--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ADVANCED RADIO TELECOM CORP.
135,000 Units Consisting of
$135,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and
Warrants to Purchase 2,731,725 Shares of Common Stock
INDENTURE
Dated as of February ___, 0000
XXX XXXX XX XXX XXXX
Trustee
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1) . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . . .
313(a) . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1 . . . . . . . . . . . . . . . . . . . . . .
(b)(2) . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . 7.06; 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . 4.03; 10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . 4.18
(c)(1). . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . 4.18
(d) . . . . . . . . . . . . . . . . . . . . . . . 4.18
(e) . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.05, 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . 2.09
(a)(1)(a) . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(b) . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . 2.13
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . 10.01
(b) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . 10.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . 16
Section 1.03. Incorporation by Reference of Trust Indenture Act . . . . 17
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . 17
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . 17
Section 2.02. Execution and Authentication . . . . . . . . . . . . . . . 18
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . 18
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . 19
Section 2.05. Lists of Holders of the Notes . . . . . . . . . . . . . . 19
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . 19
Section 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . . 20
Section 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . . 20
Section 2.09. Treasury Notes . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 21
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . 21
Section 2.13. Record Date . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.14. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . 22
Section 3.02. Selection of Notes to Be Redeemed . . . . . . . . . . . . 22
Section 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . 23
Section 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . 23
Section 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . 23
Section 3.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . 24
Section 3.07. Optional Redemption . . . . . . . . . . . . . . . . . . . 24
Section 3.08. Mandatory Redemption . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . . . 25
Section 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . 25
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.04. Compliance Certificate . . . . . . . . . . . . . . . . . . 26
Section 4.05. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.06. Stay, Extension and Usury Laws . . . . . . . . . . . . . . 27
Section 4.07. Limitation on Restricted Payments . . . . . . . . . . . . 27
i
Section 4.08. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries . . . . . . 30
Section 4.09. Limitation on Indebtedness . . . . . . . . . . . . . . . . 31
Section 4.10. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries . . . . . . . . . . . . . . . . . 34
Section 4.11. Disposition of Proceeds of Asset Sales . . . . . . . . . . 34
Section 4.12. Limitation on Transactions with Affiliates . . . . . . . . 35
Section 4.13. Limitation on Liens Securing Certain Indebtedness . . . . 36
Section 4.14. Corporate Existence . . . . . . . . . . . . . . . . . . . 36
Section 4.15. Change of Control . . . . . . . . . . . . . . . . . . . . 36
Section 4.16. Business Activities of the Company . . . . . . . . . . . . 37
Section 4.17. No Amendment to Voting Trust Agreement . . . . . . . . . . 37
Section 4.18. Pledge Agreement; Security . . . . . . . . . . . . . . . . 37
ARTICLE 5
SUCCESSORS
Section 5.01. Consolidation, Merger, Sale of Assets, Etc. . . . . . . . 38
Section 5.02. Successor Corporation Substituted . . . . . . . . . . . . 39
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . 40
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 42
Section 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . 42
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . 42
Section 6.07. Rights of Holders of Notes to Receive Payment . . . . . . 43
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . 43
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . 43
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . 44
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 44
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 45
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . 46
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . 46
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 46
Section 7.06. Reports by Trustee to Holders of the Notes . . . . . . . . 46
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . 46
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . 47
Section 7.09. Successor Trustee by Merger, etc . . . . . . . . . . . . . 48
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . 48
Section 7.11. Preferential Collection of Claims Against Company . . . . 48
ii
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 8.02. Legal Defeasance and Discharge . . . . . . . . . . . . . . 49
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . 49
Section 8.04. Conditions to Legal or Covenant Defeasance . . . . . . . . 50
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions. . . . . . . 50
Section 8.06. Repayment to Company . . . . . . . . . . . . . . . . . . . 51
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes . . . . . . . . . . . 52
Section 9.02. With Consent of Holders of Notes . . . . . . . . . . . . . 52
Section 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . 53
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . 53
Section 9.05. Notation on or Exchange of Notes . . . . . . . . . . . . . 54
Section 9.06. Trustee to Sign Amendments, etc . . . . . . . . . . . . . 54
ARTICLE 10
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . 54
Section 10.02. Notices . . . . . . . . . . . . . . .. . . . . . . . . . . 54
Section 10.03. Communication by Holders of Notes with Other
Holders of Notes . . . . . . . . . . . . . . . . . . . . . 55
Section 10.04. Certificate and Opinion as to Conditions Precedent . . . . 55
Section 10.05. Statements Required in Certificate or Opinion . . . . . . 56
Section 10.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . 56
Section 10.07. No Personal Liability of Partners, Directors, Officers,
Employees and Stockholders . . . . . . . . . . . . . . . . 56
Section 10.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.09. No Adverse Interpretation of Xxx.xx Agreements . . . . . . 56
Section 10.10. Successors . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.11. Severability . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.12. Counterpart Originals . . . . . . . . . . . . . . . . . . 57
Section 10.13. Table of Contents, Headings, etc . . . . . . . . . . . . . 57
iii
EXHIBITS
Exhibit A Form of the Note
Exhibit B Form of the Pledge Agreement
iv
INDENTURE dated as of February ___, 1997 between Advanced Radio Telecom
Corp., f/k/a Advanced Radio Technologies Corporation, a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the ___% Senior Notes
due 2007 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined in conformity with GAAP; PROVIDED that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the net income of any Person (other than net income attributable to a
Restricted Subsidiary) in which any Person (other than the Company or any of its
Restricted Subsidiaries) has a joint interest and the net income of any
Unrestricted Subsidiary, except to the extent of the amount of dividends or
other distributions actually paid to the Company or any of its Restricted
Subsidiaries by such other Person (including, without limitation, an
Unrestricted Subsidiary) during such period; (ii) solely for the purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of Section 4.07(a) hereof (and in such case, except to the extent
includable pursuant to clause (i) above), the net income (or loss) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) the net income of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of such net income is not
at the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary; (iv) any gains or losses
(on an after-tax basis) attributable to Asset Sales; (v) except for purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of Section 4.07(a) hereof, any amount paid as, or accrued for, cash
dividends on Preferred Stock of the Company or any Restricted Subsidiary owned
by Persons other than the Company and any of its Restricted Subsidiaries;
(vi) all extraordinary or nonrecurring gains and losses; and (vii) the net
income of the Company in respect of the Pledged Securities.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles (other than
licenses issued by the FCC), all as set forth on the quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and most recently filed with the Commission
pursuant to Section 4.03 hereof; PROVIDED that the value of any licenses issued
by the FCC shall, in the event of an auction for similar licenses, be equal to
the fair market value ascribed thereto in good faith by the Board and evidenced
by a resolution of the Board. As used herein, references to financial
statements of the Company and its Restricted Subsidiaries shall be adjusted to
exclude Unrestricted Subsidiaries if the context requires.
"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 voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control. For purposes hereof, the term "Affiliate" shall at all
times include Xxxxxxxx X. Xxxxxxxxx, Landover Holdings Corporation and their
respective Affiliates.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ART LICENSING" means ART Licensing Corp., a Delaware corporation and a
wholly owned subsidiary of the Company, or any successor thereto, or such other
Restricted Subsidiary or Restricted Subsidiaries of the Company formed for the
purpose of the application for, acquisition of or ownership of FCC licenses and
authorizations.
"XXX XXXX" means XXX Xxxx Joint Venture, a Delaware partnership owned by
the Company and Extended Communications, Inc.
"ASSET ACQUISITION" means (i) an Investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of the Company or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries or (ii) an
acquisition by the Company or any of its Restricted Subsidiaries of the property
and assets of any Person other than the Company or any of its Restricted
Subsidiaries that constitute substantially all of a division or line of business
of such Person.
"ASSET SALE" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property or assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary; PROVIDED that the following shall not be included within
the meaning of "Asset Sale": (A) sales or other dispositions of inventory,
receivables and other current assets; (B) sales or other dispositions of
equipment that has become worn out, obsolete, damaged or otherwise unsuitable or
undesirable for use in connection with the business of the Company or its
Restricted Subsidiaries; (C) Permitted Asset Swaps; (D) sales,
2
transfers or other dispositions otherwise constituting Asset Sales in an
aggregate amount not to exceed $500,000 during the relevant twelve-month period
referred to in Section 4.11 hereof; (E) any Restricted Payment permitted by
Section 4.07 hereof; (F) any Lien permitted to be Incurred by Section 4.13
hereof; (G) any transaction that is governed by the provisions of Article 5
hereof; (H) any sale, transfer or other disposition of the Capital Stock of an
Unrestricted Subsidiary; and (I) any disposition pursuant to the Option
Agreement, dated as of July 3, 1996, between the Company and Commco, L.L.C.
"AVERAGE LIFE" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of
(A) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (B) the amount
such principal payment by (ii) the sum of all such principal payments.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person; and "Capitalized
Lease Obligations" means the discounted present value of the rental obligations
under such lease.
"CHANGE IN CONTROL" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Voting Stock representing more than 50% of the total voting power of the Voting
Stock of the Company on a fully diluted basis, (ii) individuals who on the Issue
Date constitute the Board (together with any new directors whose election by the
Board or whose nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the members of the Board then in
office who either were members of the Board on the Issue Date or whose election
or nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board then in office or (iii) the
merger or consolidation of the Company with or into another corporation, or the
merger or consolidation of another corporation with and into the Company, with
the effect that, immediately after such transaction, the stockholders of the
Company immediately prior to such transaction hold less than 50% of the Voting
Stock of the Person surviving such merger or consolidation.
"COLLATERAL" means, for so long as held pursuant to the Pledge Agreement,
(a) all of Pledgor's now owned and existing and hereafter arising or acquired
right, title and interest in and to the Pledged Securities and the Pledge
Account, (b) the certificates or other evidences of ownership representing any
Pledged Securities or the Pledge Account and (c) all proceeds of any of the
Pledged Securities, including, without limitation, all dividends, interest,
principal payments, cash, options, warrants, rights, instruments,
3
investment property, subscriptions and other property or proceeds from time to
time received, receivable or otherwise distributed or distributable in respect
of or in exchange for any or all of the Pledged Securities.
"COLLATERAL AGENT" means the party named as collateral agent under the
Pledge Agreement, or its successor.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to share of Capital Stock of any other class of such Person.
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts for
such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest
Expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (iii) income taxes, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income (other than income
taxes (either positive or negative) attributable to extraordinary and non-
recurring gains or losses or sales of assets), (iv) depreciation expense, to the
extent such amount was deducted in calculating Adjusted Consolidated Net Income,
(v) amortization expense, to the extent such amount was deducted in calculating
Adjusted Consolidated Net Income and (vi) all other non-cash items reducing
Adjusted Consolidated Net Income (other than items that shall require cash
payments and for which an accrual or reserve is, or is required by GAAP to be,
made), less all non-cash items increasing Adjusted Consolidated Net Income on
any series of preferred stock of such Person, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in conformity
with GAAP; PROVIDED that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to (A) the amount
of the Adjusted Consolidated Net Income attributable to such Restricted
Subsidiary MULTIPLIED BY (B) the quotient of (1) the number of shares of
outstanding Common Stock of such Restricted Subsidiary not owned on the last day
of such period by the Company or any of its Restricted Subsidiaries DIVIDED BY
(2) the total number of shares of outstanding Common Stock of such Restricted
Subsidiary on the last day of such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization and other non-cash charges of, a Restricted Subsidiary of a Person
shall be added to Adjusted Consolidated Net Income to compute Consolidated
EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating the Adjusted Consolidated
Net Income of such Person and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including amortization of original issue
discount on any Indebtedness and the interest portion of any deferred payment
obligation, calculated in accordance with the effective interest method of
accounting; all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net payments
(if any) pursuant to Hedging Obligations;
4
and Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; EXCLUDING, HOWEVER, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded from the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Note Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 10.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT FACILITY" means a bank credit facility, to be entered into among
the Company, Canadian Imperial Bank of Commerce, Inc., as agent (the "Agent"),
and certain lenders to be party thereto, on substantially the terms set forth in
the Summary of Terms and Conditions of the Agent, dated as of December 19, 1996,
and any amendment, extension, restatement, refinancing or refunding thereof;
PROVIDED that the Company and the Agent shall have (A) executed a commitment
letter with respect to such facility not later than June 30, 1997 and (B)
entered into such facility not later than December 31, 1997; PROVIDED FURTHER
that, in the event that the Company and the Agent shall have failed to execute a
commitment letter or enter into such facility within the time periods specified
in the first and the second proviso of this definition, respectively, Sections
4.09(b)(xiii) and (xiv) hereof shall be of no further force and effect.
