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EXHIBIT 4.1
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INDENTURE
Dated as of July 30, 1997
Between
DIGITAL TELEVISION SERVICES, LLC
and
DTS CAPITAL, INC., as Issuers,
and
THE GUARANTORS SIGNATORY HERETO, as Guarantors
and
THE BANK OF NEW YORK, as Trustee
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$155,000,000
12 1/2% Senior Subordinated Notes due 2007, Series A
12 1/2% Senior Subordinated Notes due 2007, Series B
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INDENTURE dated as of July 30, 1997, between Digital
Television Services, LLC, a Delaware limited liability company (the "Company"),
and DTS Capital, Inc., a Delaware corporation ("Capital") (each an "Issuer" and
collectively, the "Issuers"), each of the Guarantors (as defined herein) and The
Bank of New York, a New York banking corporation, as trustee.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accredited Investor Global Security" see Section 2.01.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Acquisition from such Person or (b) existing at
the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Company or any Restricted Subsidiary.
"Acquired Person" means, with respect to any specified Person,
any other Person that merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated or merged with or into the
Company or any Restricted Subsidiary or (ii) any acquisition by the Company or
any Restricted Subsidiary of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Additional Interest" has the meaning provided in Section 4(a)
of the Registration Rights Agreement.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of
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voting securities, by agreement or otherwise; provided, however, that (i)
beneficial ownership of 10.0% or more of the voting power of the then
outstanding voting securities of a Person shall be deemed to be control; and
(ii) no individual, other than a manager or director of the Company or an
officer of the Company with a policy making function, shall be deemed an
Affiliate of the Company or any of the Company's Subsidiaries, solely by reason
of such individual's employment, position or responsibilities by or with respect
to the Company or any of the Company's Subsidiaries.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary; (ii) any material license,
franchise or other authorization of the Company or any Restricted Subsidiary;
(iii) any assets of the Company or any Restricted Subsidiary that constitute
substantially all of an operating unit or line of business of the Company or any
Restricted Subsidiary; or (iv) any other property or asset of the Company or any
Restricted Subsidiary outside of the ordinary course of business (including the
receipt of proceeds paid on account of the loss of or damage to any property or
asset and awards of compensation for any asset taken by condemnation, eminent
domain or similar proceedings). The term "Asset Sale" shall not include (a) any
transaction consummated in compliance with Section 5.01 and the creation of any
Lien not prohibited by Section 4.18; provided, however, that any transaction
consummated in compliance with Section 5.01 involving a sale, conveyance,
assignment, transfer, lease or other disposal of less than all of the properties
or assets of the Company and the Restricted Subsidiaries shall be deemed to be
an Asset Sale with respect to the properties or assets of the Company and
Restricted Subsidiaries that are not so sold, conveyed, assigned, transferred,
leased or otherwise disposed of in such transaction; (b) sales of property or
equipment that has become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of the Company or any Restricted
Subsidiary, as the case may be; (c) any transaction consummated in compliance
with Section 4.06; and (d) sales of accounts receivable for cash at fair market
value. In addition, solely for purposes of Section 4.05, any sale, conveyance,
transfer, lease or other disposition of any property or asset, whether in one
transaction or a series of related transactions, involving assets with a Fair
Market Value not in excess of $500,000, and not in the aggregate, together with
all other such sales, conveyances, transfers, leases or dispositions after the
Issue Date, exceeding $2.0 million shall be deemed not to be an Asset Sale.
"Bankruptcy Law" see Section 6.01.
"Board of Directors" means (i) in the case of a Person that is
a corporation, the board of directors of such Person and (ii) in the case of any
other Person, the board of directors, board of managers, management committee or
similar governing body of such Person (or in the case of a limited partnership,
of such Person's general partner, or in the case of a limited
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liability company, of such Person's manager), or any authorized committee
thereof responsible for the management of the business and affairs of such
Person.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means a day (other than a Saturday or Sunday)
on which the Depository and banks in New York are open for business.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"Cash Equivalents" means: (a) U.S. dollars; (b) securities
issued or directly and fully guaranteed or insured by the U.S. government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition; (c) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; and (e) commercial paper rated
P-1, A-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc. or
Standard & Poor's, respectively, and in each case maturing within six months
after the date of acquisition.
"Change of Control" shall mean the occurrence of any of the
following events (whether or not approved by the Board of Directors of the
Company): (a) any "person" or "group" (as such terms are used in 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), excluding Permitted Holders, is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time upon the happening of an event or
otherwise), directly or indirectly, of more than 45% of the total voting power
of the then outstanding Equity Interests of the Company; (b) 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 members
of the Board of Directors whose election by the Board of Directors of the
Company or whose nomination for election by the members or stockholders of the
Company was approved by a vote of at least a majority of the members of the
Board of Directors then still in office who were either such members 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 (c) the liquidation or dissolution of the Company;
provided, however, that a Corporate Conversion shall not be a Change of Control
except that, in such case, the surviving corporation in such Corporate
Conversion shall be substituted for the
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Company for purposes of clauses (a) and (b) of this paragraph; provided further,
that a Change of Control will be deemed not to occur pursuant to clauses (a) or
(b) above if either (x) the acquiring "person" is a corporation engaged in the
telecommunications business with outstanding senior, unsecured corporate debt
securities having a maturity at original issuance of at least one year and such
debt securities are rated Investment Grade (without giving effect to any
third-party credit support or enhancement) by Standard & Poor's or Xxxxx'x
Investors Service, Inc. for a period of at least 90 consecutive days, beginning
on the date of such event (which period will be extended up to 90 additional
days for as long as the rating of such debt securities is under publicly
announced consideration for possible downgrading by the applicable rating
agency), or (y) in the event that the acquiring "person" is a corporation that
either (1) does not have any outstanding senior, unsecured corporate debt
securities that are rated by Standard & Poor's or Xxxxx'x Investors Service,
Inc. at any time during a period of 90 consecutive days beginning on the date of
such event (which period will be extended up to an additional 90 days for as
long as any such rating agency has publicly announced that such debt securities
will be rated), or (2) after the date of such event but during such 90 day
period, has outstanding senior, unsecured corporate debt securities having a
maturity at original issuance of at least one year that have been rated
Investment Grade (without giving effect to any third-party credit support or
enhancement) by Standard & Poor's or Xxxxx'x Investors Service, Inc. which
rating continues in effect for the remainder of the period specified in clause
(x) above, the Securities shall be rated Investment Grade immediately upon such
Change of Control.
"Change of Control Date" see Section 4.14.
"Collateral" has the meaning provided in Section 2 of the
Security Agreement.
"Collateral Documents" means the Interest Escrow Agreement and
the Security Agreement.
"Communications Act" means the Communications Act of 1934, as
amended.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President, a Vice President or its Treasurer,
and by an Assistant Treasurer, its Secretary or an Assistant Secretary, or, at
any time when the Company is a limited liability company, by the Company's
manager through an individual serving in such capacity with the Company's
manager, and delivered to the Trustee.
"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for federal, state, local and foreign
income taxes payable by the Company and the Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.
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"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest expense
of the Company and the Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount; (b) the net cost under Interest Rate
Protection Obligations (including any amortization of discounts); (c) the
interest portion of any deferred payment obligation; (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing; and (e) all capitalized interest and all accrued
interest; (ii) the interest component of Capital Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by the Company and the Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP; and (iii) dividends and distributions in respect of
Disqualified Equity Interests actually paid in cash by the Company during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any period,
the net income of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such net income, by excluding, without
duplication, (a) all extraordinary gains or losses and all gains and losses from
the sales or other dispositions of assets out of the ordinary course of business
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period; (b) that portion of such net income derived from or in
respect of investments in Persons other than Restricted Subsidiaries, except to
the extent actually received in cash by the Company or any Restricted Subsidiary
(subject, in the case of any Restricted Subsidiary, to the provisions of clause
(e) of this definition); (c) the portion of such net income (or loss) allocable
to minority interests in any Person (other than a Restricted Subsidiary) for
such period, except to the extent actually received in cash by the Company or
any Restricted Subsidiary (subject, in the case of any Restricted Subsidiary, to
the provisions of clause (e) of this definition); (d) net income (or loss) of
any other Person combined with the Company or any Restricted Subsidiary on a
"pooling of interests" basis attributable to any period prior to the date of
combination; and (e) the net income of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time (regardless of any waiver)
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its Equity
Interest holders.
"Consolidated Net Worth" with respect to any Person means the
equity of the holders of Qualified Equity Interests of such Person and its
Restricted Subsidiaries, as reflected on a balance sheet of such Person
determined on a consolidated basis and in accordance with GAAP.
"Consolidated Operating Cash Flow" means, with respect to any
period, Consolidated Net Income for such period increased (without duplication)
by the sum of (a) Consolidated Income Tax Expense for such period to the extent
deducted in determining Consolidated Net Income for such period; (b)
Consolidated Interest Expense for such period to the extent deducted in
determining Consolidated Net Income for such period; (c) all dividends on
Preferred Equity Interests to the extent not taken into account for computing
Consolidated
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Net Income for that period; and (d) depreciation, amortization and any other non
cash items for such period to the extent deducted in determining Consolidated
Net Income for such period (other than any non cash item that requires the
accrual of, or a reserve for, cash charges for any future period) of the Company
and the Restricted Subsidiaries, including, without limitation, amortization of
capitalized debt issuance costs for such period, all of the foregoing determined
on a consolidated basis in accordance with GAAP minus non cash items to the
extent they increase Consolidated Net Income (including the partial or entire
reversal of reserves taken in prior periods) for such period.
"Corporate Conversion" shall mean the conversion of the
Company to a corporation, whether pursuant to a merger, consolidation,
conversion by filing, assignment of assets, or similar transaction or series of
transactions, in each case resulting in a corporation substantially all of the
assets of which consist of substantially all of the assets that were held
directly or indirectly by the Company immediately prior to such transaction and
substantially all of the capital stock of which corporation is held by Persons
who were members of the Company immediately prior to such transaction or
Permitted Transferees of such Persons in substantially the same proportions.
"Corporate Trust Office" of the Trustee shall be at the
address of the Trustee specified in Section 13.02 or such other address as the
Trustee may give notice to the Company.
"Credit Facility" means the Amended and Restated Credit
Agreement, dated as of July 30, 1997, between Digital Television Services, LLC,
the lenders named therein, CIBC Wood Gundy Securities Corp., as Arranger, Xxxxxx
Guaranty Trust Company of New York, as Syndication Agent, Fleet National Bank,
as Documentation Agent and Canadian Imperial Bank of Commerce, as Administrative
Agent, including any deferrals, renewals, waivers, extensions, replacements,
refinancings or refundings thereof, or amendments, modifications or supplements
thereto and any agreement providing therefor, whether by or with the same or any
other lender, creditor, group of lenders or group of creditors, and including
related notes, guaranties, security agreements, pledge agreements, mortgages,
other collateral documents (including all Loan Documents (as defined in the
Credit Facility)) and note agreements and other instruments and agreements
executed in connection therewith.
"Cumulative Operating Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the Issue Date and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"Custodian" see Section 6.01.
"DBS" means direct broadcast satellite.
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"Debt to Operating Cash Flow Ratio" means the ratio of (a) an
amount equal to the Total Consolidated Indebtedness as of the date of
calculation (the "Determination Date") minus the amount of funds on deposit in
the Interest Escrow Account as of the Determination Date to (b) four times the
Consolidated Operating Cash Flow for the latest fiscal quarter for which
financial information is available immediately preceding such Determination Date
(the "Measurement Period"). For purposes of calculating Consolidated Operating
Cash Flow for the Measurement Period immediately prior to the relevant
Determination Date, (I) any Person that is a Restricted Subsidiary on the
Determination Date (or would become a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Restricted Subsidiary at all times during such Measurement Period, (II)
any Person that is not a Restricted Subsidiary on such Determination Date (or
would cease to be a Restricted Subsidiary on such Determination Date in
connection with the transaction that requires the determination of such
Consolidated Operating Cash Flow) will be deemed not to have been a Restricted
Subsidiary at any time during such Measurement Period, and (III) if the Company
or any Restricted Subsidiary shall have in any manner (x) acquired (including
through an Acquisition or the commencement of activities constituting such
operating business) or (y) disposed of (including by way of an Asset Sale or the
termination or discontinuance of activities constituting such operating
business) any operating business during such Measurement Period or after the end
of such period and on or prior to such Determination Date, such calculation will
be made on a pro forma basis in accordance with GAAP as if, in the case of an
Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated on the first day of such
Measurement Period and, in the case of an Asset Sale or termination or
discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period; provided, however, that such pro forma adjustment shall not give effect
to the Operating Cash Flow of any Acquired Person to the extent that such
Person's net income would be excluded pursuant to clause (e) of the definition
of Consolidated Net Income. For purposes of determining Total Consolidated
Indebtedness as of any Determination Date, the sum of all Indebtedness
outstanding under the Credit Facility on such Determination Date and all amounts
that the Company or any Restricted Subsidiary could borrow under the Credit
Facility on such Determination Date (assuming the satisfaction of all conditions
precedent under the Credit Facility other than conditions relating solely to
incremental amounts being available under the Credit Facility) shall be deemed
to be outstanding and added to Total Consolidated Indebtedness on such
Determination Date (but without duplication).
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Default Amount" means the principal amount of all outstanding
Securities (plus any applicable premium thereon), plus accrued and unpaid
interest, if any, thereon.
"Depository" means, with respect to the Securities issued in
the form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
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"Designated Senior Indebtedness" means (a) any Indebtedness of
the Company and any Guarantor outstanding under the Credit Facility (including
guaranties) and (b) any other Senior Indebtedness or Guarantor Senior
Indebtedness that, at the time of determination, has an aggregate principal
amount outstanding, together with any commitments to lend additional amounts, of
at least $10.0 million, if (in the case of Senior Indebtedness or Guarantor
Senior Indebtedness described in this clause (b)) the instrument governing such
Senior Indebtedness or Guarantor Senior Indebtedness expressly states that such
Indebtedness is "Designated Senior Indebtedness" for purposes of this Indenture,
a Board Resolution setting forth such designation by the Company has been filed
with the Trustee and such designation is not prohibited by the Credit Facility.
"Designation" see Section 4.17.
"Designation Amount" see Section 4.17.
"Determination Date" has the meaning set forth in the
definition of "Debt to Operating Cash Flow Ratio" above.
"DirecTv(R) Services" means DBS television services and all
other video, audio, data packages, "a la carte" programming services and other
services offered by DirecTv, Inc., a subsidiary of Xxxxxx Communications Galaxy,
Inc.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable,
at the option of the holder thereof, in whole or in part, or exchangeable into
Indebtedness on or prior to the earlier of the maturity date of the Securities
or the date on which no Securities remain outstanding.
"Eligible Institution" means a commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated Investment Grade at the time
as of which any investment or rollover therein is made.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, or member interests in such Person, including any Preferred Equity
Interests.
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"Escrow Agent" means The Bank of New York, as Escrow Agent
under the Interest Escrow Agreement, or any successor thereto appointed pursuant
to such agreement.
"Event of Default" see Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Existing Indebtedness" means any Indebtedness of the Company
and its Subsidiaries in existence on the Issue Date until such amounts are
repaid.
"Expiration Date" has the meaning set forth in the definition of "Offer
to Purchase" below.
"Fair Market Value" means, with respect to any asset, the
price (after taking into account any liabilities relating to such assets) that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is under
any compulsion to complete the transaction; provided, however, that the Fair
Market Value of any such asset or assets shall be determined conclusively by the
Board of Directors of the Company acting in good faith, and shall be evidenced
by resolutions of the Board of Directors of the Company delivered to the
Trustee; provided, however, that if the fair market value of such assets exceeds
$10.0 million, the fair market value shall be determined by an investment
banking firm of national standing selected by the Company.
"Final Maturity Date" means August 1, 2007.
"Funding Guarantor" see Section 11.05.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States that are applicable at the
date of determination and that are consistently applied for all applicable
periods.
"Global Security" means a security evidencing all or a portion
of the Securities issued to the Depository or its nominee in accordance with
Section 2.01 and bearing the legend set forth in Exhibit C hereto.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States are
pledged.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn
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down by letters of credit. A guarantee shall include, without limitation, any
agreement to maintain or preserve any other Person's financial condition or to
cause any other Person to achieve certain levels of operating results.
"Guarantor" means each Restricted Subsidiary, whether formed
or acquired before or after the Issue Date, that is required to become a
Guarantor of the Securities pursuant to Section 4.20.
"Guarantor Payment Blockage Period" see Section 12.02(a).
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, at any date, (i) all Obligations of such Guarantor under the Credit
Facility, (ii) all Interest Rate Protection Obligations of such Guarantor, (iii)
all Obligations of such Guarantor under stand-by letters of credit and (iv) all
other Indebtedness of such Guarantor for borrowed money, including principal,
premium, if any, and interest (including Post-Petition Interest) on such
Indebtedness, unless the instrument under which such Indebtedness of such
Guarantor for money borrowed is Incurred expressly provides that such
Indebtedness for money borrowed is not senior or superior in right of payment to
such Guarantor's Guaranty, and all renewals, extensions, modifications,
amendments or refinancings thereof. Notwithstanding the foregoing, Guarantor
Senior Indebtedness shall not include (i) to the extent that it may constitute
Indebtedness, any Obligation for federal, state, local or other taxes, (ii) any
Indebtedness among or between such Guarantor and the Company or any of such
Guarantor or the Company, (iii) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business, (iv) that portion of any Indebtedness that is Incurred in violation
of this Indenture; provided, however, that such Indebtedness shall be deemed not
to have been Incurred in violation of this Indenture for purposes of this clause
(iv) if (I) the holder(s) of such Indebtedness or their representative or such
Guarantor shall have furnished to the Trustee an opinion of independent legal
counsel, unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an officers' certificate of
such Guarantor) to the effect that the Incurrence of such Indebtedness does not
violate the provisions of this Indenture or (II) in the case of any Obligations
under the Credit Facility, the holder(s) of such Obligations or their agent or
representative shall have received a representation from such Guarantor to the
effect that the Incurrence of such Indebtedness does not violate the provisions
of this Indenture, (v) Indebtedness evidenced by the Guaranty, (vi) Indebtedness
of such Guarantor that is expressly subordinate or junior in right of payment to
any other Indebtedness of such Guarantor, (vii) to the extent that it may
constitute Indebtedness, any obligation owing under leases (other than Capital
Lease Obligations) or management agreements and (viii) any obligation that by
operation of law is subordinate to any general unsecured obligations of such
Guarantor.
"Guaranty" means the guarantee of a Restricted Subsidiary set
forth in Article 11.
"High Power Satellite Transmission Business" means the
business of the acquisition, transmission or sale of programming in the high
power DBS business utilizing broadcast satellite service (including any
provision of such services to cable operators or other
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media providers), which may utilize all or part of satellites owned by DirecTv,
Inc. or Xxxxxx Communication Galaxy Inc. and all other activities relating
thereto or arising therefrom.
"Holder," "holder of Securities," "Securityholders" or other
similar terms mean the registered holder of any Security.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall
have meanings correlative to the foregoing).
"Indebtedness" means (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such Person
and whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable incurred in the
ordinary course of business and payable in accordance with industry practices,
or other accrued liabilities arising in the ordinary course of business that are
not overdue or that are being contested in good faith); (e) every Capital Lease
Obligation of such Person; (f) every net obligation under interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and other agreements or arrangements designed to protect such Person against
fluctuations in interest rates; (g) every obligation of the type referred to in
clauses (a) through (f) of another Person and all dividends of another Person
the payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor, guarantor or
otherwise; and (h) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a) through (g) above. Indebtedness
(a) shall never be calculated taking into account any cash and cash equivalents
held by such Person; (b) shall not include obligations of any Person (x) arising
from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds in the
ordinary course of business, provided that such obligations are extinguished
within two Business Days of their incurrence unless covered by an overdraft
line, (y) resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business and consistent with past business
practices and (z) under stand-by letters of credit to the extent collateralized
by cash or Cash Equivalents; (c) that provides that an amount less than the
principal amount thereof shall be due upon any declaration of acceleration
thereof shall be deemed to be incurred or outstanding in an amount equal to the
accreted value thereof at the date of determination; (d) shall include the
liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company or any Restricted
Subsidiary; and (e) shall not include obligations under performance bonds,
performance guaranties, surety bonds and appeal bonds, letters of credit or
similar obligations,
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Incurred in the ordinary course of business (including standby letters of credit
securing obligations to the NRTC Incurred in the ordinary course of business
that are not overdue or that are being contested in good faith by appropriate
proceedings) (other than obligations under or in respect of any direct or
indirect credit support for obligations of any Unrestricted Subsidiary).
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent Financial Advisor" means a nationally recognized,
accounting, appraisal, investment banking firm or consultant with experience
advising DBS businesses that is, in the judgment of the Company's Board of
Directors, qualified to perform the task for which it has been engaged (i) that
does not, and whose directors, officers and employees or Affiliates do not, have
a direct or indirect financial interest in the Company and (ii) that, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Initial Purchasers" means Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, CIBC Wood Gundy Securities Corp. and X.X. Xxxxxx
Securities Inc.
