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GCI, INC.,
a wholly-owned subsidiary of
General Communication, Inc.,
Issuer
$150,000,000
% Senior Notes Due 2007
INDENTURE
Dated as of July __, 1997
THE BANK 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.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.08;
10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05, 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a) (last sentence) . . . . . . . . . . . . . . . . . . . . . 10.06
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03
i
TIA Indenture
Section Section
------- ---------
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
N.A. means Not Applicable.
---------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
ii
TABLE OF CONTENTS
ARTICLE 1 Definitions and Incorporation by Reference . . . . . . . . . . . . .1
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . 19
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. . . 19
SECTION 1.04. Rules of Construction. . . . . . . . . . . . . . . . . 20
ARTICLE 2 The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . 21
SECTION 2.04. Paying Agent To Hold Money in Trust. . . . . . . . . . 21
SECTION 2.05. Noteholder Lists . . . . . . . . . . . . . . . . . . . 22
SECTION 2.06. Replacement Notes. . . . . . . . . . . . . . . . . . . 22
SECTION 2.07. Outstanding Notes. . . . . . . . . . . . . . . . . . . 22
SECTION 2.08. Temporary Notes. . . . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.10. Defaulted Interest . . . . . . . . . . . . . . . . . . 23
SECTION 2.11. Transfer and Exchange. . . . . . . . . . . . . . . . . 24
SECTION 2.12. CUSIP Number.. . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.13. Book-Entry Provisions for Global Notes.. . . . . . . . 25
ARTICLE 3 Redemption of Securities. . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.01. Right of Redemption. . . . . . . . . . . . . . . . . . 26
SECTION 3.02. Applicability of Article . . . . . . . . . . . . . . . 26
SECTION 3.03. Election to Redeem; Notice to Trustee. . . . . . . . . 26
SECTION 3.04. Selection by Trustee of Notes to be Redeemed . . . . . 26
SECTION 3.05. Notice of Redemption . . . . . . . . . . . . . . . . . 26
SECTION 3.06. Deposit of Redemption Price. . . . . . . . . . . . . . 27
SECTION 3.07. Notes Payable on Redemption Date . . . . . . . . . . . 28
SECTION 3.08. Notes Redeemed or Purchased in Part. . . . . . . . . . 28
ARTICLE 4 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . 28
SECTION 4.02. Maintenance of Office or Agency. . . . . . . . . . . . 28
SECTION 4.03. Money for Note Payments to Be Held in Trust. . . . . . 29
SECTION 4.04. Corporate Existence. . . . . . . . . . . . . . . . . . 30
SECTION 4.05. Payment of Taxes and Other Claims. . . . . . . . . . . 30
SECTION 4.06. Maintenance of Properties. . . . . . . . . . . . . . . 30
SECTION 4.07. Insurance. . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08. Books and Records. . . . . . . . . . . . . . . . . . . 31
SECTION 4.09. Compliance Certificate . . . . . . . . . . . . . . . . 31
SECTION 4.10. SEC Reports. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.11. Limitation on Indebtedness . . . . . . . . . . . . . . 31
SECTION 4.12. Limitation on Indebtedness of AULP. . . . . . . . . . 32
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SECTION 4.13. Limitation on Restricted Payments. . . . . . . . . . . 33
SECTION 4.14. Limitation on Transactions with Affiliates . . . . . . 34
SECTION 4.15. Change of Control Offer. . . . . . . . . . . . . . . . 35
SECTION 4.16. Limitation on Liens. . . . . . . . . . . . . . . . . . 36
SECTION 4.17. Limitation on Asset Sales. . . . . . . . . . . . . . . 37
SECTION 4.18. Limitation on Restrictions on Distributions From
Restricted Subsidiaries. . . . . . . . . . . . . . . . 39
SECTION 4.19. Ownership of Significant Subsidiaries. . . . . . . . . 40
SECTION 4.20. [Fiber Construction Agreements. . . . . . . . . . . . . 40
SECTION 4.21. Operation of Unrestricted Subsidiaries . . . . . . . . 41
ARTICLE 5 Successor Company . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.01. Merger, Consolidation and Sale of Assets . . . . . . . 41
ARTICLE 6 Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . 42
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.04. Waiver of Existing Defaults. . . . . . . . . . . . . . 44
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . . . 45
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . 45
SECTION 6.07. Rights of Holders To Receive Payment . . . . . . . . . 45
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . 45
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . 46
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . 46
SECTION 6.12. Waiver of Stay or Extension Laws . . . . . . . . . . . 46
ARTICLE 7 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . 47
SECTION 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . 48
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . 48
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . 48
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . 48
SECTION 7.06. Reports by Trustee to Holders. . . . . . . . . . . . . 49
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . 49
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . 50
SECTION 7.09. Successor Trustee by Merger. . . . . . . . . . . . . . 50
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . . . 51
SECTION 7.11. Preferential Collection of Claims Against Company. . . 51
ARTICLE 8 Discharge of Indenture; Defeasance. . . . . . . . . . . . . . . . 51
SECTION 8.01. Discharge of Liability on Notes; Defeasance. . . . . . 51
SECTION 8.02. Conditions to Defeasance . . . . . . . . . . . . . . . 52
SECTION 8.03. Application of Trust Money . . . . . . . . . . . . . . 53
SECTION 8.04. Repayment to Company . . . . . . . . . . . . . . . . . 53
SECTION 8.05. Indemnity for Government Obligations . . . . . . . . . 53
ii
Page
----
SECTION 8.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 9 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . 54
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . . 54
SECTION 9.03. Compliance with Trust Indenture Act. . . . . . . . . . 55
SECTION 9.04. Revocation and Effect of Consents and Waivers. . . . . 55
SECTION 9.05. Notation on or Exchange of Notes . . . . . . . . . . . 56
SECTION 9.06. Trustee To Sign Amendments . . . . . . . . . . . . . . 56
SECTION 9.07. Payment for Consent. . . . . . . . . . . . . . . . . . 56
ARTICLE 10 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.01. Trust Indenture Act Controls. . . . . . . . . . . . . 56
SECTION 10.02. Notices . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.03. Communication by Holders with Other Holders . . . . . 57
SECTION 10.04. Certificate and Opinion as to Conditions Precedent. . 58
SECTION 10.05. Statements Required in Certificate or Opinion . . . . 58
SECTION 10.06. Rules by Trustee, Paying Agent and Registrar. . . . . 58
SECTION 10.07. Legal Holidays. . . . . . . . . . . . . . . . . . . . 58
SECTION 10.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.09. No Recourse Against Others. . . . . . . . . . . . . . 59
SECTION 10.10. Successors. . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.11. Multiple Originals. . . . . . . . . . . . . . . . . . 59
SECTION 10.12. Table of Contents; Headings . . . . . . . . . . . . . 59
SECTION 10.13. Severability. . . . . . . . . . . . . . . . . . . . . 60
iii
INDENTURE dated as of July __, 1997 between GCI, INC., an Alaska
corporation (the "Company"), a wholly owned subsidiary of General Communication,
Inc., and THE BANK OF NEW YORK, a New York banking 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 _____% Senior
Notes Due 2007 (the "Notes"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (i) any Property (other than cash, cash
equivalents or securities) to be owned by the Company or a Restricted Subsidiary
and used in a Related Business, (ii) the costs of improving or developing any
Property owned by the Company or a Restricted Subsidiary which is used in a
Related Business and (iii) Investments in any other Person engaged primarily in
a Related Business (including the acquisition from third parties of Capital
Stock of such Person) as a result of which such other Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary.
"Affiliate" of any specified Person means (i) any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any other Person who is a
director or executive officer (a) of such specified Person, (b) of any
Subsidiary of such specified Person or (c) of any Person described in clause (i)
above. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. "Affiliate" shall also mean any
beneficial owner of shares 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 Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Annualized Pro Forma EBITDA" means, with respect to any Person, the
product of such Person's Pro Forma EBITDA for the latest fiscal quarter for
which financial statements are available multiplied by four.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger or a Sale and Leaseback
Transaction) by such Person or any of its Subsidiaries (or, in the case of the
Company, its Restricted Subsidiaries) in any single transaction or series of
transactions
of (a) shares of Capital Stock or other ownership interests in another Person
(including, with respect to the Company and its Restricted Subsidiaries, Capital
Stock of Unrestricted Subsidiaries) or (b) any other Property of such Person or
any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that the term "Asset
Sale" shall not include: (i) the sale or transfer of Temporary Cash Investments,
inventory, accounts receivable or other Property (including, without limitation,
the sale or lease of excess satellite transponder capacity and the sale or lease
of excess fiber capacity) in the ordinary course of business; (ii) the
liquidation of Property received in settlement of debts owing to such Person or
any of its Restricted Subsidiaries as a result of foreclosure, perfection or
enforcement of any Lien or debt, which debts were owing to such Person or any of
its Restricted Subsidiaries in the ordinary course of business, (iii) when used
with respect to the Company, any asset disposition permitted pursuant to Section
5.01 which constitutes a disposition of all or substantially all of the
Company's Property; (iv) the sale or transfer of any Property by such Person or
any of its Restricted Subsidiaries to such Person or any of its Restricted
Subsidiaries; (v) a disposition in the form of a Restricted Payment permitted to
be made pursuant to Section 4.13; or (vi) a disposition (taken together with any
other dispositions in a single transaction or series of related transactions)
with a Fair Market Value and a sale price of less than $5 million.
"Attributable Indebtedness" means Indebtedness deemed to be incurred
in respect of a Sale and Leaseback Transaction and shall be, at the date of
determination, the present value (discounted at the actual rate of interest
implicit in such transaction, compounded annually), of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended).
"AULP" means _________________________, an Alaska partnership that
will be an Unrestricted Subsidiary on the Issue Date.
"Average Life" means, as of the date of determination, with respect to
any security, the quotient obtained by dividing (i) the sum of the products of
the numbers of years (rounded to the nearest one-twelfth of one year) from the
date of determination to the dates of each successive scheduled principal or
other redemption payment of such security multiplied by the amount of such
payment by (ii) the sum of all such payments.
"Board of Directors" of any Person means the Board of Directors of
such Person or any committee thereof duly authorized to act on behalf of such
Board.
"Board Resolution" of any Person means a copy of a resolution
certified by the Secretary or an Assistant Secretary of Parent and the Company
to have been duly adopted by the Board of Directors of such Person, to be in
full force and effect on the date of such certification and delivered to the
Trustee.
2
"Business Day" means each day which is not a Legal Holiday (as defined
in Section 10.07).
"Capacity Lease" means the Lease Contract and related guaranty by and
among GCI Communication Corporation (a Restricted Subsidiary) as lessee, GCI
Holdings (a Restricted Subsidiary) as guarantor of the lessee's obligations and
AULP as lessor, on terms and conditions substantially as outlined in and
otherwise consistent with Exhibit A (Summary of Terms and Conditions) attached
to the Fiber Construction Facility Commitment Letter pursuant to which GCI
Communication Corporation agrees to lease up to 45% of the output capacity of
the System, as such lease contract may otherwise be amended, supplemented or
otherwise modified in accordance with the terms thereof and of this Indenture.
"Capital Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares
or other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right, warrant, option or other interest
in the nature of an equity interest in such Person, but excluding any debt
security convertible or exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash Proceeds
received by the Company from the issue or sale (other than to a Subsidiary of
the Company or an employee stock ownership plan or trust established by the
Company or any Subsidiary of the Company and other than pursuant to the Stock
Offering) by the Company of any class of its Capital Stock (other than
Disqualified Stock) after the Issue Date, provided, however, that exercise of
the over-allotment option with respect to the Stock Offering shall not
constitute Capital Stock Sale Proceeds.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (within the meaning and otherwise consistent
with Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b) (1) under the Exchange Act) other than one or more of the Permitted
Holders, or an entity or entities controlled by one or more of the Permitted
Holders, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 40% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of Parent or the Company,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Parent or the
Company (together with any new directors whose election by the Board of
Directors of Parent or the Company, as the case may be, or whose nomination for
election by the shareholders of Parent or the Company, as the case may be, was
approved by a majority vote of the directors of Parent or the Company, as the
case may be, then still in office who were either directors at the beginning of
such period or
3
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of Parent or the
Company, as the case may be, then in office, (iii) the Company consolidates or
merges with or into any other Person (other than one or more Permitted Holders
or an entity or entities controlled by one or more Permitted Holders) or any
other Person (other than one or more Permitted Holders or an entity or entities
controlled by one or more Permitted Holders) consolidates or merges with or into
the Company, in either case, other than (a) a consolidation or merger with a
wholly owned Restricted Subsidiary in which all of the Voting Stock of the
Company outstanding immediately prior to the effectiveness thereof is changed
into or exchanged for substantially the same consideration or (b) a
consolidation or merger with or into Parent or (iv) the Company sells, conveys,
transfers or leases, directly or indirectly, all or substantially all of its
assets (other than a transfer of such assets as an entirety or virtually as an
entirety to a wholly owned Restricted Subsidiary, Parent, one or more Permitted
Holders or an entity or entities controlled by one or more Permitted Holders).
