstanding Notes,
the consent of whose Holders is required for any such supplemental indenture or
required for any waiver of compliance with the provisions of this Indenture, the
Collateral Documents or the Senior Note Collateral Documents; or
(c) modify any of the provisions of Section 6.4 hereof, except to increase
any percentage set forth therein or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holders
of each outstanding Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate, the Notes
or the Guarantees to any other Indebtedness other than the Senior Indebtedness;
or
(e) make any change in the provisions of Article XII which would adversely
affect the holders of the Notes; or
(f) adversely affect the right of the holders of the Notes to convert such
Notes or the Reset Penalty payment provisions contained in Article XIII hereof;
or
(g) modify any provision of this Indenture relating to the obligations of
the Company to make offers to purchase Notes upon a Change of Control or from
the proceeds of an Asset Sale or upon a Termination of Trading; or
(h) modify any of the provisions of this Section 9.2, except to increase
any percentage set forth herein or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holders
of each outstanding Note affected thereby; or
(i) amend, supplement or otherwise modify the provisions of the Indenture
relating to the Guarantees.
It shall not be necessary for any Act of Holders under this Section 9.2 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof. Notwithstanding
the foregoing, so long as the Senior Notes are outstanding and the Senior Note
Indenture has not been satisfied and discharged, the Trustee shall not cause to
become effective a supplemental indenture (i) amending any Collateral Documents
or Senior Note Collateral Documents unless a supplemental indenture to the
Senior
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Note Indenture making the same amendment to such Collateral Document or Senior
Note Collateral Document becomes simultaneously effective, or (ii) amending
either Section 4.8 or Section 11.4 of the Indenture unless a supplemental
indenture to the Senior Note Indenture making the same amendment to Section 4.8
or Section 11.4 of the Senior Note Indenture, as the case may be, becomes
simultaneously effective.
SECTION 9.3 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article IX, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.4 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes shall comply with the Trust Indenture
Act as then in effect.
SECTION 9.5 Revocation and Effect of Consents and Waivers. A consent to an
amendment, supplement or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of such Note or portion of such Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on such Note; provided that such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Note or portion of
such Note if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective. After an amendment,
supplement or waiver becomes effective pursuant to this Article IX, it shall
bind every Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 calendar
days after such record date.
SECTION 9.6 Changed Terms of Notes. If a supplemental indenture changes
the terms of a Note, the Trustee may require the Holder thereof to deliver such
Note to the Trustee. The Trustee may place an appropriate notation on such Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for such Note
shall issue and the Trustee shall authenticate a new Note (accompanied by a
notation of the Guarantees duly endorsed by the Guarantors) that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment or supplement.
SECTION 9.7 Trustee to Execute Supplemental Indentures. The Trustee shall
execute any supplemental indenture authorized pursuant to this Article IX if
such supplemental indenture
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does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but shall not be required to, execute such
supplemental indenture. In executing any supplemental indenture, the Trustee
shall be entitled to receive indemnity reasonably satisfactory to it and to
receive, and (subject to Section 7.1 hereof) shall be fully protected in relying
upon, an Officers' Certificate (which need only cover the matters set forth in
clause (a) below) and an Opinion of Counsel provided by the Company stating
that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors have all necessary corporate power and
authority to execute and deliver the supplemental indenture and that the
execution, delivery and performance of such supplemental indenture has been duly
authorized by all necessary corporate action of the Company and the Guarantors;
(c) the execution, delivery and performance of the supplemental indenture
do not conflict with, or result in the breach of or constitute a default under
any of the terms, conditions or provisions of (i) this Indenture, (ii) the
charter documents and by-laws of the Company or any Guarantor, or (iii) any
material agreement or instrument to which the Company or any Guarantor is
subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of Counsel, the
execution, delivery and performance of the supplemental indenture do not
conflict with, or result in the breach of any of the terms, conditions or
provisions of (i) any law or regulation applicable to the Company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly executed and
delivered by the Company and the Guarantors, and the Indenture together with
such supplemental indenture constitutes a legal, valid and binding obligations
of the Company and the Guarantors enforceable against the Company and the
Guarantors, as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and
(f) the Indenture together with such amendment or supplement complies with
the Trust Indenture Act.
SECTION 9.8 Solicitation of Consents. Neither the Company nor any of its
Subsidiaries nor any of their Affiliates shall, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holders of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture, the
Collateral Documents, the Senior Note Collateral Documents or the Notes unless
such consideration is offered to be paid or agreed to be paid to all Holders of
the Notes that
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consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
ARTICLE X
GUARANTEES
SECTION 10.1 Guarantees. (a) For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Guarantors, together with each Restricted Subsidiary of the Company which in
accordance with Section 4.9 is required in the future to guarantee the
obligations of the Company and the Guarantors under the Notes, the Indenture and
the Collateral Documents and the Senior Note Collateral Documents upon execution
of a supplemental indenture, hereby jointly and severally, irrevocably and
unconditionally guarantees to the Trustee and to each Holder of a Note
authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Notes, or any of the Collateral Documents
or the Senior Note Collateral Documents or the obligations of the Company and
the Guarantors, under this Indenture, that: (i) the principal of, premium, if
any, and any interest, Additional Amounts, if any, and Special Interest, if any,
on the Notes (including, without limitation, any interest that accrues after the
filing of a proceeding of the type described in Sections 6.1(h) and (i)), and
any other amount due in respect of the Notes, and any fees, expenses and other
amounts owing under the Indenture and the Collateral Documents will be duly and
punctually paid in full when due, whether at Stated Maturity, by acceleration,
call for redemption, upon a Change of Control Offer, Asset Sale Offer, exercise
of a repurchase right upon a Termination of Trading, purchase or otherwise, and
interest on the overdue principal and (to the extent permitted by law) interest,
if any, Additional Amounts, if any, and Special Interest, if any, on the Notes,
and any other amount due in respect of the Notes, if lawful, and all other
obligations of the Company and the other Guarantors to the Holders of the Notes
under this Indenture, the Notes, the Collateral Documents and the Senior Note
Collateral Documents, whether now or hereafter existing, will be promptly paid
in full or performed, all strictly in accordance with the terms hereof, of the
Notes, the Collateral Documents and the Senior Note Collateral Documents; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration, call for redemption, upon a Change of Control
Offer, Asset Sale Offer, exercise or a repurchase right upon a Termination of
Trading, purchase or otherwise. If payment is not made when due of any amount so
guaranteed for whatever reason, each Guarantor shall be jointly and severally
obligated to pay the same individually whether or not such failure to pay has
become an Event of Default which could cause acceleration pursuant to Section
6.2. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection. An Event of Default under this Indenture, any
Collateral Document, any Senior Note Collateral Document or the Notes shall
constitute an Event of Default under this Guarantee, and shall entitle the
Holders to accelerate the obligations of each Guarantor hereunder in the same
manner and to the same extent as the obligations of the Company. This Guarantee
is intended
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to be superior to or pari passu in right of payment with all Indebtedness of the
Guarantors and each Guarantor's obligations are independent of any obligation of
the Company or any other Guarantor.
(b) Each Guarantor hereby agrees that its obligations hereunder shall
be joint and several, absolute, irrevocable and unconditional, irrespective of
the validity, regularity or enforceability of the Notes, any Collateral
Document, any Senior Note Collateral Document, this Indenture or any other
document relating thereto, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any provisions hereof or
thereof, any release or non-perfection of Collateral, any release of any other
Guarantor, any delays in obtaining or realizing upon failure to obtain or
realize upon or application of Collateral, the recovery of any judgment against
the Company or any other Person, any action to enforce the same or any other
circumstance (including, without limitation, any statute of limitations) which
might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives promptness, diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company or any other Person, any right to require a proceeding
first against the Company or any other Person, protest, notice and all demands
whatsoever and covenants that its Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture,
the Collateral Documents, the Senior Note Collateral Documents and this
Guarantee. If any Holder or the Trustee is required by any court or otherwise to
return to the Company or to any Guarantor, or any receiver, trustee, assignee,
liquidator or similar official under any applicable bankruptcy or insolvency or
other similar law any amount paid by the Company or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(c) Until such time as the Notes and the other obligations of the
Company guaranteed hereby have been satisfied in full, each Guarantor hereby
irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holders or the Trustee against the
Company or any other Guarantor or any Collateral or Senior Note Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company or any other Guarantor, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to such
Guarantor in violation of the preceding sentence at any time prior to the later
of the payments in full of the Notes and all other amounts payable under this
Indenture, this Guarantee, the Collateral Documents, the Senior Note Collateral
Documents and the Stated Maturity of the Notes, such amount shall be held in
trust for the benefit of the Holders and the Trustee and shall forthwith be paid
to the Trustee to be credited and applied to the Notes and all other amounts
payable under this Guarantee, whether matured or unmatured,
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in accordance with the terms of this Indenture, or to be held as Collateral for
any obligations or other amounts payable under this Guarantee thereafter
arising.
(d) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 10.1(d) is knowingly made in
contemplation of such benefits. Each Guarantor further agrees that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
subject to this Article X, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article VI for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations guaranteed hereby as provided in
Article VI, such obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of this Guarantee.
(e) A Guarantor that makes a distribution or payment under a Guarantee
shall be entitled to contribution from each other Guarantor in a pro rata amount
based on the Adjusted Net Assets of each such other Guarantor for all payments,
damages and expenses incurred by that Guarantor in discharging the Company's
obligations with respect to the Notes, this Indenture, the Collateral Documents
and the Senior Note Collateral Documents or any other Guarantor with respect to
its Guarantee, the Collateral Documents and the Senior Note Collateral
Documents, so long as the exercise of such right does not impair the rights of
the Holders of the Notes under the Guarantees, any Collateral Document or any
Senior Note Collateral Document.
SECTION 10.2 Limitation of Guarantor's Liability. Each Guarantor and,
by its acceptance hereof, each beneficiary hereof, hereby confirms that it is
its intention that the Guarantee by such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of the United States Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, the
Companies Creditors' Arrangement Act (Canada), the Bankruptcy and Insolvency Act
(Canada) or any other bankruptcy, receivership, insolvency, liquidation or other
similar legislation or legal principles under any applicable foreign law to the
extent applicable to any Guarantees. To effectuate the foregoing intention, each
such Guarantor hereby irrevocably agrees that the obligation of such Guarantor
under its Guarantee under this Article X shall be limited to the lesser of (a)
an amount equal to such Guarantor's Adjusted Net Assets as of the date such
Guarantee is executed and delivered or (b) the maximum amount as will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws (including, if
applicable, its obligations under the Senior Notes), and after giving effect to
any collections from, rights to receive contribution from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article X result in the obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent conveyance or
fraudulent transfer or not otherwise being void, voidable or unenforceable under
any bankruptcy, reorganization, receivership, insolvency, liquidation or other
similar legislation or legal principles under any applicable foreign law.
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SECTION 10.3 Execution and Delivery of Guarantees. To further evidence
its Guarantee set forth in Section 10.1 hereof, each Guarantor hereby agrees
that notation of such Guarantee shall be endorsed on each Note authenticated and
delivered by the Trustee and executed by either manual or facsimile signature of
an authorized officer of such Guarantor. Each Guarantor hereby agrees that its
Guarantee set forth in Section 10.1 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee. If an officer of a Guarantor whose signature is on this Indenture or
a Note no longer holds that office at the time the Trustee authenticates such
Note or at any time thereafter, such Guarantor's Guarantee of such Note shall be
valid nevertheless. The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of the Guarantor.
SECTION 10.4 When a Guarantor May Merge, etc.. No Guarantor shall
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person) another corporation, Person or entity whether or not
affiliated with such Guarantor (but excluding any consolidation, amalgamation or
merger if the surviving corporation is no longer a Subsidiary) unless (i)
subject to the provisions of Section 10.6 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture and appropriate Collateral Documents and Senior Note Collateral
Documents in form reasonably satisfactory to the Trustee under the Notes, this
Indenture, the Collateral Documents; and (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists. In connection with any
such consolidation or merger, the Trustee shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel stating that such consolidation
or merger is permitted by this Section 10.4.
SECTION 10.5 Additional Guarantors (a) The Company shall cause each
Subsidiary which, after the date of this Indenture, is required pursuant to
Section 4.9(a) hereof to become a Guarantor to (a) execute and deliver to the
Trustee a supplemental indenture in form and substance reasonably satisfactory
to the Trustee which subjects such Restricted Subsidiary to the provisions of
this Indenture as a Guarantor, (b) execute and deliver to the Trustee,
simultaneous with its execution and delivery to the Trustee of a supplemental
indenture and any applicable Collateral Documents and Senior Note Collateral
Documents; and (c) deliver to the Trustee an Opinion of Counsel to the effect
that such supplemental indenture has been duly authorized and executed by such
Person and constitutes the legal, valid, binding and enforceable obligation of
such Person (subject to such customary exceptions concerning debtor's rights and
equitable principles as may be acceptable to the Trustee in its reasonable
discretion) and containing such other matters as the Trustee may reasonably
request.
(b) Any Person that was not a Guarantor on the Issue Date may become a
Guarantor by executing and delivering to the Trustee (a) a supplemental
Indenture in form and substance reasonably satisfactory to the Trustee and any
applicable Collateral Documents and Senior Note Collateral Documents, and (b) an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized and executed by such Person and constitutes the legal, valid, binding
and enforceable obligation of such Person (subject to such customary exceptions
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concerning creditors' rights and equitable principles as may be acceptable to
the Trustee in its reasonable discretion) and containing such other matters as
the Trustee may reasonably request.
SECTION 10.6 Release of a Guarantor. (a) Upon the sale or other
transfer of all of the Capital Stock of a Guarantor, other than a Leasing
Company or NWE Cyprus, to any Person that is not an Affiliate of the Company in
compliance with the terms of this Indenture (including, without limitation,
Section 4.8 hereof), such Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under this
Indenture and any Collateral Document to which it is a party without any further
action required on the part of the Trustee or any Holder; provided that the Net
Cash Proceeds of such sale or other disposition are applied in accordance with
Section 4.8 of the Indenture as if such sale or disposition were an Asset Sale
and in accordance with the other applicable provisions of this Indenture. The
Trustee shall deliver an appropriate instrument or instruments evidencing such
release upon receipt of a request of the Company accompanied by an Officers'
Certificate and Opinion of Counsel certifying as to the compliance with this
Section 10.6(a), Section 4.8 hereof and the other applicable provisions of this
Indenture.
(b) Notwithstanding the foregoing, any Guarantee by a Restricted
Subsidiary other than NWE Cyprus, a Leasing Company, BCL, WTC or a future
Wholly-Owned Subsidiary of the Company shall be automatically and
unconditionally released and discharged upon the release or discharge of the
guarantee of Guaranteed Indebtedness which resulted in the creation of such
Guarantee pursuant to Section 4.9 hereof, except a discharge or release by, or
as a result of, payment under such guarantee. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to compliance with this Section 10.6(b) and the other
applicable provisions of this Indenture.
ARTICLE XI
COLLATERAL AND SECURITY
SECTION 11.1 Collateral Documents. The due and punctual payment of the
principal of, premium, if any, interest (including Additional Amounts, if any,
and Special Interest, if any) on, and any other amounts due in respect of, the
Notes when and as the same shall be due and payable, whether on an Interest
Payment Date, at Stated Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, exercise of a repurchase right upon a
Termination of Trading, purchase or otherwise, and interest on the overdue
principal of and interest (including Additional Amounts, if any, and Special
Interest, if any) (to the extent permitted by law), on the Notes and performance
of all other obligations of the Company and any Guarantor to the Holders of the
Notes or the Trustee under this Indenture, the Notes, the Guarantees, the
Collateral Documents and the Senior Note Collateral Documents, according to the
terms hereunder or thereunder, shall be secured (i) as provided in the
Collateral Documents, (ii) as provided in the Senior Note Collateral Documents,
(iii) by a pledge by any future
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Guarantor of the Capital Stock of any Wholly-Owned Subsidiary (whether now owned
or hereafter acquired) of such future Guarantor and any and all dividends,
distributions and proceeds thereof, and (iv) by a pledge by all Wholly-Owned
Subsidiaries of all Intercompany Notes from Restricted Subsidiaries owned by
such Wholly-Owned Restricted Subsidiaries (other than any Intercompany Note made
with the dividends, distributions, payments and proceeds of Technocom Preferred
Stock or other Collateral or otherwise constituting Collateral). The Company
will cause such future Guarantors and Wholly-Owned Subsidiaries to xxxxx x Xxxx
and security interest pursuant to Senior Note Collateral Documents substantially
similar to the Company Senior Note Security Agreement, and any other additional
Senior Note Collateral Documents as may be necessary or appropriate to create or
make effective such Lien and security interest, such Lien and security interest
to be for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes to secure the Notes, the Guarantees and the other
obligations of the Company and the Guarantors under this Indenture, the other
Collateral Documents and the Senior Note Collateral Documents. Each Holder, by
its acceptance of a Note, consents and agrees to the terms of the Collateral
Documents and the Senior Note Collateral Documents (including, without
limitation, the provisions providing for foreclosure and release of Collateral
and the Senior Note Collateral, as applicable) as the same may be in effect or
may be amended from time to time in accordance with the terms thereof and hereof
and authorizes and directs the Trustee to enter into each of the Collateral
Documents and the Senior Note Collateral Documents and to perform its respective
obligations and exercise its respective rights thereunder in accordance
therewith. The Company and each Guarantor will do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Collateral Documents and the Senior Note Collateral Documents
to which it is a party, to assure and confirm to the collateral agent and the
Trustee the Liens in the Collateral and the Senior Note Collateral contemplated
hereby and by the Collateral Documents and the Senior Note Collateral Documents
to which it is a party, as from time to time constituted, so as to render the
same available to the fullest extent permitted by law for the security and
benefit of this Indenture and of the Notes and the Guarantees secured thereby,
according to the intent and purposes herein expressed. The Company and each
Guarantor shall to the fullest extent permitted by law take, upon request of the
Trustee, any and all actions reasonably required to cause the Collateral
Documents and the Senior Note Collateral Documents to which it is a party to
create and maintain, as security for the obligations of the Company and the
Guarantors under this Indenture, the Notes, the Guarantees, the Collateral
Documents and the Senior Note Collateral Documents, valid and enforceable,
perfected (except as expressly provided therein), Liens in and on all the
Collateral and Senior Note Collateral, in favor of the Trustee or a collateral
agent for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Notes and for the benefit of the Senior Note Trustee and the
equal and ratable benefit of the Holders of the Senior Notes so long as the
Senior Notes remain outstanding without preference, priority or distinction of
any thereof over any other by reason of difference in time of issuance, sale or
otherwise, superior to and prior to the rights of all third persons except with
respect to the Senior Note Collateral, the Senior Note Trustee and the Holders
of the Senior Notes, and subject to no other Liens, other than as provided
herein and therein.
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SECTION 11.2 Recording and Opinions. (a) Each of the Company and the
Guarantors represents that it has caused or will promptly cause to be executed
and delivered, filed and recorded and covenants that it will promptly cause to
be executed and delivered and filed and recorded, all instruments and documents,
and represents that it has done and will do or will cause to be done all such
acts and other things, at the Company's or the Guarantor's expense, as
applicable, as are necessary to subject the Collateral and the Senior Note
Collateral to valid Liens and to perfect those Liens, all to the fullest extent
permitted by law. Each of the Company and the Guarantors shall, as promptly as
practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the Liens under the Collateral Documents and the
Senior Note Collateral Documents (except as otherwise expressly provided herein
and therein), all to the fullest extent permitted by law.
