EXECUTION COPY
SENIOR DISCOUNT NOTES
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WINSTAR COMMUNICATIONS, INC.
Issuer
14-3/4% Senior Discount Notes Due 2010
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INDENTURE
Dated as of April 10, 2000
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UNITED STATES TRUST COMPANY
OF NEW YORK
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 10.03
(c) .............................. 10.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 10.02
(d) .............................. 7.06
314(a) .............................. 4.02; 4.12
10.02
(b) .............................. N.A.
(c)(1) .............................. 10.04
(c)(2) .............................. 10.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 10.05
(f) .............................. 4.12
315(a) .............................. 7.01
(b) .............................. 7.05; 10.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) .......................... 2.08
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 10.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ..................................... 1
SECTION 1.02. Other Definitions ...............................35
SECTION 1.03. Incorporation by Reference
of Trust Indenture Act ....................35
SECTION 1.04. Rules of Construction ...........................36
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating .................................37
SECTION 2.02. Execution and Authentication ....................37
SECTION 2.03. Registrar and Paying Agent ......................38
SECTION 2.04. Paying Agent To Hold Money in Trust .............39
SECTION 2.05. Securityholder Lists ............................39
SECTION 2.06. Transfer and Exchange ...........................39
SECTION 2.07. Replacement Securities ..........................40
SECTION 2.08. Outstanding Securities;
When Securities Disregarded ...............40
SECTION 2.09. Temporary Securities ............................41
SECTION 2.10. Cancellation ....................................41
SECTION 2.11. Defaulted Interest ..............................41
SECTION 2.12. XXXXX, XXXX and Common Code Numbers .............41
SECTION 2.13. Issuance of Additional Securities ...............42
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee ..............................43
SECTION 3.02. Selection of Securities To
Be Redeemed ...............................43
SECTION 3.03. Notice of Redemption ............................43
SECTION 3.04. Effect of Notice of Redemption ..................44
SECTION 3.05. Deposit of Redemption Price .....................45
SECTION 3.06. Securities Redeemed in Part .....................45
2
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities ...........................45
SECTION 4.02. SEC Reports .....................................45
SECTION 4.03. Limitation on Indebtedness ......................46
SECTION 4.04. Limitation on Restricted Payments ...............50
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted
Group Members .............................55
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock ..........................58
SECTION 4.07. Limitation on Affiliate Transactions. ...........62
SECTION 4.08. Limitation on the Sale or Issuance
of Capital Stock of Restricted
Group Members .............................64
SECTION 4.09. Change of Control ...............................66
SECTION 4.10. Limitation on Liens .............................67
SECTION 4.11. Limitation on Sale/Leaseback
Transactions ..............................68
SECTION 4.12. Compliance Certificate ..........................68
SECTION 4.13. Further Instruments and Acts ....................68
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or
Transfer Assets ...........................69
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default ...............................70
SECTION 6.02. Acceleration ....................................72
SECTION 6.03. Other Remedies ..................................73
SECTION 6.04. Waiver of Past Defaults .........................73
SECTION 6.05. Control by Majority .............................73
SECTION 6.06. Limitation on Suits .............................74
SECTION 6.07. Rights of Holders to Receive
Payment ...................................74
SECTION 6.08. Collection Suit by Trustee ......................74
SECTION 6.09. Trustee May File Proofs of Claim ................75
SECTION 6.10. Priorities ......................................75
SECTION 6.11. Undertaking for Costs ...........................75
SECTION 6.12. Waiver of Stay or Extension Laws ................76
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ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee ...............................76
SECTION 7.02. Rights of Trustee ...............................77
SECTION 7.03. Individual Rights of Trustee ....................78
SECTION 7.04. Trustee's Disclaimer ............................78
SECTION 7.05. Notice of Defaults ..............................78
SECTION 7.06. Reports by Trustee to Holders ...................79
SECTION 7.07. Compensation and Indemnity ......................79
SECTION 7.08. Replacement of Trustee ..........................80
SECTION 7.09. Successor Trustee by Merger .....................81
SECTION 7.10. Eligibility; Disqualification ...................81
SECTION 7.11. Preferential Collection of
Claims Against Company ....................81
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on
Securities; Defeasance ....................82
SECTION 8.02. Conditions to Defeasance ........................83
SECTION 8.03. Application of Trust Money ......................84
SECTION 8.04. Repayment to Company ............................84
SECTION 8.05. Indemnity for Government
Obligations ...............................85
SECTION 8.06. Reinstatement ...................................85
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders ......................85
SECTION 9.02. With Consent of Holders .........................86
SECTION 9.03. Compliance with Trust Indenture Act .............87
SECTION 9.04. Revocation and Effect of Consents
and Waivers ...............................87
SECTION 9.05. Notation on or Exchange of
Securities ................................88
SECTION 9.06. Trustee To Sign Amendments ......................88
SECTION 9.07. Payment for Consent .............................88
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ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls ...................88
SECTION 10.02. Notices ........................................89
SECTION 10.03. Communication by Holders with
Other Holders ........................89
SECTION 10.04. Certificate and Opinion as to
Conditions Precedent ....................89
SECTION 10.05. Statements Required in Certificate
or Opinion .................................90
SECTION 10.06. Rules by Trustee, Paying Agent and
Registrar ................................90
SECTION 10.07. Legal Holidays .................................90
SECTION 10.08. Governing Law ..................................91
SECTION 10.09. No Recourse Against Others .....................91
SECTION 10.10. Successors .....................................91
SECTION 10.11. Multiple Originals .............................91
SECTION 10.12. Table of Contents; Headings ....................91
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Face of Initial Security
Exhibit A - Form of Face of Exchange Security or Private
Exchange Security
INDENTURE dated as of April 10, 2000, between WINSTAR
COMMUNICATIONS, INC., a Delaware corporation (the "Company"),
and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount at maturity of
Securities:
(1) if the Specified Date occurs on one of the following dates
(each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
Semi-Annual Accreted
Accrual Date Value
------------ -----
Issue Date . . . . . . . . . . . . . . . .$ 489.90
October 15, 2000 . . . . . . . . . . . . . 527.07
April 15, 2001 . . . . . . . . . . . . . . 565.95
October 15, 2001 . . . . . . . . . . . . . 607.68
April 15, 2002 . . . . . . . . . . . . . . 652.50
October 15, 2002 . . . . . . . . . . . . . 700.62
April 15, 2003 . . . . . . . . . . . . . . 752.29
October 15, 2003 . . . . . . . . . . . . . 807.78
April 15, 2004 . . . . . . . . . . . . . . 867.35
October 15, 2004 . . . . . . . . . . . . . 931.32
April 15, 2005 . . . . . . . . . . . . . . 1,000.00
(2) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will be equal to the sum of (A) the
Accreted Value for the Semi-Annual Accrual Date immediately
preceding such Specified Date and (B) an amount equal to the
product of (x) the
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Accreted Value for the immediately following Semi-Annual
Accrual Date less the Accreted Value for the immediately
preceding Semi-Annual Accrual Date multiplied by (y) a
fraction, the numerator of which is the number of days elapsed
from the immediately preceding Semi-Annual Accrual Date to the
Specified Date, using a 360-day year of 12 30-day months, and
the denominator of which is 180 (or, if the Semi-Annual
Accrual Date immediately preceding the Specified Date is the
Issue Date, the denominator of which is the number of days
from and including the Issue Date to and excluding the next
Semi-Annual Accrual Date); or
(3) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of an entity outstanding
on the date on which an interest in such entity is acquired, by merger or
otherwise (other than Indebtedness Incurred in connection with, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of transactions pursuant to which such entity was
acquired).
"Additional Securities" means, subject to the Company's compliance
with Section 4.03, 14-3/4% Senior Discount Notes Due 2010 issued from time to
time after the Issue Date under the terms of this Indenture (other than pursuant
to Section 2.06, 2.07, 2.09, 3.06, 4.06 or 4.09 of this Indenture and other than
Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner (other than Credit Suisse First Boston Private Equity Division
and any Affiliate of Credit
3
Suisse First Boston Private Equity Division) of Capital Stock representing 10%
or more of the total voting power of the Voting Stock (on a fully diluted basis)
of the Company or of rights or warrants to purchase such Capital Stock (whether
or not currently exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Group Member, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Group Member (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Group Member);
(2) all or substantially all the assets of any division or line
of business of the Company or any Restricted Group Member; or
(3) any other assets of the Company or any Restricted Group Member
outside of the ordinary course of business of the Company or such
Restricted Group Member
(other than, in the case of clauses (1), (2) and (3)
(A) a disposition by a Restricted Group Member to the Company
or by the Company or a Restricted Group Member to a Restricted Group
Member;
(B) for purposes of Section 4.06 only, a disposition that
constitutes a Restricted Payment permitted by Section 4.04 or a
Permitted Investment;
(C) for purposes of Section 4.06 only, a sale of shares of
Capital Stock of an Unrestricted Subsidiary for Fair Market Value;
(D) for purposes of Section 4.06 only, a disposition of
Receivables in a Qualified Receivables Transaction; and
4
(E) a disposition of assets with a fair market value of less
than $250,000 in a single transaction or series of related
transactions).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing:
(1) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of or redemption or similar payment with respect to such Indebtedness
multiplied by the amount of such payment by
(2) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
5
"Change of Control" means the occurrence of any of the following
events:
(1) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for purposes of this clause (1) such person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 35% of the total voting power of the Voting Stock of the
Company; provided, however, that the Permitted Holders beneficially own
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Company than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors (for the
purposes of this clause (1), such other person shall be deemed to
beneficially own any Voting Stock of a Person (the "specified person")
held by any other Person (the "parent entity"), if such other person is
the beneficial owner (as defined above in this clause (1)), directly or
indirectly, of more than 35% of the voting power of the Voting Stock of
such parent entity and the Permitted Holders beneficially own (as defined
in this proviso), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent entity
and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the board of
directors of such parent entity);
(2) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 66-2/3% of the directors of the Company
then still in office who were either directors on the Issue Date or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in
office;
6
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on
a consolidated basis) to another Person (other than, in all such cases, a
Person that is controlled by the Permitted Holders), other than a
transaction following which in the case of a merger or consolidation
transaction, securities that represented 100% of the Voting Stock of the
Company immediately prior to such transaction (or other securities into
which such securities are converted as part of such merger or
consolidation transaction) constitute at least a majority of the voting
power of the Voting Stock of the surviving Person in such merger or
consolidation transaction.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Restricted Group Members (including the
total interest expense of unconsolidated Permitted International Joint
Ventures), plus, to the extent not included in such total interest expense, and
to the extent incurred by the Company or its Restricted Group Members, without
duplication:
(1) interest expense attributable to capital leases and the interest
expense attributable to leases constituting part of a Sale/Leaseback
Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
7
(6) net payments pursuant to Hedging Obligations;
(7) Preferred Stock dividends in respect of all Preferred Stock of
Restricted Group Members held by Persons other than the Company or a
Restricted Group Member (other than dividends payable solely in Capital
Stock (other than Disqualified Stock) of the issuer of such Preferred
Stock);
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Group Member; and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust;
excluding, however, a portion of any such interest expense or other item listed
in clauses (1) through (10) above to the extent included therein solely as an
expense or other item of an unconsolidated Permitted International Joint Venture
and equal to the Third Party Ownership Interest in such Permitted International
Joint Venture.