"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.
"Completion Guarantee" means the Completion Guarantee between GCI
Holdings and AULP in form and on terms and conditions substantially as outlined
in and otherwise consistent with Exhibit A (Summary of Terms and Conditions)
attached to the Fiber Construction Facility Commitment Letter pursuant to which
GCI Holdings agrees, subject to certain limitations, to advance funds, directly
or indirectly, to a Fiber Construction Facility Obligor for, or otherwise cause,
the timely completion of construction of the System, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and of this Indenture.
"Consolidated Interest Expense" means, for any Person, for any period,
the amount of interest in respect of Indebtedness (including amortization of
original issue discount, fees payable in connection with financings, including
commitment, availability and similar fees, and amortization of debt issuance
costs, non-cash interest payments on any Indebtedness and the interest portion
of any deferred payment obligation and after taking into account the effect of
elections made under, and the net costs associated with, any Interest Rate
Agreement, however denominated, with respect to such Indebtedness), the amount
of dividends in respect of Disqualified Stock paid by such Person, the amount of
Preferred Stock dividends in respect of all Preferred Stock of Subsidiaries of
such Person held other than by such Person or a Subsidiary (other than any
Unrestricted Subsidiary) of such Person, commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance
financing, and the interest component of rentals in respect of any Capital Lease
Obligation or Sale and Leaseback Transaction paid, accrued or scheduled to be
paid or accrued by such Person during such period, determined on a consolidated
basis for such Person and its Subsidiaries (or, in the case of the Company, its
Restricted Subsidiaries) in accordance with GAAP consistently applied. For
4
purposes of this definition, interest on a Capital Lease Obligation or a Sale
and Leaseback Transaction shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
Capital Lease Obligation or Sale and Leaseback Transaction in accordance with
GAAP consistently applied.
"Consolidated Net Income" of a Person means for any period, the net
income (loss) of such Person and its Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income (i) with respect to the
Company, any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that (a) subject to the limitations contained in clause (iv)
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 Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (b) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income, (ii) any
net income (loss) of any Person acquired by such Person or a Subsidiary of such
Person in a pooling of interests transaction for any period prior to the date of
such acquisition, (iii) with respect to the Company, any net income (loss) of
any Restricted Subsidiary if such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (a) subject to the limitations contained in clause (iv)
below, the Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary as
a dividend (subject, in the case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause) and (b) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (iv) any gains or losses realized upon
the sale or other disposition of any Property of such Person or its consolidated
Subsidiaries (including pursuant to any Sale and Leaseback Transaction) which is
not sold or otherwise disposed of in the ordinary course of business, (v) any
extraordinary gain or loss and (vi) the cumulative effect of a change in
accounting principles.
Notwithstanding the provisions of clause (iii) in the preceding
paragraph, in the event that Consolidated Net Income is being calculated with
respect to the Company or any Surviving Entity (a) for purposes of determining
whether the Company or any Surviving Entity could incur at least $1.00 of
additional Indebtedness pursuant to clause (a) of the first paragraph of Section
4.11 for purposes of (i) clause (b) of the first sentence of Section 4.13, (ii)
clause (c) of Section 5.01 or (iii) the definition of "Unrestricted Subsidiary"
or (b) for purposes of calculating Cumulative EBITDA pursuant to clause (c) of
the first sentence of Section 4.13, restrictions on the payment of dividends or
the making of distributions to the Company by GCI Holdings referred to in clause
(1)(iii) of the second sentence under Section 4.18 shall be disregarded.
5
Notwithstanding the provisions of clause (iii) in the first paragraph
of this definition, in the event that Consolidated Net Income is being
calculated with respect to the Company for purposes of determining whether the
Incurrence of Indebtedness proposed to be Incurred is permissible under clause
(a) of the first paragraph of Section 4.11, then (i) if such proposed
Indebtedness is proposed to be Incurred by GCI Holdings or any Subsidiary
thereof that is a Restricted Subsidiary, restrictions on the payment of
dividends or the making of distributions to the Company by GCI Holdings referred
to in clause (1)(iii) of the second sentence of Section 4.18 shall be
disregarded and (ii) if such proposed Indebtedness is proposed to be Incurred by
the Company or any Subsidiary of the Company (other than GCI Holdings and its
Subsidiaries) that is a Restricted Subsidiary, restrictions on the payment of
dividends or the making of distributions to the Company by GCI Holdings referred
to in clause (1)(iii) of the second sentence of Section 4.18 shall be
disregarded, PROVIDED that the lenders pursuant to the Credit Facility modify
the Credit Facility to (A) allow for the payment of dividends or the making of
distributions to the Company in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable or, in the case of a proposed Incurrence of Indebtedness by a
Subsidiary, in an amount sufficient to fund capital contributions or other
Investments to or in such Subsidiary in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable so long as there does not exist an event which after notice or passage
of time or both would permit the lenders under the Credit Facility to declare
all amounts thereunder due and payable, and (B) provide that in no event shall
any encumbrance or restriction pursuant to the Credit Facility prohibit
distributions to pay principal, premium, if any, and interest on such proposed
Indebtedness for more than 180 days in any consecutive 360 day period, unless
the maturity of the Credit Facility has been accelerated.
"Credit Facility" means the $375 million credit facility pursuant to a
credit agreement, dated as of ____________, 1997, among GCI Holdings, as
borrower, and NationsBank of Texas, N.A., Credit Lyonnais, New York Branch and
Toronto Dominion (USA) Inc., as agents, and the lenders party thereto, as
amended or supplemented, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring all or any portion of the
Indebtedness under such agreement or any successor replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Cumulative EBITDA" means at any date of determination the cumulative
EBITDA of the Company from and after the last day of the fiscal quarter of the
Company immediately preceding the Issue Date to the end of the fiscal quarter
immediately preceding the date of determination or, if such cumulative EBITDA
for such period is negative, the amount (expressed as a negative number) by
which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means at any date of determination the
aggregate amount of Consolidated Interest Expense paid, accrued or scheduled to
be paid or accrued by the Company and its Restricted Subsidiaries from the last
day of the fiscal quarter of the Company immediately preceding the Issue Date to
the end of the fiscal quarter immediately preceding the date of determination.
6
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default pursuant to Section 6.01.
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness at the option of
the holder thereof, or is redeemable at the option of the holder thereof, in
whole or in part, on or prior to the final maturity date of the Notes.
"EBITDA" means, for any Person, for any period, an amount equal to (A)
the sum of (i) Consolidated Net Income for such period, plus, to the extent
deducted in arriving at Consolidated Net Income for such period, (ii) (a) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
(b) Consolidated Interest Expense for such period, (c) depreciation for such
period on a consolidated basis, (d) amortization of intangibles for such period
on a consolidated basis, and (e) any other non-cash items reducing Consolidated
Net Income for such period, minus (B) all non-cash items increasing Consolidated
Net Income for such period, all for such Person and its Subsidiaries determined
in accordance with GAAP consistently applied, except that with respect to the
Company each of the foregoing items shall be determined on a consolidated basis
with respect to the Company and its Restricted Subsidiaries only.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any Property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided, (i) if such property or asset has a
Fair Market Value of less than or equal to $15 million, by any Officer of Parent
and the Company or (ii) if such property or asset has a Fair Market Value in
excess of $15 million, by a majority of the Board of Directors of Parent and the
Company and evidenced by a Board Resolution, dated within 30 days of the
relevant transaction.
"Fiber Construction Agreement" means each of the Fiber Construction
Facility, the Completion Guarantee, the GCI Transport Keep-Well Agreement, the
Operating Keep-Well Agreement, the Operating and Maintenance Contract and the
Capacity Lease.
"Fiber Construction Facility" means the Construction and Term Loan
Facility by and among the Fiber Construction Facility Banks as agents, certain
lenders and AULP on terms and conditions (i) substantially as
7
outlined in and otherwise consistent with Exhibit A (Summary of Terms and
Conditions) attached to the Fiber Construction Facility Commitment Letter, and
(ii) to include an additional covenant requiring third party commitments
(including for this purpose bona fide purchases by the Company and its
Restricted Subsidiaries) to generate capacity purchase revenues or lease
payments pursuant to which the Fiber Construction Facility Banks have agreed to
provide financing to construct and develop an undersea fiber optic cable
connecting Anchorage, Fairbanks and Juneau, Alaska with the continental United
States, as such facility may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof and of this Indenture.
"Fiber Construction Facility Banks" means Credit Lyonnais, New York
Branch, NationsBank of Texas, N.A. and Toronto Dominion (USA) Inc.
"Fiber Construction Facility Commitment Letter" means the commitment
letter dated July 3, 1997 for such facility between Parent and the Fiber
Construction Facility Banks.
"Fiber Construction Facility Obligor" means each of AULP and one or
more of its Subsidiaries and their respective successors so long as it is a
party to the Fiber Construction Facility.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date, unless stated otherwise.
"Galaxy X Agreement" means each of the Galaxy X Transponder Service
Agreement between Xxxxxx Communications Satellite Services, Inc. and GCI
Communication Corp. and the Galaxy X Transponder Purchase Agreement, each of
which is dated August 24, 1995, as such agreements may be amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof and
the terms of this Indenture.
"GCI" means General Communication, Inc., an Alaska corporation, and
its successors.
"GCI Holdings" means GCI Holdings, Inc., an Alaska corporation, and
its successors.
"GCI Transport" means GCI Transport Company, an Alaska corporation,
and its successors.
"GCI Transport Keep-Well Agreement" means the Operating Keep-Well
Agreement dated ________, 1997 between GCI Transport and AULP in form and on
terms and conditions substantially as outlined in and otherwise consistent with
Exhibit A (Summary of Terms and Conditions) attached to the Fiber Construction
Facility Commitment Letter pursuant to which GCI Transport agrees, subject to
certain limitations, to advance funds, directly or indirectly to a Fiber
Construction Facility Obligor to pay (i) any operating expenses, including
interest and principal payments on indebtedness, in excess of revenues of AULP
and (ii) any unpaid amount on the Fiber Construction Facility when due at Stated
Maturity or upon acceleration, as such agreement may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
the terms of this Indenture.
8
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other 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
condition or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligation" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, foreign exchange contract, currency
swap agreement, currency option or any other similar agreement or arrangement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall
have meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in
GAAP that results in an obligation of such Person that exists at such time, and
is not theretofore classified as Indebtedness, becoming Indebtedness shall not
be deemed an Incurrence of such Indebtedness; PROVIDED FURTHER, that solely for
purposes of determining compliance with Section 4.11, amortization of debt
discount shall not be deemed to be the Incurrence of Indebtedness, PROVIDED that
in the case of Indebtedness sold at a discount, the amount of such Indebtedness
Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness, secured or unsecured, contingent or otherwise, which
is for borrowed money (whether or not the recourse of the lender is to the whole
of the assets of such Person or only to a portion thereof), or evidenced by
bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding any
balances that constitute customer advance payments and deposits, accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capital Lease Obligations, (ii) Indebtedness of other Persons secured by a Lien
to which the Property owned or held by such first Person is subject, whether or
not the obligation or obligations secured thereby shall have been assumed (the
amount of such Indebtedness being
9
deemed to be the lesser of the value of such property or assets or the amount of
the Indebtedness so secured), (iii) Guarantees of Indebtedness of other Persons,
(iv) any Disqualified Stock, (v) any Attributable Indebtedness, (vi) all
reimbursement obligations of such Person in respect of letters of credit,
bankers' acceptances or other similar instruments or credit transactions issued
for the account of such Person, (vii) in the case of the Company, Preferred
Stock of its Restricted Subsidiaries, and (viii) to the extent not otherwise
included in clauses (i) through (vii) of this paragraph, any payment obligations
of any such Person at the time of determination under any Hedging Obligation.
For purposes of this definition, the maximum fixed repurchase price of any
Disqualified Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; PROVIDED, HOWEVER, that if
such Disqualified Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Disqualified Stock. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability of any contingent obligations in respect thereof at such date. For
purposes of this definition, the amount of the payment obligation with respect
to any Hedging Obligation shall be an amount equal to (i) zero, if such
obligation is an Interest Rate Agreement permitted pursuant to clause (v) of the
second paragraph of Section 4.11 or (ii) the notional amount of such Hedging
Obligation, if such Hedging Obligation is not an Interest Rate Agreement so
permitted.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the TIA that are deemed to be a part of and govern
this instrument, and any such supplemental indenture, respectively.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, or Incurrence of a Guarantee of any
obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Indebtedness issued by, any other
Person. In determining the amount of any Investment made by transfer of any
Property other than cash, such Property shall be valued at its Fair Market Value
at the time of such Investment (it being understood that leasing output capacity
of the System under the Capacity Lease shall not be or be deemed an Investment).