"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.
"DIRECTED INVESTMENT" means any Investment in a Telecommunications Business
that is made by investing the net proceeds of the issuance of Capital Stock
(other than Redeemable Stock) by the Company (or options, warrants or other
rights to purchase such Capital Stock) after the Issue Date; PROVIDED that such
Investment shall be made with such net proceeds in the form received by the
Company and shall be limited to an amount equal to (A) 50% of such net proceeds
to the extent that such net proceeds consist of cash, and (B) 100% of such net
proceeds to the extent such net proceeds consist of Capital Stock or
Telecommunications Assets; PROVIDED FURTHER that such Investment is made within
180 days of such issuance of Capital Stock.
"EQUITY OFFERING" means an underwritten public offering or flotation of
Common Stock of the Company which has been registered under the Securities Act
and/or admitted to listing on a national securities exchange.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations thereunder.
"FAIR MARKET VALUE" means the price that would be paid in an arm's
length transaction between an informed and willing seller under no compulsion
to sell and an informed and willing buyer under no
5
compulsion to buy,
as determined in good faith by the Board (whose determination shall be
conclusive) and evidenced by a resolution of the Board; PROVIDED that, with
respect to the Pledged Securities, the fair market value thereof shall be net of
the accrued and unpaid interest, if any, on the Notes.
"FCC" means the United States Federal Communications Commission and any
state or local telecommunications authority, department, commission or agency
(and any successors thereto).
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, including, without limitation, those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations contained herein shall be
computed in conformity with GAAP applied on a consistent basis, except that
calculations made for purposes of determining compliance with the terms of the
covenants and with other provisions hereof shall be made without giving effect
to (i) the amortization of any expenses incurred in connection with the offering
of the Notes and (ii) except as otherwise provided, the amortization of any
amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and
17.
"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 is pledged.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"HEDGING 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.
"HOLDER" means a Person in whose name a Note is registered.
"INCUR" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including, with respect to the Company and its Restricted Subsidiaries, an
"incurrence" of Indebtedness by reason of a Person becoming a Restricted
Subsidiary of the Company;
6
PROVIDED that neither the accrual of interest nor the accretion of original
issue discount shall be considered an Incurrence of Indebtedness.
"INDEBTEDNESS" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments (whether negotiable or non-
negotiable), (iii) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, except trade
payables and escrows, holdbacks and comparable arrangements to secure
indemnification obligations under acquisition agreements, (v) all obligations of
such Person as lessee under Capitalized Leases, (vi) all indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
indebtedness is assumed by such Person, PROVIDED that the amount of such
indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such indebtedness, (vii) the
balance deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable and (viii) all indebtedness of other Persons
Guaranteed by such Person to the extent such indebtedness is Guaranteed by such
Person. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations that are included in any of
clauses (i) through (viii) above, the maximum liability upon the occurrence of
the contingency giving rise to the obligation, PROVIDED (A) that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness, less the remaining unamortized portion
of the original issue discount of such Indebtedness on such date, (B) that
Indebtedness shall not include any liability for federal, state, local or other
taxes and (C) that Indebtedness shall not include the fair market value of the
Pledged Securities then held by the Trustee as determined in good faith by an
officer of the Company.
"INDEBTEDNESS TO EBITDA RATIO" means, as at any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis ("Consolidated Indebtedness") as
at the date of determination (the "Transaction Date") to (ii) the Consolidated
EBITDA of the Company for the then most recent four full fiscal quarters for
which reports have been filed pursuant to Section 4.03 hereof (such four full
fiscal quarter period being referred to herein as the "Four Quarter Period");
PROVIDED that (x) pro forma effect shall be given to any Indebtedness Incurred
from the beginning of the Four Quarter Period through the Transaction Date
(including any Indebtedness Incurred on the Transaction Date), to the extent
outstanding on the Transaction Date, (y) if during the period commencing on the
first day of such Four Quarter Period through the Transaction Date (the
"Reference Period"), the Company or any of the Restricted Subsidiaries shall
have engaged in any Asset Sale, Consolidated EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive), or increased by an
amount equal to the EBITDA (if negative), directly attributable to the assets
which are the subject of such Asset Sale and any related retirement of
Indebtedness as if such Asset Sale and related retirement of Indebtedness had
occurred on the first day of such Reference Period or (z) if during such
Reference Period the Company or any of the Restricted Subsidiaries shall have
made any Asset Acquisition, Consolidated EBITDA of the Company shall be
calculated on a pro forma basis as if such Asset Acquisition and any Incurrence
of Indebtedness to finance such Asset Acquisition had taken place on the first
day of such Reference Period.
7
"INDEBTEDNESS TO TOTAL MARKET CAPITALIZATION RATIO" means, at any date of
determination, the ratio of (i) the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis outstanding to
(ii) the Total Market Capitalization of the Company.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INVESTMENT" in any Person means any direct or indirect advance, loan or
extension of credit (including, without limitation, by way of Guarantee or
similar arrangement, but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of the Company or its Restricted Subsidiaries) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person and shall include (i) the designation
of a Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the fair
market value of the Capital Stock held by the Company and the Restricted
Subsidiaries of any Person that has ceased to be a Restricted Subsidiary by
reason of any transaction permitted by clause (iii) of Section 4.10 hereof. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.07 hereof,
(i) "Investment" shall include the fair market value of the assets (net of
liabilities) of any Restricted Subsidiary of the Company at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude
the fair market value of the assets (net of liabilities) of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary of the Company and (ii) any property transferred to or
from an Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined by the Board in good faith.
"ISSUE DATE" means the date of original issuance of the Notes.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"NET CASH PROCEEDS" means (a) with respect to any Asset Sale, the proceeds
of such Asset Sale in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
and proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes
shall actually be paid or are payable) as a
8
result of such Asset Sale without regard to the consolidated results of
operations of the Company and its Restricted Subsidiaries, taken as a whole,
(iii) payments made to repay Indebtedness or any other obligation outstanding at
the time of such Asset Sale that either (A) is secured by a Lien on the property
or assets sold or (B) is required to be paid as a result of such sale and
(iv) appropriate amounts to be provided by the Company or any Restricted
Subsidiary of the Company as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as determined in conformity with GAAP and (b) with respect to any
issuance or sale of Capital Stock, the proceeds of such issuance or sale in the
form of cash or cash equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary of the Company) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of attorney's fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees incurred
in connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NON-RECOURSE DEBT" means Indebtedness (a) as to which neither the Company
nor any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) or (ii) is directly or indirectly liable (as a guarantor or
otherwise); (b) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness (other than the Notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (c) as to which the lender of any indebtedness for borrowed money in an
aggregate amount in excess of $5.0 million has been notified in writing that
such lender shall not have any recourse to the stock or assets of the Company or
any of its Restricted Subsidiaries.
"NOTES" means the Notes described above issued under this Indenture.
"OFFER TO PURCHASE" means an offer to purchase Notes by the Company from
the holders that is required by Section 4.11 or Section 4.15 hereof and which is
commenced by mailing a notice to the Trustee and each holder stating: (i) the
covenant pursuant to which the offer is being made and that all Notes validly
tendered shall be accepted for payment on a PRO RATA basis; (ii) the purchase
price and the date of purchase (which shall be a business day no earlier than 30
days nor later than 60 days from the date such notice is mailed) (the "Payment
Date"); (iii) that any Note not tendered shall continue to accrue interest
pursuant to its terms; (iv) that, unless the Company defaults in the payment of
the purchase price, any Note accepted for payment pursuant to the Offer to
Purchase shall cease to accrue interest on and after the Payment Date; (v) that
holders electing to have a Note purchased pursuant to the Offer to Purchase
shall be required to surrender the Note together with the form entitled "Option
of the Holder to Elect Purchase" on the reverse side thereof completed, to the
Paying Agent at the address specified in the notice prior to the close of
business on the business day immediately preceding the Payment Date; (vi) that
holders shall be entitled to withdraw their election if the Payment Agent
receives, not later than the close of business on the third business day
immediately preceding the Payment Date, a facsimile transmission or letter
setting forth the name of such holder, the principal amount of Notes delivered
for purchase and a statement that such holder is withdrawing his election to
have such Notes purchased; and
9
(vii) that holders whose Notes are being purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion thereof; PROVIDED
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, the Company shall
(i) accept for payment on a PRO RATA basis Notes or portions thereof tendered
pursuant to an Offer to Purchase, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof so accepted for payment by the Company.
The Paying Agent shall promptly mail to the holders of Notes so accepted for
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered; PROVIDED that each Note
purchased and each new Note issued shall be in a principal amount of $1,000 or
integral multiples thereof. The Company shall publicly announce the results of
an Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company shall
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes pursuant to an
Offer to Purchase.
"OFFICERS' CERTIFICATE" means a certificate (a) signed by two officers of
the Company, one of whom shall be the chief executive officer, chief financial
officer or chief accounting officer of the Company, and (b) which complies with
Sections 10.04 and 10.05 hereof.
"OPINION OF COUNSEL" means an opinion (a) from legal counsel, who may be an
employee of or counsel to the Company or any Subsidiary of the Company, and (b)
which complies with Sections 10.04 and 10.05 hereof.
"PERMITTED ASSET SWAP" means any disposition by the Company or any of its
Restricted Subsidiaries of Telecommunications Assets or a majority of the Voting
Stock of a Restricted Subsidiary in exchange for comparable Telecommunications
Assets or a majority of the Voting Stock of a comparable Restricted Subsidiary;
PROVIDED that the Board shall have approved such disposition and exchange and
determined the fair market value of the assets subject to such transaction as
evidenced by a resolution of the Board or such fair market value has been
determined by a written opinion of an investment banking firm of national
standing or other recognized independent expert with experience appraising the
terms and conditions of the type of transaction contemplated thereby.
"PERMITTED INVESTMENTS" means: (i) an Investment in a Restricted Subsidiary
or a Person which shall, upon the making of such Investment, become a Restricted
Subsidiary or be merged or consolidated with or into or transfer or convey all
or substantially all its assets to, the Company or a Restricted Subsidiary;
(ii)Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; (iv) loans or advances to employees
(other than executive officers of the Company) in an aggregate principal amount
not to exceed $1.0 million at any one time outstanding; (v) stock, obligations
or securities received in satisfaction of judgments; (vi) Investments, to the
extent that the consideration provided by the Company or any of its Restricted
Subsidiaries consists solely of Capital Stock (other than Redeemable Stock) of
the Company; (vii) notes payable to the Company that are received by the Company
as payment of the purchase price for Capital Stock (other than Redeemable Stock)
of the Company; (viii) Investments in an aggregate amount not to exceed $20.0
million at any one time
10
outstanding; (ix) Investments in an aggregate amount not to exceed $1.0 million
at any time outstanding in Unrestricted Subsidiaries engaged in the
Telecommunications Business outside of the United States; (x) Investments in
entities (other than XXX Xxxx) that own licenses granted by the FCC; PROVIDED
that (A) such Investments are made pursuant to a senior promissory note, in an
amount equal to such Investment, that by its terms is payable in full at or
before any required repayment of principal on the Notes, (B) such promissory
note is secured equally and ratably with (or prior to) any other secured
Indebtedness of such entity, (C) such Investment is made and used for the
purpose of effecting, and does not exceed the amount reasonably required to
effect, the minimum build-out with respect to such licenses that is required by
the FCC as a prerequisite to the transfer of a majority equity interest in such
entity to the Company or one of its Restricted Subsidiaries, as determined in
good faith by the Board and (D) the Company, at the time such Investment is
made, had a contractual right to, and intends (subject in all cases to
compliance with applicable FCC rules and regulations) to, acquire such majority
equity interest; (xi) Investments existing on the Issue Date; (xii) the
acquisition of all equity interests of XXX Xxxx not otherwise owned by the
Company; (xiii) Directed Investments; and (xiv) promissory notes from Commco,
L.L.C. in payment of the exercise price of the option granted by the Company to
Commco, L.L.C. in accordance with the terms of the Option Agreement, dated as of
July 3, 1996, between the Company and Commco, L.L.C.