"Consolidated Leverage Ratio" as of any date of determination means
the ratio of (x) the aggregate amount of Indebtedness of the Company and its
Restricted Group Members as of such date of determination to (y) EBITDA for the
most recent four consecutive fiscal quarters ending at least 45 days prior to
such date of determination (the "Reference Period"); provided, however, that:
(1) if the transaction giving rise to the need to calculate the
Consolidated Leverage Ratio is an Incurrence of Indebtedness, the amount
of such Indebtedness shall be calculated after giving effect on a pro
forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of the Reference Period;
(2) if the Company or any Restricted Group Member has repaid,
repurchased, defeased or otherwise discharged any Indebtedness that was
outstanding as of the
8
end of such fiscal quarter or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged on the date of the
transaction giving rise to the need to calculate the Consolidated Leverage
Ratio (other than, in each case, Indebtedness Incurred under any revolving
credit agreement), the aggregate amount of Indebtedness shall be
calculated on a pro forma basis and EBITDA shall be calculated as if the
Company or such Restricted Group Member had not earned the interest
income, if any, actually earned during the Reference Period in respect of
cash or Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness;
(3) if since the beginning of the Reference Period the Company or
any Restricted Group Member shall have made any Asset Disposition, the
EBITDA for the Reference Period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are the
subject of such Asset Disposition for the Reference Period or increased by
an amount equal to the EBITDA (if negative) directly attributable thereto
for the Reference Period;
(4) if since the beginning of the Reference Period the Company or
any Restricted Group Member (by merger or otherwise) shall have made an
Investment in any Restricted Group Member (or any Person which becomes a
Restricted Group Member) or an acquisition of assets which constitutes all
or substantially all of a business or one or more operating units of a
business, EBITDA for the Reference Period shall be calculated after giving
pro forma effect thereto (including the Incurrence of any Indebtedness) as
if such Investment or acquisition occurred on the first day of the
Reference Period; and
(5) if since the beginning of the Reference Period any Person that
subsequently became a Restricted Group Member or was merged with or into
the Company or any Restricted Group Member since the beginning of such
Reference Period shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant to
clause (3) or (4) above if made by the Company or a Restricted Group
Member during the Reference Period, EBITDA for the Reference Period shall
be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of the
Reference Period.
9
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its consolidated Restricted Group Members and (without
duplication) the Company's equity in the net income (or loss) of any
unconsolidated Permitted International Joint Ventures; provided, however, that
there shall not be included in such Consolidated Net Income:
(1) any net income (or loss) of any Person (other than the Company)
if such Person is not a Restricted Group Member, except that:
(A) subject to the exclusions contained in clauses (4) and (7)
below, the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Group Member as a
dividend or other distribution (subject, in the case of a dividend
or other distribution paid to a Restricted Group Member, to the
limitations contained in clause (3) below); and
(B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company,
a Subsidiary or a Permitted International Joint Venture in a pooling of
interests transaction for any period prior to the date of such
acquisition;
(3) any net income (or loss) of any Restricted Group Member if such
Restricted Group Member is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by
such Restricted Group Member, directly or indirectly, to the Company,
except that:
(A) subject to the exclusions contained in clauses (4) and (7)
below, the Company's equity in the net income of any such Restricted
Group Member for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash distributed or capable
of being distributed by such Restricted Group Member during such
period to the Company or another Restricted Group Member as a
dividend or other distribution (subject, in
10
the case of a dividend or other distribution paid to another
Restricted Group Member, to the limitation contained in this
clause); and
(B) the Company's equity in a net loss of any such Restricted
Group Member for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition
of any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and
any gain (or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting principles
after the Issue Date; and
(7) to the extent not otherwise excluded in accordance with GAAP,
the net income (or loss) of any unconsolidated Permitted International
Joint Venture in an amount that corresponds to the Third Party Ownership
Interest in the income of such Permitted International Joint Venture on
the last day of such period.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of the Investments or
return of capital to the Company or a Restricted Group Member to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such covenant pursuant to Section
4.04(a)(3)(D).
"Currency Agreement" means, in respect of a Person, any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
11
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable (other than for Capital
Stock that is not Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder
for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the ninety-first day after the Stated Maturity of
the Securities; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
ninety-first day after the Stated Maturity of the Securities shall not
constitute Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions applicable to
such Capital Stock are not more favorable to the holders of such Capital
Stock than the terms applicable to the Securities in Section 4.06 and
Section 4.09; and
(2) any such requirement only becomes operative after compliance
with such terms applicable to the Securities, including the purchase of
any Securities tendered pursuant thereto.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income:
(1) all income tax expense of the Company and its consolidated
Restricted Group Members; provided, however, that a portion of the income
tax expense of an unconsolidated Permitted International Joint Venture
equal to the percentage of the net income (net loss) of such Permitted
International Joint Venture allocated to the Company and its Restricted
Subsidiaries in accor-
12
dance with GAAP shall be included in EBITDA regardless of whether deducted
in calculating Consolidated Net Income;
(2) Consolidated Interest Expense; provided, however, that the
portion of Consolidated Interest Expense attributable to an unconsolidated
Permitted International Joint Venture shall be included in EBITDA
regardless of whether deducted in calculating Consolidated Net Income;
(3) depreciation and amortization expense of the Company and its
consolidated Restricted Group Members (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in
a prior period); provided, however, that a portion of the depreciation and
amortization expense of an unconsolidated Permitted International Joint
Venture equal to the percentage of the net income (net loss) of such
Permitted International Joint Venture allocated to the Company and its
Restricted Subsidiaries in accordance with GAAP shall be included in
EBITDA regardless of whether deducted in calculating Consolidated Net
Income; and
(4) all other noncash charges of the Company and its consolidated
Restricted Group Members (excluding any such noncash charge to the extent
that it represents an accrual of or reserve for cash expenditures in any
future period); provided, however, that a portion of all other noncash
charges of an unconsolidated Permitted International Joint Venture equal
to the percentage of the net income (net loss) of such Permitted
International Joint Venture allocated to the Company and its Restricted
Subsidiaries in accordance with GAAP shall be included in EBITDA
regardless of whether deducted in calculating Consolidated Net Income;
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Group Member shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Group Members was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Group Members without prior approval (that has not been obtained),
13
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Group Members or its stockholders.
"Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent monthly
consolidated balance sheet of the Company, arising in the ordinary course of
business of the Company or any Restricted Subsidiary.
"Euro Equivalent" means with respect to any monetary amount in a
currency other than euros, at any time for determination thereof, the amount of
euros obtained by converting such foreign currency involved in such computation
into euros at the spot rate for the purchase of euros with the applicable
foreign currency as published in The Wall Street Journal in the "Exchange Rates"
column under the heading "Currency Trading" on the date two Business Days prior
to such determination.
"Euro Notes" means the Company's 12-3/4% Senior Notes due 2010
denominated in Euro.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Senior Notes" means the 14% Senior Discount Notes due 2005
of the Company and the 14-1/2% Senior Deferred Interest Notes due 2005 of the
Company and the 12-1/2% Guaranteed Senior Secured Notes due 2004 of Winstar
Equipment II Corp. and the 12-1/2% Guaranteed Senior Secured Notes due 2004 of
Winstar Equipment Corp.
"Existing Subordinated Notes" means the 10% Senior Subordinated
Notes due 2008 of the Company, the 15% Senior Subordinated Deferred Interest
Notes due 2007 of the Company and the 11% Senior Subordinated Deferred Interest
Notes due 2008 of the Company.
"Fair Market Value" means, with respect to any Property (other than
cash), the price that could be negotiated in an arm's-length free market
transaction for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise specified, (1) in the case of items with a Fair Market Value in excess
of $1,000,000 but less than or equal to $12.5 million, Fair Market Value shall
be determined by the chief financial officer or treasurer of the Company acting
in good faith and, if such Fair Market
14
Value is in excess of $2.0 million, shall be evidenced by an Officers'
Certificate and (2) in the case of items with a Fair Market Value in excess of
$12.5 million, Fair Market Value shall be determined by the Board of Directors
acting in good faith and shall be evidenced by a resolution of the Board of
Directors.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants,
(2) statements and pronouncements of the Financial Accounting
Standards Board,
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC. All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
15
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Group Member
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Group Member. The
term "Incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into
by such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit,
16
bank guarantee, banker's acceptance, surety bond or performance bond;
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of
such Person or, with respect to any Preferred Stock of any Subsidiary or
Restricted Group Member of such Person, the principal amount of such
Preferred Stock to be determined in accordance with the Indenture (but
excluding, in each case, any accrued dividends);
(6) all obligations of the type referred to in clauses (1) through
(5) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through
(6) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided, however, that
the amount of Indebtedness of any unconsolidated Permitted International Joint
Venture shall be reduced by an amount that corresponds to the Third Party
Ownership Interest in such Permitted International Joint Venture.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Rate Agreement" means, in respect of a Person, any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
17
"Investee" means any Person (other than the Company or any
Restricted Group Member) in which the Company or any Restricted Group Member has
an Investment.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as Receivables on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person.
For purposes of the definitions of "Unrestricted Subsidiary",
"Restricted Payment" and "Permitted International Joint Venture", and for
purposes of Section 4.04 and Section 4.06:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary or other entity) of the Fair
Market Value of the net assets of any (A) Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary or (B)
Permitted International Joint Venture at the time that such entity is
designated an Investee; provided, however, that if any Permitted
International Joint Venture shall cease to satisfy the definition of
"Permitted International Joint Venture" and is not designated promptly as
a Restricted Subsidiary or an Unrestricted Subsidiary, it shall be deemed
to have been designated as an Investee; provided further, however, that
upon a redesignation of such Subsidiary as a Restricted Subsidiary or such
Investee as a Permitted International Joint Venture, the Company shall be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary or Investee, as applicable, equal to an amount (if positive)
equal to (A) the Company's "Investment" in such entity at the time of such
redesignation less (B) the portion (proportionate to the Company's equity
interest in such entity) of the Fair Market Value of the net assets of
such entity at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
or Investee shall be valued at its Fair Market Value at the time of such
transfer.
18
"Issue Date" means April 10, 2000.
"Issue Date 2010 Senior Notes" means 2010 Senior Notes issued on the
Issue Date, the aggregate principal amount of such notes to be evidenced by an
Officers' Certificate.
"Issue Date Euro Notes" means Euro Notes issued on the Issue Date,
the aggregate principal amount of such notes to be evidenced by an Officers'
Certificate.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Marketable Securities" means, with respect to any Asset
Disposition, any readily marketable equity securities of a corporation whose
primary business is the Telecommunications Business that are (i) traded on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market and (ii) issued by a corporation having a total equity market
capitalization of not less than $250.0 million; provided, however, that the
excess of (A) the aggregate amount of securities of any one such corporation
held by the Company and any Restricted Group Member over (B) 20 times the
average daily trading volume of such securities during the 20 immediately
preceding trading days shall be deemed not to be Marketable Securities, as
determined on the date of the contract relating to such Asset Disposition.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:
(1) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Disposition;
19
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Group Members as a result of such
Asset Disposition; and
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Group Member after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Xxxxxx.xxx" means Xxxxxx.xxx Inc. and its successors.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Permitted Credit Facility" means one or more credit agreements,
loan agreements, lease agreements, commercial paper facilities, Receivables
facilities or similar facilities, secured or unsecured, providing for revolving
credit loans, term loans, sales of receivables or letters of credit, entered
into from time to time by the
20
Company or its Restricted Group Members, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time. A Vendor Financing that otherwise
satisfies the foregoing definition will also constitute a Permitted Credit
Facility.
"Permitted Holders" means Xxxxxxx X. Xxxxxxx, Xx. (or in the
event of his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative (collectively,
"heirs")) or any Person controlled, directly or indirectly, by Xxxxxxx X.
Xxxxxxx, Xx. or his heirs.
