1
EXHIBIT 4.8
================================================================================
GLOBAL TELESYSTEMS GROUP, INC.
[ ]% Convertible Senior Subordinated Debentures
due 2010
---------------------
INDENTURE
Dated as of , 1998
---------------------
The Bank of New York
Trustee
================================================================================
2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1)............................................................... 8.10
(a)(2)............................................................... 8.10
(a)(3)............................................................... N.A.*
(a)(4)............................................................... N.A.
(a)(5)............................................................... 8.10
(b).................................................................. 8.8; 8.10
(c).................................................................. N.A.
311(a).................................................................. 8.11
(b).................................................................. 8.11
(c).................................................................. N.A.
312(a).................................................................. 2.5
(b).................................................................. 11.3
(c).................................................................. 11.3
313(a).................................................................. 8.6
(b)(1)............................................................... N.A.
(b)(2)............................................................... 8.6
(c).................................................................. 8.6; 11.2
(d).................................................................. 8.6
314(a).................................................................. 5.2; 5.4;11.2
(b).................................................................. N.A.
(c)(1)............................................................... 11.4(a)
(c)(2)............................................................... 11.4(a)
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 11.4(b)
(f).................................................................. N.A.
315(a).................................................................. 8.1(b)
(b).................................................................. 8.5; 11.2
(c).................................................................. 8.1(a)
(d).................................................................. 8.1(c)
(e).................................................................. 7.11
316(a)(last sentence)................................................... 2.9
(a)(1)(A)............................................................ 7.5
(a)(1)(B)............................................................ 7.4
(a)(2)............................................................... N.A.
(b).................................................................. 7.7
(c).................................................................. 11.5
317(a)(1)............................................................... 7.8
(a)(2)............................................................... 7.9
(b).................................................................. 2.4
318 (a).................................................................. 11.1
---------------
* N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
3
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.....................................................................1
SECTION 1.2. Other Definitions...............................................................8
SECTION 1.3. Trust Indenture Act Provisions..................................................8
SECTION 1.4. Rules of Construction...........................................................9
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating................................................................10
SECTION 2.2. Execution and Authentication...................................................10
SECTION 2.3. Registrar, Paying Agent and Conversion Agent...................................11
SECTION 2.4. Paying Agent to Hold Money In Trust............................................12
SECTION 2.5. Securityholder Lists...........................................................12
SECTION 2.6. Transfer and Exchange..........................................................12
SECTION 2.7. Replacement Securities.........................................................13
SECTION 2.8. Outstanding Securities.........................................................14
SECTION 2.9. Treasury Securities............................................................14
SECTION 2.10. Temporary Securities...........................................................15
SECTION 2.11. Cancellation...................................................................15
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.1. Right to Redeem; Notice to Trustee.............................................15
SECTION 3.2. Selection of Securities to Be Redeemed.........................................16
SECTION 3.3. Notice of Redemption...........................................................16
SECTION 3.4. Effect of Notice of Redemption.................................................17
SECTION 3.5. Deposit of Redemption Price....................................................17
SECTION 3.6. Securities Redeemed in Part....................................................18
SECTION 3.7. Conversion Arrangement on Call for Redemption..................................18
SECTION 3.8. Purchase of Securities at Option of the Holder Upon Change in Control..........19
SECTION 3.9. Effect of Change in Control Purchase Notice....................................23
SECTION 3.10. Deposit of Change in Control Purchase Price....................................24
SECTION 3.11. Securities Purchased In Part...................................................24
-i-
4
Page
----
SECTION 3.12. Compliance With Securities Laws Upon Purchase of Securities....................25
SECTION 3.13. Repayment to the Company.......................................................25
ARTICLE 4
CONVERSION
SECTION 4.1. Conversion Privilege...........................................................25
SECTION 4.2. Conversion Procedure...........................................................26
SECTION 4.3. Fractional Shares..............................................................28
SECTION 4.4. Taxes on Conversion............................................................28
SECTION 4.5. Company to Provide Stock.......................................................28
SECTION 4.6. Adjustment of Conversion Price.................................................28
SECTION 4.7. No Adjustment..................................................................33
SECTION 4.8. Adjustment for Tax Purposes....................................................33
SECTION 4.9. Notice of Adjustment...........................................................33
SECTION 4.10. Notice of Certain Transactions.................................................34
SECTION 4.11. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege........................................................34
SECTION 4.12. Trustee's Disclaimer...........................................................35
SECTION 4.13. Voluntary Reduction............................................................36
ARTICLE 5
COVENANTS
SECTION 5.1. Payment of Securities..........................................................36
SECTION 5.2. SEC Reports....................................................................36
SECTION 5.3. Compliance Certificates........................................................37
SECTION 5.4. Notice of Defaults.............................................................37
SECTION 5.5. Further Instruments and Acts...................................................37
SECTION 5.6. Liquidation....................................................................37
ARTICLE 6
SUCCESSOR CORPORATION
SECTION 6.1. When Company May Merge, Etc....................................................38
SECTION 6.2. Successor Corporation Substituted..............................................39
ARTICLE 7
DEFAULT AND REMEDIES
SECTION 7.1. Events of Default..............................................................39
SECTION 7.2. Acceleration...................................................................40
SECTION 7.3. Other Remedies.................................................................41
-ii-
5
Page
----
SECTION 7.4. Waiver of Defaults and Events of Default.......................................42
SECTION 7.5. Control by Majority............................................................42
SECTION 7.6. Limitations on Suits...........................................................42
SECTION 7.7. Rights of Holders to Receive Payment and to Convert............................43
SECTION 7.8. Collection Suit by Trustee.....................................................43
SECTION 7.9. Trustee May File Proofs of Claim...............................................43
SECTION 7.10. Priorities.....................................................................44
SECTION 7.11. Undertaking for Costs..........................................................44
SECTION 7.12. Waiver of Usury, Stay or Extension Laws........................................45
ARTICLE 8
TRUSTEE
SECTION 8.1. Duties of Trustee..............................................................45
SECTION 8.2. Rights of Trustee..............................................................46
SECTION 8.3. Individual Rights of Trustee...................................................47
SECTION 8.4. Trustee's Disclaimer...........................................................47
SECTION 8.5. Notice of Default or Events of Default.........................................47
SECTION 8.6. Reports by Trustee to Holders..................................................47
SECTION 8.7. Compensation and Indemnity.....................................................48
SECTION 8.8. Replacement of Trustee.........................................................49
SECTION 8.9. Successor Trustee by Merger, Etc...............................................50
SECTION 8.10. Eligibility; Disqualification..................................................50
SECTION 8.11. Preferential Collection of Claims Against Company..............................50
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.1. Satisfaction and Discharge of Indenture........................................51
SECTION 9.2. Application of Trust Money.....................................................52
SECTION 9.3. Repayment to Company...........................................................52
SECTION 9.4. Reinstatement..................................................................53
ARTICLE 10
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1. Without Consent of Holders.....................................................53
SECTION 10.2. With Consent of Holders........................................................53
SECTION 10.3. Compliance With Trust Indenture Act............................................55
SECTION 10.4. Revocation and Effect of Consents..............................................55
SECTION 10.5. Notation on or Exchange of Securities..........................................55
SECTION 10.6. Trustee to Sign Amendments, etc................................................55
-iii-
6
Page
----
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls...................................................56
SECTION 11.2. Notices........................................................................56
SECTION 11.3. Communications by Holders With Other Holders...................................57
SECTION 11.4. Certificate and Opinion as to Conditions Precedent.............................57
SECTION 11.5. Record Date for Vote or Consent of Securityholders.............................58
SECTION 11.6. Rules by Trustee, Paying Agent, Registrar and Conversion Agent.................58
SECTION 11.7. Legal Holidays.................................................................58
SECTION 11.8. Governing Law..................................................................58
SECTION 11.9. No Adverse Interpretation of Other Agreements..................................59
SECTION 11.10. No Recourse Against Others.....................................................59
SECTION 11.11. Successors.....................................................................59
SECTION 11.12. Multiple Counterparts..........................................................59
SECTION 11.13. Separability...................................................................59
SECTION 11.14. Table of Contents, Headings, etc...............................................59
ARTICLE 12
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Indebtedness.................................59
SECTION 12.2. Securities Subordinated to Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation, Reorganization, Etc., of the Company...........60
SECTION 12.3. Securityholders to Be Subrogated to Right of Holders of Senior
Indebtedness................................................................62
SECTION 12.4. Obligations of the Company Unconditional.......................................62
SECTION 12.5. Company Not to Make Payment With Respect to Securities in Certain
Circumstances...............................................................63
SECTION 12.6. Notice to Trustee..............................................................64
SECTION 12.7. Application by Trustee of Money Deposited With It..............................65
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of Company or
Holders of Senior Indebtedness..............................................66
SECTION 12.9. Trustee to Effectuate Subordination............................................66
-iv-
7
Page
----
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness...................................66
SECTION 12.11. Article 5 Not to Prevent Events of Default.....................................66
SECTION 12.12. No Fiduciary Duty Created to Holders of Senior Indebtedness....................67
SECTION 12.13. Article Applicable to Paying Agents............................................67
EXHIBIT A.......................................................................................A-1
-v-
8
THIS INDENTURE dated as of [ ], 1998, is between Global
TeleSystems Group, Inc., a Delaware corporation (the "Company"), and The Bank of
New York, a New York banking corporation, as Trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and
for the equal and ratable benefit of the registered holders of the Company's [
]% Convertible Senior Subordinated Debentures due 2010:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions
"Affiliate" means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means any obligation under a
lease of (or other agreement conveying the right to use) any property (whether
real, personal or mixed) that is required to be classified and accounted for as
a capital amount thereof at such date, determined in accordance with GAAP.
"Cash" or "cash" means such coin or currency of the United
States as at any time of payment is legal tender for the payment of public and
private debts.
"Common Stock" means the common stock of the Company, $.10 par
value, as it exists on the date of this Indenture and any shares of any class or
classes of capital stock of the Company resulting from any reclassification or
reclassifications thereof.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture, and thereafter means
the successor.
9
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of this Indenture is
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Trust Trustee Administration or at any other time at such other address as the
Trustee may designate from time to time by notice to the Company.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Issuer or any Subsidiary or any Significant Joint Venture against
fluctuations in currency values.
"Default" or "default" means any event which is, or after
notice or passage of time, or both, would be an Event of Default.
"Eligible Joint Venture" means a Joint Venture (other than a
Subsidiary) (a) that is formed with respect to the construction, development,
acquisition, servicing, ownership, improvement, operation or management of a
telecommunications business, (b) in which the Company, directly or indirectly,
owns at least 25% of the outstanding capital stock or other ownership interest
therein and (c) in respect of which the Company, directly or indirectly, either
(i) controls, by voting power, membership on the board of directors or
management committee or other similar governing body, or through the provisions
of any applicable partnership, joint venture, shareholder or other similar
agreement or under an operating, maintenance or management agreement or
otherwise, the management and operation of the Joint Venture and any
telecommunications project of such Joint venture or (ii) otherwise has the right
to control or veto material acts and decisions with respect to the management or
operation of the Joint Venture that, taken as a whole, are substantially similar
to the rights of the Company with respect to the Existing Joint Ventures as of
the date of original issuance of the Debentures.