(b) The Company shall furnish to the Trustee promptly after the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments or otherwise necessary to make effective the
Liens intended to be created by the Collateral Documents and the Senior Note
Collateral Documents, and reciting the details of such action, or (ii) stating
that, in the opinion of such counsel, no such action is necessary to make such
Liens effective. Such opinion of counsel shall cover the necessity for
recordings, registrations and filings required in all relevant jurisdictions.
(c) The Company shall furnish to the Trustee within three months after
each anniversary of the Issue Date, an Opinion of Counsel, dated as of such
date, stating either that (i) in the opinion of such counsel, all action has
been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance or
otherwise as is necessary to maintain the effectiveness of the Liens intended to
be created by the Collateral Documents and the Senior Note Collateral Documents
and reciting the details of such action or (ii) in the opinion of such counsel,
no such action is necessary to maintain the effectiveness of such Liens. Such
opinion of counsel shall cover the necessity of recordings, registrations,
filings, re-recordings, re-registrations and refilings in all relevant
jurisdictions.
(d) The Company shall otherwise comply with the provisions of Section
314(b) of the Trust Indenture Act.
SECTION 11.3 Further Assurances and Security. The Company and each
Guarantor will execute, acknowledge and deliver to the Trustee, at the Company's
and/or such Guarantor's expense, at any time and from time to time such further
assignments, transfers, assurances or other instruments as may be reasonably
required to effectuate the terms of this Indenture or the Collateral Documents
and the Senior Note Collateral Documents, and will at any time and from time to
time do or cause to be done all such acts and things as may be necessary or
proper, or as may be reasonably required by the Trustee, to assure and confirm
to the collateral agent and the Trustee the Liens in the Collateral and the
Senior Note Collateral contemplated hereby, by
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the Collateral Documents and by the Senior Note Collateral Documents, all to the
fullest extent permitted by law. The Trustee shall have no duty to determine
whether any filing or recording is necessary hereunder or under any Collateral
Document.
SECTION 11.4 Possession, Use and Release of Collateral.
(a) All payments received on any Collateral, including on the Technocom
Preferred Stock or in respect of any Qualified Investments or Intercompany Notes
that constitute Collateral, shall be promptly deposited, without commingling
prior to such deposit, in the Company Convertible Note Escrow Account and will
also constitute Collateral and be subject to a first priority perfected lien in
favor of the Trustee and the Holders of the Notes. All funds deposited in the
Company Convertible Note Escrow Account shall be invested at the direction of
the Company, except during the continuance of a Default or an Event of Default,
and at the direction of the Trustee during the continuance of a Default or an
Event of Default, in Eligible Cash Equivalents pursuant to the terms and
conditions of and in the manner provided for in the Company Convertible Note
Escrow Account Agreement.
(b) Funds or Eligible Cash Equivalents in the Company Convertible Note
Escrow Account may, subject to subsections (f) and (g) below, be utilized
(i) to pay when due principal of, premium, if any, interest
(including Additional Amounts, if any, and Special Interest, if any)
on, and any other amounts due in respect of, the Notes; or
(ii) to make Qualified Investments if such Qualified
Investments are made in a manner which complies with subsection (c)
below; or
(iii) to make an intercompany loan to a Leasing Company
evidenced by an Intercompany Note (which will constitute Collateral),
so long as such Leasing Company thereafter utilizes the funds received
to make Qualified Investments in a manner which complies with
subsection (c) below.
(c) A Qualified Investment shall be deemed to have been made in
compliance with this subsection (c) if, in respect of such Qualified Investment,
the following conditions are satisfied, and the Trustee shall have received an
Officer's Certificate of the Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing, or will occur as a result thereof;
(ii) a Lien on the Qualified Investment is granted to the
Trustee or a collateral agent for the benefit of the Trustee and the
equal and ratable benefit of the Holders of the Notes and the benefit
of the Senior Note Trustee and the equal and ratable benefit of the
Holders of the Senior Notes so long as the Senior Notes are outstanding
to secure
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the Notes, the Guarantees and the other Obligations of the Company and
the Guarantors under this Indenture and the other Collateral Documents
and, on a junior basis, to secure any applicable Intercompany Note and
to secure the Senior Notes and the other obligations of the Company and
the Guarantors under the Senior Notes, the Senior Note Indenture and
the Senior Note Collateral Documents;
(iii) the entity in which such Qualified Investment is made
has all licenses, registrations and permits necessary to operate the
Telecommunications Business in which it is engaging or proposes to
engage on the date of such Qualified Investment;
(iv) all licenses, registrations and permits required for
such Qualified Investment and such Liens have been obtained; and
(v) appropriate Collateral Documents have been executed and
delivered and properly recorded, registered and filed to the extent
necessary to make effective the Liens intended to be created therein.
The Company shall also deliver (x) an Opinion of Counsel covering clause (v)
above in the form and substance reasonably satisfactory to the Trustee, and (y)
such other documents as may be required by the Collateral Documents.
(d) Subject to subsections (f) and (g) of this Section 11.4, Collateral
may be released from the Liens created by the Collateral Documents (a) upon
payment in full of the Notes in accordance with the terms of the Notes and this
Indenture and the other obligations then due and owing under the Notes, this
Indenture and the Collateral Documents; (b) with respect to inventory, upon the
sale of such inventory in the ordinary course of business; (c) with respect to
Collateral sold or disposed of in an Asset Sale if such sale or other
disposition is not prohibited under this Indenture and if the Net Cash Proceeds
of such sale or other disposition are applied as provided in Section 4.8 hereof;
(d) with respect to amounts in the Company Convertible Note Escrow Account
consisting of Net Cash Proceeds of Asset Sales, upon the expenditure of such
cash if such expenditure is made in accordance with this Indenture; and (e) with
respect to other amounts in the Company Convertible Note Escrow Account other
than the Net Cash Proceeds of any Asset Sale, including payments received on the
Technocom Preferred Stock, Qualified Investments or Intercompany Notes that
constitute Collateral, if the procedures described in this Section 11.4 are
complied with; provided that all such releases described above are in compliance
with the Trust Indenture Act.
(e) In the event of any Asset Sale, the Company or the relevant
Restricted Subsidiary shall cause the Net Cash Proceeds derived or resulting
from any Asset Sale that involves any Collateral to be deposited in the Company
Convertible Note Escrow Account on or before the Business Day following the
fifth Business Day on which such Net Cash Proceeds are received by the Company
or such Restricted Subsidiary. In the event that the Company or the relevant
Restricted Subsidiary engages in an Asset Sale with respect to Collateral which
is permitted by this Indenture and the Collateral Documents (or the Company
designates a Guarantor to be an
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Unrestricted Subsidiary in accordance with this Indenture), the Trustee shall
execute and deliver such documents as requested by the Company to evidence the
release of the Liens of the Collateral Documents on the assets subject to the
Asset Sale or on the assets owned by such Unrestricted Subsidiary, as
applicable. The proceeds of such Collateral (including any earnings thereon) may
be released from the Company Convertible Note Escrow Account in order to, and in
only such amount as is required to, (a) pay the principal amount of the Notes
tendered pursuant to an Asset Sale Offer, or (b) purchase Replacement Assets to
the extent permitted by Section 4.8 hereof, in which case the proceeds of such
Collateral may be released to the Company, if such proceeds are to be used in
accordance with this Indenture; provided that upon consummation of such
Investment or purchase the collateral agent or the Trustee shall have received a
first priority fully perfected Lien, subject to Permitted Liens and the
interests of the Senior Note Trustee and the Holders of the Convertible Notes,
in the Property or assets acquired by the Company.
(f) Notwithstanding any provision of Section 11.5 to the contrary, the
disposition of inventory in the ordinary course of the Company's and Guarantors'
businesses, as applicable, may be made without delivery to the Trustee of
certificates required by the Trust Indenture Act. However, in lieu thereof, the
Company will be required to deliver semi-annual Officers' Certificates to the
effect that all such dispositions have been made in the ordinary course of the
applicable Company's or Guarantors' business and that the proceeds therefrom
have been applied in a manner permitted by the Indenture. The Trustee shall, in
the absence of negligence or bad faith on its part, be entitled to rely on such
Officers' Certificates and Opinions of Counsel with respect to the Company's and
the Guarantors' compliance with the collateral release provisions of this
Indenture.
(g) The release of any Collateral from the terms of the Collateral
Documents, or the release, in whole or in part, of the Liens created by the
Collateral Documents, will not be deemed to impair the security under this
Indenture in contravention of the provisions thereof and of the Collateral
Documents if and to the extent that the Collateral is released pursuant to this
Indenture and the Collateral Documents. In connection with the release of
Collateral, the Trustee shall determine whether it has received all
documentation required by Section 314(d) of the Trust Indenture Act to permit
such release.
SECTION 11.5 Certificates of the Company. The Company will furnish to
the Trustee prior to each proposed release of Collateral pursuant to the
Collateral Documents other than by reason of transactions referred to in Section
11.4(f) above, all documents required by Section 314(d) of the Trust Indenture
Act. The Trustee may, to the extent permitted by Sections 7.1 and 7.2 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such instruments. Any certificate or opinion
required by Section 314(d) of the Trust Indenture Act may be made by an Officer
of the Company or a Guarantor, as the case may be, except in cases where Section
314(d) of the Trust Indenture Act requires that such certificate or opinion be
made by an independent engineer, appraiser or other expert within the meaning of
Section 314(d) of the Trust Indenture Act.
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SECTION 11.6 Authorization of Actions to be Taken by the Trustee Under
the Collateral Documents. The Trustee may, in its sole discretion and without
the consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of the
Collateral Documents and (b) collect and receive any and all amounts payable in
respect of the obligations of the Company and the Guarantors hereunder. The
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Collateral Documents, or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
government enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or of the Trustee).
SECTION 11.7 Authorization of Receipt of Funds by the Trustee Under the
Collateral Documents. The Trustee is authorized to receive any funds for the
benefit of the Holders distributed under the Collateral Documents, and to make
further distributions of such funds to the Holders according to the provisions
of this Indenture and the Collateral Documents.
SECTION 11.8 Possession, Use and Release of Senior Note Collateral.
(a) All funds deposited in the Company Senior Note Escrow Account
representing net proceeds of the Senior Notes constitute Senior Note Collateral
and will, at the direction of the Company except during the continuance of a
Default or an Event of Default under the Senior Note Indenture and at the
direction of the Trustee during the continuance of a Default or an Event of
Default under the Senior Note Indenture, be invested in Eligible Cash
Equivalents in the manner provided for in the Company Senior Note Escrow Account
Agreement. No funds shall be released from the Company Senior Note Escrow
Account except as provided herein or therein.
(b) Subject to the provisions of Section 4.8(k) below and Section
11.4(f) above, up to $9,000,000 of the net proceeds of the Senior Notes may be
withdrawn from the Company Senior Note Escrow Account and utilized by the
Company to make Qualified Investments if, in respect of each such Qualified
Investment, the following conditions are satisfied, and the Trustee shall have
received an Officers' Certificate of the Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing, or will occur as a result thereof;
(ii) a Lien on the Qualified Investment is granted to the
Senior Note Trustee or a collateral agent for the benefit of the
Trustee and the equal and ratable benefit of the Holders to secure the
Notes, the Guarantees and the other obligations of the Company and the
Guarantors under this Indenture and the Collateral Documents;
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(iii) the entity in which such Qualified Investment is made
has all licenses, registrations and permits necessary to operate the
Telecommunications Business in which it is engaging or proposes to
engage on the date of such Qualified Investment;
(iv) all licenses, registrations and permits required for
such Qualified Investment and such Liens have been obtained; and
(v) appropriate Senior Note Collateral Documents have been
executed and delivered and properly recorded, registered and filed to
the extent necessary to make effective the Liens intended to be created
therein.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (v) above and (y) such other documents as may be required by the Senior
Note Collateral Documents to be delivered by the Company to a collateral agent
or the Trustee.
(c) Subject to the provisions of Section 11.8(k) and Section 11.4(f)
above, the net proceeds of the Senior Notes (including any portion of the
$9,000,000 of net proceeds of the Senior Notes not used as provided in
subsection (b) above) retained in the Company Senior Note Escrow Account may be
withdrawn from the Company Senior Note Escrow Account and utilized by the
Company to purchase Capital Stock of the Leasing Companies or to make
intercompany loans to the Leasing Companies evidenced by Intercompany Notes,
each of which will constitute Senior Note Collateral, by transferring such funds
to the applicable Leasing Company Escrow Accounts of such Leasing Companies, if
the following conditions are satisfied, and the Trustee shall have received an
Officers' Certificate of the Company and the applicable Leasing Company to such
effect:
(i) no Default or Event of Default has occurred and is
continuing or will occur as a result thereof;
(ii) the applicable Leasing Company utilizes such funds
(except for funds to be utilized for Qualified Investments to the
extent permitted by the Senior Note Indenture) to purchase
Telecommunications Assets contemporaneously with such purchase of
Capital Stock or intercompany loan, as applicable, from a supplier
located in the United States, Canada, Western Europe (including
Scandinavia), Israel, Japan, Taiwan and South Korea;
(iii) the applicable Leasing Company contemporaneously enters
into a Telecommunications Asset Lease covering such Telecommunications
Assets with a Restricted Subsidiary or a Qualified Joint Venture;
(iv) Liens on such Telecommunications Asset Lease are granted
to the Senior Note Trustee or a collateral agent for the benefit of the
Trustee and the equal and ratable benefit of the Holders to secure the
Notes, the Guarantees and the other obligations of
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the Company and the Guarantors under this Indenture and the Collateral
Documents and to secure any applicable Intercompany Note;
(v) the Restricted Subsidiary or Qualified Joint Venture that
will be the lessee under the applicable Telecommunications Asset Lease
has or has applied for all licenses, registrations and permits
necessary to operate the Telecommunications Assets subject to such
Telecommunications Asset Lease and the Telecommunications Business for
which such Telecommunications Assets are intended to be utilized;
(vi) if a Qualified Investment is to be made by a Leasing
Company with that portion of the $9,000,000 of net proceeds of the
Senior Notes not utilized by the Company for Qualified Investments
pursuant to subsection (b) of this Section 11.8, (x) the Leasing
Company has granted a Lien on such Qualified Investment to the Senior
Note Trustee or a collateral agent for the benefit of the Trustee and
the equal and ratable benefit of the Holders to secure the Notes, the
Guarantees and the other obligations of the Company and the Guarantors
under this Indenture and the other Collateral Documents and to secure
any applicable Intercompany Note, and (y) all licenses, registrations
and permits required for such Qualified Investment and such Lien have
been obtained; and
(vii) appropriate Senior Note Collateral Documents have been
executed and delivered and properly recorded, registered and filed to
the extent necessary to make effective the Lien intended to be created
therein and have been delivered to the Trustee or the collateral agent.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (vii) above in form and substance reasonably satisfactory to the Trustee
and (y) such other documents as may be required by the Senior Note Collateral
Documents to be delivered to the Trustee or a collateral agent by the Company or
the applicable Leasing Company. If the foregoing conditions are satisfied, the
funds representing the net proceeds of the Senior Notes in the applicable
Leasing Company Escrow Account derived from the Investment in the Capital Stock
of the Leasing Company or the intercompany loan evidenced by an Intercompany
Note may be withdrawn and utilized by such Leasing Company to purchase the
applicable Telecommunications Assets or make the applicable Qualified
Investments.
(d) All payments made to the Company in respect of any Qualified
Investments or Intercompany Notes evidencing loans of the net proceeds of the
Senior Notes to Leasing Companies held by the Company or any Pledged Stock of
the Leasing Companies shall be promptly deposited, without commingling prior to
such deposit, in the Company Senior Note Escrow Account and will also constitute
Collateral and be subject to a first priority perfected Lien in favor of a
collateral agent or the Senior Note Trustee for the benefit of the Trustee and
the equal and ratable benefit of the Holders of the Notes and the Senior Note
Trustee and the equal and ratable benefit of the Holders of the Senior Notes;
and unless and until an Event of Default has occurred and is continuing, the
Company and/or the Leasing Companies and/or the Restricted Subsidiaries will be
entitled to receive and retain, free from the Liens of the Senior
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Note Collateral Documents, payments made under any Intercompany Notes not
evidencing loans to Leasing Companies and any instruments not constituting
Pledged Stock of the Leasing Companies or Qualified Investments.
(e) All payments made by an investee, an obligor or the lessee to any
Leasing Company in respect of any Qualified Investments or Intercompany Notes
held by such Leasing Company or any Telecommunications Asset Lease shall be
promptly deposited, without commingling prior to such deposit, in the applicable
Leasing Company Escrow Account and will also constitute Collateral and be
subject to a first priority perfected Lien in favor of the Trustee or a
collateral agent and subject to Section 11.8(k) below and Section 11.4(f) above
may be utilized
(x) to purchase additional Telecommunications Assets
for additional Telecommunications Asset Leases if the following
conditions are satisfied, and the Trustee shall have received an
Officer's Certificate of the Company to such effect:
(i) no Default or Event of Default has occurred and is
continuing or will occur as a result thereof;
(ii) the applicable Leasing Company utilized such funds to
purchase such Telecommunications Assets from a supplier located in the
United States, Canada, Western Europe (including Scandinavia), Israel,
Japan, Taiwan and South Korea;
(iii) the applicable Leasing Company contemporaneously enters
into a Telecommunications Asset Lease covering such Telecommunications
Assets with a Restricted Subsidiary or a Qualified Joint Venture;
(iv) Liens on such Telecommunications Asset Lease are granted
to the Senior Note Trustee or a collateral agent for the benefit of the
Trustee and the equal and ratable benefit of the Holders to secure the
Notes, the Guarantees and the other obligations of the Company and the
Guarantors under this Indenture and the Collateral Documents and to
secure any applicable Intercompany Note;
(v) the Restricted Subsidiary or Qualified Joint Venture that
will be the lessee under the applicable Telecommunications Asset Lease
has or has applied for all licenses, registrations and permits
necessary to operate the Telecommunications Assets subject to such
Telecommunications Asset Lease; and
(vi) appropriate Senior Note Collateral Documents have been
executed and delivered and properly recorded, registered or filed to
the extent necessary to make effective to the fullest extent permitted
by law the Lien intended to be created therein; provided that the
Leasing Company shall also deliver (A) an Opinion of Counsel covering
clause (vi) above and in form and substance reasonably satisfactory to
the Trustee and (B) such other documents as may be required by the
Senior Note Collateral Documents
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to be delivered to a collateral agent or the Senior Note Trustee by the
Company or the Leasing Company;
(y) to pay when due the Accreted Value, premium, if
any, on and interest (including Additional Amounts, if any, and Special
Interest, if any) on the Senior Notes; and
(z) provided that an aggregate amount equal to the
interest due on the Senior Notes in the next succeeding 12 months the
(the "Minimum Amount") exclusive of amounts constituting the net
proceeds of the Senior Notes or the Net Cash Proceeds of any Asset Sale
(whether or not constituting Excess Proceeds or Aggregate Unused
Proceeds) is in the Company Senior Note Escrow Account and the Leasing
Company Escrow Accounts, which Minimum Amount may be utilized only for
the purposes set forth in clauses (x) and (y) above, any amount in
excess of such Minimum Amount may be invested by the Leasing Companies
or the Company in Qualified Investments to the extent permitted by the
Senior Note Indenture if, in respect of each such Qualified Investment,
the following conditions are satisfied and the Trustee shall have
received an Officers' Certificate to such effect:
(i) no Default or Event of Default under
the Senior Note Indenture has occurred and is continuing or
will occur as a result thereof;
(ii) a Lien on the Qualified Investment is
granted to the Senior Note Trustee or a collateral agent for
benefit of the Trustee and the equal and ratable benefit of
the Holders of the Notes to secure the Notes and the
Guarantees and to secure any applicable Intercompany Note;
(iii) the entity in which such Qualified
Investment is made has all licenses, registrations and permits
necessary to operate the Telecommunications Business in which
it is engaging or proposes to engage on the date of such
Qualified Investment;
(iv) all licenses, registrations and permits
required for such Qualified Investment and such Lien have been
obtained; and
(v) appropriate Senior Collateral Documents
have been executed and delivered and properly recorded,
registered or filed to the extent necessary to make effective
to the fullest extent permitted by law the Lien intended to be
created therein.