"PERMITTED LIENS" means: (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings timely instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory or common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings timely instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money) and a bank's unexercised right of
set-off with respect to deposits made in the ordinary course; (v) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Subsidiaries or other irregularities that do not materially interfere with the
ordinary course of business of the Company or any of its Subsidiaries; (vi)
Liens (including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; PROVIDED that (A) such Lien is created solely for
the purpose of securing Indebtedness Incurred in accordance with Section 4.09
hereof, (1) to finance the cost (including the cost of improvement or
construction) of the item of property or assets subject thereto and such Lien is
created prior to, at the time of or within six months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property or (2) to refinance any Indebtedness previously so
secured, (B) the principal amount of the Indebtedness secured by such Lien does
not exceed 100% of such cost and (C) any such Lien shall not extend to or cover
any property or assets other than such item of property or assets and any
improvements on such item; (vii) leases or subleases granted to others that do
not materially interfere with the ordinary course of business of the Company and
its Subsidiaries, taken as a whole; (viii) Liens encumbering property or assets
under construction arising from progress or partial
11
payments by a customer of the Company or its Subsidiaries relating to such
property or assets; (ix) any interest or title of a lessor in the property
subject to any Capitalized Lease or operating lease; (x) Liens arising from
filing Uniform Commercial Code financing statements regarding leases; (xi) Liens
on property of, or on shares of stock or Indebtedness of, any corporation
existing at the time such corporation becomes, or becomes a part of, any
Subsidiary; PROVIDED that such Liens do not extend to or cover any property or
assets of the Company or any Subsidiary other than the property or assets
acquired; (xii) Liens in favor of the Company or any Subsidiary; (xiii) Liens
arising from the rendering of a final judgment or order against the Company or
any Subsidiary of the Company that does not give rise to an Event of Default;
(xiv) Liens securing reimbursement obligations with respect to letters of credit
that encumber documents and the property relating to such letters of credit and
the products and proceeds thereof; (xv) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xvi) Liens arising out of conditional
sale, title retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course of
business in accordance with the past practices of the Company and its
Subsidiaries prior to the Issue Date; (xvii) Liens on or sales of receivables;
(xviii) Liens securing other Indebtedness in an aggregate amount not to exceed
$250,000 at any one time; (xix) Liens on assets of Unrestricted Subsidiaries
that secure Non-Recourse Debt of Unrestricted Subsidiaries; (xx) Liens existing
on the Issue Date and any extension, renewal or replacement of any Liens
existing on Issue Date, PROVIDED that the Liens in any such extension, renewal
or replacement are no less favorable in any material respect to the holders of
the Notes than those Liens that are being extended, renewed or replaced; (xxi)
Liens granted after the Issue Date on any assets or Capital Stock of the Company
or its Subsidiaries created in favor of the holders of the Notes; (xxii) Liens
with respect to the assets of a Subsidiary granted by such Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary to secure Indebtedness owing to
the Company or such other Wholly Owned Restricted Subsidiary; (xxiii) Liens
securing Indebtedness which is Incurred to refinance secured Indebtedness which
is permitted to be Incurred under Section 4.09(b)(iii) hereof; PROVIDED that
such Liens do not extend to or cover any property or assets of the Company or
any Subsidiary other than the property or assets securing the Indebtedness being
refinanced; (xxiv) purchase money Liens upon equipment, software or systems
acquired or held by the Company or any of its Subsidiaries taken or retained by
the seller (or a financing institution acting on behalf of the seller) of such
equipment, software or systems to secure all or a part of the purchase price
therefor; PROVIDED that such Liens do not extend to or cover any property or
assets of the Company or any Subsidiary other than the equipment so acquired;
(xxv) Liens securing Indebtedness which is permitted to be Incurred under
Section 4.09(b)(xiii) or (xiv) hereof; and (xxvi) Liens on the Pledged
Securities in favor of the holders of the Notes.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE ACCOUNT" means an account established with the Collateral Agent
pursuant to the terms of the Pledge Agreement for the deposit of the Pledged
Securities purchased by the Company with a portion of the net proceeds from the
sale of the Notes.
"PLEDGE AGREEMENT" means the Collateral Pledge and Security Agreement,
dated as of the date hereof, by and between The Bank of New York and the
Company, among other things, governing the disbursement of funds from the Pledge
Account.
12
"PLEDGED SECURITIES" means the Government Securities purchased by the
Company with a portion of the net proceeds from the sale of the Notes, and any
substitute securities, to be deposited in the Pledge Account.
"PREFERRED STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the Issue Date, and including, without limitation, all classes and series of
preferred or preference stock of such Person.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any Person
that by its terms or otherwise is (i) required to be redeemed prior to the
Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes (unless the redemption price is, at the Company's option, without
conditions precedent, payable solely is Common Stock (other than Redeemable
Stock) of the Company) or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; PROVIDED that any Capital
Stock that would not constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Redeemable Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 4.11 and 4.15 hereof and
such Capital Stock specifically provides that such Person shall not repurchase
or redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Sections
4.11 and 4.15 hereof.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"SECURITIES ACT" means the Securities Act of 1933, as amended (or any
successor act), and the rules and regulations thereunder.
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Restricted Subsidiary of the Company that, together with its Subsidiaries, (i)
for the most recent fiscal year of the Company, accounted for more than 10% of
the consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, had assets accounting for more than 10% of
the consolidated assets of the Company and its Restricted Subsidiaries, all as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
13
"SPECIFIED DATE" means any redemption date, any date of purchase of Notes
pursuant to Section 4.11 or Section 4.15 hereof, or any date on which the Notes
are due and payable after an Event of Default.
"STATED MATURITY" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"STRATEGIC EQUITY INVESTOR" means any Person which is (or a controlled
Affiliate of any Person which is or a controlled Affiliate of which is) engaged
principally in the Telecommunications Business and which has a Total Market
Capitalization of at least $1.0 billion.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"TELECOMMUNICATIONS ASSETS" means all assets (including, without
limitation, assets consisting of subscribers), rights (contractual or otherwise)
and properties, whether tangible or intangible, used in connection with a
Telecommunications Business.
"TELECOMMUNICATIONS BUSINESS" means, when used in reference to any Person,
that such Person is engaged primarily in the business of (i) providing voice,
video or data communications services, (ii) creating, developing, marketing or
selling communications related equipment, software and other devices or (iii)
evaluating, participating in or pursuing any other activity or opportunity that
is related or incidental to those identified in clauses (i) or (ii) above.
"TEMPORARY CASH INVESTMENT" means any of the following: (i) direct
obligations of the United States or any agency thereof or obligations fully and
unconditionally guaranteed by the United States or any agency thereof; (ii) time
deposit accounts, certificates of deposit and money market deposits maturing
within six months of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States, any state
thereof or any foreign country recognized by the United States, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $500.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor; (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above; (iv) commercial paper, maturing
not more than six months after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States, any state thereof or any foreign country recognized
by the United States with rating at the time as of which any investment therein
is made of
14
"P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or
higher) according to Standard & Poor's Ratings Group; and (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States, or by any political subdivision or taxing authority thereof, and
rated at least "A" by Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA, except as provided in Section 9.03.
"TOTAL MARKET CAPITALIZATION" of any Person means, as of any day of
determination, the sum of (a) the consolidated Indebtedness of such Person and
its Restricted Subsidiaries on such day, PLUS (b) the product of (i) the
aggregate number of outstanding shares of Common Stock of such Person on such
day (which shall not include any options or warrants on, or securities
convertible or exchangeable into, shares of Common Stock of such Person) and
(ii) the average Closing Price of such Common Stock over the 10 consecutive
Trading Days ending not earlier than 10 Trading Days immediately prior to such
date of determination, PLUS (c) the liquidation value of any outstanding shares
of Preferred Stock of such Person on such day. If no such Closing Price exists
with respect to shares of any such class, the value of such shares for purposes
of clause (b) of the preceding sentence shall be determined by the Board in good
faith and evidenced by a resolution of the Board filed with the Trustee.
Notwithstanding the foregoing, unless the Company's Common Stock is listed on
any national securities exchange or on the Nasdaq National Market, the "Total
Market Capitalization" of the Company shall mean, as of any date of
determination, the enterprise value (without duplication) of the Company and its
Restricted Subsidiaries (including the fair market value of their debt and
equity, but excluding the enterprise value of the Company's Unrestricted
Subsidiaries), as determined by an independent banking firm of national standing
with experience in such valuations and evidenced by a written opinion in
customary form filed with the Trustee; PROVIDED that for purposes of any such
determination, the enterprise value of the Company shall be calculated as if the
Company were a publicly held corporation without a controlling stockholder. For
purposes of any such determination, such banking firm's written opinion may
state that such fair market value is no less than a specified amount and such
opinion may be as of a date no earlier than 90 days prior to the date of such
determination.
"TRUSTEE" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"TRADING DAY" with respect to a securities exchange or automated quotation
system means a day on which such exchange or system is open for full day of
trading.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by the
Board as an Unrestricted Subsidiary pursuant to a resolution of the Board; but
only to the extent that such Subsidiary (i) has no Indebtedness other than Non-
Recourse Debt; (ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (iii) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional equity interests, except to the extent that such
obligation complies with Section 4.07 hereof, or (B) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
15
(iv) is not a guarantor of or otherwise directly or indirectly provides credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries; and (v) has, immediately prior to the commencement of material
business operations, at least one director on its board of directors that is not
a director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries. Any
such designation by the Board shall be evidenced to the Trustee by filing with
the Trustee a certified copy of the resolution of the Board giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
Incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that such designation shall
be deemed to be an Incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 4.09 hereof and (ii) no Default or Event of Default would be in
existence following such designation.
"VOTING STOCK" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"VOTING TRUST AGREEMENTS" means (i) that certain Voting Trust Agreement,
(ii) that certain Cooperation Agreement and (iii) Section 7 of that certain
Confidentiality Agreement, each dated as of November 5, 1996.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, such
Subsidiary if all of the outstanding Capital Stock in such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) is owned by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02.OTHER DEFINITIONS.
Defined in
TERM Section
"Affiliate Transaction".................. 4.12
"Bankruptcy Law"......................... 4.01
"Covenant Defeasance".................... 8.03
"Custodian".............................. 6.01
"Event of Default"....................... 6.01
"Excess Proceeds"........................ 4.11
"Legal Defeasance"....................... 8.02
"Paying Agent"........................... 2.03
"Payment Default"........................ 6.01
"Registrar".............................. 2.03
"Restricted Payments".................... 4.07
16
SECTION 1.03.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:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.04.RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
SECTION 2.01.FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Notes may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Note shall be dated
17
the date of its authentication. The Notes shall be issuable only in
denominations of $1,000 and integral multiples thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two officers of the Company shall sign the Notes for the Company by manual
or facsimile signature. The Company's seal shall be reproduced on the Notes.