"Permitted International Joint Venture" means any entity (other than
a Subsidiary of the Company) all or substantially all of whose business is
outside the U.S. and that (i) based on a determination of the Board of
Directors, the Company has, directly or indirectly, the requisite control over
such entity to prevent it from Incurring Indebtedness, or taking any other
action at any time, in contravention of any of the provisions of this Indenture
that apply to a Permitted International Joint Venture, (ii) the Company or a
Restricted Subsidiary owns at least 331/3% of the Voting Stock of such entity
and the Third Party Ownership Interest of such entity does not exceed 662/3%,
(iii) such entity is engaged primarily in aspects of the Telecommunications
Business directly related to the Company's business and (iv) the Company has
designated such entity as a Permitted International Joint Venture pursuant to a
resolution of the Board of Directors.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions. The Board of Directors may designate any Permitted International
Joint Venture to no longer be a Permitted International Joint Venture and to be
treated as an Investee; provided, however, that such designation would be
permitted under Section 4.04. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
21
"Permitted Investment" means an Investment by the Company or any
Restricted Group Member in:
(1) the Company, a Restricted Group Member or a Person that will,
upon the making of such Investment, become a Restricted Group Member;
provided, however, that the primary business of such Restricted Group
Member is the Telecommunications Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Group
Member; provided, however, that such Person's primary business is the
Telecommunications Business;
(3) cash and Temporary Cash Investments;
(4) Receivables owing to the Company or any Restricted Group
Member;
(5) Capital Stock of customers of the Company or any Restricted
Group Member received in exchange for products and services provided in
the ordinary course of business; provided, however, that the value of such
products and services (calculated as the consideration received by the
Company or such Restricted Group Member for such products and services in
a comparable arm's-length transaction) shall not exceed $50.0 million
during each successive 12-month period following the Issue Date;
(6) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(7) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Group Member or as part of a compensation scheme approved by the Board of
Directors in an amount not to exceed $5.0 million at any one time
outstanding;
(8) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Group Member or in satisfaction of judgments or settlement of
claims or disputes;
22
(9) shares of Capital Stock of an Unrestricted Subsidiary; provided,
however, that such shares are being acquired from the Company or a
Restricted Group Member; and
(10) any Person to the extent such Investment represents the noncash
portion (other than Marketable Securities) of the consideration received
for an Asset Disposition as permitted pursuant to Section 4.06.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent or similar
operational requirements, in each case Incurred in the ordinary course of
business;
(2) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person
shall then be proceeding with an appeal or other proceedings for review
and Liens arising solely by virtue of any statutory or common law
provision relating to banker's Liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (A) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board and (B) such deposit
account is not intended by the Company or any Restricted Group Member to
provide collateral to the depository institution;
(3) Liens for taxes not yet subject to penalties for nonpayment or
which are being contested in good faith and by appropriate proceedings
promptly insti-
23
tuted and diligently concluded; provided, however, that such Person has
created a reserve or other appropriate provision therefor as may be
required by GAAP;
(4) Liens in favor of issuers of letters of credit, bank guarantees,
bankers' acceptances, surety bonds, bid bonds and performance bonds issued
pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that the Indebtedness
in respect thereto is permitted to be Incurred by Section 4.03;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes,
or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
(6) Liens to secure Indebtedness permitted under the provisions
described in Section 4.03(b)(1), Section 4.03(b)(5), Section 4.03(b)(8)
(but with respect to Section 4.03(b)(8) only to the extent such
Indebtedness constitutes Refinancing Indebtedness of Purchase Money
Indebtedness) and Section 4.03(b)(10); provided, however, that any such
Liens securing Indebtedness (other than Indebtedness pursuant to a
Permitted Credit Facility) described in Section 4.03(b)(5) (or Refinancing
Indebtedness thereof) may not extend to any property owned by the Company
or any of the Restricted Group Members other than the property acquired
with the proceeds from Indebtedness Incurred under such Section 4.03(b)(5)
and the proceeds therefrom;
(7) Liens existing on the Issue Date;
(8) Liens on property or shares of Capital Stock of another Person
at the time such other Person becomes a Subsidiary of such Person or a
Permitted International Joint Venture; provided, however, that the Liens
may not extend to any other property owned by such Person or any of its
Restricted Group Members
24
(other than assets and property affixed or appurtenant thereto);
(9) Liens on property at the time such Person or any of its
Subsidiaries or Permitted International Joint Ventures acquires the
property, including any acquisition by means of a merger or consolidation
with or into such Person or a Subsidiary of such Person; provided,
however, that the Liens may not extend to any other property owned by such
Person or any of its Restricted Group Members (other than assets and
property affixed or appurtenant thereto);
(10) Liens in favor of the Company or any Restricted Group Member
on any property other than property of the Company;
(11) Liens securing Hedging Obligations consisting of (A) Interest
Rate Agreements or Currency Agreements directly related to Indebtedness
that is, and is permitted to be incurred under this Indenture or (B)
Currency Agreements used to hedge non-U.S. dollar currency exposures of
the Company and its Restricted Group Members, entered into in accordance
with customary industry practices for companies in the Telecommunications
Business with international operations and not for purposes of
speculation, in each case secured by a Lien on the same property securing
such Hedging Obligations;
(12) Liens incurred in the ordinary course of business of the
Company or any of its Restricted Group Members with respect to obligations
that do not exceed $10.0 million at any one time outstanding; provided,
however, that
(A) such obligations are not Incurred in connection with
the borrowing of money; and
(B) such Liens do not in the aggregate materially detract from
the value of the property or materially impair the use thereof in
the operation of business by the Company or such Restricted Group
Member;
(13) Liens on the Capital Stock of an Unrestricted Subsidiary; and
(14) Liens to secure any Refinancing (or successive Refinancings) as
a whole, or in part, of any
25
Indebtedness secured by any Xxxx referred to in the foregoing clauses (7),
(8) or (9); provided, however, that:
(A) such new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements
pursuant to which the original Lien arose, could secure the original
Lien (plus improvements and accessions to, such property or proceeds
or distributions thereof); and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (x) the outstanding
principal amount or, if greater, committed amount of the
Indebtedness described under clauses (7), (8) or (9) at the time the
original Lien became a Permitted Lien and (y) an amount necessary to
pay any fees and expenses, including premiums and defeasance costs,
related to such refinancing, refunding, extension, renewal or
replacement.
For purposes of this definition, the term "Indebtedness" shall be deemed to
include interest, fees and other amounts due on such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Preferred Stock Exchange Offer" means an offer by the Company to
exchange any and all of its Series C Preferred Stock (or the exchange debentures
issuable in respect of such Series C Preferred Stock in accordance with its
terms) for 2010 Senior Notes and Securities.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the
26
Security which is due or overdue or is to become due at the relevant time.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture the value of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness (including Capital
Lease Obligations, Acquired Indebtedness, mortgage financings and purchase money
obligations) Incurred for the purpose of financing all or any part of the cost
of construction, installation, acquisition, lease, development or improvement by
the Company or any Restricted Group Member of any Telecommunications Assets of
the Company or any Restricted Group Member, including any related note,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time.
"Qualified Receivables Transaction" means an Incurrence of
Indebtedness of the Company or any Restricted Group Member pursuant to either
(1) credit facilities secured by Receivables or (2) Receivables purchase
facilities.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
and proceeds and products thereof in each case generated in the ordinary course
of business.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted
27
Group Member existing on the Issue Date or Incurred in compliance with this
Indenture, including Indebtedness that Refinances Refinancing Indebtedness;
provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding (plus fees and expenses, including any premium and defeasance
costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary or a Permitted International Joint Venture that
Refinances Indebtedness of the Company or (B) Indebtedness of the Company or a
Restricted Group Member that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated April 10, 2000, among the Company, Credit Suisse First Boston
Corporation, Xxxxxxx Xxxxx Xxxxxx Inc., BNY Capital Markets, Inc. and CIBC
World Markets Corp., as representatives of the several initial purchasers
identified therein.
"Restricted Group Member" means collectively each Restricted
Subsidiary and each Permitted International Joint Venture.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its
Capital Stock (other than dividends or distribu-
28
tions payable solely in its Capital Stock (other than Disqualified Stock),
rights to purchase additional Capital Stock (other than Disqualified
Stock) for cash and dividends or distributions payable solely to the
Company or a Restricted Group Member, and other than pro rata dividends or
other distributions made by a Restricted Group Member that is not a Wholly
Owned Subsidiary to minority stockholders or holders of Third Party
Ownership Interests (or owners of an equivalent interest in the case of a
Restricted Group Member that is an entity other than a corporation) or
holders of Third Party Ownership Interests);
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company or any direct or indirect parent
of the Company held by any Person or of any Capital Stock of a Restricted
Group Member held by any Affiliate of the Company (other than a Restricted
Group Member), including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of such Person (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such purchase,
repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Group Member on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Group Member transfers such property to a Person (other
than the Company or a Restricted Group Member) and the Company or a Restricted
Group Member leases it from such Person.
29
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien on property of the Company or any Restricted Group Member.
"Senior Indebtedness" means:
(1) Indebtedness of the Company, whether outstanding on the Issue
Date or thereafter Incurred; and
(2) accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization
relating to the Company to the extent postfiling interest is allowed in
such proceeding) in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which the Company is
responsible or liable
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Securities;
provided, however, that Senior Indebtedness shall not include:
(1) any obligation of the Company to any Subsidiary or Permitted
International Joint Venture;
(2) any liability for Federal, state, local or other taxes owed
or owing by the Company;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof
or instruments evidencing such liabilities);
(4) any Indebtedness of the Company (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect
to any other Indebtedness or other obligation of the Company; or
(5) that portion of any Indebtedness which at the time of Incurrence
is Incurred in violation of this Indenture.
30
"Securities" means the Securities issued under this Indenture.
"Series C Preferred Stock" means the Series C 14-1/4% Senior
Cumulative Exchangeable Preferred Stock due 2007 of the Company issued and
outstanding on the Issue Date.
"Significant Restricted Group Member" means any Restricted Group
Member that would be a "Significant Subsidiary" of the Company within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, assuming for
the purpose of this definition that a Permitted International Joint Venture that
is not a Subsidiary of the Company is a Subsidiary of the Company.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
"Telecommunications Assets" means (a) any Property (other than cash,
cash equivalents and securities) used in the Telecommunications Business; (b)
for purposes of Section 4.03, Section 4.04 and Section 4.10 only, Capital Stock
of any Person, or (c) for all other purposes of this Indenture, Capital Stock of
a Restricted Group Member or a
31
Person that becomes a Restricted Group Member as a result of the acquisition of
such Capital Stock by the Company or another Restricted Group Member, in each
case, acquired from any Person (other than a Subsidiary of the Company or a
Permitted International Joint Venture) in a bona fide transaction; provided,
however, that, in the case of clause (b) or (c), such Person is primarily
engaged in the Telecommunications Business.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through transmission facilities, (ii) constructing, creating,
developing or producing communications networks, related network transmission
equipment, software, devices and content for use in a communications or content
distribution business, (iii) data center management, computer and application
outsourcing, computer systems integration, reengineering of computer software,
information services and web hosting and any services related thereto or (iv)
evaluating, participating or pursuing any other activity or opportunity that is
primarily related to those identified in (i), (ii) or (iii) above or in
furtherance thereof, including, without limitation, any business conducted by
the Company or any Restricted Group Member on the Issue Date; provided, however,
that the determination of what constitutes a Telecommunications Business shall
be made in good faith by the Board of Directors.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit,
money market deposits, bankers' acceptances and repurchase obligations
maturing within 365 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus
and undivided profits aggregating in excess of $500,000,000 (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least one
nationally
32
recognized statistical rating organization (as defined in Rule 436 under
the Securities Act) or any money-market fund sponsored by a registered
broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than 270 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of
which any investment therein is made of "P-1" (or higher) according to
Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Ratings Group;
(5) investments in securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service,
Inc.;
(6) auction rate preferred stocks of any corporation maturing within
90 days after the date of acquisition rated at least "A" by Standard and
Poor's Ratings Group; and
(7) any investment in a registered investment company investing
exclusively in investments of the types described in clauses (1) through
(6) above.
