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UNITED STATES TELECOMMUNICATIONS, INC.,
AS ISSUER
TO ___________________
AS TRUSTEE
INDENTURE
DATED AS OF _____________ ___, 2000
UNSECURED INSTALLMENT NOTES
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ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION; APPLICABILITY OF THE TRUST INDENTURE ACT............1
Section 1.01 Definitions.......................................................................1
Section 1.02 Other Definitions.................................................................3
Section 1.03 Rules of Construction.............................................................3
Section 1.04 Trust Indenture Act...............................................................4
ARTICLE 2 THE SECURITIES.............................................................................4
Section 2.01 Form and Dating...................................................................4
Section 2.02 Execution and Authentication......................................................4
Section 2.03 Agents............................................................................5
Section 2.04 Paying Agent To Hold Money in Trust...............................................5
Section 2.05 Securityholder Lists..............................................................5
Section 2.06 Transfer and Exchange.............................................................5
Section 2.07 Replacement Securities............................................................6
Section 2.08 Outstanding Securities............................................................6
Section 2.09 Treasury Securities Disregarded for Certain Purposes..............................6
Section 2.10 Temporary Securities..............................................................6
Section 2.11 Global Securities. ...............................................................7
Section 2.12 Cancellation......................................................................7
Section 2.13 Defaulted Interest................................................................7
ARTICLE 3 COVENANTS..................................................................................8
Section 3.01 Payment of Securities.............................................................8
Section 3.02 SEC Reports.......................................................................8
Section 3.03 Compliance Certificate............................................................8
Section 3.04 Notice of Certain Events..........................................................8
ARTICLE 4 SUCCESSORS.................................................................................8
Section 4.01 When Company May Merge, etc.......................................................8
Section 4.02 Successor Corporation Substituted.................................................9
ARTICLE 5 DEFAULTS AND REMEDIES......................................................................9
Section 5.01 Events of Default.................................................................9
Section 5.02 Acceleration.....................................................................10
Section 5.03 Other Remedies...................................................................11
Section 5.04 Waiver of Past Defaults..........................................................11
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Section 5.05 Control by Majority..............................................................11
Section 5.06 Limitation on Suits..............................................................11
Section 5.07 Rights of Holders To Receive Payment.............................................12
Section 5.08 Priorities.......................................................................12
Section 5.09 Undertaking for Costs............................................................12
Section 5.10 Proof of Claim...................................................................12
Section 5.11 Actions of a Holder..............................................................13
ARTICLE 6 TRUSTEE...................................................................................13
Section 6.01 Duties of Trustee................................................................13
Section 6.02 Rights of Trustee................................................................14
Section 6.03 Individual Rights of Trustee; Disqualification...................................15
Section 6.04 Trustee's Disclaimer.............................................................15
Section 6.05 Notice of Defaults...............................................................15
Section 6.06 Reports by Trustee to Holders....................................................15
Section 6.07 Compensation and Indemnity.......................................................15
Section 6.08 Replacement of Trustee...........................................................16
Section 6.09 Successor Trustee by Merger, etc.................................................17
Section 6.10 Eligibility......................................................................17
Section 6.11 Preferential Collection of Claims Against Company................................17
ARTICLE 7 SATISFACTION AND DISCHARGE................................................................17
Section 7.01 Satisfaction and Discharge of Indenture..........................................17
Section 7.02 Application of Trust Funds.......................................................18
Section 7.03 Reinstatement....................................................................18
Section 7.04 Repayment to Company.............................................................19
ARTICLE 8 AMENDMENTS................................................................................19
Section 8.01 Without Consent of Holders.......................................................19
Section 8.02 With Consent of Holders..........................................................19
Section 8.03 Compliance with Trust Indenture Act and Section 10.03............................20
Section 8.04 Revocation and Effect of Consents and Waivers....................................20
Section 8.05 Notice of Amendment; Notation on or Exchange of Securities.......................20
Section 8.06 Trustee Protected................................................................21
ARTICLE 9 SUBORDINATION.............................................................................21
Section 9.01 Securities Subordinated to Senior Debt...........................................21
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Section 9.02 Securities Subordinated in Any Proceeding........................................21
Section 9.03 No Payment on Securities in Certain Circumstances................................21
Section 9.04 Subrogation......................................................................22
Section 9.05 Obligations of the Company Unconditional.........................................22
Section 9.06 Trustee and Paying Agents Entitled to Assume Payments Not Prohibited in
Absence of Notice................................................................22
Section 9.07 Satisfaction and Discharge.......................................................23
Section 9.08 Subordination Rights Not Impaired by Acts or Omissions of the Company or
Holders of Senior Debt...........................................................23
Section 9.09 Right to Hold Senior Debt........................................................23
Section 9.10 No Fiduciary Duty of Trustee or Securityholders to Holders of Senior Debt........23
Section 9.11 Distribution to Holders of Senior Debt...........................................23
Section 9.12 Trustee's Rights to Compensation, Reimbursement of Expenses and
Indemnification..................................................................23
Section 9.13 Exception for Certain Distributions..............................................23
Section 9.14 Certain Definitions..............................................................24
ARTICLE 10 MISCELLANEOUS.............................................................................24
Section 10.01 Notices..........................................................................24
Section 10.02 Communication by Holders with Other Holders......................................25
Section 10.03 Certificate and opinion as to Conditions Precedent...............................25
Section 10.04 Statements Required in Certificate or Opinion....................................25
Section 10.05 Rules by Trustee and Agents......................................................25
Section 10.06 Legal Holidays...................................................................25
Section 10.07 No Recourse Against Others.......................................................26
Section 10.08 Duplicate Originals..............................................................26
Section 10.09 Variable Provisions..............................................................26
Section 10.10 Governing Law....................................................................27
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ARTICLE 1
DEFINITIONS AND RULES OF CONSTRUCTION;
APPLICABILITY OF THE TRUST INDENTURE ACT
SECTION 1.01 DEFINITIONS.