If an officer whose signature is on a Note no longer holds that office at
the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
officers of the Company, authenticate Notes for original issue up to an
aggregate face amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time shall not exceed the amount
set forth therein except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any co-
registrar, the "REGISTRAR") and (ii) an office or agency where Notes may be
presented for payment ("PAYING AGENT") and an office or agency in the Borough of
Manhattan, City and State of New York, where notices and demands upon the
Company in respect of the Notes and this Indenture may be served. The Registrar
shall maintain an office or agency in the Borough of Manhattan, City and State
of New York, where Notes may be presented for registration of transfer or for
exchange, and the Paying Agent shall maintain an office or agency in the Borough
of Manhattan, City and State of New York, where Notes may be presented for
payment. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder of a Note. The Company shall
notify the Trustee and the Trustee, at the Company's direction, shall notify the
Holders of the Notes of the name and address of any Agent not a party to this
Indenture. The Company may act as Paying Agent, Registrar or co-registrar. The
Company 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 Company shall notify the Trustee of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails
to give the foregoing
18
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent shall hold in trust for the benefit of the
Holders of the Notes or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, and interest on the Notes, and shall
notify the Trustee of any Default by the Company in making any such payment.
While any such Default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company) shall have no further
liability for the money delivered to the Trustee. If the Company acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders of the Notes all money held by it as Paying Agent.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
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 of the Notes and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of Holders
of the Notes, including the aggregate principal amount of the Notes held by each
thereof, and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a request to register the
transfer of or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer of or make the exchange
if its requirements for such transactions are met; PROVIDED, HOWEVER, that any
Note presented or surrendered for registration of transfer or exchange shall be
duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit registrations
of transfer and exchanges, the Company shall issue and the Trustee shall
authenticate Notes at the Registrar's request, subject to such rules as the
Trustee may reasonably require.
Neither the Company nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.02 or (ii) register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a
19
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than such transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05, which
shall be paid by the Company).
Prior to due presentment to the Trustee for registration of the transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, premium, if any, and interest on
such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and neither the Trustee, any Agent nor the Company shall be affected by
notice to the contrary.
SECTION 2.07.REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements for replacements of Notes are
met. An indemnity bond shall be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent or any authenticating agent from any loss which any of them may suffer
if a Note is replaced. Each of the Company and the Trustee may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for cancellation
and those described in this Section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01,
it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.09, a Note does not cease to be outstanding because
the Company, a Subsidiary of the Company or an Affiliate of the Company holds
the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Subsidiary of the Company or any Affiliate of the Company shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Responsible Officer actually knows to be so owned
shall be so considered. Notwithstanding the foregoing, Notes that are to be
acquired by the Company, any Subsidiary of the Company or an Affiliate of the
Company pursuant to an exchange offer, tender offer or other agreement shall not
be deemed to be owned by the Company, a Subsidiary of the Company or an
Affiliate of the
20
Company until legal title to such Notes passes to the Company or such Subsidiary
or Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee, upon receipt of
the written order of the Company signed by two officers of the Company, shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall retain cancelled Notes
(subject to the record retention requirement of the Exchange Act), unless the
Company directs cancelled Notes to be returned to it. The Company may not issue
new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders of the Notes
on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
payment date, in each case at the rate provided in the Notes and in
Section 4.01. The Company shall, with the consent of the Trustee, fix or cause
to be fixed each such special record date and payment date. At least 15 days
before the special record date, the Company (or the Trustee, in the name of and
at the expense of the Company) shall mail to Holders of the Notes a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. RECORD DATE.
The Company or the Trustee, as the case may be, may set any day as a record
date for the purpose of determining the Holders of outstanding Notes entitled to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Notes and may set a record expiration date not later than
180 days after the record date as the date upon which such record date shall
expire. The Holders of outstanding Notes on such record date, and no other
Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date; PROVIDED that no such action
shall be effective hereunder unless taken on or prior to the applicable record
expiration date, if any, by Holders of the requisite principal amount of
outstanding Notes on such record date; and PROVIDED, FURTHER, that for the
purpose of determining whether Holders of the requisite principal amount of such
Notes have taken such
21
action, no Note shall be deemed to have been outstanding on such record date
unless it is also outstanding on the date such action is to become effective.
The Company may set a new record date or record expiration date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date or record expiration date previously set shall
automatically and with no action by any Person by canceled and of no effect),
nor shall anything in this paragraph be construed to render ineffective any
action taken by Holders of the requisite principal amount of outstanding Notes
on or prior to the date such action is taken.
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if it does
so, the Trustee shall use the CUSIP number 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 the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07, it shall furnish to the Trustee, at least 45 days
(unless a shorter period is acceptable to the Trustee) but not more than 60 days
before a redemption date, an Officers' Certificate setting forth (i) the
redemption date, (ii) the principal amount of Notes to be redeemed and (iii) the
redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a PRO RATA basis, by
lot or in accordance with any other method the Trustee in its sole discretion
considers fair and appropriate (and in such manner as complies with applicable
legal and stock exchange requirements of the principal national securities
exchange, if any, on which the Notes being redeemed are listed), PROVIDED that
no Notes of $1,000 or less shall be redeemed in part. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 45 nor more than 60 days prior to the
redemption date by the Trustee from the then outstanding Notes not previously
called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
them selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed. Except as provided in the preceding
22
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Sections 4.11 and 4.15 hereof, at least
30 days but not more than 60 days before a redemption date, the Company shall
mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address; PROVIDED that
in the event of a redemption pursuant to Section 3.07(b) arising out of a sale
of the Company's Capital Stock (other than Disqualified Stock) to a Strategic
Equity Investor, such notice shall not be mailed prior to the consummation of
such sale.
The notice shall identify the Notes to be redeemed (including CUSIP number)
and shall state: (a) the redemption date; (b) the redemption price; (c) if any
Note is being redeemed in part, the portion of the principal amount of such Note
to be redeemed and that, after the redemption date upon surrender of such Note,
a new Note or Notes in principal amount equal to the unredeemed portion shall be
issued; (d) the name and address of the Paying Agent; (e) that Notes called for
redemption shall be surrendered to the Paying Agent to collect the redemption
price; (f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date; (g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and (h)
that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company
shall have delivered to the Trustee, at least 45 days (unless a shorter period
is acceptable to the Trustee) prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
23
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder of the Note at the expense of
the Company a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in Section 3.07(b) below, the Company
shall not have the option to redeem the Notes prior to ______________ 2002.
Thereafter, the Notes shall be redeemable at the option of the Company, in
whole or in part, at any time on or after , 2002, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest, if any, to the date of redemption, if redeemed during the 12-month
period beginning on of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002.......................................... %
2003.......................................... %
2004.......................................... %
2005 and thereafter..........................100.000%
(b) Notwithstanding the provisions of Section 3.07(a) above, in
the event of a sale by the Company of its Common Stock in one or more Equity
Offerings or Investments by one or more Strategic Equity Investors on or
prior to , 2000 (other than in connection with a Change in Control
of the Company), the Company may, at its option, use all or a portion of the
net proceeds thereof to redeem up to a maximum of 25% of the initially
outstanding aggregate principal amount of the Notes at a redemption price
equal to % of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the redemption date; PROVIDED that not less than
75% of the initially outstanding aggregate principal amount of the Notes
remain outstanding following such redemption. Any such redemption shall be
effected upon not less than 30 nor more than 60 days' notice given within 30
days after any such Equity Offering or sale to a Strategic Equity Investor.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.11 and 4.15 hereof, the Company shall
not be required to make mandatory redemption payments with respect to the Notes.
There are no sinking fund payments with respect to the Notes.
24
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Paying Agent, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company 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 Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the
Securities and Exchange Commission (the "COMMISSION"), so long as any Notes
are outstanding, the Company shall furnish to the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained
25
in a filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports.
In addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability (unless the Commission shall not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. The Company shall also comply with the
provisions of TIA Section 314(a).
(b) The Company shall provide the Trustee with a sufficient number of
copies of all SEC Reports that the Trustee may be required to deliver to the
Holders of the Notes under this Section 4.03.
(c) 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 contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
officers with a view to determining whether the Company has kept, observed,
performed and fulfilled, and has caused each of its Subsidiaries to keep,
observe, perform and fulfill, its obligations under this Indenture, and
further stating, as to each such officer signing such certificate, that to
the best of his or her knowledge the Company has kept, observed, performed
and fulfilled, and has caused each of its Subsidiaries to keep, observe,
perform and fulfill, each and every covenant contained in this Indenture and
no such Person is in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture to be performed or
observed by it (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action each is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred
and remains in existence by reason of which payments on account of the
principal of, premium, if any, or interest, if any, on the Notes are
prohibited or if such event has occurred, a description of the event and what
action each is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention which would lead them to
believe that the Company has violated any provisions of ARTICLE 4 or ARTICLE
5 of this Indenture, insofar as they relate to accounting matters, or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of
any such violation.
26
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any officer becoming
aware of (i) any Default or Event of Default or (ii) any default under any
Indebtedness referred to in Section 6.01(e), an Officers' Certificate
specifying such Default, Event of Default or default and what action the
Company is taking or proposes to take with respect thereto.
(d) At the time of any Restricted Payment, the Company and its
Subsidiaries shall deliver to the Trustee an Officers' Certificate required
by this Section.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies,
except as contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company 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, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, 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 has
been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend or
make any distribution on its or such Restricted Subsidiary's Capital Stock
(other than dividends or distributions payable solely in shares of its or
such Restricted Subsidiary's Capital Stock (other than Redeemable Stock) or
in options, warrants or other rights to acquire such shares of Capital Stock)
other than such Capital Stock held by the Company or any of its Restricted
Subsidiaries (and other than PRO RATA dividends or distributions on Common
Stock of Restricted Subsidiaries), (ii) repurchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock (including options,
warrants or other rights to acquire such shares of Capital Stock) of the
Company (other than any such Capital Stock held by the Company or any Wholly
Owned Restricted Subsidiary of the Company), (iii) make any voluntary or
optional principal payment, or voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for value, of Indebtedness of
the Company that is subordinated in right of payment to the Notes or (iv)
make any Investment, other than a Permitted Investment, in any Person (such
payments or any other actions described in clauses (i) through (iv) being
collectively "RESTRICTED PAYMENTS") if, at the time of, and after giving
effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing;
27
(B) except with respect to any Investment (other than an
Investment consisting of the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary), the Company could not Incur at least $1.00
of Indebtedness under Section 4.09(a) hereof; and
(C) the aggregate amount expended for all Restricted Payments (the
amount so expended, if other than in cash, to be determined in good
faith by the Board, whose determination shall be conclusive and
evidenced by a resolution of the Board) after the Issue Date shall
exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is
a loss, MINUS 100% of such amount) (determined by excluding income
resulting from transfers of assets by the Company or a Restricted
Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative basis
during the period (taken as one accounting period) beginning on the
first day of the fiscal quarter immediately following the Issue Date
and ending on the last day of the last fiscal quarter preceding the
date for which reports have been filed pursuant to Section 4.03 hereof,
PLUS (2) the aggregate Net Cash Proceeds received by the Company after
the Issue Date from the issuance and sale permitted by this Indenture
of its Capital Stock (other than Redeemable Stock) to a Person who is
not a Subsidiary of the Company, or from the issuance to a Person who
is not a Subsidiary of the Company of any options, warrants or other
rights to acquire Capital Stock of the Company (in each case, exclusive
of any convertible Indebtedness, Redeemable Stock or any options,
warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity of
the Notes), MINUS the actual amount of Net Cash Proceeds used to make
Directed Investments, PLUS (3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in any
Person resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of assets, in each
case to the Company or any Restricted Subsidiary (except to the extent
any such payment is included in the calculation of Adjusted
Consolidated Net Income), or from the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investments"), not to exceed the amount
of Investments previously made by the Company and its Restricted
Subsidiaries in such Person.