"Existing Joint Ventures" means each of PrymTelefon,
Bancomsvyaz, TeleCommunications of Moscow, GTS Monaco Access X.X.X., Sovam
Teleport Kiev Divison L.L.C., EDN Sovintel, all the entities in which
SFMT-Rusnet, Inc. currently has an interest, all the entities in which Vostok
Mobile b.v. currently has an interest and their respective successors.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial
-2-
10
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States of America, which are applicable from time to time and are
consistently applied.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without
duplication, (a) all liabilities of such person for borrowed money or for the
deferred purchase price of property or services, excluding any (i) trade account
payables arising in the ordinary course of business and (ii) other accrued
current liabilities incurred in the ordinary course of business, including,
without limitation, all obligations, contingent or otherwise, of such person in
connection with any letters of credit, banker's acceptance or other similar
credit transactions; (b) all obligations of such person evidenced by bonds,
debentures or other similar instruments; (c) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such person (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business; (d) all Capitalized Lease
Obligations of such person; (e) all Indebtedness referred to in the preceding
clauses of other persons and all dividends of other persons, the payment of
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such person, even though such person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured); (f) all guarantees of Indebtedness referred to in this
definition by such person; (g) all Redeemable Capital Stock of such person,
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued dividends; (h) all obligations under or in respect of
Currency Agreements and Interest Rate Protection Obligations of such person; (i)
any Preferred Stock of such person that provides for payments of liquidation
value by way of a sinking fund, or by way of a mandatory redemption, defeasance,
retirement, repurchase or otherwise, or allows the holder the option to redeem,
in each case prior to the 91st day prior to the Maturity of the Debentures
(valued at the sum of (without duplication) (A) the liquidation preference
thereof, (B) any mandatory redemption payment obligations in respect thereof and
(C) accrued dividends thereon); and (j) any amendment, supplement, modification,
deferral, renewal, extension or refunding
-3-
11
of any liability of the types referred to in clauses (a) through (i) above. For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to the Indenture, and if such price is based upon, or
measured by, the fair market value of such Redeemable Capital Stock, such fair
market value shall be determined in good faith by the board of directors of the
issuer of such Redeemable Capital Stock.
"Indenture" means this Indenture as amended or supplemented
from time to time pursuant to the terms of this Indenture.
"Interest Rate Protection Agreement" means any arrangement
with any other person whereby, directly or indirectly, such person is entitled
to receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such person calculated by applying a fixed or a
floating rate of interest on the same notional amount and shall include without
limitation, interest rate swaps, caps, floors, collars and similar agreements.
"Interest Rate Protection Obligations" means the obligations
of any person pursuant to an Interest Rate Protection Agreement.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether corporation, partnership or other legal form where
the Company or one or more Subsidiaries has, directly or indirectly, less than a
majority of the Voting Stock or other ownership interest.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim or
preference or priority or other encumbrance upon or with respect to any property
of any kind; provided, that in no event shall an operating lease be deemed to
constitute a Lien. A person shall be deemed to own subject to Lien any property
which such person has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement.
"Material Joint Venture" means a Joint Venture that, as of the
end of the most recent four-quarter period, had (i) total assets which exceeded
10 percent of the total combined assets of the Company at the end of such period
or
-4-
12
(ii) total revenues which exceeded 15 percent of the total combined revenues of
the Company for such period.
"Maturity" means, (i) when used with respect to the
Debentures, , 2010 and (ii) when used with respect to any Indebtedness other
than the Debentures, the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Officer" means the Chairman or any Co-Chairman of the Board,
any Vice Chairman of the Board, the President, any Vice President, the Chief
Financial Officer, the Secretary or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers; provided, however, that for purposes of Section 5.4, "Officers'
Certificate" means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel. The counsel may be an employee of or counsel to the Company or the
Trustee.
"Permitted Holders" means (a) Xxxx X. Xxxxxx and any entity
controlled by him, (b) one or more of Xxxxxx Xxxxx, Xxxxx Fund Management LLC,
Xxxxxxxx Xxxxxxxxxx or Chatterjee Management Company or Affiliates of any of the
foregoing, and any person or entity for which any such person or entity acts as
investment advisor or investment manager and (c) charitable organizations
controlled by or affiliated with any of the Persons named in the foregoing
clauses (a) and (b).
"Person" or "person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, or any other entity or organization, including a government or
political subdivision or instrumentality thereof.
"Preferred Stock" of any person means capital stock of such
person of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such person, to shares of
capital stock of any other class of such person.
"Principal" or "principal" of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
-5-
13
"Redeemable Capital Stock" means any shares of any class or
series of Capital Stock, that, either by the terms thereof, by the terms of any
security into which it is convertible or exchangeable or by contract or
otherwise, is or upon the happening of an event or passage of time would be,
required to be redeemed prior to the Maturity with respect to the principal of
the Debentures or is redeemable at the option of the holder thereof at any time
prior to any such Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Maturity.
"Redemption Date" or "redemption date," when used with respect
to any Security to be redeemed, means the date fixed for such redemption
pursuant to this Indenture.
"Redemption Price" or "redemption price, when used with
respect to any Security to be redeemed, means the price fixed for such
redemption pursuant to this Indenture, as set forth in the form of Security
annexed as Exhibit A hereto.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means the [ ]% Convertible Senior Subordinated
Debentures due 2010 or any of them (each, a "Security"), as amended or
supplemented from time to time, that are issued under this Indenture.
"Senior Indebtedness" means the principal of, premium, if any,
interest, and other amounts payable on or in respect of any Indebtedness of the
Company, whether outstanding on the date of original issuance or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Debentures. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (a) Indebtedness evidenced by
the Debentures, (b) Indebtedness that is pursuant to the instrument creating
such Indebtedness expressly subordinate or junior in right of payment to any
Indebtedness of the Company, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) or Xxxxx 00, Xxxxxx Xxxxxx Code,
is without recourse to the Company, (d) Indebtedness that is presented by
Redeemable Capital Stock, (e) Indebtedness for goods, materials or services
purchased in the ordinary course of business or Indebtedness consisting of trade
account payables or other current liabilities incurred in the ordinary course of
business, (f) Indebtedness of or amounts owed by the Company for compensation to
employees or for services rendered to the Company, (g) any liability for
federal, state, local or
-6-
14
other taxes owed or owing by the Company, (h) Indebtedness of the Company to a
Wholly Owned Subsidiary or any other Affiliate of the Company or any of such
Affiliate's Wholly Owned Subsidiaries and (i) amounts owing under leases (other
than Capitalized Lease Obligations).
"Subsidiary" means, with respect to the Company, (i) a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned by the Company, by one or more Subsidiaries of the Company or
by the Company and one or more Subsidiaries and (ii) any other person (other
than a corporation), including, without limitation, a joint venture, in which
the Company, one or more Subsidiaries of the Company or the Company and one or
more Subsidiaries, directly or indirectly, at the date of determination thereof,
has at least majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other person performing similar
functions). For purposes of this definition, any directors' qualifying shares or
investments by foreign nationals mandated by applicable law shall be disregarded
in determining the ownership of a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990 and as in effect on the date of this
Indenture, except as provided in Section 10.3, and except to the extent an
amendment to the Trust Indenture Act expressly provides for application of the
Trust Indenture Act as in effect on another date.
"Trading Day" means, with respect to an security, each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on which securities
are not generally traded on the exchange or market in which such security is
traded.
"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.
"Trust Officer" means, with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any managing director,
vice president, assistant vice president, assistant treasurer, assistant
secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above-designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
-7-
15
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof under ordinary circumstances have the
power to vote in the election of the board of directors, managers or trustees of
any person (irrespective of whether or not, at the time, Capital Stock of any
other class or classes shall have, or might have, voting power by reason of the
happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Company
of which 100 percent of the outstanding Capital Stock is owned by the Company or
by one or more Wholly-Owned Subsidiaries of the Company or by the Company and
one or more Wholly-Owned Subsidiaries of the Company. For purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Subsidiary.
SECTION 1.2. Other Definitions
Term Defined In Section
---- ------------------
"Bankruptcy Law"................................................................ 7.1
"Change in Control.............................................................. 3.8
"Change in Control Purchase Date"............................................... 3.8
"Change in Control Purchase Notice"............................................. 3.8
"Change in Control Purchase Price".............................................. 3.8
"Company Order"................................................................. 2.2
"Conversion Agent".............................................................. 2.3
"Conversion Date"............................................................... 4.2
"Conversion Price".............................................................. 4.6
"Conversion Shares"............................................................. 4.6
"Custodian"..................................................................... 7.1
"Determination Date"............................................................ 4.6
"Distribution Date"............................................................. 4.6
"Event of Default".............................................................. 7.1
"Exchange Act".................................................................. 3.8
"Legal Holiday"................................................................. 11.7
"NYSE".......................................................................... 4.6
"Paying Agent".................................................................. 2.3
"Purchase Agreement"............................................................ 2.1
"Registrar"..................................................................... 2.3
"Rights"........................................................................ 4.6
"Triggering Distribution"....................................................... 4.6
"Unissued Shares"............................................................... 3.8
SECTION 1.3. Trust Indenture Act Provisions
Whenever this Indenture refers to a provision of the TIA, that
provision is incorporated by reference in and made a part of this Indenture. The
Indenture shall also include those provisions of the TIA required to be included
herein by the
-8-
16
provisions of the Trust Indenture Reform Act of 1990. The following TIA terms
used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.4. 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 generally accepted accounting
principles in the United States of America and in effect on the
date hereof, and any other reference in this Indenture to
"generally accepted accounting principles" refers to generally
accepted accounting principles in the United States of America
and in effect on the date hereof;
(3) words in the singular include the plural, and words in
the plural include the singular;
(4) provisions apply to successive events and transactions;
(5) the term "merger" includes a statutory share exchange
and the term "merged" has a correlating meaning;
(6) the masculine gender includes the feminine and the
neuter;
(7) references to agreements and other instruments include
subsequent amendments thereto; and
-9-
17
(8) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating
The Securities and the Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibit A which is incorporated
in and made part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Security
shall be dated the date of its authentication. The Securities are being offered
and sold by the Company pursuant to a Purchase Agreement, dated [ ], 1998 (the
"Purchase Agreement"), among the Company and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation.
SECTION 2.2. Execution and Authentication
An Officer shall sign the Securities for the Company by manual
or facsimile signature. The Company's seal shall be affixed to or reproduced on
the Securities and attested by the Secretary or an Assistant Secretary of the
Company. Typographic and other minor errors or defects in any such reproduction
of the seal or any such facsimile signature shall not affect the validity or
enforceability of any Security which has been authenticated and delivered by the
Trustee.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$400,000,000 (plus up to an additional $60,000,000 issued pursuant to the
exercise of the over-allotment option described in the Purchase Agreement upon
receipt of a written order or orders of the Company signed by two Officers of
the Company (a "Company Order"). The Company Order shall specify the amount of
Securities to be authenticated and
-10-
18
the date on which each original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$400,000,000, except as provided above and in Section 2.7.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.3. Registrar, Paying Agent and Conversion Agent
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency where Securities may be presented for payment
(the "Paying Agent"), an office or a agency where Securities may be presented
for conversion (the "Conversion Agent") and an office or agency where notices
and demands to or upon the Company in respect of the securities and this
Indenture may be served. The Registrar shall keep a register of the Securities
and of their transfer and exchange.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. 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 Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands, or fails to give the foregoing notice,
the Trustee shall act as such. The Company or any Affiliate of the Company may
act as Paying Agent (except for the purposes of Section 5.1 and Article 9),
Registrar or Conversion Agent.
The Company initially appoints the Trustee as Registrar,
Paying Agent, Conversion Agent and agent for service of notices and demands in
connection with the Securities.
-11-
19
SECTION 2.4. Paying Agent to Hold Money In Trust
Prior to 11:00 a.m., New York City time, on each due date of
the principal of or interest on any Securities, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal or interest so becoming
due. Subject to Section 12.7, the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company (or any other obligor on the Securities)
in making any such payment. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall, before 11:00 a.m., New York City time, on each due
date of the principal of or interest on any Securities, segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee, and the Trustee may at any
time during the continuance of any default, upon written request to a Paying
Agent, require such Paying Agent to forthwith pay to the Trustee all sums so
held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than
the Company) shall have no further liability for the money.