"Insolvency or Liquidation Proceeding" means, with respect to
any Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of
any cash interest and any Additional Interest, if any, on the Securities.
"Interest Escrow Account" shall mean an account established in
the name of the Escrow Agent and funded by the Issuers on the Closing Date
pursuant to this Indenture.
"Interest Escrow Agreement" means the Interest Escrow
Agreement, dated as of the date hereof, by and among the Escrow Agent, the
Issuers and The Bank of New York, in its capacities as Trustee hereunder and as
Collateral Agent under the Security Agreement governing the disbursement of
funds from the Interest Escrow Account, in the form of Exhibit G.
"Interest Payment Date" means each semiannual interest payment
date on August 1 and February 1 of each year, commencing February 1, 1998.
"Interest Rate Protection Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
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"Interest Record Date" for the interest payable on any
Interest Payment Date (except a date for payment of defaulted interest) means
the July 15 or January 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guarantee or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
Person. The amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, and minus the amount of any
portion of such Investment repaid to such Person in cash as a repayment of
principal or a return of capital, as the case may be, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment. In determining the amount of any
Investment involving a transfer of any property or asset other than cash, such
property shall be valued at its fair market value at the time of such transfer,
as determined in good faith by the Board of Directors (or comparable body) of
the Person making such transfer.
"Investment Grade" means with respect to a security, that such
security is rated, by at least two nationally recognized statistical rating
organizations, in one of each such organization's four highest generic rating
categories.
"Issue Date" means the original issue date of the Series A
Securities (July 30, 1997).
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof, and any agreement to give any security interest).
"Marketable Securities" means (a) Government Securities; (b)
any certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution; (c)
commercial paper maturing not more than 365 days after the date of acquisition
issued by a corporation (other than an Affiliate of the Issuer) with an
Investment Grade rating, at the time as of which any investment therein is made,
issued or offered by an Eligible Institution; (d) any bankers acceptances or
money market deposit accounts issued or offered by an Eligible Institution; and
(e) any fund investing exclusively in investments of the types described in
clauses (a) through (d) above.
"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.
"Measurement Period" has the meaning set forth in the
definition of "Debt to Operating Cash Flow Ratio" above.
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"Net Cash Proceeds" means the aggregate proceeds in the form
of cash or Cash Equivalents received by the Company or any Restricted Subsidiary
in respect of any Asset Sale, including all cash or Cash Equivalents received
upon any sale, liquidation or other exchange of proceeds of Asset Sales received
in a form other than cash or Cash Equivalents, net of (a) the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable, or amounts in respect
thereof permitted to be distributed pursuant to clause (vi) of the second
paragraph of Section 4.06, as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements); (c)
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale; (d)
amounts deemed, in good faith, appropriate by the Board of Directors of the
Company to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such assets that are the subject of such Asset Sale
(provided that the amount of any such reserves shall be deemed to constitute Net
Cash Proceeds at the time such reserves shall have been released or are not
otherwise required to be retained as a reserve); and (e) with respect to Asset
Sales by Subsidiaries, the portion of such cash payments attributable to Persons
holding a minority interest in such Subsidiary.
"Non-Payment Event of Default" means any event (other than a
Payment Default) the occurrence of which entitles one or more Persons to
immediately accelerate the maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a person who is not a U.S. Person, as
defined in Regulation S.
"NRTC" means the National Rural Telecommunications Cooperative
and any successor entity to it.
"Obligations" means any principal, interest (including,
without limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer
to Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent
by or on behalf of the Company by first-class mail, postage prepaid, to each
Holder at such Holder's address appearing in the register for the Securities on
the date of the Offer offering to purchase up to the principal amount of
Securities specified in such Offer at the purchase price specified in such Offer
(as determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase, which shall be not less than 20 Business Days
nor more than 60 days after the date of such Offer, and a settlement date (the
"Purchase Date") for purchase of Securities to occur no later than five Business
Days after the Expiration Date. The Company shall notify the Trustee at least 15
Business Days (or such shorter period as is acceptable to the Trustee) prior to
the mailing of the Offer of the Company's obligation to make an Offer to
Purchase, and the Offer shall be mailed by the Company or, at the Company's
request, by the Trustee in the name and at the expense
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of the Company; provided, however, that, if the Company mails the Offer, the
Company may notify the Trustee on the same Business Day as the mailing of the
Offer of the Company's obligation to make an Offer to Purchase pursuant to the
above. The Offer shall contain all the information required by applicable law to
be included therein. The Offer shall also contain information concerning the
business of the Company and its Subsidiaries that the Company in good faith
believes will enable such Holders to make an informed decision with respect to
the Offer to Purchase (which at a minimum will include (i) the most recent
annual and quarterly financial statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the
document required to be filed with the Trustee pursuant to this Indenture (which
requirements may be satisfied by delivery of such documents together with the
Offer), (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring the Company to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such Holders to tender Securities pursuant to
the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which such
amount has been determined pursuant to the Section of this Indenture
requiring the Offer to Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each
$1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal face amount;
(6) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(8) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
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(9) that each Holder electing to tender all or any portion of
a Security pursuant to the Offer to Purchase will be required to
surrender such Security at the place or places specified in the Offer
prior to the close of business on the Expiration Date (such Security
being, if the Company or the Trustee so requires, duly endorsed by, or
accompanied by 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 duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the fifth Business
Day next preceding the Expiration Date, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Security the Holder tendered, the certificate number of the
Security the Holder tendered and a statement that such Holder is
withdrawing all or a portion of such Holder's tender;
(11) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (b) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000
principal amount or integral multiples thereof shall be purchased); and
(12) that in the case of any Holder whose Security is
purchased only in part, 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 any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"Officer" means the Chairman, any Vice Chairman, the
President, any Vice President, the Chief Financial Officer, the Treasurer, or
the Secretary of the Company, or of Capital, as the context may require, or, in
the case of the Company, at any time when the Company is a limited liability
company, an individual serving in such capacity with the Company's manager while
acting on behalf of the Company's manager in its capacity as such manager.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 13.04 and 13.05.
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"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Other Indebtedness" see Section 4.05.
"Participant" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Period" see Section 8.02(a).
"Payment Default" means any default, after any requirement for
the giving of notice, the lapse of time or both, or any other condition to such
default becoming an event of default has occurred, in the payment of principal
of (or premium, if any) or interest on or any other amount payable in connection
with Designated Senior Indebtedness.
"Permitted Acquisition Deposits" means any advance or payment
of funds, whether as consideration for an option to acquire or as a deposit,
binder or xxxxxxx money, whether or not refundable, and whether or not made into
escrow, made pursuant to any written agreement, term sheet, letter of intent or
other instrument providing for the Acquisition of any High Power Satellite
Transmission Business, the consummation of which would not constitute a
Restricted Payment pursuant to clause (iv) of the first paragraph under Section
4.06, or providing for an Investment made in compliance with clause (vii) of the
second paragraph under Section 4.06, to the extent that the aggregate of such
amounts outstanding at any one time with respect to Acquisitions or such
Investments that have not yet been consummated does not exceed $10 million.
"Permitted Holder" means any of those Persons who were members
of the Company on the Issue Date, the Permitted Transferees of such Persons, and
any Person or group controlled by each or any of such Persons.
"Permitted Indebtedness" see Section 4.04.
"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding; (d) Interest Rate Protection Obligations; (e) bonds, notes,
debentures or other securities received as a result of Asset Sales permitted
under Section 4.05 not to exceed 20% of the total consideration for such Asset
Sales (determined and computed as set forth in Section 4.05); (f) transactions
with officers, directors and employees of the Company, or any Restricted
Subsidiary entered into in the ordinary course of business (including
compensation or employee benefit arrangements with any such director or
employee) and consistent with past business practices; (g) Investments existing
as of the Issue Date and any amendment, extension, renewal or modification
thereof to the extent that any such amendment, extension, renewal or
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modification does not require the Company or any Restricted Subsidiary to make
any additional cash or non-cash payments or provide additional services in
connection therewith; (h) any Investment to the extent that the consideration
therefor consists of Qualified Equity Interests of the Company; (i) any
Investment consisting of a guarantee by a Restricted Subsidiary of Senior
Indebtedness or any guarantee permitted under clause (e) of the second paragraph
of Section 4.04; and (j) Investments in Marketable Securities by the Escrow
Agent and held in the Interest Escrow Account.
"Permitted Junior Guarantor Securities" means any securities
of any Guarantor or any other Person that are (i) equity securities without
special covenants or (ii) subordinated in right of payment to all Guarantor
Senior Indebtedness that may at the time be outstanding, to substantially the
same extent as, or to a greater extent than, its Guaranty is subordinated as
provided in this Indenture, in any event pursuant to a court order so providing
and as to which (a) the rate of interest on such securities shall not exceed the
effective rate of interest on the Securities on the date of this Indenture, (b)
such securities shall not be entitled to the benefits of covenants or defaults
materially more beneficial to the holders of such securities than those in
effect with respect to the Securities on the date of this Indenture and (c) such
securities shall not provide for amortization (including sinking fund and
mandatory prepayment provisions) commencing prior to the date six months
following the final scheduled maturity date of the Guarantor Senior Indebtedness
(as modified by the plan of reorganization or readjustment pursuant to which
such securities are issued).
"Permitted Junior Securities" means any securities of the
Company or any other Person that are (i) equity securities without special
covenants or (ii) subordinated in right of payment to all Senior Indebtedness
that may at the time be outstanding, to substantially the same extent as, or to
a greater extent than, the Securities are subordinated as provided in this
Indenture, in any event pursuant to a court order so providing and as to which
(a) the rate of interest on such securities shall not exceed the effective rate
of interest on the Securities on the date of this Indenture, (b) such securities
shall not be entitled to the benefits of covenants or defaults materially more
beneficial to the holders of such securities than those in effect with respect
to the Securities on the date of this Indenture and (c) such securities shall
not provide for amortization (including sinking fund and mandatory prepayment
provisions) commencing prior to the date six months following the final
scheduled maturity date of the Senior Indebtedness (as modified by the plan of
reorganization or readjustment pursuant to which such securities are issued).
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company
or any Restricted Subsidiary; provided, however, that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
secure any property or assets of the Company or any Restricted Subsidiary other
than the property or assets subject to the Liens prior to such merger or
consolidation; (b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business that secure payment of obligations not more than 60 days past due or
that are being contested in good faith and by appropriate proceedings; (c) Liens
existing on the Issue Date; (d) Liens securing only the Securities; (e) Liens in
favor of the Company or any Restricted Subsidiary so long as held by
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the Company or any Restricted Subsidiary; (f) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted; provided, however, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor; (g) easements, reservation of rights of way, restrictions and other
similar easements, licenses, restrictions on the use of properties, or minor
imperfections of title that in the aggregate are not material in amount and do
not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of the Company and the
Restricted Subsidiaries; (h) Liens resulting from the deposit of cash or notes
in connection with contracts, Permitted Acquisition Deposits, tenders or
expropriation proceedings, or to secure workers' compensation, surety or appeal
bonds, costs of litigation when required by law and public and statutory
obligations or obligations under franchise arrangements and agreements with the
NRTC entered into in the ordinary course of business; (i) Liens securing
Indebtedness consisting of Capital Lease Obligations, Purchase Money
Indebtedness, mortgage financings, industrial revenue bonds or other monetary
obligations, in each case incurred solely for the purpose of financing all or
any part of the purchase price or cost of construction or installation of assets
used in the business of the Company or the Restricted Subsidiaries, or repairs,
additions or improvements to such assets; provided, however, that (I) such Liens
secure Indebtedness in an amount not in excess of the original purchase price or
the original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such Indebtedness), (II) such Liens do not extend to any other
assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or
improved), (III) the Incurrence of such Indebtedness is permitted by Section
4.04, and (IV) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement; (j) Liens to secure any
refinancings, renewals, extensions, modifications or replacements (collectively,
"refinancing") (or successive refinancings), in whole or in part, of any
Indebtedness secured by Liens referred to in the clauses above so long as such
Lien does not extend to any other property (other than improvements thereto);
(k) Liens securing letters of credit entered into in the ordinary course of
business and consistent with past business practice; (l) Liens on and pledges of
the Equity Interests of any Unrestricted Subsidiary securing any Indebtedness of
such Unrestricted Subsidiary; and (m) any calls or rights of first refusal with
respect to any partnership interests.
"Permitted Transferee" means, with respect to any Person: (a)
in the case of any Person who is a natural person, such individual's spouse or
children, any trust for such individual's benefit or the benefit of such
individual's spouse or children, or any corporation, limited liability company
or partnership in which the direct and beneficial owner of all of the equity
interest is such Person or such individual's spouse or children or any trust for
the benefit of such persons; (b) in the case of any Person who is a natural
person, the heirs, executors, administrators or personal representatives upon
the death of such Person or upon the incompetency or disability of such Person
for purposes of the protection and management of such individual's assets; and
(c) in the case of any Person who is not a natural person, any Affiliate of such
Person.
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"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Securities" has the meaning set forth in Section
2.01.
"Post-Petition Interest" means, with respect to any
Indebtedness of any Person, all interest accrued or accruing on such
Indebtedness after the commencement of any Insolvency or Liquidation Proceeding
with respect to such Person in accordance with and at the contract rate
(including, without limitation, any rate applicable upon default) specified in
the agreement or instrument creating, evidencing or governing such Indebtedness,
whether or not, pursuant to applicable law or otherwise, the claim for such
interest is allowed as a claim in such Insolvency or Liquidation Proceeding.
"Preferred Equity Interest", in any Person, means an Equity
Interest of any class or classes (however designated) that is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"principal" of a debt security means the principal of the
security, plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" has the meaning provided in
Section 2(b) of the Registration Rights Agreement.
"Private Placement Legend" means the legend initially set
forth on the Securities in the form set forth on Exhibit A hereto.
"Public Equity Offering" means an underwritten public offering
of Qualified Equity Interests of the Company or its corporate successor pursuant
to an effective registration statement filed under the Securities Act (excluding
registration statements filed on Form S-8).
"Purchase Agreement" means the Purchase Agreement dated July
25, 1997 between the Company and the Initial Purchasers.
"Purchase Amount" has the meaning set forth in the definition
of "Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the
Company or any Restricted Subsidiary Incurred for the purpose of financing all
or any part of the purchase price or the cost of construction or improvement of
any property; provided, however, that the aggregate principal amount of such
Indebtedness does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost, including any refinancing of such
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Indebtedness that does not increase the aggregate principal amount (or accreted
amount, if less) thereof as of the date of refinancing.
"Purchase Price" has the meaning set forth in the definition
of "Offer to Purchase" above.
"QIB Global Security" see Section 2.01.
"Qualified Equity Interest" in any Person means any Equity
Interest in such Person other than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"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", 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 hereto as Exhibit A.
"Registered Exchange Offer" means the offer to exchange the
Series B Securities for all of the outstanding Series A Securities in accordance
with the Registration Rights Agreement.
"Registrar" see Section 2.03.
"Registration" means a Registered Exchange Offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Registration Rights Agreement" means the Senior Subordinated
Notes Registration Rights Agreement dated as of July 30, 1997 between the
Company and the Initial Purchasers.
"Registration Statement" means the registration statement(s)
as defined and described in the Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" see Section 2.01.
"Representative" see Section 8.02(b).
"Required Filing Date" see Section 4.12.
"Restricted Investment" means any Investment other than a
Permitted Investment.
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"Restricted Payments" see Section 4.06.
"Restricted Security" has the meaning set forth in Rule
144(a)(3) under the Securities Act; provided, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company
that has not been designated by the Board of Directors of the Company, by a
resolution of the Board of Directors of the Company delivered to the Trustee, as
an Unrestricted Subsidiary pursuant to Section 4.17. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of Section 4.17.
"Revocation" see Section 4.17.
"Rule 144A" means Rule 144A under the Securities Act.
"Rural DirecTv(R) Market" means a designated rural area of the
United States in which the NRTC has the exclusive right to provide DirecTv(R)
Services to residential households and business establishments.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series A Securities, the Series B
Securities and the Private Exchange Securities treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Securities Amount" see Section 4.05.
"Securities Portion of Unutilized Net Cash Proceeds" see
Section 4.05.
"Security Agreement" means the Escrow Security Agreement dated
as of the date of this Indenture, by and between the Escrow Agent and the
Issuers, governing the disbursement of funds for the Interest Escrow Account.
"Senior Indebtedness" means, at any date, (a) all Obligations
of the Company under the Credit Facility; (b) all Interest Rate Protection
Obligations of the Company; (c) all Obligations of the Company under stand-by
letters of credit; and (d) all other Indebtedness of the Company for borrowed
money, including principal, premium, if any, and interest (including
Post-Petition Interest) on such Indebtedness, unless the instrument under which
such Indebtedness of the Company for money borrowed is Incurred expressly
provides that such Indebtedness for money borrowed is not senior or superior in
right of payment to the Securities, and all renewals, extensions, modifications,
amendments or refinancings thereof. Notwithstanding the foregoing, Senior
Indebtedness shall not include (a) to the extent that it may
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constitute Indebtedness, any Obligation for federal, state, local or other
taxes; (b) any Indebtedness among or between the Company and any Subsidiary of
the Company; (c) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods or
materials, or for services obtained, in the ordinary course of business; (d)
that portion of any Indebtedness that is Incurred in violation of this
Indenture; provided, however, that such Indebtedness shall be deemed not to have
been Incurred in violation of this Indenture for purposes of this clause (d) if
(I) the holder(s) of such Indebtedness or their representative or the Company
shall have furnished to the Trustee an opinion of independent legal counsel,
unqualified in all material respects, addressed to the Trustee (which legal
counsel may, as to matters of fact, rely upon an officers' certificate of the
Company) to the effect that the Incurrence of such Indebtedness does not violate
the provisions of this Indenture or (II) in the case of any Obligations under
the Credit Facility, the holder(s) of such Obligations or their agent or
representative shall have received a representation from the Company to the
effect that the Incurrence of such Indebtedness does not violate the provisions
of this Indenture; (e) Indebtedness evidenced by the Securities; (f)
Indebtedness of the Company that is expressly subordinate or junior in right of
payment to any other Indebtedness of the Company; (g) to the extent that it may
constitute Indebtedness, any obligation owing under leases (other than Capital
Lease Obligations) or management agreements; and (h) any obligation that by
operation of law is subordinate to any general unsecured obligations of the
Company.
"Series A Securities" means the 12 1/2% Senior Subordinated
Notes due 2007, Series A, of the Issuers issued pursuant to this Indenture and
sold pursuant to the Purchase Agreement.
"Series B Securities" means the 12 1/2% Senior Subordinated
Notes due 2007, Series B, of the Issuers to be issued in exchange for the Series
A Securities pursuant to the Registered Exchange Offer and the Registration
Rights Agreement.
"Significant Restricted Subsidiary" means, at any date of
determination, (a) any Restricted Subsidiary that, together with its
Subsidiaries that constitute Restricted Subsidiaries (i) for the most recent
fiscal year of the Company accounted for more than 5.0% of the consolidated
revenues of the Company and the Restricted Subsidiaries or (ii) as of the end of
such fiscal year, owned more than 5.0% of the consolidated assets of the Company
and the Restricted Subsidiaries, all as set forth on the consolidated financial
statements of the Company and the Restricted Subsidiaries for such year prepared
in conformity with GAAP, and (b) any Restricted Subsidiary that, when aggregated
with all other Restricted Subsidiaries that are not otherwise Significant
Restricted Subsidiaries and as to which any event described in clause (7), (8)
or (9) of Section 6.01 has occurred, would constitute a Significant Restricted
Subsidiary under clause (a) of this definition.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
interest is due and payable.
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"Strategic Equity Investor" means a Person that owns and
operates businesses in the telecommunications, DBS information systems,
entertainment, cable television, programming, electronics or similar or related
industries.
"Subordinated Indebtedness" means (a) with respect to the
Company, any Indebtedness of the Company that is expressly subordinated in right
of payment to the Securities and (b) with respect to any Guarantor, any
Indebtedness of such Guarantor that is expressly subordinated in right of
payment to the Guaranty of such Guarantor.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended, as in effect on the date of this Indenture,
except as provided in Section 10.03.
"Total Consolidated Indebtedness" means, as at any date of
determination, an amount equal to the aggregate amount of all Indebtedness and
Disqualified Equity Interests of the Company and the Restricted Subsidiaries
outstanding as of such date of determination.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary, assistant treasurer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such trust matter is referred because of his knowledge
of and familiarity with the particular subject.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.17. Any such designation may be revoked
by a resolution of the Board of Directors of the Company delivered to the
Trustee, subject to the provisions of Section 4.17.
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"Unutilized Net Cash Proceeds" see Section 4.05(a).
"U.S. Person" means a "U.S. person" as defined in Rule 902
under the Securities Act.
"Voting Equity Interests" means Equity Interests in a
corporation or other Person with voting power under ordinary circumstances
entitling the holders thereof to elect the Board of Directors or other governing
body of such corporation or such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Company.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
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SECTION 1.03. 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 effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
ARTICLE II.
THE SECURITIES
SECTION 2.01. Form and Dating.