"Affiliate." Any Person controlling or controlled by or under common
control with the referenced Person. "Control" for this definition means the
power to direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities, by contract, or otherwise.
The terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent." Any Registrar or Paying Agent.
"Board." The Board of Directors of the Person or any officer or
committee thereof authorized to act for such Board.
"Business Day." A day that is not a Legal Holiday.
"Company." United States Telecommunications, Inc., until a successor
which duly assumes the obligations upon the Securities and under the Indenture
replaces it and thereafter means the successor.
"Debt" means, with respect to any Person, (i) any obligation of such
Person to pay the principal of, premium of, if any, interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not a claim for such
post-petition interest is allowed in such proceeding), penalties, reimbursement
or indemnification amounts, fees, expenses or other amounts relating to any
indebtedness, and any other liability, contingent or otherwise, of such Person
(A) for borrowed money (including instances where the recourse of the lender is
to the whole of the assets of such Person or to a portion thereof), (B)
evidenced by a note, debenture or similar instrument (including a purchase money
obligation) including securities, (C) for any letter of credit or performance
bond in favor of such Person, or (D) for the payment of money relating to a
capitalized lease obligation; (ii) any liability of others of the kind described
in the preceding clause (i), which the Person has guaranteed or which is
otherwise its legal liability; (iii) any obligation of the type described in
clauses (i) and (ii) secured by a lien to which the property or assets of such
Person are subject, whether or not the obligations secured thereby shall have
been assumed by or shall otherwise be such Persons legal liability; and (iv) any
and all deferrals, renewals, extensions and refunding of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (i), (ii) or (iii).
"Default." Any event which is, or after notice or passage of time would
be, an Event of Default.
"Exchange Act." The Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder." A Person in whose name a Security is
registered.
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"Indenture." This Indenture as amended from time to time, including the
terms of the Securities and any amendments.
"Officers' Certificate." A certificate signed by two Officers, one of
whom must be the President, the Treasure or a Vice-President of the Company. See
Sections 10.03 and 10.04.
"Opinion of Counsel." Written opinion from legal counsel who is
acceptable to the Trustee. See Sections 10.03 and 10.04.
"Person." Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Principal" of a Security means the principal of the Security plus the
premium, if any, on the Security which is due or overdue or is to become due at
the relevant time.
"Proceeding." A liquidation, dissolution, bankruptcy, insolvency,
reorganization, receivership or similar proceeding under Bankruptcy Law, an
assignment for the benefit of creditors, any marshalling of assets or
liabilities, or winding up or dissolution, but shall not include any transaction
permitted by and made in compliance with Article 4.
"Representative." The indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"SEC." The U.S. Securities and Exchange Commission.
"Securities." The Securities described above issued under this
Indenture.
"Senior Debt." Senior Debt includes (i) any obligations of the Company
to the U.S. Internal Revenue Service or any state, county or local government
for taxes due and payable, (ii) any obligations of the Company under any surety
bonds issued in connection with the licensing requirements of state public
utility commissions or in connection with resale agreement entered into between
the Company and local exchange carriers, (iii) the obligation of the Company to
the previous unitholders of Tel Com Plus Jacksonville, LLC, a predecessor entity
of the Company, pursuant to a rescission offer made by Tel Com Plus
Jacksonville, LLC to the unitholders and (iv) any debt of the Company, whenever
issued, that is by its terms senior in right of payment to the Securities.
"TIA." The Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb),
as amended, as in effect on the date of this Indenture, except as provided in
Sections 1.04 and 8.03.
"Trust Officer." Any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters or to whom a
matter concerning the Indenture may be referred.
"Trustee." The party named as such above until a successor replaces it
and thereafter means the successor. See also Section 9.14.
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"U.S. Government Obligations." Securities that are direct, noncallable,
nonredeemable obligations of, or noncallable, nonredeemable obligations
guaranteed by, the United States for the timely payment of which obligation or
guarantee the full faith and credit of the United States is pledged, or funds
consisting solely of such securities, including funds managed by the Trustee or
one of its Affiliates (including such funds for which it or its Affiliates
receives fees in connection with such management).
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in Section
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"Bankruptcy Law" ................................................... 6.01
"Common Stock" ..................................................... 10.01
"Conversion Agent" ................................................. 2.03
"Custodian" ........................................................ 6.01
"Defaulted Interest" ............................................... 2.13
"Distribution" ..................................................... 9.14
"Event of Default" ................................................. 6.01
"Legal Holiday" .................................................... 12.06
"Notice" ........................................................... 12.01
"Officer" .......................................................... 12.09
"Paying Agent" ..................................................... 2.03
"Payment Blockage Period" .......................................... 9.14
"Proceeding" ....................................................... 1.01
"Quoted Price" ..................................................... 10.11
"Registrar" ........................................................ 2.03
"Senior Debt Default Notice" ....................................... 9.14
"Senior Debt Payment Default" ...................................... 9.14
SECTION 1.03 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term defined in Section 1.01 or 1.02 has the meaning
assigned to it therein, and terms defined in the TIA have the meanings assigned
to them in the TIA;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
the United States;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
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(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) "including" means including without limitation.
SECTION 1.04 TRUST INDENTURE ACT.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture
upon and so long as the Indenture and Securities are subject to the TIA. If any
provision of this Indenture limits, qualifies or conflicts with such duties, the
imposed duties shall control. If a provision of the TIA requires or permits a
provision of this Indenture and the TIA provision is amended, then the Indenture
provision shall be automatically amended to like effect. Any reference to a
requirement under the TIA shall only apply upon and so long as the Indenture is
qualified under and subject to the TIA.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING.