SECTION 2.5. Securityholder Lists
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee on or before each semiannual interest payment date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.6. Transfer and Exchange
When a Security is presented to the Registrar with a request
to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by
the Holder thereof or its attorney duly authorized in writing. To permit
registration of transfers and exchanges, upon surrender of any Security for
registration of transfer or exchange at the office or agency maintained pursuant
to Section 2.3, the Company shall execute and the Trustee shall authenticate
Securities of a like aggregate principal amount at the Registrar's request. An
exchange or
-12-
20
transfer shall be without charge, except that the Company or the Registrar may
require payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto, and provided
further that this sentence shall not apply to any exchange pursuant to Section
2.10, 3.6, 3.11, 4.2 (last paragraph) or 10.5.
Neither the Company, the Registrar nor the Trustee shall be
required to exchange or register a transfer of (a) any Securities for a period
of 15 days next preceding any selection of Securities to be redeemed, (b) any
Securities or portions thereof selected or called for redemption (except, in the
case of redemption of a Security in part, the portion not to be redeemed) or (c)
any Securities or portions there in respect of which a Change in Control
Purchase Notice has been delivered and not withdrawn by the Holder thereof
(except, in the case of the purchase of a Security in part, the portion not to
be purchased).
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same debt
and entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
SECTION 2.7. Replacement Securities
If any mutilated Security is surrendered to the Company, the
Registrar or the Trustee, or the Company, the Registrar and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company, the Registrar and the Trustee
such Security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company, the Registrar or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be redeemed or
purchased by the Company pursuant to Article 3, the Company in its discretion
may, instead of issuing a new Security, pay, redeem or purchase such Security,
as the case may be.
Upon the issuance of any new Securities under this Section
2.7, the Company may require the payment of a sum sufficient
-13-
21
to cover any tax, assessment or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee or the Registrar) in connection therewith.
Every new Security issued pursuant to this Section 2.7 in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.8. Outstanding Securities
Securities outstanding at any time are all Securities
authenticated by the Trustee, except for those canceled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases
to be outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds on a
redemption date or maturity date money sufficient to pay the principal of
(including premium, if any) and accrued interest on Securities payable on that
date, then on and after that date such Securities cease to be outstanding and
interest on them ceases to accrue.
Subject to the restrictions contained in Section 2.9, a
Security does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Security.
SECTION 2.9. Treasury Securities
In determining whether the Holders of the required principal
amount of Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that, for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are
-14-
22
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to the
Securities and that the pledgee is not the Company or any other obligor on the
Securities or any Affiliate of the Company or of such other obligor.
SECTION 2.10. Temporary Securities
Until definitive Securities are ready for delivery, the
Company may prepare and execute, and, upon receipt of a Company Order, the
Trustee shall authenticate and deliver, temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company with the consent of the Trustee considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate and deliver definitive
Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee or its agent any Securities surrendered to them for
transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, redemption, payment, conversion or cancellation and
shall deliver the canceled Securities to the Company. The Company may not issue
new Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 4.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.1. Right to Redeem; Notice to Trustee
The Securities may be redeemed at the election of the Company,
as a whole or from time to time in part, at any time on or after [ ], 2001, at
the redemption prices specified in paragraph 5 of the form of Security attached
hereto as Exhibit A, together with accrued interest up to but not including the
Redemption Date.
If the Company elects to redeem Securities pursuant to this
Section 3.1 and paragraph 5 of the Securities, it shall
-15-
23
notify the Trustee at least 35 days prior to the redemption date as fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee) of the
redemption date and the principal amount of Securities to be redeemed. If fewer
than all of the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.
SECTION 3.2. Selection of Securities to Be Redeemed
If less than all of the Securities are to be redeemed, the
Trustee shall, not more than 60 days prior to the redemption date, select the
Securities to be redeemed by lot. The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption, pro rata or by
another method the Trustee considers fair and appropriate. Securities in
denominations of $1,000 may only be redeemed in whole. The Trustee may select
for redemption portions (equal to $1,000 or any multiple thereof) of the
principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed shall
be treated by the Trustee as outstanding for the purpose of such selection.
SECTION 3.3. Notice of Redemption
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed a notice of redemption to
each Holder of Securities to be redeemed at such Holder's address as it appears
on the Registrar's books.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the then current Conversion Price;
-16-
24
(4) the name and address of the Paying Agent and the
Conversion Agent;
(5) that Securities called for redemption must be presented
and surrendered to the Paying Agent to collect the redemption price;
(6) that the Securities called for redemption may be
converted at any time before the close of business on the redemption
date;
(7) that Holders who wish to convert Securities must satisfy
the requirements in paragraph 8 of the Securities;
(8) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption shall
cease accruing on and after the redemption date and the only remaining
right of the Holder shall be to receive payment of the redemption price
upon presentation and surrender to the Paying Agent of the Securities;
and
(9) if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, after
the redemption date, upon presentation and surrender of such Security,
a new Security or Securities in aggregate principal amount equal to the
unredeemed portion thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.4. Effect of Notice of Redemption
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice, except for Securities that are converted in
accordance with the provisions of Section 4.1. Upon presentation and surrender
to the Paying Agent, Securities called for redemption shall be paid at the
redemption price, plus accrued interest up to but not including the redemption
date.
SECTION 3.5. Deposit of Redemption Price
Prior to 11:00 a.m. New York City time, on the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company acts
as Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that
-17-
25
date, other than Securities or portions thereof called for redemption on that
date which have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall return to the Company any money not
required for that purpose because of the conversion of Securities pursuant to
Article 4 or otherwise. If such money is then held by the Company in trust and
is not required for such purpose, it shall be discharged from the trust.
SECTION 3.6. Securities Redeemed in Part
Upon presentation and surrender of a Security that is redeemed
in part, the Company shall execute and the Trustee shall authenticate for and
deliver to the Holder a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.
SECTION 3.7. Conversion Arrangement on Call for Redemption
In connection with any redemption of Securities, the Company
may arrange for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Paying Agent in trust
for the Securityholders, on or before the close of business on the Redemption
Date, an amount that, together with any amounts deposited with the Paying Agent
by the Company for the redemption of such Securities, is not less than the
Redemption Price, together with interest, if any, accrued to, but not including,
the Redemption Date, of such Securities. Notwithstanding anything to the
contrary contained in this Article 3, the obligation of the Company to pay the
Redemption Price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option of
the Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Paying Agent shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid to
it for purchase and conversion in the same manner as it would money deposited
with it by the Company for the redemption of Securities. Without the Paying
Agent's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Securities shall increase or
otherwise affect any of the powers, duties, responsibilities or
-18-
26
obligations of the Paying Agent as set forth in this Indenture, and the Company
agrees to indemnify the Paying Agent from, and hold it harmless against, any
loss, liability or expense arising out of or in connection with any such
arrangement for the purchase and conversion of any Securities between the
Company and such purchasers, including the costs and expenses incurred by the
Paying Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
SECTION 3.8. Purchase of Securities at Option of the Holder Upon Change in
Control
(a) If at any time that Securities remain outstanding
there shall have occurred a Change in Control, Securities shall be purchased by
the Company at the option of the Holder thereof, as of the date that is 30
Business Days after the occurrence of the Change in Control (the "Change in
Control Purchase Date") at a purchase price equal to 100% of the principal
amount thereof (the "Change in Control Purchase Price") plus accrued interest up
to but not including the Change in Control Purchase Date, subject to
satisfaction by or on behalf of any Holder of the requirements set forth in
subsection (c) of this Section 3.8.
A "Change in Control" shall be deemed to have occurred at such
time after the initial issuance of the Securities if there shall occur:
(1) any Person or group, other than the Permitted Holders,
is or becomes owner, directly or indirectly, of shares of capital stock
of the Company representing 50% of the total voting power of all shares
of capital stock of the Company or has the power, directly or
indirectly, to elect a majority of the members of the Board of
Directors of the Company;
(2) the Company consolidates with, or merges with or into,
another Person or the Company sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of the assets
of the Company, or any Person consolidates with, or merges with or
into, the Company, in any such event other than pursuant to a
transaction in which the Person or Persons that "beneficially owned,"
directly or indirectly, shares of capital stock of the Company
representing a majority of the total voting power of all classes of
capital stock of the Company immediately prior to such transaction,
"beneficially own," directly or indirectly, shares of capital stock of
the Company representing a majority of the total voting power
-19-
27
of all classes of capital stock of the surviving or transferee Person;
(3) during any consecutive two year period, individuals who
at the beginning of such period constituted the Board of Directors of
the Company (together with any new directors whose election by the
Board of Directors of the Company or whose nomination for election by
the stockholders of the Company was previously approved by a vote of a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason (other than by action of the Permitted Holders) to constitute a
majority of the Board of Directors of the Company, then in office; or
(4) there shall occur the liquidation or dissolution of the
Company.
For purposes of a Change in Control, "group" has the meaning
under Section 13(d) and 14(d) 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.
Notwithstanding the foregoing, a Change of Control will be
deemed not to have occurred (i) if the last sale price of the Common Stock for
any five trading days during the ten trading days immediately preceding the
Change of Control is at least equal to 105% of the Conversion Price in effect
immediately preceding the Change of Control or (ii) if at least 90% of the
consideration (excluding cash payments for fractional shares or cash payments
for appraisal rights) in the transaction or transactions constituting the Change
in Control consists of shares of common Stock or securities convertible into
shares of common stock that are, or upon issuance will be, traded on a national
securities exchange or through the Nasdaq National Market.
A "beneficial owner" shall be determined in accordance with
Rule 13d-3 promulgated by the Commission under the Exchange Act, as in effect on
the date of execution of this Indenture, except that, for purposes of this
subsection (a), the number of shares of capital stock of the Company entitling
the holders thereof to vote generally in elections of directors shall be deemed
to include, in addition to all outstanding shares of capital stock of the
Company entitling the holders thereof to vote generally in the election of
directors and Unissued Shares deemed to be held by the Person with respect to
which the Change in Control determination is being made, all
-20-
28
Unissued Shares deemed to be held by all other Persons. As used herein,
"Unissued Shares" shall mean shares of capital stock of the Company not
outstanding that are subject to options, warrants, rights to purchase or
conversion privileges exercisable within 60 days following the date of
determination of a Change in Control and that, upon issuance, shall entitle the
holders thereof to vote generally in the election of directors.
(b) Within 10 Business Days after the occurrence of a
Change in Control, the Company shall mail a written notice of Change in Control
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law) and shall cause a copy of such notice to be published in a daily
newspaper of national circulation. The notice shall include the form of a Change
in Control Purchase Notice to be completed by the Holder and shall state:
(1) the date of such Change in Control and, briefly, the
events causing such Change in Control;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.8 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Securities;
(6) the name and address of the Paying Agent and the
Conversion Agent;
(7) the then current Conversion Price;
(8) that Securities as to which a Change in Control Purchase
Notice has been given may be converted into Common Stock only to
the extent that the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(9) the procedures that the Holder must follow to exercise
rights under this Section 3.8;
(10) the procedures for withdrawing a Change in Control
Purchase Notice, including a form of notice of withdrawal; and
-21-
29
(11) that the Holder must satisfy the requirements set forth
in the Securities in order to convert the Securities.
(c) A Holder may exercise its rights specified in
subsection (a) of this Section 3.8 upon delivery of a written notice of the
exercise of such rights (a "Change in Control Purchase Notice") to the Paying
Agent at any time prior to the close of business on the Business Day next
preceding the Change in Control Purchase Date, stating:
(1) the certificate number of each Security that the Holder
will deliver to be purchased;
(2) the portion of the principal amount of each Security
that the Holder will deliver to be purchased, which portion must
be $1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the
terms and conditions specified in this Indenture.
The delivery of such Security to the Paying Agent (together
with all necessary endorsements) at the office of the Paying Agent shall be a
condition to the receipt by the Holder of the Change in Control Purchase Price
therefor; provided, however, that such Change in Control Purchase Price shall be
so paid pursuant to this Section 3.8 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant
to this Section 3.8, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security pursuant to Sections
3.8 through 3.13 also apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this subsection (c) shall have the right to withdraw such Change
in Control Purchase Notice in whole or in a portion thereof that is $1,000 or in
an integral multiple thereof at any time prior to the close of business on the
Business Day next preceding the Change in Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 3.9.
