EXECUTION COPY
EURO NOTES
================================================================================
WINSTAR COMMUNICATIONS, INC.
Issuer
12-3/4% Senior Notes Due 2010
--------------------
INDENTURE
Dated as of April 10, 2000
---------------------
UNITED STATES TRUST COMPANY
OF NEW YORK
Trustee
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 10.03
(c) .............................. 10.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 10.02
(d) .............................. 7.06
314(a) .............................. 4.02; 4.12 10.02
(b) .............................. N.A.
(c)(1) .............................. 10.04
(c)(2) .............................. 10.04
(c)(3) .............................. N.A
(d) .............................. N.A.
(e) .............................. 10.05
(f) .............................. 4.12
315(a) .............................. 7.01
(b) .............................. 7.05; 10.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) .............................. 2.08
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 10.01
N.A. means Not Applicable.
-------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions...............................................................................1
SECTION 1.02. Other Definitions........................................................................34
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........................................35
SECTION 1.04. Rules of Construction....................................................................35
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating..........................................................................36
SECTION 2.02. Execution and Authentication.............................................................37
SECTION 2.03. Registrar and Paying Agent...............................................................37
SECTION 2.04. Paying Agent To Hold Money in Trust......................................................38
SECTION 2.05. Securityholder Lists.....................................................................38
SECTION 2.06. Transfer and Exchange....................................................................39
SECTION 2.07. Replacement Securities...................................................................39
SECTION 2.08. Outstanding Securities; When Securities Disregarded......................................39
SECTION 2.09. Temporary Securities.....................................................................40
SECTION 2.10. Cancellation.............................................................................40
SECTION 2.11. Defaulted Interest.......................................................................41
SECTION 2.12. CUSIP, ISIN and Common Code Numbers......................................................41
SECTION 2.13. Issuance of Additional Securities........................................................41
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee.......................................................................42
SECTION 3.02. Selection of Securities To Be Redeemed...................................................42
SECTION 3.03. Notice of Redemption.....................................................................43
SECTION 3.04. Effect of Notice of Redemption...........................................................44
SECTION 3.05. Deposit of Redemption Price..............................................................44
SECTION 3.06. Securities Redeemed in Part..............................................................44
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities....................................................................44
2
SECTION 4.02. SEC Reports..............................................................................45
SECTION 4.03. Limitation on Indebtedness...............................................................45
SECTION 4.04. Limitation on Restricted Payments........................................................49
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Group Members................55
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.......................................57
SECTION 4.07. Limitation on Affiliate Transactions.....................................................62
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of Restricted Group Members..........64
SECTION 4.09. Change of Control........................................................................65
SECTION 4.10. Limitation on Liens......................................................................67
SECTION 4.11. Limitation on Sale/Leaseback Transactions................................................67
SECTION 4.12. Compliance Certificate...................................................................68
SECTION 4.13. Further Instruments and Acts.............................................................68
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets................................................68
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default........................................................................69
SECTION 6.02. Acceleration.............................................................................72
SECTION 6.03. Other Remedies...........................................................................72
SECTION 6.04. Waiver of Past Defaults..................................................................72
SECTION 6.05. Control by Majority......................................................................73
SECTION 6.06. Limitation on Suits......................................................................73
SECTION 6.07. Rights of Holders to Receive Payment.....................................................74
SECTION 6.08. Collection Suit by Trustee...............................................................74
SECTION 6.09. Trustee May File Proofs of Claim.........................................................74
SECTION 6.10. Priorities...............................................................................74
SECTION 6.11. Undertaking for Costs....................................................................75
SECTION 6.12. Waiver of Stay or Extension Laws.........................................................75
3
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee........................................................................75
SECTION 7.02. Rights of Trustee........................................................................77
SECTION 7.03. Individual Rights of Trustee.............................................................77
SECTION 7.04. Trustee's Disclaimer.....................................................................78
SECTION 7.05. Notice of Defaults.......................................................................78
SECTION 7.06. Reports by Trustee to Holders............................................................78
SECTION 7.07. Compensation and Indemnity...............................................................78
SECTION 7.08. Replacement of Trustee...................................................................79
SECTION 7.09. Successor Trustee by Merger..............................................................80
SECTION 7.10. Eligibility; Disqualification............................................................81
SECTION 7.11. Preferential Collection of Claims Against Company........................................81
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.........................................81
SECTION 8.02. Conditions to Defeasance.................................................................82
SECTION 8.03. Application of Trust Money...............................................................84
SECTION 8.04. Repayment to Company.....................................................................84
SECTION 8.05. Indemnity for Government Obligations.....................................................85
SECTION 8.06. Reinstatement............................................................................85
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders...............................................................85
SECTION 9.02. With Consent of Holders..................................................................86
SECTION 9.03. Compliance with Trust Indenture Act......................................................87
SECTION 9.04. Revocation and Effect of Consents and Waivers............................................87
SECTION 9.05. Notation on or Exchange of Securities....................................................88
SECTION 9.06. Trustee To Sign Amendments...............................................................88
SECTION 9.07. Payment for Consent......................................................................88
4
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls............................................................88
SECTION 10.02. Notices.................................................................................89
SECTION 10.03. Communication by Holders with Other Holders.............................................89
SECTION 10.04. Certificate and Opinion as to Conditions Precedent......................................89
SECTION 10.05. Statements Required in Certificate or Opinion...........................................90
SECTION 10.06. Rules by Trustee, Paying Agent and Registrar............................................90
SECTION 10.07. Legal Holidays..........................................................................90
SECTION 10.08. Governing Law...........................................................................91
SECTION 10.09. No Recourse Against Others..............................................................91
SECTION 10.10. Successors..............................................................................91
SECTION 10.11. Multiple Originals......................................................................91
SECTION 10.12. Table of Contents; Headings.............................................................91
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Face of Initial Security
Exhibit A - Form of Face of Exchange Security or Private Exchange Security
Exhibit B-1 - Form of Certification to be Given by Holder of Beneficial
Interest in a Temporary Regulation S Global Security
Exhibit B-2 - Form of Euroclear and Clearstream Certificate
INDENTURE dated as of April 10, 2000,
between WINSTAR COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and UNITED STATES TRUST
COMPANY OF NEW YORK, a New York corporation (the
"Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
Initial Securities, Exchange Securities and Private Exchange Securities
(collectively, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of an entity
outstanding on the date on which an interest in such entity is acquired, by
merger or otherwise (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of transactions pursuant to which such
entity was acquired).
"Additional Securities" means, subject to the Company's
compliance with Section 4.03, 12-3/4% Senior Notes Due 2010 issued from time to
time after the Issue Date under the terms of this Indenture (other than pursuant
to Section 2.06, 2.07, 2.09, 3.06, 4.06 or 4.09 of this Indenture and other than
Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner (other than Credit Suisse First Boston Private Equity Division
and any Affiliate of Credit Suisse First Boston Private Equity Division) of
Capital
2
Stock representing 10% or more of the total voting power of the Voting Stock (on
a fully diluted basis) of the Company or of rights or warrants to purchase such
Capital Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Group Member, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Group Member
(other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a
Restricted Group Member);
(2) all or substantially all the assets of any division or
line of business of the Company or any Restricted Group Member; or
(3) any other assets of the Company or any Restricted Group
Member outside of the ordinary course of business of the Company or
such Restricted Group Member (other than, in the case of clauses (1),
(2) and (3)
(A) a disposition by a Restricted Group Member to the
Company or by the Company or a Restricted Group Member to a
Restricted Group
Member;
(B) for purposes of Section 4.06 only, a disposition
that constitutes a Restricted Payment permitted by Section
4.04 or a Permitted Investment;
(C) for purposes of Section 4.06 only, a sale of
shares of Capital Stock of an Unrestricted Subsidiary for Fair
Market Value;
(D) for purposes of Section 4.06 only, a disposition
of Receivables in a Qualified Receivables Transaction; and
3
(E) a disposition of assets with a fair market value
of less than $250,000 in a single transaction or series of
related transactions).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing:
(1) the sum of the products of numbers of years from the date
of determination to the dates of each successive scheduled principal
payment of or redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such payment by
(2) the sum of all such payments.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
4
"Change of Control" means the occurrence of any of the
following events:
(1) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that for purposes of this clause
(1) such person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of
the Voting Stock of the Company; provided, however, that the Permitted
Holders beneficially own (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the
Company than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the Board of Directors (for the purposes of this clause
(1), such other person shall be deemed to beneficially own any Voting
Stock of a Person (the "specified person") held by any other Person
(the "parent entity"), if such other person is the beneficial owner
(as defined above in this clause (1)), directly or indirectly, of more
than 35% of the voting power of the Voting Stock of such parent entity
and the Permitted Holders beneficially own (as defined in this
proviso), directly or indirectly, in the aggregate a lesser percentage
of the voting power of the Voting Stock of such parent entity and do
not have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the board of
directors of such parent entity);
(2) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the
directors of the Company then still in office who were either
directors 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 Board of Directors then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
5
(4) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company (determined on a consolidated basis) to another Person (other
than, in all such cases, a Person that is controlled by the Permitted
Holders), other than a transaction following which in the case of a
merger or consolidation transaction, securities that represented 100%
of the Voting Stock of the Company immediately prior to such
transaction (or other securities into which such securities are
converted as part of such merger or consolidation transaction)
constitute at least a majority of the voting power of the Voting Stock
of the surviving Person in such merger or consolidation transaction.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its Restricted Group Members
(including the total interest expense of unconsolidated Permitted International
Joint Ventures), plus, to the extent not included in such total interest
expense, and to the extent incurred by the Company or its Restricted Group
Members, without duplication:
(1) interest expense attributable to capital leases and the
interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) amortization of debt discount and debt
issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(6) net payments pursuant to Hedging Obligations;
6
(7) Preferred Stock dividends in respect of all Preferred
Stock of Restricted Group Members held by Persons other than the
Company or a Restricted Group Member (other than dividends payable
solely in Capital Stock (other than Disqualified Stock) of the issuer
of such Preferred Stock);
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any other Person
to the extent such Indebtedness is Guaranteed by (or secured by the
assets of) the Company or any Restricted Group Member; and
(10) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such
plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or
trust;
excluding, however, a portion of any such interest expense or other item listed
in clauses (1) through (10) above to the extent included therein solely as an
expense or other item of an unconsolidated Permitted International Joint Venture
and equal to the Third Party Ownership Interest in such Permitted International
Joint Venture.
"Consolidated Leverage Ratio" as of any date of determination
means the ratio of (x) the aggregate amount of Indebtedness of the Company and
its Restricted Group Members as of such date of determination to (y) EBITDA for
the most recent four consecutive fiscal quarters ending at least 45 days prior
to such date of determination (the "Reference Period"); provided, however, that:
(1) if the transaction giving rise to the need to calculate
the Consolidated Leverage Ratio is an Incurrence of Indebtedness, the
amount of such Indebtedness shall be calculated after giving effect on
a pro forma basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of the Reference Period;
(2) if the Company or any Restricted Group Member has repaid,
repurchased, defeased or otherwise discharged any Indebtedness that was
outstanding as of the end of such fiscal quarter or if any Indebtedness
is to be repaid, repurchased, defeased or otherwise discharged on the
date of the transaction giving rise to
7
the need to calculate the Consolidated Leverage Ratio (other than, in
each case, Indebtedness Incurred under any revolving credit agreement),
the aggregate amount of Indebtedness shall be calculated on a pro forma
basis and EBITDA shall be calculated as if the Company or such
Restricted Group Member had not earned the interest income, if any,
actually earned during the Reference Period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness;
(3) if since the beginning of the Reference Period the Company
or any Restricted Group Member shall have made any Asset Disposition,
the EBITDA for the Reference Period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets which
are the subject of such Asset Disposition for the Reference Period or
increased by an amount equal to the EBITDA (if negative) directly
attributable thereto for the Reference Period;
(4) if since the beginning of the Reference Period the Company
or any Restricted Group Member (by merger or otherwise) shall have made
an Investment in any Restricted Group Member (or any Person which
becomes a Restricted Group Member) or an acquisition of assets which
constitutes all or substantially all of a business or one or more
operating units of a business, EBITDA for the Reference Period shall be
calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of the Reference Period; and
(5) if since the beginning of the Reference Period any Person
that subsequently became a Restricted Group Member or was merged with
or into the Company or any Restricted Group Member since the beginning
of such Reference Period shall have made any Asset Disposition, any
Investment or acquisition of assets that would have required an
adjustment pursuant to clause (3) or (4) above if made by the Company
or a Restricted Group Member during the Reference Period, EBITDA for
the Reference Period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of the Reference Period.