"Issue Date" means the date on which the Notes are initially issued.
10
"Leverage Ratio" means the ratio of (i) the outstanding Indebtedness
of a Person and its Subsidiaries (or in the case of the Company, the outstanding
Indebtedness of the Company and its Restricted Subsidiaries) divided by (ii) the
Trailing Pro Forma EBITDA of such Person (or in the case of the Company, the
Trailing Pro Forma EBITDA of the Company and its Restricted Subsidiaries).
"Lien" means, with respect to any Property of any Person, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"Net Available Cash" from an Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to such Properties or assets or received in any other noncash form) in each case
net of all legal, title and recording tax expenses, commissions and other fees
and expenses incurred, and all federal, state, provincial, foreign and local
taxes required to be accrued as a liability under GAAP, as a consequence of such
Asset Sale, and in each case net of all payments made on any Indebtedness (a)
which is secured by any assets subject to such Asset Sale, in accordance with
the terms of any Lien upon or other security agreement of any kind with respect
to such assets, or (b) which must (1) by its terms, or in order to obtain a
necessary consent to such Asset Sale (except, in the case of this clause (b),
Indebtedness that is PARI PASSU with or subordinated to the Notes), or (2) by
applicable law be repaid out of the proceeds from such Asset Sale, and net of
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale.
"Net Cash Proceeds" with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale, net of attorney's 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.
"Notes" means the Notes issued under this Indenture.
"Officer" means the Chief Executive Officer, the President, the Chief
Financial Officer and the Chief Accounting Officer of Parent and the Company.
11
"Officers' Certificate" means a certificate signed by two Officers of
Parent and the Company, at least one of whom shall be the principal executive
officer or principal financial officer of Parent and the Company, and delivered
to the Trustee.
"Operating and Maintenance Contract" means the Operating and
Maintenance Contract between GCI Communication Corporation (a Restricted
Subsidiary) and AULP on terms and conditions substantially as outlined in and
otherwise consistent with Exhibit A (Summary of Terms and Conditions) attached
to the Fiber Construction Facility Commitment Letter, pursuant to which GCI
Communication Corporation agrees, subject to certain limitations, to operate
and maintain the system and receive compensation for the actual services
provided by it, as such agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and of this
Indenture.
"Operating Keep-Well Agreement" means the Operating Keep-Well
Agreement between GCI Holdings and AULP on terms and conditions substantially as
outlined in and otherwise consistent with Exhibit A (Summary of Terms and
Conditions) attached to the Fiber Construction Facility Commitment Letter
pursuant to which such Restricted Subsidiary agrees, subject to certain
limitations, to advance funds, directly or indirectly, to a Fiber Construction
Facility Obligor to pay (i) any operating expenses, including interest and
principal payments on Indebtedness, in excess of revenues of AULP and (ii) any
unpaid amount on the Fiber Construction Facility when due at Stated Maturity or
upon acceleration, as such agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and of this
Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be counsel to Parent, the Company or
the Trustee.
"Parent" means GCI so long as it owns, and any other Person which
acquires or owns, directly or indirectly, 80% or more of the Voting Stock of the
Company.
"pari passu" as applied to the ranking of any Indebtedness of a Person
in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of payment to the same Indebtedness
as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to which
the other is not so subordinate.
"Permitted Holders" means (i) Xxxxxx Xxxxxx and his estate, spouse,
ancestors, lineal descendants and the trustee of any bona fide trust of which
the foregoing are the sole beneficiaries, (ii) MCI Telecommunications
Corporation and its controlled Affiliates, (iii) Prime Cable Growth Partners,
L.P., Prime Venture I Holdings, L.P., Prime Venture II, L.P., Prime Cable
Limited Partnership and their respective controlled Affiliates, (iv) the General
Communication, Inc. Employee Stock Purchase Plan, and (v) the Estate of Xxx
Xxxxxxx so long as Xxxxx Xxxxxx is one of no more than two legal representatives
of such estate.
12
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary, PROVIDED the
primary business of such Restricted Subsidiary is a Related Business; (ii)
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 (after which such other Person shall cease to exist or shall remain a
"shell" corporation), the Company or a Restricted Subsidiary, PROVIDED such
Person's primary business is a Related Business; (iii) Temporary Cash
Investments; (iv) accounts receivable owing to the Company or any Restricted
Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; (v) 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; (vi) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; and (vii) loans and advances to employees of Parent,
the Company or a Restricted Subsidiary made in the ordinary course of business
consistent with past practice of Parent, the Company or such Restricted
Subsidiary, as the case may be, PROVIDED, that such loans and advances do not
exceed in the aggregate $5 million at any one time outstanding.
"Permitted Issue Date Transactions" means any transaction on or
promptly after the Issue Date relating to (i) the repayment in full of bank
credit facilities of the Company's Subsidiaries outstanding on the Issue Date
before giving effect to the incurrence of Indebtedness under the Credit Facility
and (ii) the contribution or advancement by the Company or a Restricted
Subsidiary of an amount not in excess of $50 million to GCI Transport.
"Permitted Liens" means (i) Liens on the Property of the Company or
any Restricted Subsidiary existing on the Issue Date, (ii) Liens on all or
substantially all of the assets of the Restricted Subsidiaries and the Capital
Stock of any Restricted Subsidiary owned by the Issuer in favor of the lender
under the Credit Facility; (iii) Liens on the Property of the Company or any
Restricted Subsidiary to secure any extension, renewal, refinancing, replacement
or refunding (or successive extensions, renewals, refinancings, replacements or
refundings), in whole or in part, of any Indebtedness secured by Liens referred
to in any of clauses (i), (ii), (vii) or (x); PROVIDED, HOWEVER, that any such
Lien will be limited to all or part of the same Property that secured the
original Lien (plus improvements on such Property) and the aggregate principal
amount of Indebtedness that is secured by such Lien will not be increased to an
amount greater than the sum of (A) the outstanding principal amount, or, if
greater, the committed amount, of the Indebtedness secured by Liens described
under clauses (i), (ii), (vii) or (x), as applicable, at the time the original
Lien became a Permitted Lien under the Indenture and (B) an amount necessary to
pay any premiums, fees and other expenses incurred by the Company in connection
with such extension, renewal, refinancing, replacement or refunding; (iv) Liens
for taxes, assessments or governmental charges or levies on the Property of the
Company or any Restricted Subsidiary if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings; (v) Liens imposed by law, such as
13
carriers', warehousemen's and mechanics' Liens and other similar Liens on the
Property of the Company or any Restricted Subsidiary arising in the ordinary
course of business and securing payment of obligations which are not more than
60 days past due or are being contested in good faith and by appropriate
proceedings; (vi) Liens on the Property of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements, performance or
return-of-money bonds, surety bonds or other obligations of a like nature and
Incurred in a manner consistent with industry practice; (vii) Liens on Property
at the time the Company or any Restricted Subsidiary acquired such Property,
including any acquisition by means of a merger or consolidation with or into the
Company or any Restricted Subsidiary; PROVIDED such Lien shall not have been
Incurred in anticipation of or in connection with such transaction or series of
related transactions pursuant to which such Property was acquired by the Company
or any Restricted Subsidiary; (viii) other Liens on the Property of the Company
or any Restricted Subsidiary incidental to the conduct of their respective
businesses or the ownership of their respective Properties which were not
created in anticipation of or in connection with the Incurrence of Indebtedness
or the obtaining of advances or credit and which do not in the aggregate
materially detract from the value of their respective Properties or materially
impair the use thereof in the operation of their respective businesses; (ix)
pledges or deposits by the Company or any Restricted Subsidiary 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 the Company or any Restricted
Subsidiary is party, or deposits to secure public or statutory obligations of
the Company or any Restricted Subsidiary, or deposits for the payment of rent,
in each case Incurred in the ordinary course of business; (x) Liens on the
Property of a Person at the time such Person becomes a Restricted Subsidiary;
PROVIDED any such Lien does not extend to any other Property of the Company or
any Restricted Subsidiary; and PROVIDED FURTHER that any such Lien was not
Incurred in anticipation of or in connection with the transaction or series of
related transactions pursuant to which such Person became a Restricted
Subsidiary; and (xi) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character.
"Permitted Refinancing Indebtedness" means any extensions, renewals,
refinancings, replacements or refundings of any Indebtedness, including any
successive extensions, renewals, refinancings, replacements or refundings so
long as (i) the aggregate amount of Indebtedness represented thereby is not
increased by such extension, renewal, refinancing, replacement or refunding
(other than to finance fees and expenses, including any premium and defeasance
costs, incurred in connection therewith), (ii) the Average Life of such
Indebtedness is equal to or greater than the Average Life of the Indebtedness
being extended, renewed, refinanced, replaced or refunded, (iii) the Stated
Maturity of such Indebtedness is no earlier than the Stated Maturity of the
Indebtedness being refinanced and (iv) the new Indebtedness shall not be senior
in right of payment to the Indebtedness that is being extended, renewed,
refinanced, replaced or refunded; PROVIDED, that Permitted Refinancing
Indebtedness shall not include (a) Indebtedness of a Subsidiary that extends,
renews, refinances, replaces or refunds Indebtedness of the Company or
14
(b) Indebtedness of the Company or a Restricted Subsidiary that extends, renews,
refinances replaces or refunds Indebtedness of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms hereof, a calculation in accordance with Article
11 of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of
such Person as determined on a consolidated basis in accordance with GAAP
consistently applied after giving effect to the following: (i) if, during or
after such period, such Person or any of its Subsidiaries shall have made any
disposition of any Person or business, Pro Forma EBITDA of such Person and its
Subsidiaries shall be computed so as to give pro forma effect to such
disposition and (ii) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the acquisition
of such Person or business; PROVIDED, HOWEVER, that, with respect to the
Company, all of the foregoing references to "Subsidiary or "Subsidiaries" shall
be deemed to refer only to the "Restricted Subsidiaries" of the Company.
"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, without limitation, Capital Stock in, and
other securities of, any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
"Public Equity Offerings" means an underwritten public offering of
Qualified Stock of Parent or the Company, that generates in the aggregate gross
proceeds of at least $50 million, pursuant to a registration statement filed
with the SEC in accordance with the Securities Act; PROVIDED that, the Stock
Offering (including any over-allotment option in respect thereof) shall be
15
excluded from the definition of Public Equity Offerings; PROVIDED FURTHER, that
in the event of a Public Equity Offering by Parent, Parent contributes to the
capital of the Company the portion of the net cash proceeds of such Public
Equity Offering necessary to pay the aggregate redemption price (plus accrued
and unpaid interest thereon to the redemption date) of the Notes to be redeemed
pursuant to the Company's Optional Redemption or other Indebtedness of any
Restricted Subsidiary required to be paid out of such proceeds.
"Qualified Stock" means any Capital Stock that is not Disqualified
Stock.
"Redemption Date" means, with respect to any Note to be redeemed, any
date fixed for such redemption by or pursuant to this Indenture and the terms of
the Notes.
"Redemption Price" means, with respect to any Note to be redeemed, the
price at which it is to be redeemed pursuant to this Indenture and the terms of
the Notes.
"Related Business" means the business of (i) transmitting, or
providing services related to the transmission of voice, video or data through
owned or leased wireline or wireless transmission facilities, (ii) creating,
developing, constructing, installing, repairing, maintaining or marketing
communications-related systems, network equipment and facilities, software and
other products or (iii) pursuing any other business that is primarily related to
those identified in the foregoing clauses (i) or (ii).
"Restricted Payment" means (i) any dividend or distribution (whether
made in cash, Property or securities) declared or paid on or with respect to any
shares of Capital Stock of the Company or Capital Stock of any Restricted
Subsidiary except for any dividend or distribution which is made solely by a
Restricted Subsidiary to the Company or another Restricted Subsidiary (and, if
such Restricted Subsidiary is not wholly owned, to the other shareholders of
such Restricted Subsidiary on a pro rata basis) or dividends or distributions
payable solely in shares of Capital Stock (other than Disqualified Stock) of the
Company; (ii) a payment made by the Company or any Restricted Subsidiary to
purchase, redeem, acquire or retire any Capital Stock of the Company or Capital
Stock of any Affiliate of the Company (other than a Restricted Subsidiary) or
any warrants, rights or options to directly or indirectly purchase or acquire
any such Capital Stock or any securities exchangeable for or convertible into
any such Capital Stock; (iii) a payment made by the Company or any Restricted
Subsidiary to redeem, repurchase, defease or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled sinking fund or mandatory
redemption payment (other than the purchase, repurchase, or other acquisition of
any Indebtedness subordinate in right of payment to the Notes 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 acquisition),
Indebtedness of the Company which is subordinate (whether pursuant to its terms
or by operation of law) in right of payment to the Notes; or (iv) an Investment
(other than Permitted Investments) in any Person; PROVIDED, HOWEVER, that the
term "Restricted Payment" shall not include any of the Permitted Issue Date
Transactions.