-22-
30
The Paying Agent shall promptly notify the Company of the
receipt by it of any Change in Control Purchase Notice or written withdrawal
thereof.
SECTION 3.9. Effect of Change in Control Purchase Notice
Upon receipt by the Paying Agent of the Change in Control
Purchase Notice specified in Section 3.8(c), the Holder of the Security in
respect of which such Change in Control Purchase Notice was given shall (unless
such Change in Control Purchase Notice is withdrawn as specified below)
thereafter be entitled to receive solely the Change in Control Purchase Price
with respect to such Security plus accrued interest thereon up to but not
including the Change in Control Purchase Date. Such Change in Control Purchase
Price and accrued interest shall be paid to such Holder promptly following the
later of (a) the Change in Control Purchase Date with respect to such Security
(provided the conditions in Section 3.8(c) have been satisfied) and (b) the time
of delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.8(c). Securities in respect of which a Change in
Control Purchase Notice has been given by the Holder thereof may not be
converted into shares of Common Stock on or after the date of the delivery of
such Change in Control Purchase Notice unless such Change in Control Purchase
Notice has first been validly withdrawn.
A Change in Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered by the Holder to the office of the
Paying Agent at any time prior to the close of business on the Business Day
immediately preceding the Change in Control Purchase Date, specifying:
(1) the certificate number of each Security in respect of
which such notice of withdrawal is being submitted;
(2) the principal amount of the Security or portion thereof
with respect to which such notice of withdrawal is being
submitted; and
(3) the principal amount, if any, of such Security that
remains subject to the original Change in Control Purchase Notice
and that has been or will be delivered for purchase by the
Company.
There shall be no purchase of any Securities pursuant to
Section 3.8 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Securities, of the required Change in Control
Purchase Notice) and is continuing an Event of Default (other than a default in
the payment
-23-
31
of the Change in Control Purchase Price with respect to such Securities).
SECTION 3.10. Deposit of Change in Control Purchase Price
At or before 11:00 a.m., New York City time, on the second
Business Day immediately following a Change in Control Purchase Date, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the aggregate
Change in Control Purchase Price of all the Securities or portions thereof that
are to be purchased as of such Change in Control Purchase Date plus accrued
interest thereon up to but not including the Change in Control Purchase Date.
The manner in which the deposit required by this Section 3.10 is made by the
Company shall be at the option of the Company, provided that such deposit shall
be made in a manner such that the Trustee or the Paying Agent shall have
immediately available funds on the second Business Day immediately following the
Change in Control Purchase Date.
If the Paying Agent holds, in accordance with the terms
hereof, money sufficient to pay the Change in Control Purchase Price of any
Security tendered for purchase, then, on the second Business Day immediately
following to the Change in Control Purchase Date, such Security will cease to be
outstanding and will be deemed paid, whether or not such Security is delivered
to the Paying Agent, and all other rights of the Holder in respect thereof shall
terminate (other than the right to receive the Change in Control Purchase Price
upon delivery of such Security).
SECTION 3.11. Securities Purchased In Part
Any Security that is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney-in-fact duly authorized in writing), and
promptly after the Change in Control Purchase Date the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of such authorized
denomination or denominations as may be requested by such Holder, in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
-24-
32
SECTION 3.12. Compliance With Securities Laws Upon Purchase of Securities
In connection with any offer to purchase or purchase of
Securities under Section 3.8 (provided that such offer or purchase constitutes
an "issuer tender offer" for purposes of Rule 13e-4 under the Exchange Act
(which term, as used herein, includes any successor provision thereto) at the
time of such offer or purchase), the Company shall (a) comply with Rule 13e-4
and Rule 14e-1 under the Exchange Act, (b) file the related Schedule 13E-4 (or
any successor or similar schedule, form or report) under the Exchange Act, and
(c) otherwise comply with all federal and state securities laws so as to permit
the rights of the Holders and obligations of the Company under Sections 3.8
through 3.11 to be exercised in the time and in the manner specified therein.
SECTION 3.13. Repayment to the Company
Subject to the provisions of Section 5.7, to the extent that
the aggregate amount of cash deposited by the Company pursuant to Section 3.10
exceeds the aggregate Change in Control Purchase Price of the Securities or
portions thereof that the Company is obligated to purchase, plus accrued
interest thereon up to but not including the Change in Control Purchase Date,
then promptly after the second Business Day immediately following the Change in
Control Purchase Date, the Trustee or the Paying Agent, as the case may be,
shall return any such excess to the Company.
ARTICLE 4
CONVERSION
SECTION 4.1. Conversion Privilege
Subject to the further provisions of this Section 4.1, a
Holder of a Security may convert such Security into Common Stock at any time
prior to maturity, at the Conversion Price then in effect; provided, however,
that, if such Security is called for redemption pursuant to Article 3, such
conversion right shall terminate at the close of business on the Business Day
immediately preceding the redemption date for such Security (unless the Company
shall default in making the redemption payment when due, in which case the
conversion right shall terminate at the close of business on the date such
default is cured and such Security is redeemed); provided, further, that, if the
Holder of a Security presents such Security for redemption prior to the close of
business on the Business Day immediately preceding the redemption date for such
Security, the right of conversion shall terminate upon presentation of the
Security to
-25-
33
the Trustee (unless the Company shall default in making the redemption payment
when due, in which case the conversion right shall terminate at the close of
business on the date such default is cured and such Security is redeemed). The
number of shares of Common Stock issuable upon conversion of a Security shall be
determined by dividing the principal amount of the Security or portion thereof
surrendered for conversion by the Conversion Price in effect on the Conversion
Date. The initial Conversion Price is set forth in paragraph 8 of the Securities
and is subject to adjustment as provided in this Article 4.
A Holder may convert a portion of a Security equal to $1,000
or any integral multiple thereof. Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of a
Security.
A Security in respect of which a Holder has delivered a Change
in Control Purchase Notice pursuant to Section 3.8(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such Change in Control Purchase Notice is withdrawn by a written notice
of withdrawal delivered to the Paying Agent prior to the close of business on
the Business Day immediately preceding the Change in Control Purchase Date in
accordance with Section 3.9.
A Holder of Securities is not entitled to any rights of a
holder of Common Stock until such Holder has converted its Securities to Common
Stock, and only to the extent such Securities are deemed to have been converted
into Common Stock pursuant to this Article 4.
SECTION 4.2. Conversion Procedure
To convert a Security, a Holder must (a) complete and manually
sign the conversion notice on the back of the Security and deliver such notice
to the Conversion Agent, (b) surrender the Security to the Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by the
Registrar or the Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the "Conversion Date." As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of whole shares of Common Stock issuable upon the conversion,
payment for accrued interest on such Security to the extent required by this
Section 4.2 and cash in lieu of any fractional shares pursuant to Section 4.3.
The person in whose name the certificate is registered shall
be deemed to be a shareholder of record on the Conversion Date; provided,
however, that no surrender of a Security
-26-
34
on any date when the stock transfer books of the Company shall be closed shall
be effective to constitute the person or persons entitled to receive the shares
of Common Stock upon such conversion as the record holder or holders of such
shares of Common Stock on such date, but such surrender shall be effective to
constitute the person or persons entitled to receive such shares of Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided, further, that such conversion shall be at the Conversion Price in
effect on the Conversion Date as if the stock transfer books of the Company had
not been closed. Upon conversion of a Security, such person shall no longer be a
Holder of such Security. No payment or adjustment will be made for dividends or
distributions on shares of Common Stock issued upon conversion of a Security.
Except as otherwise provided in this Section 4.2, no payment
or adjustment will be made for accrued interest on a converted Security.
Interest accrued through and including [ ], 2001 shall be paid on any Security
called for redemption pursuant to Article 3 and surrendered for conversion
pursuant to this Article 4 before the close of business on [ ], 2001. If any
Holder surrenders a Security for conversion after the close of business on the
record date for the payment of an installment of interest and before the close
of business on the related interest payment date, then, notwithstanding such
conversion, the interest payable on such interest payment date shall be paid to
the Holder of such Security on such record date. In such event, unless such
Security has been called for redemption, such Security, when surrendered for
conversion, must be accompanied by delivery of a check or draft payable to the
Conversion Agent in an amount equal to the interest payable on such interest
payment date on the portion so converted. If such payment does not accompany
such Security, the Security shall not be converted. If the Company defaults in
the payment of interest payable on the interest payment date, the Conversion
Agent shall repay such funds to the Holder.
If a Holder converts more than one Security at the same time,
the number of shares of Common Stock issuable upon the conversion shall be based
on the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security equal in principal amount to the unconverted portion of
the Security surrendered.
-27-
35
SECTION 4.3. Fractional Shares
The Company will not issue fractional shares of Common Stock
upon conversion of Securities. In lieu thereof, the Company will pay an amount
in cash based upon the closing sale price of the Common Stock on the Trading Day
immediately prior to the date of conversion.
SECTION 4.4. Taxes on Conversion
If a Holder converts a Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon such conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificate representing the Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay any
tax which will be due because the shares are to be issued in a name other than
the Holder's name. Nothing herein shall preclude any tax withholding required by
law or regulation.
SECTION 4.5. Company to Provide Stock
The Company shall, prior to issuance of any Securities
hereunder, and from time to time as it may be necessary, reserve, out of its
authorized but unissued Common Stock, a sufficient number of shares of Common
Stock to permit the conversion of all outstanding Securities into shares of
Common Stock.
All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall be duly
authorized, validly issued, fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
SECTION 4.6. Adjustment of Conversion Price
The conversion price as stated in paragraph 8 of the
Securities (the "Conversion Price") shall be adjusted from time to time by the
Company as follows:
-28-
36
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock to all holders of Common Stock, (ii) make a distribution
in shares of Common Stock to all holders of Common Stock, (iii)
subdivide its outstanding Common Stock into a greater number of shares,
or (iv) combine its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall
be adjusted so that the Holder of any Security thereafter surrendered
for conversion shall be entitled to receive that number of shares of
Common Stock which it would have owned had such Security been converted
immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (a) shall become effective immediately
after the record date in the case of a dividend in shares or
distribution and shall become effective immediately after the effective
date in the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
or substantially all holders of its Common Stock entitling them (for a
period commencing no earlier than the record date described below and
expiring not more than 60 days after such record date) to subscribe for
or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price per share less than the current market price
per share of Common Stock (as determined in accordance with subsection
(e) of this Section 4.6) at the record date for the determination of
shareholders entitled to receive such rights or warrants, the
Conversion Price in effect immediately prior thereto shall be adjusted
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares which
the aggregate offering price of the total number of shares of Common
Stock so offered (or the aggregate Conversion Price of the convertible
securities so offered) would purchase at such current market price, and
of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of
Common Stock offered (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become
effective immediately after such record date. If at the end of the
period during which such rights or warrants are exercisable not all
rights or warrants shall have been exercised, the adjusted Conversion
Price shall be immediately readjusted to what it would have been based
upon the number of additional shares of Common Stock actually issued
-29-
37
(or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
(c) In case the Company shall distribute to all or
substantially all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock), evidences of
indebtedness or other non-cash assets (including securities of any
company other than the Company), or shall distribute to all or
substantially all holders of its Common Stock rights or warrants to
subscribe for or purchase any of its securities (excluding those
referred to in subsection (b) of this Section 4.6), then in each such
case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction
of which the numerator shall be the current market price per share (as
defined in subsection (e) of this Section 4.6) of the Common Stock on
the record date mentioned below less the fair market value on such
record date (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value)
of the portion of the capital stock, evidences of indebtedness or other
non-cash assets so distributed or of such rights or warrants applicable
to one share of Common Stock (determined on the basis of the number of
shares of Common Stock outstanding on the record date), and of which
the denominator shall be the current market price per share (as defined
in subsection (e) of this Section 4.6) of the Common Stock on such
record date. Such adjustment shall become effective immediately after
the record date for the determination of shareholders entitled to
receive such distribution. Notwithstanding the foregoing, in the event
that the Company shall distribute rights or warrants (other than those
referred to in subsection (b) of this Section 4.6) ("Rights") pro rata
to holders of Common Stock, the Company may, in lieu of making any
adjustment pursuant to this Section 4.6, make proper provision so that
each holder of a Security who converts such Security (or any portion
thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive
upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion (the "Conversion Shares"), a number of
Rights to be determined as follows: (i) if such conversion occurs on or
prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"),
the same number of Rights to which a holder of a number of shares of
Common Stock equal to the number of Conversion Shares is entitled at
the time of such conversion in accordance
-30-
38
with the terms and provisions of and applicable to the Rights and (ii)
if such conversion occurs after the Distribution Date, the same number
of Rights to which a holder of the number of shares of Common Stock
into which the principal amount of the Security so converted was
convertible immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at
any time distribute (a "Triggering Distribution") to all or
substantially all holders of its Common Stock cash in an aggregate
amount that, together with the aggregate amount of all cash
distributions to all or substantially all holders of its Common stock
made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price
adjustment pursuant to this Section 4.6 has been made, exceeds 12.5% of
the product of the current market price per share of Common Stock (as
determined in accordance with subsection (e) of this Section 4.6) on
the Business Day (the "Determination Date") immediately preceding the
day on which such Triggering Distribution is declared by the Company
multiplied by the number of shares of Common Stock outstanding on such
date (excluding shares held in the Treasury of the Company), the
Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying such Conversion Price in effect
immediately prior to the Determination Date by a fraction of which the
numerator shall be the current market price per share of the Common
Stock (as determined in accordance with subsection (e) of this Section
4.6) on the Determination Date less the amount of cash (plus the fair
market value of such other consideration) so distributed within such 12
months (including, without limitation, the Triggering Distribution)
applicable to one share of Common Stock (determined on the basis of the
number of shares of Common Stock outstanding on the Determination Date)
and the denominator shall be such current market price per share of the
Common Stock (as determined in accordance with subsection (e) of this
Section 4.6) on the Determination Date, such reduction to become
effective immediately prior to the opening of business on the day
following the date on which the Triggering Distribution IS paid.