The Company shall also deliver to the Trustee (x) an Opinion of Counsel covering
clause (v) above and (y) such other documents as may be required by the Senior
Note Collateral Documents to be delivered by the Company to the collateral agent
or the Trustee.
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(f) Although all Pledged Stock, all Intercompany Notes and all other
instruments included in the Senior Note Collateral, including those representing
Qualified Investments, will be delivered to and held by the Trustee, the Senior
Note Trustee or the collateral agent, unless and until an Event of Default has
occurred and is continuing, the Company and/or the Leasing Companies and/or
other Restricted Subsidiaries, as applicable, shall be entitled to exercise any
voting and consensual rights with respect to such Senior Note Collateral.
(g) Any Telecommunications Assets purchased with the net proceeds of
the Senior Notes that are subject to a Telecommunications Asset Lease or a
series of related Telecommunications Asset Leases may not be transferred or
shipped to the lessee under the applicable Telecommunications Asset Lease or
Leases or to a jurisdiction other than the United States, Canada, Western Europe
(including Scandinavia), Israel, Japan, Taiwan and South Korea unless the
applicable lessee has all licenses, registrations and permits necessary to
operate such Telecommunications Assets and the Telecommunications Business for
which such Telecommunications Assets are intended and the Company delivers to
the Trustee a favorable Opinion of Counsel to such effect. With respect to any
Telecommunications Assets not purchased with the net proceeds of the Senior
Notes, up to $5,000,000 of such Telecommunications Assets may be shipped or
transferred to such lessee at any time without such Opinion of Counsel being
required but thereafter, on each occasion when $5,000,000 in the aggregate of
such Telecommunications Assets shall have been shipped or transferred, such
Opinion of Counsel shall be delivered before any additional Telecommunications
Assets may be shipped or transferred.
(h) If no Default or Event of Default has occurred and is continuing,
funds or Eligible Cash Equivalents held in any Leasing Company Escrow Account
may be loaned or advanced to any other Leasing Company Escrow Account or
transferred to the Company Senior Note Escrow Account (until the Senior Notes
are no longer outstanding and the Senior Note Indenture has been satisfied and
discharged, in which case such transfer shall be made to the Company Convertible
Note Escrow Account), and funds or Eligible Cash Equivalents in the Company
Senior Note Escrow Account may be transferred from the Company Senior Note
Escrow Account to any Leasing Company Escrow Account.
(i) Subject to Section 11.8(k) below and Section 11.4(f) above, Senior
Note Collateral may be released from the Liens created by the Senior Note
Collateral Documents (a) upon payment in full of the Notes in accordance with
the terms of the Notes and this Indenture and the other obligations then due and
owing under the Notes, this Indenture and the Collateral Documents; (b) with
respect to inventory, upon the sale of such inventory in the ordinary course of
business; (c) with respect to Collateral sold or disposed of in an Asset Sale if
such sale or other disposition is not prohibited under this Indenture and if the
Net Cash Proceeds of such sale or other disposition are applied as provided in
Section 4.8 hereof; (d) to the extent that a Lien is granted on such Collateral
pursuant to subsection (iv) of the definition of "Permitted Liens" set forth in
Section 1.1 hereof; (e) with respect to amounts in the Company Senior Note
Escrow Account and the Leasing Company Escrow Accounts consisting of Net Cash
Proceeds of Asset Sales, upon the expenditure of such cash if such expenditure
is made in accordance with this
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Indenture; (f) with respect to amounts in the Company Senior Note Escrow Account
and the Leasing Company Escrow Accounts constituting net proceeds of the Senior
Notes if the procedures described in subsection (a), (b) or (c) above are
complied with; (g) with respect to other amounts in the Company Senior Note
Escrow Account and the Leasing Company Escrow Accounts other than the Net Cash
Proceeds of any Asset Sale, including payments received on Pledged Stock,
Telecommunications Asset Leases and Qualified Investments, if the procedures
described in this Section 11.8 are complied with; (h) with respect to Collateral
that is Capital Stock of a Guarantor, if such Guarantor is released pursuant to
Section 10.6 of this Indenture; and (i) with respect to any Intercompany Note
not evidencing a loan of net proceeds of the Senior Notes to the Leasing
Companies, upon the repayment, forgiveness or other termination of such
Intercompany Note; provided that all such releases described above are in
compliance with the Trust Indenture Act.
(j) In the event of any Asset Sale, the Company or the relevant
Restricted Subsidiary shall cause the Net Cash Proceeds derived or resulting
from any Asset Sale that involves any Senior Note Collateral or involves
Telecommunications Assets subject to a Telecommunications Asset Lease to be
deposited in the Company Senior Note Escrow Account (until the Senior Notes are
no longer outstanding and the Senior Note Indenture has been satisfied and
discharged, in which case such transfer shall be made to the Company Convertible
Note Escrow Account) or the applicable Leasing Company Escrow Account, as
applicable, on or before the fifth Business Day following the Business Day on
which such Net Cash Proceeds are received by the Company or such Restricted
Subsidiary. In the event that the Company or the relevant Restricted Subsidiary
engages in an Asset Sale with respect to Senior Note Collateral which is
permitted by this Indenture and the Senior Note Collateral Documents (or the
Company designates a Guarantor to be an Unrestricted Subsidiary in accordance
with this Indenture), the Trustee shall execute and deliver such documents as
requested by the Company to evidence the release of the Liens of the Senior Note
Collateral Documents on the assets subject to the Asset Sale or on the assets
owned by such Unrestricted Subsidiary, as applicable. The proceeds of such
Collateral or such Telecommunications Assets (including any earnings thereon)
may be released from the Company Senior Note Escrow Account (or, if applicable,
the Company Convertible Note Escrow Account) or the applicable Leasing Company
Escrow Account, in order to, and in only such amount as is required to, (a) pay
the principal amount of the Senior Notes or Notes tendered pursuant to an Asset
Sale Offer, or (b) purchase Replacement Assets or Replacement Telecommunications
Assets, as applicable, to the extent permitted by Section 4.8 hereof, in which
case the proceeds of such Senior Note Collateral may be released to the Company,
the Guarantor or Restricted Subsidiary, as applicable, if such proceeds are to
be used in accordance with this Indenture; provided that upon consummation of
such Investment or purchase the Senior Note Trustee or a collateral agent shall
have received first priority fully perfected Liens, subject to Permitted Liens
and the interests of the Trustee and the Holders of the Notes, in the Property
or assets acquired by the Company or any of its Restricted Subsidiaries in
connection therewith or in the case of Replacement Telecommunications Assets, in
the relevant Telecommunications Asset Lease.
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(k) The release of any Senior Note Collateral from the terms of the
Senior Note Collateral Documents, or the release, in whole or in part, of the
Liens created by the Senior Note Collateral Documents, will not be deemed to
impair the security under this Indenture in contravention of the provisions
hereof and of the Senior Note Collateral Documents if and to the extent that the
Collateral is released pursuant to this Indenture and the Senior Note Collateral
Documents. In connection with the release of Senior Note Collateral, the Trustee
shall determine whether it has received all documentation required by Section
314(d) of the Trust Indenture Act to permit such release.
(l) Notwithstanding anything elsewhere contained in this Section 11.8,
at all times on or after November 30, 1998, the Company will be required to have
funds or Eligible Cash Equivalents in the Company Senior Note Escrow Account
and/or the Leasing Company Escrow Accounts in an aggregate amount not less than
an amount necessary to pay on the next succeeding Interest Payment Date the
interest, including Additional Interest, if any, and Special Interest, if any,
on the Senior Notes then outstanding.
(m) The Company and the Leasing Companies may utilize at the Company's
option any funds in the Company Senior Note Escrow Account or the Leasing
Company Escrow Accounts to pay when due the Accreted Value of, the premium, if
any, on, and interest (including Additional Amounts, if any, and Special
Interest, if any) on the Senior Notes; provided that after giving effect to any
such withdrawal there remains in the Company Senior Note Escrow Account and/or
the Leasing Company Escrow Account funds and/or Eligible Cash Equivalents
required by Section 11.8(l) to be so retained.
ARTICLE XII
SUBORDINATION OF NOTES
SECTION 12.1 Notes Subordinated to Senior Indebtedness. The Company and
the Guarantor covenant and agree, and each Holder of a Note, by acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth and except as otherwise set forth in this Article, the
Indebtedness represented by the Notes and this Indenture (including the
Guarantees) and the payment of the principal of and premium, if any, and
interest (including Additional Amounts, if any, and Special Interest, if any) on
each and all of the Notes and of any amounts due in respect of any Notes and
this Indenture (including the Guarantees) (and any payment thereon made or to be
made by a Guarantor under its Guarantee), are hereby expressly made subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness; provided that the Notes will be secured by a first priority lien
on the Collateral and notwithstanding the foregoing, the Notes will rank as to
all assets of the Company or any Leasing Company or, if applicable, other
Guarantors constituting such Collateral, whether or not the Liens purporting to
secure such Collateral are valid and effective (hereinafter called "assets
constituting Collateral" even if there is no effective Lien thereon), and the
payment of any amounts due in respect of any Notes (and any payment thereon made
or to be made by a
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Guarantor under its Guarantee), are senior in right of payment to the Senior
Indebtedness as a result of the subordination provisions contained in the Senior
Note Indenture and the Convertible Note Collateral Documents.
SECTION 12.2 Payment Over of Proceeds Upon Dissolution, Etc. Except as
otherwise provided in Section 12.16, in the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding, relative to the Company or other Obligor or
to its creditors, as such, or to a substantial part of its assets, other than
assets constituting Collateral or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company or any other Obligor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company or any other Obligor, then and in any such
event the holders of Senior Indebtedness shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior
Indebtedness, or provision shall be made for such payment in money or money's
worth, before the Holders of the Notes are entitled to receive any payment or
distribution of any kind or character, whether in cash, property or securities,
on account of principal of or premium, if any, or interest (including Additional
Amounts, if any, and Special Interest, if any) on the Notes and on account of
any amounts due in respect of any Notes and any payment thereon made or to be
made by a Guarantor under its Guarantee, other than in respect of the assets
constituting Collateral, and to that end the holders of Senior Indebtedness
shall be entitled to receive, for application to the payment thereof, any
payment or distribution of any kind or character, whether in cash, property or
securities, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company or
any other Obligor being subordinated to the payment of the Notes, which may be
payable or deliverable in respect of the Notes in any such case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company other
than in respect of the assets constituting Collateral.
In the event that, notwithstanding the foregoing provisions of this
Section , other than in respect of the assets constituting Collateral, the
Trustee or the Holder of any Note shall have received any payment or
distribution of assets of the Company or any other Obligor of any kind or
character, whether in cash, property or securities, prohibited by the foregoing,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company or of a
Guarantor being subordinated to the payment of the Notes or a Guarantee, as
applicable, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to a Trust Officer of the Trustee in writing
or such Holder, as the case may be, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of the Company or any other
Guarantor for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in full, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
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For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company as
reorganized or readjusted, or securities of the Company or any other Guarantor
or any other corporation provided for by a plan of reorganization or
readjustment which are subordinated in right of payment to all Senior
Indebtedness which may at the time be outstanding to substantially the same
extent as, or to a greater extent than, the Notes or the Guarantees are so
subordinated as provided in this Article. The consolidation or amalgamation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another person upon
the terms and conditions set forth in Article V shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the person formed by such consolidation or into
which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article V. Similarly, the consolidation or amalgamation
of a Guarantor with, or the merger of a Guarantor into, another Person or the
liquidation or dissolution of a Guarantor to the extent permitted by this
Indenture shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of a Guarantor for the purposes of this Section.
SECTION 12.3 Prior Payment to Senior Indebtedness upon Acceleration of
Notes. In the event that any Notes are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Notes so become due and payable shall be entitled
to receive payment in full of all amounts due on or in respect of such Senior
Indebtedness before the Holders of the Notes are entitled to receive any payment
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Company or any other Obligor being subordinated to the
payment of the Notes or the Guarantees, as applicable) by the Company or any
other Obligor on account of the principal of or premium, if any, or interest on
or other amounts due in respect of, the Notes or the Guarantees, as applicable,
or on account of the purchase or other acquisition of Notes, other than in
respect of the assets constituting Collateral.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Note prohibited by the
foregoing provisions of this Section , other than in respect of the assets
constituting Collateral, and if such fact shall, at or prior to the time of such
payment, have been made known to a Trust Officer of the Trustee in writing, or
such Holder, as the case may be, then and in such event such payment shall be
paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
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SECTION 12.4 No Payment When Senior Indebtedness in Default.
(a) In the event (i) and during the continuation of any default in the
payment of principal of, premium, if any, on, interest, if any, (including
Additional Amounts if any, and Special Interest, if any) on, or other amounts
due in respect of, any Senior Indebtedness, whether at the date of a required
payment, maturity, upon mandatory prepayment redemption or otherwise, or (ii)
that any event of default with respect to any Senior Indebtedness shall have
occurred and be continuing and shall have resulted in such Senior Indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable unless and until such event of default
shall have been cured or waived in writing or shall have ceased to exist and
such acceleration shall have been rescinded or annulled or if any judicial
proceeding is pending with respect to such event of default with respect to the
Senior Indebtedness, then no payment (including any payment which may be payable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Notes) shall be made by the Company on
account of the principal of, premium, if any, on interest on, or other amounts
due in respect of, the Notes or on account of the purchase, redemption or other
acquisition of Notes, other than in respect of the Collateral.
(b) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Note prohibited by the
foregoing provisions of this Section , other than in respect of the Collateral,
and if such fact shall, at or prior to the time of such payment, have been made
known to a Trust Officer of the Trustee in writing or to such Holder, as the
case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.5 Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Notes shall prevent (a)
the Company or the Guarantors, at any time except during the pendency of any
case, proceeding, dissolution, liquidation, or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 12.2 or under the conditions described in Section
12.3 or 12.4, from making payments at any time of principal of and premium, if
any, or interest (including Additional Amounts, if any, and Special Interest, if
any) on the Notes, or other amount due in respect of the Notes, or the
Guarantees as applicable, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of,
premium, if any, on interest (including Additional Amounts, if any, and Special
Interest, if any) on, or other amounts due in respect of, the Notes or retention
of such payment by the Holders, if, at the time of such application by the
Trustee, it did not have knowledge that such payment would have been prohibited
by the provisions of this Article.
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SECTION 12.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the prior payment in full of all amounts due on or in respect of
Senior Indebtedness, other than in respect of the assets constituting Collateral
with respect to which the Holders of the Notes are not subordinated, the Holders
of the Notes shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of, premium, if any, on, interest
(including Additional Amounts, if any, and Special Interest, if any) on, and any
other amounts due in respect of, the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Notes or the Trustee, shall, as
among the Company and any Guarantor, as the case may be, its respective
creditors other than holders of Senior Indebtedness and the Holders of the
Notes, be deemed to be a payment or distribution by the Company or any
Guarantor, as applicable, to or on account of the Senior Indebtedness.
SECTION 12.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
(a) impair, as among the Company or any Guarantor, its respective creditors
other than holders of Senior Indebtedness and the Holders of the Notes, the
obligation of the Company or such Guarantor, which is absolute and
unconditional, to pay to the Holders of the Notes, the principal of, premium, if
any, on, interest (including Additional Amounts, if any, and Special Interest,
if any) on, and any other amounts due in respect of, the Notes or in respect of
the Guarantees, as applicable, as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Notes and creditors of the Company other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Notes from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 12.8 Trustee to Effectuate Subordination. Each Holder of a Note
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 12.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any Guarantor or by any act
or failure to act, in good faith, by any such holder,
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or by any noncompliance by the Company or any Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with. No provision of the
subordination provisions contained in this Article may be amended without the
consent of a majority in principal amount of Stated Maturity of Senior
Indebtedness in the manner provided for in the Senior Note Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Notes,
without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Notes to be holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment, of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company or any Guarantor and any other Person.
SECTION 12.10 Notice to Trustee. The Company and each Guarantor shall
give prompt written notice to the Trustee of any fact known to the Company or
such Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of the Notes or the Guarantees, as applicable.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Notes or the Guarantees unless and until a Trust Officer of the
Trustee shall have received written notice thereof from the Company, any
Guarantor or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if a Trust Officer of the Trustee
shall not have received the notice provided for in this Section at least three
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of, premium, if any, or interest (including Additional Amounts, if
any, and Special Interest, if any) on, and any other amounts due in respect of
any Note), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a holder
of
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Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such person to furnish evidence to the
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered in writing
to the Trustee or to the Holders of Notes, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article.
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Notes or to the
Company or to any other person cash, property or securities to which holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payment to, the
Trustee under or pursuant to Section 7.7.
SECTION 12.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.13 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
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SECTION 12.15 Certain Conversions Deemed Payment. For the purposes of
this Article only, and subject to the prohibition against conversion of Notes
into property that is not a "prescribed security" for purposes of clause
212(1)(b)(vii)(E) of the Income Tax Act (Canada) set out in Section 13.12, (a)
the issuance and delivery of junior securities upon conversion of Notes in
accordance with Article XIII shall not be deemed to constitute a payment or
distribution on account of the principal of, premium, if any, on, interest
(including Additional Amounts, if any, and Special Interest, if any) on, or
other amounts due in respect of, Notes or on account of the purchase or other
acquisition of Notes and (b) the payment, issuance or delivery of cash, property
or securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section , the term "junior securities" means (i) shares of any
class of Capital Stock of the Company and (ii) securities of the Company or a
Guarantor which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Notes are
so subordinated as provided in this Article. Nothing contained in this Article
or elsewhere in this Indenture (other than in Section 13.12) or in the Notes or
the respective Guarantee is intended to or shall impair, as among the Company,
its respective creditors other than holders of Senior Indebtedness and the
Holders of the Notes, the right, which is absolute and unconditional, of the
Holder of any Note to convert such Security in accordance with and subject to
the provisions of Article XIII.