(b) The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date
of declaration thereof if, at said date of declaration, such payment
would comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Notes, including premium, if
any, and accrued and unpaid interest, with the proceeds of, or in
exchange for, Indebtedness Incurred under Section 4.09(b)(iii) hereof;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Company (or options, warrants or other rights to
acquire such Capital Stock) in exchange for, or out of the proceeds of
a substantially concurrent offering of, shares of Capital Stock or
options, warrants or other rights to acquire such Capital Stock (in
each case, other than Redeemable Stock) of the Company;
28
(iv) the making of any principal payment or repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment
to the Notes in exchange for, or out of the proceeds of, a
substantially concurrent offering of, shares of the Capital Stock of
the Company (other than Redeemable Stock);
(v) payments or distributions, in the nature of satisfaction
of dissenters' rights, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions hereof applicable to mergers, consolidations and transfers
of all or substantially all of the property and assets of the Company;
(vi) any purchase or acquisition from, or withholding on
issuances to, any employee of the Company's Capital Stock in order to
satisfy any applicable federal, state or local tax payments in respect
of the receipt of shares of the Company's Capital Stock;
(vii) any purchase or acquisition from, or withholding on
issuances to, any employee of the Company's Capital Stock in order to
pay the purchase price of such Capital Stock or similar instrument
pursuant to a stock option, equity incentive or other employee benefit
plan or agreement of the Company or any of its Restricted Subsidiaries;
(viii) the repurchase of shares of, or options to purchase shares
of, the Company's Capital Stock from employees of the Company in
connection with the termination of their employment; PROVIDED that (A)
the aggregate price paid for all such repurchased shares of Capital
Stock made in any twelve-month period shall not exceed $250,000 PLUS
the aggregate cash proceeds received by the Company during such
twelve-month period from any reissuance of such Capital Stock by the
Company to employees of the Company and its Restricted Subsidiaries and
(B) no Default shall have occurred and be continuing immediately after
such transaction;
(ix) payments and distributions pursuant to any tax sharing
agreement between the Company and any other Person with which the
Company files a consolidated tax return or with which the Company is
part of a consolidated group, in each case, for federal income tax
purposes;
(x) cash payments in lieu of the issuance of fractional shares
of Common Stock of the Company upon conversion of any class of
Preferred Stock of the Company; and
(xi) the issuance of shares of Common Stock upon exercise of
warrants to purchase shares of common stock of ART Licensing existing
on the Issue Date, including any contribution of such shares of Common
Stock to ART Licensing, any payment by ART Licensing to the Company in
consideration thereof and any contribution by the Company to ART
Licensing in respect thereof.
PROVIDED that, except in the case of clauses (i) and (ii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth herein. Any Investments made other than in
cash shall be valued, in good faith, by the Board.
29
(c) Each Restricted Payment permitted pursuant to the preceding
paragraph (other than Restricted Payments referred to in clause (ii) thereof)
and the Net Cash Proceeds from any issuance of Capital Stock referred to in
clause (iii) or (iv) shall be included in calculating whether the conditions
of clause (C) of Section 4.07(a) hereof have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Company are used for the redemption, repurchase or other
acquisition of the Notes or Indebtedness that is PARI PASSU with the Notes,
then the Net Cash Proceeds of such issuance shall be included in clause (C)
of Section 4.07(a) hereof only to the extent such proceeds are not used for
such redemption, repurchase or other acquisition of Indebtedness.
(d) The Board may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated shall be deemed to be Restricted Payments at
the time of such designation and shall reduce the amount available for
Restricted Payments under the first paragraph of this covenant. All such
outstanding Investments shall be deemed to constitute Investments in an
amount valued in accordance with the definition of "Investment." Such
designation shall only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
SECTION 4.08. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (i) pay dividends or make other distributions permitted
by applicable law on any Capital Stock of such Restricted Subsidiary owned by
the Company or any other Restricted Subsidiary, (ii) pay any Indebtedness owed
to the Company or any other Restricted Subsidiary that owns, directly or
indirectly, any Capital Stock of such Restricted Subsidiary, (iii) make loans or
advances to the Company or any other Restricted Subsidiary that owns, directly
or indirectly, any Capital Stock of such Restricted Subsidiary or (iv) transfer
any of its property or assets to the Company or any other Restricted Subsidiary
that owns, directly or indirectly, any Capital Stock of such Restricted
Subsidiary.
(b) The foregoing provisions shall not prohibit any encumbrances or
restrictions:
(i) existing on the Issue Date in this Indenture or any other
agreement in effect on the Issue Date, and any extension, refinancing,
renewal or replacement of any such agreement; PROVIDED that the
encumbrances and restrictions in any such extension, refinancing, renewal
or replacement are no less favorable in any material respect to the holders
than those encumbrances or restrictions that are then in effect and that
are being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted Subsidiary,
at the time of such acquisition and not Incurred in contemplation thereof,
which encumbrances or restrictions are not applicable to any
30
Person or the property or assets of any Person other than such Person or
the property or assets of such Person so acquired;
(iv) in the case of clause (iv) of Section 4.08(a) hereof, (A)
that restrict in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (B) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary, not
otherwise prohibited hereby or (C) arising or agreed to in the ordinary
course of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner material
to the Company or any Restricted Subsidiary; or
(v) imposed pursuant to an agreement that has been entered
into for the sale or disposition of Capital Stock of, or property or assets of,
the Company or a Restricted Subsidiary; PROVIDED that such encumbrance or
restriction shall only remain in force during the pendency of such acquisition
or disposition; or
(vi) imposed pursuant to agreements governing Indebtedness
permitted to be Incurred under Sections 4.09(b)(xiii) and (xiv) hereof.
(c) Nothing contained in this Section 4.08 shall prevent the Company
or any Restricted Subsidiary from (a) creating, Incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.13 hereof or (b) restricting
the sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.09. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, Incur any Indebtedness (including Acquired Debt); PROVIDED that
the Company may Incur Indebtedness (including Acquired Debt) if, after giving
effect to the Incurrence of such Indebtedness and the receipt and application of
the proceeds therefrom, the Indebtedness to EBITDA Ratio would be greater than
zero and less than 5 to 1.
(b) The foregoing provisions shall not apply to:
(i) Indebtedness of the Company outstanding at any time in an
aggregate principal amount not to exceed $100.0 million, less any amount of
Indebtedness permanently repaid as provided under Section 4.11 hereof
(other than any such permanent reduction of the Indebtedness under clause
(xiii) hereof); PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness outstanding pursuant to clauses (i) and (xiii) hereof shall
not exceed $125.0 million at any time;
(ii) Indebtedness of any of the Company's Restricted
Subsidiaries owing to the Company or another Restricted Subsidiary;
PROVIDED, HOWEVER, that (A) any subsequent issuance or transfer of Capital
Stock that results in any such Indebtedness being held by a Person other
31
than the Company or a Restricted Subsidiary and (B) any sale or other
transfer of any such Indebtedness to a Person that is not the Company or a
Restricted Subsidiary shall be deemed, in each case, to constitute an
Incurrence of such Indebtedness by the Company;
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness,
other than Indebtedness Incurred under clause (i), (ii), (v), (vi) or
(viii) of this paragraph, and any refinancings thereof in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); PROVIDED that Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is
PARI PASSU with, or subordinated in right of payment to, the Notes shall
only be permitted under this clause (iii) if (A) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is PARI PASSU with
the Notes, such new Indebtedness (by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is
outstanding) is PARI PASSU with, or is expressly made subordinate in right
of payment to, the remaining Notes, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is outstanding, is expressly made
subordinate in right of payment to the Notes at least to the extent that
the Indebtedness to be refinanced is subordinated to the Notes, and
(C) such new Indebtedness, determined as of the date of Incurrence of such
new Indebtedness, does not have a Stated Maturity prior to the Stated
Maturity of the Indebtedness to be refinanced or refunded, and the Average
Life of such new Indebtedness is at least equal to the remaining Average
Life of the Indebtedness to be refinanced or refunded; and PROVIDED FURTHER
that in no event may Indebtedness of the Company be refinanced by means of
any Indebtedness of any Restricted Subsidiary of the Company pursuant to
this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety
or appeal bonds provided in the ordinary course of business; and
(B) arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from Guarantees or letters of
credit, surety bonds or performance bonds securing any obligations of the
Company or any of the Restricted Subsidiaries pursuant to such agreements,
in any case Incurred in connection with the disposition of any business,
assets or Restricted Subsidiary of the Company (other than Guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary of the Company for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition;
(v) without duplication of clause (viii) hereof, Indebtedness
of the Company not to exceed, at any one time outstanding, two TIMES an
amount equal to (A) the aggregate proceeds (less appropriate fees and
expenses)(which proceeds may consist of cash, Capital Stock of an entity
that as a result of such transaction becomes a Restricted Subsidiary of the
Company, or Telecommunications Assets which in connection with such
transaction become held by the Company or a Restricted Subsidiary of the
Company, and the value of which proceeds shall be the fair market value
thereof as determined in good faith by the Board, which in all events shall
make any appropriate adjustments on account of any Indebtedness associated
with such Capital Stock or Telecommunications Assets in making such
determination) received by the Company from the issuance and sale of its
Capital Stock (other than Redeemable Stock and Preferred Stock that
provides for the payment of dividends in cash) after the Issue Date MINUS
(B) the fair market
32
value of any Directed Investments made with the proceeds of such issuances
or sales; PROVIDED that such Indebtedness (x) does not have a Stated
Maturity prior to the Stated Maturity of the Notes and has an Average Life
longer than the Notes and (y) is unsecured and is expressly subordinated in
right of payment to the Notes;
(vi) Indebtedness to the extent such Indebtedness is secured
by Liens permitted under clause (xxiv) of the definition of "Permitted
Liens;"
(vii) Indebtedness of the Company, to the extent the proceeds
thereof are immediately used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control;
(viii) without duplication of clause (v) hereof, Indebtedness of
the Company Incurred in connection with the acquisition of (A) 38 GHz
licenses or authorizations through auctions conducted by the FCC or (B)
other licenses or authorizations through other spectrum auctions conducted
by the FCC with respect to other frequencies approved for microwave point-
to-point transmissions, in an amount not to exceed, at any one time
outstanding, the greater of (1) $10.0 million and (2) an amount equal to
the aggregate proceeds (less appropriate fees and expenses) (which proceeds
may consist of cash, Capital Stock of an entity that as a result of such
transaction becomes a Restricted Subsidiary of the Company, or
Telecommunications Assets which in connection with such transaction become
held by the Company or a Restricted Subsidiary of the Company, and the
value of which proceeds shall be the fair market value thereof as
determined in good faith by the Board, which in all events shall make any
appropriate adjustments on account of any Indebtedness associated with such
Capital Stock or Telecommunications Assets in making such determination)
received by the Company from the issuance and sale of its Capital Stock
(other than Redeemable Stock and Preferred Stock that provides for the
payment of dividends in cash) after the Issue Date MINUS the fair market
value of any Directed Investments made with the proceeds of such issuances
or sales; PROVIDED that such Indebtedness (x) does not have a Stated
Maturity prior to the Stated Maturity of the Notes and has an Average Life
longer than the Notes and (y) is unsecured and is PARI PASSU or
subordinated in right of payment with the Notes;
(ix) revolving credit Indebtedness of any Restricted
Subsidiary Incurred pursuant to a credit facility in an aggregate amount
not to exceed, at any one time outstanding, the greater of 62.5% and such
greater percentage permitted pursuant to such credit facility of the
accounts receivable net of reserves and allowances for doubtful accounts,
determined in accordance with GAAP, of such Restricted Subsidiary and its
Restricted Subsidiaries (without duplication); PROVIDED that such
Indebtedness is not Guaranteed by the Company or any of its other
Restricted Subsidiaries;
(x) the Incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are Incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness of the Company or any Restricted Subsidiary, as the case may
be, that is permitted by the terms hereof to be outstanding;
(xi) the Incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt, PROVIDED, HOWEVER, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
shall be deemed to constitute an Incurrence of Indebtedness by a Restricted
Subsidiary of the Company;
33
(xii) the Incurrence by Unrestricted Subsidiaries of
Indebtedness to the Company or any Restricted Subsidiary of the Company to
the extent permitted by Section 4.07 hereof;
(xiii) Indebtedness of the Company outstanding at any time in an
aggregate principal amount not to exceed $100.0 million Incurred pursuant
to the Credit Facility less any amount of Indebtedness pursuant to the
Credit Facility permanently repaid as provided under Section 4.11 hereof;
PROVIDED, HOWEVER, that the aggregate principal amount of Indebtedness
outstanding pursuant to clauses (i) and (xiii) hereof shall not exceed
$125.0 million at any time;
(xiv) Guarantees by the Company's Restricted Subsidiaries of
the Indebtedness referred to in clause (xiii) above;
(xv) Indebtedness of the Company existing on the Issue Date;
and
(xvi) Indebtedness of the Company represented by the Notes and
this Indenture.