The Series A Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Series B Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Private
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, but shall have the
Private Placement Legend contained in Exhibit A. The Securities may have
notations, legends or endorsements (including notations relating to the
Guaranties) required by law, stock exchange rule or usage. The Company and the
Trustee shall approve the form of the Securities and any notation, legend or
endorsement (including notations relating to the Guaranties) on them. Each
Security shall be dated the date of its issuance and shall show the date of its
authentication.
Securities initially offered and sold by the Initial
Purchasers (i) to Qualified Institutional Buyers in reliance on Rule 144A, (ii)
to Institutional Accredited Investors or (iii) in offshore transactions in
reliance on Regulation S shall, unless the applicable Holder requests Securities
in the form of Certificated Securities in registered form ("Physical
Securities"), which shall be in substantially the form set forth in Exhibit A,
be issued initially in the form of one
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or more permanent Global Securities in registered form, substantially in the
form set forth in Exhibit A hereto, deposited with the Trustee, as custodian for
the Depository, and shall bear the legend set forth on Exhibit C hereto. One or
more separate Global Securities shall be issued to represent Securities held by
(i) Qualified Institutional Buyers (a "QIB Global Security"), (ii) Institutional
Accredited Investors (an "Accredited Investor Global Security") and (iii)
Persons acquiring Securities in offshore transactions in reliance on Regulation
S (a "Regulation S Global Security"). The Company shall cause the QIB Global
Securities, Accredited Investor Global Securities and Regulation S Global
Securities to have separate CUSIP numbers. The aggregate principal amount of any
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, of
each of the Issuers shall sign, or one Officer shall sign and one Officer or an
Assistant Secretary (each of whom shall, in each case, have been duly authorized
by all requisite corporate actions) of each of the Issuers shall attest to, the
Securities for the Issuers by manual or facsimile signature. Seals may be
accepted by facsimile transmission. A single individual may serve as an Officer
or Assistant Secretary of each of the Issuers and execute or attest the
execution of the Securities in such dual capacity with the effect that the
Securities shall have been executed or attested to by at least two individuals
and an Officer or Assistant Secretary of each Issuer.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but 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 (i) Series A Securities for
original issue in the aggregate principal face amount not to exceed $155,000,000
and (ii) Series B Securities or Private Exchange Securities from time to time
only in exchange for a like principal face amount of Series A Securities, in
each case upon a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of Securities to
be authenticated, the series of Securities and the date on which the Securities
are to be authenticated. The aggregate principal face amount of Securities
outstanding at any time may not exceed $155,000,000, except as provided in
Section 2.07. Upon receipt of a written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in substitution
for Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent.
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An authenticating agent has the same rights as an Agent to deal with the Company
and Affiliates of the Company.
The Securities shall be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency in the Borough
of Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands 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 Issuers, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term "Paying
Agent" includes any additional Paying Agent. Except as provided herein, either
of the Issuers, or any Subsidiary may act as Paying Agent, Registrar or
co-Registrar.
The Issuers shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Issuers shall notify the Trustee of the
name and address of any such Agent. If the Issuers fail to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Issuers initially appoint the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Issuers shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets 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 Issuers in making any such payment. The Issuers at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Issuers to the
Paying Agent (if other than either of the Issuers or a Subsidiary), the Paying
Agent shall have no further liability for such assets. If either of the Issuers,
any Subsidiary or any of their respective Affiliates acts as Paying Agent, it
shall, on or before each due date of the principal of or interest on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
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SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Issuers shall
furnish to the Trustee before each Interest Record Date and at such other times
as the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of Holders, which
list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Issuers and the Registrar or co-Registrar, duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing. To permit registrations of transfers and exchanges, the Issuers shall
execute and the Trustee shall authenticate Securities at the Registrar's or
co-Registrar's written request. No service charge shall be made for any
registration of transfer or exchange, but the Issuers may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or other
governmental charge payable upon exchanges or transfers pursuant to Section
2.02, 2.10, 3.06, 4.05, 4.14 or 10.05). The Registrar or co-Registrar shall not
be required to register the transfer or exchange of any Security (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities and ending at the close of business on the
day of such mailing and (ii) selected for redemption in whole or in part
pursuant to Article Three hereof, except the unredeemed portion of any Security
being redeemed in part.
Prior to the registration of any transfer by a Holder as
provided herein, the Issuers, the Trustee, and any Agent of the Issuers shall
treat the person in whose name the Security is registered as the owner thereof
for all purposes whether or not the Security shall be overdue, and neither the
Issuers, the Trustee, nor any such Agent shall be affected by notice to the
contrary. Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Depository
(or its agent), and that ownership of a beneficial interest in a Global Security
shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. Such Holder must provide an indemnity bond or other
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indemnity, sufficient in the judgment of both the Issuers and the Trustee, to
protect the Issuers, the Trustee and any Agent from any loss that any of them
may suffer if a Security is replaced and evidence to their satisfaction of the
apparent loss, destruction or theft of such Security. The Issuers may charge
such Holder for their reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional joint and several
obligation of the Issuers.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because either of the Issuers or any of their Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Final Maturity
Date the Paying Agent holds money sufficient to pay all of the principal and
interest due on the Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by either of the Issuers, the Guarantors or any of their
respective Affiliates shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that a Trust Officer of the
Trustee actually knows are so owned shall be disregarded.
The Trustee may require an Officers' Certificate listing
Securities owned by either of the Issuers, the Guarantors or their respective
Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Issuers may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Issuers consider appropriate for temporary
Securities. Without unreasonable delay, the Issuers shall prepare and the
Trustee
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shall authenticate upon receipt of a written order of the Issuers pursuant to
Section 2.02 definitive Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
The Issuers at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel all Securities surrendered for transfer,
exchange, payment or cancellation and deliver to the Company such canceled
Securities for disposal. Subject to Section 2.07, the Issuers may not issue new
Securities to replace Securities that they have paid or delivered to the Trustee
for cancellation. If either of the Issuers or any Guarantor shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Issuers default in a payment of principal or interest
on the Securities, they shall jointly and severally pay interest on overdue
principal and on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate per annum
borne by the Securities, to the extent lawful.
SECTION 2.13. CUSIP Number.
The Issuers in issuing the Securities will use one or more
"CUSIP" numbers and the Trustee shall use any such CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of any such CUSIP numbers printed in the notice or on the Securities,
and that reliance may be placed only on the other identification numbers printed
on the Securities. The Issuers shall promptly notify the Trustee of any changes
in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest
Payment Date, Redemption Date, Purchase Date and the Final Maturity Date, the
Issuers shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Purchase Date or Final Maturity Date, as the case may be, in a
timely manner that permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Purchase Date or Final Maturity
Date, as the case may be.
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SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C hereto.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository, or the Trustee as its
custodian, or under such Global Security, and the Depository may be treated by
the Issuers, the Trustee and any agent of the Issuers or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the
Trustee or any agent of the Issuers or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities may
be transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Issuers within 90 days of such notice or (ii) the Issuers, at their
option, notify the Trustee in writing that the Issuers elect to cause the
issuance of Securities in the form of Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall upon written
instructions from the Issuers authenticate and make available for delivery, to
each beneficial owner identified by the Depository in exchange for its
beneficial interest in the Global Securities, an aggregate principal face amount
of Physical Securities of authorized denominations equal to such beneficial
owner's interest in the Global Securities.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action that a Holder is entitled to
take under this Indenture or the Securities.
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SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When
Physical Securities are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal number
of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(II) in the case of Physical Securities the offer and sale of
which have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company,
by the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to
the Registrar or co-Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification
from such Holder to that effect (substantially in the form of
Exhibit D hereto); or
(B) if such Physical Security is being transferred to
a Qualified Institutional Buyer in accordance with Rule 144A,
a certification to that effect (substantially in the form of
Exhibit D hereto); or
(C) if such Physical Security is being transferred to
an Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee certificate for
Institutional Accredited Investors substantially in the form
of Exhibit E hereto; or
(D) if such Physical Security is being transferred in
reliance on Regulation S, delivery of a certification to that
effect (substantially in the form of Exhibit D hereto) and a
transferor certificate for Regulation S transfers
substantially in the form of Exhibit F hereto and an Opinion
of Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the Securities
Act; or
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(E) if such Physical Security is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (substantially in the form of Exhibit D hereto) and an
Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
or co-Registrar of a Physical Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Registrar or
co-Registrar, together with:
(A) certification, substantially in the form of
Exhibit D hereto, that such Physical Security is being
transferred (I) to a Qualified Institutional Buyer, (II) to an
Accredited Investor or (III) in an offshore transaction in
reliance on Regulation S; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to make, an
endorsement on the applicable Global Security to reflect an
increase in the aggregate amount of the Securities represented
by the Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal face amount of Securities represented by the
applicable Global Security to be increased accordingly. If no Global Security
representing Securities held by Qualified Institutional Buyers, Institutional
Accredited Investors or Persons acquiring Securities in offshore transactions in
reliance on Regulation S, as the case may be, is then outstanding, the Company
shall issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate such a Global Security in the
appropriate principal face amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the registration of transfer of an
interest in a QIB Global Security, an Accredited Investor Global Security or
Regulation S Global Security, as the case may be, to another type of Global
Security, together with the applicable Global Securities (or, if the
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applicable type of Global Security required to represent the interest as
requested to be transferred is not then outstanding, only the Global Security
representing the interest being transferred) and a certification, substantially
in the form of Exhibit D hereto, that such interest is being transferred (I) to
a Qualified Institutional Buyer, (II) to an Accredited Investor or (III) in an
offshore transaction in reliance on Regulation S, as the case may by, the
Registrar or Co-Registrar shall cancel such Global Securities (or Global
Security) and the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.02, authenticate new
Global Securities of the types so canceled (or the type so canceled and
applicable type required to represent the interest as requested to be
transferred) reflecting the applicable increase and decrease of the principal
face amount of Securities represented by such types of Global Securities, giving
effect to such transfer. If the applicable type of Global Security required to
represent the interest as requested to be transferred is not outstanding at the
time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Security of such type in principal face amount equal
to the principal face amount of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Security for
a Physical Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Physical Security. Upon receipt by the Registrar or co-Registrar of
written instructions, or such other form of instructions as is
customary for the Depository, from the Depository or its nominee on
behalf of any Person having a beneficial interest in a Global Security
and upon receipt by the Trustee of a written order or such other form
of instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the offer
and sale of which have not been registered under the Securities Act,
the following additional information and documents:
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as being the
beneficial owner, a certification from such Person to that
effect (substantially in the form of Exhibit D hereto); or
(B) if such beneficial interest is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A, a certification to that effect (substantially in the
form of Exhibit D hereto); or
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee certificate for
Institutional Accredited Investors substantially in the form
of Exhibit E hereto; or
(D) if such beneficial interest is being transferred
in reliance on Regulation S, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto)
and a transferor certificate for Regulation S transfers
substantially in the form of Exhibit F hereto and an Opinion
of Counsel
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reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred
in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (substantially in the form of
Exhibit D hereto) and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (substantially in the form of Exhibit D hereto) and an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal face amount
of the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver
to the transferee a Physical Security in the appropriate principal face
amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar or co-Registrar in writing. The
Registrar or co-Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private Placement
Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act.
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(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Participants
or beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE III.
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Issuers want to redeem Securities pursuant to paragraph
5 or 6 of the Securities at the applicable redemption price set forth thereon,
they shall notify the Trustee in writing of the Redemption Date and the
principal amount of Securities to be redeemed. The Issuers shall give such
notice to the Trustee at least 45 days before the Redemption Date (unless a
shorter notice shall be agreed to by the Trustee in writing), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of the Depository)
based on the aggregate principal amount of Securities held by each Holder. The
Trustee shall make the selection from the Securities then outstanding, subject
to redemption and not previously called for redemption.
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The Trustee may select for redemption pursuant to paragraph 5
or 6 of the Securities portions of the principal face amount of Securities that
have denominations equal to or larger than $1,000 principal face amount.
Securities and portions of them the Trustee so selects shall be in amounts of
$1,000 principal face amount or integral multiples thereof. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Issuers shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose Securities are to be redeemed no
later than 90 days following the consummation of the last Public Equity Offering
or sale of Qualified Equity Interests of the Company to Strategic Equity
Investors resulting in gross cash proceeds to the Company, when aggregated with
all prior Public Equity Offerings and sales of Qualified Equity Interests of the
Company to Strategic Equity Investors, of at least $25.0 million.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) that, unless the Issuers default in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to
the Paying Agent; and
(6) 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 surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued.
At the Issuers' request, the Trustee shall give the notice of
redemption on behalf of the Issuers, in the Issuers' names and at the Issuers'
joint and several expense.
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SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the
Issuers shall deposit with the Paying Agent (or if either of the Issuers or a
Subsidiary is the Paying Agent, it shall, on or before the Redemption Date,
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued interest, if any, on all Securities to be redeemed on that date other
than Securities or portions thereof called for redemption on that date that have
been delivered by the Issuers to the Trustee for cancellation.
If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of the Issuers to deposit with the Paying Agent money sufficient to
pay the redemption price thereof, the principal and accrued and unpaid interest,
if any, thereon shall, until paid or duly provided for, bear interest as
provided in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Securities.
The Issuers shall jointly and severally pay the principal of
and interest on the Securities in the manner provided in the Securities and the
Registration Rights Agreement. An installment of principal or interest shall be
considered paid on the date due if the Trustee or Paying Agent (other than
either of the Issuers, a Subsidiary or an Affiliate of the Issuers) holds on
that date money designated for and sufficient to pay the installment in full and
is not prohibited from paying such money to the Holders of the Securities
pursuant to the terms of this Indenture.
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The Issuers shall jointly and severally pay cash interest on
overdue principal at the same rate per annum borne by the Securities. The
Issuers shall jointly and severally pay cash interest on overdue installments of
interest at the same rate per annum borne by the Securities, to the extent
lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The
City of New York, the office or agency required under Section 2.03. The Issuers
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Issuers shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
13.02 hereof. The Issuers hereby initially designate the Trustee at its address
set forth in Section 13.02 hereof as its office or agency in the Borough of
Manhattan, The City of New York for such purposes.
SECTION 4.03. Transactions with Affiliates.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, conduct any business or enter
into any transaction (or series of related transactions) with or for the benefit
of any of their respective Affiliates or any direct or indirect beneficial
holder of 10% or more of the Equity Interests of the Company or any officer,
director or employee of the Company or any Restricted Subsidiary (each an
"Affiliate Transaction"), unless such Affiliate Transaction is on terms that are
no less favorable to the Company or such Restricted Subsidiary, as the case may
be, than would be available in a comparable transaction with an unaffiliated
third party. If such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments or other consideration having a Fair
Market Value in excess of $5.0 million, the Company shall not, and shall not
cause or permit any Restricted Subsidiary to, enter into such Affiliate
Transaction, unless a majority of the disinterested members of the Board of
Directors of the Company shall have approved such Affiliate Transaction and
determined that such Affiliate Transaction complies with the foregoing
provisions; provided, however, that if such Affiliate Transaction is in the
ordinary course of business consistent with the past practice of any business of
the Company or a Restricted Subsidiary, then there shall be no need to comply
with this sentence. In the event that the Company obtains a written opinion from
an Independent Financial Advisor (and files the same with the Trustee) stating
that the terms of an Affiliate Transaction are fair, from a financial point of
view, to the Company or the Restricted Subsidiary involved in such Affiliate
Transaction, as the case may be, such opinion will conclusively meet the
requirements of the first sentence of this paragraph and there shall be no need
to comply with the second sentence of this paragraph.
Notwithstanding the foregoing, the restrictions set forth in
this Section 4.03 shall not apply to (i) transactions with or among the Company
and any Restricted Subsidiary or between or among Restricted Subsidiaries; (ii)
customary directors' fees, indemnification and similar arrangements, consulting
fees, employee salaries, bonuses or employment agreements, compensation or
employee benefit arrangements and incentive arrangements with any officer,
director or employee of the Company entered into in the ordinary course of
business (including
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customary benefits thereunder) and payments under any indemnification
arrangements permitted by applicable law; (iii) any transactions undertaken
pursuant to any other contractual obligations in existence on the Issue Date (as
in effect on the Issue Date); (iv) any Restricted Payments made in compliance
with Section 4.06; (v) loans and advances to officers, directors and employees
of the Company and the Restricted Subsidiaries for travel, entertainment, moving
and other relocation expenses, in each case made in the ordinary course of
business and consistent with past business practices; (vi) the Incurrence of
intercompany Indebtedness permitted pursuant to clause (d) of the second
paragraph of Section 4.04 hereof; (vii) the pledge of Equity Interests of
Unrestricted Subsidiaries to support the Indebtedness thereof; and (viii) the
issuance and sale by the Company of Qualified Equity Interests.
SECTION 4.04. Limitation on Indebtedness.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) or issue any Disqualified Equity Interests
except for Permitted Indebtedness; provided, however, that the Company or any
Restricted Subsidiary may Incur Indebtedness and the Company or any Restricted
Subsidiary may issue Disqualified Equity Interests if, at the time of and
immediately after giving pro forma effect to such Incurrence of Indebtedness or
issuance of Disqualified Equity Interests and the application of the proceeds
therefrom, the Debt to Operating Cash Flow Ratio would be less than or equal to
6.5 to 1.0.
The foregoing limitations will not apply to the Incurrence by
the Company (or any Restricted Subsidiary with respect to clauses (a), (b), (d),
(e), (f), (g), (i), (j), (l) and, to the extent provided therein, clauses (h)
and (k) below of this Section 4.04) of any of the following (collectively,
"Permitted Indebtedness"), each of which shall be given independent effect:
(a) Indebtedness under the Securities, the Guaranties and this
Indenture;
(b) Existing Indebtedness;
(c) Indebtedness of the Company under the Credit Facility in
an aggregate principal amount at any one time outstanding not to exceed
the sum of (A) $75.0 million, which amount shall be reduced by (x) any
permanent reduction of commitments thereunder and (y) any other
repayment accompanied by a permanent reduction of commitments
thereunder (other than in connection with any refinancing thereof where
the aggregate principal amount outstanding and commitments thereunder
immediately prior thereto are not greater than such amounts immediately
thereafter), plus (B) any amounts outstanding under the Credit Facility
that utilize clause (l) of this Section 4.04;
(d) (x) Indebtedness of any Restricted Subsidiary owed to and
held by the Company or any Restricted Subsidiary and (y) Indebtedness
of the Company owed to and held by any Restricted Subsidiary that is
unsecured and subordinated in right of payment to the payment and
performance of the Company's obligations under any Senior Indebtedness,
this Indenture and the Securities (or pledged to secure any Senior
Indebtedness); provided, however, that an Incurrence of Indebtedness
that is not permitted
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by this clause (d) shall be deemed to have occurred upon (i) any sale
or other disposition of any Indebtedness of the Company or any
Restricted Subsidiary referred to in this clause (d) to a Person (other
than the Company or any Restricted Subsidiary), (ii) any sale or other
disposition of Equity Interests of any Restricted Subsidiary that holds
Indebtedness of the Company or another Restricted Subsidiary such that
such Restricted Subsidiary ceases to be a Restricted Subsidiary, or
(iii) the designation of a Restricted Subsidiary that holds
Indebtedness of the Company or any other Restricted Subsidiary as an
Unrestricted Subsidiary;
(e) guarantees by any Restricted Subsidiary of Senior
Indebtedness of the Company or of Guarantor Senior Indebtedness of any
Guarantor;
(f) Interest Rate Protection Obligations of the Company or any
Restricted Subsidiary relating to Indebtedness of the Company or such
Restricted Subsidiary (which Indebtedness (i) bears interest at
fluctuating interest rates and (ii) is otherwise permitted to be
Incurred under this Section 4.04) and guarantees by the Company or any
Restricted Subsidiary of such Interest Rate Protection Obligations;
provided, however, that the notional principal amount of such Interest
Rate Protection Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Obligations relate;
(g) Purchase Money Indebtedness and Capital Lease Obligations
of the Company or any Restricted Subsidiary that do not exceed $2.0
million in the aggregate for the Company and all of its Restricted
Subsidiaries at any one time outstanding;
(h) Indebtedness or Disqualified Equity Interests to the
extent representing a replacement, renewal, refinancing or extension
(collectively, a "refinancing") of outstanding Indebtedness or
Disqualified Equity Interests Incurred in compliance with the Debt to
Operating Cash Flow Ratio of the first paragraph of this Section 4.04
or clause (a), (b), (i) or (k) of this paragraph of this Section 4.04;
provided, however, that (i) any such refinancing shall not exceed the
sum of the principal amount (or, if such Indebtedness or Disqualified
Equity Interests provide for a lesser amount to be due and payable upon
a declaration of acceleration thereof at the time of such refinancing,
an amount no greater than such lesser amount) of the Indebtedness or
Disqualified Equity Interests being refinanced, plus the amount of
accrued interest or dividends thereon, plus the amount of any
reasonably determined prepayment premium necessary to accomplish such
refinancing and such reasonable fees and expenses incurred in
connection therewith, (ii) Indebtedness representing a refinancing of
Indebtedness (other than Senior Indebtedness and Guarantor Senior
Indebtedness) shall have a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the
Indebtedness being refinanced, (iii) Indebtedness that is pari passu
with the Securities or a Guaranty may only be refinanced with
Indebtedness that is made pari passu with or subordinate in right of
payment to the Securities or such Guaranty, as applicable, and
Subordinated Indebtedness or Disqualified Equity Interests may only be
refinanced with Subordinated Indebtedness or Disqualified Equity
Interests, (iv) with respect to any refinancing of Indebtedness
Incurred pursuant to clauses (i) or (k) of this paragraph, such
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refinancing pursuant to this clause (h) shall also be deemed to be
Incurred pursuant to clause (i) or (k), as the case may be, of this
paragraph (for the avoidance of doubt, the result of which is that a
refinancing does not create new debt Incurrence capacity under such
clauses) and (v) Indebtedness of the Company Incurred under clauses (b)
or (k) of this paragraph may only be refinanced with Indebtedness of
the Company;
(i) Indebtedness of the Company or any Restricted Subsidiary
Incurred to finance the acquisition of the exclusive right to
distribute DirecTv(R) Services within designated Rural DirecTv(R)
Markets; provided, however, that such Indebtedness shall be Permitted
Indebtedness under this clause (i) in an amount not greater than the
face amount of any letter of credit issued under the Credit Facility to
support such Indebtedness, it being understood that the issuance of
such letter of credit constitutes a reduction in the amount of
Permitted Indebtedness available to be Incurred under clause (c) of
this Section 4.04.