16
"Restricted Subsidiary" means (i) any Subsidiary of the Company on or
after the Issue Date unless such Subsidiary shall have been designated an
Unrestricted Subsidiary as permitted or required pursuant to the definition of
"Unrestricted Subsidiary" and (ii) an Unrestricted Subsidiary which is
redesignated as a Restricted Subsidiary as permitted pursuant to the definition
of "Unrestricted Subsidiary."
"Sale and Leaseback Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person (or, in the case of
the Company, its Restricted Subsidiaries) and is thereafter leased back from the
purchaser or transferee thereof by such Person or one of its Subsidiaries (or,
in the case of the Company, its Restricted Subsidiaries).
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(w) of Regulation S-X under the Securities Act as in effect on the Issue
Date; PROVIDED, HOWEVER, that for purposes of this definition only, (i)
subclause (3) of such Rule 1.02(w) shall be disregarded and (ii) "Significant
Subsidiary" shall include any Subsidiary (and its Subsidiaries) whose EBITDA
comprises more than 10% of the EBITDA of the Company for the most recently
completed fiscal year.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer thereof unless such contingency has
occurred).
"Stock Offering" means the offering of 13,800,000 shares of Class A
common stock of Parent, no par value per share, 7,000,000 shares of which were
sold by the Company pursuant to registration statement No. 333-28001, filed with
the SEC on May 27, 1997, as amended on July 7, 1997, plus any over-allotment
option exercised by the underwriters in connection therewith.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which at least a majority of the total voting power of the Voting Stock is
held by such first-named Person or any of its Subsidiaries and such first-named
Person or any of its Subsidiaries has the power to direct the management,
policies and affairs thereof; or (ii) in the case of a partnership, joint
venture, association, or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or cause
the
17
direction of the management and policies of such entity by contract or otherwise
if in accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes.
"System" has the meaning set forth in the Fiber Construction Facility
as in effect on the Issue Date.
"Temporary Cash Investments" means any of the following: (i)
Investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 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 or any state thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and whose
long-term debt is rated "A-3" or "A-" or higher according to Xxxxx'x Investors
Service, Inc. or Standard & Poor's Ratings Group (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)) and shall, in any event,
include National Bank of Alaska or First National Bank of Anchorage, (iii)
repurchase obligations with a term of not more than 7 days for underlying
securities of the types described in clause (i) entered into with a bank meeting
the qualifications described in clause (ii) above, and (iv) Investments in
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than the Company or an Affiliate of the Company)
organized and in existence under the laws of the United States of America with a
rating at the time as of which any Investment therein is made of "P-1" (or
higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Group (or such similar equivalent rating
by at least one "nationally recognized statistical rating organization" (as
defined in Rule 436 under the Securities Act)).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services.
"Trailing Pro Forma EBITDA" means, with respect to any Person, such
Person's Pro Forma EBITDA for the four most recent full fiscal quarters for
which financial statements are available.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
18
"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.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (a) GCI Transport, GCI Satellite
Company, GCI Fiber Company, Fiber Hold Company, and AULP and (b) any Subsidiary
of an Unrestricted Subsidiary. The Parent's and the Company's Board of
Directors may designate any Person that becomes a Subsidiary of the Company or
any Restricted Subsidiary to be an Unrestricted Subsidiary if (i) the Subsidiary
to be so designated does not own any Capital Stock or Indebtedness of, or own or
hold any Lien on any Property of, the Company or any other Restricted
Subsidiary, (ii) the Subsidiary to be so designated is not obligated under any
Indebtedness or other obligation that, if in default, would result (with the
passage of time or notice or otherwise) in a default on any Indebtedness of the
Company or any Restricted Subsidiary and (iii) either (A) the Subsidiary to be
so designated has total assets of $1,000 or less or (B) such designation is
effective immediately upon such entity becoming a Subsidiary of the Company or
any Restricted Subsidiary. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company or of any Restricted
Subsidiary will be classified as a Restricted Subsidiary; PROVIDED, HOWEVER,
that such Subsidiary shall not be designated a Restricted Subsidiary and shall
be automatically classified as an Unrestricted Subsidiary if the Company would
be unable to Incur at least $1.00 of additional Indebtedness pursuant to clause
(a) of the first paragraph of Section 4.11. Except as provided in the second
sentence of this paragraph, no Restricted Subsidiary may be redesignated as an
Unrestricted Subsidiary. Parent's and the Company's Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary if,
immediately after giving pro forma effect to such designation, (x) the Company
could Incur at least $1.00 of additional indebtedness pursuant to clause (a) of
the first paragraph of Section 4.11 and (y) no Default or Event of Default shall
have occurred and be continuing or would result therefrom. Any such designation
by Parent's and the Company's Board of Directors will be evidenced to the
Trustee by filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying (i) that such
designation complies with the foregoing provisions and (ii) giving the effective
date of such designation, such filing with the Trustee to occur within 75 days
after the end of the fiscal quarter of the Company in which such designation is
made (or in the case of a designation made during the last fiscal quarter of the
Company's fiscal year, within 120 days after the end of such fiscal year).
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Vendor Financing" means the financing entered into with any vendor or
supplier (or any financial institution acting on behalf of or for the purpose of
directly financing purchases from
19
such vendor or supplier) to the extent the Indebtedness thereunder is incurred
for the purpose of financing the cost (including the cost of design,
development, site acquisition, construction, integration, manufacture or
acquisition) or maintenance of personal property (tangible or intangible) used,
or to be used, in a Related Business.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction". . . . . . . . . . . 4.14
"Agent Members". . . . . . . . . . . . . . . 2.13
"Bankruptcy Law" . . . . . . . . . . . . . . 6.01
"Change of Control Offer". . . . . . . . . . 4.15
"Change of Control Payment Date" . . . . . . 4.15
"Change of Control Purchase Price" . . . . . 4.15
"covenant defeasance option" . . . . . . . . 8.01(b)
"Custodian". . . . . . . . . . . . . . . . . 6.01
"Defaulted Interest" . . . . . . . . . . . . 2.10
"Event of Default" . . . . . . . . . . . . . 6.01
"Global Notes. . . . . . . . . . . . . . . . 2.13
"incorporated provision" . . . . . . . . . . 10.01
"legal defeasance option". . . . . . . . . . 8.01(b)
"Legal Holiday". . . . . . . . . . . . . . . 10.07
"Notes Register" . . . . . . . . . . . . . . 2.11
"Notice of Default". . . . . . . . . . . . . 6.01
"Paying Agent" . . . . . . . . . . . . . . . 2.03
"Registrar". . . . . . . . . . . . . . . . . 2.03
"Surviving Entity" . . . . . . . . . . . . . 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:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
20
"obligor" on the indenture securities means the Company and any other
obligor on the Notes.
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; and
(6) "herein" and "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE 2
The Notes
SECTION 2.01. Form and Dating. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
attached hereto which is hereby incorporated in and expressly made a part of
this Indenture. The Notes may have notations, legends or endorsements required
by law, stock exchange rules, 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 Note shall be dated the date of its
authentication.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount. Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
21
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate the Notes for original issue in the
aggregate principal amount not to exceed $150,000,000 upon written orders of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of the Notes to be authenticated and the date on which
the Notes are to be authenticated. The aggregate principal amount of the Notes
outstanding at any time may not exceed $150,000,000, except as provided in
Section 2.06.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference 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.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency (which shall be located in the Borough of Manhattan in the
City of New York, State of New York) where (a) Notes may be presented for
registration of transfer or for exchange (the "Registrar"), (b) Notes may be
presented for payment (the "Paying Agent") and (c) notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent. Neither
the Company nor any Affiliate of the Company may act as 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 initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Note, 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
22
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Trustee all
money held by the Paying Agent for the payment of principal of and interest on
the Notes and shall notify the Trustee of any default by the Company in making
any such payment. 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. Noteholder 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 Noteholders. 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 Noteholders.
SECTION 2.06. Replacement Notes. If a mutilated Note is surrendered
to the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note 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 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 Note is replaced.
The Company and the Trustee may charge the Holder for their expenses in
replacing a Note. Every replacement Note is an additional obligation of the
Company.
SECTION 2.07. Outstanding Notes. Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note 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 Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction or consent or any amendment, modification
or other change to this
23
Indenture, Notes owned by the Company or by an Affiliate of the Company shall be
disregarded and treated as if they were not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent or any amendment, modification or other change
to the Indenture, only Notes which the Trustee actually knows are so owned shall
be so disregarded. Notes so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to the Notes and that the pledgee is
not the Company or an Affiliate of the Company.
SECTION 2.08. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes and deliver them in exchange for temporary
Notes.
SECTION 2.09. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee shall cancel or destroy (subject to
the record retention requirements of the Exchange Act) all Notes 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 Notes to the Company. The Trustee shall in no event
be required to destroy Notes. The Company may not issue new Notes to replace
Notes it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.10. Defaulted Interest. Any interest on any Note which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Notes and this Indenture (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in clause
(i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Note and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record
24
date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be given to each Holder,
not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes are registered at the close of
business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.10, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 2.11. Transfer and Exchange. The Company shall cause to be
kept at the Corporate Trust Office of the Trustee a register (the register
maintained in such office and in any other office or agency designated pursuant
to Section 4.02 being sometimes referred to herein as the "Notes Register") in
which, subject to such reasonable regulations as the Registrar may prescribe,
the Company shall provide for the registration of Notes and of transfers and
exchanges of Notes. The Trustee is hereby initially appointed Registrar for the
purpose of registering Notes and transfers of Notes as herein provided.
When Notes are presented to the Registrar or a co-Registrar with a
request from the Holder of such Notes to register the transfer or exchange for
an equal principal amount of Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested;
provided that every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed or be accompanied by a written instrument of
transfer or exchange in form satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
Whenever any Notes are so presented for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Notes which the Holder making
the exchange is entitled to receive. No service charge shall be made to the
Noteholder for any registration of transfer or exchange. The Company may
require from the Noteholder payment of a sum sufficient to cover any transfer
taxes or other governmental charge that may be imposed in relation to a transfer
or exchange, but this provision shall not apply to any exchange pursuant to
Section 2.09, 4.15 or 4.17 hereof (in which events the Company will
25
be responsible for the payment of all such taxes which arise solely as a result
of the transfer or exchange and do not depend on the tax status of the Holder).
The Trustee shall not be required to exchange or register the transfer of any
Note for a period of 15 days immediately preceding the first mailing of notice
of redemption of Notes to be redeemed or of any Note selected, called or being
called for redemption except, in the case of any Note where public notice has
been given that such Note is to be redeemed in part, the portion thereof not to
be redeemed.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
SECTION 2.12. CUSIP Number. The Company in issuing the Notes may use
a "CUSIP" number (if then generally in use), and if so, the Trustee may use the
CUSIP numbers in notices of redemption or exchange as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes, and that reliance may be placed only on the other identification
numbers. The Company shall promptly notify the Trustee in writing of any change
in the CUSIP number of the Notes.
SECTION 2.13. Book-Entry Provisions for Global Notes.
(a) The Notes shall be issued initially in the form of one or more
permanent global Notes in the form as set forth in Exhibit A attached hereto
(the "Global Notes") and shall (i) be registered in the name of the Depository
or the nominee of such Depository, (ii) be delivered to the Trustee as custodian
for such Depository and (iii) bear a legend as set forth in Exhibit B attached
hereto.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Notes.
(b) Transfers of Global Notes shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for physical Notes in accordance with the rules and procedures of the
Depository. In addition, physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Notes if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Note and a
26
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount at maturity of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more physical Notes of like tenor and principal amount of
authorized denominations.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Notes, an equal aggregate principal amount at maturity of physical Notes
of like tenor of authorized denominations.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
ARTICLE 3
Redemption of Securities
SECTION 3.01. Right of Redemption. The Notes may be redeemed at the
option of the Company, in whole or in part, on the bases and at the Redemption
Prices specified in the form of Note, together with accrued but unpaid interest
to the Redemption Date.
SECTION 3.02. Applicability of Article. Redemption of Notes at the
election of the Company or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
SECTION 3.03. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Notes pursuant to Section 3.01 shall be evidenced by a
Board Resolution and an Officers' Certificate. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice period shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Notes to be redeemed.
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SECTION 3.04. Selection by Trustee of Notes to be Redeemed. If less
than all the Notes are to be redeemed, the particular Notes or portions thereof
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the outstanding Notes not previously called for
redemption in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes being redeemed are listed, or,
if the Notes are not listed on a national exchange, by such method as the
Trustee shall deem fair and appropriate; provided that no Notes of a principal
amount of $1,000 or less will be redeemed in part; provided, further, that any
such redemption pursuant to the provisions relating to a Public Equity Offering
shall be made on a pro rata basis or on as nearly a pro rata basis as
practicable (subject to the procedures of the Depository or any other
depository).