(e) For the purpose of any computation under subsections (b),
(c) and (d) of this Section 4.6, the current market price per share of
Common Stock on any date shall be deemed to be the average of the daily
closing prices for the 30 consecutive Trading Days commencing 45
Trading
-31-
39
Days before (1) the Determination Date with respect to distributions
under subsection (d) of this Section 4.6 or (ii) the record date with
respect to distributions, issuances or other events requiring such
computation under subsection (b) or (c) of this Section 4.6. The
closing price for each day shall be the last reported sales price or,
in case no such reported sale takes place on such date, the average of
the reported closing bid and asked prices in either case on the New
York Stock Exchange (the "NYSE") or, if the Common Stock is not listed
or admitted to trading on the NYSE, on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national
securities exchange, the closing sales price of the Common Stock as
quoted by NASDAQ or, in case no reported sale takes place, the average
of the closing bid and asked prices as quoted by NASDAQ or any
comparable system or, if the Common Stock is not quoted on NASDAQ or
any comparable system, the closing sales price or, in case no reported
sale takes place, the average of the closing bid and asked prices, as
furnished by any two members of the National Association of Securities
Dealers, Inc. selected from time to time by the Company for that
purpose. If no such prices are available, the current market price per
share shall be the fair value of a share of Common Stock as determined
by the Board of Directors.
(f) In any case in which this Section 4.6 shall require that
an adjustment be made following a record date or a Determination Date,
as the case may be, established for purposes of this Section 4.6, the
Company may elect to defer (but only until five Business Days following
the filing by the Company with the Trustee of the certificate described
in Section 4.9) issuing to the Holder of any Security converted after
such record date or Determination Date the shares of Common Stock and
other capital stock of the Company issuable upon such conversion over
and above the shares of Common Stock and other capital stock of the
Company issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the shares the
issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence
prepared by the Company of the right to receive such shares. If any
distribution in respect of which an adjustment to the Conversion Price
is required to be made as of the record date, effective date or
Determination Date therefor is not thereafter made or paid by the
Company for any reason, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect if such record date had
not been
-32-
40
fixed or such effective date or Determination Date had not occurred.
SECTION 4.7. No Adjustment
No adjustment in the Conversion Price shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 4.7 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in
Section 4.6 if all Securityholders are entitled to participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction. The Company shall give notice to
the Trustee of any such determination.
No adjustment need be made for rights to purchase Common Stock
or issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a
change to no par value of the Common Stock.
To the extent that the Securities become convertible into the
right to receive cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
SECTION 4.8. Adjustment for Tax Purposes
The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by Section 4.6, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable.
SECTION 4.9. Notice of Adjustment
Whenever the Conversion Price is adjusted, the Company shall
promptly mail to Securityholders a notice of the adjustment and file with the
Trustee an Officers' Certificate
-33-
41
briefly stating the facts requiring the adjustment and the manner of computing
it.
SECTION 4.10. Notice of Certain Transactions
In the event that:
(1) the Company takes any action which would require an
adjustment in the Conversion Price;
(2) the Company consolidates or merges with, or transfers
all or substantially all of its property and assets to, another
corporation and shareholders of the Company must approve the
transaction; or
(3) there is a dissolution or liquidation of the Company,
the Company shall mail to Securityholders and file with the Trustee a notice
stating the proposed record or effective date, as the case may be. The Company
shall mail the notice at least ten days before such date. Failure to mail such
notice or any defect therein shall not affect the validity of any transaction
referred to in clause (1), (2) or (3) of this Section 4.10.
SECTION 4.11. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege
If any of the following shall occur, namely: (a) any
reclassification or change of shares of Common Stock issuable upon conversion of
the Securities (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination, or any other change for which an adjustment is provided in Section
4.6); (b) any consolidation or merger to which the Company is a party other than
a merger in which the Company is the continuing corporation and which does not
result in any reclassification of, or change (other than a change in name, or in
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination) in, outstanding shares of Common
Stock; or (c) any sale or conveyance of all or substantially all of the property
and assets of the Company to any person, then the Company, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale or conveyance,
execute and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then outstanding shall have the right to convert such
Security into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock deliverable upon conversion of such Security immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Price provided for in this Article 4. If, in the case of any such
consolidation, merger, sale or conveyance, the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
include shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or
-34-
42
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provisions of this
Section 4.11 shall similarly apply to successive consolidations, mergers, sales
or conveyances.
In the event the Company shall execute a supplemental
indenture pursuant to this Section 4.11, the Company shall promptly file with
the Trustee (x) an Officers' Certificate briefly stating the reasons therefor,
the kind or amount of shares of stock or other securities or property (including
cash) receivable by Holders of the Securities upon the conversion of their
Securities after any such reclassification, change, consolidation, merger, sale
or conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with.
SECTION 4.12. Trustee's Disclaimer
The Trustee shall have no duty to determine when an adjustment
under this Article 4 should be made, how it should be made or what such
adjustment should be, but may accept as conclusive evidence of that fact or the
correctness of any such adjustment, and shall be protected in relying upon, an
Officers' Certificate including the Officers' Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to Section 4.9.
The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee shall
not be responsible for the Company's failure to comply with any provisions of
this Article 4.
The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 4.11, but
-35-
43
may accept as conclusive evidence of the correctness thereof, and shall be fully
protected in relying upon, the Officers' Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 4.11.
SECTION 4.13. Voluntary Reduction
The Company from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least 20 days or such
longer period as may be required by law and if the reduction is irrevocable
during the period; provided, however, that in no event may the Conversion Price
be less than the par value of a share of Common Stock.
ARTICLE 5
COVENANTS
SECTION 5.1. Payment of Securities
The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of principal or interest shall be considered paid on
the date it is due if the Paying Agent (other than the Company) holds by 11:00
a.m., New York City time, on that date money, deposited by the Company or an
Affiliate thereof, sufficient to pay the installment. The Company shall pay
interest on overdue principal at the rate borne by the Securities per annum; it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.
SECTION 5.2. SEC Reports
The Company shall file all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act, and within 15 days after it files them with the SEC,
the Company shall file copies of all such reports, information and other
documents with the Trustee.
In the event the Company is at any time no longer subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company will prepare, for the first three quarters of each fiscal year,
quarterly financial statements substantially equivalent to the financial
statements required to be included in a report on Form 10-Q under the Exchange
Act. The Company will also prepare, on an annual basis, complete audited
consolidated financial statements, including, but not limited to, a balance
sheet, a statement of operations, a statement of cash flows and all appropriate
notes. All such
-36-
44
financial statements will be prepared in accordance with generally accepted
accounting principles. The Company will cause a copy of such financial
statements to be filed with the Trustee and mailed to the Holders of the
Securities within 50 days after the end of each of the first three quarters of
each fiscal year and within 95 days after the close of each fiscal year. The
Company will also comply with the other provisions of TIA Section 314(a).
SECTION 5.3. Compliance Certificates
The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate as to the
signer's knowledge of the Company's compliance with all conditions and covenants
on its part contained in this Indenture and stating whether or not the signer
knows of any default or Event of Default. If such signer knows of such a default
or Event of Default, the Officers' Certificate shall describe the default or
Event of Default and the efforts to remedy the same. For the purposes of this
Section 5.3, compliance shall be determined without regard to any grace period
or requirement of notice provided pursuant to the terms of this Indenture.
SECTION 5.4. Notice of Defaults
In the event (a) that indebtedness of the Company in an
aggregate principal amount in excess of $25,000,000 is declared due and payable
before its maturity because of the occurrence of any default under such
indebtedness, or (b) of the occurrence of any event which entitles the holder or
holders of such indebtedness to declare such indebtedness due and payable before
its maturity and with respect to which any applicable grace period has lapsed or
expired, the Company will promptly give written notice to the Trustee of such
declaration or event.
SECTION 5.5. Further Instruments and Acts
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
SECTION 5.6. Liquidation
The Company shall not adopt any plan of liquidation which
provides for, contemplates or the effectuation of which is preceded by (A) the
sale, lease, conveyance or other disposition of all or substantially all the
assets of the Company otherwise than substantially as an entirety in accordance
with
-37-
45
Article 6 and (B) the distribution of all or substantially all the proceeds of
such sale, lease, conveyance or other disposition and the remaining assets of
the Company to holders of Common Stock of the Company, unless the Company shall
in connection with the adoption of such plan make provision for, or agree that
prior to making any liquidating distributions it will make provision for, the
satisfaction of the Company's obligations under this Indenture and under the
Securities as to the payment of principal and interest thereof.
ARTICLE 6
SUCCESSOR CORPORATION
SECTION 6.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge with or into,
or transfer all or substantially all of its property and assets to, any person
unless:
(a) either the Company shall be the resulting or surviving
corporation or such person is a corporation organized and existing
under the laws of Bermuda, the British Virgin Islands, Netherlands
Antilles, Canada, any country which is a member of the European Union
or the United States, a State thereof or the District of Columbia, and
such person expressly assumes by supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture (in
which case all such obligations of the Company shall terminate); and
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company as
a result of such transaction as having been incurred by the Company at
the time of such transaction, no default or Event of Default shall have
occurred and be continuing.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate and an Opinion of Counsel, each of which
shall comply with Section 11.4 and shall state that such consolidation, merger
or transfer and any such supplemental indenture comply with this Article 6 and
that all conditions precedent herein provided for relating to such transaction
have been complied with; provided, however, that such Opinion of Counsel shall
address only the matters referred to in clause (a) of this Section 6.1.