The Securities and the 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 Section 2.11, law, stock exchange rule,
automated quotation system, agreements to which the Company is subject, or
usage. Each Security shall be dated the date of its authentication.
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 Security is authenticated, the Security is still valid.
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.
The Trustee shall authenticate Securities for original issue up to the
amount stated in paragraph 4 of Exhibit A in accordance with an Officers'
Certificate of the Company. The aggregate principal amount of Securities
outstanding at any time may not exceed that amount except as provided in Section
2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. 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 an Agent to deal with the Company or
an Affiliate.
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SECTION 2.03 AGENTS.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") or where
Securities may be presented for payment ("Paying Agent"). Whenever the Company
must issue or deliver Securities pursuant to this Indenture, the Trustee shall
authenticate the Securities at the Company's request. The Registrar shall keep a
register of the Securities and of their transfer and exchange.
The Company may appoint more than one Registrar or Paying Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company does not appoint another Registrar or
Paying Agent, the Trustee shall act as such.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
On or 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 will hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of the Principal of or interest
on the Securities, will notify the Trustee of any Default by the Company in
making any such payment, and will comply with Article 9. While any such Default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. 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. If the Company or any
Affiliate acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund.
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 10 Business Days before each interest
payment date and at such other times as the Trustee may request, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.06 TRANSFER AND EXCHANGE.
The Securities shall be issued in registered form and shall be
transferable only upon surrender of a Security for registration of transfer.
When a Security is presented to the Register with a request to register a
transfer or to exchange them for an equal principal amount of Securities of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met and the Security has
not been redeemed. The Company may charge a reasonable fee for any registration
of transfer or exchange but not for any exchange pursuant to Sections 2.10, 8.05
or 9.02.
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All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07 REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, then, in the absence of notice to the Company
that the Security has been acquired by a protected purchaser, the Company shall
issue a replacement Security. If required by the Trustee or the Company, an
indemnity bond must be provided which is sufficient in the judgment of both to
protect the Company, the Trustee and the Agents from any loss which any of them
may suffer if a Security is replaced. The Company or the Trustee may charge the
Holder for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08 OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by the Registrar, 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
holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If Securities are considered paid under Section 3.01, they cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09 TREASURY SECURITIES DISREGARDED FOR CERTAIN PURPOSES.
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 an Affiliate shall be disregarded and deemed not to be
outstanding, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to deliver any such direction, waiver or consent with respect to
the Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.
SECTION 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may use
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
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unreasonable delay, the Company shall deliver definitive Securities in exchange
for temporary Securities.
SECTION 2.11 GLOBAL SECURITIES.
The Company may issue some or all of the Securities in temporary or
permanent global form. The Company may issue a global Security only to a
depository. A depository may transfer a global Security only to its nominee or
to a successor depository. A global Security shall represent the amount of
Securities specified in the global Security. A global Security may have
variations that the depository requires or that the Company considers
appropriate for such a security.
Beneficial owners of part or all of a global Security are subject to
the rules of the depository as in effect from time to time.
The Company, the Trustee and the Agents shall not be responsible for
any acts or omissions of a depository, for any depository records of beneficial
ownership interests or for any transactions between the depository and
beneficial owners.
SECTION 2.12 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Paying Agent, if not the Trustee, shall forward to the Trustee
any Securities surrendered to them for payment. The Trustee shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of canceled Securities according to its standard
procedures or as the Company otherwise directs. The Company may not issue new
Securities to replace Securities that it has paid or which have been delivered
to the Trustee for cancellation.
SECTION 2.13 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Securities
("Defaulted Interest") such Defaulted Interest shall cease to be payable to the
Securityholder on the relevant record date and shall be paid by the Company, at
its election, under either (1) or (2) below:
(1) The Company may pay the Defaulted Interest together with
interest thereon to the Persons which are Securityholders on a subsequent
special record date. The Company shall notify the Trustee of the amount of
Defaulted Interest together with interest thereon to be paid and pay over such
amount to the Trustee. The Trustee shall then fix a special record date and at
the Company's expense shall notify Securityholders not less than 10 days prior
to such special record date of the proposed payment, of the special record date,
and of the payment date.
(2) The Company may make payment of Defaulted Interest together
with interest thereon in any lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on which
the Securities may be listed or designated for issuance. The Company shall give
prompt notice to the Trustee and Securityholders that it intends to make payment
pursuant to this Section 2.13(2) and of the special record date of the proposed
payment, and of the payment date.
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ARTICLE 3
COVENANTS
SECTION 3.01 PAYMENT OF SECURITIES.
The Company shall pay the Principal of and interest on the Securities
on the dates and in the manner provided in the Securities and this Indenture.
Principal and interest shall be considered paid on the date due if the Paying
Agent holds in accordance with this Indenture on that date money sufficient to
pay all Principal and interest then due and the Paying Agent is not prohibited
from paying such money to the Holders on such date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue Principal at the rate borne
by the Securities; it shall pay interest on overdue Defaulted Interest at the
same rate to the extent lawful.
SECTION 3.02 SEC REPORTS.
The Company shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information, documents
and other reports which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Company will cause any quarterly
and annual reports which it makes available to its stockholders to be mailed to
the Holders. The Company will also comply with the other provisions of TIA
Section 314(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute notice or constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 3.03 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 105 days after the end
of each fiscal year of the Company, a brief certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company, as to the signer's knowledge of the Company's compliance with
all conditions and covenants contained in this Indenture (determined without
regard to any period of grace or requirement of notice provided herein).