SECTION 12.16 Rights in Respect of Collateral. Notwithstanding any
other provision of this Article, the Notes are secured by, and are entitled to
receive free of the rights of the holders of Senior Indebtedness, payment of
principal of, premium, if any, on, interest (including Additional Amounts, if
any, and Special Interest, if any) on, and any other amounts due in respect to,
the Notes from the proceeds of the Collateral and the assets constituting
Collateral, and as to the Collateral and the assets constituting Collateral, the
Notes rank senior in right of payment to the Senior Indebtedness as a result of
the subordination provisions contained in the Senior Note Indenture and the
Convertible Note Collateral Documents.
ARTICLE XIII
CONVERSION OF NOTES
SECTION 13.1 Conversion Privilege and Conversion Price; Reset Penalty.
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Note or any portion of the principal amount
thereof which equals $1,000 or any integral multiple thereof may be converted at
any time on or after 9:00 a.m. New York City time on July 30, 1996 at the
principal amount thereof, or such portion thereof, into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100 of a
share) of Common Stock, at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
expire at the close of business on the Business Day next preceding the Stated
Maturity of principal. In case a Note or portion thereof is called for
redemption, such
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conversion right in respect of the Note or portion so called shall expire at the
close of business on the Business Day next preceding the Redemption Date, unless
the Company defaults in making the payment due upon redemption.
The price at which Common Stock of the Company shall be delivered upon
conversion (herein called the "Conversion Price") shall be equal to $6.90 per
share.
On December 1, 1996 (the "Reset Date"), the Conversion Price will be
adjusted (the "Conversion Reset") to equal (x) the product of (i) the average of
the high and low prices on the Nasdaq National Market, or the consolidated
transaction reporting tape in the event that the Common Stock of the Company is
not then traded on the Nasdaq National Market, and (ii) the number of shares of
Common Stock of the Company reported as being traded on that day, for each
Trading Day of the 30 calendar days preceding the Reset Date (the "Conversion
Reset Period"), divided by the total number of shares of Common Stock of the
Company traded over the Conversion Reset Period, then multiplied by (y) 115%
(the "Conversion Reset Price"), if such Conversion Reset Price shall be lower
than the Conversion Price before such calculation, provided that the Conversion
Reset Price shall never be adjusted to less than $4.30 per share, but the
Company will be required to pay to Holders of Notes a quarterly reset penalty
("Reset Penalty") attributable to the Company's inability to adjust the
Conversion Reset Price below $4.30 per share. In the event that the Conversion
Price before such calculation shall be equal to or less than the Conversion
Reset Price, then no adjustment to the Conversion Price shall be made. The
quarterly Reset Penalty payable to each Holder of Notes shall be an amount equal
to $2.50 per Note held by such Holder (which for the purposes of this Section
13.1 will be determined to be Certificated Notes each in the denomination of
$1000) unless, but for the proviso in the preceding sentence, the Conversion
Reset Price would have been less than $3.80 per share, in which case such
quarterly Reset Penalty shall be an amount equal to $5.00 per Note held by such
Holder. The Reset Penalty shall be payable on each March 1, June 1, September 1
and December 1 (each such date being referred to herein as a "Reset Penalty
Payment Date"), commencing on March 1, 1997, the first such Reset Penalty
Payment Date occurring after the Reset Date, and shall be payable to Holders of
record of Notes on the February 15, May 15, August 15 and November 15
immediately preceding such Reset Penalty Payment Date. The Reset Penalty shall
not accrue and shall be payable only to holders of record on the dates provided
above. Notwithstanding any provision to the contrary, no amount shall be paid to
any Holder in respect of any Reset Penalty upon any redemption, offer to
purchase or other acquisition of the Note or Notes by the Company except in
respect of a record date which has passed. The Reset Penalty will not be payable
upon any conversion of a Note except in respect of a record date which has
passed. As used in this Indenture, the phrase "any other amounts due in respect
of any Note" shall include the Reset Penalty then due.
Notwithstanding anything to the contrary contained herein, no Holder
shall be entitled to convert any of its Notes into Common Stock of the Company
to the extent that any such conversion would constitute a violation of any
applicable securities laws of the United States, any province of Canada, or any
other applicable jurisdiction. Any certificates evidencing Common Stock of the
Company issued upon the conversion of Notes shall bear such legends,
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including legends reflecting restrictions on transfer required in order to
maintain compliance with the provisions of the Securities Act, as the Company
shall deem to be necessary or appropriate.
SECTION 13.2 Exercise of Conversion Privileges. In order to exercise
the conversion privilege, the Holder of any Note shall surrender such Note, duly
endorsed or assigned to the Company or in blank, at any office or agency of the
Company maintained pursuant to Section 4.2, accompanied by written notice to the
Company in the form provided in the Note (or such other notice as is acceptable
to the Company) at such office or agency that the Holder elects to convert such
Note or, if less than the entire principal amount thereof is to be converted,
the portion thereof to be converted. In the case of any Note which is
surrendered for conversion during the period from the close of business on any
Record Date through and including the next succeeding Interest Payment Date
(other than any Note whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
person in whose name that Note is registered at the close of business on such
Record Date. In the case of any Note which is surrendered for conversion during
the period from the close of business on any record date for the payment of any
Reset Penalty through and including the next succeeding Reset Penalty Payment
Date (other than any Note whose maturity is prior to such succeeding Reset
Penalty Payment Date), the Reset Penalty due on such succeeding Reset Penalty
Payment Date shall be payable on such date notwithstanding such conversion, and
such Reset Penalty (whether or not punctually paid or duly provided for) shall
be paid to the person in whose name that Note is registered at the close of
business on such record date. Notes surrendered for conversion subsequent to any
such Record Date or any record date for the payment of a Reset Penalty shall
(except in the case of Notes or portions thereof which have been called for
redemption on a Redemption Date within such period) be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount being surrendered for conversion and/or any Reset Penalty due.
Except as provided in the immediately preceding sentence, in the case of any
Note which is converted (a) interest whose Stated Maturity is after the date of
conversion of such Note shall not be payable, (b) the Reset Penalty will cease
to be payable, and (c) no payment or adjustment shall be made upon conversion on
account of any dividends on the Common Stock of the Company issued upon
conversion.
Notes shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Notes for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Notes as Holders shall cease, and the person or persons entitled
to receive the Common Stock of the Company issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock as
and after such time. As promptly as practicable on or after conversion date, the
Company shall issue and shall deliver at any office or agency of the Company
maintained pursuant to Section 4.2 a certificate or certificates for the number
of full shares of Common Stock of the Company issuable upon conversion, together
with payment in lieu of any fraction of a share, as provided in Section 13.3.
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In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Note.
SECTION 13.3 Fractions of Shares. No fractional share of Common Stock
of the Company shall be issued upon conversion of Notes. If more than one Note
shall be surrendered for conversion at one time by the same Holder, the number
of full shares of Common Stock which shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount of the Notes
(or specified portions thereof) so surrendered. Instead of any fractional share
of such Common Stock which would otherwise be issuable upon conversion of any
Note or Notes (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fractional share in an amount equal to such
fraction multiplied by the Closing Price at the close of business on the day of
conversion (or, if such day is not a Trading Day, on the Trading Day immediately
preceding such day).
SECTION 13.4 Adjustment of Conversion Price.
(a) In case the Company shall make a dividend or other distribution on
the Common Stock of the Company exclusively in Common Stock of the Company
(other than a distribution referred to in paragraph (c) of this Section ), the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock of the Company outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such number
of shares of Common Stock and the total number of shares of Common Stock
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. In case the Company shall make a dividend or
other distribution on its Common Stock in shares of its Capital Stock other than
Common Stock, and such dividend or distribution would not otherwise require
reduction of the conversion price pursuant to paragraph (d) then subject to
Section 13.12 hereof, the conversion price and the number and kind of shares of
Capital Stock of the Company issuable upon the conversion of a Note (as in
effect immediately prior to such dividend or distribution) shall be
proportionately adjusted, so that the Holder of any Note thereafter converted
may, subject to Section 13.12 hereof, receive the aggregate number and kind of
shares of Capital Stock of the Company that such Holder would have owned
immediately following such dividend or distribution if such Note had been
converted immediately prior thereto. For the purpose of this paragraph (a), the
amount of Common Stock of the Company at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of such
Common Stock. The Company shall not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
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(b) Subject to the last sentence of paragraph (g) of this Section , in
case the Company shall make a dividend or other distribution on its Common Stock
consisting exclusively of, or shall otherwise issue to all holders of its Common
Stock, rights, options or warrants entitling the holders thereof to subscribe
for or purchase such Common Stock or securities convertible into or exchangeable
for such Common Stock at a price per share (determined on an as-converted or as-
exercised basis if the rights, options or warrants pertain to securities
convertible into or exchangeable for such Common Stock) less than the Current
Market Price (determined as provided in paragraph (h) of this Section ) on the
date fixed for the determination of shareholders entitled to receive such
rights, options or warrants, the conversion price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of such Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of such Common Stock which the aggregate of the offering price (including
the minimum consideration payable upon conversion or exchange of securities
convertible into or exchangeable for Common Stock) of the total number of shares
of such Common Stock so offered for subscription or purchase would purchase at
such Current Market Price and the denominator shall be the number of shares of
such Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of such Common Stock. The
Company shall not issue any rights, options or warrants in respect of shares of
Common Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares of such Common Stock, the conversion
price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of such Common Stock shall be combined
into a smaller number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which subdivision or
combination becomes effective.
(d) (i) Subject to the last sentence of this paragraph (d)(i) and the
last sentence of paragraph (g) of this Section , in case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock evidences
of its indebtedness, shares of any class of its Capital Stock, cash or other
assets (including securities, but excluding any rights, options or warrants
referred to in paragraph (b) of this Section , excluding any dividend or
distribution paid exclusively in cash out of consolidated current or retained
earnings as shown on the books of the Company prepared in accordance with GAAP
(other than any Extraordinary Cash Dividend (as hereinafter defined)) and
excluding any dividend or distribution referred to in paragraph (a)
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or (c) of this Section), the conversion price shall be reduced by multiplying
the conversion price in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to such distribution
by a fraction of which the numerator shall be the Current Market Price
(determined as provided in paragraph (h) of this Section) on such date less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors) on
such date of the portion of the evidences of indebtedness, shares of Capital
Stock, cash and other assets to be distributed applicable to one share of Common
Stock and the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the day
following such date. If the Board of Directors determines the fair market value
of any distribution for purposes of this paragraph (d)(i) by reference to the
actual or when-issued trading market for any securities comprising part or all
of such distribution, it must in doing so consider those prices in such market
over the same period used in computing the Current Market Price pursuant to
paragraph (h) of this Section, to the extent possible. For purposes of this
paragraph (d)(i), an "Extraordinary Cash Dividend" shall be that portion, if
any, of the aggregate amount of all cash dividends paid in any fiscal year which
exceed $25,000,000. For purposes of this paragraph (d), any dividend or
distribution that includes shares of Common Stock of the Company, rights,
options or warrants to subscribe for or purchase shares of such Common Stock or
securities convertible into or exchangeable for shares of such Common Stock
shall be deemed to be (x) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of Capital Stock other than such shares of
such Common Stock, such rights, options or warrants or such convertible or
exchangeable securities (making any conversion price reduction required by this
paragraph (d)(i)) immediately followed by (y) in the case of shares of Common
Stock or such rights, options or warrants, a dividend or distribution thereof
(making any further conversion price reduction required by paragraph (a) and (b)
of this Section , except any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of paragraph (a) of this
Section), or (z) in the case of such convertible or exchangeable securities, a
dividend or distribution of the number of shares of such Common Stock as would
then be issuable upon the conversion or exchange thereof, whether or not the
conversion or exchange of such securities is subject to any conditions (making
any further conversion price reduction required by paragraph (a) of this
Section, except the shares deemed to constitute such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue its Common Stock for a
consideration per share less than the Current Market Price (determined as
provided in paragraph (h) of this Section), the conversion price shall be
reduced by multiplying the conversion price in effect immediately prior to the
close of business on the date on which the Company fixes the offering price of
such additional Common Stock by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus a fraction equal to the aggregate
consideration received by the Company from the issuance of such additional
shares of Common Stock over the Current Market Price on the date on which the
Company fixes the offering price of such additional shares of Common
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Stock (determined as provided in paragraph (h) of this Section ), and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such issuance. The reduction in the
conversion price provided for in the preceding sentence shall not apply to (i)
securities issued in transactions described in paragraphs (a), (b), (c), (d)(i),
d(ii) or (f) of this Section or pursuant to the conversion or exchange of any
such securities (to the extent applicable); (ii) the conversion or exchange of
securities (including options) convertible or exchangeable for Common Stock of
the Company outstanding on the Issue Date, or issuable pursuant to binding
agreements in effect on the Issue Date; (iii) Common Stock of the Company issued
and issuable upon the exercise of options issued to the Company's directors,
officers and employees under bona fide employee benefit plans adopted by the
Board of Directors and approved by the holders of such Common Stock when
required by law or otherwise where such issuances have been approved by the
Board of Directors (but only to the extent that the aggregate number of shares
excluded hereby and issued after the Issue Date shall not exceed 1% of the
Common Stock outstanding on the Issue Date); (iv) Common Stock of the Company
issued to shareholders of any person that merges into the Company in proportion
to their stock holdings of such person immediately prior to such merger, upon
such merger; (v) Common Stock of the Company issued in a bona fide underwritten
public offering; (vi) Common Stock of the Company issued in a bona fide private
placement through a placement agent that is a member firm of the NASD (except to
the extent that any discount from the Current Market Price (determined as
provided in paragraph (h) of this Section) attributable to restrictions on
transferability of such Common Stock, as determined in good faith by the Board
of Directors and described in a resolution thereof which shall be filed with the
Trustee, shall exceed 20%), or issuable pursuant to a binding agreement in
effect on the Issue Date; or (vii) Common Stock issued as a dividend on any
securities outstanding on the Issue Date required to be made pursuant to the
certificate of designation pertaining to such securities in effect at the time
such securities were issued.
(iii) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock for a consideration per
share (including the minimum consideration per share payable upon conversion or
exchange of any securities convertible into or exchangeable for Common Stock) of
Common Stock initially deliverable upon conversion or exchange of such
securities less than the Current Market Price (determined as provided in
paragraph (h) of this Section ), the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the close of
business on the date on which the Company fixes the offering price of such
additional shares by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to the issuance of such
securities plus a fraction equal to the aggregate consideration received for the
issuance of such securities (including the minimum consideration per share
payable upon conversion or exchange of any securities convertible into or
exchangeable for such Common Stock) over the Current Market Price on the date on
which the Company fixes the offering price of such additional shares (determined
as provided in paragraph (h) of this Section), and the denominator of which
shall be the number of shares outstanding immediately prior to the issuance of
such securities plus the maximum number of shares deliverable upon conversion of
or in exchange for such securities at the initial conversion or exchange rate.
The reduction in the conversion
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price provided for in the preceding sentence shall not apply to (i) securities
issued in transactions described in paragraphs (a), (b) or (d)(i) of this
Section ; (ii) convertible securities issued to shareholders of any person that
merges into the Company, or with a Restricted Subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to such
merger, upon such merger; (iii) convertible securities issued in a bona fide
underwritten public offering; (iv) convertible securities issued in a bona fide
private placement through a placement agent that is a member firm of the NASD
(except to the extent that any discount from the Current Market Price
(determined as provided in paragraph (h) of this Section) attributable to
restrictions on transferability of Common Stock of the Company issuable upon
conversion, as determined in good faith by the Board of Directors and described
in a resolution thereof which shall be filed with the Trustee, shall exceed 20%
of the then Current Market Price, or issuable pursuant to a binding agreement in
effect on the Issue Date; or (v) stock options issued to the Company's
directors, officers or employees.
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock of the Company cash (excluding any
cash that is distributed as part of a distribution referred to in paragraph
(d)(i) of this Section or in conjunction with a transaction to which Section
13.11 applies) in an aggregate amount that, together with (i) the aggregate
amount of any other distributions to all holders of such Common Stock made
exclusively in cash within the 12 months preceding the date fixed for the
determination of shareholders entitled to such distribution and in respect of
which no conversion price adjustment pursuant to paragraph (d)(i) or this
paragraph (e) has been made previously and (ii) the aggregate of any cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) as of such date of determination of consideration payable in respect
of any tender offer by the Company or a Restricted Subsidiary for all or any
portion of its Common Stock, and any purchase by the Company of its Common Stock
in the open market, consummated within the 12 months preceding such date of
determination and in respect of which no conversion price adjustment pursuant to
paragraph (f) of this Section has been made previously, exceeds 12.5% of the
product of the Current Market Price (determined as provided in paragraph (h) of
this Section) on such date of determination times the number of shares of Common
Stock of the Company outstanding on such date, the conversion price shall be
reduced by multiplying the conversion price in effect immediately prior to the
close of business on such date of determination by a fraction of which the
numerator shall be the Current Market Price (determined as provided in paragraph
(h) of this Section) on such date less the amount of cash to be distributed at
such time applicable to one share of such Common Stock and the denominator shall
be such Current Market Price, such reduction to become effective immediately
prior to the opening of business on the day after such date.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock of the Company shall be
consummated, or in case the Company shall purchase shares of Common Stock in the
open market, the conversion price shall be reduced by multiplying the conversion
price in effect immediately prior to the Expiration Time by a fraction of which
the numerator shall be (x) the product of the Current Market Price
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(determined as provided in paragraph (h) of this Section) times the number of
shares of such Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time and the denominator shall be the sum of (A) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders upon consummation of such tender or exchange offer, or
upon such purchase, and (B) the product of such Current Market Price times such
number of outstanding shares at the Expiration Time minus the number of shares
accepted for payment in such tender or exchange offer, or so purchased (the
"Purchased Shares"). For the purpose of this paragraph, "Expiration Time" means
either the last time that tenders may be made pursuant to a tender offer or
exchanges may be made pursuant to an exchange offer, or the time of an agreement
to purchase shares in the open market, as the case may be. Any reduction in the
conversion price pursuant to this paragraph shall be made immediately following
the close of business on the last Trading Day used to compute Current Market
Price; provided, that, such reduction shall be deemed to have become effective
immediately prior to the opening of business on the day following the Expiration
Time. To the extent that a Holder converts Notes prior to the conclusion of the
period for which Current Market Price is to be calculated, any adjustment in the
amount of Common Stock of the Company issuable upon exercise of such Note shall
inure to the benefit of the holder of record of such Note at the close of
business on the first Trading Day following the Expiration Time.
(g) The reclassification of Common Stock of the Company into securities
which include securities other than such Common Stock (other than any
reclassification upon a consolidation or merger to which Section 13.11 applies)
shall be deemed to involve (i) a distribution of such securities other than such
Common Stock to all holders of such Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the determination of
shareholders entitled to such distribution" within the meaning of paragraph
(d)(i) of this Section), and (ii) a subdivision or combination, as the case may
be, of the number of shares of Common Stock of the Company outstanding
immediately prior to such reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of this Section). Rights,
options or warrants issued by the Company to all holders of the Common Stock
entitling the holders thereof to subscribe for or purchase shares of such Common
Stock (either initially or under certain circumstances), which rights, options
or warrants (i) are deemed to be transferred with such Common Stock, (ii) are
not exercisable and (iii) are also issued in respect of future issuances of such
Common Stock, in each case in clauses (i) through (iii) until or upon the
occurrence of a specified event or events ("Trigger Event"), shall for purposes
of this Section 13.4 not be deemed issued until the occurrence of the earliest
Trigger Event.