(j) indemnification obligations of the Company or any
Restricted Subsidiary and guarantees thereof under agreements providing
for the disposition of assets or one or more businesses or Restricted
Subsidiaries; provided, however, that such obligations do not exceed at
any time the Fair Market Value of the gross proceeds received by the
Company and its Restricted Subsidiaries for such disposition;
(k) Acquired Indebtedness of any Restricted Subsidiary
Incurred upon the Acquisition of such Restricted Subsidiary or
substantially all of its assets (other than Acquired Indebtedness
incurred in connection with or in anticipation of such Acquisition) and
Indebtedness of the Company not to exceed, in the aggregate, an amount
equal to the product of two multiplied by the sum of the aggregate net
proceeds received in cash by the Company (x) as capital contributions
to the Company for which no Equity Interests were issued after the
Issue Date and (y) from the issue and sale (other than to a Restricted
Subsidiary) of its Qualified Equity Interests after the Issue Date
(excluding (i) the net proceeds from any issuance and sale of Qualified
Equity Interests financed, directly or indirectly, using funds borrowed
from the Company or any Restricted Subsidiary until and to the extent
such borrowing is repaid, (ii) any of such net proceeds to the extent
that such proceeds were at any time included in clause (c)(2) of the
first paragraph or clause (ii), (iii) or (iv) of the second paragraph
of Section 4.06 hereof based upon such proceeds and (iii) the net
proceeds from any issuance or sale of Qualified Equity Interests to a
seller or its Affiliates in connection with such Acquisition); and
(l) in addition to the items referred to in clauses (a)
through (k) above, Indebtedness of the Company or any of the Restricted
Subsidiaries (including any Indebtedness under the Credit Facility that
utilizes this clause (l)) or any Restricted Subsidiaries having an
aggregate principal amount for the Company and all of its Restricted
Subsidiaries not to exceed $5.0 million at any time outstanding.
Indebtedness of any Person or any of its Subsidiaries existing
at the time such Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
with the Company or any Restricted Subsidiary), shall be deemed Incurred at the
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time any such Person becomes a Restricted Subsidiary or merges into or
consolidates with the Company or any Restricted Subsidiary.
SECTION 4.05. Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) at least 80% of such
consideration consists of (A) cash or Cash Equivalents, (B) properties and
capital assets to be used in distributing DirecTv(R) Services, other services
provided by DirecTv, Inc. or other high-powered DBS services, or (C) Equity
Interests in one or more Persons that thereby become Restricted Subsidiaries
whose assets consist primarily of properties and capital assets used in
distributing DirecTv(R) Services, other services provided by DirecTv, Inc. or
other high-powered DBS services; provided, however, that if the Fair Market
Value of the assets sold or otherwise disposed of exceeds $25.0 million, the
Company shall be required to obtain the written opinion from an Independent
Financial Advisor (and file such opinion with the Trustee) stating that the
terms of such Asset Sale are fair, from a financial point of view, to the
Company or the Restricted Subsidiary involved in such Asset Sale. The amount of
any (i) Indebtedness (other than any Subordinated Indebtedness) of the Company
or any Restricted Subsidiary that is actually assumed by the transferee in such
Asset Sale and from which the Company and the Restricted Subsidiaries are fully
released shall be deemed to be cash for purposes of determining the percentage
of cash consideration received by the Company or the Restricted Subsidiaries and
(ii) notes or other similar obligations received by the Company or the
Restricted Subsidiaries from such transferee that are immediately converted,
sold or exchanged (or are converted, sold or exchanged within thirty days of the
related Asset Sale) by the Company or the Restricted Subsidiaries into cash
shall be deemed to be cash, in an amount equal to the net cash proceeds realized
upon such conversion, sale or exchange for purposes of determining the
percentage of cash consideration received by the Company or the Restricted
Subsidiaries.
The Company or such Restricted Subsidiary, as the case may be,
may (i) apply the Net Cash Proceeds of any Asset Sale within 365 days of receipt
thereof to repay Senior Indebtedness and permanently reduce any related
commitment, (ii) commit in writing to acquire, construct or improve properties
and capital assets to be used in distributing DirecTv(R) Services, other
services provided by DirecTv, Inc. or other high-powered DBS services at such
time and so apply such Net Cash Proceeds within 365 days after the receipt
thereof, or (iii) apply the Net Cash Proceeds of any Asset Sale within 365 days
after receipt thereof to the making of any Investment that is permitted to be
made under Section 4.06.
To the extent that all or part of the Net Cash Proceeds of any
Asset Sale are not applied within 365 days of such Asset Sale as described in
clause (i), (ii) or (iii) of the immediately preceding paragraph (such Net Cash
Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall, within 20 days
after such 365th day, make an Offer to Purchase all outstanding Securities up to
a maximum principal amount of Securities equal to the Securities Portion of
Unutilized Net Cash Proceeds, at a purchase price in cash equal to 100% of the
principal amount of Securities, plus accrued and unpaid interest (including
Additional Interest,
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if any) thereon, if any, to the Purchase Date; provided, however, that the Offer
to Purchase may be deferred until there are aggregate Unutilized Net Cash
Proceeds equal to or in excess of $5.0 million, at which time the entire amount
of such Unutilized Net Cash Proceeds, and not just the amount in excess of $5.0
million, shall be applied as required pursuant to this paragraph.
In the event that any other Indebtedness of the Company or any
Restricted Subsidiary that ranks pari passu with the Securities or any Guaranty
requires that an offer to purchase be made to repurchase such Indebtedness upon
the consummation of any Asset Sale (the "Other Indebtedness"), the Company may
apply the Unutilized Net Cash Proceeds otherwise required to be applied to an
Offer to Purchase to an offer to purchase such Other Indebtedness and to an
Offer to Purchase so long as the amount of such Unutilized Net Cash Proceeds
applied to repurchase the Securities is not less than the Securities Portion of
Unutilized Net Cash Proceeds. With respect to any Unutilized Net Cash Proceeds,
the Company shall make the Offer to Purchase in respect thereof at the same time
as the analogous offer to purchase is made under any Other Indebtedness and the
Purchase Date in respect thereof shall be the same under this Indenture as the
purchase date in respect thereof pursuant to any Other Indebtedness.
For purposes of this Section 4.05, "Securities Portion of
Unutilized Net Cash Proceeds" means the amount of the Unutilized Net Cash
Proceeds equal to the product of (x) the Unutilized Net Cash Proceeds and (y) a
fraction the numerator of which is the principal amount of all Securities
tendered pursuant to the Offer to Purchase related to such Unutilized Net Cash
Proceeds (the "Securities Amount") and the denominator of which is the sum of
the Securities Amount and the lesser of the aggregate principal face amount or
accreted value as of the relevant purchase date of all Other Indebtedness
tendered pursuant to a concurrent offer to purchase such Other Indebtedness made
at the time of such Offer to Purchase.
With respect to any Offer to Purchase effected pursuant to
this Section 4.05, to the extent that the principal amount of the Securities
tendered pursuant to such Offer to Purchase exceeds the Securities Portion of
Unutilized Net Cash Proceeds to be applied to the repurchase thereof, such
Securities shall be purchased pro rata based on the principal amount of such
Securities tendered by each Holder.
In the event that the Issuers make an Offer to Purchase the
Securities, the Issuers shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.
(b) Each Holder shall be entitled to tender all or any portion
of the Securities owned by such Holder pursuant to the Offer to Purchase,
subject to the requirement that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal face amount and subject to
any proration among tendering Holders as described above.
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SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on
any Equity Interests of the Company or any Restricted Subsidiary or
make any payment or distribution to the direct or indirect holders (in
their capacities as such) of Equity Interests of the Company or any
Restricted Subsidiary (other than any dividends, distributions and
payments made to the Company or any Wholly Owned Restricted Subsidiary
and dividends or distributions payable to any Person solely in
Qualified Equity Interests of the Company or in options, warrants or
other rights to purchase Qualified Equity Interests of the Company);
(ii) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of the Company or any Restricted Subsidiary
(other than any such Equity Interests owned by the Company or any
Wholly Owned Restricted Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make
any principal payment on, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated
Indebtedness (other than any Subordinated Indebtedness held by any
Wholly Owned Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments or
Permitted Acquisition Deposits) in any Person (other than in the
Company, any Restricted Subsidiary or a Person that becomes a
Restricted Subsidiary, or is merged with or into or consolidated with
the Company or a Restricted Subsidiary (provided the Company or a
Restricted Subsidiary is the survivor) as a result of or in connection
with such Investment);
(such payments or any other actions (other than the exceptions thereto)
described in (i), (ii), (iii) and (iv) collectively, "Restricted Payments"),
unless
(a) no Default or Event of Default shall have occurred and be
continuing at the time or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted
Payment, the Company would be able to Incur $1.00 of Indebtedness
(other than Permitted Indebtedness) under the Debt to Operating Cash
Flow Ratio of the first paragraph of Section 4.04; and
(c) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or
made on or after the Issue Date does not exceed an amount equal to the
sum of (1) the difference between (x) the Cumulative Operating Cash
Flow determined at the time of such Restricted Payment and (y) 150% of
cumulative Consolidated Interest Expense of the Company determined for
the period commencing on the Issue Date and ending on the last day of
the most recent fiscal quarter immediately preceding the date of such
Restricted Payment for which
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consolidated financial information of the Company is available, plus
(2) the aggregate net cash proceeds received by the Company either (x)
as capital contributions to the Company after the Issue Date or (y)
from the issue and sale (other than to a Restricted Subsidiary) of its
Qualified Equity Interests after the Issue Date (excluding (i) the net
proceeds from any issuance and sale of Qualified Equity Interests
financed, directly or indirectly, using funds borrowed from the Company
or any Restricted Subsidiary until and to the extent such borrowing is
repaid and (ii) any such proceeds to the extent that such proceeds were
included at any time in clause (k) of Section 4.04), plus (3) the
principal amount (or accrued or accreted amount, if less) of any
Indebtedness of the Company or any Restricted Subsidiary Incurred after
the Issue Date that has been converted into or exchanged for Qualified
Equity Interests of the Company, plus (4) in the case of the
disposition or repayment of any Investment constituting a Restricted
Payment made after the Issue Date, an amount (to the extent not
included in the computation of Cumulative Operating Cash Flow) equal to
the lesser of: (i) the return of capital with respect to such
Investment, (ii) the amount of such Investment that was treated as a
Restricted Payment, and (iii) the amount of cash received by the
Company or a Wholly Owned Restricted Subsidiary for such disposition or
in such repayment, less in any case, the cost of the disposition of
such Investment and net of taxes, plus, (5) so long as the Designation
thereof was treated as a Restricted Payment made after the Issue Date,
with respect to any Unrestricted Subsidiary that has been redesignated
as a Restricted Subsidiary after the Issue Date in accordance with
Section 4.17, the Company's proportionate interest in the lesser of the
Fair Market Value and the net worth of any Unrestricted Subsidiary that
has been redesignated as a Restricted Subsidiary after the Issue Date
in accordance with Section 4.17 not to exceed in any case the
Designation Amount with respect to such Restricted Subsidiary upon its
Designation, plus (6) (to the extent not included in the computation of
Cumulative Operating Cash Flow) the amount of cash dividends or cash
distributions (other than to pay taxes) received from any Unrestricted
Subsidiary since the Issue Date, minus (7) the greater of (i) $0 and
(ii) the Designation Amount (measured as of the date of Designation)
with respect to any Subsidiary of the Company that has been designated
as an Unrestricted Subsidiary after the Issue Date in accordance with
Section 4.17.
The foregoing provisions will not prevent (i) the payment of
any dividend or distribution on, or redemption of, Equity Interests within 60
days after the date of declaration of such dividend or distribution or the
giving of formal notice of such redemption, if at the date of such declaration
or giving of formal notice such payment or redemption would comply with the
provisions of this Indenture; (ii) the purchase, redemption, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of
the net cash proceeds of the substantially concurrent issue and sale (other than
to a Restricted Subsidiary) of, Qualified Equity Interests of the Company;
provided, however, that any such net cash proceeds and the value of any Equity
Interests issued in exchange for such retired Equity Interests are excluded from
clause (c)(2) of the preceding paragraph and clause (k) of Section 4.04 (and
were not included therein at any time); (iii) the purchase, redemption,
retirement, defeasance or other acquisition of Subordinated Indebtedness, or any
other payment thereon, made in exchange for, or out of the net cash proceeds of,
a substantially concurrent issue and sale (other than to a Restricted
Subsidiary) of (x) Qualified Equity Interests of the Company; provided, however,
that
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any such net cash proceeds and the value of any Equity Interests issued in
exchange for Subordinated Indebtedness are excluded from clauses (c)(2) and
(c)(3) of the preceding paragraph and clause (k) of Section 4.04 (and were not
included therein at any time) or (y) other Subordinated Indebtedness having no
stated maturity for the payment of principal thereof prior to the final stated
maturity of the Securities; (iv) any Investment to the extent that the
consideration therefor consists of the net cash proceeds of the substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of Qualified
Equity Interests of the Company; provided, however, that any such net cash
proceeds are excluded from clause (c)(2) of the preceding paragraph and clause
(k) of Section 4.04 (and were not included therein at any time); (v) the
purchase, redemption or other acquisition, cancellation or retirement for value
of Equity Interests, or options, warrants, equity appreciation rights or other
rights to purchase or acquire Equity Interests (or distributions by any
Restricted Subsidiary to the Company to permit such purchase, redemption or
other acquisition, cancellation or retirement for value), of the Company or any
Restricted Subsidiary, or similar securities, held by officers or employees or
former officers or employees of the Company or any Restricted Subsidiary (or
their estates or beneficiaries under their estates), upon death, disability,
retirement or termination of employment, not to exceed $1.0 million in any
calendar year, and (vi) the payment of any dividend or distribution on Equity
Interests of the Company or any Restricted Subsidiary to the extent necessary to
permit the direct or indirect beneficial owners of such Equity Interests to pay
federal, state and local income tax liabilities arising from income of the
Company or such Restricted Subsidiary and attributable to them solely as a
result of the Company or such Restricted Subsidiary (and any intermediate entity
through which such holder owns such Equity Interests) being a partnership or a
similar pass-through entity, or ignored as an entity separate from its owner,
for federal, state or local income tax purposes; provided, however, that in the
case of each of clauses (ii), (iii) and (iv) no Default or Event of Default
(and, in the case of clause (v), no Default or Event of Default under clause
(1), (2) or (3) of Section 6.01) shall have occurred and be continuing or would
arise therefrom. For purposes of this paragraph, any Investment made in any
Person that subsequently becomes a Restricted Subsidiary shall be deemed not to
be outstanding so long as such Person is a Restricted Subsidiary.
In determining the amount of Restricted Payments permissible
under this Section 4.06, amounts expended pursuant to clauses (i) and (v) of the
immediately preceding paragraph shall be included as Restricted Payments and
amounts expended pursuant to clauses (ii), (iii), (iv) and (vi) shall be
excluded. The amount of any non-cash Restricted Payment shall be deemed to be
equal to the Fair Market Value thereof at the date of the making of such
Restricted Payment.
SECTION 4.07. Corporate Existence.
Subject to Article Five, each of the Issuers shall do or shall
cause to be done all things necessary to preserve and keep in full force and
effect its corporate, partnership or other existence and the corporate,
partnership or other existence of each Restricted Subsidiary in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the rights (charter and statutory) and material franchises of the Company and
the Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right or franchise, or the corporate existence of
any Restricted Subsidiary, if the Board of
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Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and
will not be, adverse in any material respect to the Holders; provided, further
however, that a determination of the Board of Directors of the Company shall not
be required in the event of a merger of one or more Wholly Owned Restricted
Subsidiaries of the Company with or into another Wholly Owned Restricted
Subsidiary of the Company or another Person, if the surviving Person is a Wholly
Owned Restricted Subsidiary of the Company organized under the laws of the
United States or a State thereof or of the District of Columbia.
SECTION 4.08. Payment of Taxes and Other Claims.
The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon either of the
Issuers or any Restricted Subsidiary or upon the income, profits or property of
either of the Issuers or any Restricted Subsidiary and (2) all lawful claims for
labor, materials and supplies which, in each case, if unpaid, may by law become
a material liability, or Lien upon the property, of either of the Issuers or any
Restricted Subsidiary; provided, however, that neither Issuer shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate provision has
been made.
SECTION 4.09. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any
of its Subsidiaries is declared due and payable before its maturity because of
the occurrence of any default (or any event that, with notice or lapse of time,
or both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default,
the Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by
or leased to it or any Restricted Subsidiary and used in the conduct of its
business or the business of any Restricted Subsidiary to be maintained and kept
in normal condition, repair and working order, normal and tear excepted, and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 4.10 shall prevent the Company
or any Restricted Subsidiary from
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discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors or of the board of directors of the Restricted
Subsidiary concerned, or of an officer (or other agent employed by the Company
or of any Restricted Subsidiary) of the Company or such Restricted Subsidiary
having managerial responsibility for any such property, desirable in the conduct
of the business of the Company or any Restricted Subsidiary, and if such
discontinuance or disposal is not adverse in any material respect to the
Holders.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, and workers' compensation
insurance. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to obtain business interruption insurance.
SECTION 4.11. Compliance Certificate.
The Issuers shall deliver to the Trustee within 45 days after
the end of each of the first three fiscal quarters of the Company and within 90
days after the close of each fiscal year a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of each Issuer stating that a review of the activities of the Issuers has been
made under the supervision of the signing officers with a view to determining
whether a Default or Event of Default has occurred and whether or not the
signers know of any Default or Event of Default by either of the Issuers that
occurred during such fiscal quarter or fiscal year. If they do know of such a
Default or Event of Default, the certificate shall describe all such Defaults or
Events of Default, their status and the action the Issuers are taking or propose
to take with respect thereto. The first certificate to be delivered by the
Issuers pursuant to this Section 4.11 shall be for the fiscal quarter ending
September 30, 1997.
SECTION 4.12. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Company shall
file with the SEC (if permitted by SEC practice and applicable law and
regulations) the annual reports, quarterly reports and other documents that the
Company would have been required to file with the SEC pursuant to such Section
13(a) or 15(d) or any successor provision thereto if the Company were so
subject, such documents to be filed with the SEC on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required so to file such documents if the Issuers were so subject. The Company
shall also in any event (a) within 15 days of each Required Filing Date (whether
or not permitted or required to be filed with the SEC) (i) transmit (or cause to
be transmitted) by mail to all Holders, as their names and addresses appear in
the Security Register, without cost to such Holders, and (ii) file with the
Trustee, copies of the annual reports, quarterly reports and other documents
that the Company is required to file with the SEC pursuant to the preceding
sentence, or, if such filing is not so permitted, information and data of a
similar nature, and (b) if, notwithstanding the preceding sentence, filing such
documents by the Company with the SEC is not permitted by SEC practice or
applicable law
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or regulations, promptly upon written request supply copies of such documents to
any Holder. In addition, for so long as any Securities remain outstanding, the
Company will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, and, to any beneficial holder of
Securities, if not obtainable from the SEC, information of the type that would
be filed with the SEC pursuant to the foregoing provisions, upon the request of
any such holder. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information therein, including the Company's compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
Each of the Issuers and each Guarantor covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law, that would prohibit or
forgive either Issuer or such Guarantor from paying all or any portion of the
principal of and/or interest, if any, on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Issuers and each Guarantor hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 4.14. Change of Control.