(c) For purposes of determining compliance with this Section 4.09, in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described in the above clauses, the Company, in its
sole discretion, shall classify such item of Indebtedness and only be required
to include the amount and type of such Indebtedness in one of such clauses.
(d) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Guarantee of Indebtedness of any Unrestricted
Subsidiary.
(e) Notwithstanding the foregoing, ART Licensing shall not Incur any
Indebtedness or issue any Preferred Stock; PROVIDED that ART Licensing may Incur
Indebtedness of the type and in the amount set forth in Section 4.09(b)(xiv).
SECTION 4.10. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Company shall not sell, and shall not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of Capital Stock of a
Restricted Subsidiary (including options, warrants or other rights to purchase
shares of such Capital Stock), except (i) to the Company or a Wholly Owned
Restricted Subsidiary, (ii) issuances or sales to foreign nationals of shares of
Capital Stock of foreign Restricted Subsidiaries, to the extent required by
applicable law, (iii) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary or (iv) issuances or sales of Common Stock of Restricted
Subsidiaries, if within six months of each such issuance or sale, the Company or
such Restricted Subsidiary applies an amount not less than the Net Cash Proceeds
thereof (if any) in accordance with Section 4.11(a)(i)(A) or (B).
SECTION 4.11. DISPOSITION OF PROCEEDS OF ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, consummate any Asset Sale, unless (a) the consideration received
by the Company or such Restricted Subsidiary is at least equal to the fair
market value of the assets sold or disposed of and (b) at least 85% of the
consideration received consists of cash or Temporary Cash Investments, PROVIDED
that any notes or other obligations received by the Company or any such
Restricted Subsidiary as consideration that are converted
34
by the Company or such Restricted Subsidiary into cash within 30 days of their
receipt (to the extent of the cash received), shall be deemed to be cash for
purposes of this provision. In the event and to the extent that the Net Cash
Proceeds received by the Company or its Restricted Subsidiaries from one or more
Asset Sales occurring on or after the Issue Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of
the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Restricted Subsidiaries has
been prepared), then the Company shall, or shall cause the relevant Restricted
Subsidiary to, (i) within six months after the date Net Cash Proceeds so
received exceed 10% of Adjusted Consolidated Net Tangible Assets (A) apply an
amount equal to such excess Net Cash Proceeds to permanently repay
unsubordinated Indebtedness of the Company or any of its Restricted Subsidiaries
owing to a Person other than the Company or any of its Restricted Subsidiaries
or (B) invest an equal amount, or the amount not so applied pursuant to clause
(A) (or enter into a definitive agreement committing to so invest within six
months after the date of such agreement), in property or assets of a nature or
type or that are used in a business (or in a company having property and assets
of a nature or type, or engaged in a business) similar or related to the nature
or type of the property and assets of, or the business of, the Company and its
Restricted Subsidiaries existing on the date of such Investment (as determined
in good faith by the Board, whose determination shall be conclusive and
evidenced by a resolution of the Board and (ii) apply (no later than the end of
the six-month period referred to in clause (i)) such excess Net Cash Proceeds
(to the extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.11. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such six-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "EXCESS PROCEEDS."
(b) If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase
pursuant to this Section 4.11 totals at least $5.0 million, the Company shall
commence, not later than the fifteenth business day of the succeeding month, and
consummate an Offer to Purchase from the holders on a PRO RATA basis an
aggregate principal amount of Notes equal to the Excess Proceeds on such date,
at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of purchase.
SECTION 4.12. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make any contract, agreement, loan, advance or Guarantee with, or any
contract, agreement, loan, advance or Guarantee for the specific benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (A) with respect
to any Affiliate Transaction involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (A)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (B) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $5.0
million, a written opinion, appraisal or certification from a nationally
recognized professional experienced in evaluating similar types of transactions
stating that the terms of such transaction are fair to the Company
35
or such Restricted Subsidiary, as the case may be, from a financial point of
view; PROVIDED that the following shall not be deemed to constitute Affiliate
Transactions: (i) the payment of reasonable fees to directors of the Company who
are not employees of the Company; (ii) agreements and arrangements existing on
the date hereof; (iii) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business of the
Company or such Restricted Subsidiary; (iv) the adoption of employee benefit
plans in the ordinary course of business and payments and other transactions
thereunder; PROVIDED that any such adoption, payment or other transaction shall
have been approved by a majority of the disinterested members of the Board; (v)
transactions between or among the Company and/or its Wholly Owned Restricted
Subsidiaries; (vi) any contract, agreement, loan, advance or Guarantee for the
general benefit of the Company and its stockholders, including stockholders that
are Affiliates of the Company; and (vii) any Affiliate Transactions permitted by
the provisions of Section 4.07 hereof.
SECTION 4.13. LIMITATION ON LIENS SECURING CERTAIN INDEBTEDNESS.
The Company shall not, and shall not permit any Subsidiary to, create,
Incur, assume or suffer to exist any Lien, other than Permitted Liens, on any of
its assets or properties of any character, or any shares of Capital Stock or
Indebtedness of any Subsidiary, without making effective provision for all of
the Notes and all other amounts due hereunder to be directly secured equally and
ratably with (or, if the obligation or liability to be secured by such Lien is
subordinated in right of payment to the Notes prior to) the obligation or
liability secured by such Lien.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its existence as a
corporation, and the corporate, partnership or other existence of any
Subsidiary, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.15. CHANGE OF CONTROL.
In the event of a Change in Control, the Company shall commence and
consummate an Offer to Purchase for all the then outstanding Notes, at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase. Not later than 20 days
following any Change in Control, the Company shall mail a notice to the Trustee
and each Holder describing the transaction or transactions that constitute the
Change in Control and offering to repurchase Notes pursuant to the procedures
required by this Indenture and described in such notice.
36
SECTION 4.16. BUSINESS ACTIVITIES OF THE COMPANY AND RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in (i) any business other than the Telecommunications
Business and such business activities as are incidental or related thereto and
(ii) any business, activities or services in which the Company and its
Restricted Subsidiaries were engaged on the Issue Date. In addition, the
Company shall (i) at such time and to the extent permitted by the FCC, transfer,
or cause to be transferred, all FCC licenses and authorizations of the Company
and its Restricted Subsidiaries to ART Licensing and (ii) cause ART Licensing to
remain a Wholly Owned Restricted Subsidiary of the Company.
(b) Notwithstanding the foregoing, to the extent permitted by the
FCC, the Company shall not permit ART Licensing to engage in any business or
activity, other than the application for, acquisition of or ownership of FCC
licenses and authorizations; PROVIDED, HOWEVER, that ART Licensing shall be
permitted to own and operate any equipment or assets that were owned by ART
Licensing on or prior to the Issue Date.
SECTION 4.17. NO AMENDMENT TO VOTING TRUST AGREEMENT.
The Company shall not amend, modify or alter any Voting Trust Agreement
without having obtained the consent of the holders of not less than a majority
in principal amount of the then outstanding Notes; PROVIDED, HOWEVER, that the
Company may amend, modify or alter any Voting Trust Agreement, if, in the
opinion of Delaware counsel, such amendment, modification or alteration is
necessary to cause such Voting Trust Agreement to comply with Delaware law or
any change thereto.
SECTION 4.18. PLEDGE AGREEMENT; SECURITY.
(a) The Company shall (i) enter into the Pledge Agreement (in the
form attached hereto as Exhibit B) and comply with the terms and provisions
thereof and (ii) use a portion of the net proceeds of the sale of the Notes to
purchase the Pledged Securities to be pledged to the Collateral Agent for its
benefit and the ratable benefit of the Holders of the Notes in an amount
sufficient upon receipt of scheduled interest and principal payments, 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 six
scheduled interest payments on the Notes when and as due. The Pledged
Securities shall be pledged by the Company to the Collateral Agent for its
benefit and the ratable benefit of the Holders of the Notes and shall be held by
the Collateral Agent in the Pledge Account pending disbursement pursuant to the
Pledge Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of 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 Collateral Agent to enter into the Pledge Agreement
to which it is a party and to perform its respective obligations and exercise
its respective rights thereunder in accordance therewith. The Company shall 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 Pledge Agreement, to assure and
confirm to the Collateral Agent the security interest in the Collateral
contemplated hereby, by the Pledge Agreement or any part thereof, as from time
to time constituted, so as to render the same available for
37
the security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein expressed. The Company shall take,
or shall cause to be taken, upon request of the Collateral Agent, any and all
actions reasonably required to cause the Pledge Agreement to create and
maintain, as security for the obligations of the Company under this Indenture
and the Notes, valid and enforceable first priority perfected security interest
in and to all of the Collateral, in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons and subject to no Liens other than
as provided herein.
(c) The release of any Collateral pursuant to the Pledge 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 this Indenture and the Pledge Agreement. To the extent applicable,
the Company shall cause TIA Section 314(d) relating to the release of property
or securities from the Lien and security interest of the Pledge Agreement and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Pledge Agreement to be
complied with. Any certificate or opinion required by TIA Section 314(d) may
be made by an officer of the Company, 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 engineer, appraiser or other expert
selected or approved by the Collateral Agent in the exercise of reasonable care.
(d) The Company shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien of the Pledge Agreement, to be complied with. The
Company shall furnish to the Trustee prior to each proposed release of
Collateral pursuant to the Pledge Agreement (i) all documents required by TIA
Section 314(d) and (ii) an opinion of the counsel to the effect that such
accompanying documents constitute all documents required by TIA Section 314(d).
The Collateral Agent may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such instruments.
(e) The Collateral Agent may, in its sole discretion and without the
consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (i) enforce any of the terms of the Pledge
Agreement and (ii) collect and receive any and all amounts payable in respect of
the obligations of the Company hereunder. The Collateral Agent shall have power
to institute and to 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 the Pledge Agreement or this Indenture, and such suits and
proceedings as the Collateral Agent may deem expedient to preserve or protect
its interests and the interests of the Holders 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 or of the
Collateral Agent).
ARTICLE 5
SUCCESSORS
SECTION 5.01. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
(a) The Company shall not consolidate with, merge with or into, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets (as an entirety or
38
substantially an entirety in one transaction or a series of related
transactions) to, any Person (other than a consolidation or merger with or into
a Wholly Owned Restricted Subsidiary with a positive net worth; PROVIDED that,
in connection with any such merger or consolidation, no consideration (other
than Capital Stock in the surviving Person or the Company) shall be issued or
distributed to the stockholders of the Company) or permit any Person to merge
with or into the Company unless: (i) the Company shall be the continuing Person,
or the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and assets
of the Company shall be a corporation organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, all of the obligations of the Company on all of the Notes and under
this Indenture; (ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro forma basis,
the Indebtedness to Total Market Capitalization Ratio (determined as of a date
no earlier than 10 days prior to such transaction) of the Company, or any person
becoming the successor obligor of the Notes, would be no greater than 130% of
the Indebtedness to Total Market Capitalization Ratio of the Company immediately
prior to giving effect to such transaction; PROVIDED that this clause (iii)
shall not apply to any transaction or series of transactions effected solely for
the purpose of creating a parent corporation of which the Company shall be a
Wholly Owned Subsidiary and whose stockholders shall be identical (without
regard to the exercise of options or warrants, or securities convertible or
exchangeable into shares of Common Stock) to those of the Company immediately
prior thereto; and (iv) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and an Opinion of Counsel, in each case, stating that such
consolidation, merger or transfer and such supplemental indenture complies with
this provision and that all conditions precedent provided for herein relating to
such transaction have been complied with; PROVIDED, HOWEVER, that clause (iii)
above does not apply if, in the good faith determination of the Board, whose
determination shall be evidenced by a resolution of the Board, the principal
purpose of such transaction is to change the state of incorporation of the
Company; and PROVIDED FURTHER that any such transaction shall not have as one of
its purposes the evasion of the foregoing limitations.