(h) For the purpose of any computation under this paragraph and
paragraphs (b), (d), and (e) of this Section, the current market price per share
of Common Stock (the "Current Market Price") on any date shall be deemed to be
the average of the daily Closing Prices for the 30 consecutive Trading Days
commencing 45 Trading Days before the date in question. For the
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purpose of any computation under paragraph (f) of this Section , the Current
Market Price on any date shall be deemed to be the average of the daily Closing
Prices for the five consecutive Trading Days commencing on the first Trading Day
immediately following the Expiration Time. Notwithstanding anything to the
contrary contained in this paragraph, (i) if the "ex" date for any event (other
than the issuance or distribution requiring such computation) that requires an
adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d) or
(e) above occurs on or after the 15th Trading Day prior to the date in question
and prior to the "ex" date for the issuance or distribution requiring such
computation, the Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the same
fraction by which the conversion price is so required to be adjusted as a result
of such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f)
above occurs on or after the "ex" date for the issuance or distribution
requiring such computation and on or prior to the date in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the reciprocal of the fraction
by which the conversion price is so required to be adjusted as a result of such
other event, and (iii) if the "ex" date for the issuance or distribution
requiring such computation is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (ii) of this proviso,
the Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value on
the date in question (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of paragraph (d) or
(e) of this Section , whose determination shall be conclusive and described in a
resolution of the Board of Directors) of the evidences of indebtedness, shares
of Capital Stock or assets being distributed applicable to one share of Common
Stock of the Company as of the close of business on the day before such "ex"
date.
(i) (i) If any event shall occur as to which the other provisions of
this Section 13.4 are not strictly applicable but the failure to make any
adjustment would have the effect of depriving Holders of the benefit of all or a
portion of the conversion rights in respect of any Note in accordance with the
essential intent and principles of this Section 13.4, then, in each such case,
the Company shall appoint an Independent Financial Expert, which shall give its
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 13.4 necessary to preserve,
without dilution, such conversion rights; provided that such opinion shall take
into account the prohibition on conversion set out in Section 13.12. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the
Holders and shall, subject to Section 13.12, make the adjustments described
therein. As used herein, an "Independent Financial Expert" is a firm (A) which
does not, and whose directors, officers and employees or Affiliates do not, have
a direct or indirect financial interest in the Company and (B) which, in the
judgment of the Board of Directors, is otherwise independent and qualified to
perform the task for which it is to be engaged.
(ii) The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of
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securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of the Notes, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holders thereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (i) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of its Common Stock on the conversion of the
Notes from time to time outstanding and (ii) will not take any action which
results in any adjustment of the conversion price if the total number of shares
of its Common Stock issuable after the action upon the conversion of all of the
Notes would exceed the total number of shares of such Common Stock then
authorized by the Company's certificate of incorporation and available for the
purposes of issue upon such exercise.
(j) The Company may, but shall not be obligated to, make such
reductions in the conversion price, in addition to those required by paragraphs
(a), (b), (c), (d), (e), (f) and (g) of this Section , as it considers to be
advisable in order that any event treated for United States federal income tax
purposes as a dividend of stock or stock rights shall not be taxable to the
recipients or, if that is not possible, to diminish any income taxes that are
otherwise payable because of such event.
(k) No adjustment in the conversion price shall be required unless such
adjustment (plus any other adjustments not previously made by reason of this
paragraph (k)) would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this paragraph (k) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(l) Notwithstanding any other provision of this Section 13.4, no
adjustment to the conversion price shall reduce the conversion price below the
then par value per share of the Common Stock of the Company, and any such
purported adjustment shall instead reduce the conversion price to such par
value. The Company hereby covenants not to take any action to increase the par
value per share of its Common Stock.
(m) In any case in which this Section 13.4 shall require that an
adjustment in the conversion price be made effective as of or immediately after
a record date for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the Holder of any Note exercised after
such record date the shares of Common Stock and other Capital Stock of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock and other Capital Stock of the Company, if any, issuable upon such
exercise on the basis of the conversion price prior to such adjustment and (ii)
paying to such Holder any amount in cash in lieu of a fractional share pursuant
to Section 13.3 hereof; provided that, subject to Section 13.12, the Company
shall deliver to such Holder a due xxxx or other appropriate instrument
evidencing such Holder's right to receive such additional shares of Common
Stock, other Capital Stock and cash upon the occurrence of the event requiring
such adjustment.
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(n) When No Adjustment Required.
(i) No adjustment need be made for a transaction referred to
in subsections (a), (b), (c), (d), (e) or (f) of this Section 13.4 if
Holders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common
Stock of the Company participate in the transaction.
(ii) No adjustment need be made for (x) a transaction referred
to in subsections (b), (d)(ii) or (d)(iii) of this Section 13.4 if the
below market portion of such issuances, taken together with the below
market portion of all other below market issuances and with the above
market portion of all above market tender or exchange offers described
in clause (y) of this paragraph made on and after the Issue Date, is
less than 2.0% of the Total Market Capitalization of the Company
(determined by reference to the sum of the percentages of Total Market
Capitalization of the Company attributable to each such transaction on
the date thereof) and (y) a transaction referred to in subsection (f)
of this Section 13.4 if the above market portion of such tender or
exchange offers, taken together with the above market portion of all
other above market tender or exchange offers and with the below market
portion of all below market issuances described in clause (x) of this
paragraph made on or after the date of this Indenture, is less than
2.0% of the Total Market Capitalization of the Company (determined by
reference to the sum of the percentages of Total Market Capitalization
of the Company attributable to each such transaction on the date
thereof).
(iii) No adjustment need be made for a change in the par
value, or from par value to no par value, or from no par value to par
value, of the Common Stock of the Company.
(iv) No adjustment need be made in respect of any adjustment
in the warrant exercise price of the warrants being issued pursuant to
the Warrant Agreement dated May 31, 1996 made on the "Reset Date" as
contemplated by Section 2 of such Warrant Agreement.
SECTION 13.5 Notice of Adjustments of Conversion Price. Whenever the
conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 13.4 and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth the adjusted
conversion price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of
conversion of Notes pursuant to Section 4.2; and
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(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice shall be furnished by the
Company to the Trustee and mailed by the Company at its expense to all Holders
at their last addresses as they shall appear in the Note Register.
SECTION 13.6 Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require a conversion price
adjustment pursuant to paragraph (e) of Section 13.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of Capital Stock of any class or of any other rights (excluding shares of
Capital Stock or options for Capital Stock issued pursuant to a benefit plan for
employees, officers or directors of the Company); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of the outstanding shares of such Common
Stock), or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(e) the Company or any Subsidiary shall commence a tender or exchange
offer (other than an exchange offer contemplated by clause (c) above) for all or
a portion of the outstanding shares of Common Stock (or shall amend any such
tender or exchange offer to change the maximum number of shares being sought or
the amount or type of consideration being offered (including by exchange)
therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 4.2, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Note Register, at least 21 days (or
11 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of its Common Stock
of record who will be entitled to such dividend, distribution, rights, options
or warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of its Common Stock of record shall be entitled to
exchange their Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
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transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender or exchange offer (other than an exchange offer contemplated by clause
(y) above) commenced, the date on which such tender or exchange offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Neither
the failure to give any such notice nor any defect therein shall affect the
legality or validity of any action described in clauses (a) through (e) of this
Section 13.6.
SECTION 13.7 Company to Reserve Common Stock. The Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or out of its Common Stock held in
treasury, for the purpose of effecting the conversion of Notes, the full number
of shares of its Common Stock then issuable upon the conversion of all
outstanding Notes.
SECTION 13.8 Taxes on Conversions. The Company will pay any and all
original issuance, transfer, stamp and other similar taxes that may be payable
in respect of the issue or delivery of shares of its Common Stock on conversion
of Notes pursuant hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of its Common Stock in a name other than that of the Holder
of the Note or Notes to be converted, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.
SECTION 13.9 Covenant as to Common Stock.
(a) The Company covenants that all shares of its Common Stock which may
be issued upon conversion of Notes will upon issue be validly issued, fully paid
and nonassessable.
(b) The Company shall from time to time take all action necessary so
that the Common Stock which may be issued upon conversion of Notes, immediately
upon their issuance (or, if such Common Stock is subject to restrictions on
transfer under the Securities Act, upon their resale pursuant to an effective
Convertible Note Shares Shelf Registration Statement), will be listed on the
principal securities exchanges, interdealer quotation systems and markets, if
any, on which other shares of Common Stock of the Company are then listed or
quoted.
SECTION 13.10 Cancellation of Converted Notes. All Notes delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.10.
SECTION 13.11 Provisions as to Consolidation, Merger or Sale of Assets.
In case of any consolidation or amalgamation of the Company with, or merger of
the Company into, any other person, any merger of another person into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any sale or transfer of all or substantially all of the assets
of the Company, subject to Section 13.12 hereof, the Person formed by such
consolidation or
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resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each Note then outstanding shall have the right thereafter, during
the period such Note shall be convertible as specified in Section 13.1, but
subject to Section 13.12 hereof, to convert such Note only into the kind and
amount of securities, cash and other Property, if any, receivable upon such
consolidation, amalgamation, merger, sale or transfer by a holder of the amount
of Common Stock of the Company into which such Note might have been converted
immediately prior to such consolidation, amalgamation, merger, sale or transfer,
assuming such holder of Common Stock (i) is not a person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, amalgamation, merger, sale or
transfer (provided that if the kind or amount of securities, cash and other
Property receivable upon such consolidation, amalgamation, merger, sale or
transfer is not the same for each share of Common Stock held immediately prior
to such consolidation, amalgamation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, amalgamation, merger, sale or
transfer by each nonelecting share shall, subject to Section 13.12 hereof, be
deemed to be the kind and amount so receivable per share by a plurality of the
nonelecting shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article. The above provisions of this Section
shall similarly apply to successive consolidations, amalgamations, mergers,
sales or transfers.
SECTION 13.12 Prohibition upon Conversion in Certain Circumstances. Any
provision in this Article XIII or elsewhere in this Indenture to the contrary
notwithstanding, if any amalgamation, consolidation, merger, sale or transfer,
or any other event which could give rise to a right on the part of any Holder to
convert all or a part of the Notes held by such Holder into any securities, cash
or other property other than the Common Stock of the Company into which the
Notes are convertible as of the Issue Date, should occur on or prior to the Five
Year Date, a Holder of a Note shall not be entitled in any such circumstances to
convert such Note into or exchange such Note for any securities, cash or other
property (collectively, "Substituted Properties") unless all such Substituted
Properties are "prescribed securities" with respect to the Notes for purposes of
clause 212(1)(b)(vii)(E) of the Income Tax Act (Canada), as such Act may be
amended from time to time.
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ARTICLE XIV
SATISFACTION AND DISCHARGE
SECTION 14.1 Satisfaction and Discharge. This Indenture and the
Collateral Documents shall upon the request of the Company cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Notes herein expressly provided for, the Company's obligations under
Sections 4.13, 7.7 and 14.4 hereof, and the Company's, the Trustee's and the
Paying Agent's obligations under Section 12.3 hereof) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture and releasing all Liens in the
Collateral when
(a) either
(i) all Notes theretofore authenticated and delivered (other
than (A) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.7 and (B) Notes for
whose payment money has been deposited in trust with the Trustee or any
Paying Agent and thereafter paid to the Company or discharged from such
trust) have been delivered to the Trustee for cancellation; or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
(B) will become due and payable at their stated
maturity within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the
Company, or
(D) and delivered to the Trustee for conversion in
accordance with Article XIII,
and the Company, in the case of clause (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose money or U.S. Government Obligations in an amount sufficient (as
certified by an independent public accountant designated by the Company) to pay
and discharge the entire indebtedness on such Notes not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any), interest and
Additional Amounts, if any, and Special Interest, if any, and any other amounts
due in respect of the Notes, to the date of such deposit (in the case of Notes
which have become due and payable) or the Stated Maturity or Redemption Date, as
the case may be;
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(b) the Company has paid or caused to be paid all other sums then due
and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit and after giving effect
to such deposit; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 4.22, 7.7, 7.8, 14.2, 14.3
and 14.4, and the conversion and Reset Penalty provisions in Article XIII of
this Indenture and the Trustee's and Paying Agent's obligations in Section 14.3
shall survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 4.13, 7.7, 14.3 and 14.4 and the Trustee's and
Paying Agent's obligations in Section 14.3 shall survive.
In order to have money available on a payment date to pay principal or
interest on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
SECTION 14.2 Application of Trust Money. All money deposited with the
Trustee pursuant to Section 14.1 shall be held in trust and, at the written
direction of the Company, be invested prior to maturity in U.S. Government
Obligations, and applied by the Trustee in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any), interest (including Additional Amounts, if any,
and Special Interest, if any), and any other amounts due in respect of the
Notes, for the payment of which money has been deposited with the Trustee; but
such money need not be segregated from other funds except to the extent required
by law.
SECTION 14.3 Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided that the Company shall have either caused notice of
such payment to be mailed to each Holder of Notes entitled thereto no less than
30 days prior to such repayment or within such period shall have published such
notice in a financial newspaper of widespread circulation published in The City
of New York, including, without limitation, The Wall Street Journal. After
payment to the
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Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
SECTION 14.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 14.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and Guarantors' obligations under this Indenture, the Notes, the
Guarantees and the Collateral Documents shall be revived and reinstated as
through no deposit has occurred pursuant to Section 14.1 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 14.2; provided, however, that if the
Company or the Guarantors have made any payment of interest on or principal of
any Notes because of the reinstatement of their Obligations, the Company or such
Guarantors shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Trust Indenture Act Controls. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provisions (an "incorporated provision") included in
this Indenture by operation of, Section 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control.
SECTION 15.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows or by facsimile transmission: if to the Company: Petersburg
Long Distance Inc.: 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0; if to
NWE Cyprus: c/o Phoebus, Xxxxxxxx Xxxxxxxx, N. Pirilides & Associates, Nicosia
Office, Stassinos Court, Corner of Stassinos Avenue & Xxxxx Xxxxxx 0, 0xx Xxxxx,
X. X. Xxx 0000, Xxxxxxx, Xxxxxx, Tel. 00-000000, fax: 00-000000; if to the
Leasing Companies: c/o Phoebus, Xxxxxxxx Xxxxxxxx, N. Pirilides & Associates,
Nicosia Office, Stassinos Avenue & Xxxxx Xxxxxx 0, 0xx Xxxxx, X. X. Xxx 0000,
Xxxxxxx, Xxxxxx, Tel. 00-000000, fax: 00- 000000; if to BCL: Baltic
Communications Limited, c/o Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000: Attn. E. Xxxxx Xxxxxxxx, Esquire, Tel.
000-000-0000, fax: 000-000-0000; if to WTC: Wireless Technology Corporations
Limited, c/o, Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Square, Philadelphia,
Pennsylvania 19103- 6993: Attn. E. Xxxxx Xxxxxxxx, Esquire, Tel. 000-000-0000,
fax: 215-963-
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5299; if to the Trustee: The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 21
West, New York, New York 10286, Attn: Corporate Trust Department, Fax: (212)
000-0000 or 5917.
The Company, the Guarantors or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication mailed to a Holder shall be sent to
the Holder by first class mail, postage prepaid, at the Holder's address as it
appears in the Note Register and shall be given if so sent within the time
prescribed. Failure to mail a notice or communications to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed or faxed to the Company, the Guarantors, the
Trustee or a Holder in the manner provided above, it is duly given, whether or
not the addressee receives it but shall not be effective in the case of the
Company or the Guarantors unless actually received. In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give notice by mail to Holders, then such notification as shall
be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 15.3 Communications by Holders with Other Holders. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the Trust Indenture Act.
SECTION 15.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company or the Guarantors to the Trustee to
take or refrain from taking any action under this Indenture or the Collateral
Documents (other than any certificate pursuant to Section 3.14 (a) of the Trust
Indenture Act), the Trustee may require, and in such event the Company or the
Guarantors, as applicable, shall furnish to the Trustee: (a) an Officers'
Certificate in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 15.5, if applicable) stating
that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture and the Collateral Documents relating to the
proposed action have been complied with; and (b) an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
SECTION 15.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture and the Collateral Documents (other than a
certificate provided pursuant to Section 314(a)(4) of the Trust Indenture Act)
shall include: (a) a statement that the individual making such certificate or
opinion has read such covenant or condition; (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statement or
opinions contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such individual, such person has made such examination
or investigation as is necessary to enable such person to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (d) a statement as to whether or not, in the opinion of such person, such
covenant or
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condition has been complied with; provided that with respect to matters of fact,
an Opinion of Counsel may rely upon Officers' Certificates or certificates of
public officials.
SECTION 15.6 Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Holders, and any
Registrar and Paying Agent may make reasonable rules for their functions;
provided that no such rule shall conflict with terms of this Indenture or the
Trust Indenture Act.
SECTION 15.7 Payments on Business Days. If a payment hereunder is
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding day that is a Business Day, and no interest shall accrue
with respect to that payment during the intervening period. If a regular record
date is a date that is not a Business Day, such record date shall not be
affected.
SECTION 15.8 Governing Law; Submission to Jurisdiction. (a) THIS
INDENTURE, THE GUARANTEES, EACH NOTE AND EACH COLLATERAL DOCUMENT (EXCEPT TO THE
EXTENT EXPRESSLY PROVIDED FOR OTHERWISE) SHALL EACH BE DEEMED TO BE A CONTRACT
UNDER THE LAW OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF SAID STATE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS MAY
OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS OF LAW AND WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 15.9 Legal Proceedings. Any suit, action or proceeding against
the Company or any Guarantor or their respective Properties, assets or revenues
with respect to this Indenture, the Guarantees, a Note or a Collateral Document
(a "Related Proceeding") may be brought in any federal or state court located in
the State of New York, County of New York. Each of the Company and the
Guarantors hereby irrevocably consents to the jurisdiction of each such court
for the purposes of any Related Proceeding, and irrevocably waives, to the
fullest extent it may effectively and lawfully do so, any objection to the
laying of venue of any Related Proceeding in any such court and the defense of
an inconvenient forum to the maintenance of any Related Proceeding in any such
court. Each of the Company and the Guarantors further submits to the
jurisdiction of the courts of its own corporate domicile in any Related
Proceeding.
SECTION 15.10 Service of Process. Each of the Company and the
Guarantors hereby agrees that service of all writs, process and summonses in any
Related Proceeding brought against it in the State of New York may be made upon
CT Corporation System in The City of New York, presently located at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Process Agent"), and each of the
Company and the Guarantors have irrevocably appointed the Process Agent as its
agent and true and lawful attorney-in-fact in its name, place and stead to
accept such service of any and all such writs, process and summonses. Each of
the Company and the Guarantors agrees that service of process on the Process
Agent in such instances shall be deemed in every respect effective service of
process upon it in any such Related Proceeding and further
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agrees that the failure of the Process Agent to give any notice to it of any
such service of process shall not impair or affect the validity of such service
or of any judgment based thereon. Each of the Company and the Guarantors agrees
to maintain at all times an agent with an office in New York to act as Process
Agent as aforesaid. Each of the Company and the Guarantors agrees to take any
and all actions as may be necessary to maintain such designation and appointment
of such Process Agent in full force and effect. Nothing herein shall in any way
be deemed to limit the ability to serve any such writs, process and summonses in
any other manner permitted by applicable law.