"Third Party Ownership Interest" in a Permitted International Joint
Venture means a percentage equal to the difference between 100% and the
percentage of the net income (net loss) of such Permitted International Joint
Venture allocated to the Company and its Restricted Subsidiaries in accordance
with GAAP.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) as in effect on the date of this Indenture.
33
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"2008 Senior Notes" means the Company's 12-1/2% Senior Notes due
2008.
"2010 Senior Notes" means the Company's 12-3/4% Senior Notes due
2010 denominated in U.S. dollars.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) Xxxxxx.xxx;
(2) Winstar Credit Corp.;
(3) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors
in the manner provided below; and
(4) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company (other than
Capital Stock (other than Disqualified Stock) of the Company contributed to such
Unrestricted Subsidiary and promptly transferred by such Unrestricted Subsidiary
in exchange for Telecommunications Assets) or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated or is the
obligor on any Indebtedness a default on which would result in a default on any
Indebtedness of the Company or a Restricted Subsidiary; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $10,000 or
less or (B) if such Subsidiary has assets greater than $10,000, such designation
would be permitted under Section 4.04.
34
The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (A) the Consolidated Leverage Ratio would be no worse
than the Consolidated Leverage Ratio determined immediately prior to such
designation, (B) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such designation would, if Incurred at such
time, have been permitted to be Incurred at such time for all purposes of this
Indenture and (C) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency involved in such computation into U.S. dollars at the spot rate for
the purchase of U.S. dollars with the applicable foreign currency as
published in The Wall Street Journal in the "Exchange Rates" column under the
heading "Currency Trading" on the date two Business Days prior to such
determination.
Except as described in Section 4.03, whenever it is necessary to
determine whether the Company has complied with any covenant in this Indenture
or a Default has occurred and an amount is expressed in a currency other than
U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent
determined as of the date such amount is initially determined in such currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Vendor Financing" means any financing or other credit or deferred
payment arrangement provided by a supplier, manufacturer or lessor of
Telecommunications Assets or any Affiliate thereof.
35
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................ 4.07
"Appendix"......................................... 2.01
"Bankruptcy Law"................................... 6.01
"Change of Control Offer".......................... 4.09(b)
"covenant defeasance option"....................... 8.01(b)
"Custodian"........................................ 6.01
"Event of Default"................................. 6.01
"Initial Lien"..................................... 4.10
"legal defeasance option".......................... 8.01(b)
"Legal Holiday".................................... 10.07
"Offer"............................................ 4.06(b)
"Offer Amount"..................................... 4.06(c)(2)
"Offer Period"..................................... 4.06(c)(2)
"Paying Agent"..................................... 2.03
"Purchase Date".................................... 4.06(c)(1)
"Registrar"........................................ 2.03
"Successor Company"................................ 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
36
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (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, whichever is greater; and
(9) all references to the date the Securities were originally issued
shall refer to the Issue Date.
37
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix and Exhibit A are part of the terms of this
Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
On the Issue Date and on consummation of the Preferred Stock
Exchange Offer, the Trustee shall authenticate and deliver up to an aggregate of
$930,443,000 aggregate principal amount at maturity of 14-3/4% Senior Discount
Notes Due 2010 (inclusive of any Initial Securities issued in connection with
the Preferred Stock Exchange Offer) and, at any time and from time to time
thereafter, the Trustee shall authenticate and deliver Securities for original
issue in an aggregate principal amount specified in
38
such order, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and, in the case of an issuance of Additional Securities
pursuant to Section 2.13 after the Issue Date, shall certify that such issuance
is in compliance with Section 4.03.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
39
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each
due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met. No
service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax,
assessments or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.09 and
9.05).
40
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities; When Securities Disregarded.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
Notwithstanding any other provisions of this Indenture to the
contrary, in determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in
41
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12.XXXXX, ISIN and Common Code Numbers. The Company in
issuing the Securities may use "CUSIP", "ISIN" or "Common Code" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers, "ISIN or
"Common Code" in notices of redemption as a convenience to Holders; provided,
however, that any such
42
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
SECTION 2.13. Issuance of Additional Securities. The Company shall
be entitled, subject to its compliance with Section 4.03, to issue Additional
Securities under this Indenture which shall have identical terms as the Initial
Securities issued on the Issue Date and in exchange for the Series C Preferred
Stock or any exchange debentures issued in exchange for the Series C Preferred
Stock, other than with respect to the date of issuance and issue price;
provided, however, that the maximum aggregate Accreted Value of Additional
Securities (determined as of their issue date) issued by the Company shall not
exceed $250.0 million. The Initial Securities issued on the Issue Date and in
exchange for the Series C Preferred Stock or any exchange debentures issued in
exchange for the Series C Preferred Stock, any Additional Securities and all
Exchange Securities or Private Exchange Securities issued in exchange therefor
shall be treated as a single class for all purposes under this Indenture.
With respect to any Additional Securities, the Company shall set
forth in a resolution of the Board of Directors and an Officers' Certificate, a
copy of each of which shall be delivered to the Trustee, the following
information:
(1) the aggregate principal amount at maturity of such Additional
Securities to be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP number, ISIN
number and Common Code number of such Additional Securities; provided,
however, that, except for Additional Securities issued pursuant to the
Preferred Stock Exchange Offer, no Additional Securities may be issued at
a price that would cause such Additional Securities to have "original
issue discount" within the meaning of Section 1273 of the Code (other than
"original issue discount" in an equal amount to that of any existing
Securities); and
(3) whether such Additional Securities shall be Transfer Restricted
Securities and issued in the form
43
of Initial Securities as set forth in the Appendix to this Indenture or
shall be issued in the form of Exchange Securities as set forth in
Exhibit A.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount at maturity of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 30 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal amount at maturity of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in principal amounts at maturity of $1,000 or a whole multiple
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
44
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts at maturity of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date; and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, ISIN or Common Code number, if any, listed in such
notice or printed on the Securities.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), 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.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). 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.
45
SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount at maturity to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the SEC and provide the Trustee and
Securityholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
In addition, the Company will furnish to the Holder of the Securities and to
prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to
46
Rule 144A(d)(4) under the Securities Act so long as any Securities are not
freely transferable under the Securities Act. The Company also shall comply with
the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company will not,
and will not permit any Restricted Group Member to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company will be
entitled to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto on a pro forma basis, the Consolidated Leverage Ratio
would be less than 6.0 to 1.
(b) Notwithstanding Section 4.03(a), so long as no Default has
occurred and is continuing, the Company and the Restricted Group Members will be
entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to one or more Permitted Credit
Facilities; provided, however, that, after giving effect to any such
Incurrence, the aggregate principal amount of such Indebtedness then
outstanding does not exceed (A) the greater of (x) $1.15 billion and (y)
85% of Eligible Receivables less (B) the sum of (i) all principal payments
with respect to such Indebtedness (other than Indebtedness Incurred
pursuant to the revolving loan portion of a Permitted Credit Facility)
pursuant to Section 4.06(a)(3)(A) and (ii) the principal amount of such
Indebtedness assumed by a transferee in any Asset Disposition;
(2) Indebtedness owed to and held by the Company or a Restricted
Group Member; provided, however, that (A) any subsequent issuance or
transfer of any Capital Stock or the occurrence of any other event which
results in any such Restricted Group Member ceasing to be a Restricted
Group Member or any subsequent transfer of such Indebtedness (other than
to the Company or another Restricted Group Member) shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the
obligor thereon and (B) if the Company is the obligor on such
Indebtedness, such Indebtedness is not secured and is expressly
subordinated to the prior payment in full in cash of all obligations with
respect to the Securities;
47
(3) the Securities (other than any Additional Securities),
the 2008 Senior Notes, the Issue Date 2010 Senior Notes and the
Issue Date Euro Notes;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section 4.03(b))
and any exchange debentures issued in exchange for the Series C Preferred
Stock in accordance with its terms or Initial Securities or 2010 Senior
Notes issued in exchange for such exchange debentures or Series C
Preferred Stock;
(5) Purchase Money Indebtedness; provided, however, that, to the
extent such Purchase Money Indebtedness is Incurred by a Restricted Group
Member, such Purchase Money Indebtedness shall be Incurred pursuant to a
Permitted Credit Facility or a Vendor Financing; provided further,
however, that the amount of such Purchase Money Indebtedness does not
exceed 100% of the cost and directly related expenses of the construction,
installation, acquisition, lease, insurance, shipping, development or
improvement of, or any service agreement, maintenance agreement, warranty
agreement or similar agreement in respect of, the applicable
Telecommunications Assets;
(6) Indebtedness of the Company in an amount which, when taken
together with the amount of all other Indebtedness of the Company Incurred
pursuant to this clause (6) and then outstanding, does not exceed two
times the sum of (x) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of Capital Stock (other than
Disqualified Stock) of the Company (other than an issuance or sale to a
Subsidiary of the Company or a Permitted International Joint Venture and
other than an issuance or sale to an employee stock ownership plan or to a
trust established by the Company, any of its Subsidiaries or any Permitted
International Joint Venture for the benefit of their employees) and (y)
the fair market value of any Capital Stock (other than Disqualified Stock)
of the Company issued to any Person (other than a Subsidiary of the
Company or a Permitted International Joint Venture) (i) in exchange for
Telecommunications Assets or (ii) in exchange for Capital Stock of another
Person a substantial majority of the assets of which consist of
Telecommunications Assets in a transaction pursuant to which such other
Person becomes a Restricted Group Member, in each case received or issued,
as the case may be, on or subsequent to
48
February 1, 2000; provided, however, that such Net Cash Proceeds or fair
market value have not served as a basis for making a Restricted Payment
pursuant to Section 4.04(a)(3)(B), Section 4.04(b)(1) or Section
4.04(b)(5);
(7) Indebtedness of a Restricted Group Member Incurred and
outstanding on or prior to the date on which such Subsidiary (in the case
of a Restricted Subsidiary) or an interest in such entity (in the case of
a Permitted International Joint Venture) was acquired by the Company
(other than Indebtedness Incurred in connection with, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary (in the case of a Restricted Subsidiary) or an interest in such
entity (in the case of a Permitted International Joint Venture) was
acquired by the Company); provided, however, that on the date of such
acquisition and after giving pro forma effect thereto, the Company would
have been able to Incur at least $1.00 of additional Indebtedness pursuant
to Section 4.03(a);
(8) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (3), (4), (5) or (7) of
this Section 4.03(b) or this clause (8); provided, however, that any
Refinancing Indebtedness Incurred by a Restricted Group Member in respect
of Indebtedness Incurred pursuant to clause (5) of this Section 4.03(b) is
Incurred pursuant to a Permitted Credit Facility or a Vendor Financing;
(9) Hedging Obligations consisting of (A) Interest Rate Agreements
or Currency Agreements directly related to Indebtedness permitted to be
Incurred by the Company pursuant to this Indenture; provided, however,
that the notional amount of any such Hedging Obligation does not exceed
the amount of Indebtedness to which such Hedging Obligation relates or (B)
Currency Agreements used to hedge non-U.S. dollar currency exposures of
the Company and its Restricted Group Members, entered into in accordance
with customary industry practices for companies in the Telecommunications
Business with international operations and not for purposes of
speculation;
(10) Indebtedness solely in respect of letters of credit, bank
guarantees, banker's acceptances, cash
49
deposits, surety bonds, bid bonds and performance bonds Incurred in the
ordinary course of business; provided, however, that such instruments or
deposits do not support any Indebtedness other than Indebtedness which, if
Incurred by the Company, would be permitted to be Incurred pursuant to
another provision of this Section 4.03;
(11) Indebtedness of the Company or a Restricted Group Member
consisting of a Guaranty of Indebtedness of a Restricted Group Member
permitted to be Incurred under this Indenture; provided, however, that the
entity providing the Guaranty would have been able to Incur such
Indebtedness under this Indenture; and
(12) Indebtedness of the Company or a Restricted Group Member in an
aggregate principal amount which, when taken together with all other
Indebtedness of the Company and the Restricted Group Members outstanding
on the date of such Incurrence (other than Indebtedness permitted by
clauses (1) through (11) of this Section 4.03(b) or Section 4.03(a)) does
not exceed $50.0 million.