(b) The Company shall deliver to the Trustee prior to such
transaction an Officers' Certificate covering clauses (i) through (iv) of
Section 5.01(a) hereof, stating that such transaction and such supplemental
indenture comply with this Indenture, and an Opinion of Counsel.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the Company shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company, herein; PROVIDED, HOWEVER, that the predecessor Company shall
not be relieved from the obligations to pay the principal of and interest on the
Notes, except in the case of a sale of all of the Company's assets that meets
the requirements of Section 5.01 hereof.
39
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(a) default in the payment of interest on the Notes when it
becomes due and payable as to any interest payment date on or prior to
_______, 2000, and continuance of such default for a period of five (5)
days or more; or default in the payment of interest on the Notes when it
becomes due and payable as to any interest payment date after _______,
2000, and continuance of such default for a period of thirty (30) days or
more; or
(b) default in the payment of principal of, or premium, if
any, on the Notes when due; or
(c) default in the performance, or breach, of any covenant
described under Sections 4.07, 4.09, 4.11, 4.15 and 4.18(a) and Article 5
hereof; or
(d) default in the performance, or breach, of any covenant in
this Indenture (other than defaults specified in clause (a), (b) or (c)
above), and the continuance of such default or breach for a period of 30
days or more after written notice to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the then outstanding Notes (in each case, when such
notice is deemed received in accordance with this Indenture); or
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is Guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the Issue Date, which default (i) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or
(ii) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default, or the maturity of which has been
so accelerated, aggregates $5.0 million or more; or
(f) any final judgment or order (not covered by insurance)
for the payment of money in excess of $5.0 million in the aggregate for all
such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $5.0 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
40
(g) a court having jurisdiction in the premises enters a
decree or order for (i) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (ii) the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
the Company or any Significant Subsidiary or (iii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(h) the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (ii) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (iii) effects any
general assignment for the benefit of creditors.
The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) above with respect to the Company) occurs and is continuing, then the
Trustee or the holders of at least 25% in principal amount of outstanding Notes
may, by written notice, and the Trustee upon the request of the holders of not
less than 25% in principal amount of the then outstanding Notes shall, declare
the principal of, and any accrued and unpaid interest on, all outstanding Notes
to be immediately due and payable and upon any such declaration such amounts
shall become immediately due and payable. If an Event of Default specified in
clause (g) or (h) above with respect to the Company occurs and is continuing,
then all outstanding Notes shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
holder.
After a declaration of acceleration, the holders of a majority in aggregate
principal amount of outstanding Notes may, by notice to the Trustee, rescind
such declaration of acceleration if all existing Events of Default, other than
nonpayment of the principal of, and any accrued and unpaid interest on, the
Notes that has become due solely as a result of such acceleration, have been
cured or waived and if the rescission of acceleration would not conflict with
any judgment or decree. The holders of a majority in principal amount of the
then outstanding Notes also have the right to waive past defaults under this
Indenture, except a default in the payment of the principal of, or any interest
on, any outstanding Note, or in respect of a covenant or a provision that cannot
be modified or amended without the consent of all holders of Notes.
41
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may, on behalf of the
Holders of all of the Notes, waive an existing Default or Event of Default and
its consequences, except a continuing Default or Event of Default in the payment
of the principal of, premium, if any, or interest on, the Notes. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05.CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
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 the law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if, (a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default, (b) the Holders of at least 25% in principal
amount of the then outstanding Notes make a written request to the Trustee to
pursue the remedy, (c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense; (d) 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 (e) during such 60-day period, the Holders of a
majority in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
42
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note, 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 of
the Note.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
Subject to Section 6.02 hereof, if an Event of Default specified in
Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal of, premium, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest 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 is authorized to 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
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), the Company's creditors or the Company's
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder of
a Note 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 Holders of the
Notes, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties which the Holders of the Notes may be entitled to receive
in such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder of a Note any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder of a Note thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder of a
Note in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
43
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
SECOND: (i) first to Holders of Notes, for amounts due and
unpaid on such Notes for principal, premium, if any, and interest, ratably,
without preference or priority of any kind according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively, and (ii) second, to the extent any other monies are
available, to Holders of all Notes for amounts due and unpaid on all such
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes.
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 a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01.DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default, (i) the
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Trustee, and (ii)
in the absence of bad faith on its part, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, in case of any such
certificates or opinions which by any
44
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that (i) this paragraph does not limit the effect of
paragraph (b) of this Section; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holder of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee against any loss,
liability or expense.
(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.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an officer of the Company.
(f) 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 Holders unless such Holders shall have
45
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest, it shall eliminate
such conflict within 90 days, apply to the Commission for permission to continue
as trustee or resign. Any Agent may do the same with like rights and duties.
The Trustee is also 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 Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after January 1 beginning with the January 1 following the
date of this Indenture, the Trustee shall mail to the Holders of the Notes a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within
the twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed. The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for its
acceptance of this Indenture and services
46
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor Trustee
against any and all losses, liabilities, damages, claims or expenses, including
taxes (other than taxes based on the income of the Trustee) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, except any such loss, liability or expense as may
be attributable to the negligence or bad faith of the Trustee. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company' payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal, premium, if any, and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if: (a) the Trustee fails to comply with Section 7.10; (b)
the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or
public officer takes charge of the Trustee or its property; or (d) the Trustee
becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
47
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee after written request by any Holder of a Note who has been a
Holder of a Note for at least six months fails to comply with Section 7.10, such
Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's 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, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
48
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Notes, elect to have either Section 8.02 or 8.03 be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article Eight. In the event of Legal Defeasance or Covenant Defeasance, the
security interest described under Section 4.18 will be released.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the then outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all of its other obligations under such Notes 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 Notes to receive payments in
respect of the principal of, premium, if any, and interest on, such Notes when
such payments are due, or on the redemption date, as the case may be; (b) the
Company's obligations with respect to the Notes concerning the issuance of
temporary Notes, the registration of Notes, mutilated, destroyed, lost or stolen
Notes and the maintenance of an office or agency for payment and money for
security payments held in trust; (c) the rights, powers, trust, duties and
immunities of the Trustee, and the Company's obligations in connection
therewith; and (d) the Legal Defeasance provisions of this Indenture.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company shall be released from its obligations under the
covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17 and 4.18 and Article Five with respect to the then
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes 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 Notes shall not
be deemed outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the then outstanding Notes, the Company
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 Section 6.01(c), but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company' exercise under Section 8.01
49
of the option applicable to this Section 8.03, Sections 6.01(d) through 6.01(f)
shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or Section 8.03 to the then outstanding Notes: (i) the Company
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 Eight applicable to it) as trust
funds in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable U.S.
government obligations, or a combination thereof, in such amounts as shall be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants selected by the Company, to pay the principal of, premium, if any,
and interest on the then outstanding Notes, on the stated maturity or on the
applicable optional redemption date, as the case may be, of such principal or
installment of principal of, premium, if any, or interest on the then
outstanding Notes; (ii) in the case of Legal Defeasance, the Company shall
deliver to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) 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 then outstanding Notes shall not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and shall 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; (iii) in the case of Covenant
Defeasance, the Company shall deliver to the Trustee an opinion of counsel in
the United States reasonably acceptable to the Trustee confirming that the
holders of the then outstanding Notes shall not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
shall be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a default
under any material agreement or instrument (other than this Indenture) to which
the Company is a party or by which the Company is bound; (vi) the Company shall
have delivered to the Trustee an Officers' Certificate stating that the deposit
was not made by the Company with the intent of preferring the holders of Notes
over the other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; (vii) the Company
shall have delivered to the Trustee an Officers' Certificate and an opinion of
counsel, each stating that all conditions precedent provided for relating to the
Legal Defeasance or the Covenant Defeasance have been complied with; and (viii)
the Company shall have paid or duly provided for payment of all amounts due to
the Trustee pursuant to Section 7.07 hereof.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06, all money and Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the "TRUSTEE") pursuant to
Section 8.04 in respect of the then outstanding Notes shall be held in trust and
50
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Company may determine, to
the Holders of such Notes 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 Company shall 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 8.04 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 then outstanding Notes.
Anything in this Article Eight 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 8.04 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 8.04(a)), 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 8.06. 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 on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest 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 Note shall thereafter, as a
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States Dollars
or Government Securities in accordance with Section 8.02 or 8.03, 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 Company's obligations under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03, as the case may be;
PROVIDED, HOWEVER, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
51
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend
or supplement this Indenture, the Pledge Agreement or the Notes without the
consent of any Holder of a Note, (a) to cure any ambiguity, defect or
inconsistency, (b) to provide for uncertificated Notes in addition to or in
place of certificated Notes, (c) to provide for the assumption of the Company's
obligations to Holders of the Notes in the case of a merger or consolidation in
accordance with Section 5.01 hereof, (d) to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under this Indenture of any such Holder, or
(e) to comply with requirements of the Commission in order to effect or maintain
the qualification of this Indenture under the Trust Indenture Act.
Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall join with the Company in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture which affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
The Company and the Trustee may amend or supplement this Indenture, the
Pledge Agreement or the Notes or any amended or supplemental indenture with the
written consent of the Holders of Notes of not less than a majority in aggregate
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes), and any
existing Default and its consequences or compliance with any provision of this
Indenture, the Pledge Agreement or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes).
Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall join with the Company in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
52
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes 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 amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders of a
majority in aggregate principal amount of the then outstanding Notes may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a non-
consenting Holder of Notes): (i) reduce the percentage in principal amount
outstanding of Notes whose Holders shall consent to an amendment, supplement or
waiver or consent to take any action under this Indenture or the Notes; (ii)
reduce the principal or extend the fixed maturity of any Note or alter the
provisions with respect to the redemption of the Notes (other than Section 4.11
or Section 4.15 hereof); (iii) reduce the rate of or change the time for payment
of interest on any Notes; (iv) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration); (v) make any Note, or any premium or accrued
interest thereon, payable in money other than that stated in the Notes; (vi)
make any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of holders of Notes to receive payments of principal of,
premium, if any, or interest on the Notes; (vii) waive a redemption payment with
respect to any Note (other than a payment required by Section 4.11 or Section
4.15 hereof); (viii) make any change in the foregoing amendment and waiver
provisions; (ix) impair the right to institute suit for the enforcement of any
payment on or with respect to the Notes; (x) adversely affect the ranking of the
Notes in a manner adverse to the holders of the Notes; or (xi) release any
Collateral from the Lien created by the Pledge Agreement, except in accordance
with the terms thereof.
In addition, without the consent of the holders of at least 66 2/3% in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes), no amendment to
this Indenture may make any change in, and no waiver may be made with respect to
any Default in the performance of, Section 4.11 or Section 4.15 hereof.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental indenture that complies with the TIA as then
in effect.
SECTION 9.04.REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, unless such amendment, supplement or waiver provides otherwise,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder of a Note.
53
The Company may fix a record date for determining which Holders of the
Notes shall consent to such amendment, supplement or waiver. If the Company
fixes a record date, the record date shall be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders of Notes furnished to the Trustee prior to such solicitation
pursuant to Section 2.05 or (ii) such other date as the Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental indenture until the Board of
Directors approves it. If it does, the Trustee may, but need not, sign it. In
signing such amendment or supplemental indenture, the Trustee shall be entitled
to receive, and, subject to Section 7.01 hereof, shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that such amendment or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
shall be valid and binding upon the Company in accordance with its terms. The
Company may not sign an amendment or supplemental indenture until the Board of
Directors approves it.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 10.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the other's address:
If to the Company:
Advanced Radio Telecom Corp.