SECTION 15.11 Waiver of Immunities. To the extent that the Company, the
Guarantors or any of their respective revenues, assets or Properties shall be
entitled, with respect to any Related Proceeding at any time brought against the
Company, the Guarantor or any of their respective revenues, assets or Properties
in the courts identified above, to any immunity from suit, from attachment prior
to judgment, from attachment in aid of execution of judgment, or from any other
legal or judicial remedy, and to the extent that in any such jurisdiction there
shall be attributed such an immunity, each of the Company and the Guarantors
hereby irrevocably agrees not to claim and irrevocably waives such immunity, and
any defense based on such immunity, to the extent permitted by law in respect of
its obligations under (i) this Indenture, (ii) the Guarantees, (iii) any Note or
(iv) any Collateral Document. Without limiting the foregoing, each of the
Company and the Guarantors hereby, to the fullest extent permitted by applicable
law, expressly and irrevocably waives any defense of sovereign immunity from
jurisdiction, attachment in aid of execution and execution to which it might
otherwise be entitled in any Related Proceeding; provided that each of the
Company and the Guarantors here by expressly reserves its rights, if any, to
claim immunity from attachment prior to judgment to which it may now or
hereafter be entitled. Each of the Company and the Guarantors agrees that final
judgment in any such Related Proceeding brought in such a court will be
conclusive and binding on it and may be enforced in other jurisdictions by suit
on the judgment or in any other matter provided by law, provided that service of
process is effected upon the Company or any Guarantors, as the case may be, in
the manner specified in Section 15.9(c) above or as otherwise permitted by law.
SECTION 15.12 Judgment Currency; Currency Indemnity. If for the
purposes of obtaining judgment in any court it is necessary to convert a sum due
from the Company or any Guarantor hereunder or under any Guarantee, any of the
Notes or any of the Collateral Documents in U.S. Dollars into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Trustee could purchase U.S. Dollars with such other
currency at the Trustee's New York office on the Business Day preceding that on
which final judgment is given. Any amount received or recovered in a currency
other than U.S. Dollars (whether as a result of a judgment or order of a court
of any jurisdiction, or the enforcement thereof, in the winding up or
dissolution of the Company or any Guarantor or otherwise) by the Trustee or any
Holder in respect of any sum expressed to be due to it from the Company or such
Guarantor shall only constitute discharge of the Company or such Guarantor to
the extent of the U.S. Dollar amount which the recipient is able to purchase
with
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the amount so received or recovered in such other currency on the date of
such receipt or recovery; provided that if it is not practicable to make such
purchase on such date, such purchase shall be made on the first date on which is
practicable to do so. If the amount of U.S. Dollars so purchased is less than
the U.S. Dollar amount expressed to be due to such recipient hereunder or under
the Guarantees, any Note or any Collateral Document, to the extent permitted by
applicable law the Company or the Guarantors, as applicable, shall indemnify
such recipient against any loss sustained by it as a result and, in any event,
the Company or the Guarantors shall indemnify such recipient against the cost of
making any such purchase. For the purposes of this Section 15.12, it shall be
sufficient for any such recipient to certify that it would have suffered a loss
had an actual purchase of U.S. Dollars been made with the amount so received in
such other currency on the date of receipt or recovery (or, if a purchase of
Dollars on such date had not been practicable, on the first date on which it
would have been practicable). To the extent permitted by applicable law, the
indemnities granted by this Section 15.12 constitute a separate and independent
obligation from the other obligations of the Company hereunder and the
Guarantors hereunder and shall give rise to a separate and independent cause of
action in favor of the Trustee or any Holder, as the case may be.
SECTION 15.13 No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or of any Guarantor, as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Notes, the Guarantees or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation,
solely by reason of his or her status as a director, officer, employee,
incorporator or stockholder of the Company or of any Guarantor. By accepting a
Note, each Holder waives and releases all such liability (but only such
liability) as part of the consideration for issuance of such Note to such
Holder.
SECTION 15.14 Successors. All agreements of the Company and the
Guarantor in this Indenture, the Notes and the Collateral Documents shall bind
its successors and assigns whether so expressed or not, unless it is
specifically and expressly provided otherwise in this Indenture. All agreements
of the Trustee in this Indenture shall bind its successors and assigns whether
so expressed or not.
SECTION 15.15 Counterparts. This Indenture may be executed in any
number of counterparts and by the parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 15.16 Table of Contents; Headings. The table of contents,
cross-reference table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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SECTION 15.17 Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 15.18 Further Instruments and Acts. Upon request of the
Trustee, the Company and the Guarantors will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.
SECTION 15.19 Independent Covenants. Each covenant contained in this
Indenture and the Collateral Documents is intended by the parties to be a
separate and independent covenant, the compliance or noncompliance with such is
to be determined independently and without regard to whether the Company, a
Guarantor or a Restricted Subsidiary is in compliance with another covenant
contained in this Indenture or the Collateral Documents.
SECTION 15.20 Final Expression. This Indenture, together with the
related Collateral Documents, is intended by the parties as a final, complete
and exclusive statement of the agreement of the parties on the subject hereof
and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PETERSBURG LONG DISTANCE INC.
By: /s/ Xxxxx Xxxx
----------------------------------
Name: XXXXX XXXX
Title: CHAIRMAN
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: XXXXX XXXXXXX
Title: C.F.O.
[Corporate Seal]
NWE CAPITAL (CYPRUS) LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: XXXXXXX X. XXXXX
Title: DIRECTOR
PLD ASSET LEASING LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: XXXXXXX X. XXXXX
Title: DIRECTOR
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxx,
to me known, who, being by me duly sworn, did depose and say that he is Chairman
of Petersburg Long Distance Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxxxxx,
to me known, who, being by me duly sworn, did depose and say that he is Chief
Financial Officer of Petersburg Long Distance Inc., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Xxxxx Extract
-----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
Director of NWE Capital (Cyprus) Limited, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
Director of PLD Asset Leasing Limited, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
---------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
154
PLD CAPITAL LIMITED
Guarantor
By: /s/ Xxxxxxx X. Xxxxx
____________________________________
Name: XXXXXXX X. XXXXX
Title: DIRECTOR
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
Guarantor
By: /s/ Xxxxx Xxxx
_____________________________________
Name: XXXXX XXXX
Title:
BALTIC COMMUNICATIONS LIMITED
Guarantor
By: /s/ Xxxxx Xxxxxxx
_____________________________________
Name: XXXXX XXXXXXX
Title:
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxxx X.
Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is
Director of PLD Capital Limited, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxx,
to me known, who, being by me duly sworn, did depose and say that he is
_______________ of Wireless Technology Corporations Limited, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Xxxxx Extract
---------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxx Xxxxxxx,
to me known, who, being by me duly sworn, did depose and say that he is
_______________ of Baltic Communications Limited, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Xxxxx Extract
-----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
000
XXX XXXX XX XXX XXXX,
as Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
_________________________________
Name: XXXXXX X. XXXXXXXX
Title: Assistant Treasurer
[Corporate Seal]
Attest: /s/ Xxxxxxxx Xxxxx
-------------------
000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the 12th day of June, 1996, before me personally came Xxxxxx X.
Xxxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is Assistant Treasurer of The Bank of New York, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Xxxxx Extract
----------------------------------------
Notary Public, State of New York
[Seal] My Commission Expires: March 30, 1997
/s/ Xxxxx Extract
----------------------------------------
XXXXX EXTRACT
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires March 30, 1997
160
EXHIBIT B
161
FORM OF FACE OF CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
No. _____ CUSIP No. 00000XXX0
9% CONVERTIBLE SUBORDINATED NOTE DUE 2006
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND THE PROVINCES OF CANADA.
FOR THE PURPOSES OF THE INTEREST ACT (CANADA) AND DISCLOSURE THEREUNDER,
WHENEVER INTEREST, ADDITIONAL AMOUNTS, SPECIAL INTEREST, OR DEFAULTED INTEREST
OR INTEREST ON DEFAULTED INTEREST RELATING TO THIS NOTE, IS TO BE CALCULATED ON
THE BASIS OF A YEAR OF 360 DAYS OR ANY OTHER PERIOD OF TIME THAT IS LESS THAN A
CALENDAR YEAR, THE YEARLY RATE OF INTEREST TO WHICH THE RATE DETERMINED PURSUANT
TO SUCH CALCULATION IS EQUIVALENT IS THE RATE SO DETERMINED MULTIPLIED BY THE
ACTUAL NUMBER OF DAYS IN THE CALENDAR YEAR IN WHICH THE SAME IS TO BE
ASCERTAINED AND DIVIDED BY EITHER 360 OR SUCH OTHER PERIOD OF TIME, AS THE CASE
MAY BE. THE RATE ACCRUING ON THIS NOTE FOR PAYMENT PURPOSES SHALL BE DETERMINED
AS SET FORTH ON THE REVERSE HEREOF.
Petersburg Long Distance Inc., an Ontario corporation (the
"Company"), for value received, hereby promises to pay to _____________________,
or its registered assign, the principal sum of _____________________, on June 1,
2006.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
162
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
Dated:
PETERSBURG LONG DISTANCE INC.
By:_____________________________
Name:
Title:
[Corporate Seal]
By:_____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:____________________________________
Authorized Signatory
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163
FORM OF REVERSE SIDE OF CERTIFICATED NOTE
PETERSBURG LONG DISTANCE INC.
9% CONVERTIBLE SUBORDINATED NOTE DUE 2006
1. Indenture.
This Note is one of a duly authorized issue of debt securities
of Petersburg Long Distance Inc., an Ontario corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), designated as its "9% Convertible Subordinated
Notes due 2006" (herein called the "Notes") limited in aggregate principal
amount at Stated Maturity to $26,500,000, issued under an indenture dated as of
May 31, 1996 (as amended or supplemented from time to time, the "Indenture")
among the Company, the corporations acting as guarantors and named therein (the
"Guarantors") and The Bank of New York, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and each Holder of Notes and of the terms upon which the Notes are, and
are to be, authenticated and delivered. The summary of the terms of this Note
contained herein does not purport to be complete and is qualified by reference
to the Indenture. All terms used in this Note which are not defined herein shall
have the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to make Asset Sales. The Indenture
also imposes limitations on the ability of the Company to consolidate or merge
with or into any other Person or permit any other Person to merge with or into
the Company, or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property of the Company to any other Person. The
Indenture does not contain any restrictions on the incurrence of indebtedness,
the creation of liens or the payment of dividends or the making of
distributions, investments or certain other restricted payments or any financial
covenants.
2. Principal and Interest.
The Company promises to pay the principal amount set forth on
the face hereof to the Holder hereof on June 1, 2006.
This Note will commence to accrue interest from the Issue Date
computed as if this Note had been issued bearing interest at the rate of 9% per
annum on May 31, 1996 (being the rate of 9.5858% per annum for the period from
the Issue Date through November 30, 1996), and this Note will bear interest at
the rate of 9% per annum from December 1, 1996. The Company shall pay such
interest from the Issue Date, or from the most recent Interest Payment Date
thereafter to which interest has been paid or duly provided, for semi-annually
on June 1 and December 1 of each year, commencing on December 1, 1996, in cash,
to the Holder hereof until the principal amount hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, subject to certain exceptions provided in the
Indenture, be paid to the Person in whose name this Note (or the Note in
exchange or substitution for which this Note was issued) is registered at the
close of business on the Record Date for interest payable on such Interest
Payment Date. The Record
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Date for any Interest Payment Date is the close of business on May 15 or
November 15, as the case may be, whether or not a Business Day, immediately
preceding the Interest Payment Date on which such interest is payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest")
shall forthwith cease to be payable to the Holder on such Record Date and shall
be paid as provided in Section 2.11 of the Indenture. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Each payment of interest in respect of an Interest Payment
Date will include interest (including Additional Amounts (as hereinafter
defined), if any, and Special Interest (as hereinafter defined), if any),
accrued through the day before such Interest Payment Date. If an Interest
Payment Date falls on a day that is not a Business Day, the interest payment to
be made on such Interest Payment Date will be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date, and no additional interest will accrue as a result of such delayed
payment.
To the extent lawful, the Company shall pay interest on (i)
any overdue principal of (and premium, if any, on) this Note, at the interest
rate borne on this Note, plus 1% per annum, and (ii) Defaulted Interest (without
regard to any applicable grace period), at the same rate. The Company's
obligation pursuant to the previous sentence shall apply whether such overdue
amount is due at its Stated Maturity, as a result of the Company's obligations
pursuant to Section 3.6, Section 4.7, Section 4.8 or Section 4.14 of the
Indenture, or otherwise.
3. Additional Amounts.
Except to the extent required by law, any and all payments of,
or in respect of, this Note shall be made free and clear of and without
deduction for or on account of any and all present or future taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect
thereto imposed by Canada, the Russian Federation, Cyprus or any other
jurisdiction with which the Company or any Guarantor has some connection
(including any jurisdiction (other than the United States of America) from or
through which payments under the Notes are made) or any political subdivision of
or any taxing authority in any such jurisdiction ("Canadian Taxes," "Russian
Taxes," "Cypriot Taxes" or "Other Taxes," respectively). If the Company or any
Guarantor shall be required by law to withhold or deduct any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes from or in respect of any sum
payable under this Note or pursuant to a Guarantee, the sum payable by the
Company or such Guarantor, as the case may be, thereunder shall be increased by
the amount ("Additional Amounts") necessary so that after making all required
withholdings and deductions, the Holder of this Note shall receive an amount
equal to the sum that it would have received had no such withholdings and
deductions been made; provided that any such sum shall not be paid in respect of
any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes to the Holder of
this Note (an "Excluded Holder") (i) resulting from the beneficial owner of this
Note carrying on business or being deemed to carry on business in or through a
permanent establishment or fixed base in the relevant taxing jurisdiction or any
political subdivision thereof or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of this Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of this Note
or the Guarantees or the enforcement of this Note or the Guarantees, (ii)
resulting from the Company or any Guarantor not dealing at arm's length (within
the meaning of the Income Tax Act (Canada)), with the Holder of this Note at the
time of such payment or at the time the amount of such payment is deemed to have
been paid or credited or (iii) that would not have been imposed but for the
presentation (where presentation is required) of this Note for payment more than
180 days after the date such payment became due and payable or was duly provided
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for, whichever occurs later. The Company or the Guarantors, as applicable, will
also (i) make such withholding or deduction and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law, and, in any such case, the Company will furnish to each Holder on whose
behalf an amount was so remitted, within 30 calendar days after the date the
payment of any Canadian Taxes, Russian Taxes, Cypriot Taxes or Other Taxes is
due pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company or the Guarantors, as applicable. The Company will, upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Notes, and (ii) any Canadian Taxes,
Russian Taxes, Cypriot Taxes or Other Taxes so levied or imposed with respect to
any reimbursement under the foregoing clause (i) so that the net amount received
by such Holder (net of payments made under or with respect to such Notes or the
Guarantees) after such reimbursement will not be less than the net amount the
Holder hereof would have received if Canadian Taxes, Russian Taxes, Cypriot
Taxes or Other Taxes on such reimbursement had not been imposed.
In addition, the Company or the Guarantors will pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties, in respect of the creation, issue and offering of the
Notes payable in Canada, the United States, the Russian Federation or Cyprus or
any political subdivision thereof or taxing authority of or in the foregoing.
The Company and the Guarantors will also pay and indemnify the Holders from and
against all court fees and taxes or other taxes and duties, including interest
and penalties, paid by any of them in any jurisdiction in connection with any
action permitted to be taken by Trustees or the Holders to create the Liens on
the Collateral and the Senior Note Collateral and to enforce the obligations of
the Company or the Guarantors under the Notes, the Indenture, the Guarantees,
the Collateral Documents or the Senior Note Collateral Documents.
4. Special Interest.
Special interest means such additional interest as is set
forth in subparagraphs (a) and (b) below.
(a) The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of May 31, 1996, between the Company and
the Initial Purchasers (the "Registration Agreement"), which agreement is
attached to the Indenture as Exhibit C thereto. In the event that either (a) the
Convertible Note Shelf Registration Statement (as such term is defined in the
Registration Agreement) is not filed with the Securities and Exchange Commission
(the "Commission") on or prior to the 45th day following the Issue Date, (b) the
Shelf Registration Statement is not declared effective by the Commission on or
prior to the 120th day following the Issue Date or (c) any such Shelf
Registration Statement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purposes, without
being succeeded by a post-effective amendment to such Shelf Registration
Statement that cures such failure and that is itself declared effective, for a
period of more than 30 consecutive days, interest shall accrue on this Note (in
addition to any accrual of stated interest on this Note) from and including the
next day following each of (i) such 45-day period in the case of clause (a)
above, (ii) such 120-day period in the case of clause (b) above, (iii) such
30-day period in the case of clause (c) above (each such event referred to in
clauses (i) through (iii), a "Registration Default"). In each case following the
occurrence of a Registration Default, such additional interest (the "Special
Interest") will be payable to the Holder hereof during the first 90-day period
immediately following the occurrence of such Registration Default in cash
semiannually in arrears on each Interest Payment Date, at a rate equal to $0.01
per week per $1,000 principal amount of this Note. The Special Interest payable
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to the Holder of this Note shall increase by an additional $0.01 per week per
$1,000 principal amount of this Note for each 90-day period up to a maximum of
$0.50 per week per $1,000 of this Note. Upon (w) the filing of the Shelf
Registration Statement after the 45-day period described in clause (a) above,
(x) the effectiveness of a Shelf Registration Statement after the 120-day period
described in clause (b) above, or (y) the effectiveness of an applicable
Registration Statement after the 30-day period described in clause (c) above,
the Special Interest payable on this Note, with respect to such clause (a), (b)
or (c), as the case may be, from the date of such filing, effectiveness or
consummation, as the case may be, shall cease to accrue and all accrued and
unpaid Special Interest as of the occurrence of (w), (x) or (y) shall be paid to
the Holder hereof on the next Interest Payment Date with respect thereto.
Following the occurrence of (w), (x) and (y) above, the interest terms of this
Note shall revert to the original terms set forth above subject to paragraph (b)
below.
(b) In the event of the failure of the Company to procure, on
or before July 12, 1996, a recognized financial institution with capital of not
less than $10,000,000 organized under the laws of the Republic of Ireland which
the Trustee may lawfully appoint as a Qualified Foreign Collateral Agent (as
defined in Section 7.3 of the Indenture) (the "Procurement") with respect to
Technocom Preferred Stock, any payments thereon and any property substituted
therefor (the "Subject Collateral") pursuant to an agreement under which such
Qualified Foreign Collateral Agent will agree not to resign without the
contemporaneous appointment of a successor Qualified Foreign Collateral Agent
(the "Prescribed Agreement"), then, commencing on July 12, 1996, the Company
shall pay to each Holder of the Notes additional Special Interest in an amount
equal to 1% per annum on the principal amount of such Holder's Notes, accruing
for each day until the Procurement is made or Technocom or a successor is
reorganized under the laws of Cyprus and a successor Qualified Foreign
Collateral Agent has been appointed in respect of the Subject Collateral (the
"Reorganization") under a Prescribed Agreement. Such Special Interest shall be
payable in cash semiannually in arrears at the times and in the manner provided
for in the Indenture. Such Special Interest shall cease to accrue upon the
Procurement or the Reorganization taking place and all accrued and unpaid
Special Interest shall be paid to each Holder of the Notes on the next Interest
Payment Date with respect thereto. Any Special Interest payable pursuant to this
paragraph 4(b) shall be in addition to any Special Interest that may be payable
pursuant to paragraph 4(a) above.