The Trustee shall promptly notify the Company and each Note Registrar
in writing of the Notes selected for partial redemption and the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 3.05. Notice of Redemption. Notice of redemption will be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Notes to be
redeemed, at the address of such Holder appearing in the Note Register.
All notices of redemption will state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all outstanding Notes are to be redeemed, the
identification of the particular Notes to be redeemed;
(iv) in the case of a Note to be redeemed in part, the principal
amount of such Note to be redeemed and that after the Redemption Date upon
surrender of such Note, a new Note or Notes in the aggregate principal amount
equal to the unredeemed portion thereof shall be issued;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(vi) that on the Redemption Date the Redemption Price shall become
due and payable upon each such Note or portion thereof, and that (unless the
Company shall default in payment of the Redemption Price) interest thereon shall
cease to accrue on and after said date;
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(vii) the place or places where such Notes are to be surrendered for
payment of the Redemption Price;
(viii) the CUSIP number, relating to such Notes; and
(ix) the paragraph of the Notes pursuant to which the Notes are
being redeemed.
Notice of redemption of Notes to be redeemed at the election of the
Company will be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided will be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption as a whole or in
part will not affect the validity of the proceedings for the redemption of any
other Note.
SECTION 3.06. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company will deposit with the Trustee or with a Paying
Agent an amount of money in same day funds sufficient to pay the Redemption
Price of, and accrued interest on, all the Notes or portions thereof which are
to be redeemed on that date.
SECTION 3.07. Notes Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Notes so to be redeemed will, on the
Redemption Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Notes will cease to bear interest and such
Notes will cease to be outstanding. Upon surrender of any such Note for
redemption in accordance with said notice, such Note will be paid by the Company
at the Redemption Price; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Notes, registered as such on the relevant regular record dates.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the rate then borne by such Note.
SECTION 3.08. Notes Redeemed or Purchased in Part. Any Note which is
to be redeemed or purchased only in part shall be surrendered to the Paying
Agent at the office or agency maintained for such purpose pursuant to Section
4.02 (with, if required by the Company, the Note Registrar or the Trustee, due
endorsement by, or a written instrument of transfer in form satisfactory to, the
Company, the Note Registrar or the Trustee duly executed by the Holder thereof
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver (at the Company's
expense) to the Holder of such Note
29
without service charge, a new Note or Notes, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Note so surrendered that is
not redeemed or purchased.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Notes. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes 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 Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan in The City of New York, State of New York,
an office or agency where Notes may be presented or surrendered for payment,
where Notes may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The office of the Trustee at its Corporate Trust
Office will be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such required office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Notes may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, State of New
York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
SECTION 4.03. Money for Note Payments to Be Held in Trust. The
Company will, on or before each due date of the principal of or interest on, any
Notes, deposit with a Paying
30
Agent a sum in same day funds sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Holders
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act. The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent will agree with the Trustee, subject to the provisions of this Section
4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of or
interest on Notes in trust for the benefit of the Holders entitled thereto
until such sums shall be paid to such Holders or otherwise disposed of as
herein provided;
(b) give the Trustee notice of any Default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal of
or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities
of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture for any other purpose, pay, or by
Company order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Company upon receipt of a Company
request therefor, or (if then held by the Company) will be discharged from such
trust; and the Holder of such Note will thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, will thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and the Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 4.04. Corporate Existence. Subject to Article Four, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect the corporate
31
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; provided, however, that the
Company will not be required to preserve any such right, license or franchise if
the Board of Directors or Directors of Parent and the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries as a whole and that the
loss thereof is not adverse in any material respect to the Holders; provided,
further, that the foregoing will not prohibit a sale, transfer or conveyance of
a Subsidiary of the Company or any of its assets in compliance with the terms of
this Indenture.
SECTION 4.05. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed (i) upon the Company or any of its Subsidiaries or (ii) upon the
income, profits or property of the Company or any of the Restricted Subsidiaries
and (b) all material lawful claims for labor, materials and supplies, which, if
unpaid, could reasonably be expected to become a Lien upon the property of the
Company or any of the Restricted Subsidiaries; provided, however, that the
Company will not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted.
SECTION 4.06. Maintenance of Properties. The Company will cause all
material properties owned by the Company or any of the Restricted Subsidiaries
or used or held for use in the conduct of their respective businesses to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 4.06 will prevent the Company
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable ln the conduct of
its business or the business of any of the Restricted Subsidiaries and is not
disadvantageous in any material respect to the Holders.
SECTION 4.07. Insurance. The Company will at all times keep all of
its and the Restricted Subsidiaries' properties which are of an insurable nature
insured, either with insurers believed by the Company in good faith to be
financially sound and responsible or by maintaining reserves in amounts
customarily maintained by corporations similarly situated, against loss or
damage to the extent that property of similar character is usually and
customarily so insured by corporations similarly situated and owning like
properties.
SECTION 4.08. Books and Records. The Company will, and will cause
each of the Restricted Subsidiaries to, keep proper books of record and account,
in which full and correct entries will be made of all financial transactions and
the assets and business of the Company and each Restricted Subsidiary of the
Company in accordance with GAAP, consistently applied.
32
SECTION 4.09. 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 Section 314(a)(4).
SECTION 4.10. SEC Reports. The Company shall file with the Trustee
and provide Noteholders, within 15 days after it files them with the SEC, copies
of its annual report and 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. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall continue to file with the SEC and provide the Trustee and
Noteholders with the annual reports and the information, documents and other
reports which are specified in Sections 13 and 15(d) of the Exchange Act at the
times specified for the filing of such information. The Company also shall
comply with the other provisions of TIA Section 314(a).
SECTION 4.11. Limitation on Indebtedness. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur any
Indebtedness; PROVIDED, HOWEVER, that (a) if after giving pro forma effect to
the application of the proceeds thereof, no Default or Event of Default would
occur as a consequence of such Incurrence or be continuing following such
Incurrence, the Company may Incur Indebtedness and Restricted Subsidiaries may
borrow or Guarantee borrowings under the Credit Facility and Incur Indebtedness
that is Vendor Financing, in each case, if on the date of the Incurrence of such
Indebtedness, after giving effect to the Incurrence of such Indebtedness and the
receipt and application of the proceeds thereof, the Leverage Ratio of the
Company and the Restricted Subsidiaries (on a consolidated basis) would not
exceed (i) 7.5 from the Issue Date until December 31, 1999 and (ii) 6.0 after
December 31, 1999 and (b) Permitted Indebtedness may be Incurred.
"Permitted Indebtedness" is defined to include any and all of the
following: (i) in addition to any amounts outstanding pursuant to clause (vii)
below, Indebtedness pursuant to the Credit Facility and this clause (i) in an
aggregate amount outstanding at any time not to exceed $75 million; (ii)
Indebtedness of the Company evidenced by the Notes; (iii) Indebtedness of the
Company owing to and held by a Restricted Subsidiary and Indebtedness of a
Restricted Subsidiary owing to and held by the Company or any Restricted
Subsidiary; PROVIDED, HOWEVER, that any event that results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof; PROVIDED, FURTHER, that any Indebtedness of
the Company owing to and held by a Restricted Subsidiary shall be expressly
subordinated to the Notes; (iv) Indebtedness (other than Indebtedness permitted
by the immediately preceding paragraph or elsewhere in this paragraph) in an
aggregate principal amount outstanding at any time not to exceed $15 million;
(v) Indebtedness under Interest Rate Agreements entered into for the purpose of
limiting interest rate
33
risks, PROVIDED, that the obligations under such agreements are related to
payment obligations on Indebtedness otherwise permitted by the terms of this
Section 4.11; (vi) Indebtedness in connection with one or more standby letters
of credit or performance bonds issued in the ordinary course of business or
pursuant to self-insurance obligations and not in connection with the borrowing
of money or the obtaining of advances or credit; (vii) Indebtedness outstanding
on the Issue Date (after giving effect to the application of the proceeds of the
sale of the Notes and the Stock Offering); (viii) Permitted Refinancing
Indebtedness Incurred in respect of Indebtedness Incurred pursuant to clause (a)
of the immediately preceding paragraph and clauses (ii) and (vii) above; (ix)
Indebtedness incurred solely as a result of the execution by the Company or its
Restricted Subsidiaries of the Capacity Lease; and (x) Indebtedness incurred
solely as a result of the execution by the Company or its Restricted
Subsidiaries of the Operating Keep-Well Agreement and the Completion Guarantee;
PROVIDED, HOWEVER, that the foregoing exception shall not be applicable to
Indebtedness actually incurred by the Company or any of its Restricted
Subsidiaries in order to fund the obligations of the Company or its Restricted
Subsidiaries to perform under the Operating Keep-Well Agreement or the
Completion Guarantee.
SECTION 4.12. Limitation on Indebtedness of AULP. The Company shall
not permit AULP or any Subsidiary of AULP to, directly or indirectly, incur any
Indebtedness other than (i) Indebtedness under the Fiber Construction Facility
or any Permitted Refinancing Indebtedness incurred in respect of such Fiber
Construction Facility in an aggregate principal amount not to exceed $75
million, less any principal payments made thereunder, (ii) Indebtedness owing to
and held by GCI Transport, the Issuer or any Restricted Subsidiary and
evidencing amounts advanced pursuant to the GCI Transport Keep-Well Agreement or
the Operating Keep-Well Agreement, (iii) additional Indebtedness not to exceed
$5 million in the aggregate at any one time outstanding and (iv) Indebtedness
(other than Indebtedness permitted under the preceding clauses (i) through
(iii)) in an aggregate principal amount outstanding at any time not to exceed
$10 million, but only if and to the extent that (a) all principal, interest and
other obligations of any kind under such Indebtedness permitted under this
clause (iv) are excluded for all purposes in determining amounts that may become
due and owing pursuant to the GCI Transport Keep-Well Agreement or the Operating
Keep-Well Agreement and (b) such Indebtedness permitted under this clause (iv)
is non-recourse to, and the lender thereunder has waived all claims against, the
Company and its Restricted Subsidiaries and their respective Properties and
assets with respect thereto.
SECTION 4.13. Limitation on Restricted Payments. The Company shall
not make, and shall not permit any Restricted Subsidiary to make, directly or
indirectly, any Restricted Payment if at the time of, and after giving effect
to, such proposed Restricted Payment, (a) a Default or an Event of Default shall
have occurred and be continuing, (b) the Company could not Incur at least $1.00
of additional Indebtedness pursuant to clause (a) of the first paragraph of
Section 4.11 or (c) the aggregate amount of such Restricted Payment and all
other Restricted Payments made since the Issue Date (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value) would exceed an amount equal to the sum of (i) the excess of (A)
Cumulative EBITDA over (B) the product of 1.5 and Cumulative Interest Expense,
(ii) Capital Stock Sale Proceeds, (iii) the amount by which Indebtedness of the
Company or any Restricted
34
Subsidiary is reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) subsequent to the Issue
Date of any Indebtedness of the Company or any Restricted Subsidiary convertible
or exchangeable for Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash or other Property distributed by the Company or any
Restricted Subsidiary upon conversion or exchange) and (iv) an amount equal to
the net reduction in Investments made by the Company and its Restricted
Subsidiaries subsequent to the Issue Date in any Person resulting from (A)
dividends, repayment of loans or advances, or other transfers or distributions
of Property (but only to the extent the Company excludes such transfers or
distributions from the calculation of Cumulative EBITDA for purposes of clause
(c)(i)(A) above), in each case to the Company or any Restricted Subsidiary from
any Person or (B) the redesignation of any Unrestricted Subsidiary as a
Restricted Subsidiary, not to exceed, in the case of (A) or (B) of this
subclause (iv), the amount of such Investments previously made by the Company
and its Restricted Subsidiaries in such Person or such Unrestricted Subsidiary,
as the case may be, which were treated as Restricted Payments.