(c) Notwithstanding the foregoing, the Company will not Incur any
Indebtedness pursuant to Section 4.03(b) (other than the Incurrence of (1) any
exchange debentures issued in exchange for the Series C Preferred Stock in
accordance with its terms or Initial Securities or 2010 Senior Notes issued in
exchange for such exchange debentures or Series C Preferred Stock and (2) any
Indebtedness issued in exchange for the Existing Subordinated Notes) if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities to
at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.03,
(1) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses and (2) the Company will be entitled to divide and classify
an item of Indebtedness in more than one of the types of Indebtedness described
above.
(e) For purposes of determining compliance with any U.S. dollar or
euro-denominated restriction on the
50
Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a
different currency, the amount of such Indebtedness will be the U.S. Dollar
Equivalent or Euro Equivalent, as the case may be, determined on the date of the
Incurrence of such Indebtedness, provided, however, that if any such
Indebtedness denominated in a different currency is subject to a Currency
Agreement with respect to U.S. dollars or euros, as the case may be, covering
all principal, premium, if any, and interest payable on such Indebtedness the
amount of such Indebtedness expressed in U.S. dollars or euros will be as
provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness, being Refinanced
will be the Euro Equivalent or U.S. Dollar Equivalent, as appropriate, of the
Indebtedness Refinanced, except to the extent that (1) such U.S. Dollar
Equivalent or Euro Equivalent was determined based on a Currency Agreement, in
which case the Refinancing Indebtedness will be determined in accordance with
the preceding sentence, and (2) the principal amount of the Refinancing
Indebtedness exceeds the principal amount of the Indebtedness being Refinanced,
in which case the U.S. Dollar Equivalent or Euro Equivalent of such excess, as
appropriate, will be determined on the date such Refinancing Indebtedness is
Incurred.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
will not, and will not permit any Restricted Group Member, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Group Member makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) after giving effect thereto on a pro forma basis, the Company is
not entitled to Incur an additional $1.00 of Indebtedness pursuant to
Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) the amount of (x) cumulative EBITDA during the period
(taken as a single accounting period) beginning on the first day of
the fiscal quarter of the Company beginning after the Issue Date and
ending on the last day of the most recent
51
fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment minus (y) the product of 1.5 times cumulative
Consolidated Interest Expense during such period; plus
(B) subject to Section 4.04(c), 100% of the aggregate Net Cash
Proceeds received by the Company from the issuance or sale of its
Capital Stock (other than Disqualified Stock) subsequent to the
Issue Date (other than an issuance or sale to a Subsidiary of the
Company or a Permitted International Joint Venture and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company, any of its Subsidiaries or any Permitted
International Joint Venture for the benefit of their employees);
provided, however, that such Net Cash Proceeds have not served as a
basis to make a Restricted Payment pursuant to Section 4.04(b)(1) or
Section 4.04(b)(5); plus
(C) the amount by which Indebtedness of the Company or a
Restricted Group Member is reduced on the Company's consolidated
balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company or a Permitted International Joint
Venture) subsequent to the Issue Date of any Indebtedness of the
Company or a Restricted Group Member for or into Capital Stock
(other than Disqualified Stock) of the Company (less the amount of
any cash, or the fair value of any other property (other than
Capital Stock of the Company that is not Disqualified Stock),
distributed by the Company or a Restricted Group Member upon such
conversion or exchange); plus
(D) an amount equal to the sum of (x) the net reduction in the
Investments (other than Permitted Investments) made by the Company
or any Restricted Group Member in any Person resulting from
repurchases, repayments or redemptions of such Investments by such
Person, proceeds realized on the sale of such Investment, proceeds
representing the return of capital (excluding dividends and
distributions), in each case received by the Company or any
Restricted Group Member, and (y) if an Unrestricted Subsidiary is
designated as a Restricted Group Member or an Investee is designated
as a Restricted Group Member or becomes a Restricted Subsidiary, the
portion (proportionate
52
to the Company's equity interest in such Subsidiary or Investee) of
the fair market value of the net assets of such Unrestricted
Subsidiary or Investee at the time such Unrestricted Subsidiary is
designated a Restricted Group Member or such Investee is designated
as a Restricted Group Member or becomes a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the
case of any such Person, Unrestricted Subsidiary or Investee, the
amount of Investments (excluding Permitted Investments) previously
made (and treated as a Restricted Payment and included in the
calculation of the amount of Restricted Payments) by the Company or
any Restricted Group Member in such Person, Unrestricted Subsidiary
or Investee.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) subject to Section 4.04(c), any Restricted Payment made out of
the Net Cash Proceeds of the substantially concurrent sale of (or
specified with particularity at the time of the sale of, and subsequently
made with such Net Cash Proceeds of), or made by exchange for, Capital
Stock (other than Disqualified Stock) of the Company (other than Capital
Stock issued or sold to a Subsidiary of the Company or a Permitted
International Joint Venture or an employee stock ownership plan or to a
trust established by the Company, any of its Subsidiaries or any Permitted
International Joint Venture for the benefit of their employees); provided,
however, that such Net Cash Proceeds have not served as a basis for making
any other Restricted Payment; provided further, however, that (A) such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from any such sale (to
the extent so used for such Restricted Payment) shall be excluded from the
calculation of amounts under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of (or specified with particularity at the time of the sale of, and
subsequently made with such proceeds of), Indebtedness which is permitted
to be Incurred pursuant to Section 4.03; provided, however, that such
53
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section 4.04; provided, however, that at the time of payment of
such dividend, no other Default shall have occurred and be continuing (or
result therefrom); provided further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of the Company
from employees, former employees, directors or former directors of the
Company, any of its Subsidiaries or any Permitted International Joint
Venture (or permitted transferees of such employees, former employees,
directors or former directors), pursuant to the terms of agreements
(including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals purchase
or sell or are granted the option to purchase or sell, shares of such
Capital Stock; provided, however, that the aggregate amount of such
repurchases and other acquisitions (other than repurchases and
acquisitions made pursuant to agreements in effect on the Issue Date)
shall not exceed $5.0 million in any calendar year (with unused amounts
being carried forward indefinitely); provided further, however, that such
repurchases and other acquisitions shall be included in the calculation of
the amount of Restricted Payments;
(5) subject to Section 4.04(c), Investments in any Person a
substantial majority of the assets of which consist of Telecommunications
Assets; provided, however, that the Fair Market Value of all such
Investments made pursuant to this clause (5) (measured on the date each
such Investment was made) and then outstanding, does not exceed the sum of
$100.0 million, plus the sum of (x) the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of Capital Stock (other
than Disqualified Stock) of the Company (other than an issuance or sale to
a Subsidiary of the Company or a Permitted International Joint Venture and
other than an issuance or sale to an employee stock
54
ownership plan or to a trust established by the Company, any of its
Subsidiaries or any Permitted International Joint Venture for the benefit
of their employees) and (y) the fair market value of any Capital Stock
(other than Disqualified Stock) of the Company issued to any Person (other
than a Subsidiary of the Company or a Permitted International Joint
Venture) (i) in exchange for Telecommunications Assets or (ii) in exchange
for Capital Stock of another Person a substantial majority of the assets
of which consist of Telecommunications Assets in a transaction pursuant to
which such other Person becomes a Restricted Group Member, in each case
received or issued, as the case may be, subsequent to February 1, 2000;
provided, however, that such Net Cash Proceeds or fair market value have
not served as a basis for making any other Restricted Payment; provided
further, however, that (A) such Investments shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from any such issuance or sale of Capital Stock (to the extent so
used for such Restricted Payment) shall be excluded from the calculation
of amounts under Section 4.04(a)(3)(B);
(6) Investments in any Person whose primary business it is to
directly (or indirectly through subsidiaries) own or hold licenses granted
by the Federal Communications Commission or any other governmental entity
with authority to grant telecommunications or radio frequency licenses or
authorizations; provided, however, that the Company or a Restricted Group
Member shall, at the time of making such Investment, have an active role
in the management or operation of such Person and in the provision of
telecommunications services by such Person; provided further, however,
that such Investment shall be included in the calculation of the amount of
Restricted Payments;
(7) the exchange or purchase and retirement of (A) the Series C
Preferred Stock for (i) exchange debentures in accordance with the terms
of the Series C Preferred Stock or (ii) cash or Indebtedness of the
Company or (B) the Existing Subordinated Notes for cash or Indebtedness of
the Company; provided, however, that such exchange or purchase and
retirement shall be excluded in the calculation of the amount of
Restricted Payments;
55
(8) cash payments in lieu of the issuance of fractional shares in
connection with stock splits or upon the conversion into Capital Stock of
the Company (other than Disqualified Stock) of any security of the Company
or any convertible Indebtedness of the Company; provided, however, that
such exchange and retirement shall be excluded in the calculation of the
amount of Restricted Payments;
(9) Investments in Xxxxxx.xxx, the fair market value of which
(measured on the date each such Investment is made) does not exceed (x) in
the case of an Investment to be made on or immediately after the Issue
Date, $50.0 million, and (y) during each of the three 12-month periods
following the Issue Date, $25.0 million per year (with unused annual
amounts being carried over to future periods even if such periods occur
after the third anniversary of the Issue Date); provided, however, that
such Investments shall be excluded in the calculation of the amount of
Restricted Payments; and
(10) Investments, the aggregate Fair Market Value (measured on the
date each such Investment was made) of which, when taken together with the
Fair Market Value of all other Investments made pursuant to this clause
(10) then outstanding, does not exceed $10.0 million; provided, however,
that such Investment shall be included in the calculation of the amount of
Restricted Payments.