8
"Consolidated Net Income" means, for any period, the net
income (or loss) of the Company and its consolidated Restricted Group Members
and (without duplication) the Company's equity in the net income (or loss) of
any unconsolidated Permitted International Joint Ventures; provided, however,
that there shall not be included in such Consolidated Net Income:
(1) any net income (or loss) of any Person (other than the
Company) if such Person is not a Restricted Group Member, except that:
(A) subject to the exclusions contained in clauses
(4) and (7) below, the Company's equity in the net income of
any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the
Company or a Restricted Group Member as a dividend or other
distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Group Member, to the
limitations contained in clause (3) below); and
(B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such
Consolidated Net Income;
(2) any net income (or loss) of any Person acquired by the
Company, a Subsidiary or a Permitted International Joint Venture in a
pooling of interests transaction for any period prior to the date of
such acquisition;
(3) any net income (or loss) of any Restricted Group Member if
such Restricted Group Member is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Group Member, directly or indirectly, to the
Company, except that:
(A) subject to the exclusions contained in clauses
(4) and (7) below, the Company's equity in the net income of
any such Restricted Group Member for such period shall be
included in such Consolidated Net Income up to the aggregate
amount of cash distributed or capable of being distributed by
such Restricted Group Member during such period to the Company
or another Restricted Group Member as a dividend or other
distribution (subject, in
9
the case of a dividend or other distribution paid to another
Restricted Group Member, to the limitation contained in this
clause); and
(B) the Company's equity in a net loss of any such
Restricted Group Member for such period shall be included in
determining such Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries
or any other Person (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (or loss) realized upon the sale or
other disposition of any Capital Stock of any Person;
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting principles
after the Issue Date; and
(7) to the extent not otherwise excluded in accordance with
GAAP, the net income (or loss) of any unconsolidated Permitted
International Joint Venture in an amount that corresponds to the Third
Party Ownership Interest in the income of such Permitted International
Joint Venture on the last day of such period.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of the Investments or
return of capital to the Company or a Restricted Group Member to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such covenant pursuant to Section
4.04(a)(3)(D).
"Currency Agreement" means, in respect of a Person, any
foreign exchange contract, currency swap agreement or other similar agreement
designed to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
10
"Discount Notes" means the Company's 14-3/4% Senior Discount
Notes due 2010.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) or
upon the happening of any event:
(1) matures or is mandatorily redeemable (other than for
Capital Stock that is not Disqualified Stock) pursuant to a sinking
fund obligation or otherwise;
(2) is convertible or exchangeable at the option
of the holder for Indebtedness or Disqualified Stock;
or
(3) is mandatorily redeemable or must be purchased
upon the occurrence of certain events or otherwise, in
whole or in part;
in each case on or prior to the ninety-first day after the Stated Maturity of
the Securities; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
ninety-first day after the Stated Maturity of the Securities shall not
constitute Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders
of such Capital Stock than the terms applicable to the Securities in
Section 4.06 and Section 4.09; and
(2) any such requirement only becomes operative after
compliance with such terms applicable to the Securities, including the
purchase of any Securities tendered pursuant thereto.
"EBITDA" for any period means the sum of Consolidated Net
Income, plus the following to the extent deducted in calculating such
Consolidated Net Income:
(1) all income tax expense of the Company and its consolidated
Restricted Group Members; provided, however, that a portion of the
income tax expense of an unconsolidated Permitted International Joint
Venture
11
equal to the percentage of the net income (net loss) of such Permitted
International Joint Venture allocated to the Company and its Restricted
Subsidiaries in accordance with GAAP shall be included in EBITDA
regardless of whether deducted in calculating Consolidated Net Income;
(2) Consolidated Interest Expense; provided, however, that the
portion of Consolidated Interest Expense attributable to an
unconsolidated Permitted International Joint Venture shall be included
in EBITDA regardless of whether deducted in calculating Consolidated
Net Income;
(3) depreciation and amortization expense of the Company and
its consolidated Restricted Group Members (excluding amortization
expense attributable to a prepaid operating activity item that was paid
in cash in a prior period); provided, however, that a portion of the
depreciation and amortization expense of an unconsolidated Permitted
International Joint Venture equal to the percentage of the net income
(net loss) of such Permitted International Joint Venture allocated to
the Company and its Restricted Subsidiaries in accordance with GAAP
shall be included in EBITDA regardless of whether deducted in
calculating Consolidated Net Income; and
(4) all other noncash charges of the Company and its
consolidated Restricted Group Members (excluding any such noncash
charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period); provided, however, that a
portion of all other noncash charges of an unconsolidated Permitted
International Joint Venture equal to the percentage of the net income
(net loss) of such Permitted International Joint Venture allocated to
the Company and its Restricted Subsidiaries in accordance with GAAP
shall be included in EBITDA regardless of whether deducted in
calculating Consolidated Net Income;
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Group Member shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Group Members was included in
calculating Consolidated Net Income and only if a corresponding amount
12
would be permitted at the date of determination to be dividended to the Company
by such Restricted Group Members 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 such Restricted Group Members or its stockholders.
"Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent monthly
consolidated balance sheet of the Company, arising in the ordinary course of
business of the Company or any Restricted Subsidiary.
"Euro Equivalent" means with respect to any monetary amount in
a currency other than euros, at any time for determination thereof, the amount
of euros obtained by converting such foreign currency involved in such
computation into euros at the spot rate for the purchase of euros with the
applicable foreign currency as published in The Wall Street Journal in the
"Exchange Rates" column under the heading "Currency Trading" on the date two
Business Days prior to such determination.
"European Economic Area" means the member nations of the
European Economic Area pursuant to the Oporto Agreement on the European Economic
Area day May 2, 1992, as amended.
"European Governmental Obligation" means direct non-callable
obligations of, or non-callable obligations permitted by, any member nation of
the European Union, the payment or guarantee of which is secured by the full
faith and credit of the respective nation, provided that such nation has a
credit rating at least equal to that of the highest rated member nation of the
European Economic Area.
"European Union" means the member nations to the third stage
of economic and monetary union pursuant to the Treaty of Rome establishing the
European Community, as amended by the Treaty on European Union, signed at
Maastricht on February 7, 1992.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Senior Notes" means the 14% Senior Discount Notes
due 2005 of the Company and the 14-1/2% Senior Deferred Interest Notes due 2005
of the Company and the 12-1/2% Guaranteed Senior Secured Notes due 2004 of
13
Winstar Equipment II Corp. and the 12-1/2% Guaranteed Senior Secured Notes due
2004 of Winstar Equipment Corp.
"Existing Subordinated Notes" means the 10% Senior
Subordinated Notes due 2008 of the Company, the 15% Senior Subordinated Deferred
Interest Notes due 2007 of the Company and the 11% Senior Subordinated Deferred
Interest Notes due 2008 of the Company.
"Fair Market Value" means, with respect to any Property (other
than cash), the price that could be negotiated in an arm's-length free market
transaction for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise specified, (1) in the case of items with a Fair Market Value in excess
of $1,000,000 but less than or equal to $12.5 million, Fair Market Value shall
be determined by the chief financial officer or treasurer of the Company acting
in good faith and, if such Fair Market Value is in excess of $2.0 million, shall
be evidenced by an Officers' Certificate and (2) in the case of items with a
Fair Market Value in excess of $12.5 million, Fair Market Value shall be
determined by the Board of Directors acting in good faith and shall be evidenced
by a resolution of the Board of Directors.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants,
(2) statements and pronouncements of the Financial Accounting
Standards Board,
(3) such other statements by such other entity as approved by
a significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements
in staff accounting bulletins and similar written statements from the
accounting staff of the SEC. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
14
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such 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
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Restricted Group Member
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Group Member. The
term "Incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is
15
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered
into by such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, bank guarantee, banker's
acceptance, surety bond or performance bond;
(5) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock of such Person or, with respect to any Preferred Stock of any
Subsidiary or Restricted Group Member of such Person, the principal
amount of such Preferred Stock to be determined in accordance with the
Indenture (but excluding, in each case, any accrued dividends);
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets and the amount of the obligation
so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of 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 the
maximum liability,
16
upon the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date; provided, however, that the amount of
Indebtedness of any unconsolidated Permitted International Joint Venture shall
be reduced by an amount that corresponds to the Third Party Ownership Interest
in such Permitted International Joint Venture.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Rate Agreement" means, in respect of a Person, any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investee" means any Person (other than the Company or any
Restricted Group Member) in which the Company or any Restricted Group Member has
an Investment.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as Receivables on the balance sheet of the lender) or
other extensions of credit (including by way of Guarantee or similar
arrangement) 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, Indebtedness
or other similar instruments issued by such Person.
For purposes of the definitions of "Unrestricted Subsidiary",
"Restricted Payment" and "Permitted International Joint Venture", and for
purposes of Section 4.04 and Section 4.06:
(1) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary or other entity) of
the Fair Market Value of the net assets of any (A) Subsidiary of the
Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary or (B) Permitted International Joint Venture at the time
that such entity is designated an Investee; provided, however, that if
any Permitted International Joint Venture shall cease to satisfy the
definition of "Permitted International Joint Venture" and is not
designated promptly as a Restricted Subsidiary or an Unrestricted
Subsidiary, it
17
shall be deemed to have been designated as an Investee; provided
further, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary or such Investee as a Permitted International
Joint Venture, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary or Investee, as
applicable, equal to an amount (if positive) equal to (A) the Company's
"Investment" in such entity at the time of such redesignation less (B)
the portion (proportionate to the Company's equity interest in such
entity) of the Fair Market Value of the net assets of such entity at
the time of such redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary or Investee shall be valued at its Fair Market Value at the
time of such transfer.
"Issue Date" means April 10, 2000.
"Issue Date Discount Notes" means Discount Notes issued on the
Issue Date, the aggregate principal amount of such notes to be evidenced by an
Officers' Certificate.
"Issue Date 2010 Senior Notes" means 2010 Senior Notes issued
on the Issue Date, the aggregate principal amount of such notes to be evidenced
by an Officers' Certificate.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Marketable Securities" means, with respect to any Asset
Disposition, any readily marketable equity securities of a corporation whose
primary business is the Telecommunications Business that are (i) traded on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market and (ii) issued by a corporation having a total equity market
capitalization of not less than $250.0 million; provided, however, that the
excess of (A) the aggregate amount of securities of any one such corporation
held by the Company and any Restricted Group Member over (B) 20 times the
average daily trading volume of such securities during the 20 immediately
preceding trading days shall be deemed not to be Marketable Securities, as
determined on the date of the contract relating to such Asset Disposition.
18
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:
(1) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made
to minority interest holders in Restricted Group Members as a result of
such Asset Disposition; and
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset
Disposition and retained by the Company or any Restricted Group Member
after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"OECD" means the Organization for Economic Cooperation and
Development.
19
"Xxxxxx.xxx" means Xxxxxx.xxx Inc. and its successors.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Credit Facility" means one or more credit
agreements, loan agreements, lease agreements, commercial paper facilities,
Receivables facilities or similar facilities, secured or unsecured, providing
for revolving credit loans, term loans, sales of receivables or letters of
credit, entered into from time to time by the Company or its Restricted Group
Members, and including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, as the same may be
amended, supplemented, modified, restated or replaced from time to time. A
Vendor Financing that otherwise satisfies the foregoing definition will also
constitute a Permitted Credit Facility.
"Permitted Holders" means Xxxxxxx X. Xxxxxxx, Xx. (or in the
event of his incompetence or death, his estate, heirs, executor, administrator,
committee or other personal representative (collectively, "heirs")) or any
Person controlled, directly or indirectly, by Xxxxxxx X. Xxxxxxx, Xx. or his
heirs.
"Permitted International Joint Venture" means any entity
(other than a Subsidiary of the Company) all or substantially all of whose
business is outside the U.S. and that (i) based on a determination of the Board
of Directors, the Company has, directly or indirectly, the requisite control
over such entity to prevent it from Incurring Indebtedness, or taking any other
action at any time, in contravention of any of the provisions of this Indenture
that apply to a Permitted International Joint Venture, (ii) the Company or a
Restricted Subsidiary owns at least 33 1/3% of the Voting Stock of such entity
and the Third Party Ownership Interest of such entity does not exceed 66 2/3%,
(iii) such entity is engaged primarily in aspects of the Telecommunications
Business directly related to the
20
Company's business and (iv) the Company has designated such entity as a
Permitted International Joint Venture pursuant to a resolution of the Board of
Directors.
Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions. The Board of Directors may designate any Permitted
International Joint Venture to no longer be a Permitted International Joint
Venture and to be treated as an Investee; provided, however, that such
designation would be permitted under Section 4.04. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"Permitted Investment" means an Investment by the Company or
any Restricted Group Member in:
(1) the Company, a Restricted Group Member or a Person that
will, upon the making of such Investment, become a Restricted Group
Member; provided, however, that the primary business of such Restricted
Group Member is the Telecommunications Business;
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Group Member; provided, however, that such Person's primary
business is the Telecommunications Business;
(3) cash and Temporary Cash Investments;
(4) Receivables owing to the Company or any Restricted Group
Member;
(5) Capital Stock of customers of the Company or any
Restricted Group Member received in exchange for products and services
provided in the ordinary course of business; provided, however, that
the value of such products and services (calculated as the
consideration received by the Company or such Restricted Group Member
for such products and services in a comparable arm's-length
transaction) shall not exceed $50.0 million
21
during each successive 12-month period following the Issue Date;
(6) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business;
(7) loans or advances to employees made in the ordinary course
of business consistent with past practices of the Company or such
Restricted Group Member or as part of a compensation scheme approved by
the Board of Directors in an amount not to exceed $5.0 million at any
one time outstanding;
(8) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Group Member or in satisfaction of judgments
or settlement of claims or disputes;
(9) shares of Capital Stock of an Unrestricted Subsidiary;
provided, however, that such shares are being acquired from the Company
or a Restricted Group Member; and
(10) any Person to the extent such Investment represents the
noncash portion (other than Marketable Securities) of the consideration
received for an Asset Disposition as permitted pursuant to Section
4.06.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's
compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or import
duties or for the payment of rent or similar operational requirements,
in each case Incurred in the ordinary course of business;
22
(2) Liens imposed by law, such as carriers', warehousemen's
and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other
proceedings for review and Liens arising solely by virtue of any
statutory or common law provision relating to banker's Liens, rights of
set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; provided,
however, that (A) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by
the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board and (B) such deposit account is not intended
by the Company or any Restricted Group Member to provide collateral to
the depository institution;
(3) Liens for taxes not yet subject to penalties for
nonpayment or which are being contested in good faith and by
appropriate proceedings promptly instituted and diligently concluded;
provided, however, that such Person has created a reserve or other
appropriate provision therefor as may be required by GAAP;
(4) Liens in favor of issuers of letters of credit, bank
guarantees, bankers' acceptances, surety bonds, bid bonds and
performance bonds issued pursuant to the request of and for the account
of such Person in the ordinary course of its business; provided,
however, that the Indebtedness in respect thereto is permitted to be
Incurred by Section 4.03;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially
impair their use in the operation of the business of such Person;
(6) Liens to secure Indebtedness permitted under the
provisions described in Section 4.03(b)(1),
23
Section 4.03(b)(5), Section 4.03(b)(8) (but with respect to Section
4.03(b)(8) only to the extent such Indebtedness constitutes Refinancing
Indebtedness of Purchase Money Indebtedness) and Section 4.03(b)(10);
provided, however, that any such Liens securing Indebtedness (other
than Indebtedness pursuant to a Permitted Credit Facility) described in
Section 4.03(b)(5) (or Refinancing Indebtedness thereof) may not extend
to any property owned by the Company or any of the Restricted Group
Members other than the property acquired with the proceeds from
Indebtedness Incurred under such Section 4.03(b)(5) and the proceeds
therefrom;
(7) Liens existing on the Issue Date;
(8) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such
Person or a Permitted International Joint Venture; provided, however,
that the Liens may not extend to any other property owned by such
Person or any of its Restricted Group Members (other than assets and
property affixed or appurtenant thereto);
(9) Liens on property at the time such Person or any of its
Subsidiaries or Permitted International Joint Ventures acquires the
property, including any acquisition by means of a merger or
consolidation with or into such Person or a Subsidiary of such Person;
provided, however, that the Liens may not extend to any other property
owned by such Person or any of its Restricted Group Members (other than
assets and property affixed or appurtenant thereto);
(10) Liens in favor of the Company or any Restricted Group
Member on any property other than property of the Company;
(11) Liens securing Hedging Obligations consisting of (A)
Interest Rate Agreements or Currency Agreements directly related to
Indebtedness that is, and is permitted to be incurred under this
Indenture or (B) Currency Agreements used to hedge non-U.S. dollar
currency exposures of the Company and its Restricted Group Members,
entered into in accordance with customary industry practices for
companies in the Telecommunications Business with international
operations and not for purposes of speculation, in each case
24
secured by a Lien on the same property securing such Hedging
Obligations;
(12) Liens incurred in the ordinary course of business of the
Company or any of its Restricted Group Members with respect to
obligations that do not exceed $10.0 million at any one time
outstanding; provided, however, that
(A) such obligations are not Incurred in
connection with the borrowing of money; and
(B) such Liens do not in the aggregate materially
detract from the value of the property or materially impair
the use thereof in the operation of business by the Company or
such Restricted Group Member;
(13) Liens on the Capital Stock of an Unrestricted
Subsidiary; and
(14) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any Indebtedness secured by
any Lien referred to in the foregoing clauses (7), (8) or (9);
provided, however, that:
(A) such new Lien shall be limited to all or part of
the same property and assets that secured or, under the
written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and
accessions to, such property or proceeds or distributions
thereof); and
(B) the Indebtedness secured by such Lien at such
time is not increased to any amount greater than the sum of
(x) the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (7), (8) or
(9) at the time the original Lien became a Permitted Lien and
(y) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, related to such
refinancing, refunding, extension, renewal or replacement.
For purposes of this definition, the term "Indebtedness" shall be deemed to
include interest, fees and other amounts due on such Indebtedness.
25
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Preferred Stock Exchange Offer" means an offer by the Company
to exchange any and all of its Series C Preferred Stock (or the exchange
debentures issuable in respect of such Series C Preferred Stock in accordance
with its terms) for Discount Notes or 2010 Senior Notes.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities of,
any other Person. For purposes of any calculation required pursuant to this
Indenture the value of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness (including
Capital Lease Obligations, Acquired Indebtedness, mortgage financings and
purchase money obligations) Incurred for the purpose of financing all or any
part of the cost of construction, installation, acquisition, lease, development
or improvement by the Company or any Restricted Group Member of any
Telecommunications Assets of the Company or any Restricted Group Member,
including any related note, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.
26
"Qualified Receivables Transaction" means an Incurrence of
Indebtedness of the Company or any Restricted Group Member pursuant to either
(1) credit facilities secured by Receivables or (2) Receivables purchase
facilities.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
and proceeds and products thereof in each case generated in the ordinary course
of business.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Group Member existing on the
Issue Date or Incurred in compliance with this Indenture, including Indebtedness
that Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate accreted value)
then outstanding (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary or a Permitted International Joint Venture that
Refinances Indebtedness of the Company or (B) Indebtedness of the Company or a
Restricted Group Member that Refinances Indebtedness of an Unrestricted
Subsidiary.
27
"Registration Rights Agreement" means the Registration Rights
Agreement dated April 10, 2000, among the Company, Credit Suisse First Boston
(Europe) Limited, Salomon Brothers International Limited, Xxxxxxx Xxxxx
International, Xxxxxxx Xxxxx International, BNY Capital Markets, Inc. and CIBC
World Markets Corp., as representatives of the several Initial Purchasers
identified therein.
"Restricted Group Member" means collectively each Restricted
Subsidiary and each Permitted International Joint Venture.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock), rights to
purchase additional Capital Stock (other than Disqualified Stock) for
cash and dividends or distributions payable solely to the Company or a
Restricted Group Member, and other than pro rata dividends or other
distributions made by a Restricted Group Member that is not a Wholly
Owned Subsidiary to minority stockholders or holders of Third Party
Ownership Interests (or owners of an equivalent interest in the case of
a Restricted Group Member that is an entity other than a corporation)
or holders of Third Party Ownership Interests);
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any direct
or indirect parent of the Company held by any Person or of any Capital
Stock of a Restricted Group Member held by any Affiliate of the Company
(other than a Restricted Group Member), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of
the Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of such Person (other than the purchase,
28
repurchase or other acquisition of Subordinated Obligations purchased
in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the
date of such purchase, repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Group Member on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Group Member transfers such property to a Person (other
than the Company or a Restricted Group Member) and the Company or a Restricted
Group Member leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien on property of the Company or any Restricted Group Member.
"Senior Indebtedness" means:
(1) Indebtedness of the Company, whether outstanding on the
Issue Date or thereafter Incurred; and
(2) accrued and unpaid interest (including interest accruing
on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company to the extent postfiling
interest is allowed in such proceeding) in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which the Company is responsible or liable
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Securities;
29
provided, however, that Senior Indebtedness shall not include:
(1) any obligation of the Company to any
Subsidiary or Permitted International Joint Venture;
(2) any liability for Federal, state, local or
other taxes owed or owing by the Company;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities);
(4) any Indebtedness of the Company (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in
any respect to any other Indebtedness or other obligation of the
Company; or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Securities" means the Securities issued under this Indenture.
"Series C Preferred Stock" means the Series C 14-1/4% Senior
Cumulative Exchangeable Preferred Stock due 2007 of the Company issued and
outstanding on the Issue Date.
"Significant Restricted Group Member" means any Restricted
Group Member that would be a "Significant Subsidiary" of the Company within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, assuming for
the purpose of this definition that a Permitted International Joint Venture that
is not a Subsidiary of the Company is a Subsidiary of the Company.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or
30
thereafter Incurred) which is subordinate or junior in right of payment to the
Securities pursuant to a written agreement to that effect.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of
such Person; or
(3) one or more Subsidiaries of such Person.
"Telecommunications Assets" means (a) any Property(other than
cash, cash equivalents and securities) used in the Telecommunications Business;
(b) for purposes of Section 4.03, Section 4.04 and Section 4.10 only, Capital
Stock of any Person, or (c) for all other purposes of this Indenture, Capital
Stock of a Restricted Group Member or a Person that becomes a Restricted Group
Member as a result of the acquisition of such Capital Stock by the Company or
another Restricted Group Member, in each case, acquired from any Person (other
than a Subsidiary of the Company or a Permitted International Joint Venture) in
a bona fide transaction; provided, however, that, in the case of clause (b) or
(c), such Person is primarily engaged in the Telecommunications Business.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through transmission facilities, (ii) constructing, creating,
developing or producing communications networks, related network transmission
equipment, software, devices and content for use in a communications or content
distribution business, (iii) data center management, computer and application
outsourcing, computer systems integration, reengineering of computer software,
information services and web hosting and any services related thereto or (iv)
evaluating, participating or pursuing any other activity or opportunity that is
primarily related to those identified in (i), (ii) or (iii) above or in
furtherance thereof, including, without limitation, any business conducted by
the Company or any Restricted Group Member on the Issue Date; provided, however,
that the determination of what constitutes a
31
Telecommunications Business shall be made in good faith by the Board of
Directors.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States
of America or any agency thereof or obligations guaranteed by the
United States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of
deposit, money market deposits, bankers' acceptances and repurchase
obligations maturing within 365 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of
the United States of America, 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
$500,000,000 (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;
(3) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (1)
above entered into with a bank meeting the qualifications described in
clause (2) above;
(4) investments in commercial paper, maturing not more than
270 days 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 of America, any state thereof or any foreign
country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher)
according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher)
according to Standard and Poor's Ratings Group;
(5) investments in securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or xxxxx-
32
tory of the United States of America, or by any political subdivision
or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.;
(6) auction rate preferred stocks of any corporation maturing
within 90 days after the date of acquisition rated at least "A" by
Standard and Poor's Ratings Group; and
(7) any investment in a registered investment company
investing exclusively in investments of the types described in clauses
(1) through (6) above.
"Third Party Ownership Interest" in a Permitted International
Joint Venture means a percentage equal to the difference between 100% and the
percentage of the net income (net loss) of such Permitted International Joint
Venture allocated to the Company and its Restricted Subsidiaries in accordance
with GAAP.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"2008 Senior Notes" means the Company's 12-1/2% Senior Notes
due 2008.
"2010 Senior Notes" means the Company's 12-3/4% Senior Notes
due 2010 denominated in U.S. dollars.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) Xxxxxx.xxx;
(2) Winstar Credit Corp.;
33
(3) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; and
(4) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company (other than
Capital Stock (other than Disqualified Stock) of the Company contributed to such
Unrestricted Subsidiary and promptly transferred by such Unrestricted Subsidiary
in exchange for Telecommunications Assets) or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated or is the
obligor on any Indebtedness a default on which would result in a default on any
Indebtedness of the Company or a Restricted Subsidiary; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $10,000 or
less or (B) if such Subsidiary has assets greater than $10,000, such designation
would be permitted under Section 4.04.
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (A) the Consolidated Leverage Ratio
would be no worse than the Consolidated Leverage Ratio determined immediately
prior to such designation, (B) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such designation would, if Incurred
at such time, have been permitted to be Incurred at such time for all purposes
of this Indenture and (C) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in
34
the "Exchange Rates" column under the heading "Currency Trading" on the date two
Business Days prior to such determination.