Notwithstanding the foregoing limitation, the Company and, in the case
of clauses (e), (f) and (h), its Restricted Subsidiaries may (a) pay dividends
on its Capital Stock within 60 days of the declaration thereof if, on the
declaration date, such dividends could have been paid in compliance with this
Indenture, (b) redeem, repurchase, defease, acquire or retire for value, any
Indebtedness subordinate (whether pursuant to its terms or by operation of law)
in right of payment to the Notes with the proceeds of any Indebtedness that is
Permitted Refinancing Indebtedness in respect of such subordinated Indebtedness,
(c) acquire, redeem or retire Capital Stock of the Company or Indebtedness
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the Notes in exchange for, or in connection with a substantially
concurrent issuance of, Capital Stock of the Company (other than Disqualified
Stock and other than Capital Stock issued or sold to a Subsidiary of the Company
or an employee stock ownership plan or other trust established by the Company or
any Subsidiary of the Company), (d) make Investments in Persons the primary
businesses of which are Related Businesses (other than Investments in the
Capital Stock of the Company) in an amount at any time outstanding not to exceed
in the aggregate for all such Investments made in reliance upon this clause (d),
the sum of (i) $35 million and (ii) an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries subsequent to
the Issue Date in any Person resulting from payments of dividends, repayment of
loans or advances, or other transfers or distributions of Property (to the
extent not included in EBITDA) to the Company or any Restricted Subsidiary from
any Person (but only to the extent such net reduction in Investments has not
been utilized to permit a Restricted Payment pursuant to clause (c)(i) or
(c)(iv) in the immediately preceding paragraph) not to exceed, in the case of
clause (d)(ii), the amount of such Investments previously made by the Company
and its Restricted Subsidiaries in such Person which were treated as Restricted
Payments, (e) execute the Completion Guarantee and the Operating Keep-Well
Agreement; PROVIDED, HOWEVER, any funding of the Completion Guarantee or the
Operating Keep-Well Agreement may only be made if it complies with the
immediately preceding paragraph or clause (d) in this paragraph and such funding
or purchases shall count as Restricted Payments for purposes of determining such
compliance, (f) execute the Operating and Maintenance Contract and
35
make payments pursuant thereto in an annual amount not to exceed the pro rata
share of the annual operating and maintenance costs of the system allocated to
the output capacity of the system leased and/or purchased by the Company and its
Restricted Subsidiaries, (g) purchase or redeem Capital Stock in connection with
the repurchase provisions under employee stock option or stock purchase
agreements or other agreements to compensate management employees of Parent, the
Company or one of its Subsidiaries; PROVIDED, HOWEVER, that the amount paid in
connection with all such redemptions or repurchases pursuant to this clause (g)
shall not exceed in any fiscal year $2 million in the aggregate, and (h) assign
or otherwise transfer to GCI Transport, or any of its Subsidiaries the credit in
favor of the Company and all other related rights arising from the Company's
$9.1 million deposit made in connection with the Galaxy X Agreement.
Any payments made pursuant to clauses (b), (c), (f) and (h) of the
immediately preceding paragraph shall be excluded from the calculation of the
aggregate amount of Restricted Payments made after the Issue Date; PROVIDED,
HOWEVER, that the proceeds from the issuance of Capital Stock pursuant to clause
(c) of the immediately preceding paragraph shall not constitute Capital Stock
Sale Proceeds for purposes of clause (c)(ii) of the first paragraph of this
Section 4.13. The Company may, at the time of any Restricted Payment,
designate, by delivery to the Trustee of an Officers' Certificate referencing
this covenant and such designation, whether such Restricted Payment is being
made in accordance with the second preceding paragraph or, if applicable, the
clause of the preceding paragraph pursuant to which such Restricted Payment is
being made.
SECTION 4.14. Limitation on Transactions with Affiliates. The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
lease or exchange of any Property or the rendering of any service) with, or for
the benefit of, any Affiliate of the Company (an "Affiliate Transaction") unless
(a) the terms of such Affiliate Transaction are (i) set forth in writing, (ii)
in the best interest of the Company or such Restricted Subsidiary, as the case
may be, and (iii) no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's-length transaction with a Person that is not an Affiliate of
the Company or such Restricted Subsidiary, (b) with respect to an Affiliate
Transaction involving aggregate payments or value in excess of $15 million, the
Board of Directors of Parent and the Company (including a majority of the
disinterested members of the Board of Directors of Parent and the Company)
approves such Affiliate Transaction and, in its good faith judgment, believes
that such Affiliate Transaction complies with clauses (a)(ii) and (iii) of this
paragraph as evidenced by a Board Resolution and (c) with respect to an
Affiliate Transaction involving aggregate payments or value in excess of $25
million, the Company obtains a written opinion from an independent appraisal
firm to the effect that such Affiliate Transaction is fair, from a financial
point of view to the Company or such Restricted Subsidiary, as applicable.
Notwithstanding the foregoing limitation, the Company may enter into
or suffer to exist the following: (i) any transaction pursuant to any contract
in existence on the Issue Date on the terms of such contract as in effect on the
Issue Date; (ii) any transaction or series of transactions
36
between the Company and one or more of its Restricted Subsidiaries or between
two or more of its Restricted Subsidiaries; (iii) any Restricted Payment
permitted to be made pursuant to Section 4.13; (iv) the payment of compensation
(including, amounts paid pursuant to employee benefit plans) for the personal
services of officers, directors and employees of Parent, the Company or any of
its Restricted Subsidiaries, so long as the Board of Directors of Parent and the
Company in good faith shall have approved the terms thereof and deemed the
services theretofore or thereafter to be performed for such compensation or fees
to be fair consideration therefor; (v) loans and advances to employees of
Parent, the Company or a Restricted Subsidiary made in the ordinary course of
business and consistent with past practice of Parent, the Company or such
Restricted Subsidiary, as the case may be, provided, that such loans and
advances do not exceed in the aggregate $5 million at any one time outstanding;
(vi) any transaction pursuant to any Fiber Construction Facility Agreement;
(vii) any transaction pursuant to the Galaxy X Agreement; and (viii) the
Permitted Issue Date Transactions and (ix) any transaction pursuant to any Fiber
Construction Agreement.
SECTION 4.15. Change of Control Offer. (a) Upon the occurrence of a
Change of Control, the Company shall notify the Trustee in writing of such
occurrence and shall make an offer to purchase (the "Change of Control Offer")
the Notes at a purchase price equal to 101% of the principal amount thereof,
plus any accrued and unpaid interest thereon to the Change of Control Payment
Date (as hereinafter defined) (the "Change of Control Purchase Price") in
accordance with the procedures set forth in this Section 4.15.
(b) Within 30 days of the occurrence of a Change of Control, with
respect to the Notes, the Company also shall (i) cause a notice of the Change of
Control Offer to be sent at least once to the Dow Xxxxx News Service or similar
business news service in the United States and (ii) mail a notice by first class
mail, postage prepaid, to the Trustee and to each Holder of the Notes, at his
address appearing in the register of the Notes maintained by the Registrar,
stating:
(1) that a Change in Control has occurred and a Change of Control
Offer is being made pursuant to this Section 4.15 and that all such Notes
timely tendered will be accepted for payment;
(2) the Change of Control Purchase Price and the purchase date, which
shall be a Business Day, no earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Notes (or portions thereof) accepted for payment (and
duly paid on the Change of Control Payment Date) pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(4) that any Notes (or portions thereof) not tendered will continue
to accrue interest;
37
(5) that Holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender such
Notes to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day preceding the Change of Control
Payment Date;
(6) that Holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of such Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, provided that each Note purchased and each such new
Note issued shall be in a principal amount in denominations of $1,000 and
integral multiples thereof; and
(8) any other procedures that a Holder must follow to accept a Change
of Control Offer or effect withdrawal of such acceptance.
(c) On the Change of Control Payment Date, the Company shall (a)
accept for payment the Notes or portions thereof tendered pursuant to the Change
of Control Offer, (b) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered and (c) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate indicating the Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each holder of Notes so
accepted payment in an amount equal to the purchase price for such Notes, and
the Trustee shall promptly authenticate and mail to such holder a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered;
provided that each such new Note shall be issued in an original principal amount
in denominations of $1,000 and integral multiples thereof.
(d) The Company shall comply, to the extent applicable, with the
requirements of Rule 14(e)-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Notes in connection with a Change
of Control Offer made pursuant to this Section 4.15. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the covenant described hereunder, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer
to exist, any Lien (other than Permitted Liens) upon any of its Property,
whether now owned or hereafter acquired, or any interest therein, or any income
or profits therefrom, unless (a) with respect to any Restricted Subsidiary, such
Lien secures Indebtedness other than Guarantees of Indebtedness of the Company
38
or (b) effective provision has been or will be made whereby the Notes will be
secured by such Lien equally and ratably with all other Indebtedness of the
Company or any Restricted Subsidiary secured by such Lien; PROVIDED, HOWEVER,
that no Lien may be granted with respect to Indebtedness of the Company that is
subordinated to the Notes.
SECTION 4.17. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale after the Issue
Date unless (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale and (ii) (A) at least
80% of the consideration paid to the Company or such Restricted Subsidiary in
connection with such Asset Sale is in the form of cash or cash equivalents or
(B) the consideration paid to the Company or such Restricted Subsidiary is
determined in good faith by the Board of Directors of Parent and the Company, as
evidenced by a Board Resolution, to be substantially comparable in type to the
assets being sold; PROVIDED, HOWEVER, this clause (ii) shall not apply to (1)
any sales of property or equipment that have become worn out, obsolete or
damaged or otherwise unsuitable for use in connection with the business of the
Company or any Restricted Subsidiary, as the case may be and (2) any sales of
Capital Stock of AULP on terms that are otherwise deemed fair to the Company and
its Subsidiaries in the reasonable business judgment of the Board of Directors
of Parent and the Company, as evidenced by a Board Resolution.
The Net Available Cash (or any portion thereof) from Asset Sales may
be applied by the Company or a Restricted Subsidiary, (A) to prepay, repay or
purchase Indebtedness under the Credit Facility or Indebtedness of a Restricted
Subsidiary (excluding Indebtedness owed to the Company or an Affiliate of the
Company); or (B) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary).
Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within one year from the date of such Asset Sale or
the receipt of such Net Available Cash shall constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10 million (taking into account
income earned on such Excess Proceeds), the Company will be required to make an
offer to purchase (the "Prepayment Offer") the Notes, and any other
Indebtedness, if any, that ranks PARI PASSU with the Notes and contains similar
provisions requiring an Asset Sale prepayment offer, on a pro rata basis, at a
purchase price equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon (if any) to the date of purchase in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
paragraph (b) below (or, in the event of Indebtedness that is discounted, at a
price of the then accreted value thereof); PROVIDED, HOWEVER, if any other such
Indebtedness that ranks PARI PASSU with the Notes does not contain similar Asset
Sale prepayment offer provisions with regard to the pro rata repayment of such
other Indebtedness and the Notes, the Company will be required to purchase the
Notes before purchasing any other such Indebtedness from such Excess Proceeds.
39
If the aggregate principal amount of Notes surrendered for purchase by holders
thereof exceeds the amount of Excess Proceeds allocated to the Notes, then the
Trustee shall select the Notes to be purchased pro rata according to principal
amount or by lot with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased. To the extent that any portion of the amount of
Net Available Cash remains after compliance with the preceding sentence and,
PROVIDED that all holders of Notes have been given the opportunity to tender
their Notes for purchase as described in the following paragraph in accordance
with this Indenture, the Company or such Restricted Subsidiary may use such
remaining amount for general corporate purposes and the amount of Excess
Proceeds will be reset to zero.
(b) Within five Business Days after one year from the date of an
Asset Sale or the receipt of Net Available Cash therefrom, the Company shall, if
it is obligated to make a Prepayment Offer, send a written notice, by first-
class mail, to the holders of the Notes (the "Prepayment Offer Notice"),
accompanied by such information regarding the Company and its Subsidiaries as
the Company in good faith believes will enable such holders of the Notes to make
an informed decision with respect to the Prepayment Offer. The Prepayment Offer
Notice shall state, among other things, (1) that the Company is offering to
purchase Notes pursuant to Section 4.17, (2) that any Note (or any portion
thereof) accepted for payment (and duly paid on the Purchase Date (defined
below)) pursuant to the Prepayment Offer shall cease to accrue interest after
the Purchase Date, (3) the purchase price and purchase date, which shall be,
subject to any contrary requirements of applicable law, no less than 30 days nor
more than 60 days from the date the Prepayment Offer Notice is mailed (the
"Purchase Date"), (4) the aggregate principal amount of Notes (or portions
thereof) to be purchased, (5) that Holders electing to have a Note purchased
pursuant to a Prepayment Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day prior to the Purchase Date, (6)
that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than five Business Days prior to the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Notes the Holder delivered for purchase and
a statement that such Holder is withdrawing his or her election to have such
Note purchased, and (7) that Holders whose Notes are purchased only in part will
be issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; PROVIDED that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral multiples
thereof.
On or before the Prepayment Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Prepayment
Offer, (ii) deposit with the Paying Agent sufficient money to pay the purchase
price plus accrued interest, if any, of all Notes to be purchased and (iii)
deliver to the Trustee Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to the Holders of Notes so accepted payment in
an amount equal to the purchase price plus accrued interest, if any. For
purposes of this Section 4.17, the Trustee shall act as the
40
Paying Agent. Any amounts remaining after the purchase of Notes pursuant to a
Prepayment Offer shall be returned by the Trustee to the Company.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws or regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with the provisions relating to the
Prepayment Offer, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations
described above by virtue thereof.