-38-
46
SECTION 6.2. Successor Corporation Substituted
Upon any consolidation or merger, or any transfer of all or
substantially all of the property and assets of the Company in accordance with
Section 6.1, the successor corporation formed by such consolidation or into
which the Company is merged or to which such transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named as the Company herein.
ARTICLE 7
DEFAULT AND REMEDIES
SECTION 7.1. Events of Default
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at maturity, upon
redemption or otherwise;
(3) the Company fails to comply with any of its other
agreements contained in the Securities or this Indenture and the
default continues for the period and after the notice specified below;
(4) a default shall occur under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company having
an aggregate outstanding principal amount in excess of $25,000,000,
which default shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have been due and payable, without such indebtedness having
been discharged, such acceleration having been rescinded or annulled or
there having been deposited in trust a sum of money sufficient to
discharge in full such indebtedness, in each case within a period of 10
days following the occurrence of such acceleration;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
-39-
47
(B) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(D) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case
or proceeding;
(B) appoints a Custodian of the Company or for all or
substantially all of its property; or
(C) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in effect
for 60 days.
The term "Bankruptcy Law" means Title 11 of the United States
Code or any similar federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A default under clause (3) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
principal amount of the Securities then outstanding notify the Company and the
Trustee, of the default, and the Company does not cure the default within 60
days after receipt of such notice. The notice given pursuant to this Section 7.1
must specify the default, demand that it be remedied and state that the notice
is a "Notice of Default." When any default under this Section 7.1 is cured, it
ceases.
Subject to the provisions of Sections 8.1 and 8.2, the Trustee
shall not be charged with knowledge of any Event of Default unless written
notice thereof shall have been given to a Trust Officer at the Corporate Trust
Office of the Trustee by the Company, the Paying Agent, any Holder or any agent
of any Holder.
SECTION 7.2. Acceleration
If an Event of Default (other than an Event of Default
specified in clause (5) or (6) of Section 7.1) occurs and
-40-
48
is continuing, the Trustee may, by notice to the Company, or the Holders of at
least 25% in principal amount of the Securities then outstanding may, by notice
to the Company and the Trustee, and the Trustee shall, upon the request of such
Holders, declare all unpaid principal of and accrued interest to the date of
acceleration on the Securities then outstanding (if not then due and payable) to
be due and payable upon any such declaration, and the same shall become and be
immediately due and payable. If an Event of Default specified in clause (5) or
(6) of Section 7.1 occurs, all unpaid principal of and accrued interest on the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in principal amount of the Securities
then outstanding by notice to the Trustee may rescind an acceleration and its
consequences if (a) all existing Events of Default, other than the nonpayment of
the principal of and accrued interest on the Securities which has become due
solely by such declaration of acceleration, have been cured or waived; (b) to
the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid; (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (d) all payments due to the Trustee and any predecessor
Trustee under Section 8.7 have been made. Anything herein contained to the
contrary notwithstanding, in the event of any acceleration pursuant to this
Section 7.2, the Company shall not be obligated to pay any premium which it
would have had to pay if it had then elected to redeem the Securities pursuant
to paragraph 5 of the Securities, except in the case of any Event of Default
occurring by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding payment of the
premium which it would have had to pay if it had then elected to redeem the
Securities pursuant to paragraph 5 of the Securities, in which case an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law.
SECTION 7.3. Other Remedies
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or
-41-
49
any Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 7.4. Waiver of Defaults and Events of Default
Subject to Sections 7.7 and 10.2, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing default or Event of Default and its consequence, except a
default in the payment of the principal of or interest on any Security as
specified in clauses (1) and (2) of Section 7.1. When a default or Event of
Default is waived, it is cured and ceases.
SECTION 7.5. Control by Majority
The Holders of a majority in principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of another Securityholder or the
Trustee, or that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 7.6. Limitations on Suits
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities (except actions for payment of overdue
principal or interest or for the conversion of the Securities pursuant to
Article 4) unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
-42-
50
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Securities then outstanding.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 7.7. Rights of Holders to Receive Payment and to Convert
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of the principal of and
interest on the Security, on or after the respective due dates expressed in the
Security, to convert such Security in accordance with Article 4 and to bring
suit for the enforcement of any such payment on or after such respective dates
or the right to convert, is absolute and unconditional and shall not be impaired
or affected without the consent of the Holder.
SECTION 7.8. Collection Suit by Trustee
If an Event of Default in the payment of principal or interest
specified in clause (1) or (2) of Section 7.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or another obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with, to the extent
that payment of such interest is lawful, interest on overdue principal and on
overdue installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 7.9. 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor on the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceeding is hereby authorized by each
Securityholder
-43-
51
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 8.7, and to the extent that such payment
of the reasonable compensation, expenses, disbursements and advances in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other property which the Securityholders may be entitled
to receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to, or, on behalf of any
Securityholder, to authorize, accept or adopt any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
SECTION 7.10. Priorities
If the Trustee collects any money pursuant to this Article 7,
it shall pay out the money in the following order:
First, to the Trustee for amounts due under Section 8.7;
Second, to the holders of Senior Indebtedness to the extent
required by Article 12;
Third, to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Fourth, to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 7.10.
SECTION 7.11. 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
-44-
52
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 7.11
does not apply to a suit made by the Trustee, a suit by a Holder pursuant to
Section 7.7, or a suit by Holders of more than 10% in principal amount of the
Securities then outstanding.
SECTION 7.12. Waiver of Usury, Stay or Extension Laws
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, 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 covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 8
TRUSTEE
SECTION 8.1. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no others; 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. The Trustee, however, shall examine any certificates
-45-
53
and opinions which by any provision hereof are specifically required to
be delivered to the Trustee to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of subsection (b)
of this Section 8.1;
(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 7.5.
(d)The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability, expense or fee.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to subsections (a), (b), (c) and (d) of this
Section 8.1.
(f) 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. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 8.2. Rights of Trustee
Subject to Section 8.1:
(a) The Trustee may rely conclusively 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, which shall
conform to Section 11.4(b). The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
Certificate or Opinion.
-46-
54
(c) The Trustee may act through its agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel, and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection in respect of any such action taken,
omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
SECTION 8.3. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or an
affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 8.10 and 8.11.
SECTION 8.4. Trustee's Disclaimer
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 8.5. Notice of Default or Events of Default
If a default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the default or Event of Default within 90 days after it occurs. Except
in the case of a default or an Event of Default in payment of the principal of
or interest on any Security, the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
notice is in the interests of Securityholders.
SECTION 8.6. Reports by Trustee to Holders
If such report is required by TIA Section 313, within 60 days
after each January 15, beginning with the January 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such January 15
-47-
55
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b)(2) and (c).
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Securities are listed. The Company shall
notify the Trustee whenever the Securities become listed on any stock exchange
and any changes in the stock exchanges on which the Securities are listed.
SECTION 8.7. Compensation and Indemnity
The Company shall pay to the Trustee from time to time
reasonable compensation for its services (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it. Such
expenses may include the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
The Company shall indemnify the Trustee (which for purposes of
this Section 8.7 shall include its officers, directors, employees and agents)
for, and hold it harmless against, any loss, liability or expense (including
reasonable legal fees and expenses) incurred by it in connection with its duties
under this Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder including
the reasonable costs and expenses of the Trustee and its counsel in defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The Company need not pay for any settlement without its written
consent, which shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it resulting from its
negligence or bad faith.
To secure the Company's payment obligations in this Section
8.7, the Trustee shall have a senior claim to which the Securities are hereby
made subordinate on all money or property held or collected by the Trustee,
except such money or property held in trust to pay the principal of and interest
on particular Securities. The obligations of the Company under this Section 8.7
to compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that of
the Securities upon
-48-
56
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities. The
obligations of the Company under this Section 8.7 shall survive the satisfaction
and discharge of this Indenture or the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an
Event of Default specified in clause (5) or (6) of Section 7.1 occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 8.8. Replacement of Trustee
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and may, with the Company's
written consent, appoint a successor Trustee. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of l0% in principal amount of the Securities then
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
-49-
57
liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
A retiring Trustee shall not be liable for the acts or
omissions of any successor Trustee after its succession.
Notwithstanding replacement of the Trustee pursuant to this
Section 8.8, the Company's obligations under Section 8.7 shall continue for the
benefit of the retiring Trustee.
SECTION 8.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee, provided such transferee
corporation shall qualify and be eligible under Section 8.10. Such successor
Trustee shall promptly mail notice of its succession to the Company and each
Securityholder.
SECTION 8.10. Eligibility; Disqualification
The Trustee shall always satisfy the requirements of
paragraphs (1), (2) and (5) of TIA Section 310(a). If at any time the Trustee
shall cease to satisfy any such requirements, it shall resign immediately in the
manner and with the effect specified in this Article 8. The Trustee shall be
subject to the provisions of TIA Section 310(b). Nothing herein shall prevent
the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
SECTION 8.11. 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 therein.
-50-
58
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.1. Satisfaction and Discharge of Indenture
This Indenture shall cease to be of further effect (except as
to any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.7 and (ii) Securities for whose
payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 9.3)
have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
stated maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if
any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the stated
maturity or Redemption Date, as the case may be;
-51-
59
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 8.7 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 9.2 and the last
paragraph of Section 9.3 shall survive.
SECTION 9.2. Application of Trust Money
Subject to the provisions of Section 9.3, the Trustee or the
Paying Agent shall hold in trust, for the benefit of the Holders, all money
deposited with it pursuant to Section 9.1, and shall apply the deposited money
in accordance with this Indenture to the payment of the principal of and
interest on the Securities. Money so held in trust shall not be subject to the
Subordination provisions of Article 12.
SECTION 9.3. Repayment to Company
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money (i) deposited with them pursuant to
Section 9.1 and (ii) held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after a right to such money has matured;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such payment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in The City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall be at least 30
days from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Securityholders entitled to money must look to the Company for payment
as general creditors unless otherwise prohibited by law.
-52-
60
SECTION 9.4. Reinstatement
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 9.2 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, then the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 9.1 until
such time as the Trustee or the Paying Agent is permitted to apply all such
money in accordance with Section 9.2; provided, however, that if the Company has
made any payment of the principal of or interest on any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the
money held by the Trustee or the Paying Agent.
ARTICLE 10
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1. Without Consent of Holders
The Company and the Trustee may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.11 and 6.1;
(b) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(c) to cure any ambiguity, defect or inconsistency, or to make
any other change that does not adversely affect the rights of any
Securityholder;
(d) to comply with the provisions of the TIA; or
(e) to appoint a successor Trustee.
SECTION 10.2. With Consent of Holders
The Company and the Trustee may amend or supplement this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the Securities then outstanding. The Holders
of at least a majority in principal amount of the Securities then outstanding
may waive compliance in a particular instance by the Company with any provision
of this Indenture or the Securities without notice to any Securityholder.
Subject to Section 10.4, without
-53-
61
the written consent of each Securityholder affected, however, an amendment,
supplement or waiver, including a waiver pursuant to Section 7.4, may not:
(1) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or premium on or change the fixed
maturity of any Security or alter the redemption provisions with
respect thereto in a manner adverse to the Holder thereof;
(4) alter the conversion provisions with respect to any
Security in a manner adverse to the Holder thereof;
(5) waive a default in the payment of the principal of
(including any premium) or interest on any Security;
(6) make any changes in Section 7.4 or in this Section 10.2,
except to increase any percentage in principal amount of outstanding
Securities required for any amendment, supplement or waiver;
(7) modify the provisions of Article 12 in a manner adverse to
the Holders; or
(8) make any Security payable in money other than that in the
Security.
It shall not be necessary for the consent of the Holders under
this Section 10.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
10.2 becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
An amendment under this Section 10.2 may not make any change
that adversely affects the rights under Article 12 of any holder of an issue of
Senior Indebtedness unless the holders of that issue, pursuant to its terms,
consent to the change.
-54-
62
SECTION 10.3. Compliance With Trust Indenture Act
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as in effect at the date of such amendment
or supplement.