(a) Following the occurrence of a Change of Control (the date
of such occurrence being the "Change of Control Date"), the Issuers shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 20 days after the Change of Control Date,
jointly and severally make an Offer to Purchase all Securities then outstanding
at a purchase price in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest (including Additional Interest, if
any) thereon, if any, to the Purchase Date. The Issuers' obligations may be
satisfied if a third party makes the Offer to Purchase in the manner, at the
times and otherwise in compliance with the requirements of this Indenture
applicable to an Offer to Purchase made by the Issuers and purchases all
Securities validly tendered and not withdrawn under such Offer to Purchase. Each
Holder shall be entitled to tender all or any portion of the Securities owned by
such Holder pursuant to the Offer to Purchase, subject to the requirement that
any portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal face amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Issuers shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent (or, if either Issuer or a Subsidiary is acting as the Paying Agent,
segregate and hold in trust as provided in Section 2.04) money sufficient to
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pay the Purchase Price of all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee for cancellation all
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Issuers. The Paying
Agent (or either of the Issuers or a Subsidiary, if so acting) shall promptly
mail or deliver to Holders of Securities so accepted, payment in an amount equal
to the Purchase Price for such Securities, and the Trustee shall promptly
authenticate and mail or deliver to each Holder of Securities a new Security or
Securities equal in principal amount at maturity to any unpurchased portion of
the Security surrendered as requested by the Holder. Any Security not accepted
for payment shall be promptly mailed or delivered by the Issuers to the Holder
thereof. The Issuers shall publicly announce the results of the Offer on or as
soon as practicable after the Purchase Date.
(c) If the Issuers make an Offer to Purchase, the Issuers will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed, and any violation of the provisions of this Indenture relating to such
Offer to Purchase occurring as a result of such compliance shall not be deemed
an Event of Default or an event that, with the passing of time or giving of
notice, or both, would constitute an Event of Default.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
(a) The Issuers shall not, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
Senior Indebtedness.
(b) The Company shall not permit any Guarantor to and no
Guarantor shall, directly or indirectly, Incur any Indebtedness that by its
terms would expressly rank senior in right of payment to the Guaranty of such
Guarantor and expressly rank subordinate in right of payment to any Guarantor
Senior Indebtedness of such Guarantor.
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (b) make loans or advances to, or guarantee any
Indebtedness or other obligations of, the Company or any other Restricted
Subsidiary, or (c) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) the Credit Facility or any other agreement of
the Company or the Restricted Subsidiaries outstanding on the Issue Date, in
each case as in effect on the Issue Date, and any amendments,
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restatements, renewals, replacements or refinancings thereof; provided, however,
that any such amendment, restatement, renewal, replacement or refinancing is no
more restrictive in the aggregate with respect to such encumbrances or
restrictions than those contained in the Credit Facility on the Issue Date; (ii)
applicable law; (iii) any instrument governing Indebtedness or Equity Interests
of an Acquired Person acquired by the Company or any Restricted Subsidiary as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred by such Acquired Person in connection with, as a result of or in
contemplation of such acquisition); provided, however, that such encumbrances
and restrictions are not applicable to the Company or any Restricted Subsidiary,
or the properties or assets of the Company or any Restricted Subsidiary, other
than the Acquired Person; (iv) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices and non-assignment provisions in agreements between the Company or any
Restricted Subsidiary and the NRTC with respect to DBS services; (v) Purchase
Money Indebtedness for property acquired in the ordinary course of business that
only imposes encumbrances and restrictions on the property so acquired; (vi) any
agreement for the sale or disposition of the Equity Interests or assets of any
Restricted Subsidiary; provided, however, that such encumbrances and
restrictions described in this clause (vi) are only applicable to such
Restricted Subsidiary or assets, as applicable, and any such sale or disposition
is made in compliance with Section 4.05 to the extent applicable thereto; (vii)
refinancing Indebtedness permitted under clause (h) of the second paragraph of
Section 4.04; provided, however, that the encumbrances and restrictions
contained in the agreements governing such Indebtedness are no more restrictive
in the aggregate than those contained in the agreements governing the
Indebtedness being refinanced immediately prior to such refinancing; (viii) this
Indenture; or (ix) any such customary encumbrance or restriction existing under
any other security agreement, instrument or document hereafter in effect;
provided, however, that the terms and conditions of any such encumbrance or
restriction are not more restrictive than those contained in the Credit Facility
as in effect on the Issue Date.
SECTION 4.17. Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any
Subsidiary of the Company as an "Unrestricted Subsidiary" under this Indenture
(a "Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such
Designation, the Company could Incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the Debt to Operating Cash
Flow Ratio of the first paragraph of Section 4.04; and
(iii) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of Designation
(assuming the effectiveness of such Designation) pursuant to the first
paragraph of Section 4.06 in an amount (the "Designation Amount") equal
to the Fair Market Value of the Company's proportionate interest in the
net worth of such Subsidiary on such date calculated in accordance with
GAAP.
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Notwithstanding the above, no Subsidiary of the Company shall
be designated an Unrestricted Subsidiary if such Subsidiary (i) distributes,
directly or indirectly, DirecTv(R) Services or has any right, title or interest
in the revenue or profits in, or holds any Lien in respect of, such distribution
or (ii) conducts, directly or indirectly, the High Power Satellite Transmission
Business or the business of distributing high power DBS services to subscribers,
or has any interest in any such business or the right to receive the income or
profits therefrom.
Neither the Company nor any Restricted Subsidiary shall at any
time (x) provide credit support for, subject any of its property or assets
(other than the Equity Interests of any Unrestricted Subsidiary) to the
satisfaction of, or guarantee, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary, or (z) be directly or indirectly liable for any
Indebtedness that provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary,
except, in the case of clause (x) or (y), to the extent otherwise permitted
under the terms of this Indenture, including, without limitation, pursuant to
Sections 4.05 and 4.06, and except for any non-recourse guarantee given solely
to support the pledge by the Company or any Restricted Subsidiary of the Equity
Interests of any Unrestricted Subsidiary.
(b) The Company may revoke any Designation of a Subsidiary as
an Unrestricted Subsidiary (a "Revocation") if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation;
and
(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
Incurred at such time, have been permitted to be Incurred for all
purposes of this Indenture.
All Designations and Revocations must be evidenced by
resolutions of the Board of Directors of the Company, delivered to the Trustee
certifying compliance with the foregoing provisions.
SECTION 4.18. Limitation on Liens.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, Incur any Liens of any kind
against or upon any of their respective properties or assets now owned or
hereafter acquired, or any proceeds therefrom or any income or profits
therefrom, to secure any Indebtedness unless contemporaneously therewith
effective provision is made to secure the Securities equally and ratably with
such Indebtedness with a Lien on the same properties and assets securing
Indebtedness for so long as such Indebtedness is secured by such Lien, except
for (i) Liens securing any Senior Indebtedness or any guarantee of Senior
Indebtedness by any Restricted Subsidiary and (ii) Permitted Liens.
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SECTION 4.19. Deposit of Funds with Escrow Agent.
The Issuers shall initially place $38,750,000 million of the
net proceeds realized from the sale of the Series A Securities in the Interest
Escrow Account held by the Escrow Agent for the benefit of the Holders of the
Securities. The disbursement of such funds shall be governed by the Interest
Escrow Agreement and the Security Agreement. Such funds, together with the
proceeds from the investment thereof, will secure, and will be sufficient (and
shall be applied) to pay, the first four semi-annual interest payments on the
Securities. Funds will be released from the Interest Escrow Account, pro rata,
to reflect any reduction in the outstanding principal amount of Securities prior
to the fourth semi-annual interest payment date.
Pending disbursement, funds maintained in the Interest Escrow
Account will be invested in Marketable Securities.
SECTION 4.20. Guaranty of Securities by Subsidiaries.
The Company shall cause each Restricted Subsidiary which is
not a party hereto to jointly and severally guarantee the Issuers' Obligations
under this Indenture and the Securities; provided however, that the Guaranty
shall be subordinated in right of payment to all Guarantor Senior Indebtedness
pursuant to the subordination provisions of Article Twelve. The Company shall
cause each Restricted Subsidiary issuing a Guaranty to (i) execute and deliver
to the Trustee a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall become a party to
this Indenture and thereby unconditionally guarantee all of the Issuers'
Obligations under the Securities and this Indenture on the terms set forth in
Article Eleven and Article Twelve hereof, and (ii) deliver to the Trustee an
opinion of counsel that such supplemental indenture has been duly authorized,
executed and delivered by such Restricted Subsidiary and constitutes a legal,
valid, binding and enforceable obligation of such Restricted Subsidiary (which
opinion may be subject to customary assumptions and qualifications). Thereafter,
such Restricted Subsidiary shall (unless released in accordance with the terms
of this Indenture) be a Guarantor for all purposes of this Indenture.
SECTION 4.21. Limitations on Conduct of Business of Capital and the Company.
Capital will not hold any operating assets or other properties
or conduct any business other than to serve as an Issuer and co-obligor with
respect to the Securities and will not own any Equity Interests of any Person to
the extent that such ownership would cause such Person to be deemed a Subsidiary
of Capital.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any business, either directly or through
any Subsidiary, except for those businesses in which the Company and its
Restricted Subsidiaries were engaged on the Issue Date or businesses reasonably
related thereto.
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SECTION 4.22. Payments for Consent.
None of the Issuers or any of the Company's Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of a Security for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid or agreed to be paid to all Holders of the Securities that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
ARTICLE V.
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
(a) No Issuer shall consolidate with or merge with or into
(whether or not such Issuer is the Surviving Person) any other entity and the
Company shall not and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's properties and assets (determined on a
consolidated basis for the Company and the Restricted Subsidiaries) to any
entity in a single transaction or series of related transactions, unless: (i)
either (x) such Issuer shall be the Surviving Person or (y) the Surviving Person
(if other than such Issuer) shall be, in the case of Capital, a corporation, or
in any other case, a corporation, partnership or limited liability company
organized and validly existing under the laws of the United States of America or
any State thereof or the District of Columbia, and shall, in any such case,
expressly assume by a supplemental indenture, the due and punctual payment of
the principal of, premium, if any, and interest on all the Securities and the
performance and observance of every covenant of this Indenture, the Collateral
Documents and the Registration Rights Agreement to be performed or observed on
the part of the Issuers; (ii) immediately thereafter, no Default or Event of
Default shall have occurred and be continuing; and (iii) immediately after
giving effect to any such transaction involving the Incurrence by the Company or
any Restricted Subsidiary, directly or indirectly, of additional Indebtedness
(and treating any Indebtedness not previously an obligation of the Company or
any Restricted Subsidiary in connection with or as a result of such transaction
as having been Incurred at the time of such transaction), the Surviving Person
could Incur, on a pro forma basis after giving effect to such transaction as if
it had occurred at the beginning of the latest fiscal quarter for which
consolidated financial statements of the Company are available, at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) under the Debt to
Operating Cash Flow Ratio of the first paragraph of Section 4.04; (iv) the
Issuers have delivered to the Trustee an opinion of counsel to the effect that
the holders of the Securities will not recognize gain or loss for federal income
tax purposes as a result of such transaction; and (v) immediately thereafter the
Surviving Person shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of such Issuer immediately prior to such transaction.
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Notwithstanding the foregoing, Capital may merge into the
Company upon or at any time following a Corporation Conversion, and clauses
(iii), (iv) and (v) of the first paragraph of this Section 5.01(a) shall not
apply in the case of a merger by the Company if (i) the Company is the Surviving
Person, (ii) the consideration issued or paid by the Company in such merger
consists solely of Qualified Equity Interests of the Company, and (iii)
immediately after giving effect to such merger, (x) if the Debt to Operating
Cash Flow Ratio immediately before such merger is positive, the Debt to
Operating Cash Flow Ratio immediately after such merger does not exceed such
ratio immediately prior to such merger (giving pro forma effect to the merger as
described in clause (iii) of the first paragraph of this Section 5.01(a)) or (y)
if the Debt to Operating Cash Flow Ratio immediately before such merger is
negative, the Company shall have Consolidated Net Worth immediately after such
merger equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such merger.
For purposes of this Section 5.01(a), the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries the Equity Interest of which constitutes all or
substantially all the properties and assets of the Company shall be deemed to be
the transfer of all or substantially all the properties and assets of the
Company.
(b) Subject to the requirements of subparagraph (a) of this
Section 5.01, in the event of a sale of all or substantially all the assets of
any Guarantor or all of the Equity Interests of any Guarantor, by way of merger,
consolidation or otherwise, then the Surviving Person of any such merger or
consolidation, or such Guarantor, if all of its Equity Interests are sold, shall
be released and relieved of any and all obligations under the Guaranty of such
Guarantor if (i) the Person or entity surviving such merger or consolidation or
acquiring the Equity Interests of such Guarantor is not a Restricted Subsidiary,
and (ii) the Net Cash Proceeds from such sale are used after such sale in a
manner that complies with the provisions of Section 4.05. Except as provided in
the preceding sentence, no Guarantor shall consolidate with or merge with or
into another Person, whether or not such Person is affiliated with such
Guarantor and whether or not such Guarantor is the Surviving Person, unless (i)
the Surviving Person is a corporation, partnership or limited liability company
organized and validly existing under the laws of the United States, any State
thereof or the District of Columbia, (ii) the Surviving Person (if other than
such Guarantor) assumes all the Obligations of such Guarantor under the
Securities, this Indenture and the Registration Rights Agreement pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, (iii)
at the time of and immediately after such Disposition, no Default or Event of
Default shall have occurred and be continuing, and (iv) the Surviving Person
will have Consolidated Net Worth (immediately after giving pro forma effect to
the Disposition) equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; provided, however, that clause
(iv) of this paragraph shall not be a condition to a merger or consolidation of
a Guarantor if such merger or consolidation only involves the Company and/or one
or more Wholly Owned Restricted Subsidiaries.
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SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described
in and complying with the conditions listed in Section 5.01(a) or (b), in which
an Issuer, or any Guarantor, that is a party to such transaction is not the
Surviving Person and the Surviving Person is to assume all of the Obligations of
such Issuer or any such Guarantor under the Securities, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture, such
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, such Issuer or any such Guarantor, as applicable, and
such Issuer or such Guarantor, as applicable, shall be discharged from its
Obligations under this Indenture, the Securities and the Guaranty, as
applicable.
ARTICLE VI.
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for
purposes of this Indenture:
(1) failure to pay principal of (or premium, if any, on) any
Security when due, whether or not such payment is prohibited by Article
Eight hereof;
(2) failure to pay any interest on any Security when due,
continued for 30 days or more, whether or not such payment is
prohibited by Article Eight hereof;
(3) default in the payment of principal of or interest on
Securities required to be purchased pursuant to any Offer to Purchase
required by this Indenture when due and payable or failure to pay on
the Purchase Date the Purchase Price for any Security validly tendered
pursuant to any Offer to Purchase, whether or not such payment is
prohibited by Article Eight hereof;
(4) failure to perform or comply with any of the provisions of
Section 5.01 hereof;
(5) failure to perform or comply with any of the provisions of
Section 4.19 or the Collateral Documents;
(6) failure to perform any other covenant, warranty or
agreement under this Indenture or in the Securities, and the Default
continues for the period and after the notice specified in the last
paragraph of this Section 6.01;
(7) a default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of any Issuer or any of
the Company's Significant Restricted Subsidiaries having an outstanding
principal amount of $5.0 million or more
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individually or in the aggregate that has resulted in the acceleration
of the payment of such Indebtedness; provided, however, that it shall
not be an Event of Default if such Indebtedness shall have been repaid
in full or such acceleration shall have been rescinded within 20 days;
(8) there shall have been any final judgment or judgments (not
subject to appeal) against any Issuer or any of the Company's
Significant Restricted Subsidiaries in an amount of $2.0 million or
more (net of any amounts covered by reputable and creditworthy
insurance companies) that remains undischarged or unstayed for a period
of 60 days after the date on which the right to appeal has expired;
(9) any Issuer or any Significant Restricted Subsidiary of the
Company pursuant to or within the meaning of any Bankruptcy Law:
(A) admits in writing its inability to pay its debts
generally as they become due,
(B) commences a voluntary case or proceeding,
(C) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(D) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it,
(E) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(F) makes a general assignment for the benefit of its
creditors, or any of them takes any action to authorize or
effect any of the foregoing;
(10) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against any Issuer or any
Significant Restricted Subsidiary of the Company in an
involuntary case or proceeding,
(B) appoints a Custodian of any Issuer or any
Significant Restricted Subsidiary of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of any Issuer or any
Significant Restricted Subsidiary of the Company, and in each
case the order or decree remains unstayed and in effect for 60
days; provided, however, that if the entry of such order or
decree is appealed and dismissed on appeal, then the Event of
Default hereunder by reason of the entry of such order or
decree shall be deemed to have been cured; or
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(11) any Guaranty of a Guarantor shall be held in a judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect, or any Guarantor, or any Person acting
on behalf of any Guarantor, shall deny or disaffirm its obligations
under its Guaranty.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal, state or foreign 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 (6) is not an Event of Default until
the Trustee notifies the Issuers, or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Issuers and the Trustee, of the
Default in writing and the Issuers do not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." Such notice shall
be given by the Trustee if so requested by the Holders of at least 25% in
principal amount of the Securities then outstanding. When a Default is cured, it
ceases.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other
than an Event of Default specified in clause (9) or (10) of Section 6.01 with
respect to the Company) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the outstanding Securities by
notice in writing to the Company (and to the Trustee if given by the Holders)
may declare the Default Amount to be due and payable immediately and, upon any
such declaration, such Default Amount, notwithstanding anything contained in
this Indenture or the Securities to the contrary, but subject to the provisions
limiting payment described in Article Eight shall become immediately due and
payable; provided, however, that so long as the Credit Facility shall be in full
force and effect, if an Event of Default shall have occurred and be continuing
(other than an Event of Default specified in clause (9) or (10) of Section 6.01
with respect to the Company), the Securities shall not become due and payable
until the earlier to occur of (x) five Business Days following delivery of a
written notice of such acceleration of the Securities to the agent under the
Credit Facility and (y) the acceleration (ipso facto or otherwise) of any
Indebtedness under the Credit Facility.
If an Event of Default specified in clause (9) or (10) of
Section 6.01 with respect to an Issuer occurs under this Indenture, the Default
Amount shall ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of the
Securities.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of (and premium, if any) or interest on the
Securities which has become due solely by virtue of such acceleration) have been
cured or waived and if the rescission would
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not conflict with any judgment or decree. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or either of the
Collateral Documents.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy maturing 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 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of, premium or
interest on any Security as specified in clauses (1), (2) and (3) of Section
6.01 or a Default in respect of any term or provision of this Indenture that may
not be amended or modified without the consent of each Holder affected as
provided in Section 10.02. The Issuers shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
the Issuers, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture, the Collateral Documents and the
Securities, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on 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 that
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may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This
Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities (excluding Affiliates of
the Company) do not give the Trustee a direction which, in the opinion
of the Trustee, is inconsistent with the request.
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 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of or interest on a
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(1), (2) or (3) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful, interest
on
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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 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (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 upon the Securities), its creditors or its property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder 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 agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Issuers.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable
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attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance
of such duties as are specifically set forth herein; 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 conforming to the requirements of this Indenture; however, in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee shall 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 paragraph (b)
of this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense that may be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(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 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to the provisions of Section 13.05. 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.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence
of any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel as to matters of law shall be
full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such
counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered
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to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred by it in compliance with
such request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee,
subject to Section 7.10 hereof. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Issuers' use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee knows of such Defaults or Events of Default, the Trustee shall
mail to each Securityholder notice of the Default or Event of Default within 30
days after the occurrence thereof or, if later, within 10 days after such
Default or Event of Default becomes known to the Trustee. Except in the case of
a Default or an Event of Default in payment of principal of or interest on any
Security or a Default or Event of Default in complying with Section 5.01 hereof,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the interest
of Securityholders. This Section 7.05 shall be in lieu of the proviso to ss.
315(b) of the TIA and such proviso to ss. 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Securities, as permitted by the TIA.
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SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
The Issuers shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Issuers shall jointly and severally pay to the Trustee
from time to time such compensation as the Issuers and the Trustee shall from
time to time agree in writing for its services. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Issuers shall jointly and severally reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances (including fees, disbursements
and expenses of its agents and counsel) incurred or made by it in addition to
the compensation for its services except any such disbursements, expenses and
advances as may be attributable to the Trustee's negligence or bad faith. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents, accountants, experts and counsel and any taxes or other
expenses incurred by a trust created pursuant to Section 9.01 hereof.
The Issuers shall jointly and severally indemnify the Trustee
for, and hold it harmless against any and all loss, damage, claims, liability or
expense, including taxes (other than franchise taxes imposed on the Trustee and
taxes based upon, measured by or determined by the income of the Trustee),
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent that such loss,
damage, claim, liability or expense is due to its own negligence or bad faith.
The Trustee shall notify the Issuers promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee to
so notify the Issuers shall not relieve the Issuers of their obligations
hereunder. The Issuers shall defend the claim and the Trustee shall cooperate in
the defense (and may employ its own counsel) at the Issuers' expense; provided,
however, that the Issuers' reimbursement obligation with respect to counsel
employed by the Trustee will be limited to the reasonable fees and expenses of
such counsel.
The Issuers need not pay for any settlement made without their
written consent, which consent shall not be unreasonably withheld. The Issuers
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee as a result of the violation of this Indenture by the
Trustee.