SECTION 4.18. Limitation on Restrictions on Distributions From
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective, or enter into any agreement with any Person
that would cause to become effective, any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock, or pay any Indebtedness or other obligation owed, to the Company or any
other Restricted Subsidiary, (b) make any loans or advances to the Company or
any other Restricted Subsidiary or (c) transfer any of its Property to the
Company or any other Restricted Subsidiary. Such limitation will not apply (1)
with respect to clauses (a), (b) and (c), to encumbrances and restrictions (i)
in existence under or by reason of any agreements (not otherwise described in
clause (iii)) in effect on the Issue Date, (ii) relating to Indebtedness of a
Restricted Subsidiary and existing at such Restricted Subsidiary at the time it
became a Restricted Subsidiary if such encumbrance or restriction was not
created in connection with or in anticipation of the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company, (iii) any encumbrance or
restriction pursuant to (x) the Credit Facility as in effect on the Issue Date
and (y) any agreement which amends, extends, renews, refinances, replaces or
refunds the Credit Facility, PROVIDED, HOWEVER, that in the case of this
subclause (y), such restrictions or encumbrances are no less favorable to the
holders of the Notes than those restrictions or encumbrances pursuant to the
Credit Facility as in effect on the Issue Date; PROVIDED, FURTHER, HOWEVER, that
in the case of subclauses (x) and (y), the provisions of the Credit Facility (A)
permit (whether explicitly or as a result of the relative maturities of the
Credit Facility and the Notes) distributions to the Company for the purpose of,
and in an amount sufficient to fund, the payment of principal due at Stated
Maturity and interest in respect of the Notes (PROVIDED, in either case, that
such payment is due or to become due within 30 days from the date of such
distribution) at a time when there does not exist an event which after notice or
passage of time or both would permit the lenders under the Credit Facility to
declare all amounts thereunder due and payable, and (B) provide that in no event
shall any encumbrance or restriction pursuant to the Credit Facility prohibit
distributions for Indebtedness on the Notes for more than 180 days in any
consecutive 360 day period, unless (1) there exists a default under the Credit
Facility resulting from any payment default under the Credit Facility when due
or (2) the maturity of the Credit Facility has been accelerated, or (iv) which
result from the extension renewal, refinancing, replacement, refunding or
amendment of an agreement referred to in the immediately
41
preceding clauses (1)(i) and (ii) above and in clauses (2)(i) and (ii) below,
PROVIDED, such encumbrance or restriction is no more restrictive to such
Restricted Subsidiary and is not materially less favorable to the holders of
Notes than those under or pursuant to the agreement evidencing the Indebtedness
so extended, renewed, refinanced, replaced, refunded or amended, and (2) with
respect to clause (c) only, to (i) any encumbrance or restriction relating to
Indebtedness that is permitted to be Incurred and secured pursuant to Sections
4.11 and 4.16 that limits the right of the debtor to dispose of the assets or
Property securing such Indebtedness, (ii) any encumbrance or restriction in
connection with an acquisition of Property, so long as such encumbrance or
restriction relates solely to the Property so acquired and was not created in
connection with or in anticipation of such acquisition, (iii) customary
provisions restricting subletting or assignment of leases of the Company or any
Restricted Subsidiary and customary provisions in other agreements that restrict
assignment of such agreements or rights thereunder or (iv) customary
restrictions contained in asset sale agreements limiting the transfer of such
assets pending the closing of such sale.
SECTION 4.19. Ownership of Significant Subsidiaries. The Company
will at all times maintain, either directly or indirectly, 100% ownership of the
Capital Stock of any Person that is or becomes a Significant Subsidiary of the
Company; PROVIDED, HOWEVER, that (i) the Company may, directly or indirectly,
acquire after the Issue Date and thereafter maintain ownership comprising less
than 100% of the Capital Stock of such Person provided such acquisition is
otherwise effected in accordance with the terms of this Indenture and (ii) the
Company may transfer, convey, sell or otherwise dispose of all or substantially
all of the assets of a Significant Subsidiary as permitted pursuant to Section
4.17.
SECTION 4.20. Fiber Construction Agreements. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, Guarantee any Indebtedness of any Unrestricted Subsidiary or enter
into any keep-well, support or other similar agreement with respect to any
Unrestricted Subsidiary other than pursuant to the Fiber Construction
Agreements.
The Company and the Restricted Subsidiaries may, but shall not,
directly or indirectly, be required to purchase, lease or otherwise acquire
output capacity of the System other than pursuant to the Capacity Lease.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, advance Funds pursuant to the
Completion Guarantee and the Operating Keep-Well Agreement unless (i) such
advance is permitted by Section 4.13 and (ii) in no event shall the aggregate
amount of such advances exceed $100 million.
The Fiber Construction Facility will provide that the obligation of
the Company and its Restricted Subsidiaries to advance funds pursuant to the
Completion Guarantee and the Operating Keep-Well Agreement will be limited to
the amount that is permitted to be distributed pursuant to Section 4.13.
42
The Operating Keep Well Agreement will provide that no payments of the
type referred to in clause (i) of the definition of "Operating Keep-Well
Agreement" will be required to be made unless GCI Transport has failed to pay
such amount within 5 days after demand for such payment pursuant to the GCI
Transport Keep-Well Agreement and no payments of the types referred to in clause
(ii) of the definition of "Operating Keep-Well Agreement" will be required
unless the Fiber Construction Facility Banks have taken commercially reasonable
efforts to exhaust their remedies against all assets of AULP, the Capital Stock
of AULP, and demand for payment against GCI Transport under the GCI Transport
Keep-Well Agreement and a filing of a claim for payment against GCI Transport
under the GCI Transport Keep-Well Agreement.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, amend, supplement or otherwise modify any term or
condition of any Fiber Construction Agreement in any manner that, directly or
indirectly, materially increases or adversely affects in a material manner any
obligation or contingent obligation of the Company or any of its Restricted
Subsidiaries under the Completion Guarantee, the Operating Keep-Well Agreement,
the Operating and Maintenance Contract, the Capacity Lease or any other
agreement or arrangement executed or delivered in connection with the Fiber
Construction Agreements or the transactions contemplated thereby.
SECTION 4.21. Operation of Unrestricted Subsidiaries. The Company
shall cause each of its Unrestricted Subsidiaries (i) to maintain continuously
articles or a certificate of incorporation or, in the case of a partnership, a
partnership agreement, providing that (a) such Unrestricted Subsidiary's purpose
is limited and, in the case of AULP, that such purpose is limited to conducting
the business contemplated by the Fiber Construction Agreements, (b) such
Unrestricted Subsidiary is prohibited from engaging in any dissolution,
liquidation, merger, consolidation or sale, transfer, assignment, lease,
conveyance or other disposal of all or substantially all of its Property in any
one transaction or series of transactions as long as any Indebtedness under the
Fiber Construction Facility remains outstanding, other than (1) any such
transaction with or into the Company or any of its Restricted Subsidiaries
otherwise effected and in accordance with the terms of this Indenture, (2) any
such transaction with or into another Unrestricted Subsidiary and (3) any such
transaction which, assuming for purposes of this clause (3) only that such
Unrestricted Subsidiary were a Restricted Subsidiary, would comply with Section
4.17; PROVIDED, HOWEVER, that any Net Available Cash derived therefrom may also
be used to prepay, repay or purchase Indebtedness under the Fiber Construction
Facility and (c) the Board of Directors of such Unrestricted Subsidiary or, in
the case of a partnership, of the corporate general partner of such partnership,
shall consist of not less than one independent director; (ii) to maintain
separate books and records including, without limitation, separate financial
statements; (iii) not to commingle any of its properties or assets with the
properties or assets of the Company or any Restricted Subsidiary; (iv) to pay
its liabilities, the salaries of its employees and all consultant and advisor
fees and expenses directly out of funds that do not comprise in whole or in part
the funds of the Company or any of its Restricted Subsidiaries and (v) otherwise
to hold itself out as a separate entity.
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ARTICLE 5
Successor Company
SECTION 5.01. Merger, Consolidation and Sale of Assets. The Company
shall not merge or consolidate with or into any other entity (other than a
merger of a wholly owned Restricted Subsidiary into the Company) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all
of its Property in any one transaction or series of transactions unless: (a)
the entity formed by or surviving any such consolidation or merger (if the
Company is not the surviving entity) or the Person to which such sale, transfer,
assignment, lease, conveyance or other disposition is made (the "Surviving
Entity") shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation expressly assumes, by supplemental indenture in form satisfactory to
the Trustee, executed and delivered to the Trustee by such corporation, the due
and punctual payment of the principal of and interest on all the Notes,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be performed by the
Company; (b) immediately before and after giving effect to such transaction or
series of transactions, no Default or Event of Default shall have occurred and
be continuing; (c) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including, without limitation, any
Indebtedness Incurred or anticipated to be Incurred in connection with such
transaction or series of transactions), the Company or the Surviving Entity, as
the case may be, would be able to Incur at least $1.00 of additional
Indebtedness under clause (a) of the first paragraph of Section 4.11, and (d) in
the case of a sale, transfer, assignment, lease, conveyance or other disposition
of all or substantially all of the Company's Property, such Property shall have
been transferred as an entirety or virtually as an entirety to one Person.
In connection with any consolidation, merger or transfer contemplated
by this Section 5.01, the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer, assignment, lease, conveyance or other
disposition and the supplemental indenture in respect thereof comply with this
Section 5.01, and that all conditions precedent herein provided for relating to
such transaction or transactions have been complied with.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company fails to make any payment of interest on any Note
when the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, and such failure continues for a period of 30
days;
44
(2) the Company (i) fails to make any payment of the principal of any
of the Notes, when the same becomes due and payable, upon acceleration,
redemption, optional redemption, required purchase or otherwise, or (ii)
fails to purchase Notes when required pursuant to this Indenture or the
Notes;
(3) the Company defaults in the observance or performance of any
other covenant or agreement contained in this Indenture and such default
continues for 30 days after written notice from the Trustee or the
registered holders of not less than 25% in aggregate principal amount of
the Notes then outstanding (except in the case of a default with respect to
Section 5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) the Company or any Restricted Subsidiary defaults under any
Indebtedness for borrowed money which results in acceleration of the
maturity of such Indebtedness, or failure to pay any such Indebtedness when
due within any applicable grace period, in a total amount greater than
$15,000,000;
(5) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
45
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days; or
(7) any judgment or judgments for the payment of money in an
uninsured aggregate amount in excess of $15,000,000 is rendered against the
Company or any Restricted Subsidiary and is not waived, satisfied or
discharged and for any period of 30 consecutive days following the entry of
such judgment during which a stay of enforcement shall not be in effect.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (3) (4) or (7) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the Notes
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 which with the giving of notice and the lapse of time would become an
Event of Default under clause (3), (4) or (7), 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 with respect to
the Notes (other than an Event of Default specified in Section 6.01(5) or (6))
occurs and is continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding may declare to be
immediately due and payable the principal amount of all the Notes then
outstanding, plus accrued but unpaid interest to the date of acceleration;
PROVIDED, HOWEVER, that after such acceleration but before a judgment or decree
based on acceleration is obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may rescind and annul such acceleration if all Events of Default, other
than the nonpayment of accelerated principal or interest, have been cured or
waived as provided in this Indenture. No rescission shall affect any subsequent
Default or impair any right consequent thereto. In case an Event of Default
specified in Section 6.01(5) or (6) shall occur, such amount with respect to all
of the Notes shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the Trustee or the holders of the
Notes.
46
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 Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder 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 Existing Defaults. The registered holders of
a majority in principal amount of the Notes then outstanding by notice to the
Trustee may waive an existing Default and its consequences or compliance with
any provision of this Indenture, except (i) a Default in the payment of the
principal of or interest on a Note or (ii) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each Noteholder
affected. When a Default is waived, it is deemed cured, but such waiver shall
not 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 of the Notes 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 Noteholders 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 it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. Limitation on Suits. No Holder will have any right to
institute any proceeding with respect to this Indenture or for any remedy
hereunder, unless:
(1) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding shall have made written request and offered
reasonable indemnity to the Trustee to institute such proceeding as a
trustee;
(3) the Trustee shall not have received from the registered holders
of a majority in aggregate principal amount of the Notes then outstanding a
direction inconsistent with such request; and
47
(4) the Trustee shall have failed to institute such proceeding within
60 days;
PROVIDED, HOWEVER, such limitations do not apply to a suit instituted by a
Holder for enforcement of payment of the principal of or interest on such Note
on or after the respective due dates expressed in such Note.