(c) The amounts determined pursuant to Section 4.04(a)(3)(B),
Section 4.04(b)(1) and Section 4.04(b)(5) based on Net Cash Proceeds received
from the issuance or sale of Capital Stock (or the Fair Market Value of Capital
Stock issued) shall be reduced to the extent such Net Cash Proceeds or Fair
Market Value have served as the basis for Incurring any Indebtedness pursuant to
Section 4.03(b)(6) and such Indebtedness (including any Refinancings thereof)
remains outstanding.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Group Members. The Company will not, and will not permit any
Restricted Group Member to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Group Member to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Group Member or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the
56
Company or a Restricted Group Member or (c) transfer any of its property or
assets to the Company or a Restricted Group Member, except:
(1) any encumbrance or restriction pursuant to an agreement
in effect at or entered into on the Issue Date;
(2) any encumbrance or restriction with respect to a Restricted
Group Member pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Group Member on or prior to the date on which
such Subsidiary (in the case of a Restricted Subsidiary) or an interest in
such entity (in the case of a Permitted International Joint Venture) was
acquired by the Company (other than Indebtedness Incurred as consideration
in, or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related transactions
pursuant to which such Subsidiary (in the case of a Restricted Subsidiary)
or entity (in the case of a Permitted International Joint Venture) became
a Restricted Group Member or was acquired by the Company) and outstanding
on such date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
referred to in Section 4.05(1) or Section 4.05(2) or this clause (3) or
contained in any amendment to an agreement referred to in Section 4.05(1)
or Section 4.05(2) or this clause (3); provided, however, that the
encumbrances and restrictions with respect to such Restricted Group Member
contained in any such refinancing agreement or amendment are no less
favorable to the Securityholders than encumbrances and restrictions with
respect to such Restricted Group Member contained in such predecessor
agreements;
(4) any encumbrance or restriction pursuant to a Permitted Credit
Facility; provided, however, that (a) the outstanding Indebtedness under
such Permitted Credit Facility does not exceed the amounts permitted under
Section 4.03(b)(1), Section 4.03(b)(5) and Section 4.03(b)(8) (but with
respect to Section 4.03(b)(8) only to the extent such Indebtedness
constitutes Refinancing Indebtedness of Purchase Money Indebtedness), (b)
such restrictions (other than following an event of default under such
Permitted Credit Facility) permit dividends and distributions
57
necessary to permit the Company to satisfy its obligations on the
Securities, and (c) the chief financial officer of the Company determines
in good faith that (1) any such restrictions contained in any such
Permitted Credit Facility are no more restrictive, taken as a whole, than
those contained in a credit facility with terms that are commercially
reasonable for a borrower engaged in a business comparable to the Company
that has substantially comparable Indebtedness, and (2) any such
restrictions will not materially affect the Company's ability to make
principal, premium or interest payments on the Securities;
(5) any encumbrance or restriction arising under any
applicable law or action or at the request of a governmental
regulatory authority;
(6) in the case of clause (c) above, any such encumbrance or
restriction consisting of customary non assignment provisions in leases,
including leases in respect of data centers and indefeasible rights of
use, governing leasehold interests to the extent such provisions restrict
the transfer of the lease or the property leased thereunder;
(7) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of the Company or a
Restricted Group Member to the extent such restrictions restrict the
transfer of the property subject to such security agreements or mortgages;
(8) in the case of clause (c) above, restrictions imposed in
connection with the grant or acquisition of radio frequency spectrum (to
the extent such restrictions restrict the transfer of such radio frequency
spectrum) or common carrier licenses or their equivalent (to the extent
such restrictions restrict the transfer of such licenses);
(9) in the case of clause (c) above, restrictions relating to the
property or assets of an unconsolidated Permitted International Joint
Venture, not relating to any Indebtedness, and that do not, individually
or in the aggregate, detract from the value of the property or assets of
the Permitted International Joint Venture in any material respect;
(10) in the case of clause (c) above, customary provisions arising
or agreed to in the ordinary course
58
of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of the property
or assets of the Company or any Restricted Group Member in any material
respect; and
(11) any restriction with respect to a Restricted Group Member
imposed pursuant to an agreement entered into for the sale or disposition
of all or substantially all the Capital Stock or assets of such Restricted
Group Member pending the closing of such sale or disposition.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company will not, and will not permit any Restricted Group Member to,
directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Group Member receives
consideration at the time of such Asset Disposition at least equal to the
Fair Market Value (including as to the value of all noncash
consideration), of the shares and assets subject to such Asset
Disposition;
(2) at least 75% of the consideration thereof received by the
Company or such Restricted Group Member is in the form of cash or cash
equivalents, Marketable Securities or Telecommunications Assets; and
(3) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Group
Member, as the case may be)
(A) first, to the extent the Company or such Restricted Group
Member elects (or is required by the terms of any Indebtedness), to
prepay, repay, redeem or purchase (x) Senior Indebtedness of the
Company that is either secured Indebtedness or has a Stated Maturity
prior to the Stated Maturity of the Securities or (y) Indebtedness
(other than any Disqualified Stock) of a Restricted Group Member (in
each case other than Indebtedness owed to the Company or an
Affiliate of the Company) within one year from the later of the date
of such Asset Disposition or the receipt of such Net Available Cash;
59
(B) second, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A), to the extent
the Company elects, to acquire Telecommunications Assets within one
year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; and
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B), to
make an offer to the holders of the Securities (and to holders of
other Senior Indebtedness that have a right to be included in such
offer) to purchase Securities (and such other Senior Indebtedness)
pursuant to and subject to the conditions contained in Section
4.06(b);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Group Member shall permanently retire such Indebtedness (other than
Indebtedness Incurred pursuant to the revolving loan portion of a Permitted
Credit Facility) and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Group Members will not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this Section 4.06 exceeds $5.0 million. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Permitted Investments.
For the purposes of this Section 4.06, the following are deemed to
be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company or any Restricted
Group Member and the release of the Company or such Restricted Group
Member from all liability on such Indebtedness in connection with such
Asset Disposition; and
(2) securities received by the Company or any Restricted Group
Member from the transferee that are
60
promptly converted by the Company or such Restricted Group Member into
cash or cash equivalents.
(b) In the event of an Asset Disposition that requires the purchase
of Securities (and other Senior Indebtedness) pursuant to Section 4.06(a)(3)(C),
the Company shall purchase Securities tendered pursuant to an offer by the
Company for the Securities (and such other Senior Indebtedness) (the "Offer") at
a purchase price of 100% of their Accreted Value (or, if other than the
Securities, 100% of their principal amount or, in the event such other Senior
Indebtedness was issued with significant original issue discount, 100% of the
accreted value thereof), without premium, plus accrued but unpaid interest (or,
in respect of such other Senior Indebtedness, such lesser price, if any, as may
be provided for by the terms of such Senior Indebtedness) in accordance with the
procedures (including prorationing in the event of oversubscription) set forth
in Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available
Cash allotted to their purchase, the Company shall select the Securities and
other Senior Indebtedness to be purchased on a pro rata basis but in round
denominations, which in the case of the Securities will be denominations of
$1,000 principal amount at maturity or multiples thereof. The Company shall not
be required to make an Offer to purchase Securities (and other Senior
Indebtedness) pursuant to this Section 4.06 if the Net Available Cash available
therefor is less than $10.0 million (which lesser amount shall be carried
forward for purposes of determining whether such an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition). Upon
completion of an Offer, the amount of Net Available Cash that served as the
basis for such Offer will be reset at zero for purposes of Section 4.06(a).
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal amount
at maturity, at the applicable purchase price. The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall contain such information concerning the
business of the Company which the
61
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum will include (A) the most recently filed Annual
Report on Form 10-K (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (B) a
description of material developments in the Company's business, if any,
subsequent to the date of the latest of such Reports, and (C) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer, together with the
information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
Amount"), including information as to any other Senior Indebtedness included in
the Offer, (B) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (C) the compliance
of such allocation with the provisions of Section 4.06(a) and (b). On such date,
the Company shall also irrevocably deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust) in Temporary Cash Investments, maturing on the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by open
of business, an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section. If the Offer includes other
Senior Indebtedness, the deposit described in the preceding sentence may be made
with any other paying agent pursuant to arrangements satisfactory to the
Trustee. Upon the expiration of the period for which the Offer remains open (the
"Offer Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail or
deliver payment (or cause the delivery of payment) to each tendering Holder in
the amount of the purchase price. In the event that the aggregate purchase price
of the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
62
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount at maturity of the Security which was
delivered for purchase by the Holder and a statement that such Xxxxxx is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount at maturity to the unpurchased portion of the Securities
surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any Restricted Group Member to, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property, employee compensation arrangements or the rendering of any
service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable to
the Company or such Restricted Group Member than those that could be
obtained at the time of
63
the Affiliate Transaction in arm's-length dealings with a Person who is
not an Affiliate;
(2) if such Affiliate Transaction or series of related Affiliate
Transactions involves an amount in excess of $12.5 million, the terms of
the Affiliate Transaction are set forth in writing and either (A) a
committee of the Board of Directors a majority of whose members are
disinterested with respect to such transaction or (B) a majority of the
non-employee directors of the Company disinterested with respect to such
Affiliate Transaction have determined in good faith that the criteria set
forth in clause (1) are satisfied and that the relevant Affiliate
Transaction is in the best interest of the Company or such Restricted
Group Member and have approved the relevant Affiliate Transaction as
evidenced by a Board Resolution; and
(3) if such Affiliate Transaction or series of related Affiliate
Transactions involves an amount in excess of $25.0 million, the Board of
Directors shall also have received a written opinion from an investment
banking firm, accounting firm or appraisal firm of national prominence
that is not an Affiliate of the Company to the effect that such Affiliate
Transaction is fair, from a financial standpoint, to the Company and its
Restricted Group Members.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to Section
4.04;
(2) the entering into, maintaining or performance of any employment
contract, collective bargaining agreement, benefit plan, program or
arrangement, related trust agreement or any other similar arrangement for
or with any employee, officer or director heretofore or hereafter entered
into in the ordinary course of business, including vacation, health,
insurance, deferred compensation, retirement, savings or other similar
plans;
(3) the payment of compensation, performance of indemnification or
contribution obligations, or an issuance, grant or award of stock,
options, or other equity-related interests or other securities, to
64
employees, officers or directors in the ordinary course of business;
(4) the payment of reasonable fees to directors of the Company and
its Restricted Group Members who are not employees of the Company or its
Restricted Group Members;
(5) any transaction with a Restricted Group Member or joint venture
or similar entity that would constitute an Affiliate Transaction solely
because the Company or a Restricted Group Member owns an equity interest
in or otherwise controls such Restricted Group Member, joint venture or
similar entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company; and
(7) transactions with respect to the provision of Telecommunications
Business services, including wireline or wireless transmission capacity,
the lease or sharing or other use of cable or fiber optic lines,
equipment, rights-of-way or other access rights between the Company or any
Restricted Group Member and any other Person; provided, however, that, in
the case of this clause (7), such transaction complies with Section
4.07(a)(1) and is in the best interest of the Company or such Restricted
Group Member.
SECTION 4.08. Limitation on the Sale or Issuance of Capital
Stock of Restricted Group Members. The Company
(i) will not and will not permit any Restricted Group Member to
issue, transfer, convey, sell or otherwise dispose of any Capital Stock of any
Restricted Group Member other than to the Company or a Restricted Group Member
and
(ii) will not permit any Person other than the Company or a
Restricted Group Member to own any Capital Stock of any Restricted Group Member,
other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Group Member
except, in each case, for:
(a) a sale, transfer, conveyance or other disposition by the Company
or a Restricted Group Member of 100% of the Capital Stock of a Restricted
Group
65
Member sold in a transaction not prohibited by Section 4.06;
(b) an issuance, sale, transfer, conveyance or other disposition of
the Capital Stock of a Restricted Group Member sold in a transaction not
prohibited by Section 4.06 if, after giving effect thereto, such
Restricted Group Member remains a Restricted Group Member and the Net Cash
Proceeds of such issuance (other than an issuance by a Permitted
International Joint Venture), sale, transfer, conveyance or other
disposition are applied in accordance with Section 4.06;
(c) an issuance, sale, transfer, conveyance or other
disposition of Capital Stock of a Restricted Group Member such
that,
(1) immediately after giving effect thereto, such Restricted
Group Member would no longer constitute a Restricted Group Member,
(2) any remaining Investment in such Restricted Group Member
by the Company or any other Restricted Subsidiary would have been
permitted to be made at such time under Section 4.04 (and for
purposes of Section 4.04, such Investment will be deemed to have
been made at such time) and
(3) the Net Cash Proceeds of such issuance (other than an
issuance by a Permitted International Joint Venture), sale,
transfer, conveyance or other disposition are applied in accordance
with Section 4.06;
(d) Capital Stock of a Restricted Group Member issued and
outstanding on the Issue Date or the date of formation of such Restricted
Group Member and, in each case, held by Persons other than the Company or
any Restricted Group Member and any additional Capital Stock (other than
Disqualified Stock) issued as dividends or distributions on such Capital
Stock or pursuant to preemptive or similar rights;
(e) Capital Stock of a Restricted Group Member issued and
outstanding prior to the time that such Person becomes a Restricted Group
Member; and
66
(f) any non-convertible Preferred Stock constituting
Indebtedness and permitted to be Incurred under Section 4.03.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
purchase such Xxxxxx's Securities at a purchase price in cash equal to 101% of
the Accreted Value thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest on the relevant interest payment date), in accordance
with the terms contemplated in Section 4.09(b).