Except as described in Section 4.03, whenever it is necessary
to determine whether the Company has complied with any covenant in this
Indenture or a Default has occurred and an amount is expressed in a currency
other than U.S. dollars, such amount will be treated as the U.S. Dollar
Equivalent determined as of the date such amount is initially determined in such
currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Vendor Financing" means any financing or other credit or
deferred payment arrangement provided by a supplier, manufacturer or lessor of
Telecommunications Assets or any Affiliate thereof.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- ---------
"Affiliate Transaction".................................. 4.07
"Appendix"............................................... 2.01
"Bankruptcy Law"......................................... 6.01
"Change of Control Offer"................................ 4.09(b)
"covenant defeasance option"............................. 8.01(b)
"Custodian".............................................. 6.01
"Event of Default"....................................... 6.01
"Initial Lien"........................................... 4.10
35
"legal defeasance option"................................ 8.01(b)
"Legal Holiday".......................................... 10.07
"Offer".................................................. 4.06(b)
"Offer Amount"........................................... 4.06(c)(2)
"Offer Period"........................................... 4.06(c)(2)
"Paying Agent"........................................... 2.03
"Purchase Date".......................................... 4.06(c)(1)
"Registrar".............................................. 2.03
"Successor Company"...................................... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
36
(5) words in the singular include the plural and
words in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally
issued shall refer to the Issue Date.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.
37
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
On the Issue Date, the Trustee shall authenticate and deliver
Euro 200,000,000 of 12-3/4% Senior Notes Due 2010 and, at any time and from time
to time thereafter, the Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount specified in such order, in each
case upon a written order of the Company signed by two Officers or by an Officer
and either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of an issuance of Additional Securities pursuant to Section 2.13 after
the Issue Date, shall certify that such issuance is in compliance with Section
4.03.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
38
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
For so long as the Securities are listed on the Luxembourg
Stock Exchange, the Company will maintain a Paying Agent in Luxembourg.
The Company initially appoints Citibank, N.A. as Registrar and
Paying Agent and Banque Internationale A Luxembourg as Luxembourg Paying Agent
in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date
39
as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested if the same requirements are met.
No service charge shall be made for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer
tax, assessments or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.09 and
9.05).
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities; When Securities
Disregarded. Securities outstanding at any time are all Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. A Security
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Security.
40
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
Notwithstanding any other provisions of this Indenture to the
contrary, in determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel and destroy (subject to the record retention requirements of the Exchange
Act) all Securities surrendered for registration of transfer, exchange, payment
or cancellation and deliver a certificate of such destruction to the Company
unless the Company directs the Trustee
41
to deliver canceled Securities to the Company. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP", "ISIN" or "Common Code" numbers (if then generally
in use) and, if so, the Trustee shall use "CUSIP" numbers, "ISIN or "Common
Code" in notices of redemption as a convenience to Holders; provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.13. Issuance of Additional Securities. The Company
shall be entitled, subject to its compliance with Section 4.03, to issue
Additional Securities under this Indenture which shall have identical terms as
the Initial Securities issued on the Issue Date, other than with respect to the
date of issuance and issue price; provided, however, that the maximum aggregate
principal amount of Additional Securities issued by the Company shall not exceed
the result of (x) Euro 250.0 million less (y) the aggregate principal amount (on
a Euro Equivalent basis) of any 2010 Senior Notes issued by the Company that are
not Issue Date 2010 Senior Notes. The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor shall be treated as a single class for
all purposes under this Indenture.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of
42
Directors and an Officers' Certificate, a copy of each of which shall be
delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price, the issue date and the CUSIP number, ISIN
number and Common Code number of such Additional Securities; provided,
however, that no Additional Securities may be issued at a price that
would cause such Additional Securities to have "original issue
discount" within the meaning of Section 1273 of the Code; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Initial Securities as
set forth in the Appendix to this Indenture or shall be issued in the
form of Exchange Securities as set forth in Exhibit A.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 30 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fidu-
43
ciaries in similar circumstances. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations larger than Euro 1,000. Securities and portions of them the
Trustee selects shall be in principal amounts of Euro 1,000 or a whole multiple
of Euro 1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment, interest on Securities (or portion thereof) called
for redemption ceases to accrue on and after the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, ISIN or Common Code number, if any,
listed in such notice or printed on the Securities.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), the Trustee shall give the notice of redemption in
44
the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section. In
addition, so long as the Securities are listed on the Luxembourg Stock Exchange,
notice of redemption shall be published in a Luxembourg newspaper of general
circulation.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due.
45
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. In addition, so
long as the Securities are listed on the Luxembourg Stock Exchange, notice of
any change in interest rate shall be published in a Luxembourg newspaper of
general circulation.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company will file with the SEC and provide the Trustee and
Security-holders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
In addition, the Company will furnish to the Holder of the Securities and to
prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as any Securities are not freely transferable under the Securities Act. The
Company also shall comply with the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company will
not, and will not permit any Restricted Group Member to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company will be
entitled to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto on a pro forma basis, the Consolidated Leverage Ratio
would be less than 6.0 to 1.
(b) Notwithstanding Section 4.03(a), so long as no Default has
occurred and is continuing, the Company and the Restricted Group Members will be
entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to one or more Permitted
Credit Facilities; provided, however, that, after giving effect to any
such Incurrence, the aggregate principal amount of such Indebtedness
then outstanding does not exceed (A) the greater of (x) $1.15 billion
and (y) 85% of Eligible Receivables less (B) the sum of (i) all
principal payments with respect to such Indebtedness (other than
Indebtedness Incurred pursuant to the revolving loan portion of a
46
Permitted Credit Facility) pursuant to Section 4.06(a)(3)(A) and (ii)
the principal amount of such Indebtedness assumed by a transferee in
any Asset Disposition;
(2) Indebtedness owed to and held by the Company or a
Restricted Group Member; provided, however, that (A) any subsequent
issuance or transfer of any Capital Stock or the occurrence of any
other event which results in any such Restricted Group Member ceasing
to be a Restricted Group Member or any subsequent transfer of such
Indebtedness (other than to the Company or another Restricted Group
Member) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon and (B) if the Company is the
obligor on such Indebtedness, such Indebtedness is not secured and is
expressly subordinated to the prior payment in full in cash of all
obligations with respect to the Securities;
(3) the Securities, the Exchange Securities (other than any
Additional Securities), the 2008 Senior Notes, the Issue Date 2010
Senior Notes and the Issue Date Discount Notes;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section
4.03(b)) and any exchange debentures issued in exchange for the Series
C Preferred Stock in accordance with its terms or Discount Notes or
2010 Senior Notes issued in exchange for such exchange debentures or
Series C Preferred Stock;
(5) Purchase Money Indebtedness; provided, however, that, to
the extent such Purchase Money Indebtedness is Incurred by a Restricted
Group Member, such Purchase Money Indebtedness shall be Incurred
pursuant to a Permitted Credit Facility or a Vendor Financing; provided
further, however, that the amount of such Purchase Money Indebtedness
does not exceed 100% of the cost and directly related expenses of the
construction, installation, acquisition, lease, insurance, shipping,
development or improvement of, or any service agreement, maintenance
agreement, warranty agreement or similar agreement in respect of, the
applicable Telecommunications Assets;
(6) Indebtedness of the Company in an amount which, when taken
together with the amount of all other
47
Indebtedness of the Company Incurred pursuant to this clause (6) and
then outstanding, does not exceed two times the sum of (x) the
aggregate Net Cash Proceeds received by the Company from the issuance
or sale of Capital Stock (other than Disqualified Stock) of the Company
(other than an issuance or sale to a Subsidiary of the Company or a
Permitted International Joint Venture and other than an issuance or
sale to an employee stock ownership plan or to a trust established by
the Company, any of its Subsidiaries or any Permitted International
Joint Venture for the benefit of their employees) and (y) the fair
market value of any Capital Stock (other than Disqualified Stock) of
the Company issued to any Person (other than a Subsidiary of the
Company or a Permitted International Joint Venture) (i) in exchange for
Telecommunications Assets or (ii) in exchange for Capital Stock of
another Person a substantial majority of the assets of which consist of
Telecommunications Assets in a transaction pursuant to which such other
Person becomes a Restricted Group Member, in each case received or
issued, as the case may be, on or subsequent to February 1, 2000;
provided, however, that such Net Cash Proceeds or fair market value
have not served as a basis for making a Restricted Payment pursuant to
Section 4.04(a)(3)(B), Section 4.04(b)(1) or Section 4.04(b)(5);
(7) Indebtedness of a Restricted Group Member Incurred and
outstanding on or prior to the date on which such Subsidiary (in the
case of a Restricted Subsidiary) or an interest in such entity (in the
case of a Permitted International Joint Venture) was acquired by the
Company (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Subsidiary (in the case of a Restricted Subsidiary) or an
interest in such entity (in the case of a Permitted International Joint
Venture) was acquired by the Company); provided, however, that on the
date of such acquisition and after giving pro forma effect thereto, the
Company would have been able to Incur at least $1.00 of additional
Indebtedness pursuant to Section 4.03(a);
(8) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (3), (4),
(5) or (7) of this Section 4.03(b) or this clause (8); provided,
however,
48
that any Refinancing Indebtedness Incurred by a Restricted Group Member
in respect of Indebtedness Incurred pursuant to clause (5) of this
Section 4.03(b) is Incurred pursuant to a Permitted Credit Facility or
a Vendor Financing;
(9) Hedging Obligations consisting of (A) Interest Rate
Agreements or Currency Agreements directly related to Indebtedness
permitted to be Incurred by the Company pursuant to this Indenture;
provided, however, that the notional amount of any such Hedging
Obligation does not exceed the amount of Indebtedness to which such
Hedging Obligation relates or (B) Currency Agreements used to hedge
non-U.S. dollar currency exposures of the Company and its Restricted
Group Members, entered into in accordance with customary industry
practices for companies in the Telecommunications Business with
international operations and not for purposes of speculation;
(10) Indebtedness solely in respect of letters of credit, bank
guarantees, banker's acceptances, cash deposits, surety bonds, bid
bonds and performance bonds Incurred in the ordinary course of
business; provided, however, that such instruments or deposits do not
support any Indebtedness other than Indebtedness which, if Incurred by
the Company, would be permitted to be Incurred pursuant to another
provision of this Section 4.03;
(11) Indebtedness of the Company or a Restricted Group Member
consisting of a Guaranty of Indebtedness of a Restricted Group Member
permitted to be Incurred under this Indenture; provided, however, that
the entity providing the Guaranty would have been able to Incur such
Indebtedness under this Indenture; and
(12) Indebtedness of the Company or a Restricted Group Member
in an aggregate principal amount which, when taken together with all
other Indebtedness of the Company and the Restricted Group Members
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (11) of this Section 4.03(b) or
Section 4.03(a)) does not exceed $50.0 million.
(c) Notwithstanding the foregoing, the Company will not Incur
any Indebtedness pursuant to Section 4.03(b) (other than the Incurrence of (1)
any exchange debentures issued in exchange for the Series C Preferred Stock in
49
accordance with its terms or Discount Notes or 2010 Senior Notes issued in
exchange for such exchange debentures or Series C Preferred Stock and (2) any
Indebtedness issued in exchange for the Existing Subordinated Notes) if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities to
at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section
4.03, (1) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses and (2) the Company will be entitled to divide and classify
an item of Indebtedness in more than one of the types of Indebtedness described
above.
(e) For purposes of determining compliance with any U.S.
dollar or euro-denominated restriction on the Incurrence of Indebtedness where
the Indebtedness Incurred is denominated in a different currency, the amount of
such Indebtedness will be the U.S. Dollar Equivalent or Euro Equivalent, as the
case may be, determined on the date of the Incurrence of such Indebtedness;
provided, however, that if any such Indebtedness denominated in a different
currency is subject to a Currency Agreement with respect to U.S. dollars or
euros, as the case may be, covering all principal, premium, if any, and interest
payable on such Indebtedness the amount of such Indebtedness expressed in U.S.
dollars or euros will be as provided in such Currency Agreement. The principal
amount of any Refinancing Indebtedness Incurred in the same currency as the
Indebtedness, being Refinanced will be the Euro Equivalent or U.S. Dollar
Equivalent, as appropriate, of the Indebtedness Refinanced, except to the extent
that (1) such U.S. Dollar Equivalent or Euro Equivalent was determined based on
a Currency Agreement, in which case the Refinancing Indebtedness will be
determined in accordance with the preceding sentence, and (2) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the
Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent or Euro
Equivalent of such excess, as appropriate, will be determined on the date such
Refinancing Indebtedness is Incurred.