000 000xx Xxxxxx, X.X., Xxxxx 0000
00
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of Notes)
shall be deemed to have been duly given: at the time delivered by hand, if
Personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Note shall be sufficiently
given when mailed by first class mail, or when delivered to a courier for
guaranteed delivery not later than the next day , to such Holder's address shown
on the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder of a
Note or any defect in it shall not affect its sufficiency with respect to other
Holders of Notes.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to the Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 10.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders of the Notes may communicate pursuant to TIA Section 312(b) with
other Holders of Notes with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion
55
of the signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 10.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 10.07. NO PERSONAL LIABILITY OF PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.
SECTION 10.08. GOVERNING LAW.
The internal laws of the State of New York shall govern and be used to
construe this Indenture and the Notes without giving effect to the principles of
conflicts of law thereof.
SECTION 10.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
56
SECTION 10.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 10.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.12. 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 10.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
57
SIGNATURES
ADVANCED RADIO TELECOM CORP.
By:
-----------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------
Name:
Title:
58
EXHIBIT A
(Face of Note)
THE NOTES EVIDENCED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN UNITS WITH
WARRANTS OF THE COMPANY. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF THE
NOTES AND 15 WARRANTS, EACH WARRANT REPRESENTING THE RIGHT TO PURCHASE 1.349
SHARES OF COMMON STOCK. UNTIL THE EARLIEST OF (I) ________, 1997, (II) A CHANGE
IN CONTROL OF THE COMPANY AND (III) SUCH DATE AS THE UNDERWRITERS OF THE UNIT
OFFERING MAY, IN THEIR DISCRETION, DEEM APPROPRIATE, THE NOTES EVIDENCED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN INTEGRAL MULTIPLES OF $1,000 PRINCIPAL
AMOUNT OF NOTES AND ONLY WITH THE SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF 15
WARRANTS FOR EACH $1,000 PRINCIPAL AMOUNT OF NOTES SO TRANSFERRED.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $______,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $________, THE ISSUE DATE IS ________,
1997 AND THE YIELD TO MATURITY IS ____% PER ANNUM.
__% Senior Note due 2007
No. _______ $__________
CUSIP NO. 00754U AA 9
Advanced Radio Telecom Corp.
promises to pay to
_______________________________
or its registered assigns
the principal sum of _________________________
Dollars on _______, 2007.
Interest Payment Dates: __________ and ________, commencing __________, 1997.
Record Dates: __________ and _________ (whether or not a Business Day).
ADVANCED RADIO TELECOM CORP.
By:
-------------------------------------
Name:
Title:
(SEAL)
Attest:
By:
-------------------------------------
Name:
Title:
Dated: __________, 1997
This is one of the Notes
referred to in the within-
mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------
Authorized Signatory
A-2
(Back of Note)
__% Senior Note due 2007
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Advanced Radio Telecom Corp., a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at the
rate and in the manner specified below. Cash interest on the Notes shall be
payable, at a rate of % per annum, semi-annually in arrears on
and of each year (each, an "INTEREST PAYMENT DATE"), commencing
, 1997, to the holders of record of Notes at the close of business on the
and immediately preceding such Interest Payment Date. Interest
on the Notes shall accrue from the most recent Interest Payment Date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. Interest on overdue principal and, to the extent
permitted by law, on overdue installments of interest shall accrue at the rate
of interest borne by the Notes.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the record date next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or before such
Interest Payment Date. The Holder hereof shall surrender this Note to a Paying
Agent to collect principal payments. The Company 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. Principal of, premium, if any,
and interest on the Notes shall be payable, and the Notes shall be exchangeable
and transferable, at the office or agency of the Company in The City of New York
maintained for such purposes (which initially shall be the office of the
Trustee); PROVIDED, HOWEVER, the payment of interest may be made by check mailed
to the address of the Person entitled thereto as shown on the security register.
The Notes shall be issued only in fully registered form without coupons and only
in denominations of $1,000 and any integral multiple thereof. No service charge
shall be made for any registration of transfer, exchange or redemption of Notes,
but the Company may require payment in certain circumstances of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith. Unless otherwise designated by the Company, the Company's office or
agency shall be the office of the Trustee maintained for such purpose.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee shall act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder of a Note. The Company may act
in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as
of February ____, 1997 (the "INDENTURE"), between the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb), as in effect on the date of the Indenture.
The Notes are subject to all such terms, and Holders of Notes are referred to
the Indenture and such act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
The Notes are obligations of the Company limited to the sum of $135,000,000 in
aggregate face amount of Notes to be issued on the Issue Date.
5. SECURITY. The Company shall enter into the Pledge Agreement and use a
portion of the net proceeds of the sale of the Notes to purchase the Pledged
Securities to be pledged to the Collateral Agent
A-3
for its benefit and the ratable benefit of the Holders of the Notes in an amount
sufficient upon receipt of scheduled interest and principal payments thereon, in
the opinion of nationally recognized firm of independent public accountants
selected by the Company, to provide for payment in full of the first six
scheduled interest payments due on the Notes when and as due. The Pledged
Securities shall be pledged by the Company to the Collateral Agent for its
benefit and the ratable benefit of the Holders of the Notes and shall be held by
the Collateral Agent in the Pledge Account pending disbursement pursuant to the
Pledge Agreement.
6. OPTIONAL REDEMPTION. The Notes shall be redeemable at the option of
the Company, in whole or in part, at any time on or after , 2002, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, to the date of redemption, if redeemed during the 12-
month period beginning on of the years indicated below:
REDEMPTION
YEAR PRICE
---- -----
2002................................ %
2003................................ %
2004................................ %
2005 and thereafter................100.000%
Notwithstanding the foregoing, in the event of a sale by the Company of its
Common Stock in one or more Equity Offerings or Investments by one or more
Strategic Equity Investors, on or prior to , 2000, (other than in
connection with a Change in Control of the Company) the Company may, at its
option, use all or a portion of the net proceeds thereof to redeem up to a
maximum of 25% of the initially outstanding aggregate principal amount of the
Notes at a redemption price equal to % of the principal amount thereof,
plus accrued and unpaid interest thereon, if any, to the redemption date;
PROVIDED that not less than 75% of the initially outstanding aggregate principal
amount of the Notes remain outstanding following such redemption. Any such
redemption shall be effected upon not less than 30 nor more than 60 days' notice
given within 30 days after any such Equity Offering or sale to a Strategic
Equity Investor resulting in such gross proceeds, as the case may be.
7. MANDATORY REDEMPTION. The Company is not required to make mandatory
sinking fund payments with respect to the Notes. However, (i) upon the
occurrence of a Change in Control, the Company is obligated to make an offer to
purchase all outstanding Notes at a price of 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the date of
purchase, and (ii) the Company may be obligated to make an offer to purchase
Notes with the Net Cash Proceeds of certain Asset Sales at a price of 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase. Holders of Notes that are the subject of an Offer to Purchase
shall receive an Offer to Purchase from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 45
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes held by a
Holder of Notes are to be redeemed. On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and
A-4
Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder of a Note, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. Neither the Company nor the
Registrar need exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, neither the Company nor the Registrar need
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving payment of principal of,
premium, if any, and interest on this Note and for all other purposes
whatsoever, whether or not this Note is overdue, and neither the Trustee, any
Agent nor the Company shall be affected by notice to the contrary. The
registered Holder of a Note shall be treated as its owner for all purposes.
11. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to certain exceptions,
the Indenture, the Pledge Agreement or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture, the Pledge Agreement or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes. Without the consent of any Holder of a Note, the Indenture,
the Pledge Agreement or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's obligations to Holders of the Notes in case of a merger or
consolidation in accordance with Section 5.01 of the Indenture, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the Indenture
of any such Holder, or to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder of Notes): reduce the percentage in principal amount outstanding of Notes
whose Holders shall consent to an amendment, supplement or waiver or consent to
take any action under the Indenture or the Notes; reduce the principal or extend
the fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes (other than Section 4.11 or Section 4.15 of the
Indenture); reduce the rate of or change the time for payment of interest on any
Notes; waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of acceleration
of the Notes by the holders of at least a majority in aggregate principal amount
of the Notes and a waiver of the payment default that resulted from such
acceleration); make any Note, or any premium or accrued interest thereon,
payable in money other than that stated in the Notes; make any change in the
provisions of this Indenture relating to waivers of past Defaults or the rights
of holders of Notes to receive payments of principal of, premium, if any, or
interest on the Notes; waive a redemption payment with respect to any Note
(other than a payment required by Section 4.11 or Section 4.15 of the
Indenture); make any change in the foregoing amendment and waiver provisions;
impair the right to institute suit for the enforcement of any payment on or with
respect to the Notes; adversely affect the ranking of the Notes in a manner
adverse to the holders of the Notes; or release any Collateral from the Lien
created by the Pledge Agreement, except in accordance with the terms thereof.
In addition, without the consent of the holders of at least 662/3% in principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for Notes), no amendment to the Indenture
may make any change in, and no waiver may be made with respect to any Default in
the performance of, Section 4.11 or Section 4.15 thereof.
12. DEFAULTS AND REMEDIES. The following events are "Events of Default"
under the Indenture: (i) default in the payment of interest on the Notes when it
becomes due and payable as to any interest
A-5
payment date on or prior to ____________, 2000, and continuance of such default
for a period of five (5) days or more; or default in the payment of interest on
the Notes when it becomes due and payable as to any interest payment date after
____________, 2000, and continuance of such default for a period of thirty (30)
days or more; (ii) default in the payment of principal of, or premium, if any,
on the Notes when due; (iii) default in the performance, or breach, of any
covenant described under Sections 4.07, 4.09, 4.11, 4.15, and 4.18(a) and
Article 5 of the Indenture; (iv) default in the performance, or breach, of any
covenant in the Indenture (other than defaults specified in clause (i), (ii) or
(iii) above), and the continuance of such default or breach for a period of 30
days or more after written notice to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate principal
amount of the then outstanding Notes (in each case, when such notice is deemed
received in accordance with the Indenture); (v) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the Issue Date, which default (A) is
caused by a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (B) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default, or the maturity of which has been so accelerated, aggregates $5.0
million or more; (vi) any final judgment or order (not covered by insurance) for
the payment of money in excess of $5.0 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $5.0 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(vii) certain events of bankruptcy or insolvency with respect to the Company or
any Significant Subsidiary. If any Event of Default (other than an Event of
Default specified in clause (vii) above with respect to the Company) occurs and
is continuing, then the Trustee or the holders of at least 25% in principal
amount of outstanding Notes may, by written notice, and the Trustee upon the
request of the holders of not less than 25% in principal amount of the then
outstanding Notes shall, declare the principal of, and any accrued and unpaid
interest on, all outstanding Notes to be immediately due and payable and upon
any such declaration such amounts shall become immediately due and payable. If
an Event of Default specified in clause (vii) above with respect to the Company
occurs and is continuing, then all outstanding Notes shall IPSO FACTO become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holder. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the then
outstanding Notes, by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest or premium on, or the principal of, the Notes. The Company
is required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
A-6
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not Trustee; however, if the
Trustee acquires any conflicting interest, it shall eliminate such conflict
within 90 days or resign.
14. NO PERSONAL LIABILITIES OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS. No director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. GOVERNING LAW. The internal laws of the State of New York shall
govern and be used to construe the Indenture and the Notes.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders of Notes. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company shall furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture. Request may be made to:
Advanced Radio Telecom Corp.
000 000xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
_______________________________________________________________________________
Date: ______________
Your Signature: _____________________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Company pursuant to Section 4.11 or Section 4.15 of the Indenture check the
appropriate box:
/ / Section 4.11 / / Section 4.15
If you want to have only part of the Note purchased by the Company pursuant
to Section 4.11 or Section 4.15 of the Indenture, state the amount you elect to
have purchased:
$ _______________
Date:____________
Your Signature:_____________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee.
A-9