SECTION 3.04 NOTICE OF CERTAIN EVENTS.
The Company shall give prompt written notice to the Trustee and any
Paying Agent of (i) any Proceeding, (ii) any Default or Event of Default, (iii)
any cure or waiver of any Default or Event of Default, (iv) any Senior Debt
Payment Default or Senior Debt Default Notice, and (v) if and when the
Securities are listed on any stock exchange.
ARTICLE 4
SUCCESSORS
SECTION 4.01 WHEN COMPANY MAY MERGE, ETC.
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The Company shall not consolidate or merge with or into, or transfer
all or substantially all of its assets to, any Person unless:
(1) either the Company shall be the resulting or surviving entity
or such Person is a corporation organized and existing under the laws of the
United States, a State thereof or the District of Columbia;
(2) if the Company is not the resulting or surviving entity, such
Person assumes by supplemental indenture all the obligations of the Company
under the Securities and this Indenture; and
(3) immediately before and immediately after the transaction no
Default exists.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate and an Opinion of Counsel, each of which
shall state that such consolidation, merger or transfer and such supplemental
indenture comply with this Article 4 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 4.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 4.01,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
and the Securities with the same effect as if such successor corporation had
been named as the Company herein and in the Securities. Thereafter the
obligations of the Company under the Securities and Indenture shall terminate
except for, in the case of a transfer, the obligation to pay the Principal of
and interest on the Securities.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Security when the
same becomes due and payable and such failure continues for a period of 30 days;
(2) the Company fails to pay the Principal of any Security when
the same becomes due and payable at maturity, upon redemption or otherwise;
(3) the Company fails to comply with any of its other agreements
in the Securities or this Indenture and such failure continues for the period
and after the notice specified below;
(4) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
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(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 all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
or
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary
case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default, whether it is voluntary or involuntary, a consequence
of the application of Article 9, 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 of the U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Trustee
or the Holders of at least 25% in Principal amount of the Securities notify the
Company and the Trustee of the Default and the Company does not cure the
Default, or it is not waived, within 60 days after receipt of the notice. The
notice must specify the Default, demand that it be remedied to the extent
consistent with law, and state that the notice is a "Notice of Default."
SECTION 5.02 ACCELERATION.
If an Event of Default occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in Principal amount of the
Securities by notice to the Company and the Trustee, may declare the Principal
of and accrued and unpaid interest on all the Securities to be due and payable.
Upon such declaration the Principal and interest shall be due and payable
immediately.
The Holders of a majority in Principal amount of the Securities by
notice to the Company and the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of Principal or interest that has become due solely because of the
acceleration.
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SECTION 5.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of Principal 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. All remedies are
cumulative to the extent permitted by law.
SECTION 5.04 WAIVER OF PAST DEFAULTS.
The Holders of a majority in Principal amount of the Securities by
notice to the Trustee may waive an existing Default and its consequences except:
(1) a Default in the payment of the Principal of or interest on
any Security; or
(2) a Default with respect to a provision that under Section 8.02
cannot be amended without the consent of each Securityholder affected.
SECTION 5.05 CONTROL BY MAJORITY.
The Holders of a majority in Principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, is unduly prejudicial to the rights of other
Securityholders, or would involve the Trustee in personal liability or expense
for which the Trustee has not received a satisfactory indemnity.
SECTION 5.06 LIMITATION ON SUITS.
A Securityholder may pursue a remedy with respect to this Indenture or
the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) the Holders of at least 25% in Principal amount of the
Securities make a request to the Trustee to pursue the remedy;
(3) the Trustee either (i) gives to such Holders notice it will
not comply with the request, or (ii) does not comply with the request within 15
days after receipt of the request; and
(4) the Holders of a majority in Principal amount of the
Securities do not give the Trustee a direction inconsistent with the request
prior to the earlier of the date, if ever, on which the Trustee delivers a
notice under Section 5.06(3)(i) or the expiration of the period described in
Section 5.06(3)(ii).
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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 5.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of Principal and interest on the
Security, on or after the respective due dates expressed in the Security, 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 the Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to bring suit for the enforcement of the right to convert
the Security shall not be impaired or affected without the consent of the
Holder.
Nothing in this Indenture limits or defers the right or ability of
Holders to petition for commencement of a case under applicable Bankruptcy Law
to the extent consistent with such Bankruptcy Law.
SECTION 5.08 PRIORITIES.
After an Event of Default any money or other property distributable in
respect of the Company's obligations under this Indenture shall be paid in the
following order:
First: to the Trustee (including any predecessor Trustee) for amounts
due under Section 6.07;
Second: to holders of Senior Debt to the extent required by Article 9;
Third: to Securityholders for amounts due and unpaid on the Securities
for Principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for Principal and
interest, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 5.09 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 5.07 or a suit by Holders of more than 10% in Principal
amount of the Securities.
SECTION 5.10 PROOF OF CLAIM.
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In the event of any Proceeding, the Trustee may (and, if applicable,
the trustee for or holders of Senior Debt may) file a claim for the unpaid
balance of the Securities in the form required in the Proceeding and cause the
claim to be approved or allowed. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment, or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior Debt
to vote in respect of the claim of any Securityholder in any Proceeding.
SECTION 5.11 ACTIONS OF A HOLDER.
For the purpose of providing any consent, waiver or instruction to the
Company or the Trustee, a "Holder" or "Securityholder" shall include a Person
who provides to the Company or the Trustee, as the case may be, an affidavit of
beneficial ownership of a Security together with a satisfactory indemnity
against any loss, liability or expense to such party to the extent that it acts
upon such affidavit of beneficial ownership (including any consent, waiver or
instructions given by a Person providing such affidavit and indemnity).