SECTION 4.04. Limitation on Restricted Payments. (a) The
Company will not, and will not permit any
50
Restricted Group Member, directly or indirectly, to make a Restricted Payment if
at the time the Company or such Restricted Group Member makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) after giving effect thereto on a pro forma basis, the
Company is not entitled to Incur an additional $1.00 of Indebtedness
pursuant to Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of
(without duplication):
(A) the amount of (x) cumulative EBITDA during the
period (taken as a single accounting period) beginning on the
first day of the fiscal quarter of the Company beginning after
the Issue Date and ending on the last day of the most recent
fiscal quarter ending at least 45 days prior to the date of
such Restricted Payment minus (y) the product of 1.5 times
cumulative Consolidated Interest Expense during such period;
plus
(B) subject to Section 4.04(c), 100% of the aggregate
Net Cash Proceeds received by the Company from the issuance or
sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than an issuance or sale
to a Subsidiary of the Company or a Permitted International
Joint Venture and other than an issuance or sale to an
employee stock ownership plan or to a trust established by the
Company, any of its Subsidiaries or any Permitted
International Joint Venture for the benefit of their
employees); provided, however, that such Net Cash Proceeds
have not served as a basis to make a Restricted Payment
pursuant to Section 4.04(b)(1) or Section 4.04(b)(5); plus
(C) the amount by which Indebtedness of the Company
or a Restricted Group Member is reduced on the Company's
consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company or a Permitted
International Joint Venture) subsequent to the Issue Date of
any Indebtedness of the Company or a Restricted Group
51
Member for or into Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash, or the
fair value of any other property (other than Capital Stock of
the Company that is not Disqualified Stock), distributed by
the Company or a Restricted Group Member upon such conversion
or exchange); plus
(D) an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted
Investments) made by the Company or any Restricted Group
Member in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment, proceeds representing
the return of capital (excluding dividends and distributions),
in each case received by the Company or any Restricted Group
Member, and (y) if an Unrestricted Subsidiary is designated as
a Restricted Group Member or an Investee is designated as a
Restricted Group Member or becomes a Restricted Subsidiary,
the portion (proportionate to the Company's equity interest in
such Subsidiary or Investee) of the fair market value of the
net assets of such Unrestricted Subsidiary or Investee at the
time such Unrestricted Subsidiary is designated a Restricted
Group Member or such Investee is designated as a Restricted
Group Member or becomes a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any such Person, Unrestricted Subsidiary or Investee, the
amount of Investments (excluding Permitted Investments)
previously made (and treated as a Restricted Payment and
included in the calculation of the amount of Restricted
Payments) by the Company or any Restricted Group Member in
such Person, Unrestricted Subsidiary or Investee.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) subject to Section 4.04(c), any Restricted Payment made
out of the Net Cash Proceeds of the substantially concurrent sale of
(or specified with particularity at the time of the sale of, and
subsequently made with such Net Cash Proceeds of), or made by exchange
for, Capital Stock (other than Disqualified Stock) of the Company
(other than Capital Stock issued or sold to a Subsidiary of the Company
or
52
a Permitted International Joint Venture or an employee stock ownership
plan or to a trust established by the Company, any of its Subsidiaries
or any Permitted International Joint Venture for the benefit of their
employees); provided, however, that such Net Cash Proceeds have not
served as a basis for making any other Restricted Payment; provided
further, however, that (A) such Restricted Payment shall be excluded in
the calculation of the amount of Restricted Payments and (B) the Net
Cash Proceeds from any such sale (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts
under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent
sale of (or specified with particularity at the time of the sale of,
and subsequently made with such proceeds of), Indebtedness which is
permitted to be Incurred pursuant to Section 4.03; provided, however,
that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.04; provided, however, that at the
time of payment of such dividend, no other Default shall have occurred
and be continuing (or result therefrom); provided further, however,
that such dividend shall be included in the calculation of the amount
of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of the
Company from employees, former employees, directors or former directors
of the Company, any of its Subsidiaries or any Permitted International
Joint Venture (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or
sell, shares of such Capital Stock; provided, however, that the
aggregate amount of
53
such repurchases and other acquisitions (other than repurchases and
acquisitions made pursuant to agreements in effect on the Issue Date)
shall not exceed $5.0 million in any calendar year (with unused amounts
being carried forward indefinitely); provided further, however, that
such repurchases and other acquisitions shall be included in the
calculation of the amount of Restricted Payments;
(5) subject to Section 4.04(c), Investments in any Person a
substantial majority of the assets of which consist of
Telecommunications Assets; provided, however, that the Fair Market
Value of all such Investments made pursuant to this clause (5)
(measured on the date each such Investment was made) and then
outstanding, does not exceed the sum of $100.0 million, plus the sum of
(x) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of Capital Stock (other than Disqualified Stock) of
the Company (other than an issuance or sale to a Subsidiary of the
Company or a Permitted International Joint Venture and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company, any of its Subsidiaries or any Permitted
International Joint Venture for the benefit of their employees) and (y)
the fair market value of any Capital Stock (other than Disqualified
Stock) of the Company issued to any Person (other than a Subsidiary of
the Company or a Permitted International Joint Venture) (i) in exchange
for Telecommunications Assets or (ii) in exchange for Capital Stock of
another Person a substantial majority of the assets of which consist of
Telecommunications Assets in a transaction pursuant to which such other
Person becomes a Restricted Group Member, in each case received or
issued, as the case may be, subsequent to February 1, 2000; provided,
however, that such Net Cash Proceeds or fair market value have not
served as a basis for making any other Restricted Payment; provided
further, however, that (A) such Investments shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from any such issuance or sale of Capital Stock (to the extent
so used for such Restricted Payment) shall be excluded from the
calculation of amounts under Section 4.04(a)(3)(B);
(6) Investments in any Person whose primary business it is to
directly (or indirectly through subsidiaries) own or hold licenses
granted by the Federal Communications Commission or any other
54
governmental entity with authority to grant telecommunications or radio
frequency licenses or authorizations; provided, however, that the
Company or a Restricted Group Member shall, at the time of making such
Investment, have an active role in the management or operation of such
Person and in the provision of telecommunications services by such
Person; provided further, however, that such Investment shall be
included in the calculation of the amount of Restricted Payments;
(7) the exchange or purchase and retirement of (A) the Series
C Preferred Stock for (i) exchange debentures in accordance with the
terms of the Series C Preferred Stock or (ii) cash or Indebtedness of
the Company or (B) the Existing Subordinated Notes for cash or
Indebtedness of the Company; provided, however, that such exchange or
purchase and retirement shall be excluded in the calculation of the
amount of Restricted Payments;
(8) cash payments in lieu of the issuance of fractional shares
in connection with stock splits or upon the conversion into Capital
Stock of the Company (other than Disqualified Stock) of any security of
the Company or any convertible Indebtedness of the Company; provided,
however, that such exchange and retirement shall be excluded in the
calculation of the amount of Restricted Payments;
(9) Investments in Xxxxxx.xxx, the fair market value of which
(measured on the date each such Investment is made) does not exceed (x)
in the case of an Investment to be made on or immediately after the
Issue Date, $50.0 million, and (y) during each of the three 12-month
periods following the Issue Date, $25.0 million per year (with unused
annual amounts being carried over to future periods even if such
periods occur after the third anniversary of the Issue Date); provided,
however, that such Investments shall be excluded in the calculation of
the amount of Restricted Payments; and
(10) Investments, the aggregate Fair Market Value (measured on
the date each such Investment was made) of which, when taken together
with the Fair Market Value of all other Investments made pursuant to
this clause (10) then outstanding, does not exceed $10.0 million;
provided, however, that such Investment
55
shall be included in the calculation of the amount of Restricted
Payments.
(c) The amounts determined pursuant to Section 4.04(a)(3)(B),
Section 4.04(b)(1) and Section 4.04(b)(5) based on Net Cash Proceeds received
from the issuance or sale of Capital Stock (or the Fair Market Value of Capital
Stock issued) shall be reduced to the extent such Net Cash Proceeds or Fair
Market Value have served as the basis for Incurring any Indebtedness pursuant to
Section 4.03(b)(6) and such Indebtedness (including any Refinancings thereof)
remains outstanding.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Group Members. The Company will not, and will not permit any
Restricted Group Member to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Group Member to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Group Member or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or a Restricted Group Member or (c) transfer any of its property or assets to
the Company or a Restricted Group Member, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(2) any encumbrance or restriction with respect to a
Restricted Group Member pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Group Member on or prior to
the date on which such Subsidiary (in the case of a Restricted
Subsidiary) or an interest in such entity (in the case of a Permitted
International Joint Venture) was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary (in the case of a Restricted Subsidiary) or entity (in the
case of a Permitted International Joint Venture) became a Restricted
Group Member or was acquired by the Company) and outstanding on such
date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in
56
Section 4.05(1) or Section 4.05(2) or this clause (3) or contained in
any amendment to an agreement referred to in Section 4.05(1) or Section
4.05(2) or this clause (3); provided, however, that the encumbrances
and restrictions with respect to such Restricted Group Member contained
in any such refinancing agreement or amendment are no less favorable to
the Securityholders than encumbrances and restrictions with respect to
such Restricted Group Member contained in such predecessor agreements;
(4) any encumbrance or restriction pursuant to a Permitted
Credit Facility; provided, however, that (a) the outstanding
Indebtedness under such Permitted Credit Facility does not exceed the
amounts permitted under Section 4.03(b)(1), Section 4.03(b)(5) and
Section 4.03(b)(8) (but with respect to Section 4.03(b)(8) only to the
extent such Indebtedness constitutes Refinancing Indebtedness of
Purchase Money Indebtedness), (b) such restrictions (other than
following an event of default under such Permitted Credit Facility)
permit dividends and distributions necessary to permit the Company to
satisfy its obligations on the Securities, and (c) the chief financial
officer of the Company determines in good faith that (1) any such
restrictions contained in any such Permitted Credit Facility are no
more restrictive, taken as a whole, than those contained in a credit
facility with terms that are commercially reasonable for a borrower
engaged in a business comparable to the Company that has substantially
comparable Indebtedness, and (2) any such restrictions will not
materially affect the Company's ability to make principal, premium or
interest payments on the Securities;
(5) any encumbrance or restriction arising under
any applicable law or action or at the request of a
governmental regulatory authority;
(6) in the case of clause (c) above, any such encumbrance or
restriction consisting of customary non assignment provisions in
leases, including leases in respect of data centers and indefeasible
rights of use, governing leasehold interests to the extent such
provisions restrict the transfer of the lease or the property leased
thereunder;
(7) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of the Company
or a Restricted Group
57
Member to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages;
(8) in the case of clause (c) above, restrictions imposed in
connection with the grant or acquisition of radio frequency spectrum
(to the extent such restrictions restrict the transfer of such radio
frequency spectrum) or common carrier licenses or their equivalent (to
the extent such restrictions restrict the transfer of such licenses);
(9) in the case of clause (c) above, restrictions relating to
the property or assets of an unconsolidated Permitted International
Joint Venture, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of the
property or assets of the Permitted International Joint Venture in any
material respect;
(10) in the case of clause (c) above, customary provisions
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 the property or assets of the Company or any
Restricted Group Member in any material respect; and
(11) any restriction with respect to a Restricted Group Member
imposed pursuant to an agreement entered into for the sale or
disposition of all or substan-
tially all the Capital Stock or assets of such Restricted Group Member
pending the closing of such sale or disposition.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company will not, and will not permit any Restricted Group Member
to, directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Group Member receives
consideration at the time of such Asset Disposition at least equal to
the Fair Market Value (including as to the value of all noncash
consideration), of the shares and assets subject to such Asset
Disposition;
(2) at least 75% of the consideration thereof
received by the Company or such Restricted Group Member
58
is in the form of cash or cash equivalents, Marketable Securities or
Telecommunications Assets; and
(3) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted
Group Member, as the case may be)
(A) first, to the extent the Company or such
Restricted Group Member elects (or is required by the terms of
any Indebtedness), to prepay, repay, redeem or purchase (x)
Senior Indebtedness of the Company that is either secured
Indebtedness or has a Stated Maturity prior to the Stated
Maturity of the Securities or (y) Indebtedness (other than any
Disqualified Stock) of a Restricted Group Member (in each case
other than Indebtedness owed to the Company or an Affiliate of
the Company) within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available
Cash;
(B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause
(A), to the extent the Company elects, to acquire
Telecommunications Assets within one year from the later of
the date of such Asset Disposition or the receipt of such Net
Available Cash; and
(C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B), to make an offer to the holders of the Securities
(and to holders of other Senior Indebtedness that have a right
to be included in such offer) to purchase Securities (and such
other Senior Indebtedness) pursuant to and subject to the
conditions contained in Section 4.06(b);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Group Member shall permanently retire such Indebtedness (other than
Indebtedness Incurred pursuant to the revolving loan portion of a Permitted
Credit Facility) and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased.
59
Notwithstanding the foregoing provisions of this Section 4.06,
the Company and the Restricted Group Members will not be required to apply any
Net Available Cash in accordance with this Section 4.06 except to the extent
that the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this Section 4.06 exceeds $5.0 million. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Permitted Investments.