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To secure the Issuers' payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities or the Purchase Price or redemption price of any Securities to be
purchased or pursuant to an Offer to Purchase or redeem.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(9) or (10) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Issuers' obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Issuers' obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Issuers
in writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Issuers in
writing and may appoint a successor Trustee with the Issuers' consent. The
Issuers may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent under
any Bankruptcy Law;
(3) a custodian 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 Trustee in such event being referred
to herein as the retiring Trustee), the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
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If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers or the Holders of at least 10% in principal amount of the outstanding
Securities may petition, at the expense of the Issuers, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee provided such successor Trustee must meet the requirements set
forth in Section 7.10.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Issuers shall comply with the
provisions of TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
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ARTICLE VIII.
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
Each of the Issuers covenants and agrees, and the Trustee and
each Holder of the Securities by its acceptance thereof likewise covenant and
agree, that all Securities shall be issued subject to the provisions of this
Article Eight; and each person holding any Security, whether upon original issue
or upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of, premium, if any, and interest on the Securities by
either of the Issuers shall, to the extent and in the manner set forth in this
Article Eight, be subordinated and junior in right of payment to the prior
payment in full in cash of all amounts payable under Senior Indebtedness.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) Upon the occurrence of a Non-Payment Event of Default on
Designated Senior Indebtedness, no payment or distribution of any assets or
securities of either of the Issuers of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of either of
the Issuers being subordinated to the payment of the Securities by either of the
Issuers, but excluding any payment or distribution of Permitted Junior
Securities and excluding payments from the Interest Escrow Account) may be made
by or on behalf of either of the Issuers, including, without limitation, by way
of set-off or otherwise, for or on account of the Securities, or for or on
account of the purchase, redemption, defeasance or other acquisition of
Securities, and neither the Trustee nor any Holder or owner of any Securities
shall take or receive from either of the Issuers, directly or indirectly in any
manner, payment in respect of all or any portion of the Securities, for a period
(a "Payment Blockage Period") commencing on the date of receipt by the Trustee
of written notice from the Representative (as defined below) of such Non-Payment
Event of Default unless and until (subject to any blockage of payments that may
then be in effect under Section 8.02(b)) the earliest of (x) the date on which
more than 179 days shall have elapsed since receipt of such written notice by
the Trustee, (y) such Non-Payment Event of Default shall have been cured or
waived in writing or shall have ceased to exist or such Designated Senior
Indebtedness shall have been paid in full or (z) such Payment Blockage Period
shall have been terminated by written notice to the Company or the Trustee from
the Representative, after which, in the case of clause (x), (y) or (z), the
Issuers shall resume making any and all required payments in respect of the
Securities, including any missed payments. Notwithstanding any other provision
of this Indenture, (x) in no event shall a Payment Blockage Period commenced in
accordance with the provisions of this Indenture described in this paragraph
extend beyond 179 days from the date of the receipt by the Trustee of the notice
referred to above, (y) there shall be a period of at least 181 consecutive days
in each 360-day period when no Payment Blockage Period is in effect and (z) not
more than one Payment Blockage Period may be commenced with respect to the
Securities during any period of 360 consecutive days. Notwithstanding any other
provision of this Indenture, no event of default with respect to Designated
Senior Indebtedness which existed or was continuing on the
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date of the commencement of any Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of any other
Payment Blockage Period initiated by the Representative, whether or not within a
period of 360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(b) No payment or distribution of any assets or securities of
either of the Issuers or any Restricted Subsidiary of any kind or character
(including, without limitation, cash, property and any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the Securities
by the Company, but excluding any payment or distribution of Permitted Junior
Securities and excluding payments from the Interest Escrow Account) may be made
by or on behalf of either of the Issuers or any Restricted Subsidiary,
including, without limitation, by way of set-off or otherwise, for or on account
of the Securities, except from those funds held in trust for the benefit of
Holders of any Securities pursuant to the procedures set forth under Section
9.01, or for or on account of the purchase, redemption, defeasance or other
acquisition of the Securities, and neither the Trustee nor any Holder or owner
of any Securities shall take or receive from either of the Issuers or any
Restricted Subsidiary, directly or indirectly in any manner, payment in respect
of all or any portion of the Securities following the delivery by the
representative of the holders of Designated Senior Indebtedness under or in
respect of the Credit Facility, for so long as there shall exist any Designated
Senior Indebtedness under or in respect of the Credit Facility, and thereafter,
the holders of Designated Senior Indebtedness (in either such case, the
"Representative") to the Trustee of written notice of (i) the occurrence of a
Payment Default on Designated Senior Indebtedness or (ii) the occurrence of a
Non-Payment Event of Default on Designated Senior Indebtedness and the
acceleration of the maturity of Designated Senior Indebtedness in accordance
with its terms and in any such event, such prohibition shall continue until such
Payment Default is cured, waived in writing or ceases to exist or such
acceleration has been rescinded or otherwise cured. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of Section 8.02(a), the Issuers shall resume making
any and all required payments in respect of the Securities, including any missed
payments.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment, any payment shall be received by the Trustee or any
Holder when such payment is prohibited by Section 8.02, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Designated Senior Indebtedness or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Designated Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Designated Senior Indebtedness that such prohibited payment
has been made, the holders of the Designated Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing of
the amounts then due and owing on the Designated Senior Indebtedness, if any,
and only the amounts specified in such notice to the Trustee shall be paid to
the holders of Designated Senior Indebtedness.
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SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities
of either of the Issuers of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior Securities
and payments from the Interest Escrow Account), upon any dissolution or other
winding-up or liquidation, rearrangement or reorganization of either of the
Issuers, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings or any general assignment for the benefit of
creditors or other marshalling of assets or liabilities of either Issuer (except
in connection with the merger or consolidation of either Issuer or liquidation
or dissolution following the transfer of substantially all of its assets, upon
the terms and conditions permitted under the circumstances described in Section
5.01), all Senior Indebtedness shall first be paid and satisfied in full in cash
before the Holders of the Securities or the Trustee on behalf of such Holders
shall be entitled to receive any payment by the Issuers of the principal of,
premium, if any, or interest on the Securities (other than payments from the
Interest Escrow Account), or any payment by the Issuers to acquire any of the
Securities for cash, property or securities, or any distribution by the Issuers
with respect to the Securities of any cash, property or securities (excluding
any payment or distribution of Permitted Junior Securities and excluding
payments from the Interest Escrow Account). Before any payment may be made by,
or on behalf of, the Issuers of the principal of, premium, if any, or interest
on the Securities (other than payments from the Interest Escrow Account) upon
any such dissolution or winding-up or liquidation, rearrangement or
reorganization, any payment or distribution of assets or securities of the
Issuers of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding payments from the Interest Escrow Account) to which the Holders of the
Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by the Issuers or by
any receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, directly to the holders of the Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their representatives or to the
trustee or trustees or agent or agents under any agreement or indenture pursuant
to which any of such Senior Indebtedness might have been issued, as their
respective interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, the Trustee or any Holder of
Securities receives any payment or distribution of assets of either of the
Issuers of any kind, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding payments
from the Interest Escrow Account), including, without limitation, by way of
set-off or otherwise, in respect of the Securities at a time when such payment
or distribution is prohibited by Section 8.03 and before all Senior Indebtedness
of the Company is paid and satisfied in full in cash, then such payment or
distribution shall be held by the recipient in trust for the benefit of holders
of Senior Indebtedness and will be immediately paid over or delivered to the
trustee in bankruptcy or such other Person making payment or distribution of
assets of the Company to the extent necessary to make payment in full in cash of
all Senior Indebtedness remaining unpaid, after
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giving effect to any current payment or distribution, or provision therefor, to
or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, a corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to a corporation upon the terms and conditions
provided in Article Five shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 8.03 if such
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Indebtedness,
or provision for payment, the Holders of the Securities shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of, premium, if any, and interest on the
Securities shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article Eight, and no payment over pursuant to the provisions
of this Article Eight to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. It is understood that the provisions of this Article Eight
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Securities, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Eight shall have been applied, pursuant to the provisions of this
Article Eight, to the payment of all amounts payable under Senior Indebtedness,
then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount required to make payment in full, or provision for payment, of such
Senior Indebtedness.
SECTION 8.05. Obligations of Issuers Unconditional.
Nothing contained in this Article Eight or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Issuers and the Holders of the Securities, the obligation of the Issuers, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of the
Issuers other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Holder of any Security or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Eight of the holders
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of the Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article Eight shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due and
payable prior to their stated maturity pursuant to Section 6.01 or to pursue any
rights or remedies hereunder; provided, however, that all Senior Indebtedness
then due and payable shall first be paid in full before the Holders of the
Securities or the Trustee are entitled to receive any direct or indirect payment
from the Company of principal of, premium, if any, or interest on the
Securities.
SECTION 8.06. Notice to Trustee.
The Issuers shall give prompt written notice to the Trustee of
any fact known to the Issuers that would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article Eight. The Trustee shall not be charged with knowledge of the
existence of any event of default with respect to any Senior Indebtedness or of
any other facts that would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of each of the
Issuers, or by a holder of Senior Indebtedness or trustee or agent therefor; and
prior to the receipt of any such written notice, the Trustee shall, subject to
Article Seven, be entitled to assume that no such facts exist; provided that if
the Trustee shall not have received the notice provided for in this Section 8.06
at least two Business Days prior to the date upon which by the terms of this
Indenture any moneys shall become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Issuers and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such prior date.
Nothing contained in this Section 8.06 shall limit the right of the holders of
Senior Indebtedness to recover payments as contemplated by Section 8.03. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person purporting to be a holder of any Senior Indebtedness (or a trustee on
behalf of, or other representative of, such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that
any 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 Eight, 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 such Person under this Article Eight, 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.
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SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities
referred to in this Article Eight, the Trustee and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding-up, liquidation
or reorganization proceedings are pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities 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 Eight.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Eight with respect to any Senior Indebtedness
that may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Eight, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness (except
as provided in Section 8.02(c) or 8.03(b)). The Trustee shall not be liable to
any such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article Eight or otherwise.
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Issuers or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Issuers or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Issuers with the terms of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with. The provisions of this Article Eight are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.
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SECTION 8.10. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by its acceptance of such Securities
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Eight, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of either of the Issuers (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of either of the Issuers, the filing of a claim for the
unpaid balance of its Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of,
premium, if any, or interest on the Securities by reason of any provision of
this Article Eight shall not be construed as preventing the occurrence of an
Event of Default specified in clause (1), (2) or (3) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to
the Trustee pursuant to other sections in this Indenture, including, without
limitation, Section 7.07.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Eight or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Issuers and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Collateral Held in
Trust for Securityholders; Payments May Be Paid Prior to
Dissolution.
All money and Government Securities deposited in trust with
the Trustee pursuant to and in accordance with Article Nine shall be for the
sole benefit of the Holders and shall not be subject to this Article Eight.
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Nothing contained in this Article Eight or elsewhere in this
Indenture shall prevent (i) the Issuers, except under the conditions described
in Section 8.02, from making payments of principal of, premium, if any, and
interest on the Securities, or from depositing with the Trustee any moneys for
such payments or from effecting a termination of the Issuers' and the
Guarantors' obligations under the Securities and this Indenture as provided in
Article Nine, or (ii) the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of, premium, if
any, and interest on the Securities, to the holders entitled thereto unless at
least two Business Days prior to the date upon which such payment becomes due
and payable, the Trustee shall have received the written notice provided for in
Section 8.02(a) or 8.02(b) or in Section 8.06. The Issuers shall give prompt
written notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of either of the Issuers.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an
Event of Default, the Issuers shall promptly notify holders of the Senior
Indebtedness of the acceleration.
ARTICLE IX.
DISCHARGE OF INDENTURE
SECTION 9.01 Option to Effect Legal Defeasance or Covenant Defeasance.
Subject to the provisions of Article Eight, the Issuers may terminate
their and the Guarantors' substantive obligations in respect of the Securities
by delivering all outstanding Securities to the Trustee for cancellation and
paying all sums payable by them on account of principal of, premium, if any, and
interest on all Securities or otherwise. In addition to the foregoing, subject
to the provisions of Article Eight with respect to the creation of the
defeasance trust provided for in Section 9.04(a), the Issuers and the Guarantors
may, at the option of their respective Boards of Directors evidenced by
resolutions set forth in an Officers' Certificate for each such entity, at any
time, with respect to the Securities, elect to have either Section 9.02 or 9.03
be applied to all outstanding Securities upon compliance with the conditions set
forth below in this Article Nine.
SECTION 9.02 Legal Defeasance and Discharge.
Upon the exercise by the Issuers and the Guarantors under Section 9.01
of the option applicable to this Section 9.02, the Issuers and the Guarantors
shall be deemed to have been discharged from their respective obligations with
respect to all outstanding Securities on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that each of the Guarantors shall be deemed to be released from
its respective Guaranty and each of the Issuers shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 9.05 and the other Sections of this Indenture referred to in (a) and (b)
below of this paragraph, and to have satisfied all of their other
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respective obligations under such Securities and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Securities to receive payments in respect of the
principal of, premium, if any, and interest (including Additional Interest, if
any) on such Securities when such payments are due, or on the redemption date,
as the case may be, (b) the Issuers' obligations with respect to such Securities
under Sections 2.05, 2.07, 2.08, 2.10, 2.11 and 4.02, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article Nine. Subject to
compliance with this Article Nine, the Issuers and the Guarantors may exercise
the option under this Section 9.02 notwithstanding the prior exercise of the
option under Section 9.03 with respect to the Securities.
SECTION 9.03 Covenant Defeasance.
Upon the exercise by the Issuers and the Guarantors under Section 9.01
of the option applicable to this Section 9.03, each of the Guarantors and each
of the Issuers shall be released from its respective obligations under the
covenants contained in Sections 4.03, 4.04, 4.05, 4.06, 4.09, 4.10, 4.11, 4.12,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 and Article Five with
respect to the outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, each of the Issuers and each of the Guarantors
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Sections 6.01(4), 6.01(5) and 6.01(6), but, except
as specified above, the remainder of this Indenture and such Securities shall be
unaffected thereby. In addition, upon the exercise by the Guarantors and the
Issuers under Section 9.01 of the option applicable to this Section 9.03,
Sections 6.01(7) and 6.01(8) shall not constitute Events of Default.
SECTION 9.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 9.02 or Section 9.03 to the outstanding Securities:
(a) The Issuers shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 who shall agree to comply with the
provisions of this Article Nine applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (i) cash in United States Dollars, (ii)
non-callable Government Securities which through the
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scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, cash in United States Dollars, or (iii) a
combination thereof, in such amounts, as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee at the expense of the Issuers, to pay and discharge and
which shall be applied by the Trustee (or other qualifying trustee) to
pay and discharge the principal of, premium, if any, and interest
(including Additional Interest, if any) on the outstanding Securities
on the stated maturity or on the applicable optional redemption date,
as the case may be, of such principal or installment of principal,
premium, if any, or interest (including Additional Interest, if any);
provided that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such non-callable Government
Securities to said payments with respect to the Securities;
(b) In the case of an election under Section 9.02, the Issuers
shall have delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue
Service a ruling or (ii) since the date hereof, there has been a change
in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) In the case of an election under Section 9.03, the Issuers
shall have delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee to the effect that the Holders of the
outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(9) or 6.01(10) is concerned, at any
time in the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which either
of the Issuers is a party or by which either of the Issuers is bound;
(f) Each of the Issuers shall have delivered to the Trustee an
Officers' Certificate stating that the deposit made by such Issuer
pursuant to its election under Section 9.02 or 9.03 was not made by
such Issuer with the intent of preferring the Holders over any
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other creditors of such Issuer or with the intent of defeating,
hindering, delaying or defrauding creditors of such Issuer or others;
and
(g) Each of the Issuers shall have delivered to the Trustee an
Officers' Certificate stating that all conditions precedent provided
for or relating to either the Legal Defeasance under Section 9.02 or
the Covenant Defeasance under Section 9.03 (as the case may be) have
been complied with as contemplated by this Section 9.04.
SECTION 9.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 9.06, all money and Government Securities (including
the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 9.05, the "Trustee") pursuant to
Section 9.04 in respect of the outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company or a Guarantor, if any, acting as Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Issuers shall jointly and severally pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
Government Securities deposited pursuant to Section 9.04 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article Nine to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or Government Securities held by it as provided in
Section 9.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
9.04(a)) at the expense of the Company, are in excess of the amount thereof
which would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 9.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest (including Additional Interest, if any) on any Security and
remaining unclaimed for two years after such principal, and premium, if any, or
interest (including Additional Interest, if any) has become due and payable
shall be paid to the Company on its written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustees thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying
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Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in the New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 9.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
Dollars or Government Securities in accordance with Section 9.02 or 9.03, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations of each of the Guarantors and each of the Issuers under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 9.02 or 9.03 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 9.02 or 9.03, as the case may be; provided, however, that, if either of
the Issuers makes any payment of principal of, premium, if any, or interest
(including Additional Interest, if any) on any Security following the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE X.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Issuers and the Guarantors, when authorized by a
resolution of their respective Boards of Directors, and the Trustee may amend or
supplement this Indenture, the Securities or the Collateral Documents without
notice to or consent of any Securityholder:
(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not
adversely affect the rights of any Holder;
(ii) to effect the assumption by a successor Person
of all obligations of either Issuer under the Securities, this
Indenture, the Registration Rights Agreement and the
Collateral Documents in connection with any transaction
complying with Article Five of this Indenture;
(iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(iv) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
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(v) to make any change that would provide any
additional benefit or rights to the Holders;
(vi) to make any other change that does not adversely
affect the rights of any Holder under this Indenture;
(vii) to evidence the succession of another Person to
any Guarantor and the assumption by any such successor of the
covenants of such Guarantor herein and in the Guaranty;
(viii) to add to the covenants of the Issuers or the
Guarantors for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Issuers or any
Guarantor;
(ix) to secure the Securities pursuant to the
requirements of Section 4.18 or otherwise; or
(x) to reflect the release of a Guarantor from its
obligations with respect to its Guarantee in accordance with
the provisions of Section 11.03 and to add a Guarantor
pursuant to the requirements of Section 4.20;
provided, however, that the Issuers have delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Issuers and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, 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
outstanding Securities. Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Issuers or any Guarantor with any provision of this Indenture, the Collateral
Documents or the Securities. However, without the consent of each Securityholder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(1) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional
redemption or repurchase provisions of any Security or this Indenture
in a manner adverse to the Holders of the Securities;
(2) reduce the principal amount (or the premium) of any
Security;
(3) reduce the rate of or extend the time for payment of
interest on any Security;
(4) change the place or currency of payment of the principal
of (or premium, if any) or interest on any Security;
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(5) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07
or this Section 10.02 (other than to add sections of this Indenture or
the Securities which may not be amended, supplemented or waived without
the consent of each Securityholder affected);
(6) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default;
(7) waive a default in the payment of the principal of or
interest on or redemption payment with respect to any Security (except
a rescission of acceleration of the Securities by the Holders as
provided in Section 6.02 and a waiver of the payment default that
resulted from such acceleration);
(8) modify the ranking or priority of the Securities or of the
Guaranties in respect of any Guarantor, or modify the definition of
Senior Indebtedness or Guarantor Senior Indebtedness, or amend or
modify any of the provisions of Article Eight or Article Twelve in any
manner adverse to the Holders;
(9) release any Guarantor from any of its obligations under
its Guaranty or this Indenture otherwise than in accordance with this
Indenture;
(10) modify the provisions relating to any Offer to Purchase
required pursuant to Section 4.05 or 4.14 in a manner materially
adverse to the Holders; or
(11) release any of the Collateral from the lien created by
the Security Agreement prior to the time specified therein.
An amendment under this Section 10.02 may not make any change
under Article Eight, Article Nine, Article Eleven or Article Twelve hereof that
adversely affects in any material respect the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any representative thereof authorized to give a consent) shall have consented to
such change.
It shall not be necessary for the consent of the Holders under
this Section 10.02 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
10.02 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 supplemental indenture.
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SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of Securities entitled to
consent to any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
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 (10) of Section 10.02. 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 10.05. 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 Issuers or
the Trustee so determine, the Issuers in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
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SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Issuers and
the Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE XI.
GUARANTY
SECTION 11.01. Unconditional Guaranty.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees to each Holder of a Security authenticated by the Trustee and to the
Trustee and its successors and assigns that: the principal of, premium, if any,
and interest on the Securities will be promptly paid in full when due, subject
to any applicable grace period, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal and interest on any overdue
interest on the Securities and all other obligations of the Issuers to the
Holders or the Trustee hereunder or under the Securities will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof;
subject, however, to the limitations set forth in Section 11.04. Each Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against either Issuer, any action to
enforce the same or any other circumstance that may otherwise constitute a legal
or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of either Issuer, any right to require a
proceeding first against either Issuer, protest, notice and all demands
whatsoever and covenants that the Guaranty will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture, and this Guaranty. If any Holder or the Trustee is required by any
court or otherwise to return to either Issuer, any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to either
Issuer or any Guarantor, any amount paid by either Issuer or any Guarantor to
the Trustee or such Holder, this Guaranty, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six for the purpose of this
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due
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and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guaranty.
SECTION 11.02. Severability.