ARTICLE 6
TRUSTEE
SECTION 6.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of 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 its own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties
that are specifically set forth in this
Indenture and no others.
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon
certificates or opinions furnished to the
Trustee and conforming to the requirements
of this Indenture. However, the Trustee
shall examine the certificates and opinions
to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of
paragraph (b) of this Section.
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(ii) The Trustee shall not be liable for any
error of judgment made in good faith by a
Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect
to any action it takes or omits to take in
good faith in accordance with a direction
received by it pursuant to Section 5.050
(iv) The Trustee may refuse to perform any duty
or exercise any right or power which would
require it to expend its own funds or risk
any liability if it shall reasonably believe
that repayment of such funds or adequate
indemnity against such risk is not
reasonably assured to it.
(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 with the Company. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
SECTION 6.02 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 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 an opinion of Counsel. The Trustee may also
consult with counsel on any matter relating to the Indenture or the Securities
and the Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on the advice 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.
(e) Except in connection with compliance with TIA Section
310 or 311, the Trustee shall only be charged with knowledge of Trust Officers.
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SECTION 6.03 INDIVIDUAL RIGHTS OF TRUSTEE; DISQUALIFICATION.
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 an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to TIA
Sections 310 (b) and 311.
SECTION 6.04 TRUSTEE'S DISCLAIMER.
The Trustee shall have no responsibility for 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 in the Securities other than its authentication.
SECTION 6.05 NOTICE OF DEFAULTS.
If a continuing Default is known to the Trustee, the Trustee shall mail
to Securityholders a notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders. The Trustee shall mail to Securityholders any notice it
receives from Securityholder(s) under Section 5.06, and of any notice the
Trustee provides pursuant to Section 5.06(3) (i).
SECTION 6.06 REPORTS BY TRUSTEE TO HOLDERS.
If required pursuant to TIA Section 313(a), within 60 days after the
reporting date stated in Section 10.09, the Trustee shall mail to
Securityholders a brief report dated as of such reporting date that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b)(2).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed.
SECTION 6.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services, including for any Agent capacity in which it
acts. 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 by it. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it including in any Agent capacity in which it acts. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not
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pay for any settlement made without its consent, which consent shall not
unreasonably be withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through gross negligence, willful
misconduct 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, except that held in trust to pay Principal and
interest on particular Securities.
Without prejudice to its rights hereunder, when the Trustee incurs
expenses or renders services after an Event of Default specified in Section
5.01(4) or (5) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 6.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in Principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee is not appointed and does not take office within
30 days after the retiring Trustee resigns, the retiring Trustee may appoint a
successor Trustee at any time prior to the date on which a successor Trustee
takes office. If a successor Trustee does not take office within 45 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company
or, subject to Section 5.09, any Securityholder may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee. Within one year after a successor
Trustee appointed by the Company or a court pursuant to this Section 6.08 takes
office, the Holders of a majority in Principal amount of the Securities may
appoint a successor Trustee to replace such successor Trustee.
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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 6.07.
SECTION 6.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee, if such successor corporation is eligible and qualified under Section
6.10.
SECTION 6.10 ELIGIBILITY.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall always
have a combined capital and surplus as stated in Section 10.09.
SECTION 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
Upon and so long as the Indenture is qualified under the TIA, the
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed is
subject to TIA Section 311(a) to the extent indicated.
ARTICLE 7
SATISFACTION AND DISCHARGE
SECTION 7.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
registration of transfer or exchange of Securities expressly provided for
herein), and the Trustee, on demand of and at expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 and (ii)
Securities for whose payment money has theretofore
been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in
Section 7.04) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and
payable, or (ii) will become due and payable at their
stated maturity within one year, or (iii) are to be
called for
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redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company in the case
of (i), (ii), and (iii) above, has deposited or
caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount of money or
U.S. Government Obligations sufficient to pay and
discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for
cancellation, for Principal and interest to the date
of such deposit (in the case of Securities which have
become due and payable) or to the stated maturity or
redemption date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Holders under Section 3.01, to the Trustee
under Section 6.07, and, if money or U.S. Government Obligations shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 7.02 shall survive.
SECTION 7.02 APPLICATION OF TRUST FUNDS.
The Trustee or Paying Agent shall hold in trust, for the benefit of the
Holders, all money and U.S. Government obligations deposited with it (or into
which such money and U.S. Government Obligations are reinvested) pursuant to
Section 7.01. It shall apply such deposited money and money from U.S. Government
obligations in accordance with this Indenture to the payment of the Principal
and interest on the Securities. Money and U.S. Government Obligations so held in
trust (i) are not subject to Article 9 and (ii) are subject to the Trustee's
rights under Section 6.07.
SECTION 7.03 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Obligations in accordance with Section 7.01 by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then 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 7, until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 7.01; provided, however, that if the
Company makes any payment of Principal of or interest on any Security following
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 after payment
in full to the Holders.
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SECTION 7.04 REPAYMENT TO COMPANY.
The Trustee and Paying Agent shall promptly turn over to the Company
upon request any excess money or U.S. Government Obligations held by them at any
time. All money or U.S. Government Obligations deposited with the Trustee
pursuant to Section 7.01 (and held by it or a Paying Agent) for the payment of
Securities subsequently converted shall be returned to the Company upon request.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for payment of Principal or interest that remains
unclaimed for two years after the right to such money has matured. After payment
to the Company, Securityholders entitled to the money shall look to the Company
for payment as unsecured general creditors unless an abandoned property law
designates another Person.
ARTICLE 8
AMENDMENTS
SECTION 8.01 WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 4.01; or
(3) to make any change that does not adversely affect the rights
of any Securityholder.