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the Accreted Value thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
67
forth the name of the Holder, the principal amount at maturity of the Security
which was delivered for purchase by the Holder and a statement that such Xxxxxx
is withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.
SECTION 4.10. Limitation on Liens. The Company will not, and will
not permit any Restricted Group Member to, directly or indirectly, Incur or
suffer to exist or become effective any Lien (the "Initial Lien") of any nature
whatsoever on any of its property (including Capital Stock), whether owned at
the Issue Date or thereafter acquired, or upon any income or profits therefrom
(other than Permitted Liens) to secure any Indebtedness, without effectively
providing that the Securities shall be secured (1) equally and ratably with (or
prior to) the Indebtedness so secured for so long as such Indebtedness is so
secured or (2) in the event such Indebtedness constitutes Subordinated
Obligations, prior to such Indebtedness for so long as such Indebtedness is so
secured.
Any Lien created for the benefit of the Holders of the Securities
pursuant to this Section shall provide by its terms that such Lien shall be
automatically and uncondi-
68
tionally released and discharged upon the release and discharge of the Initial
Lien.
SECTION 4.11. Limitation on Sale/Leaseback Transactions. The
Company will not, and will not permit any Restricted Group Member to, directly
or indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale/Leaseback Transaction with respect to any property unless:
(1) the Company or such Restricted Group Member would be entitled to
(A) Incur Indebtedness in an amount equal to the Attributable Debt with
respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and
(B) create a Lien on such property securing such Attributable Debt without
equally and ratably securing the Securities pursuant to Section 4.10;
(2) the net proceeds received by the Company or any Restricted Group
Member in connection with such Sale/Leaseback Transaction are at least
equal to the Fair Market Value of such property; and
(3) the Company applies the proceeds of such transaction in
compliance with Section 4.06.
SECTION 4.12. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.13. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
69
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company
under the Securities, this Indenture and the Registration Rights
Agreement;
(2) immediately after giving pro forma effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Subsidiary at the
time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction,
the Consolidated Leverage Ratio of the Successor Company shall be no worse
than the Consolidated Leverage Ratio of the Company determined immediately
prior to such transaction;
(4) if, as a result of any such transaction, property or assets of
the Successor Company would become subject to a Lien subject to Section
4.10, the Successor Company shall have secured the Securities as required
by said Section; and
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture;
provided, however, that clauses (3) and (4) will not be applicable to (A) a
Restricted Subsidiary consolidating
70
with, merging into or transferring all or part of its properties and assets to
the Company or (B) the Company merging with an Affiliate of the Company solely
for the purpose and with the sole effect of reincorporating the Company in
another jurisdiction.
The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture, but the predecessor Company in the case of
a conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon declaration or otherwise, or (ii) fails to
redeem or purchase Securities when required pursuant to this Indenture or
the Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10 or 4.11 (other than a failure to purchase
Securities when required under Section 4.06 or 4.09) and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified below;
(6) Indebtedness of the Company or any Restricted Group Member is
not paid within any applicable grace
71
period after final maturity or is accelerated by the holders thereof
because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $25.0 million, or its foreign currency equivalent at
the time;
(7) the Company or any Significant Restricted Group Member pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Restricted Group Member in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Restricted Group Member or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the
Company or any Significant Restricted Group Member;
or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days; or
(9) any judgment or decree for the payment of money in excess of
$25.0 million or its foreign currency equivalent at the time is entered
against the Company or any Restricted Group Member, remains outstanding
for a period of 60 consecutive days following the entry of such judgment
or decree and is
72
not discharged, waived or the execution thereof stayed within 10 days
after the notice specified below.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount at maturity
of the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount at maturity of the Securities by
notice to the Company and the Trustee, may declare the Accreted Value of and
accrued but unpaid interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company occurs, the Accreted Value of and interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The Holders of a majority in principal amount at maturity of the Securities by
notice to the Trustee may rescind an acceleration and its
73
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount at maturity of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security (ii) a Default arising
from the failure to redeem or purchase any Security when required pursuant to
this Indenture or (iii) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected. When
a Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount at maturity of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to
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it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount at maturity of
the Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount at maturity of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
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SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on
the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Securities for principal and interest,
respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section
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does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount at maturity of
the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Xxxxxx's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an
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Opinion of Counsel. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its
79
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
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The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
at maturity of the Securities may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount at maturity of the Securities and such Holders
do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount at maturity of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Xxxxxx. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA
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ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA
ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation of Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(7) and (8), with respect only to Significant Restricted Group Members) and
the limitations contained in Sections 5.01(a)(3) and (4) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Restricted Group
83
Members) or because of the failure of the Company to comply with Section
5.01(a)(3) or (4).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Securities to maturity or
redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
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(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (B) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company
85
upon request any money held by them for the payment of principal or interest
that remains unclaimed for two years, and, thereafter, Securityholders entitled
to the money must look to the Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the
86
uncertificated Securities are described in Section 163(f)(2)(B) of the
Code;
(4) to add guarantees with respect to the Securities or to
secure the Securities;
(5) to add to the covenants of the Company for the benefit
of the Holders or to surrender any right or power herein
conferred upon the Company;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(7) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount at maturity of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange for the Securities).
However, without the consent of each Securityholder affected thereby, an
amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount at maturity or Accreted
Value of or extend the Stated Maturity of any Security;
(4) reduce the amount payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that
stated in the Security;
87
(6) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders; or
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders
88
after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
89
SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person, mailed by first-class mail or transmitted by
facsimile (with written confirmation of receipt) addressed as follows:
if to the Company:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention of General Counsel
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-1532
Facsimile: 000-000-0000
Attention of Corporate Trust Division
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by
90
the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a
91
regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 10.08. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 10.09. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 10.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 10.11. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.12. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
92
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
WINSTAR COMMUNICATIONS, INC.,
by /s/ Xxxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President, Treasurer
UNITED STATES TRUST COMPANY
OF NEW YORK,
by Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means (1) the 14-3/4% Senior Discount Notes
Due 2010 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, the entities identified as Purchasers in
the Purchase Agreement, and (2) with respect to each issuance of Additional
Securities, the Persons purchasing such Additional Securities under the related
Purchase Agreement.
"Initial Securities" means (1) up to $930,443,000 aggregate
principal amount at maturity of 14-3/4% Senior Discount Notes Due 2010 issued on
either the Issue Date or on consummation of the Preferred Stock Exchange Offer
and (2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount at maturity of Private Exchange Securities.
"Private Exchange Securities" means any 14-3/4% Senior Discount
Notes Due 2010 issued in connection with a Private Exchange.
2
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated March 27, 2000
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional
Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount at maturity of Exchange Securities registered
under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated April 10, 2000, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
3
1.2 Other Definitions
Defined in
Term Section:
---- --------
"Agent Members".................................... 2.1(b)
"Global Security".................................. 2.1(a)
"Regulation S"..................................... 2.1(a)
"Restricted Global Security"....................... 2.1(a)
"Rule 144A"........................................ 2.1(a)
2. The Securities.
2.1 (a) Form and Dating. Initial Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
Regulation S under the Securities Act ("Regulation S"), in each case as provided
in a Purchase Agreement, and Private Exchange Securities, as provided in a
Registration Rights Agreement, shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Restricted Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its principal corporate trust office,
as custodian for the Depository (or with such other custodian as the Depository
may direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount at maturity of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided. Exchange Securities shall be issued in global form (with the global
securities legend set forth in Exhibit 1 hereto) or in certificated form at the
option of the Holders thereof from time to time. Exchange Securities issued in
global form and Restricted Global Securities are sometimes referred to in this
Appendix as "Global Securities."
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of
4
such Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Trustee as custodian
for the Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on
either the Issue Date or on consummation of the Preferred Stock Exchange Offer,
an aggregate principal amount at maturity of up to $930,443,000 14-3/4% Senior
Discount Notes Due 2010 (inclusive of any Initial Securities issued in
connection with the Preferred Stock Exchange Offer), (2) any Additional
Securities for an original issue in an aggregate principal amount at maturity
specified in the written order of the Company pursuant to Section 2.02 of the
Indenture and (3) Exchange Securities or Private Exchange Securities for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to a Registration Rights Agreement, for a like principal amount at
maturity of Initial Securities, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and, in the case of any issuance of Additional
Securities pursuant to Section 2.13 of the Indenture, shall certify that such
issuance is in compliance with Sections 2.13 and 4.03 of the Indenture.
5
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the participant account
of the Depository to be credited with a beneficial interest in the Global
Security. The Registrar shall, on accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Security and to debit the account of the
Person making the transfer the beneficial interest in the Global Security being
transferred.
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(iii) In the event that a Restricted Global Security is exchanged
for Securities in certificated registered form pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be adopted
by the Company.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Restricted Global
Securities (and all Securities issued in exchange therefor or in
substi-
6
tution thereof) shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Restricted
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security, if the transferor thereof certifies in
writing to the Registrar that such sale or transfer was made in reliance
on Rule 144 (such certification to be in the form set forth on the reverse
of the Security).
7
(iii) After a transfer of any Initial Securities or Private Exchange
Securities pursuant to and during the period of the effectiveness of a
Shelf Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such Initial
Security or such Private Exchange Security issued to certain Holders be
issued in global form will cease to apply, and a certificated Initial
Security or Private Exchange Security or an Initial Security or Private
Exchange Security in global form, in each case without restrictive
transfer legends, will be available to the transferee of the Holder of
such Initial Securities or Private Exchange Securities upon exchange of
such transferring Holder's certificated Initial Security or Private
Exchange Security or directions to transfer such Holder's interest in the
Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to Holders of such
Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form will be available to
Holders that exchange such Initial Securities in such Registered Exchange
Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be issued in global form
will still apply with respect to Holders of such Initial Securities that
do not exchange their Initial Securities, and Private Exchange Securities
in global form with the global securities legend and the Restricted
Securities Legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Securities in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a
8
Global Security is exchanged for certificated Securities, redeemed, purchased or
canceled, the principal amount at maturity of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities
and Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.06, 4.06, 4.09 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase or redeem Securities or 15 Business Days before an interest
payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of the Indenture shall evidence the same debt and shall be
entitled to the
9
same benefits under the Indenture as the Securities surrendered upon such
transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in
the Depository or other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect
to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depository or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of the Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Certificated Securities.
(a) A Restricted Global Security deposited with the Depository or
with the Trustee as custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount at maturity equal to the principal
amount at maturity of such Global
10
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Restricted Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of certificated
Securities under the Indenture.