For the purposes of this Section 4.06, the following are
deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company or any
Restricted Group Member and the release of the Company or such
Restricted Group Member from all liability on such Indebtedness in
connection with such Asset Disposition; and
(2) securities received by the Company or any Restricted Group
Member from the transferee that are promptly converted by the Company
or such Restricted Group Member into cash or cash equivalents.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Indebtedness) pursuant to Section
4.06(a)(3)(C), the Company shall purchase Securities tendered pursuant to an
offer by the Company for the Securities (and such other Senior Indebtedness)
(the "Offer") at a purchase price of 100% of their principal amount (or, if
other than the Securities, 100% of their principal amount or, in the event such
other Senior Indebtedness was issued with significant original issue discount,
100% of the accreted value thereof), without premium, plus accrued but unpaid
interest (or, in respect of such other Senior Indebtedness, such lesser price,
if any, as may be provided for by the terms of such Senior Indebtedness) in
accordance with the procedures (including prorationing in the event of
oversubscription) set forth in Section 4.06(c). If the aggregate purchase price
of Securities (and any other Senior Indebtedness) tendered pursuant to the Offer
exceeds the Net Available Cash allotted to their purchase, the Company shall
select the Securities and other Senior Indebtedness to be purchased on a pro
rata basis but in round denominations, which in the case of the Securities will
be denominations of Euro 1,000 principal amount or multiples thereof. The
Company shall not be required to make an Offer to purchase Securities (and other
Senior Indebtedness) pursuant to this Section 4.06 if the Net Available Cash
available therefor is less than
60
$10.0 million (which lesser amount shall be carried forward for purposes of
determining whether such an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition). Upon completion of an Offer, the
amount of Net Available Cash that served as the basis for such Offer will be
reset at zero for purposes of Section 4.06(a).
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, and, so long as the
Securities are listed on the Luxembourg Stock Exchange, publish in a Luxembourg
newspaper of general circulation, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in part
(subject to prorating as described in Section 4.06(b) in the event the Offer is
oversubscribed) in integral multiples of Euro 1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain such information concerning the business of the Company
which the Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial statements)
of the Company, the most recent subsequently filed Quarterly Report on Form 10-Q
and any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding successor
reports), (B) a description of material developments in the Company's business,
if any, subsequent to the date of the latest of such Reports, and (C) if
material, appropriate pro forma financial information) and all instructions and
materials necessary to tender Securities pursuant to the Offer, together with
the information contained in clause (3).
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided below, the Company shall deliver
to the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
"Offer Amount"), including information as to any other Senior Indebtedness
included in the Offer, (B) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.06(a) and (b). On
such date, the Company shall also irrevocably
61
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust) in Temporary Cash
Investments, maturing on the last day prior to the Purchase Date or on the
Purchase Date if funds are immediately available by open of business, an amount
equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. If the Offer includes other Senior Indebtedness, the
deposit described in the preceding sentence may be made with any other paying
agent pursuant to arrangements satisfactory to the Trustee. Upon the expiration
of the period for which the Offer remains open (the "Offer Period"), the Company
shall deliver to the Trustee for cancellation the Securities or portions thereof
which have been properly tendered to and are to be accepted by the Company. The
Trustee shall, on the Purchase Date, mail or deliver payment (or cause the
delivery of payment) to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Securities
delivered by the Company to the Trustee is less than the Offer Amount applicable
to the Securities, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
62
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The
Company will not, and will not permit any Restricted Group Member to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company or such Restricted Group Member than those
that could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction or series of related
Affiliate Transactions involves an amount in excess of $12.5 million,
the terms of the Affiliate Transaction are set forth in writing and
either (A) a committee of the Board of Directors a majority of whose
members are disinterested with respect to such transaction or (B) a
majority of the non-employee directors of the Company disinterested
with respect to such Affiliate Transaction have determined in good
faith that the criteria set forth in clause (1) are satisfied and that
the relevant Affiliate Transaction is in the best interest of the
Company or such Restricted Group Member and have approved the relevant
Affiliate Transaction as evidenced by a Board Resolution; and
(3) if such Affiliate Transaction or series of related
Affiliate Transactions involves an amount in excess of $25.0 million,
the Board of Directors shall also have received a written opinion from
an investment banking firm, accounting firm or appraisal firm of
national prominence that is not an Affiliate of the Company to the
effect that such Affiliate Transaction
63
is fair, from a financial standpoint, to the Company and its Restricted
Group Members.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) any Investment (other than a Permitted Investment) or
other Restricted Payment, in each case permitted to be made pursuant to
Section 4.04;
(2) the entering into, maintaining or performance of any
employment contract, collective bargaining agreement, benefit plan,
program or arrangement, related trust agreement or any other similar
arrangement for or with any employee, officer or director heretofore or
hereafter entered into in the ordinary course of business, including
vacation, health, insurance, deferred compensation, retirement, savings
or other similar plans;
(3) the payment of compensation, performance of
indemnification or contribution obligations, or an issuance, grant or
award of stock, options, or other equity-related interests or other
securities, to employees, officers or directors in the ordinary course
of business;
(4) the payment of reasonable fees to directors of the Company
and its Restricted Group Members who are not employees of the Company
or its Restricted Group Members;
(5) any transaction with a Restricted Group Member or joint
venture or similar entity that would constitute an Affiliate
Transaction solely because the Company or a Restricted Group Member
owns an equity interest in or otherwise controls such Restricted Group
Member, joint venture or similar entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company; and
(7) transactions with respect to the provision of
Telecommunications Business services, including wireline or wireless
transmission capacity, the lease or sharing or other use of cable or
fiber optic lines, equipment, rights-of-way or other access rights
between the Company or any Restricted Group Member and any other
Person; provided, however, that, in the case of this clause (7), such
transaction complies with
64
Section 4.07(a)(1) and is in the best interest of the Company or such
Restricted Group Member.
SECTION 4.08. Limitation on the Sale or Issuance of Capital
Stock of Restricted Group Members. The Company
(i) will not and will not permit any Restricted Group Member
to issue, transfer, convey, sell or otherwise dispose of any Capital Stock of
any Restricted Group Member other than to the Company or a Restricted Group
Member and
(ii) will not permit any Person other than the Company or a
Restricted Group Member to own any Capital Stock of any Restricted Group Member,
other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Group Member
except, in each case, for:
(a) a sale, transfer, conveyance or other disposition by the
Company or a Restricted Group Member of 100% of the Capital Stock of a
Restricted Group Member sold in a transaction not prohibited by Section
4.06;
(b) an issuance, sale, transfer, conveyance or other
disposition of the Capital Stock of a Restricted Group Member sold in a
transaction not prohibited by Section 4.06 if, after giving effect
thereto, such Restricted Group Member remains a Restricted Group Member
and the Net Cash Proceeds of such issuance (other than an issuance by a
Permitted International Joint Venture), sale, transfer, conveyance or
other disposition are applied in accordance with Section 4.06;
(c) an issuance, sale, transfer, conveyance or other
disposition of Capital Stock of a Restricted Group Member such that,
(1) immediately after giving effect thereto, such
Restricted Group Member would no longer constitute a
Restricted Group Member,
(2) any remaining Investment in such Restricted Group
Member by the Company or any other Restricted Subsidiary would
have been permitted to be made at such time under Section 4.04
(and for purposes of Section 4.04,
65
such Investment will be deemed to have been made at such
time) and
(3) the Net Cash Proceeds of such issuance
(other than an issuance by a Permitted International Joint
Venture), sale, transfer, conveyance or other disposition are
applied in accordance with Section 4.06;
(d) Capital Stock of a Restricted Group Member issued and
outstanding on the Issue Date or the date of formation of such
Restricted Group Member and, in each case, held by Persons other than
the Company or any Restricted Group Member and any additional Capital
Stock (other than Disqualified Stock) issued as dividends or
distributions on such Capital Stock or pursuant to preemptive or
similar rights;
(e) Capital Stock of a Restricted Group Member issued and
outstanding prior to the time that such Person becomes a Restricted
Group Member; and
(f) any non-convertible Preferred Stock constituting
Indebtedness and permitted to be Incurred under Section 4.03.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
purchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.09(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") and, so long as the Securities are listed on the
Luxembourg Stock Exchange, publish a notice in a Luxembourg newspaper of general
circulation, stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record
66
on the relevant record date to receive interest on the relevant
interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the purchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
67
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.10. Limitation on Liens. The Company will not, and
will not permit any Restricted Group Member to, directly or indirectly, Incur or
suffer to exist or become effective any Lien (the "Initial Lien") of any nature
whatsoever on any of its property (including Capital Stock), whether owned at
the Issue Date or thereafter acquired, or upon any income or profits therefrom
(other than Permitted Liens) to secure any Indebtedness, without effectively
providing that the Securities shall be secured (1) equally and ratably with (or
prior to) the Indebtedness so secured for so long as such Indebtedness is so
secured or (2) in the event such Indebtedness constitutes Subordinated
Obligations, prior to such Indebtedness for so long as such Indebtedness is so
secured.
Any Lien created for the benefit of the Holders of the
Securities pursuant to this Section shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged upon the
release and discharge of the Initial Lien.
SECTION 4.11. Limitation on Sale/Leaseback Transactions. The
Company will not, and will not permit any Restricted Group Member to, directly
or indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale/Leaseback Transaction with respect to any property unless:
(1) the Company or such Restricted Group Member would be
entitled to (A) Incur Indebtedness in an amount equal to the
Attributable Debt with respect to such Sale/Leaseback Transaction
pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing
the Securities pursuant to Section 4.10;
(2) the net proceeds received by the Company or any Restricted
Group Member in connection with such Sale/Leaseback Transaction are at
least equal to the Fair Market Value of such property; and
68
(3) the Company applies the proceeds of such transaction in
compliance with Section 4.06.
SECTION 4.12. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.13. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a)
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities, this Indenture and the
Registration Rights Agreement;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by the Successor Company or such
Subsi-
69
diary at the time of such transaction), no Default shall have occurred
and be continuing;
(3) immediately after giving pro forma effect to such
transaction, the Consolidated Leverage Ratio of the Successor Company
shall be no worse than the Consolidated Leverage Ratio of the Company
determined immediately prior to such transaction;
(4) if, as a result of any such transaction, property or
assets of the Successor Company would become subject to a Lien subject
to Section 4.10, the Successor Company shall have secured the
Securities as required by said Section; and
(5) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
provided, however, that clauses (3) and (4) will not be applicable to (A) a
Restricted Subsidiary consolidating with, merging into or transferring all or
part of its properties and assets to the Company or (B) the Company merging with
an Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, but the predecessor Company in the
case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, and such default
continues for a period of 30 days;
70
(2) the Company (i) defaults in the payment of the principal
of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon declaration or otherwise, or
(ii) fails to redeem or purchase Securities when required pursuant to
this Indenture or the Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10 or 4.11 (other than a failure to
purchase Securities when required under Section 4.06 or 4.09) and such
failure continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in
clause (1), (2), (3) or (4) above) and such failure continues for 60
days after the notice specified below;
(6) Indebtedness of the Company or any Restricted Group Member
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $25.0
million, or its foreign currency equivalent at the time;
(7) the Company or any Significant Restricted Group Member
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign
laws relating to insolvency;
71
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Restricted Group Member in an
involuntary case;
(B) appoints a Custodian of the Company or
any Significant Restricted Group Member or for any
substantial part of its property; or
(C) orders the winding up or liquidation of
the Company or any Significant Restricted Group
Member;
or any similar relief is granted under any foreign laws
and the order or decree remains unstayed and in effect
for 60 days; or
(9) any judgment or decree for the payment of money in excess
of $25.0 million or its foreign currency equivalent at the time is
entered against the Company or any Restricted Group Member, remains
outstanding for a period of 60 consecutive days following the entry of
such judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
72
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and
73
its consequences except (i) a Default in the payment of the principal of or
interest on a Security (ii) a Default arising from the failure to redeem or
purchase any Security when required pursuant to this Indenture or (iii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction
74
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
75
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this
76
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
77
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal
78
with the Company or its Affiliates with the same rights it would have if it were
not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of- pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
79
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the
80
Securities and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities
81
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (1) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
82
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation
of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Restricted Group
Members) and the limitations contained in Sections 5.01(a)(3) and (4) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Restricted Group Members) or because of the failure of the Company to comply
with Section 5.01(a)(3) or (4).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money, U.S. Government Obligations or European Governmental Obligations
for the payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
83
without reinvestment on the deposited U.S. Government Obligations or
European Governmental Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will
be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance
84
and discharge of the Securities as contemplated by this Article 8 have
been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
For purposes of this Section, money denominated in currency
other than Euro and U.S. Government Obligations deposited pursuant to this
paragraph shall be subject in their entirety (including principal, interest and
premium, if any) to a customary currency agreement that is of a duration not
less than the defeasance period that fixes the exchange rate of such money or
U.S. Government Obligations into Euro for the benefit of the Trustee. The amount
of such money and U.S. Government Obligations expressed in Euro will be as
provided in such currency agreement. The counterparty to such currency agreement
shall be a commercial bank organized in the United States having capital and
surplus in excess of $500.0 million or a commercial bank organized under the
laws of any country that is a member of the OECD having total assets in excess
of $500.0 million (or its foreign currency equivalent at the time). Such
counterparty may obtain from the Company an Opinion of Counsel to the effect
that such currency agreement has been duly authorized and entered into by the
Company.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money, European Governmental Obligations or U.S. Government
Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from European Governmental Obligations or U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
85
SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited European Governmental
Obligations or U.S. Government Obligations or the principal and interest
received on such European Governmental Obligations or U.S. Government
Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money, European Governmental Obligations or U.S. Government
Obligations in accordance with this Article 8 by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply all such money,
European Governmental Obligations or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money,
European Governmental Obligations or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
86
(4) to add guarantees with respect to the Securities or to
secure the Securities;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(6) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(7) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders; or
87
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
88
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
89
SECTION 10.02. Notices. Any notice or communication shall be
in writing and delivered in person, mailed by first-class mail or transmitted by
facsimile (with written confirmation of receipt) addressed as follows:
if to the Company:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-584-4001
Attention of General Counsel
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: 000-000-0000
Attention of Corporate Trust Division
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by
90
the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 10.07. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to be
open in the State of New York, a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer (TARGET) system is not open or, so
long as the Securities are listed on the Luxembourg Stock
91
Exchange, the City of Luxembourg. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 10.08. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 10.09. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 10.10. Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 10.11. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.12. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
92
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
WINSTAR COMMUNICATIONS, INC.,
by /s/ Xxxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President, Treasurer
UNITED STATES TRUST COMPANY
OF NEW YORK,
by /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall
have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary or Permanent Regulation S Global Security, a
Rule 144A Global Security or beneficial interest therein, the rules and
procedures of the Depository for such Global Security, Euroclear and
Clearstream, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme.