SECTION 8.02 WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities
with the written consent of the Holders of at least a majority in Principal
amount of the Securities. However, without the consent of each Securityholder
affected, an amendment under this Section may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the interest on or change the time for payment of
interest on any Security;
(3) reduce the Principal of or change the fixed maturity of any
Security;
(4) make any Security payable in money other than that stated in
the Security;
(5) make any change in Sections 5.04, 5.07 or 8.02 (second
sentence);
(6) make any change that adversely affects the right to convert
any Security; or
(7) make any change in Article 9 that adversely affects the rights
of any Securityholder.
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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.
An amendment under this Section may not make any change that adversely
affects the rights under Article 9 of any Senior Debt unless it consents to the
change.
SECTION 8.03 COMPLIANCE WITH TRUST INDENTURE ACT AND SECTION 10.03.
Every amendment to this Indenture or the Securities shall comply with
the TIA as then in effect, so long as the Indenture and Securities are subject
to the TIA. The Trustee is entitled to, and the Company shall provide an Opinion
of Counsel and Officers' Certificate that the Trustee's execution of any
amendment or supplemental indenture is permitted under this Article 8.
SECTION 8.04 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.
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 take
any such action, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120 days
after such record date.
SECTION 8.05 NOTICE OF AMENDMENT; NOTATION ON OR EXCHANGE OF SECURITIES.
After any amendment under this Article 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 Article.
The Company or the Trustee may place an appropriate notation about an
amendment or waiver on any Security thereafter authenticated. The Company may
issue in exchange for affected Securities new Securities that reflect the
amendment or waiver.
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SECTION 8.06 TRUSTEE PROTECTED.
The Trustee need not sign any supplemental indenture that adversely
affects its rights.
ARTICLE 9
SUBORDINATION
SECTION 9.01 SECURITIES SUBORDINATED TO SENIOR DEBT
The rights of Holders to payment of the Principal of and interest on
the Securities is subordinated to the rights of holders of Senior Debt, to the
extent and in the manner provided in this Article 9.
SECTION 9.02 SECURITIES SUBORDINATED IN ANY PROCEEDING.
Upon any Distribution in any Proceeding,
(1) any Distribution to which the Holders are entitled shall be
paid directly to the holders of Senior Debt to the extent necessary to make
payment in full of all Senior Debt remaining unpaid after giving effect to all
other Distributions to or for the benefit of the holders of Senior Debt; and
(2) in the event that any Distribution is received by the Trustee
before all Senior Debt is paid in full, such Distribution shall be applied by
the Trustee in accordance with this Article 9.
SECTION 9.03 NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
The Company shall not, directly or indirectly (other than in capital
stock of the Company) pay any Principal of or interest on, redeem, defease or
repurchase any of the Securities (i) after any Senior Debt becomes due and
payable, unless and until all such Senior Debt shall first be paid in full or
(ii) after a Senior Debt Payment Default, unless and until such Senior Debt
Payment Default has been cured, waived, or otherwise has ceased to exist.
During a Payment Blockage Period, no payment of any Principal of or
interest on the Securities may be made, directly or indirectly, by the Company.
Unless the Senior Debt in respect of which the Senior Debt Default Notice has
been given has been declared due and payable in its entirety within the Payment
Blockage Period, at the end of the Payment Blockage Period, the Company shall
pay all sums not paid to the Holders during the Payment Blockage Period and
resume all other payments on the Securities as and when due. Defaulted Interest
shall be paid in accordance with Section 2.13. Any number of Senior Debt Default
Notices may be given; provided, however, that as to any issue of Senior Debt (i)
not more than one Senior Debt Default Notice shall be given within a period of
any 366 consecutive days, and (ii) no specific act, omission or condition that
gave rise to a default that existed upon the date of such Senior Debt Default
Notice (whether or not such default applies to the same issue of Senior Debt)
shall be made the basis for the commencement of any other Payment Blockage
Period.
If any Distribution, payment or deposit to redeem, defease or acquire
any of the Securities shall have been received by the Trustee at a time when
such Distribution was
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prohibited by the provisions of this Section 9.03, then, unless such
Distribution is no longer prohibited by this Section 9.03, such Distribution
shall be received and applied by the Trustee for the benefit of the holders of
Senior Debt, and shall be paid or delivered by the Trustee to the holders of
Senior Debt for application to the payment of all Senior Debt.
SECTION 9.04 SUBROGATION.
The Holders shall not have any subrogation or other rights of recourse
to any security in respect of any Senior Debt until such time as all Senior Debt
shall have been paid in full. Upon the payment in full of all Senior Debt, the
Holders shall be subrogated to the rights of the holders of Senior Debt to
receive Distributions applicable to Senior Debt until all amounts owing in
respect of the Securities shall be so paid. No Distributions to the holders of
Senior Debt which otherwise would have been made to the Holders shall, as
between the Company and the Holders, be deemed to be payment by the Company to
or on account of Senior Debt.
If any Distribution to which the Holders would otherwise have been
entitled shall have been applied pursuant to the provisions of this Article to
the payment of Senior Debt, then the Holders shall be entitled to receive from
the holders of such Senior Debt any Distributions received by such holders of
Senior Debt in excess of the amount sufficient to pay all amounts payable on
such Senior Debt to the extent provided herein.
SECTION 9.05 OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
This Article defines the relative rights of the Holders and holders of
Senior Debt. Nothing in this Indenture is intended to or shall impair, as
between the Company and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the Principal of and interest
on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company, other than the holders of
Senior Debt, nor shall anything herein or in the Securities prevent the Trustee
or any Holder from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article 9, of the holders of Senior Debt in respect of any Distribution received
upon the exercise of any such remedy. If the Company fails because of this
Article to pay principal of or interest on a Security on the due date, the
failure is still a Default. Upon any Distribution, the Trustee and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which the Proceeding is pending, or a certificate of
the liquidating trustee or agent or other Person making any Distribution for the
purpose of ascertaining the Persons entitled to participate in such
Distribution, the holders of Senior Debt and other Debt of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 9.