In case any provision of this Guaranty 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 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with the terms of
Section 9.02 of this Indenture, or if Section 5.01(b) is complied with, then
each Guarantor (in the case of such a defeasance) or the applicable Guarantor
(in the case of compliance with Section 5.01(b)) shall be deemed released from
all obligations under this Article Eleven without any further action required on
the part of the Trustee or any Holder. The Trustee shall, at the sole cost and
expense of the Company and upon receipt at the reasonable request of the Trustee
of an Opinion of Counsel that the provisions of this Section 11.03 have been
complied with, deliver an appropriate instrument evidencing such release upon
receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.03. Any Guarantor not
released pursuant to the first sentence of this Section 11.03 remains liable for
the full amount of principal of, premium, if any, and interest on the Securities
and the other obligations of the Company hereunder as provided in this Article
Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and
the Trustee, hereby confirms that it is the intention of all such parties that
the guarantee by such Guarantor pursuant to its Guaranty not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guaranty
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guaranty or
pursuant to Section 11.05, result in the obligations of such Guarantor under the
Guaranty not constituting such fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guaranty, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP,
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subject to Section 11.04, for all payments, damages and expenses incurred by
that Funding Guarantor in discharging the Issuers' obligations with respect to
the Securities or any other Guarantor's obligations with respect to the
Guaranty.
SECTION 11.06. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against either
Issuer that arises from the payment, performance or enforcement of such
Guarantor's obligations under its Guaranty or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
SECTION 11.07. Applicability of Article Eleven.
Anything contained in this Article Eleven to the contrary
notwithstanding, Article Eleven shall not apply unless and until a Person is
required to become a Guarantor pursuant to Section 4.20 hereof.
ARTICLE XII.
SUBORDINATION OF GUARANTY
SECTION 12.01. Guaranty Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Securities by its acceptance thereof likewise covenant and agree,
that the Guaranty shall be issued subject to the provisions of this Article
Twelve; and each person holding any Security, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of, premium, if any, and interest on the Securities
pursuant to the Guaranty made by or on behalf of any Guarantor shall, to the
extent and in the manner set forth in this Article Twelve, be subordinated and
junior in right of payment to the prior payment in full in cash of all amounts
payable under Guarantor Senior Indebtedness of such Guarantor.
SECTION 12.02. No Payment on Guarantees in Certain Circumstances.
(a) Upon the occurrence of a Non-Payment Event of Default on
Designated Senior Indebtedness of a Guarantor, no payment or distribution of any
assets or securities of such Guarantor of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of
such Guarantor being subordinated to the payment of the Securities by such
Guarantor, but excluding any payment or distribution of Permitted Junior
Guarantor Securities and excluding payments from the Interest Escrow Account)
may be made by or on behalf of such Guarantor, including, without limitation, by
way of set-off or otherwise, for or
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on account of the Securities, or for or on account of the purchase, redemption,
defeasance or other acquisition of Securities, and neither the Trustee nor any
Holder or owner of any Securities shall take or receive from such Guarantor,
directly or indirectly in any manner, payment in respect of all or any portion
of the Securities, for a period (a "Guarantor Payment Blockage Period")
commencing on the date of receipt by the Trustee of written notice from the
Representative of such Non-Payment Event of Default unless and until (subject to
any blockage of payments that may then be in effect under Section 12.02(b)) the
earliest of (x) the date on which more than 179 days shall have elapsed since
receipt of such written notice by the Trustee, (y) such Non-Payment Event of
Default shall have been cured or waived in writing or shall have ceased to exist
or such Designated Senior Indebtedness shall have been paid in full or (z) such
Guarantor Payment Blockage Period shall have been terminated by written notice
to the Company or the Trustee from the Representative, after which, in the case
of clause (x), (y) or (z), such Guarantor shall resume making any and all
required payments in respect of the Securities, including any missed payments.
Notwithstanding any other provision of this Indenture, (x) in no event shall a
Guarantor Payment Blockage Period commenced in accordance with the provisions of
this Indenture described in this paragraph extend beyond 179 days from the date
of the receipt by the Trustee of the notice referred to above, (y) there shall
be a period of at least 181 consecutive days in each 360-day period when no
Guarantor Payment Blockage Period is in effect and (z) not more than one
Guarantor Payment Blockage Period may be commenced with respect to the
Securities during any period of 360 consecutive days. Notwithstanding any other
provision of this Indenture, no event of default with respect to Designated
Senior Indebtedness of a Guarantor which existed or was continuing on the date
of the commencement of any Guarantor Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of any other
Guarantor Payment Blockage Period initiated by the Representative, whether or
not within a period of 360 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
(b) No payment or distribution of any assets or securities of
any Guarantor of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to the payment of the Securities by the Company, but excluding any
payment or distribution of Permitted Junior Guarantor Securities and excluding
payments from the Interest Escrow Account) may be made by or on behalf of any
Guarantor pursuant to the terms of such Guarantor's Guaranty including, without
limitation, by way of set-off or otherwise, for or on account of the Securities,
except from those funds held in trust for the benefit of Holders of any
Securities pursuant to the procedures set forth under Section 9.01, or for or on
account of the purchase, redemption, defeasance or other acquisition of the
Securities, and neither the Trustee nor any Holder or owner of any Securities
shall take or receive from any Guarantor, directly or indirectly in any manner,
payment in respect of the Guarantor's Guaranty following the delivery by the
Representative to the Trustee of written notice of (i) the occurrence of a
Payment Default on Designated Senior Indebtedness of such Guarantor or (ii) the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness
of such Guarantor and the acceleration of the maturity of Designated Senior
Indebtedness of such Guarantor in accordance with its terms and in any such
event, such prohibition shall continue until such Payment Default is cured,
waived in writing or ceases to exist or such acceleration has been rescinded or
otherwise cured. At such time as the prohibition set forth in the preceding
sentence
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shall no longer be in effect, subject to the provisions of Section 12.02(a), the
Guarantors shall resume making any and all required payments in respect of the
Guaranties, including any missed payments.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment, any payment shall be received by the Trustee or any
Holder when such payment is prohibited by Section 12.02, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Designated Senior Indebtedness of the applicable Guarantor or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Designated Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that,
upon notice from the Trustee to the holders of such Designated Senior
Indebtedness that such prohibited payment has been made, the holders of such
Designated Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing of the amounts then due and owing on such
Designated Senior Indebtedness, if any, and only the amounts specified in such
notice to the Trustee shall be paid to the holders of such Designated Senior
Indebtedness.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities
of any Guarantor of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior Guarantor
Securities and payments from the Interest Escrow Account), upon any dissolution
or other winding-up or liquidation, rearrangement or reorganization of such
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings or any general assignment for the benefit of
creditors or other marshalling of assets or liabilities of such Guarantor
(except in connection with the merger or consolidation of such Guarantor or
liquidation or dissolution following the transfer of substantially all of its
assets, upon the terms and conditions permitted under the circumstances
described in Section 5.01), all Guarantor Senior Indebtedness of such Guarantor
shall first be paid and satisfied in full in cash before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any payment by such Guarantor with respect to its Guaranty (other than payments
from the Interest Escrow Account), or any payment by such Guarantor to acquire
any of the Securities for cash, property or securities, or any distribution by
such Guarantor with respect to the Securities of any cash, property or
securities (excluding any payment or distribution of Permitted Junior Guarantor
Securities and excluding payments from the Interest Escrow Account). Before any
payment may be made by, or on behalf of, any Guarantor of the principal of,
premium, if any, or interest on the Securities (other than payments from the
Interest Escrow Account) upon any such dissolution or winding-up or liquidation,
rearrangement or reorganization, any payment or distribution of assets or
securities of such Guarantor of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Guarantor Securities and excluding payments from the Interest Escrow Account) to
which the Holders of the Securities or the Trustee on their behalf would be
entitled, but for the subordination provisions of this Indenture, shall be made
by such Guarantor or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Guarantor Senior Indebtedness of such Guarantor (pro rata to
such holders on the basis of the respective amounts of such Guarantor Senior
Indebtedness held by such holders) or their representatives or to the
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trustee or trustees or agent or agents under any agreement or indenture pursuant
to which any of such Guarantor Senior Indebtedness might have been issued, as
their respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Indebtedness in full in cash after giving effect to any prior
or concurrent payment, distribution or provision therefor to or for the holders
of such Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, the Trustee or any Holder of
Securities receives any payment or distribution of assets of a Guarantor of any
kind, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Guarantor Securities and excluding payments
from the Interest Escrow Account), including, without limitation, by way of
set-off or otherwise, in respect of such Guarantor's Guaranty at a time when
such payment or distribution is prohibited by Section 12.03 and before all
Guarantor Senior Indebtedness of such Guarantor is paid and satisfied in full in
cash, then such payment or distribution shall be held by the recipient in trust
for the benefit of holders of Guarantor Senior Indebtedness of such Guarantor
and will be immediately paid over or delivered to the trustee in bankruptcy or
such other Person making payment or distribution of assets of such Guarantor to
the extent necessary to make payment in full in cash of all Guarantor Senior
Indebtedness of such Guarantor remaining unpaid, after giving effect to any
current payment or distribution, or provision therefor, to or for the holders of
Guarantor Senior Indebtedness of such Guarantor.
The consolidation of a Guarantor with, or the merger of a
Guarantor with or into, a corporation or the liquidation or dissolution of a
Guarantor following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to a corporation upon the terms and conditions
provided in Article Five shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.03 if such
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five. The consolidation
of any Guarantor with, or the merger of any Guarantor with or into the Company
or any other Guarantor, or the liquidation or dissolution of any Guarantor
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to the Company or any other Guarantor shall not be
deemed a dissolution, winding-up, liquidation or reorganization for purposes of
this Section 12.03.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Guarantor Senior
Indebtedness of a Guarantor, or provision for payment, the Holders of the
Securities shall be subrogated to the rights of the holders of such Guarantor
Senior Indebtedness to receive payments or distributions of cash, property or
securities of such Guarantor made on such Guarantor Senior Indebtedness until
the principal of, premium, if any, and interest on the Securities shall be paid
in full in cash; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Guarantor Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article Twelve,
and no payment over pursuant to the provisions of this Article Twelve to the
holders of such Guarantor Senior Indebtedness by Holders of the Securities or
the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by such
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Guarantor to or on account of such Guarantor Senior Indebtedness. It is
understood that the provisions of this Article Twelve are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of Guarantor Senior Indebtedness of
each Guarantor, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under Guarantor Senior
Indebtedness, then and in such case, the Holders of the Securities shall be
entitled to receive from the holders of such Guarantor Senior Indebtedness any
payments or distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount required to make payment in full, or
provision for payment, of such Guarantor Senior Indebtedness.
SECTION 12.05. Obligations of Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Securities or the Guaranties is intended to or shall impair,
as among the Guarantors and the Holders of the Securities, the obligation of
each Guarantor, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of, premium, if any, and interest on the Securities
as and when the same shall become due and payable in accordance with the terms
of the Guaranty of such Guarantor, or is intended to or shall affect the
relative rights of the Holders of the Securities and creditors of any Guarantor
other than the holders of Guarantor Senior Indebtedness of such Guarantor, nor
shall anything herein or therein prevent the Holder of any Security or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Twelve of the holders of Guarantor Senior Indebtedness in
respect of cash, property or securities of any Guarantor received upon the
exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article Twelve shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due and
payable prior to their stated maturity pursuant to Section 6.01 or to pursue any
rights or remedies hereunder; provided, however, that all Guarantor Senior
Indebtedness of any Guarantor then due and payable shall first be paid in full
before the Holders of the Securities or the Trustee are entitled to receive any
direct or indirect payment from such Guarantor of principal of, premium, if any,
or interest on the Securities pursuant to such Guarantor's Guaranty.
SECTION 12.06. Notice to Trustee.
The Company and each Guarantor shall give prompt written
notice to the Trustee of any fact known to the Company or such Guarantor that
would prohibit the making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Twelve. The Trustee shall
not be charged with knowledge of the existence of any event of default with
respect to any Guarantor Senior Indebtedness or of any other facts that would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have
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received notice in writing at its Corporate Trust Office to that effect signed
by an Officer of the Company or such Guarantor, or by a holder of Guarantor
Senior Indebtedness or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article Seven, be
entitled to assume that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 12.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Security), then, regardless of
anything herein to the contrary, the Trustee shall have full power and authority
to receive any moneys from any Guarantor and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it on or after such prior date. Nothing
contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Indebtedness to recover payments as contemplated by Section
12.02 or 12.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person purporting to be a holder of any Guarantor Senior
Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such
Guarantor Senior Indebtedness or a trustee or representative on behalf of any
such holder.
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, 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 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Twelve, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Guarantor Senior Indebtedness
of such Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Twelve with respect to any Guarantor Senior
Indebtedness that may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of
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Guarantor Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Sections 12.02(b) and 12.03(b)). The Trustee
shall not be liable to any such holders if the Trustee shall in good faith
mistakenly pay over or distribute to Holders of Securities or to the Company or
to any other person cash, property or securities to which any holders of
Guarantor Senior Indebtedness shall be entitled by virtue of this Article Twelve
or otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor
Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with. The provisions of this Article Twelve are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Guarantor Senior Indebtedness.
SECTION 12.10. Securityholders Authorize Trustee To Effectuate Subordination of
Guaranty.
Each Holder of Securities by its acceptance of such Securities
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the filing of a claim for the unpaid
balance of its or his Securities in the form required in those proceedings.
SECTION 12.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of,
premium, if any, or interest on the Securities by reason of any provision of
this Article Twelve shall not be construed as preventing the occurrence of an
Event of Default specified in clauses (1) or (2) of Section 6.01.
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SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to
the Trustee pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Guaranty Subordination Provisions.
Without in any way limiting the generality of Section 12.09,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which Guarantor Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Guarantor Senior Indebtedness; and (d) exercise or refrain from exercising any
rights against any Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) a Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of, premium, if any, and
interest on the Securities, or from depositing with the Trustee any moneys for
such payments or from effecting a termination of the Issuers' and the
Guarantors' obligations under the Securities and this Indenture as provided in
Article Nine, or (ii) the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of, premium, if
any, and interest on the Securities, to the holders entitled thereto unless at
least two Business Days prior to the date upon which such payment becomes due
and payable, the Trustee shall have received the written notice provided for in
Section 12.02 or in Section 12.06. A Guarantor shall give prompt written notice
to the Trustee of any dissolution, winding-up, liquidation or reorganization of
such Guarantor.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
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Indenture excludes any TIA provision that may be so excluded, such TIA provision
shall be excluded from this Indenture.
The provisions of TIA xx.xx. 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by first-class mail,
or mailed by first-class mail addressed as follows:
if to the Issuers or to the Guarantors:
Digital Television Services, LLC
Building C-200
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Scarborough, LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
NationsBank Corporate Center
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: H. Xxxxx Xxxx III
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Issuers or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
When notice is sent by facsimile, notice is effective upon
confirmation of receipt, provided that a duplicate copy of such notice is
promptly given by first-class mail. Any notice given by facsimile shall be
deemed to have been received on the next business day if it is received after
5:00 p.m. (recipient's time) or on a nonbusiness day.
Any notice or communication mailed, first-class, postage
prepaid, to a Holder including any notice delivered in connection with TIA ss.
310(b), TIA ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to
such Holder at such Holder's address as set forth on the Security Register and
shall be sufficiently given to such Holder if so mailed within the time
prescribed. To the extent required by the TIA, any notice or communication shall
also be mailed to any Person described in TIA ss. 313(c).
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. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Issuers, the Trustee, the Registrar and any other person
shall have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that 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, such
person has made such examination or investigation as is necessary to
enable such person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(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 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture,
the Securities and the Guaranties without regard to principles of conflicts of
law.
SECTION 13.08. No Recourse Against Others.
No director, officer, employee, incorporator, manager or
stockholder, as such, of either Issuer or any of its Affiliates, as such, shall
have any liability for any obligations of such Issuer or any of its Affiliates
under the Securities, any Guaranty or this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
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SECTION 13.09. Successors.
All agreements of each Issuer in this Indenture and the
Securities shall bind its successor. All agreements of each Guarantor in this
Indenture and such Guarantor's Guaranty shall bind its successor. All agreements
of the Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or
in the Guaranties 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, and a Holder shall have no claim therefor against
any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of
payment, payment may be made at that place on the next succeeding Business Day,
and no interest shall accrue for the intervening period.
ARTICLE XIV
COLLATERAL AND SECURITY
SECTION 14.01. Interest Escrow Agreement.
On the Issue Date, the Issuers shall (i) enter into the
Interest Escrow Agreement and comply with the terms and provisions thereof and
(ii) deposit into the Interest Escrow Account such amount as will be sufficient
to provide for payment in full of the first four scheduled interest payments due
on the Securities. On the first date on which such amount is invested in
Marketable Securities, such Marketable Securities shall be in an amount
sufficient upon receipt of scheduled interest and/or principal payments of such
Collateral, in the opinion of a nationally recognized firm of independent public
accountants selected by the Company, to provide for payment in full of the first
four scheduled interest payments due on the securities. The Issuers shall grant
a first priority security interest in the Collateral to the Trustee for the
benefit of the Holders and the Collateral shall be held by the Trustee in the
Interest Escrow Account pending disposition pursuant to the Interest Escrow
Agreement.
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In the event the Registered Exchange Offer is not consummated
and the Registration Statement is not declared effective on or prior to the
Filing Date (as defined in the Registration Rights Agreement), and the interest
rate on the Securities is increased as required by the Registration Rights
Agreement, the Issuers shall purchase and deliver to the Trustee additional
Collateral in such amount as will be sufficient upon receipt of scheduled
interest and/or principal payments of all Collateral thereafter held in the
Interest Escrow Account, in the opinion of a nationally recognized firm of
independent public accountants selected by the Company, to provide payment for
the first four scheduled interest payments due on the Securities (assuming the
Additional Interest remains in effect for the entire period). The additional
Collateral shall be subject to the security interest granted by the Issuers to
the Trustee for the benefit of the Holders and shall be held by the Trustee in
the Interest Escrow Account.
Each Holder, by its acceptance of a Security, consents and
agrees to the terms of the Collateral Documents (including, without limitation,
the provisions providing for foreclosure and release of the Collateral) as the
same may be in effect or may be amended from time to time in accordance with its
terms, and authorizes and directs the Trustee to enter into the Collateral
Documents and to perform its respective obligations and exercise its respective
rights thereunder in accordance therewith. The Issuers will do or cause to be
done all such acts and things as may be necessary or proper, or as may be
required by the provisions of the Collateral Documents, to assure and confirm to
the Trustee the security interest in the Collateral contemplated hereby, by the
Collateral Documents or any part thereof, as from time to time constituted, so
as to render the same available for the security and benefit of this Indenture
and of the Securities secured hereby, according to the intent and purposes
herein expressed. The Issuers shall take, or shall cause to be taken, upon
request of the Trustee, any and all actions reasonably required to cause the
Collateral Documents to create and maintain, as security for the obligations of
the Issuers under this Indenture and the Securities, valid and enforceable first
priority liens in and on all the Collateral, in favor of the Trustee, superior
to and prior to the rights of third Persons and subject to no other Liens.
SECTION 14.02. Recording and Opinions.
(a) The Issuers shall furnish to the Trustee simultaneously
with the execution and delivery of this Indenture an Opinion of Counsel either
(i) stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the Lien intended to
be created by the Security Agreement and reciting the details of such action,
except for the filing of any necessary UCC-1 financing statements, or (ii)
stating that in the opinion of such counsel no such action is necessary to make
such Lien effective.
(b) The Issuers shall furnish to the Escrow Agent and the
Trustee on July 30, 1997 (unless on such date the balance of the Interest Escrow
Account shall be zero) an Opinion of Counsel, dated as of such date, either (i)
stating that, except for the filing of any necessary UCC-1 financing statements,
(A) in the opinion of such counsel, action has been taken with respect to the
recording, registering, filing, re-recording, re-registering and refiling of all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as are necessary to maintain the Lien of the
Security Agreement and reciting the details of such action or referring to prior
Opinions of Counsel in which such details are
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given and (B) based on relevant laws as in effect on the date of such Opinion of
Counsel, all financing statements and continuation statements have been executed
and filed that are necessary as of such date and during the succeeding 12 months
fully to preserve and protect, to the extent such protection and preservation
are possible by filing, the rights of the Holders of Securities and the Trustee
hereunder and under each of the Collateral Documents with respect to the
security interests in the Collateral or (ii) stating that, in the opinion of
such counsel, no such action is necessary to maintain such Lien and assignment.
SECTION 14.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section
14.03, Collateral may be released from the Lien and security interest created by
the Security Agreement only in accordance with the provisions of the Security
Agreement or the Interest Escrow Agreement.
(b) Except to the extent that any Lien on proceeds of
Collateral is automatically released by operation of Section 9-306 of the
Uniform Commercial Code or other similar law, no Collateral shall be released
from the Lien and security interest created by the Security Agreement pursuant
to the provisions of the Security Agreement, other than to the Holders pursuant
to the terms thereof or otherwise pursuant to the Interest Escrow Agreement,
unless there shall have been delivered to the Trustee the certificate required
by Section 14.03(d) and Section 14.04.