"Depository" means Clearstream, Euroclear, their respective
nominees and their respective successors.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York
(Brussels office) as operator of the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Securities" means (1) the 12-3/4% Senior Notes Due
2010 issued pursuant to the Indenture in connection with a Registered Exchange
Offer pursuant to a Registration Rights Agreement and (2) Additional Securities,
if any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Global Securities Legend" means the legend set forth under
that caption in Exhibit 1 to this Indenture.
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, the entities identified as Purchasers in
the Purchase Agreement, and (2) with respect to each issuance of Additional
Securities, the Persons purchasing such Additional Securities under the related
Purchase Agreement.
"Initial Securities" means (1) Euro 200,000,000 aggregate
principal amount of 12-3/4% Senior Notes Due 2010 issued on the Issue Date and
(2) Additional Securities, if
2
any, issued in a transaction exempt from the registration requirements of the
Securities Act.
"Private Exchange" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 12-3/4% Senior Notes
Due 2010 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated March 27, 2000
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or under writing
agreement among the Company and the Persons purchasing such Additional
Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated April 10, 2000, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Regulation S" means Regulation S under the Securities Act, as
amended.
"Regulation S Securities" means all Initial Securities offered
and sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means
the period of 40 consecutive days
3
beginning on and including the later of (i) the day on which such Securities are
first offered to persons other than distributors (as defined in Regulation S
under the Securities Act) in reliance on Regulation S and (ii) the Issue Date
with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in
Section 2.3(c) herein.
"Rule 144A" means Rule 144A under the Securities Act, as
amended.
"Rule 144A Securities" means all Initial Securities offered
and sold to QIBs in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means, with respect to the Securities
issued as Global Securities, the person designated as the common depository by
Euroclear or Clearstream or their respective successors, which shall initially
be Citibank, N.A.
"Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(c) hereto.
1.2 Other Definitions
Defined in
Term Section:
---- -------
"Agent Members".................................................2.1(b)
"Global Security"...............................................2.1(a)
"Permanent Regulation S Global Security"........................2.3(b)
"Regulation S Global Securities"................................2.1(a)
"Rule 144A Global Security".....................................2.1(a)
"Temporary Regulation S Global Security"........................2.1(a)
4
2. The Securities.
2.1 Form and Dating. The Initial Securities issued on the date hereof
shall be (i) offered and sold by the Company pursuant to the Purchase Agreement
and (ii) resold, initially only to (A) QIBs in reliance on Rule 144A and (B)
Persons other than U.S. Persons (as defined in Regulation S) in reliance on
Regulation S. Such Initial Securities may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S.
(a) Global Securities. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
temporary global Securities (collectively, the "Temporary Regulation S Global
Security"), in each case without interest coupons and bearing the Global
Securities Legend and Restricted Securities Legend, which shall be deposited on
behalf of the purchasers of the Securities represented thereby with the
Securities Custodian, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the Trustee
as provided in the Indenture. Except as set forth in Section 2.3, beneficial
ownership interests in the Temporary Regulation S Global Security shall not be
exchangeable for interests in the Rule 144A Global Security or a Permanent
Regulation S Global Security (as defined below) or any other Security without a
Restricted Securities Legend until the expiration of the Restricted Period. Upon
the expiration of the Restricted Period, beneficial interests in the Securities
represented by the Temporary Regulation S Global Security may be exchanged for
interests in the Permanent Regulation S Global Security as described below in
Section 2.3(b). The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are each referred to
herein as a "Global Security" and are collectively referred to herein as "Global
Securities." The Temporary Regulation S Global Security and the Permanent
Regulation S Global Security are referred to herein as "Regulation S Global
Securities." The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
5
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, the Securities Custodian or by
the Trustee as the custodian of the Depository or under such Global Security,
and the Company, the Trustee and any agent of the Company or the Trustee shall
be entitled to treat the Depository as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on
the Issue Date, an aggregate principal amount of Euro 200,000,000 12-3/4% Senior
Notes Due 2010, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant
6
to Section 2.13 of the Indenture, shall certify that such issuance is in
compliance with Sections 2.13 and 4.03 of the Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in accordance with
the Depository's procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with such instructions
instruct the Depository to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial interest in the Global
Security being transferred. Transfers by an owner of a beneficial interest in
the Rule 144A Global Security to a transferee who takes delivery of such
interest through the Regulation S Global Security, whether before or after the
expiration of the Restricted Period, will be made only upon receipt by the
Trustee of a certification from the transferor to the effect that such transfer
is being made in accordance with Regulation S or (if available) Rule 144 under
the Securities Act and that, if such transfer is being made prior to the
expiration of the Restricted Period, the interest transferred will be held
immediately thereafter through Euroclear or Clearstream.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such interest
is being transferred in an amount equal to the principal amount of the interest
to be so transferred, and the Registrar shall reflect on its books and records
the date and a corresponding decrease in the principal amount of the Global
Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security may not
be transferred as a whole except by the Depository to a nominee of the
7
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Restricted Global Security is
exchanged for Securities in certificated registered form pursuant to Section 2.4
of this Appendix, prior to the consummation of a Registered Exchange Offer or
the effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this Section
2.3 (including the certification requirements set forth on the reverse of the
Initial Securities intended to ensure that such transfers comply with Rule 144A
or Regulation S, as the case may be) and such other procedures as may from time
to time be adopted by the Company.
(b) Restrictions on Transfer of Temporary Regulation S Global
Security. (i) Prior to the expiration of the Restricted Period, interests in the
Temporary Regulation S Global Security may only be held through Euroclear or
Clearstream. During the Restricted Period, beneficial ownership interests in the
Temporary Regulation S Global Security may only be sold, pledged or transferred
through Euroclear or Clearstream in accordance with the Applicable Procedures
and only (A) to the Company, (B) inside the United States to a person whom the
seller reasonably believes is a Qualified Institutional Buyer (as defined in
Rule 144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A, (C) outside the United States in an offshore transaction in
accordance with Rule 904 under the Securities Act, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 (if available),
or (E) pursuant to an effective registration statement under the Securities Act,
in each of cases (A) through (E) in accordance with any applicable securities
laws of any state of the United States.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Temporary Regulation S Global Security may be
exchanged for interests in a permanent global security in definitive, fully
registered form without the Restricted Security Legend (the "Permanent
Regulation S Global Security") upon certification to the Trustee that such
interests are owned either by non-U.S. persons or U.S. persons who purchased
such interests pursuant to an exemption from, or transfer not subject to, the
registration requirements of the Securities
8
Act. On or prior to the expiration of the Restricted Period, each Holder of a
Temporary Regulation S Global Security shall deliver to Euroclear or Clearstream
(as applicable) a Regulation S Certificate in the form of Exhibit B-1 attached
hereto; provided, however, that any Holder of a Temporary Regulation S Global
Security upon expiration of the Restricted Period or on any payment date that
has previously delivered a Regulation S Certificate hereunder shall not be
required to deliver any subsequent Regulation S Certificate (unless the
certificate previously delivered is no longer true as of such subsequent date,
in which case such beneficial owner shall promptly notify Euroclear and
Clearstream, as applicable, thereof and shall deliver to the Paying Agent or the
Trustee an updated Regulation S Certificate). Euroclear or Clearstream, as
applicable, shall deliver to the Paying Agent or the Trustee a certificate (a
"Non-U.S. Certificate") substantially in the form of Exhibit B-2 attached hereto
promptly upon the receipt of each such Regulation S Certificate, and no such
Holder (or transferee from such Holder) shall be entitled to receive an interest
in a Permanent Regulation S Global Security or any payment of distributions or a
redemption payment, if applicable, or any other payment with respect to its
beneficial interest in a Temporary Regulation S Global Security prior to the
Paying Agent or the Trustee receiving such Non-U.S. Certificate from Euroclear
or Clearstream with respect to the portion of the Temporary Regulation S Global
Security owned by such Holder (and, with respect to an interest in the Permanent
Regulation S Global Security, prior to the expiration of the Restricted Period).
The Permanent Regulation S Global Security shall bear a legend
in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
(iii) Any payments of distributions or a redemption price, if
applicable, or any other payment on a Temporary Regulation S Global Security
received by Euroclear or Clearstream with respect to any portion of such
Regulation S Global Security owned by a Holder that has not delivered the
Regulation S Certificate required by Section
9
2.3(b) shall be held by Euroclear and Clearstream solely as agents for the
Paying Agent and the Trustee. Euroclear and Clearstream shall remit such
payments to the applicable Holder (or to a Euroclear or Clearstream member on
behalf of such Holder) only after Euroclear or Clearstream has received the
requisite Regulation S Certificate. Until the Paying Agent or the Trustee has
received a Non-U.S. Certificate from Euroclear or Clearstream, as applicable,
that it has received the requisite Regulation S Certificate with respect to the
beneficial ownership of any portion of a Temporary Regulation S Global Security,
the Paying Agent or the Trustee may revoke the right of Euroclear or
Clearstream, as applicable, to hold any payments made with respect to such
portion of such Regulation S Global Security. If the Paying Agent or the Trustee
exercises its right of revocation pursuant to the immediately preceding
sentence, Euroclear or Clearstream, as applicable, shall return such payments to
the Paying Agent or the Trustee and the Paying Agent or the Trustee, as
applicable, shall hold such payments until Euroclear or Clearstream, as
applicable, has provided the necessary Non-U.S. Certificates to the Paying Agent
or the Trustee (at which time the Paying Agent shall forward such payments to
Euroclear or Clearstream, as applicable, to be remitted to the beneficial owner
that is entitled thereto on the records of Euroclear or Clearstream (or on the
records of their respective members)).
(iv) Upon the expiration of the Restricted Period, the Issuer
shall prepare and execute the Permanent Regulation S Global Security in
accordance with the terms of this Indenture and deliver it to the Trustee for
authentication. The Trustee shall deliver the Permanent Regulation S Global
Security to the Securities Custodian. Any transfers of beneficial ownership
interests in the Temporary Regulation S Global Security made in reliance on
Regulation S shall thenceforth be recorded by the Depository or the Securities
Custodian by making an appropriate increase in the principal amount of the
Permanent Regulation S Global Security and a corresponding decrease in the
principal amount of the Temporary Regulation S Global Security. At such time as
the principal amount of the Temporary Regulation S Global Security has been
reduced to zero, the Depository or the Securities Custodian shall return the
Temporary Regulation S Global Security to the Trustee, who shall cancel the
Temporary Regulation S Global Security and deliver it to the Issuer.
(c) Legend. (i) Except as permitted by the following
paragraphs (ii), (iii) and (iv), and except for the permanent Regulation S
Global Security as provided above, each Security certificate evidencing the
Restricted
10
Global Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Restricted
Global Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the transferee thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer Restricted
Security, if the transferor thereof certifies in writing to the Registrar that
such sale or transfer was made in reliance on Rule 144 (such certification to be
in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the effectiveness of a
Shelf Registration
11
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on such
Initial Security or such Private Exchange Security will cease to apply, the
requirements requiring any such Initial Security or such Private Exchange
Security issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an Initial
Security or Private Exchange Security in global form, in each case without
restrictive transfer legends, will be available to the transferee of the Holder
of such Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange Security
or directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will still apply with respect to Holders of such Initial Securities that do
not exchange their Initial Securities, and Exchange Securities in certificated
or global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will still apply with respect to Holders of such Initial Securities that do
not exchange their Initial Securities, and Private Exchange Securities in global
form with the global securities legend and the Restricted Securities Legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, purchased or canceled, such Global
Security shall be returned to the Trustee for cancellation or retained and
canceled by the Depository or the Securities Custodian. At any time prior to
such cancellation, if any beneficial interest in a Global Security is exchanged
for certificated Securities, redeemed, purchased or canceled, the principal
amount of Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Depository with respect
12
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities. (i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections 3.06,
4.06, 4.09 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registra tion of
transfer of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of the Indenture shall evidence the same debt and shall be
entitled to the same benefits under the Indenture as the Securities surrendered
upon such transfer or exchange.