SECTION 9.06 TRUSTEE AND PAYING AGENTS ENTITLED TO ASSUME PAYMENTS NOT
PROHIBITED IN ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee, unless and until a Trust Officer shall have received, no later than
3 Business Days prior to such payment, written notice thereof from the Company
or from one or more holders of Senior Debt and, prior to the receipt
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of any such written notice, the Trustee, shall be entitled in all respects
conclusively to presume that no such fact exists. Unless the Trustee shall have
received the notice provided for in the preceding sentence, the Trustee shall
have full power and authority to receive such payment and to apply the same to
the purpose for which it was received, and shall not be affected by any notice
to the contrary which may be received by it on or after such date. The foregoing
shall not apply to any Affiliate of the Company acting as Paying Agent.
SECTION 9.07 SATISFACTION AND DISCHARGE.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article 7 and not prohibited to be deposited under Section 9.03
when deposited shall not be subject to this Article 9.
SECTION 9.08 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY OR HOLDERS OF SENIOR DEBT.
No right of any holder of any Senior Debt established in this Article 9
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any failure by the Company to comply with the
terms of this Indenture.
SECTION 9.09 RIGHT TO HOLD SENIOR DEBT.
The Trustee is entitled to all of the rights set forth in this Article
9 in respect of any Senior Debt at any time held by it to the same extent as any
other holder of Senior Debt.
SECTION 9.10 NO FIDUCIARY DUTY OF TRUSTEE OR SECURITYHOLDERS TO HOLDERS OF
SENIOR DEBT.
Neither the Trustee nor the Holders owes any fiduciary duty to the
holders of Senior Debt. Neither the Trustee nor the Holders shall be liable to
any holder of Senior Debt in the event that the Trustee, acting in good faith,
shall pay over or distribute to the Holders, the Company, or any other Person,
any property to which any holders of Senior Debt are entitled by virtue of this
Article or otherwise. Nothing contained in this Section 9.10 shall affect the
obligation of any other such Person to hold such payment for the benefit of, and
to pay such payment over to, the holders of Senior Debt.
SECTION 9.11 DISTRIBUTION TO HOLDERS OF SENIOR DEBT.
Any Distribution otherwise payable to the holders of the Securities
made to holders of Senior Debt pursuant to this Article shall be made to such
holders of Senior Debt ratably according to the respective amount of Senior Debt
held by each.
SECTION 9.12 TRUSTEE'S RIGHTS TO COMPENSATION, REIMBURSEMENT OF
EXPENSES AND INDEMNIFICATION.
The Trustee's rights to compensation, reimbursement of expenses and
indemnification under Sections 5.08 and 6.07 are not subordinated.
SECTION 9.13 EXCEPTION FOR CERTAIN DISTRIBUTIONS.
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The rights of holders of Senior Debt under this Article do not extend
(a) to any Distribution to the extent applied to the Trustee's rights to
compensation, reimbursement of expenses or indemnification or (b) to (i)
securities which are subordinated to the securities distributed to the holders
of Senior Debt on terms no less favorable to the holders of Senior Debt than the
provisions of this Article, or (ii) Distributions under any plan approved by the
court in any Proceeding.
SECTION 9.14 CERTAIN DEFINITIONS.
As used in this Article 9,
"Distribution" in any Proceeding means any payment or distribution of
assets or securities of the Company of any kind or character from any source,
whether in cash, securities or other property made by the Company, custodian,
liquidating trustee or agent or any other person whether pursuant to a plan or
otherwise.
"Payment Blockage Period" means the period beginning when a Senior Debt
Default Notice is given to the Company and the Trustee and ending (a) when the
default identified in the Senior Debt Default Notice is cured, waived or
otherwise ceases to exist or (b) after 179 or fewer days, whichever occurs
first.
"Senior Debt Default Notice" means any notice of a default (other than
a Senior Debt Payment Default) that permits the holders of any Senior Debt to
declare such Senior Debt due and payable.
"Senior Debt Payment Default" means a default in the payment of any
principal of or interest on any Senior Debt.
"Trustee" for purposes of this Article 9 includes any Paying Agent.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01 NOTICES.
Any notice by one party to the other shall be in writing and sent to
the other's address stated in Section 10.09. The notice is duly given if it is
delivered in Person or sent by a national courier service which provides next
Business Day delivery or by first-class mail.
A party by notice to the other party may designate additional or
different addresses for subsequent notices.
Any notice sent to a Securityholder shall be mailed by first-class
letter mailed to its address shown on the register kept by the Registrar.
Failure to mail a notice to a Securityholder or any defect in a notice mailed to
a Securityholder shall not affect the sufficiency of the notice mailed to other
Securityholders.
If a notice is delivered or mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
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If the Company mails a notice to Securityholders, it shall deliver or
mail a copy to the Trustee and each Agent at the same time.
A "notice" includes any communication required by this Indenture.
SECTION 10.02 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312 (b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, and Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.03 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate 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 stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.04 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each Person 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 Person, the Person
has made such examination or investigation as is necessary to enable such Person
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 10.05 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. Any Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 10.06 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open. If a payment date is a Legal Holiday
at a place of payment, payment may be
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made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 10.07 NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
SECTION 10.08 DUPLICATE ORIGINALS.
The parties may sign any number of copies, and may execute such in
counterparts, of this Indenture. One signed copy is enough to prove this
Indenture.
SECTION 10.09 VARIABLE PROVISIONS.