Except as expressly provided in this paragraph 4, Special
Interest shall be treated as interest and any date on which Special Interest is
due and payable shall be treated as Interest Payment Date, for all purposes
under this Note and the Indenture.
5. Method of Payment.
The Company, through the Paying Agent, shall pay interest on
this Note to the registered Holder of this Note, as provided above. The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of all debts public and
private. Principal and interest will be payable at the office of the Paying
Agent but, at the option of the Company, interest may be paid by check mailed to
the registered Holders at their registered addresses.
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6. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar
under the Indenture. The Company may, upon written notice to the Trustee,
appoint and change any Paying Agent or Registrar. The Company or any of its
subsidiaries may act as Paying Agent or Registrar.
7. Optional Redemption.
Except as set forth in the following paragraph, the Notes may
not be redeemed prior to June 1, 2000. During the period from June 1, 2000 to
May 31, 2002, the Company may redeem all but not less than all of the Notes if
the Closing Price (as defined in the Indenture) of the Common Stock (as defined
in the Indenture) equals or exceeds 150% of the conversion price of the Notes
for a period of 30 consecutive days, at a redemption price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, Additional
Amounts, if any, and Special Interest, if any, to the applicable Redemption
Date, and any other amounts due in respect thereof but not including any amount
on account of any Reset Penalty (as defined below). Thereafter, the Notes will
be subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 calendar days' nor more than 60 calendar days' notice, at a
redemption price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon (if any), Additional Amounts (if any) and Special
Interest (if any) to the applicable Redemption Date, and any amounts due in
respect thereof. No amount shall be paid in respect of any Reset Penalty upon
any redemption, offer to purchase or other acquisition except in respect of a
record date for the Reset Penalty, which has passed.
The Notes may be redeemed, at the option of the Company, in
whole but not in part, upon not less than 30 or more than 60 calendar days'
notice to the Holders in accordance with the terms of the Indenture, at a
redemption price equal to the principal amount thereof, plus accrued and unpaid
interest, if any (including Additional Amounts, if any, and Special Interest, if
any), to the applicable Redemption Date (subject to the right of Holders of
record on the relevant Record Date to receive interest (including Additional
Amounts, if any, and Special Interest, if any), due on the Interest Payment Date
that is on or prior to the Redemption Date) and any other amounts due if, as a
result of any change in or amendment to the laws or the regulations or rulings
promulgated thereunder of Canada, Cyprus, the Russian Federation or any other
jurisdiction with which the Company or any Guarantor has any connection (other
than a connection arising as a result of a continuance or a merger or
consolidation of the Company with or into a newly formed corporation solely for
the purpose of moving the Company's domicile out of Canada) or any political
subdivision thereof or any authority thereof or having power to tax therein, or
any change in the application or official interpretation of such laws or
regulations, or any change in administrative policy or assessing practice of the
applicable taxing authority, which change or amendment becomes effective on or
after May 24, 1996, the Company or the Guarantors (if the Guarantees are called)
are or would be required on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to the Notes or the Guarantees and the payment
of such Additional Amounts cannot be avoided by the use of any reasonable
measures available to the Company or the Guarantors, as the case may be. The
Company will also pay to holders on the Redemption Date any Additional Amounts
payable in respect of the period ending on the Redemption Date. Prior to the
publication of any notice of redemption pursuant to this provision, which in no
event will be given earlier than 90 days prior to the earliest date on which the
Company or the Guarantors, as the case may be, would be required to pay such
Additional Amounts were a payment in respect of the Notes then due, the Company
shall deliver to the Trustee (i) an Officers' Certificate stating that the
obligation to pay such Additional Amounts cannot be avoided by the Company or
the Guarantors, as the case may be, taking
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reasonable measures and (ii) an Opinion of Counsel, independent of the Company
and the Guarantors and approved by the Trustee, to the effect that the Company
or the Guarantors have or will become obligated to pay such Additional Amounts
as a result of such change or amendment. Such notice, once delivered by the
Company to the Trustee, will be irrevocable. The Trustee shall accept such
Officers' Certificate and Opinion of Counsel as sufficient evidence of the
satisfaction of the condition precedent set forth in clauses (i) and (ii) above,
in which event it shall be conclusive and binding on the Holders.
8. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days
before a Redemption Date, the Company will send a notice of redemption, first
class mail, postage prepaid, to Holders of Notes to be redeemed at the addresses
of such Holders as they appear in the Note Register.
If less than all of the Notes are to be redeemed at any time,
the Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest (including Additional Amounts, if any,
and Special Interest, if any) will be paid on such Interest Payment Date to the
Holder of the Note on such Record Date. If money in an amount sufficient to pay
the Redemption Price of all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent on or before the applicable
Redemption Date and certain other conditions are satisfied, interest (including
Additional Amounts, if any, and Special Interest, if any) on the Notes to be
redeemed on the applicable Redemption Date will cease to accrue.
The Notes are not subject to any sinking fund.
9. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to purchase such Holder's
Notes, in whole or in part in a principal amount that is an integral multiple of
$1,000, pursuant to a Change of Control Offer, at a purchase price in cash equal
to 101% of the principal amount thereof on any Change of Control Payment Date,
plus accrued and unpaid interest, if any, Additional Amounts, if any, and
Special Interest, if any, thereon to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the
Company shall send, or cause to be sent, by first-class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The holder
of this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest and Additional Amounts, if any, and Special Interest, if any,
from and after the Change of Control Payment Date.
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10. Repurchase at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the following
paragraph and the Indenture, if at any time the Company or any Restricted
Subsidiary engages in any Asset Sale, as a result of which the aggregate amount
of Excess Proceeds exceeds $5,000,000, the Company shall, within 30 calendar
days of the date the amount of Excess Proceeds exceeds $5,000,000, use the
then-existing Excess Proceeds to make an offer to purchase from all Holders, on
a pro rata basis, Notes in an aggregate principal amount equal to the maximum
principal amount that may be purchased out of the then-existing Excess Proceeds,
at a purchase price in cash equal to 100% of the principal amount thereof on any
Asset Sale Payment Date, plus accrued and unpaid interest thereon, if any, and
Additional Amounts, if any, and Special Interest, if any, to the Asset Sale
Payment Date, provided that Excess Proceeds attributable to assets not
constituting Collateral (as defined in the Indenture) must be used first to make
an Asset Sale Offer pursuant to the Senior Note Indenture (as defined in the
Indenture) unless the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged, and then to make an Asset Sale
Offer pursuant to the Senior Note Indenture (as defined in the Indenture) the
Senior Notes are no longer outstanding and the Senior Not Indenture has been
satisfied and discharged, and then to make an Asset Sale Offer for the Notes if
there remain Excess Proceeds after the Asset Sale Offer for the Senior Notes has
been completed. Upon completion of an Asset Sale Offer (including payment of the
Offer Purchase Price for accepted Notes), any surplus Excess Proceeds that were
the subject of such offer shall cease to be Excess Proceeds, and the Company may
then use such amounts for general corporate purposes.
Notwithstanding the paragraph above, the Company will not be
obligated to repurchase Notes in connection with an Asset Sale Offer
representing in the aggregate more than 25% of the original aggregate principal
amount of the Notes (which original aggregate principal amount shall for these
purposes be $26,500,000, without any adjustment whatsoever) prior to the date
following the Five Year Date, and the original aggregate principal amount of
Notes repurchased in connection with any Asset Sale Offer having a purchase date
prior to the date following the Five Year Date shall represent no more than 25%
of the original aggregate principal amount of the Notes less the original
aggregate principal amount of Notes purchased pursuant to Asset Sale Offers
relating to all prior Asset Sales. To the extent that the amount of Excess
Proceeds exceeds the amount of Notes purchased because of the limitation imposed
by the immediately preceding sentence (the amount of such excess being the
"Aggregate Unused Proceeds"), such Aggregate Unused Proceeds shall constitute
Excess Proceeds for purposes of the first Asset Sale Offer that is made after
the Five Year Date and, in the event the amount of the Aggregate Unused Proceeds
exceeds $5,000,000, promptly after the Five Year Date, the Company shall
commence an Asset Sale Offer on a pro rata basis for an aggregate principal
amount of Notes equal to the Aggregate Unused Proceeds (and any other Excess
Proceeds that arise between the Five Year Date and such Asset Sale Offer) at a
purchase price equal to 100% of the principal amount of the Notes, plus accrued
interest, if any, Special Interest, if any, and Additional Amounts, if any, to
the date of purchase.
Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $5,000,000, the Company shall send, or cause to be sent, by
first-class mail, postage prepaid, a notice regarding the Asset Sale Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Require Purchase" appearing below and tendering
this Note pursuant to the Asset Sale Offer. Unless the Company defaults in the
payment of the Offer Purchase Price with respect thereto, all Notes or portions
thereof selected for payment pursuant to the Asset Sale Offer will cease to
accrue interest and Additional Amounts, if any, and Special Interest, if any,
from and after the Asset Sale Payment Date.
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11. Repurchase at the Option of Holders upon a Termination of
Trading.
In the event of any Termination of Trading (as defined in the
Indenture) occurring after the Issue Date and on or prior to Maturity, each
Holder of Notes will have the right commencing on the date following the Five
Year Date, at the Holder's option, to require the Company to repurchase all or
any part of such Holder's Notes on the date (the "Repurchase Date") that is 30
days after the date the Company gives notice of the Termination of Trading at a
price (the "Repurchase Price") equal to 100% of the principal amount thereof,
together with accrued and unpaid interest, if any, Additional Amounts, if any,
and Special Interest, if any, thereon to the Repurchase Date.
On or before the 15th day after the occurrence of a
Termination of Trading (unless such Termination of Trading occurs prior to the
Five Year Date, then on the 15th day following the Five Year Date), the Company
shall mail to all Holders of Notes a notice of the occurrence of such
Termination of Trading, the Repurchase Price and the procedures which the Holder
must follow to exercise the repurchase right. To exercise such right, the Holder
of this Note must deliver, on or before the close of business on the Repurchase
Date, irrevocable written notice to the Company (or an agent designated by the
Company for such purpose) and to the Trustee of the Holder's exercise of such
right, together with the certificates evidencing the Notes with respect to which
the right is being exercised, duly endorsed for transfer and with the form
entitled "Option of Holder to Require Purchase" appearing below completed. Such
written notice is irrevocable.
12. Mandatory Redemption.
Except as set forth in Sections 9, 10 and 11, the Company is
not required to make any mandatory redemption payments or sinking fund payments
with respect to the Notes.
13. Transfer and Exchange.
By its acceptance of any Note represented by a certificate
bearing the Private Placement Legend, each Holder of, and beneficial owner of an
interest in, such Note acknowledges the restrictions on transfer of such Note
set forth on the face hereof, and agrees that it will transfer such a Note only
in accordance with the restrictions set forth on the face hereof and the
restrictions set forth under the heading "Transfer Restrictions" in the Final
Memorandum.
In connection with any transfer of a Note bearing the Private
Placement Legend, each Holder agrees to deliver to the Company such satisfactory
evidence, which may include an opinion of independent counsel licensed to
practice law in the State of New York, as reasonably may be requested by the
Company to confirm that such transfer is being made in accordance with the
limitations set forth in the Private Placement Legend. In the event the Company
determines that any such transfer is not in accordance with the Private
Placement Legend, the Company shall so inform the Registrar which shall not
register such transfer; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such evidence.
Upon the registration of transfer, exchange or replacement of
a Note not bearing the Private Placement Legend, the Trustee shall deliver a
Note that does not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of a Note bearing the Private Placement Legend, the
Trustee shall deliver a Note bearing the Private Placement Legend, unless such
legend may be removed from such Note as provided in the next sentence. The
Private Placement Legend may be
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171
removed from a Note if there is delivered to the Company such satisfactory
evidence, which may include an opinion of independent counsel licensed to
practice law in the State of New York, as reasonably may be requested by the
Company to confirm that neither such legend nor the restrictions on transfer set
forth therein are required to ensure that transfers of such Note will not
violate the registration and prospectus delivery requirements of the Securities
Act and if the transferee is a resident of Canada, the securities laws of the
applicable province of Canada; provided that the Trustee shall not be required
to determine (but may rely on a determination made by the Company with respect
to) the sufficiency of any such evidence. Upon provision of such evidence, the
Trustee shall authenticate and deliver in exchange for such Note, a Note or
Notes (representing the same aggregate principal amount of the Note being
exchanged) without such legend. If the Private Placement Legend has been removed
from a Note, as provided above, no other Note issued in exchange for all or any
part of such Note shall bear such legend, unless the Company has reasonable
cause to believe that such other Note represents a "restricted security" within
the meaning of Rule 144 and instructs the Trustee to cause a legend to appear
thereon.
A holder may transfer a Note only upon the surrender of such
Note for registration of transfer. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of transfer in the Note register by the Registrar.
When Notes are presented to the registrar with a request to register the
transfer of, or to exchange such Notes, the Registrar shall register the
transfer or make such exchange as requested if its requirements for such
transactions and any applicable requirements hereunder are satisfied.
Prior to the effectiveness of a Shelf Registration Statement
or following the suspension or termination thereof, the Holder of this Note (or
holders of interests therein) and prospective purchasers designated by such
Holder (or such holders of interests therein) shall have the right to obtain
from the Company upon request by such Holder (or such holders of interests) or
prospective purchasers, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, or exempt from reporting pursuant to
12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144 in connection with any transfer or proposed transfer of
such Note or interest.
14. Denominations.
The Notes are issuable only in registered form without coupons
in denominations of $1,000 and integral multiples thereof of principal amount.
15. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
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16. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some or all of its and the Guarantors' obligations under the Notes,
the Guarantees, the Indenture and the Collateral Documents and the Senior Note
Collateral Documents if the Company irrevocably deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on the
Notes to redemption or maturity, as the case may be.
17. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, the Notes, the Collateral Documents and the Senior Note
Collateral Documents may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
past Default and its consequences may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Without the consent of any Holder of Notes, the Company, the Guarantors and the
Trustee may amend the Indenture, the Notes, the Collateral Documents and the
Senior Note Collateral Documents (i) to evidence the succession of another
Person to the Company or the Guarantors, as applicable, and the assumption by
such successor of the covenants of the Company or the Guarantors under the
Indenture, the Collateral Documents and the Senior Note Collateral Documents;
(ii) to add additional covenants or to surrender rights and powers conferred on
the Company or the Guarantors by the Indenture, the Collateral Documents and the
Senior Note Collateral Documents; (iii) to add any additional Events of Default;
(iv) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to add additional
security for the Notes and the Guarantees; (vii) to cure any ambiguity in the
Indenture, the Collateral Documents or the Senior Note Collateral Documents, to
correct or supplement any provision in the Indenture, the Collateral Documents
or the Senior Note Collateral Documents which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, the Collateral Documents or the Senior
Note Collateral Documents, provided that such actions shall not adversely affect
the interests of the Holders in any material respect; (viii) to make provision
with respect to the conversion rights of the Holders of the Notes in the event
of a consolidation, merger or sale of assets involving the Company, as required
by the Indenture; or (ix) to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.
18. Defaults and Remedies.
Events of Default under the Indenture include in summary form:
default in payment of interest, including Additional Amounts, if any, or Special
Interest, if any, on the Notes for 30 days; default in payment of principal on
the Notes; the occurrence and continuance of an Event of Default under the
Senior Note Indenture (as defined therein) for a period of 15 days after written
notice has been given to the Company by the Trustee or a Holder of the Notes;
failure to comply with certain of the covenants in the Indenture, including the
Change of Control covenant, the Asset Sale covenant and the Termination of
Trading covenant; failure by the Company to comply with certain of its other
agreements in the Indenture or the Notes or any Collateral Document or any
Senior Note Collateral Document or a breach of a representation or warranty in
any Collateral Document and the continuance of such default or breach for 45
days after notice; expropriation of assets of the Company or any of its
Restricted Subsidiaries having a book value, less the book value of the
expropriation proceeds, constituting more than 15% of the book value, on a
consolidated basis, of the Company's assets minus current assets;
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defaults in the payment of certain other Indebtedness, or defaults, other than
such payment defaults, which result in the acceleration prior to express
maturity of certain other Indebtedness or which consist of the failure to pay at
maturity; certain final judgments which remain undischarged, unwaived,
unappealed, unbonded, unstayed or unsatisfied; certain events of bankruptcy or
insolvency; failure of a Guarantee, a Collateral Document or a Senior Note
Collateral Document to be in effect, the denial of obligations under a
Guarantee, a Collateral Document or a Senior Note Collateral Document or the
Notes by the Company or the Guarantors party thereto or the failure of the Notes
and the Guarantees to be secured by the theretofore perfected Liens and security
interests in the Collateral or the Senior Note Collateral (except as permitted
by the Indenture, the Collateral Documents or the Senior Note Collateral
Documents), which in each circumstance continues for 30 days after notice. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Notes, subject to certain limitations, may
declare all the Notes to be immediately due and payable. Certain events of
bankruptcy or insolvency are Events of Default and shall result in the Notes
being immediately due and payable upon the occurrence of such Events of Default
without any further act of the Trustee or any Holder.
Holders of Notes may not enforce the Indenture, the Notes, the
Guarantees, the Collateral Documents or the Senior Note Collateral Documents
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture, the Notes, the Guarantees, the Collateral Documents or the Senior
Note Collateral Documents unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Notes may direct the Trustee in its exercise of any trust or power under the
Indenture, the Collateral Documents and the Senior Note Collateral Documents.
The Holders of a majority in principal amount of the outstanding Notes, by
written notice to the Company and the Trustee, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
19. Collateral Documents.
As provided in the Indenture, the Collateral Documents and the
Senior Note Collateral Documents and subject to certain limitations set forth
therein, the obligations of the Company and the Guarantors under the Notes, the
Indenture, the Collateral Documents and the Senior Note Collateral as provided
in the Senior Note Collateral Documents are secured by the Collateral as
provided in the Collateral Documents and the Senior Note Collateral Documents.
Each Holder, by accepting a Note, agrees to be bound to all the terms and
provisions of the Collateral Documents and the Senior Note Collateral Documents,
as the same may be amended from time to time. The Liens created under the
Collateral Documents and the Senior Note Collateral Documents shall be released
upon the terms and subject to the conditions set forth in the Indenture, the
Collateral Documents and the Senior Note Collateral Documents.
20. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture
Act, the Trustee or any Paying Agent or Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company, the Guarantors, its Restricted Subsidiaries or its Affiliates
with the same rights it would have if it were not Trustee, Paying Agent or
Registrar, as the case may be, under the Indenture.
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174
21. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, the Guarantees or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of his or her status as a
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor. By accepting a Note, each Holder waives and releases all such
liability (but only such liability) as part of the consideration for issuance of
such Note to such Holder.