SECTION 10.4. Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (7) of Section 10.2. In that case the amendment, supplement
or waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.5. Notation on or Exchange of Securities
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 10.6. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized
pursuant to this Article 10 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee, but need
not sign any amendment or supplement that adversely affects the Trustee's
rights, duties, liabilities or immunities. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive and, subject
to Section 8.1, shall be fully protected in relying upon, an Opinion of Counsel
stating that such amendment or supplement is authorized or permitted by this
-55-
63
Indenture. The Company may not sign an amendment or supplement until the Board
of Directors approves it.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by any of Sections 310 to 317, inclusive, of
the TIA through operation of Section 318(c) thereof, such imposed duties shall
control.
SECTION 11.2. Notices
Any notice, request or communication shall be given in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company:
Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx - 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee
Administration
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed by first-class mail to it at its address shown on the register kept by
the Registrar.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided
-56-
64
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. Communications by Holders With Other Holders
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent
(a) Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee at the request of the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent (including any covenants,
compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action have
been complied with; and (2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent (including any
covenants, compliance with which constitutes a condition precedent)
have been complied with.
(b) Each Officers' Certificate and Opinion of Counsel
with respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
-57-
65
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
SECTION 11.5. Record Date for Vote or Consent of Securityholders
The Company (or, in the event deposits have been made pursuant
to Section 5.6 or 9.1, the Trustee) may set a record date for purposes of
determining the identity of Securityholders entitled to vote or consent to any
action by vote or consent authorized or permitted under this Indenture, which
record date shall be the later of ten days prior to the first solicitation of
such vote or consent or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 2.5 prior to such solicitation.
Notwithstanding the provisions of Section 10.4, if a record date is fixed, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.
SECTION 11.6. Rules by Trustee, Paying Agent, Registrar and Conversion Agent
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules for its functions.
SECTION 11.7. Legal Holidays
A "Legal Holiday" is a Saturday, Sunday or a day on which
state or federally chartered banking institutions in New York, New York (or such
other city and state where the Trustee's corporate trust operations are then
located) are not required to be open. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 11.8. Governing Law
This Indenture and the Securities shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
-58-
66
SECTION 11.9. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others
All liability described in paragraph 17 of the Securities of
any director, officer, employee or shareholder, as such, of the Company is
waived and released.
SECTION 11.11. Successors
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.12. Multiple Counterparts
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 11.13. Separability
In case any provisions in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.14. Table of Contents, Headings, etc.
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 to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE 12
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Indebtedness
The Company covenants and agrees, and each Holder of
Securities issued hereunder by its acceptance thereof likewise covenants and
agrees, that all Securities shall be issued subject
-59-
67
to the provisions of this Article 12; and each person holding any Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment of all amounts on account of all Securities issued
hereunder shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter created, assumed or guaranteed.
SECTION 12.2. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation, Reorganization, Etc.,
of the Company
Upon the payment or distribution of the assets of the Company
of any kind or character, whether in cash, property or securities (including any
collateral at any time securing the Securities), to creditors upon any
dissolution, winding-up, liquidation or reorganization of the Company (whether
voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, receivership proceedings, or upon an assignment for the benefit of
creditors, or any other marshaling of the assets and liabilities of the Company,
or otherwise), then in such event:
(a) all Senior Indebtedness and the reasonable fees and
expenses of the Trustee shall first be paid in full, in cash, before
any payment is made on account of the Securities, whether by way of the
payment of principal of or interest on the indebtedness evidenced by
the Securities, a deposit pursuant to Section 9.1, a repurchase,
redemption or other acquisition of the Securities or otherwise
(collectively, "pay the Securities");
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other
than securities of the Company as reorganized or readjusted, or
securities of the Company or any other Person provided for by a plan of
reorganization or readjustment, junior, or the payment of which is
otherwise subordinate, at least to the extent provided in this Article
12, with respect to the Securities, to the payment of all Senior
Indebtedness), to which the Holders or the Trustee on behalf of the
Holders would be entitled except for the provisions of this Article 12,
including any such payment or distribution which may be payable or
deliverable by reason of the payment of another debt of the Company
being subordinated to the payment of the Securities,
-60-
68
shall be paid or delivered by any debtor, Custodian or other person
making such payment or distribution, directly to the holders of the
Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, for
application to payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full after
giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 12.2, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (other than securities of the Company as reorganized or
readjusted, or securities of the Company or any other Person provided
for by a plan of reorganization or readjustment, junior, or the payment
of which is otherwise subordinate, at least to the extent provided for
in this Article 12, with respect to the Securities, to the payment of
all Senior Indebtedness), shall be received by the Trustee or the
Holders before all Senior Indebtedness is paid in full, such payment or
distribution (subject to the provisions of Sections 12.6 and 12.7)
shall be held in trust for the benefit of, and shall be immediately
paid or delivered by the Trustee or such Holders, as the case may be,
to, the Holders of Senior Indebtedness remaining unpaid or unprovided
for, or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the
Senior Indebtedness held or represented by each, for application to the
payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full after giving effect to
any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company.
Upon any distribution of assets of the Company referred to in
this Article 12, the Trustee, subject to the provisions of Sections 8.1 and 8.2,
and the Holders shall be entitled
-61-
69
to rely conclusively upon any order or decree by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceeding is pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 12.
SECTION 12.3. Securityholders to Be Subrogated to Right of Holders of Senior
Indebtedness
Subject to the prior payment in full of all Senior
Indebtedness then due, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets of
the Company applicable to the Senior Indebtedness until the principal of and
interest on the Securities shall be paid in full, and, for purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of assets, whether in cash, property or securities, distributable to the holders
of Senior Indebtedness under the provisions hereof to which the Holders would be
entitled except for the provisions of this Article 12, and no payment pursuant
to the provisions of this Article 12 to the holders of Senior Indebtedness by
the Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 12 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
SECTION 12.4. Obligations of the Company Unconditional
Nothing contained in this Article 12 or elsewhere in this
Indenture or in any Security is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and interest on the Securities, as and when
the same shall become due and payable in accordance with the terms of the
Securities, or to affect the relative rights of the Holders and other creditors
of the Company other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon the happening of an Event of Default
under this Indenture, subject
-62-
70
to the provisions of Article 7, and the rights, if any, under this Article 12 of
the holders of Senior Indebtedness to receive assets, whether in cash, property
or securities, of the Company otherwise payable or deliverable to the Trustee or
such Holder upon the exercise of any such remedy.
SECTION 12.5. Company Not to Make Payment With Respect to Securities in Certain
Circumstances
(a) Upon the happening of a default in payment (whether
at maturity or at a date fixed for prepayment or by acceleration or otherwise)
of the principal of, interest on or other amount due in respect of any Senior
Indebtedness, as such default is defined under or in respect of such Senior
Indebtedness or in any agreement pursuant to which such Senior Indebtedness has
been incurred, then, unless and until the amount of such Senior Indebtedness
then due shall have been paid in full or provision made therefor in a manner
satisfactory to the holders of such Senior Indebtedness, or such default shall
have been cured or waived or shall have ceased to exist, the Company shall not
pay the Securities.
(b) Upon the happening of an event of default with
respect to any Senior Indebtedness (other than under circumstances when the
terms of subsection (a) of this Section 12.5 are applicable), as such event of
default is defined under or in respect of such Senior Indebtedness or in any
agreement pursuant to which such Senior Indebtedness has been incurred,
permitting the holders thereof to immediately accelerate the maturity thereof,
and upon written notice thereof given to the Company and the Trustee by any one
or more holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness have been
issued (a "Default Notice"), then, unless and until such event of default shall
have been cured or waived in writing by the holders of such Senior Indebtedness
or shall have ceased to exist, the Company shall not pay the Securities;
provided, however, that this subsection (b) shall not prevent the making of any
such payment (which is not otherwise prohibited by subsection (a) of this
Section 12.5) for more than 180 days after the Default Notice shall have been
given unless the Senior Indebtedness in respect of which such event of default
exists has been declared due and payable in its entirety, in which case no such
payment may be made until such acceleration has been waived, rescinded or
annulled, or such Senior Indebtedness shall have been paid in full, or payment
thereof shall be duly provided for in cash or in any other manner satisfactory
to the holders of such Senior Indebtedness. Notwithstanding the foregoing, not
more than one Default Notice shall be given with respect to the same issue of
Senior Indebtedness
-63-
71
within a period of 360 consecutive days, and no event of default which existed
or was continuing on the date of any Default Notice and was known to the holders
of such issue of Senior Indebtedness shall be made the basis for the giving of a
subsequent Default Notice by the holders of such issue of Senior Indebtedness.
(c) In the event that, notwithstanding the foregoing
provisions of this Section 12.5, the Company shall pay the Securities and such
payment shall be received by the Trustee, any Holder or any Paying Agent (or, if
the Company is acting as its own Paying Agent, money for any such payment shall
be segregated and held in trust), after the happening of a default under any
Senior Indebtedness of the type specified in subsections (a) and (b) of this
Section 12.5, then, unless and until the amount of such Senior Indebtedness then
due shall have been paid in full, or provision made therefor or such default
shall have been cured or waived or shall have ceased to exist, such payment
(subject, in each case, to the provisions of Sections 12.6 and 12.7 and the
proviso contained in subsection (b) of this Section 12.5) shall be held in trust
for the benefit of, and shall be immediately paid over to, the holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of the
Senior Indebtedness may have been issued ratably according to the aggregate
amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of Senior Indebtedness.
SECTION 12.6. Notice to Trustee
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities. Notwithstanding the provisions
of this Article 12 or any other provision of this Indenture, the Trustee shall
not at any time be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee, unless and until
the Trustee shall have received written notice thereof from the Company or from
the holder or holders of Senior Indebtedness or from their representative or
representatives or from the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness have been
issued; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Sections 8.1 and 8.2, shall be entitled to assume
conclusively that such facts do not exist.
-64-
72
The Trustee shall be entitled to rely conclusively on the
delivery to it of a written notice by a person representing himself or herself
to be a holder of Senior Indebtedness (or a representative of such holder or the
trustee under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness have been issued) to establish that such notice has
been given by a holder of Senior Indebtedness or a representative of any such
holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each person under this Article 12, and, if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
SECTION 12.7. Application by Trustee of Money Deposited With It
Money deposited in trust with the Trustee pursuant to Section
9.1 and not in violation of this Article 12 shall be for the sole benefit of
Securityholders and shall thereafter not be subject to the subordination
provisions of this Article 12, otherwise, any deposit of money by the Company
with the Trustee or any Paying Agent (whether or not in trust) for the payment
of the principal of or interest on any Securities shall be subject to the
provisions of Sections 12.1, 12.2, 12.3 and 12.5; except that, if two Business
Days prior to the date on which by the terms of this Indenture any such money
may become payable for any purpose (including, without limitation, the payment
of either the principal of or interest on any Security) the Trustee shall not
have received with respect to such money the notice provided for in Section
12.6, then the Trustee or any Paying Agent shall have full power and authority
to receive such money and to apply such money to the purpose for which it was
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such date. This Section 12.7 shall be construed
solely for the benefit of the Trustee and the Paying Agent and shall not
otherwise affect the rights that holders of Senior Indebtedness may have to
recover any such payments from the Holders in accordance with the provisions of
this Article 12.
-65-
73
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Indebtedness
No right of any present or future holders of any Senior
Indebtedness to enforce subordination, as herein provided, shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with. The holders of any Senior Indebtedness may
extend, renew, modify or amend the terms of such Senior Indebtedness or any
security therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and obligations
of the parties to this Indenture or the Holders. No provision in any
supplemental indenture which affects the superior position of the holders of the
Senior Indebtedness shall be effective against the holders of the Senior
Indebtedness unless the holders of such Senior Indebtedness (required pursuant
to the terms of such Senior Indebtedness to give such consent) have consented
thereto.