(c) At any time when an Event of Default shall have occurred
and be continuing and the maturity of the Securities shall have been accelerated
(whether by declaration or otherwise), no Collateral shall be released pursuant
to the provisions of the Security Agreement, and no release of Collateral in
contravention of this Section 14.03(c) shall be effective as against the Holders
of Securities, except for the disbursement of all Available Funds (as defined in
the Interest Escrow Agreement) and other Collateral to the Trustee pursuant to
Section 6(a) of the Interest Escrow Agreement.
(d) The release of any Collateral from the Liens and security
interests created by this Indenture and the Security Agreement shall not be
deemed to impair the security under this Indenture in contravention of the
provisions hereof if and to the extent the Collateral is released pursuant to
the terms hereof or pursuant to the terms of the Collateral Documents. To the
extent applicable, the Issuers shall cause TIA Section 314(d) relating to the
release of property or securities from the Lien and security interest of the
Security Agreement to be complied with. Any certificate or opinion required by
TIA Section 314(d) may be made by an Officer of each of the Issuers except in
cases where TIA Section 314(d) requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent appraiser
or other expert selected or approved by the Trustee in the exercise of
reasonable care.
SECTION 14.04. Certificates of the Company.
The Issuers shall furnish to the Trustee, prior to any
proposed release of Collateral other than pursuant to the express terms of the
Interest Escrow Agreement, (i) all documents required by TIA Section 314(d)
and (ii) an Opinion of Counsel, which may be rendered by internal counsel to
either of the Issuers, to the effect that such accompanying documents
constitute all documents required by TIA Section 314(d). The Trustee may, to the
extent permitted
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by Section 7.01 and Section 7.02, accept as conclusive evidence of compliance
with the foregoing provisions the appropriate statements contained in such
documents and such Opinion of Counsel.
SECTION 14.05. Authorization of Actions to Be Taken by the Trustee Under the
Interest Escrow Agreement and Security Agreement.
Subject to the provisions of Section 7.01 and Section 7.02,
the Trustee may, without the consent of the Holders of Securities, on behalf of
the Holders of Securities, take all actions it deems necessary or appropriate in
order to (a) enforce any of the terms of each of the Collateral Documents and
(b) collect and receive any and all amounts payable in respect of the
obligations of the Issuers hereunder. The Trustee shall have power to institute
and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
either of the Collateral Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders of Securities in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders of Securities or of the Trustee).
SECTION 14.06. Authorization of Receipt of Funds by the Trustee Under the
Interest Escrow Agreement.
The Trustee is authorized to receive any funds for the benefit
of the Holders of Securities disbursed under the Interest Escrow Agreement, and
to make further distributions of such funds to the Holders of Securities
according to the provisions of this Indenture.
SECTION 14.07. Termination of Security Interest.
Upon the earliest to occur of (i) the date upon which the
balance in the Interest Escrow Account shall have been reduced to zero, (ii)
legal defeasance pursuant to Section 9.02, (iii) covenant defeasance pursuant to
Section 9.03 and (iv) the date upon which the first four semiannual Interest
Payments have been made, the Trustee shall, at the written request of each of
the Issuers, release the Liens pursuant to this Indenture, the Collateral
Documents upon the Company's compliance with the provisions of the TIA
pertaining to release of collateral.
[Signature Pages Follow]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
DIGITAL TELEVISION SERVICES, LLC
DIGITAL TELEVISION SERVICES OF
CALIFORNIA, LLC
DIGITAL TELEVISION SERVICES OF
COLORADO, LLC
DIGITAL TELEVISION SERVICES OF
GEORGIA, LLC
DIGITAL TELEVISION SERVICES OF
KANSAS, LLC
DIGITAL TELEVISION SERVICES OF
KENTUCKY, LLC
DIGITAL TELEVISION SERVICES OF NEW
MEXICO, LLC
DIGITAL TELEVISION SERVICES OF NEW
YORK I, LLC
DIGITAL TELEVISION SERVICES OF SOUTH
CAROLINA I, LLC
DIGITAL TELEVISION SERVICES OF
VERMONT, LLC
By: DTS Management, LLC,
their Manager
By: /s/
------------------------------
Name:
Title:
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DTS MANAGEMENT, LLC
By: /s/
---------------------------------
Name:
Title:
SPACENET, INC.
By: /s/
---------------------------------
Name:
Title:
DTS CAPITAL, INC.
By: /s/
---------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: /s/
---------------------------------
Name:
Title:
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EXHIBIT A
[FORM OF SERIES A SECURITY]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(A) INSIDE THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST),
(2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
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DIGITAL TELEVISION SERVICES, LLC
DTS CAPITAL, INC.
12 1/2% Senior Subordinated Note
due August 1, 2007, Series A
CUSIP No.:
No. 1 $
DIGITAL TELEVISION SERVICES, LLC, a Delaware limited liability company
(the "Company"), and DTS CAPITAL, INC., a Delaware corporation (collectively,
the "Issuers", which term includes any successor corporation to either Issuer),
for value received promises to pay to ___________ or registered assigns, the
principal sum of ____________ Dollars on August 1, 2007.
Interest Payment Dates: August 1 and February 1, commencing on
February 1, 1998.
Interest Record Dates: July 15 and January 15
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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IN WITNESS WHEREOF, the Issuers have caused this Security to
be signed manually or by facsimile by their respective duly authorized officers.
DIGITAL TELEVISION SERVICES, LLC
By: DTS Management, LLC,
its manager
By:
------------------------------
Name:
Title:
DTS CAPITAL, INC.
By:
------------------------------
Name:
Title:
Attest:
----------------------------
Name:
Title:
Attest:
----------------------------
Name:
Title:
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12 1/2% Senior Subordinated Notes due 2007,
Series A, described in the within-mentioned Indenture.
Dated:
The Bank of New York,
as Trustee
By:
---------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
DIGITAL TELEVISION SERVICES, LLC
DTS CAPITAL, INC.
12 1/2% Senior Subordinated Note
due August 1, 2007, Series A
1. Interest.
DIGITAL TELEVISION SERVICES, LLC, a Delaware limited liability
company (the "Company"), and DTS CAPITAL, INC., a Delaware corporation
("Capital," and together with the Company, the "Issuers"), jointly and severally
promise to pay interest on the principal amount of this Security at the rate per
annum shown above. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from July
30, 1997. The Issuers will pay interest semi-annually in arrears on each
Interest Payment Date, commencing on February 1, 1998. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal from time
to time on demand at the rate borne by the Securities and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Issuers shall
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 ("U.S. Legal
Tender"). However, the Issuers may pay principal and interest by wire transfer
of Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. The Issuers may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to the Holders. Either of the Issuers or any of the Company's
Subsidiaries may, subject to certain exceptions, act as Registrar.
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4. Indenture and Guaranties.
The Issuers issued the Securities under an Indenture, dated as
of July 30, 1997 (the "Indenture"), between the Issuers, certain Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and holders of
Securities are referred to the Indenture and the TIA for a statement of them.
The Securities are general obligations of the Issuers limited in aggregate
principal face amount to $155,000,000. Payment on each Security is guaranteed
(each, a "Guaranty") on a senior subordinated basis, jointly and severally, by
each Restricted Subsidiary (each, a "Guarantor") pursuant to Article Eleven and
Article Twelve of the Indenture.
5. Optional Redemption.
The Securities will be redeemable at the option of the
Issuers, in whole or in part, at any time or from time to time, on or after
August 1, 2002 at the redemption prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest (including Additional
Interest, if any) thereon, if any, to the redemption date, if redeemed during
the twelve-month period commencing on August 1 of the years set forth below:
Year Percentage
---- ----------
2002 106.250%
2003 104.167%
2004 102.083%
2005 and thereafter 100.000%
6. Optional Redemption upon Certain Equity Issuances.
At any time, or from time to time, prior to August 1, 2000,
the Issuers may, other than in any circumstance resulting in a Change of
Control, redeem up to 35% of the originally issued principal amount of the
Securities at a redemption price equal to 112.50% of the principal amount of the
Securities so redeemed, plus accrued and unpaid interest (including Additional
Interest, if any) thereon, if any, to the redemption date, with the net cash
proceeds of (a) one or more Public Equity Offerings of common equity of the
Company or (b) a sale or series of related sales of Qualified Equity Interests
of the Company to Strategic Equity Investors, in any such case resulting in
gross cash proceeds to the Company of at least $25.0 million in the aggregate;
provided, however, that at least 65% of the originally issued principal amount
of the Securities would remain outstanding immediately after giving effect to
any such redemption (excluding any Securities owned by the Company or any of its
Affiliates). Notice of any such redemption must be given within 90 days after
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the date of the consummation of such Public Equity Offering or such sale of
Qualified Equity Interests.
7. Notice of Redemption.
Notice of redemption will be mailed to each Holder by
first-class mail at least 30 days but not more than 60 days before the
Redemption Date of Securities to be redeemed at such Holder's registered
address; provided, however, that notice of redemption pursuant to paragraph 6 of
this Security will be mailed to each Holder of Securities to be redeemed no
later than 90 days following the consummation of the last Public Equity Offering
or sale of Qualified Equity Interests of the Company to Strategic Equity
Investors resulting in gross cash proceeds to the Company, when aggregated with
all prior Public Equity Offerings and sales of Qualified Equity Interests of the
Company to Strategic Equity Investors, of at least $25.0 million. In the event
that less than all of the Securities are to be redeemed at any time pursuant to
an optional redemption, selection of such Securities for redemption will be made
by the Trustee in compliance with the requirements of the national securities
exchange, if any, on which such Securities are listed or, if such Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Securities of a principal amount of $1,000 or less shall be
redeemed in part; provided further, however, that if a partial redemption is
made with the proceeds of a Public Equity Offering or sale or series of related
sales of Qualified Equity Interests of the Company to Strategic Equity
Investors, selection of the Securities or portions thereof for redemption shall
be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis
as is practicable (subject to the procedures of The Depository), unless such
method is otherwise prohibited.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Issuers have deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control, the Issuers
will be required to offer to purchase all of the outstanding Securities at a
purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest (including Additional Interest, if any) thereon, if
any, to the Purchase Date.
9. Limitation on Disposition of Assets.
In connection with the disposition of assets of the Company or
its Restricted Subsidiaries, the Issuers are, subject to certain conditions,
obligated to make an offer to purchase Securities at a purchase price equal to
100% of the aggregate principal amount
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thereof, plus accrued and unpaid interest (including Additional Interest, if
any) thereon, if any, to the Purchase Date.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Issuers at their written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Issuers and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities
and the Guaranties may be amended or supplemented with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture, the Securities and the Guaranties to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities or comply with
any requirements of the Securities and Exchange Commission in connection with
the qualification of the Indenture under the TIA,
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or make any other change that does not materially adversely affect the rights of
any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must quarterly
report to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guaranties except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guaranties unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.
18. No Recourse Against Others.
No director, officer, employee, incorporator, manager, member
or stockholder of either Issuer or any of their Affiliates, as such, shall have
any liability for any obligations of such Issuer or any of its Affiliates under
the Securities, any Guaranty or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
19. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
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20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security 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), U/G/M/A
(= Uniform Gifts to Minors Act) and U/T/M/A (= Uniform Transfers to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture,
this Security and any Guaranty thereof without regard to principles of conflicts
of laws.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
--------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ____________________________________ agent to transfer
this Security on the books of the Company. The agent may substitute another to
act in its stead.
Dated: Signed:
-------------------------- ----------------------------------
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee:
----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
116
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Issuers pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security
purchased by the Issuers pursuant to Section 4.05 or Section 4.14 of the
Indenture, state the amount: $__________
Dated: Your Signature:
---------------------- ----------------------------------
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee:
----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
117
EXHIBIT B
(FORM OF SERIES B SECURITY)
DIGITAL TELEVISION SERVICES, LLC
DTS CAPITAL, INC.
12 1/2% Senior Subordinated Note
due August 1, 2007, Series B
CUSIP No.:
No. $
DIGITAL TELEVISION SERVICES, LLC, a Delaware limited liability
company (the "Company"), and DTS CAPITAL, INC., a Delaware corporation
(collectively, the "Issuers", which term includes any successor corporation to
either Issuer), for value received promises to pay to ____________ or registered
assigns, the principal sum of _______________ Dollars on August 1, 2007.
Interest Payment Dates: August 1 and February 1, commencing on
February 1, 1998.
Interest Record Dates: July 15 and January 15
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Issuers have caused this Security to
be signed manually or by facsimile by their respective duly authorized officers.
DIGITAL TELEVISION SERVICES, LLC
By: DTS Management, LLC,
its manager
By:
---------------------------------
Name:
Title:
DTS CAPITAL, INC.
By:
---------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Title:
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12 1/2% Senior Subordinated Notes due 2007,
Series B, described in the within-mentioned Indenture.
Dated:
The Bank of New York,
as Trustee
By:
------------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
DIGITAL TELEVISION SERVICES, LLC
DTS CAPITAL, INC.
12 1/2% Senior Subordinated Note
due August 1, 2007, Series B
1. Interest.
DIGITAL TELEVISION SERVICES, LLC, a Delaware limited liability
company (the "Company"), and DTS CAPITAL, INC., a Delaware corporation
("Capital," and together with the Company, the "Issuers"), jointly and severally
promise to pay interest on the principal amount of this Security at the rate per
annum shown above. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from July
30, 1997. The Issuers will pay interest semi-annually in arrears on each
Interest Payment Date, commencing on February 1, 1998. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal from time
to time on demand at the rate borne by the Securities and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Issuers shall
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 ("U.S. Legal
Tender"). However, the Issuers may pay principal and interest by wire transfer
of Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. The Issuers may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to the Holders. Either of the Issuers or any of the Company's
Subsidiaries may, subject to certain exceptions, act as Registrar.
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4. Indenture and Guaranties.
The Issuers issued the Securities under an Indenture, dated as
of July 30, 1997 (the "Indenture"), between the Issuers, certain Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and holders of
Securities are referred to the Indenture and the TIA for a statement of them.
The Securities are general obligations of the Issuers limited in aggregate
principal face amount to $155,000,000. Payment on each Security is guaranteed
(each, a "Guaranty") on a senior subordinated basis, jointly and severally, by
each Restricted Subsidiary (each, a "Guarantor") pursuant to Article Eleven and
Article Twelve of the Indenture.
5. Optional Redemption.
The Securities will be redeemable at the option of the
Issuers, in whole or in part, at any time or from time to time, on or after
August 1, 2002 at the redemption prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest (including Additional
Interest, if any) thereon, if any, to the redemption date, if redeemed during
the twelve-month period commencing on August 1 of the years set forth below:
Year Percentage
---- ----------
2002 106.250%
2003 104.167%
2004 102.083%
2005 and thereafter 100.000%
6. Optional Redemption upon Certain Equity Issuances.
At any time, or from time to time, prior to August 1, 2000,
the Issuers may, other than in any circumstance resulting in a Change of
Control, redeem up to 35% of the originally issued principal amount of the
Securities at a redemption price equal to 112.50% of the principal amount of the
Securities so redeemed, plus accrued and unpaid interest (including Additional
Interest, if any) thereon, if any, to the redemption date, with the net cash
proceeds of (a) one or more Public Equity Offerings of common equity of the
Company or (b) a sale or series of related sales of Qualified Equity Interests
of the Company to Strategic Equity Investors, in any such case resulting in
gross cash proceeds to the Company of at least $25.0 million in the aggregate;
provided, however, that at least 65% of the originally issued principal amount
of the Securities would remain outstanding immediately after giving effect to
any such redemption (excluding any Securities owned by the Company
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or any of its Affiliates). Notice of any such redemption must be given within 90
days after the date of the consummation of such Public Equity Offering or such
sale of Qualified Equity Interests.
7. Notice of Redemption.
Notice of redemption will be mailed to each Holder by
first-class mail at least 30 days but not more than 60 days before the
Redemption Date of Securities to be redeemed at such Holder's registered
address; provided, however, that notice of redemption pursuant to paragraph 6 of
this Security will be mailed to each Holder of Securities to be redeemed no
later than 90 days following the consummation of the last Public Equity Offering
or sale of Qualified Equity Interests of the Company to Strategic Equity
Investors resulting in gross cash proceeds to the Company, when aggregated with
all prior Public Equity Offerings and sales of Qualified Equity Interests of the
Company to Strategic Equity Investors, of at least $25.0 million. In the event
that less than all of the Securities are to be redeemed at any time pursuant to
an optional redemption, selection of such Securities for redemption will be made
by the Trustee in compliance with the requirements of the national securities
exchange, if any, on which such Securities are listed or, if such Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Securities of a principal amount of $1,000 or less shall be
redeemed in part; provided further, however, that if a partial redemption is
made with the proceeds of a Public Equity Offering or sale or series of related
sales of Qualified Equity Interests of the Company to Strategic Equity
Investors, selection of the Securities or portions thereof for redemption shall
be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis
as is practicable (subject to the procedures of The Depository), unless such
method is otherwise prohibited.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Issuers have deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control, the Issuers
will be required to offer to purchase all of the outstanding Securities at a
purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest (including Additional Interest, if any) thereon, if
any, to the Purchase Date.
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9. Limitation on Disposition of Assets.
In connection with the disposition of assets of the Company or
its Restricted Subsidiaries, the Issuers are, subject to certain conditions,
obligated to make an offer to purchase Securities at a purchase price equal to
100% of the aggregate principal amount thereof, plus accrued and unpaid interest
(including Additional Interest, if any) thereon, if any, to the Purchase Date.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Issuers at their written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Issuers and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities
and the Guaranties may be amended or supplemented with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then
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outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and the Guaranties to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the Securities and Exchange Commission in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not materially adversely affect the rights of any Holder
of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must quarterly
report to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Escrow Agreement, the Securities or the
Guaranties except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture, the Escrow Agreement, the Securities or the Guaranties
unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.
18. No Recourse Against Others.
No director, officer, employee, incorporator, manager, member
or stockholder of either Issuer or any of their Affiliates, as such, shall have
any liability for any obligations of such Issuer or any of its Affiliates under
the Securities, any Guaranty or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
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19. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security 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), U/G/M/A
(= Uniform Gifts to Minors Act) and U/T/M/A (= Uniform Transfers to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture,
this Security and any Guaranty thereof without regard to principles of conflicts
of laws.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
--------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint __________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act in
its stead.
Dated: Signed:
--------------------- ----------------------------------
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee:
--------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
127
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Issuers pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security
purchased by the Issuers pursuant to Section 4.05 or Section 4.14 of the
Indenture, state the amount: $___________
Dated: Your Signature:
----------------- ----------------------------------
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee:
--------------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
128
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required in
the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A
SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF
THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
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EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 12 1/2% Senior Subordinated Notes due 2007, Series A
and 12 1/2% Senior Subordinated Notes due 2007,
Series B (the "Securities"), of Digital Television
Services, LLC and DTS Capital, Inc.
This Certificate relates to $____________ principal amount of
Securities held in the form of* ____ a beneficial interest in a Global Security
or* ____ Physical Securities by ________________________________ (the
"Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depository a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[ ] has requested by written order that the Registrar exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.06 of such Indenture,
and that the transfer of such Security does not require registration under the
Securities Act of 1933, as amended (the "Act"), because*:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act).
[ ] Such Security is being transferred in reliance on Regulation S
under the Act.
[ ] Such Security is being transferred in reliance on Rule 144 under
the Act.
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130
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
---------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------
[Authorized Signatory]
Date:
----------------------
*Check applicable box.
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131
EXHIBIT E
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
---------------, ----
[Date]
[Trustee's Name and Address]
Attention: Corporate Trust Administration
Re: Digital Television Services, LLC and DTS Capital,
Inc. (the "Issuers") Indenture (the "Indenture")
relating to 12 1/2% Senior Subordinated Notes due
2007, Series A, or 12 1/2% Senior Subordinated Notes
due 2007, Series B
Ladies and Gentlemen:
In connection with our proposed purchase of 12 1/2% Senior
Subordinated Notes due 2007, Series A, or 12 1/2% Senior Subordinated Notes due
2007, Series B (the "Securities"), of the Issuers, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we sell any Securities, we will do so only (A) to
the Issuers or any subsidiary of either Issuer, (B) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Trustee a signed
letter substantially in the form hereof, (D) outside the United States in
accordance with Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (F) pursuant to an effective registration statement under the
Securities Act, and we further
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132
agree to provide to any person purchasing Securities from us a notice advising
such purchaser that resales of the Securities are restricted as stated herein.
4. We understand that, on any proposed resale of Securities,
we will be required to furnish to the Trustee and the Issuers such
certification, legal opinions and other information as the Trustee and the
Issuers may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Issuers are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
---------------------------------
[Authorized Signatory]
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133
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
[Date]
[Trustee's Name and Address]
Attention: Corporate Trust Administration
Re: Digital Television Services, LLC and DTS Capital,
Inc. (the "Issuers") 12 1/2% Senior Subordinated
Notes due 2007, Series A, and 12 1/2% Senior
Subordinated Notes due 2007, Series B (the
"Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $____________
aggregate principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Issuers are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative
F-1
134
or legal proceedings or official inquiry with respect to the matters covered
hereby. Defined terms used herein without definition have the respective
meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
[Authorized Signatory]
F-2