22. Governing Law.
THE INDENTURE, THE GUARANTEES AND THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
23. Abbreviations.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
24. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
25. Subordination.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Note is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided, and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
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26. Conversion Rights.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Note is entitled, at his, her or its option, at
any time on or after 9:00 a.m. New York City time on July 30, 1996 and before
the close of business on the Business Day next preceding the Redemption Date, or
in case this Note or a portion hereof is called for redemption, then in respect
of this Note or such portion hereof until and including, but (unless the Company
defaults in making the payment due upon redemption) not after, the close of
business on the Business Day next preceding the Redemption Date, to convert this
Note at the principal amount hereof, or of such portion, in to fully paid and
non-assessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock of the Company at a conversion price equal to $6.90
per share of such Common Stock (or in each case at the current adjusted
conversion price if an adjustment has been made as provided in the Indenture) by
surrender of this Note, duly endorsed or assigned to the Company or in blank, to
the Company at its office or agency maintained for that purpose pursuant to the
Indenture, accompanied by written notice to the Company in the form provided in
this Note (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Note and, in case such surrender shall be made
during the period from the close of business on any regular Record Date next
preceding any Interest Payment Date or the close of business on a record date
for the payment of a Reset Penalty to the close of business on such Interest
Payment Date or the Reset Penalty Payment Date, as applicable, (unless this Note
or the portion thereof being converted has been called for redemption on a
Redemption Date within such period), also accompanied by payment in New York
Clearing House funds, or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted and/or any Reset Penalty due.
Subject to the aforesaid requirement for payment and, in the case of a
conversion after the regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Note (or any Predecessor Security) of record at such regular record date to
receive an installment of interest (with certain exceptions provided in the
Indenture), no payment or adjustment is to be made upon conversion on account of
any interest accrued hereon or on account of any dividends on the Common Stock
issued upon conversion. No fractional shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional share the
Company shall pay a cash adjustment as provided in the Indenture.
On December 1, 1996 (the "Reset Date"), the conversion price will be
adjusted (the "Conversion Reset") to equal (x) the product of (i) the average of
the high and low prices on the Nasdaq National Market, or the consolidated
transaction reporting tape in the event that the Common Stock of the Company is
not then traded on the Nasdaq National Market, and (ii) the amount of Common
Stock of the Company reported as being traded on that day, for each Trading Day
of the 30 calendar days preceding the Reset Date (the "Conversion Reset
Period"), divided by the total number of shares of Common Stock of the Company
traded over the Conversion Reset Period, then multiplied by (y) 115% (the
"Conversion Reset Price"), if such Conversion Reset Price shall be lower than
the conversion price before such calculation, provided that the Conversion Reset
Price shall never be adjusted to less than $4.30 per share, but the Company will
be required to pay to holders of Notes a quarterly reset penalty ("Reset
Penalty") attributable to the Company's inability to adjust the Conversion Reset
Price below $4.30 per share. In the event that the conversion price before such
calculation shall be equal to or less than the Conversion Reset Price, then no
adjustment to the conversion price shall be made. The quarterly Reset Penalty
payable to each Holder of Notes shall be an amount equal to $2.50 per Note held
by such Holder (which for the purposes of this Paragraph 26 will be determined
to be Certificated Notes, each in the denomination of $1,000) unless, but for
the proviso in the preceding sentence, the Conversion
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176
Reset Price would have been less than $3.80 per share, in which case such
quarterly Reset Penalty shall be an amount equal to $5.00 per Note held by such
Holder. The Reset Penalty shall be payable on each March 1, June 1, September 1
and December 1 (each such date being referred to herein as a "Reset Penalty
Payment Date"), commencing on March 1, 1997, the first such Reset Penalty
Payment Date occurring after the Reset Date, and shall be payable to holders of
record of Notes on the February 15, May 15, August 15 and November 15
immediately preceding such Reset Penalty Payment Date and shall not accrue. The
Reset Penalty will cease to be payable upon a conversion of a Note.
The Company will furnish to any Holder of Notes upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Note. Requests may be made to:
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in this Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have, jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest (including Additional
Amounts, if any, and Special Interest, if any) on the Notes, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, offer to purchase upon a Termination of Trading, purchase or
otherwise, (b) the due and punctual payment of interest on the overdue principal
of and interest (including Additional Amounts, if any, and Special Interest, if
any) on the Notes, if any, to the extent lawful, (c) the due and punctual
performance of all other obligations of the Company and the Guarantors to the
Holders under the Indenture, the Notes, the Collateral Documents and the Senior
Note Collateral Documents and (d) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at Stated Maturity, by acceleration, call for redemption,
upon a Change of Control Offer, Asset Sale Offer, offer to purchase upon a
Termination of Trading, purchase or otherwise. Capitalized terms used herein
shall have the meanings assigned to them in the Indenture unless otherwise
indicated.
Payment on each Note is guaranteed, jointly and severally, by
the Guarantors pursuant to Article X of the Indenture on a senior subordinated
basis to the extent provided in the Indenture and reference is made to such
Indenture for the precise terms of the Guarantees and such subordination.
The obligations of each Guarantor are limited to the lesser of
(a) an amount equal to such Guarantor's Adjusted Net Assets as of the date of
the Guarantee and (b) the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
(including, if applicable, its obligation under the Senior Notes) and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under the
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177
Indenture, result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law or not otherwise being void, voidable or unenforceable under any
similar other bankruptcy, receivership,insolvency, liquidation or other similar
legislation or legal principles under applicable foreign law. Each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on the
Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their
Guarantees upon the terms and subject to the conditions provided in the
Indenture.
The Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
NWE CAPITAL (CYPRUS) LIMITED
By:_______________________________
PLD ASSET LEASING LIMITED
By:_______________________________
PLD CAPITAL LIMITED
By:_______________________________
BALTIC COMMUNICATIONS LIMITED
By:_______________________________
WIRELESS TECHNOLOGY CORPORATIONS LIMITED
By:_______________________________
178
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
----------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
----------------------------------
---------------------------------- ---------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint Attorney to
transfer this Note on the Security Register, with full power of substitution.
Dated:
-----------------
--------------------------------- --------------------------------------------
Signature of Holder Signature Guaranteed:
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
179
OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to Section
4.7 of the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $ ($1,000 in principal amount or an
integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an
amount in cash equal to 101% of the principal amount indicated
in the preceding sentences, as the case may be, plus accrued
and unpaid interest thereon, if any, and Additional Amounts,
if any, and Special Interest, if any, to the Change of Control
Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section 4.8 of
the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $ ($1,000 in principal amount or an
integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an
amount in cash equal to 100% of the principal amount indicated
in the preceding sentence, as the case may be, plus accrued
and unpaid interest thereon, if any, and Additional Amounts,
if any, and Special Interest, if any, to the Asset Sale
Payment Date.
/ / In connection with the option of the Holder to require the Company to
repurchase the Holder's Note upon a Termination of Trading pursuant to
Section 4.14 of the Indenture, the undersigned hereby elects to have
/ / the entire principal amount
/ / $ ($1,000 in principal amount or an
integral multiple thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an
amount in cash equal to 100% of the principal amount indicated
in the preceding sentences, as the case may be, plus accrued
and unpaid interest thereon, if any, and Additional Amounts,
if any, and Special Interest, if any, to the Repurchase Date.
Dated:
------------
----------------------------------- -----------------------------------
Signature of Holder Signature Guaranteed:
180
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
NOTICE: The signature to the foregoing must correspond to the Name as written
upon the face of this Note in every particular, without alteration or any change
whatsoever.
FORM OF CONVERSION NOTICE
The undersigned registered owner of this Note hereby
irrevocably exercises the option to convert this Note, or the portion hereof
(which is $1,000 or a multiple thereof) designated below, into shares of Common
Stock in accordance with the terms of the Indenture referred to in this Note,
and directs that the shares issuable and deliverable upon the conversion,
together with any check in payment for a fractional share and any Note
representing any unconverted principal amount hereof, be issued and delivered to
the registered owner hereof unless a different name has been provided below. If
this Notice is being delivered on a date after the close of business on a
regular Record Date or a record date for the payment of a Reset Penalty and
prior to the close of business on the related Interest Payment Date or Reset
Penalty Payment Date, as the case may be, this Notice is accompanied by payment
in New York Clearing House funds, or other funds acceptable to the Company, of
an amount equal to the interest payable on such Interest Payment Date on the
principal of this Note to be converted and/or the Reset Penalty due on such
Note. If shares or any portion of this Note not converted are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Dated:
------------ --------------------------------------------
NOTICE This signature must correspond with
the name as written upon the face of the
within- mentioned instrument in every
particular, without alteration or any change
whatsoever.
181
Fill in for registration of shares of Common
Stock if they are to be delivered, or
Securities if they are to be issued, other
than to and in the name of the registered
owner:
---------------------------------
(Name)
---------------------------------
(Street Address)
---------------------------------
(City, State and zip code)
(Please print name and address)
Register: Common Stock
---------
Securities
---------
(Check appropriate line(s)).
Principal amount to be
converted (if less than all):
$ ,000
--------------
--------------------------------------
Social Security or other
Taxpayer Identification
Number of owner
182
Disclosure Schedules to
Indenture
9% Convertible Subordinated Notes Due 2006
Dated as of May 31, 1996
Any item disclosed on one Schedule included herein shall also be deemed
to be disclosed on all other relevant Schedules on which such item should be
disclosed and qualifies all relevant representations set forth in the Indenture.
183
SCHEDULE 1.1(b)
SPECIAL PURPOSES PROVISIONS FOR LEASING COMPANIES
"1. Notwithstanding any other provision of this Memorandum of
Association, the Articles of Association or any provision of law that otherwise
so empowers the company, the company shall not, (i) without the prior written
consent of the trustee from time to time ("the Trustee") under any indenture or
similar agreement among Petersburg Long Distance Inc., an Ontario corporation
(together with its successors and assigns, "PLD"), the company, certain other
guarantors and a financial institution acting as a trustee (the "Indenture") or
any related guarantee, collateral documents or similar agreements, if any,
pursuant to which PLD shall issue notes, debentures or bonds and (ii) without
each rating agency then rating the notes, debentures or bonds affirming in
writing that the rating of such notes, debentures or bonds will not be adversely
effective by such action, do any of the following:
(a) engage in any business or activity other than in connection
with or relating to facilitating the issuance of such notes, debentures or bonds
of PLD and other than acquiring Telecommunications Assets and leasing such
Telecommunications Assets to Restricted Subsidiaries or Qualified Joint Ventures
in Russia or Kazakstan pursuant to Telecommunications Asset Leases and making
Qualified Investments in entities primarily engaged in, or proposing to engage
in, the Telecommunications Business in Russia and Kazakstan;
(b) incur any Indebtedness, or assume or guaranty any
Indebtedness or any other entity, other than in connection with a guarantee (the
"Guarantee") of the notes issued by PLD pursuant to the Indenture and other than
indebtedness evidenced by Intercompany Notes owing to PLD or a special-purpose
corporation constituting a Restricted Subsidiary and a "Leasing Company" (as
such may be defined in the Indenture) which is also a guarantor of the notes
under such Indenture;
(c) commingle its assets with those of any other Person;
(d) dissolve or liquidate, in whole or in part;
(e) consolidate or merge with or into any other entity or convey
or transfer its properties and assets substantially as an entirety to any other
entity, unless:
(i) the entity (if other than the company) formed or
surviving the consolidation or merger or which acquires the
properties and assets of the company is organized and existing
under the laws of Cyprus, Canada or any province or any
subdivision thereof, the United States, any political subdivision
thereof, any state thereof or the District of Columbia, United
Kingdom or Bermuda, expressly assumes the due and punctual payment
of, and all obligations of the company in connection with
indebtedness of the company, and has Articles
184
of incorporation, corporate charter or other organizational
documents containing provisions identical to the provisions of
this Paragraph 2 and Paragraph 3; and
(ii) immediately after giving effect to the transaction, no
default or event of default has occurred and is continuing under
any indebtedness of the company or any agreements relating to such
indebtedness; or
(f) without the affirmative vote of 100% of the members of the
Board of Directors of the company, institute proceedings to wind up, liquidate
or be adjudicated a bankrupt or insolvent, or Consent to the institution of
winding up, liquidation, bankruptcy or insolvency proceedings against it, or
file a petition seeking or consent to reorganization or relief under any
applicable law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the company or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts generally as they become due, or take any corporate action in
furtherance of any such action.
2. Notwithstanding any other provision of this Memorandum of
Association, the Articles of Association or any provision of law that otherwise
so empowers the company, the company shall, unless first (i) having received the
prior written consent of each Trustee under any Indenture or any related
guarantee, collateral documents or similar agreements, if any, pursuant to which
PLD shall issue notes, debentures or bonds and (ii) obtaining from each rating
agency then rating the notes, debentures or bonds affirmation in writing that
the rating of such notes, debentures or bonds will not be adversely effective by
such action, do each of the following:
(a) maintain its own bank accounts, payroll and separate books of
account; and
(b) identify itself in all dealings with the public under its own
name and as a separate and distinct entity and not identify itself as being a
division or part of any other Person.
3. At least one director of the company (an "Independent Director")
shall be none of (i) a Director, officer, employee or 10% beneficial owner of
the outstanding common stock, of any Affiliate or other person or entity owning
beneficially more than 10% of the outstanding shares of capital stock of the
company (an "Affiliated Entity") or (ii) a director, officer, employee or 5%
beneficial owner of the outstanding common stock, of any such Affiliated
Entity's subsidiaries or affiliates (other than the company).
4. The company shall not, without the prior written consent of each
Trustee under any Indenture and of each nationally recognized rating agency
which has rated the Certificates issued pursuant to an Agreement, amend, alter,
change or repeal Paragraphs 1, 2, 4 or this Paragraph 3 of this [Memorandum of
Association].
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4. For the purposes of this [Memorandum of Association], the
following terms are defined as follows:
"Affiliate means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling" "under common
control with", and "controlled by"), and as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise, provided,
further, that beneficial ownership of 10% or more of the Voting Stock of a
Person (on a fully diluted basis) shall be deemed to be control.
"Capital Lease Obligation" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" in any Person means any and all shares, interests,
participation or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Disqualified Stock' means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, or otherwise matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the date on which
the notes issued pursuant to the Indenture mature.
"Indebtedness" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with acquisition of
Property, assets or businesses, excluding trade accounts payable made in the,
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property of services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and (vii) any obligation of the type referred to in clauses (i)
through (vi) of this definition of another Person
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and all dividends and distributions of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise.
"Intercompany Notes" means a promissory note representing
Indebtedness of the company owing to PLD or a Restricted Subsidiary, which, if
representing a loan of net proceeds of the notes issued by PLD pursuant to the
Indenture to the company, shall have substantially the same Maturity as the
Notes and substantially same interest payments dates, the same interest rate and
substantially the same covenants as are contained in the Indenture and the
related collateral documents and shall be secured by the applicable
Telecommunications Asset Leases and by the applicable Qualified Investments.
"Investment" in any Person means any direct, indirect or continent
(i) advance or loan to, guarantee of any Indebtedness of, extension of credit or
capital contribution to such Person, (ii) the acquisition of any shares of
Capital Stock, bonds, notes, debentures or other securities of such Person, or
(iii) the acquisition, by purchase or otherwise, of all or substantially all of
the business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude accounts receivable and other
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Joint Venture" means a Telecommunications Company of which less
than 50% of the Voting Stock is held by PLD; provided that the
Telecommunications Business of such Person is principally conducted in Russia
and Kazakstan.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Qualified Investment" means an Investment in a Telecommunications
Company primarily engaged or proposing to engage in the Telecommunications
Business in Russia or Kazakstan.
"Qualified Joint Venture" means a Joint Venture in which PLD owns
directly or indirectly Voting Stock thereof an the Issue Date, which Joint
Ventures are disclosed in a schedule to the indenture, and any further joint
Venture in which PLD owns 20% or more of the Voting Stock thereof.
"Restricted Subsidiary" means any Subsidiary of PLD that has not
been classified as an "Unrestricted Subsidiary".
"Subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person, (ii) any general partnership, joint venture or
similar entity, more than 50% of the outstanding partnership or similar
interests of which are owned,
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directly or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, (iii) any limited partnership of which such Person or any Subsidiary of
such Person is a general partner and (iv) BECET International, provided that PLD
owns directly or indirectly 50% of the then outstanding shares of Voting Stock
of BECET International.
"Telecommunications Asset Lease" means a lease by the company y of
Telecommunications Assets to Restricted Subsidiaries and Qualified Joint Venture
in Russian and Kazakstan.
"Telecommunications Assets" means, with respect to any Person,
assets (including, without limitation, rights of way, trademarks and licenses to
use copyrighted material), that are utilized by such Person, directly or
indirectly, in a Telecommunications Business. For purposes of determining a
Telecommunications Company but not for purposes of determining whether property
or assets may be subject to a Telecommunications Asset Lease, Telecommunications
Assets shall also include stock, joint venture or partnership interests in
another Person, provided that substantially all of the assets of such other
Person consist of Telecommunications Assets, and provided, further, that if such
stock, joint venture or partnership interests are held by PLD or a restricted
Subsidiary, such other Person either is, or immediately following the relevant
transaction shall become, a Restricted Subsidiary of PLD pursuant to the
Indenture.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii) creating,
developing or marketing communications related network equipment, software and
other devices for use in (i) above or (iii) evaluating, participating or
pursuing any other activity or opportunity that is related to those specified in
(i) or (ii) above and includes, without limitation, any business which PLD and
its Restricted Subsidiaries are currently engaged on the Issue Date.
"Telecommunications Company" means any Person substantially all of
the assets of which consist of Telecommunications Assets. "Unrestricted
Subsidiary" means any Subsidiary of PLD that PLD has classified as an
"Unrestricted Subsidiary," and that has not been reclassified as a Restricted
Subsidiary, pursuant to the terms of the Indenture.
"Voting Stock" means, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or it the times that such class of Capital Stock
has voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such
Person."
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SCHEDULE 1.1(d)
EXISTING LIENS
None.
189
SCHEDULE A TO THE CONVERTIBLE NOTE INDENTURE
"Special Interest" shall include the amount of interest payable
pursuant to this paragraph in the event of the failure of the Company to
procure, on or before July 12, 1996, a recognized financial institution with
capital of not less than $10,000,000 organized under the laws of the Republic of
Ireland which the Trustee may lawfully appoint as a Qualified Foreign Collateral
Agent (as defined in Section 7.3 of the Indenture) (the "Procurement") with
respect to Technocom Preferred Stock, any payments thereon and any property
substituted therefor (the "Subject Collateral") pursuant to an agreement under
which such Qualified Foreign Collateral Agent will agree not to resign without
the contemporaneous appointment of a successor Qualified Foreign Collateral
Agent (the "Prescribed Agreement"). Commencing on July 12, 1996, if the Company
has failed to make the Procurement, the Company shall pay to each Holder of the
Notes additional interest in an amount equal to 1% per annum on the principal
amount at of such Holder's Notes, accruing for each day until the Procurement is
made or Technocom or a successor is reorganized under the laws of Cyprus and a
successor Qualified Foreign Collateral Agent has been appointed in respect of
the Subject Collateral (the "Reorganization") under a Prescribed Agreement. Such
Special Interest on the Notes shall be payable in cash semi-annually in arrears
at the times and in the manner provided for in the Indenture. Such interest
shall cease to accrue upon the Procurement or the Reorganization taking place
and all accrued and unpaid Special Interest shall be paid to each Holder of the
Notes on the next Interest Payment Date with respect thereto. Any Special
Interest payable pursuant to this Schedule shall be in addition to any Special
Interest that may be payable pursuant to paragraph (a) of the definition of
Special Interest contained in the Indenture.