SECTION 12.9. Trustee to Effectuate Subordination
Each Holder of a Security by its acceptance thereof authorizes
and directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 12 and
appoints the Trustee its attorney-in-fact for any and all such purposes.
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness
The Trustee, in its individual capacity, shall be entitled to
all of the rights set forth in this Article 12 in respect of any Senior
Indebtedness at any time held by it to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 8.7.
SECTION 12.11. Article 5 Not to Prevent Events of Default
The failure to make a payment on account of the principal of
or interest on the Securities by reason of any provision
-66-
74
in this Article 12 shall not be construed as preventing the occurrence of an
Event of Default under Section 7.1.
SECTION 12.12. No Fiduciary Duty Created to Holders of Senior Indebtedness
Notwithstanding any other provision in this Article 12, the
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 12.
SECTION 12.13. Article Applicable to Paying Agents
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 12 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying
Agent were named in this Article 12 in addition to or in place of the Trustee;
provided, however, that Sections 12.6, 12.10 and 12.12 shall not apply to the
Company if it acts as Paying Agent.
-67-
75
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the day of , 1998.
GLOBAL TELESYSTEMS GROUP, INC.
By:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------------
Name:
Title:
-68-
76
[FORM OF FACE OF SECURITY]
GLOBAL TELESYSTEMS GROUP, INC.
INCORPORATED UNDER THE
LAWS OF THE STATE OF DELAWARE
CUSIP: ______ R-_____
[ ]% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2010
Global TeleSystems Group, Inc. promises to pay to Cede & Co. or
registered assigns, the principal sum of ____________ Dollars on [ ], 2010.
Interest Payment Dates: and
Record Dates: and
This Debenture is convertible as specified on the other side of this
Debenture. Additional provisions of this Debenture are set forth on the other
side of this Debenture.
In Witness Whereof, Global TeleSystems Group, Inc. has caused this
instrument to be duly executed under its corporate seal.
GLOBAL TELESYSTEMS GROUP, INC.
By:
-------------------------------------
Name:
Title:
[SEAL]
Attest:
By:
------------------------------
Name:
Title: Secretary
Dated:
A-1
77
Trustee's Certificate of Authentication: This is one of the Securities referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
A-2
78
[FORM OF REVERSE SIDE OF SECURITY]
GLOBAL TELESYSTEMS GROUP, INC.
[ ]% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2010
1. Interest
Global TeleSystems Group, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Debenture at the rate
per annum shown above. The Company shall pay interest semiannually on and of
each year, commencing , 199[]. Interest on the Debentures shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of first issuance of the Debentures under the Indenture (as
defined below); provided, however, that if there is not an existing default in
the payment of interest, and if this Debenture is authenticated between a record
date referred to on the face hereof and the next succeeding interest payment
date, interest shall accrue from such interest payment date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
The Company shall pay interest on this Debenture (except defaulted
interest) to the person who is the Holder of this Debenture at the close of
business on the th or th next preceding the related interest payment date. The
Holder must surrender this Debenture to the Paying Agent to collect payment of
principal. 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. The Company may, however pay principal and interest by its check
or wire payable in such money. It may mail an interest check to the Holder's
registered address.
3. Paying Agent, Registrar and Conversion Agent
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to the Holder. The Company or any
of its Subsidiaries may act as Paying Agent, Registrar or Conversion Agent.
4. Indenture, Limitations
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its [ ]% Convertible
A-3
79
Senior Subordinated Debentures due 2010 (the "Debentures"), issued under an
Indenture dated as of [ ] 1998 (the "Indenture"), between the Company and the
Trustee. The terms of this Debenture include those stated in the Indenture and
those required by or made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended, and as in effect on the date of the
Indenture. This Debenture is subject to all such terms, and the Holder of this
Debenture is referred to the Indenture and said Act for a statement of them.
The Debentures are subordinated unsecured obligations of the Company
limited to up to $400,000,000 aggregate principal amount, subject to Section 2.2
of the Indenture. The Indenture does not limit other debt of the Company,
secured or unsecured, including Senior Indebtedness.
5. Optional Redemption
The Debentures are subject to redemption, at any time on or after [ ],
2001, as a whole or in part, at the election of the Company. The Redemption
Prices (expressed as percentages of the principal amount) beginning [ ] of the
years indicated are as follows:
Year Redemption Price
---- ----------------
2001 %
2002 %
2003 %
2004 %
2005 %
2006 %
2007 %
2008 and thereafter 100%
in each case together with accrued interest up to but not including the
Redemption Date.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Debentures to be redeemed at its registered address. Debentures in denominations
larger than $1,000 may be redeemed in part, but only in whole multiples of
$1,000. On and after the Redemption Date, subject to the deposit with the Paying
Agent of funds sufficient to pay the Redemption Price, interest ceases to accrue
on Debentures or portions of them called for redemption.
A-4
80
7. Purchase of Debentures at Option of Holder Upon a Change in Control
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple thereof) of the Debentures held by such Holder on the
date that is 30 Business Days after a Change in Control, at a purchase price
equal to 100% of the principal amount thereof together with accrued interest up
to but not including the Change in Control Purchase Date. The Holder shall have
the right to withdraw any Change in Control Purchase Notice by delivering a
written notice of withdrawal to the Paying Agent in accordance with the terms of
the Indenture.
8. Conversion
A Holder of a Debenture may convert such Debenture into shares of
Common Stock of the Company at any time prior to maturity; provided, however,
that if the Debenture is called for redemption, the conversion right will
terminate at the close of business on the Business Day immediately preceding the
redemption date for such Debenture (unless the Company shall default in making
the redemption payment when due, in which case the conversion right shall
terminate at the close of business on the date such default is cured and such
Debenture is redeemed); provided, further, that if the Holder of a Debenture
presents such Debenture for redemption prior to the close of business on the
Business Day immediately preceding the redemption date for such Debenture, the
right of conversion shall terminate upon presentation of the Debenture to the
Trustee (unless the Company shall default in making the redemption payment when
due, in which case the conversion right shall terminate on the close of business
on the date such default is cured and such Debenture is redeemed). The initial
Conversion Price is $[ ] per share, subject to adjustment under certain
circumstances. The number of shares issuable upon conversion of a Debenture is
determined by dividing the principal amount converted by the Conversion Price in
effect on the Conversion Date. No payment or adjustment will be made for accrued
interest on a converted Debenture, except as described in the next succeeding
paragraph, or for dividends or distributions on shares of Common Stock issued
upon conversion of a Debenture. No fractional shares will be issued upon
conversion; in lieu thereof, an amount will be paid in cash based upon the
closing sale price of the Common Stock on the last Trading Day prior to the
Conversion Date.
To convert a Debenture, a Holder must (a) complete and
manually sign the conversion notice set forth below and deliver
A-5
81
such notice to the Conversion Agent, (b) surrender the Debenture to the
Conversion Agent, (c) furnish appropriate endorsements or transfer documents if
required by the Registrar or Conversion Agent, and (d) pay any transfer or
similar tax, if required. Interest accrued through and including [ ], 2001 shall
be paid on any Debenture called for redemption and surrendered for conversion
before the close of business on [ ], 2001. If a Holder surrenders a Debenture
for conversion after the close of business on the record date for the payment of
an installment of interest and before the close of business on the related
interest payment date then, notwithstanding such conversion, the interest
payable on such interest payment date shall be paid to the Holder of such
Debenture on such record date. In such event, unless the Debenture has been
called for redemption, the Debenture must be accompanied by payment of an amount
equal to the interest payable on such interest payment date on the principal
amount of the Debenture or portion thereof then converted. A Holder may convert
a portion of a Debenture equal to $1,000 or any integral multiple thereof.
A Debenture in respect of which a Holder had delivered a Change in
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Debenture may be converted only if the Change in
Control Purchase Notice is withdrawn as provided above and in accordance with
the terms of the Indenture.
9. Conversion Arrangement on Call for Redemption
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Business Day immediately preceding the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, together with
accrued interest, if any, to, but not including, the Redemption Date, by one or
more investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Common Stock of
the Company and to make payment for such Securities to the Paying Agent in Trust
for such Holders.
10. Subordination
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company. Any
Holder by accepting this Debenture agrees to and shall be bound by such
subordination provisions and authorizes the Trustee to give them effect.
A-6
82
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any terms of any instrument relating to the
Senior Indebtedness or any extension or renewal of the Senior Indebtedness.
11. Denominations, Transfer, Exchange
The Debentures are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of or exchange Debentures in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes or other governmental charges that may
be imposed by law or permitted by the Indenture.
12. Persons Deemed Owners
The Holder of a Debenture may be treated as the owner of it for all
purposes.
13. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its written request. After that, Holders entitled to money must look to the
Company for payment.
14. Amendment, Supplement and Waiver
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Debentures then outstanding and any past default or
compliance with any provision may be waived in a particular instance with the
consent of the Holders of a majority in principal amount of the Debentures then
outstanding. Without the consent of or notice to any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Debentures to, among other
things, provide for uncertificated Debentures in addition to or in place of
certificated Debentures, or to cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect the rights of any Holder.
X-0
00
00. Successor Corporation
When a successor corporation assumes all the obligations of its
predecessor under the Debentures and the Indenture in accordance with the terms
and conditions of the Indenture, the predecessor corporation will be released
from those obligations.
16. Defaults and Remedies
An Event of Default is: default for 30 days in payment of interest on
the Debentures; default in payment of principal on the Debentures when due;
failure by the Company for 60 days after notice to it to comply with any of its
other agreements contained in the Indenture or the Debentures; certain events of
bankruptcy, insolvency or reorganization of the Company; and the acceleration of
certain other indebtedness. If an Event of Default (other than as a result of
certain events of bankruptcy, insolvency or reorganization) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Debentures then outstanding may declare all unpaid principal of and accrued
interest to the date of acceleration on the Debentures then outstanding to be
due and payable immediately, all as and to the extent provided in the Indenture.
If an Event of Default occurs as a result of certain events of bankruptcy,
insolvency or reorganization, unpaid principal of and accrued interest on the
Debentures then outstanding shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and to
the extent provided in the Indenture. Holders may not enforce the Indenture or
the Debentures except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debentures.
Subject to certain limitations, Holders of a majority in principal amount of the
Debentures then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company is required to file
periodic reports with the Trustee as to the absence of default.
17. Trustee Dealings With the Company
The Bank of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
X-0
00
00. No Recourse Against Others
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Debentures or the Indenture nor for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of this Debenture by
accepting this Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Debenture.
19. Discharge Prior to Maturity
If the Company deposits with the Trustee or the Paying Agent money or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Debentures to maturity, the Company will be discharged from the Indenture
except for certain sections thereof.
20. Authentication
This Debenture shall not be valid until the Trustee or an
authenticating agent signs the certificate of authentication on the other side
of this Debenture.
21. Abbreviations and Definitions
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
All capitalized terms used in this Debenture and not specifically
defined herein are defined in the Indenture and are used herein as so defined.
22. Indenture to Control
In the case of any conflict between the provisions of this Debenture
and the Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: Global
TeleSystems Group, Inc., 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxx, 00xx Xxxxx, XxXxxx,
Xxxxxxxx 00000, Attention: Chief Financial Officer.
A-9
85
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Debenture 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 Debenture)
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Debenture)
* Signature guaranteed by:
------------------------------------------------------
By:
-----------------------------------------------------------------------------
---------------
* The signature must be guaranteed by a bank, a trust company or a member
firm of the New York Stock Exchange.
A-10
86
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company, check the box: [ ]
To convert only part of this Debenture, state the amount to be converted:
$_____________
If you want the stock certificate made out in another person's name, fill in the
form below:
--------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Date:
-----------------
Your signature:
-------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Debenture)
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Debenture)
* Signature guaranteed by:
------------------------------------------------------
By:
-----------------------------------------------------------------------------
--------
* The signature must be guaranteed by a bank, a trust company or a member
firm of the New York Stock Exchange.
A-11