"Officer" means the President, any Vice President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
The first certificate pursuant to Section 3.03 shall be for the fiscal
year ending on _________ ____, 20__
The reporting date for Section 6.06 is ___________of each year. The
first reporting date is _______________________.
The Trustee shall always have a combined capital and surplus of at
least $____________as set forth in its most recent published annual report of
condition. The Trustee will be deemed to be in compliance with the capital and
surplus requirement set forth in the preceding sentence if its obligations are
guaranteed by a Person which could otherwise act as Trustee hereunder and which
meets such capital and surplus requirement and the Trustee has at least the
minimum capital and surplus required by TIA Section 310(a)(2).
In determining whether the Trustee has a conflicting interest as
defined in TIA Section 310(b)(1), the following is excluded: Indenture dated as
of _________ __, 2000, between the Company and __________________, Trustee for
the Unsecured Debentures due.
The Company's address is:
United States Telecommunications
Suite 118
0000 000xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
The Trustee's address is:
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[Address of Trustee]
[Attention: ]
SECTION 10.10 GOVERNING LAW.
The laws of the State of Delaware shall govern this Indenture and the
Securities.
Dated: UNITED STATES TELECOMMUNICATIONS, INC.
-------------------
By:
-----------------------------------
Xxxxxxx Xxxxxxx
President
Attest:
-------------------------
Secretary
Dated: TRUSTEE
-------------------
By:
-----------------------------------
Trust Officer
Attest:
-------------------------
Assistant Secretary
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(BACK OF SECURITY)
UNITED STATES TELECOMMUNICATIONS, INC.
Unsecured Installment Notes Due ________ __, 20___
1. Payment of Principal and Interest. United States Telecommunications,
Inc.("Company"), a Florida corporation, promises to pay the Principal
and accrued simple interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay Principal plus
accrued interest in equal annual installments commencing on _______
___, 2003 and continuing thereafter on each _____________ ____of each
year until _____ __, 20__. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay Principal and interest on the
Securities to the Persons who are registered holders of Securities at
the close of business on the record date for the next payment date,
except as otherwise provided herein or in the Indenture even though
Securities are cancelled after the record date and on or before the
payment date. 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. However, the Company may pay
Principal and interest by wire transfer or check payable in such money.
It may mail an interest check to a record date holder's registered
address.
3. Agents. Initially, ________________ ("Trustee"), _____________________
(address of Trustee], will act as Registrar and Paying Agent. The
Company may change any such Agent without notice. The Company or an
Affiliate may act in any such capacity. Subject to certain conditions,
the Company may change the Trustee.
4. Indenture. The Company issued the Securities under an Indenture dated
as of ______________ ("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 the Trust Indenture Act of 1939 (15
U.S.C. xx.xx. 77aaa - 77bbbb) (the "Act"). The Securities are subject
to all such terms, and Securityholders are referred to the Indenture
and the Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to $30,000,000 in aggregate
principal amount.
5. Subordination. The Securities are subordinated to Senior Debt as
defined in the Indenture. To the extent provided in the Indenture,
Senior Debt must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination and authorizes the Trustee to give it effect.
6. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1000 and whole multiples of
$1000. The transfer of Securities may be registered and Securities may
be exchanged as provided in the Indenture. The Registrar may require a
holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes required by law. The Registrar
need not exchange or register the transfer of any Security or portion
of a
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Security selected for redemption. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before
a selection of Securities to be redeemed.
7. Persons Deemed Owners. Subject to Section 5.11, the registered holder
of a Security may be treated as its owner for all purposes.
8. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Securities may be amended, and any Default may be waived, with the
consent of the holders of a majority in Principal amount of the
Securities. Without the consent of any Securityholder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or
inconsistency, to provide for assumption of Company obligations to
Securityholders or to make any change that does not adversely affect
the rights of any Securityholder.
9. Successors. When successors assume all the obligations of the Company
under the Securities and the Indenture, the Company will be released
from those obligations, except as provided in the Indenture.
10. Satisfaction and Discharge Prior to Redemption or Maturity. Subject to
certain conditions, the Company at any time may 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.
11. Defaults and Remedies. Subject to the Indenture, if an Event of
Default, as defined in the Indenture, occurs and is continuing, the
Trustee or the holders of at least 25% in Principal amount of the
Securities may declare all the Securities to be due and payable
immediately. Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, holders of a majority in
Principal amount 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 their interests. The Company must furnish an annual
compliance certificate to the Trustee.
12. Trustee Dealings with Company. _______________, the Trustee under the
Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates,
as if it were not Trustee, subject to the Indenture and the Act.
13. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for
any obligations of the Company under the Securities or the Indenture or
for any claim based on, in respect of or by reason of such obligations
or their creation. Each Securityholder by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
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14. Authentication. This Security shall not be valid until authenticated by
a manual signature of the Trustee.
15. 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
right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G A (= Uniform Gifts to Minors Act).
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Secretary, United States Telecommunications, Suite 118, 0000 000xx
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
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EXHIBIT A
(FACE OF SECURITY)
No.____________ $____________
UNITED STATES TELECOMMUNICATIONS, INC
UNSECURED SUBORDINATED NOTES
Principal and Interest Payment Dates:___________
Record Dates:_____________
United States Telecommunications, Inc. promises to pay to __________,
or registered assigns, the sum of ___________ Dollars commencing on ______ __,
2003.
This Security is subordinated as specified on the other side of this
Security . See the reverse and the Indenture referenced for additional
provisions of this Security.
Dated:
---------------------
Authenticated:
-------------
, as Trustee
--------------
By:
------------------------
Authorized Officer
UNITED STATES TELECOMMUNICATIONS, INC.
By:
------------------------
Xxxxxxx Xxxxxxx
President
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