(b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount at maturity of certificated
Initial Securities of authorized denominations. Any portion of a Restricted
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount at
maturity and any integral multiple thereof and registered in such names as the
Depository shall direct. Any certificated Initial Security or Private Exchange
Security delivered in exchange for an interest in the Restricted Global Security
shall, except as otherwise provided by Section 2.3(b), bear the restricted
securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under the Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
2
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Original Issue Discount Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES OF SECTION
1273 OF THE CODE, THE ISSUE PRICE IS $489.90 AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $1,247.60, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF THIS
SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF THIS
SECURITY IS APRIL 10, 2000. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD
TO MATURITY (COMPOUNDED SEMIANNUALLY ON APRIL 15 AND OCTOBER 15) IS 14.75%.
No. $
------------- -----------
CUSIP No.:
ISIN No.:
Common Code No.:
14-3/4% Senior Discount Notes Due 2010
Winstar Communications, Inc., a Delaware corporation,
promises to pay to , or registered assigns, the
principal sum of _________ Dollars on April 15, 2010.
Interest Payment Dates: April 15 and October 15,
commencing October 15, 2005.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
WINSTAR COMMUNICATIONS, INC.,
by
------------------------------
Name:
Title:
by
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
14-3/4% Senior Discount Notes Due 2010
1. Interest
Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.
From April 10, 2000 until April 15, 2005, interest on the Securities
will accrue at a rate of 14-3/4% per annum and be compounded semiannually on
each Semi-Annual Accrual Date, but (except as provided below) will not be
payable in cash. From and after April 15, 2005, the Company will pay interest
semiannually on April 15 and October of each year. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company will pay
interest on overdue principal at 1% per annum in excess of the above rate and
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.
"Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount of Securities:
(1) if the Specified Date occurs on one of the following dates
(each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
Semi-Annual Accreted
----------- --------
Accrual Date Value
------------ -----
Issue Date . . . . . . . . . . . . . . . . $ 489.90
2
October 15, 2000 . . . . . . . . . . . . . 527.07
April 15, 2001 . . . . . . . . . . . . . . 565.95
October 15, 2001 . . . . . . . . . . . . . 607.68
April 15, 2002 . . . . . . . . . . . . . . 652.50
October 15, 2002 . . . . . . . . . . . . . 700.62
April 15, 2003 . . . . . . . . . . . . . . 752.29
October 15, 2003 . . . . . . . . . . . . . 807.78
April 15, 2004 . . . . . . . . . . . . . . 867.35
October 15, 2004 . . . . . . . . . . . . . 931.32
April 15, 2005 . . . . . . . . . . . . . . 1,000.00
(2) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will be equal to the sum of (A) the
Accreted Value for the Semi-Annual Accrual Date immediately
preceding such Specified Date and (B) an amount equal to the
product of (x) the Accreted Value for the immediately
following Semi-Annual Accrual Date less the Accreted Value for
the immediately preceding Semi-Annual Accrual Date multiplied
by (y) a fraction, the numerator of which is the number of
days elapsed from the immediately preceding Semi-Annual
Accrual Date to the Specified Date, using a 360-day year of 12
30-day months, and the denominator of which is 180 (or, if the
Semi-Annual Accrual Date immediately preceding the Specified
Date is the Issue Date, the denominator of which is the number
of days from and including the Issue Date to and excluding the
next Semi-Annual Accrual Date); or
(3) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global
3
Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a New York
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
April 10, 2000 (the "Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities up to a specified amount pursuant to
Section 2.13 of the Indenture. The Initial Securities issued on the Issue Date,
any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor will be treated as a single class for all
4
purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its Restricted Group Members to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase capital
stock; make investments; issue or sell capital stock of Restricted Group
Members; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of Restricted Group Members; consolidate, merge or transfer all or
substantially all of its assets and the assets of its Restricted Group Members;
and engage in sale/leaseback transactions. These covenants are subject to
important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2005.
On and after April 15, 2005, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
Accreted Value on the redemption date), plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on April 15 of the years set forth below:
Redemption
Period Price
------ -----
2005 107.375%
2006 104.917
2007 102.458
2008 and thereafter 100.000%
In addition, prior to April 15, 2003, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount at maturity not
to exceed 35% of the aggregate principal amount at maturity of the Securities
(which includes Additional Securities, if any) originally issued at a redemption
price (expressed as a percentage of Accreted Value) of 114.750%, plus accrued
and unpaid interest to the redemption date, with the net cash proceeds from one
or more Public Equity Offerings; provided, however, that (1) at least 65% of
such aggregate principal
5
amount at maturity of Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each such redemption
(other than Securities held, directly or indirectly, by the Company or its
Affiliates); and (2) each such redemption occurs within 90 days after the
closing date of the related Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed
6
in part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
10. 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.
11. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee shall be entitled to amend the Indenture or the Securities to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
5 of the Indenture, or to provide for uncertificated Securities in addition to
or in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers
7
conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of money in excess of $25.0 million. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount at maturity of the Securities may declare all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.
14. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations
8
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
18. CUSIP, ISIN and Common Code Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. To the extent such
numbers have been issued, the Company has caused ISIN and Common Code numbers to
be similarly printed on the Securities and has similarly instructed the Trustee.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
9
19. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
------------- --------------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to the Company; or
(2) |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) |_| inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the
2
account of a qualified institutional buyer to whom notice is
given that such transfer is being made in reliance on Rule
144A, in each case pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(4) |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933
in compliance with Rule 904 under the Securities Act of 1933;
or
(5) |_| pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (4) or (5) is checked, the Trustee shall be entitled to require,
prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided
by Rule 144 under such Act.
------------------------------------
Signature
Signature Guarantee:
---------------------------- -----------------------------------------
Signature must be guaranteed Signature
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.
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
-------------------- --------------------------------------------
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in amount at authorized
Principal Principal maturity of officer of
amount at amount at this Global Trustee or
maturity of maturity of Security Securities
this Global this Global following such Custodian
Security Security decrease or
increase)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount at maturity:
$
--------------
Date: Your Signature:
----------------- -----------------------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
-----------------------------------------------
(Signature must be 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.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
*/**/
[Original Issue Discount Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES
OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $489.90 AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $1,247.60, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT
OF THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF
THIS SECURITY IS APRIL 10, 2000. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE
YIELD TO MATURITY (COMPOUNDED SEMIANNUALLY ON APRIL 15 AND OCTOBER 15) IS
14.75%.
------------------------------
*/[If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
2
**/[If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]
No. $
------------- ----------------
CUSIP No.:
ISIN No.:
Common Code No.:
14-3/4% Senior Discount Notes Due 2010
Winstar Communications, Inc., a Delaware corporation,
promises to pay to , or registered assigns, the principal
sum of Dollars on April 15, 2010.
Interest Payment Dates: April 15 and October 15,
commencing October 15, 2005.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
WINSTAR COMMUNICATIONS, INC.,
by
---------------------------------
Name:
Title:
by
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
2
Authorized Signatory
[FORM OF REVERSE SIDE OF [EXCHANGE SECURITY
OR PRIVATE EXCHANGE] SECURITY
14-3/4% Senior Discount Notes Due 2010
1. Interest
Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
From April 10, 2000 until April 15, 2005, interest on the Securities
will accrue at a rate of 14-3/4% per annum and be compounded semiannually on
each Semi-Annual Accrual Date, but (except as provided below) will not be
payable in cash. From and after April 15, 2005, the Company will pay interest
semiannually on April 15 and October 15 of each year. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. The Company will pay
interest on overdue principal at 1% per annum in excess of the above rate and
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.
"Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount of Securities:
(1) if the Specified Date occurs on one of the following dates (each, a
"Semi-Annual Accrual Date"), the Accreted Value will equal the amount set forth
below for such Semi-Annual Accrual Date:
Semi-Annual Accreted
----------- --------
Accrual Date Value
------------ -----
Issue Date . . . . . . . . . . . . . . . . $ 489.90
October 15, 2000 . . . . . . . . . . . . . 527.07
April 15, 2001 . . . . . . . . . . . . . . 565.95
October 15, 2001 . . . . . . . . . . . . . 607.68
April 15, 2002 . . . . . . . . . . . . . . 652.50
October 15, 2002 . . . . . . . . . . . . . 700.62
April 15, 2003 . . . . . . . . . . . . . . 752.29
October 15, 2003 . . . . . . . . . . . . . 807.78
April 15, 2004 . . . . . . . . . . . . . . 867.35
2
October 15, 2004 . . . . . . . . . . . . . 931.32
April 15, 2005 . . . . . . . . . . . . . . 1,000.00
(2) if the Specified Date occurs between two Semi-Annual Accrual Dates,
the Accreted Value will be equal to the sum of (A) the Accreted
Value for the Semi-Annual Accrual Date immediately preceding such
Specified Date and (B) an amount equal to the product of (x) the
Accreted Value for the immediately following Semi-Annual Accrual
Date less the Accreted Value for the immediately preceding Semi-
Annual Accrual Date multiplied by (y) a fraction, the numerator of
which is the number of days elapsed from the immediately preceding
Semi-Annual Accrual Date to the Specified Date, using a 360-day year
of 12 30-day months, and the denominator of which is 180 (or, if the
Semi-Annual Accrual Date immediately preceding the Specified Date is
the Issue Date, the denominator of which is the number of days from
and including the Issue Date to and excluding the next Semi-Annual
Accrual Date); or
(3) if the Specified Date occurs after the last Semi-Annual Accrual
Date, the Accreted Value will equal $1,000.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than
3
30 days immediately preceding the relevant due date for payment (or such other
date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a New York
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
April 10, 2000 (the "Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities up to a specified amount pursuant to
Section 2.13 of the Indenture. The Initial Securities issued on the Issue Date,
any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor will be treated as a single class for all
purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its Restricted Group Members to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase capital
stock; make investments; issue or sell capital stock of Restricted Group
Members; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of Restricted Group Members; consolidate, merge or transfer all or
substantially all of its assets and the assets of its Restricted Group Members;
and engage in sale/leaseback transactions. These covenants are subject to
important exceptions and qualifications.
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5. Optional Redemption
Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2005.
On and after April 15, 2005, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
Accreted Value, on the redemption date) plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on 2005 of the years set forth below:
Redemption
Period Price
------ -----
2005 107.375%
2006 104.917
2007 102.458
2008 and thereafter 100.00%
In addition, prior to April 15, 2003, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount at maturity not
to exceed 35% of the aggregate principal amount at maturity of the Securities
(which includes Additional Securities, if any) originally issued at a redemption
price (expressed as a percentage of Accreted Value) of 114.750%, plus accrued
and unpaid interest to the redemption date, with the net cash proceeds from one
or more Public Equity Offerings; provided, however, that (1) at least 65% of
such aggregate principal amount at maturity of Securities (which includes
Additional Securities, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 90 days after the closing date of the related Public Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of
5
and accrued interest on all Securities (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
10. 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.
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11. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee shall be entitled to amend the Indenture or the Securities to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
5 of the Indenture, or to provide for uncertificated Securities in addition to
or in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any
Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of
7
money in excess of $25.0 million. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount at
maturity of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.
14. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
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17. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
18. CUSIP, ISIN and Common Code Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. To the extent such
numbers have been issued, the Company has caused ISIN and Common Code numbers to
be similarly printed on the Securities and has similarly instructed the Trustee.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
19. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
-------------- ---------------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount at maturity:
$
----------
Date: Your Signature:
-------------- ---------------------------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
-----------------------------------------------
(Signature must be 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.