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 Notes held by such Holder, on or
after the respective due dates expressed in the Notes, 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 in
payment of interest or principal specified in Section 7.01(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 of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders 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 Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Company shall mail to each
48
Noteholder 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 and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully refrain from doing 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 its
exercise as a prudent Person would exercise or use under the circumstances in
the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default: (1) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (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, in the case of any such certificates
or opinions which are required by this Indenture to be delivered to the Trustee,
the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct
except that: (1) this paragraph does not limit
49
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 Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or an 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 of its selection, and the
advice or opinion of such counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or
50
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 Notes 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 Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes 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
Noteholder 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 Note (including
payments pursuant to the mandatory redemption provisions of such Note, if any),
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 Noteholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each August 15 beginning with the August 15 following the date
of this Indenture, and in any event prior to October 15 in each year, the
Trustee shall mail to each Noteholder a brief report dated as of August 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Company agrees to notify promptly the Trustee whenever the Notes
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 such compensation as the Company and the Trustee
shall agree in writing 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
each of the Trustee and any predecessor Trustee against any and all loss,
liability, damage, claim or expense (including reasonable attorneys' fees and
expenses)
51
incurred by it in connection with the acceptance of 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 Trustee shall not settle any such claim without the written
consent (which shall not be unreasonably withheld) of the Company, provided that
the giving of such consent does not conflict with the provisions of this
Indenture or the TIA. 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 Notes 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 Notes under Article 8 or otherwise.
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(5) or (6) with respect to
the Company, the expenses are intended to constitute expenses of administration
under 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
of the Notes 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 of the Notes 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
52
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. 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
25% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes 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 Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. No obligor upon the Notes or
Person directly controlling, controlled by, or under common control with such
obligor shall serve as Trustee upon the Notes. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311 (a), excluding any creditor
relationship listed in TIA Section 311 (b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311 (a) to the extent indicated.
53
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) When
(i) the Company delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.06) for cancellation or (ii) all outstanding
Notes have become due and payable and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Notes, including interest thereon (other than Notes replaced pursuant to Section
2.06), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Sections 8.01(c) and 8.06,
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), 8.02 and 8.06, the Company at any
time may terminate (i) all its obligations under the Notes and this Indenture
("legal defeasance option") or (ii) its obligations under any covenant under
Article 4 (other than Section 4.01) and 5.01(c) and the related operation of
Section 6.01(3) and the operation of Sections 6.01(4) and 6.01(5) (with respect
to Restricted Subsidiaries) ("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
Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Sections 6.01 (3), 6.01
(4), 6.01 (5) (with respect to Restricted Subsidiaries), 6.01 (6) (with respect
to Restricted Subsidiaries) and 6.01 (7) (except to the extent covenants or
agreements referenced in such Sections remain applicable).
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, 7.07, 7.08, 8.04, 8.05 and 8.06
shall survive until the Notes 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:
54
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Notes to maturity or an earlier 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 Notes to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(5) or (6) 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;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Noteholders will
not recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and 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
Noteholders 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 amount, 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 Notes as contemplated by this Article 8
have been complied with.
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
55
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 Notes.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Noteholders 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 Notes 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.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Notes without notice to or consent of
any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes; provided, however, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code;
56
(4) to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture;
(5) to add guarantees with respect to the Notes or to secure the
Notes;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA; or
(8) to make any change that does not adversely affect the rights of
any Noteholder.
After an amendment under this Indenture becomes effective, the Company
is required to mail to Noteholders a notice briefly describing such amendment.
However, the failure to give such notice to all Noteholders, or any defect
therein, will not impair or affect the validity of the amendment.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Notes without notice to any Noteholder but with
the written consent of the Holders of at least a majority in principal amount of
the Notes. However, without the consent of each Noteholder affected, an
amendment may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Note;
(3) reduce the principal of or extend the Stated Maturity of any
Note;
(4) make any Note payable in money other than that stated in the
Note;
(5) impair the right of any Noteholder to receive payment of
principal of and interest on such holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such holder's Notes;
(6) make any change in Article 10 that adversely affects the rights
of any Noteholder under Article 10; 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.
57
An amendment under this Section that makes any change that adversely
affects the rights under Article 10 of any holder of senior Indebtedness then
outstanding shall not be effective as to such holder unless such holder (or any
group or representative thereof authorized to give a consent on such holder's
behalf) consents to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, 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 Notes 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 Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Note or portion of
the Note 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 Noteholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders 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 Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
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
58
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 (i) amendment is authorized or permitted by this Indenture and that all
conditions precedent to the execution, delivery and performance of such
amendment have been satisfied; (ii) the Company has all necessary corporate
power and authority to execute and deliver the amendment and that the execution
delivery and performance of such amendment has been duly authorized by all
necessary corporate action; (iii) the execution, delivery and performance of the
amendment do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (a) the Indenture,
(b) the Certificate of Incorporation or By-Laws of the Company, (c) any law or
regulation applicable to the Company, (d) any material order, writ, injunction
or decree of any court or governmental instrumentality applicable to the Company
or (e) any material agreement or instrument to which the Company is subject;
(iv) such amendment has been duly and validly executed and delivered by the
Company, and the Indenture together with such amendment constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles; and (v) the
Indenture together with such amendment complies with the TIA.
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 Notes 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 and to the extent
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the TIA, such imposed duties or incorporated provision shall control.
59
SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
General Communication, Inc.
0000 Xxxxxx Xx.
Xxxxx 0000
Xxxxxxxxx, Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 X
Xxx Xxxx, X .Y. 10286
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Corporate Trust Trustee Administration
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 Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears in the Note Register
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
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.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
60
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
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 Noteholders.
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 regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 10.08. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE
61
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 Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Noteholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Notes.
SECTION 10.10. Successors. All agreements of the Company in this
Indenture and the Notes 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.
62
SECTION 10.13. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
GCI, INC.
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------------
Name:
Title:
63
EXHIBIT A
CUSIP No.
No.
GCI, INC.
% SENIOR NOTES DUE 2007
GCI, INC., an Alaska corporation, promises to pay to , or
registered assigns, the principal sum of dollars on , 2007.
Interest Payment Dates: and , commencing , 1997.
Record Dates: and .
Additional provisions of this Note are set forth on the other side of
this Note.
GCI, INC.
By:
-----------------------------------
Executive Vice President
--------------------------------------
Vice President
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION Dated: July __, 1997.
THE BANK OF NEW YORK, as
Trustee, certifies that
this is one of the Notes
referred to in the within-
mentioned Indenture.
By:
--------------------------------
64
Authorized Signatory
65
% SENIOR NOTES DUE 2007
1. Interest
GCI, Inc., an Alaska 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 Note at the
rate per annum shown above. The Company will pay interest semiannually on
and of each year. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date. Interest will be computed on the basis of a 360 day
year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Notes plus 2% per annum, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the Record Date immediately preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes 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 Notes represented by a Global Note (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 Note (including
principal, premium and interest), by mailing a check to the registered address
of each Holder thereof; provided, however, that payments on the Notes may also
be made, in the case of a Holder of at least $ aggregate principal amount
of Notes, 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, The Bank of New York, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice.
4. Indenture
The Company issued the Notes under an Indenture dated as of July ,
1997 ("Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated
66
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Notes are
subject to all such terms, and Noteholders are referred to the Indenture and the
Act for a statement of those terms.
The Notes are general unsecured obligations of the Company limited to
$150,000,000 aggregate principal amount. The Indenture imposes certain
limitations on the Company and the Restricted Subsidiaries, including the
incurrence of Indebtedness and Liens, the payment of dividends on and
retirements of the Capital Stock of the Company and the Restricted Subsidiaries,
the sale of assets and transactions with Affiliates. In addition, the Indenture
limits the ability of the Company and its Restricted Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. Redemption
(a) Optional Redemption. The Notes are not redeemable prior to
_________, 2002. At any time on or after ___________, 2002, the Notes are
redeemable at the option of the Company, in whole or in part, on not less than
30 nor more than 60 days' notice, at the following redemption prices (expressed
as percentages of principal amount), plus accrued and unpaid interest (if any)
to the date of redemption:
If redeemed during the 12-month period commencing _________ of the
year indicated:
REDEMPTION
YEAR PRICE
---- ----------
2002 . . . . . . . . . . . . . . . . . . . . . . . . . %
2003 . . . . . . . . . . . . . . . . . . . . . . . . . %
2004 . . . . . . . . . . . . . . . . . . . . . . . . . %
and thereafter, beginning ____________, 2005 at 100% of the principal
amount of the Notes.
(b) Optional Redemption Upon Public Equity Offerings. At any time,
or from time to time, on or prior to ___________, 2000, the Company may, at its
option, use the net cash proceeds of Public Equity Offerings to redeem up to a
maximum of 331/3% of the initially outstanding aggregate principal amount of
Notes at a redemption price equal to ___% of the principal amount of the Notes
(determined at the redemption date), together with accrued and unpaid interest
thereon to the date of redemption; PROVIDED that not less than $100 million
aggregate principal amount of the Notes are outstanding following any such
redemption.
67
In the event that less than all of the Notes are to be redeemed at any time,
selection of such Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which such Notes are listed or, if such Notes are not then listed on a national
securities exchange, on a PRO RATA basis, by lot or by such method as the
Trustee shall deem fair and appropriate; PROVIDED, HOWEVER, that no Notes of a
principal amount of $1,000 or less shall be redeemed in part; PROVIDED, FURTHER,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Notes or portions thereof for redemption shall be
made by the Trustee only on a PRO RATA basis or on as nearly a PRO RATA basis as
is practicable (subject to procedures of the Depository Trust Company "DTC"),
unless such method is otherwise prohibited.
6. Notice of Redemption
Notice of redemption shall be mailed by first-class mail at least 30
but not more than 60 days before the redemption date to each holder of Notes to
be redeemed at its registered address. If any Note is to be redeemed in part
only, the notice of redemption that related to such Notes shall state the
portion of the principal amount thereof to be redeemed. A new Note in a
principal amount equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original Note. On and after
the redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Issuer has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to the
Indenture.
7. Offers to Purchase
Sections 3.15 and 3.17 of the Indenture provide that, after certain
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. Denominations; Transfer; Exchange
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder shall transfer or exchange
Notes 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 of any Notes for a
period of 15 Business Days before the mailing of a notice of an offer to
repurchase Notes or 15 Business Days before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it
for all purposes.
68
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 written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Notes 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 Notes to redemption or maturity, as the case
may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the Notes then outstanding, and any
past Default, other than payment Defaults, or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in principal
amount of the Notes then outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Noteholder, the Company and the
Trustee may amend the Indenture or the Notes to, among other things, cure any
ambiguity, omission, defect or inconsistency, or to provide for the assumption
by a successor corporation of the obligations of the Company under this
Indenture, or to comply with Article 6 of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to
make any other change that does not adversely affect in any material respect the
rights of any Noteholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Notes; (ii) default in payment of principal of, or
premium, if any, on the Notes at maturity, upon acceleration, redemption, option
redemption or otherwise, or failure by the Company to purchase Notes when
required; (iii) failure by the Company or the Guarantor to comply with any other
covenant or agreement in the Indenture or in the Notes and such failure
continues for 30 days after written notice from the Trustee or the registered
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding; (iv) a default under any Indebtedness for borrowed money by the
Company or any Restricted Subsidiary which results in acceleration of the
maturity of such Indebtedness, or failure to pay any such Indebtedness when due
within any applicable grace period, in a total amount greater than $15 million;
(v) certain events involving bankruptcy, insolvency or reorganization of the
Company or any Restricted Subsidiary; and (vi) certain judgments or judgments
for the payment of money in an uninsured aggregate amount in excess of $15
million. If an Event of Default (other than an Event of Default
69
resulting from certain events of bankruptcy, insolvency or reorganization with
respect to the Company or any Restricted Subsidiary) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the Notes may
declare all the Notes to be due and payable immediately. Certain events
involving bankruptcy, insolvency or reorganization are Events of Default which
will result in the Notes being due and payable immediately upon the occurrence
of such Events of Default.
Noteholders may not enforce the Indenture or the Note except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders 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 Notes 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 Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each
Noteholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Notes.
16. Authentication
This Note 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 Note.
17. Abbreviations
Customary abbreviations may be used in the name of a Noteholder 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).
70
18. Indenture
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to be bound by the provisions of the Indenture, as the same may be amended from
time to time.
19. Governing Law
THIS NOTE 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.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to: General
Communication, Inc., 0000 Xxxxxx Xx., Xxxxx 0000, Xxxxxxxxx, Xxxxxx 00000,
Attention: Chief Financial Officer.
71
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code and insert
assignee's social security or tax I.D. number)
and irrevocably appoint _____________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him or her.
Date: Your Signature:
------------------------ ------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
-------------------------
72
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.17 of the Indenture, check the box:
Section 4.15 / /
Section 4.17 / /
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.17 of the Indenture, state the
amount in principal amount: $___________.
Date: Your Signature:
------------------------ ------------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
-------------------------
73
EXHIBIT B
GLOBAL NOTE LEGEND
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
74