(e) No Obligation of the Trustee. (i) The Trustee shall have
no responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
13
beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Securities shall be
given or made only to or upon the order of the registered Holders (which shall
be the Depository or its nominee in the case of a Global Security). The rights
of beneficial owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of the Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
2.4 Certificated Securities.
(a) A Restricted Global Security deposited with the
Depository, with the Trustee as custodian for the Depository or with the
Securitites Custodian pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of certificated Securities in an aggregate
principal amount equal to the principal amount of such Global Security, in
exchange for such Global Security, only if such transfer complies with Section
2.3 and (i) the Depository notifies the Company that it is unwilling or unable
to continue as Depository for such Restricted Global Security or if at any time
such Depository ceases to be a "clearing agency" registered under the Exchange
Act and a successor depositary is not appointed by the Company within 90 days of
such notice, (ii) an Event of Default has occurred and is continuing or (iii)
the Company, in its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of certificated Securities under the Indenture.
(b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to
14
this Section shall be surrendered by the Depository to the Trustee located at
its principal corporate trust office in the Borough of Manhattan, The City of
New York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Restricted Global Security, an equal aggregate principal
amount of certificated Initial Securities of authorized denominations. Any
portion of a Restricted Global Security transferred pursuant to this Section
shall be executed, authenticated and delivered only in denominations of Euro
1,000 principal amount and any integral multiple thereof and registered in such
names as the Depository shall direct. Any certificated Initial Security or
Private Exchange Security delivered in exchange for an interest in the
Restricted Global Security shall, except as otherwise provided by Section
2.3(c), bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under the Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company shall promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE EUROCLEAR CLEARANCE SYSTEM ("EUROCLEAR") OR CLEARSTREAM
BANKING, SOCIETE ANONYME ("CLEARSTREAM"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF CITIVIC NOMINEES LIMITED OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CLEARSTREAM OR EUROCLEAR, AS THE
CASE MAY BE (AND ANY PAYMENT IS MADE TO CITIVIC NOMINEES LIMITED, OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CLEARSTREAM OR
EUROCLEAR, AS THE CASE MAY BE), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CITIVIC NOMINEES LIMITED, HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CLEARSTREAM OR EUROCLEAR, AS
THE CASE MAY BE, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE
2
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
No. Euro
------------- -------------
CUSIP No.:
ISIN No.:
Common Code No.:
12-3/4% Senior Notes Due 2010
Winstar Communications, Inc., a Delaware corporation, promises
to pay to , or registered assigns, the principal sum of ________
Euro on April 15, 2010.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
WINSTAR COMMUNICATIONS, INC.,
by
--------------------
Name:
Title:
by
--------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12-3/4% Senior Notes Due 2010
1. Interest
Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on April 15 and October 15 of each year,
commencing October 15, 2000. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from April 10, 2000. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company will pay interest on overdue principal
at 1% per annum in excess of the above rate and will pay interest on overdue
installments of interest at such higher rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in Euro or any successor money of the European Union that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by the
2
Depository. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on a
certificated Security will be made by wire transfer to a Euro account maintained
by the payee with a bank in a member state of the European Union if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, (a) United States Trust Company of New York, a New
York corporation (the "Trustee"), will act as Trustee; (b) Citibank N.A. will
act as Paying Agent and Registrar; and (c) Banque Internationale A Luxembourg
will act as Luxembourg Paying Agent. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of April 10, 2000 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities up to a specified amount
pursuant to Section 2.13 of the Indenture. The Initial Securities issued on the
Issue Date, any Additional Securities and all Exchange Securities or Private
Exchange Securities issued in exchange therefor will be treated as a single
class for all purposes under the Indenture. The Indenture contains
3
covenants that limit the ability of the Company and its Restricted Group Members
to incur additional indebtedness; pay dividends or distributions on, or redeem
or repurchase capital stock; make investments; issue or sell capital stock of
Restricted Group Members; engage in transactions with affiliates; create liens
on assets; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of Restricted Group Members; consolidate, merge or transfer
all or substantially all of its assets and the assets of its subsidiaries; and
engage in sale/leaseback transactions. These covenants are subject to important
exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled
to redeem the Securities at its option prior to April 15, 2005.
On and after April 15, 2005, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on April 15 of the
years set forth below:
Redemption
Period Price
------ ----------
2005 106.375%
2006 104.250
2007 102.125
2008 and thereafter 100.000%
In addition, prior to April 15, 2003, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 112.750%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or
more Public Equity Offerings; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains
4
outstanding immediately after the occurrence of each such redemption (other than
Securities held, directly or indirectly, by the Company or its Affiliates); and
(2) each such redemption occurs within 90 days after the closing date of the
related Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his regi stered address. Securities in denominations larger than
Euro 1,000 principal amount may be redeemed in part but only in whole multiples
of Euro 1,000. If money sufficient to pay the redemption price of and accrued
interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of Euro 1,000 principal amount and whole multiples of Euro 1,000.
A Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of
5
Securities to be redeemed or 15 days before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money, European
Governmental Obligations or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity, as the case
may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the
6
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of money in excess of $25.0 million. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
14. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may other-
7
wise deal with the Company or its Affiliates with the same rights it would have
if it were not Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent) manually signs the
certificate of authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
18. CUSIP, ISIN and Common Code Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. To the
extent such numbers have been issued, the Company has caused ISIN and Common
Code numbers to be similarly printed on the Securities and has similarly
instructed the Trustee. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
8
19. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written
request and without charge to the Security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security 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 other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to the Company; or
(2) |_| pursuant to an effective registration statement under
the Securities Act of 1933;
or
(3) |_| inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to
2
whom notice is given that such transfer is being made
in reliance on Rule 144A, in each case pursuant to
and in compliance with Rule 144A under the Securities
Act of 1933; or
(4) |_| outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act of 1933 in compliance with Rule 904
under the Securities Act of 1933; or
(5) |_| pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) or (5) is checked, the Trustee shall be entitled to
require, prior to registering any such transfer of the Securities, such
legal opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
---------------------------- -----------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
---------------- ------------------------------------
NOTICE: To be executed by
an executive officer
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security outside the United States as a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act and is aware that the sale to
it is being made in reliance on Regulation S and acknowledges that a holder of
an interest in a temporary Regulation S global security may not (i) receive the
payment of any distributions, redemption price or any other payments with
respect to the holder's beneficial interest in the temporary global security or
(ii) receive an interest in a permanent Regulation S global security until (A)
expiration of the 40th day after the later of the commencement of the offering
of the Securities and the closing date and (B) certification that the beneficial
owner of the interest in the Security is a non-U.S. person.
Dated:
---------------- ------------------------------------
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount Signature of
Exchange in Principal in Principal of this Global authorized officer
amount of this amount of this Security following of Trustee or
Global Security Global Security such decrease or Securities
increase) Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount in principal amount: Euro
----------
Date: Your Signature:
-------------------- ---------------------------------
(Sign exactly as your name
appears on the other side of this
Security.)
Signature Guarantee:
------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
*/**/
- --
-------------------
*/[If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
**/[If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]
No. Euro
------------- -------------
CUSIP No.:
ISIN No.:
Common Code No.:
12-3/4% Senior Notes Due 2010
Winstar Communications, Inc., a Delaware corporation,
promises to pay to , or registered assigns, the principal sum of
________ Euro on April 15, 2010.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
WINSTAR COMMUNICATIONS, INC.,
by
-----------------------
Name:
Title:
by
-----------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF [EXCHANGE SECURITY
OR PRIVATE EXCHANGE] SECURITY
12-3/4% Senior Notes Due 2010
1. Interest
Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually on April 15 and October 15 of each year,
commencing October 15, 2000. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from April 10, 2000. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company will pay interest on overdue principal
at 1% per annum in excess of the above rate and will pay interest on overdue
installments of interest at such higher rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in Euro or any successor money of the European Union that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by the Depository. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a Euro account maintained by the payee with a bank in a member state of the
European Union if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately
2
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, (a) United States Trust Company of New York, a New
York corporation (the "Trustee"), will act as Trustee; (b) Citibank N.A. will
act as Paying Agent and Registrar; and (c) Banque Internationale A Luxembourg
will act as Luxembourg Paying Agent. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of April 10, 2000 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities up to a specified amount
pursuant to Section 2.13 of the Indenture. The Initial Securities issued on the
Issue Date, any Additional Securities and all Exchange Securities or Private
Exchange Securities issued in exchange therefor will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its Restricted Group Members to incur
additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
Restricted Group Members; engage in transactions with affiliates; create liens
on assets; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of Restricted Group Members; consolidate, merge or transfer
all or substantially all of its assets and the assets of its Restricted Group
Members; and engage in sale/leaseback transactions. These covenants are subject
to important exceptions and qualifications.
3
5. Optional Redemption
Except as set forth below, the Company shall not be entitled
to redeem the Securities at its option prior to April 15, 2005.
On and after April 15, 2005, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount, on the redemption date) plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on April 15 of the
years set forth below:
Redemption
Period Price
------ ----------
2005 106.375%
2006 104.250
2007 102.125
2008 and thereafter 100.000%
In addition, prior to April 15, 2003, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 112.750%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or
more Public Equity Offerings; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 90 days after the
closing date of the related Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than Euro
1,000 principal amount may be redeemed in part but only in whole multiples of
Euro 1,000. If money sufficient to pay the redemption price of and accrued
interest on all Securities (or portions thereof) to
4
be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of Euro 1,000 principal amount and whole multiples of Euro 1,000.
A Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
5
11. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money, European
Governmental Obligations or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity, as the case
may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of money in excess of $25.0 million. If an Event of Default occurs
6
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
14. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
7
17. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
18. CUSIP, ISIN and Common Code Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. To the
extent such numbers have been issued, the Company has caused ISIN and Common
Code numbers to be similarly printed on the Securities and has similarly
instructed the Trustee. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
19. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security 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 other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount in principal amount: Euro __________
Date: Your Signature:
----------------------- --------------------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
--------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
2
EXHIBIT B-1
Form of Certification to be Given by Holder of Beneficial
Interest in a Temporary Regulation S Global Security
Re: WINSTAR COMMUNICATIONS, INC.
(the "Company") 12-3/4% Senior Subordinated
Notes due 2010 (the "Notes")
[Xxxxxx Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System][Clearstream Banking, societe anonymne]
Securities, [CUSIP No. ][ISIN No. ]
Reference if hereby made to the Indenture dated as of April
10, 2000 (the "Indenture") between the Company and United States Trust Company
of New York, as Trustee. Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Indenture.
[For purposes of acquiring a beneficial interest in the
Permanent Regulation S Global Security upon the expiration of the Restricted
period,][For purposes of receiving payments under the Temporary Regulation S
Global Security,] the undersigned Holder of a beneficial interest in the
Temporary Regulation S Global Security issued under the Indenture certifies that
it is [not a U.S. Person as defined by Regulation S under][a U.S. Person who
purchased the beneficial interest in the Security pursuant to an exemption from,
or transfer not subject to,] the Securities Act of 1933, as amended.
We undertake to advise you promptly by telex on or prior to
the date on which you intend to submit your corresponding certification relating
to the Securities held by you if any applicable statement herein is not correct
on such date, and in the absence of any such notification it may be assumed that
this certificate applies as of such date.
We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocable authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
for the benefit of the Initial Purchasers.
3
Date:
By:
---------------------
as, or as agent for, the
Holder of a beneficial
interest in the Securities
to which this certificate
relates
4
EXHIBIT B-2
Form of Euroclear and Clearstream Certificate
Re: WINSTAR COMMUNICATIONS, INC.
(the "Company") 12-3/4% Senior Subordinated
Notes due 2010 (the "Notes")
, as
Paying Agent
[address of Paying Agent]
, as
Trustee
[address of Trustee]
This is to certify that, based solely on the certifications
we have received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount of the Securities set forth below (our "Member
Organizations") substantially to the effect set forth in the Indenture (the
"Indenture") dated as of April 10, 2000, between the Company and United States
Trust Company of New York, as Trustee, Euro principal amount
of the Securities held by us or our behalf are beneficially owned by non-U.S.
person(s). Capitalized terms used herein and not otherwise defined have the
meanings set forth in the Indenture. As used in this paragraph, the term "U.S.
person" has the meaning given to it by Regulation S under the United States
Securities Act of 1933, as amended.
We further certify that as of the date hereof we have not received
any notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any interest in the
Securities identified above are no longer true and cannot be relied upon as of
the date hereof.
[Upon expiration of Restricted Period: We hereby acknowledge that no
portion of the Temporary Regulation S Global Security shall be exchanged for an
interest in the Permanent Regulation S Global Security with respect to the
portion thereof for which we have not received the applicable certifications
from our Member Organizations.]
[On and upon any other payment under the
Temporary Regulation S Global Security: We hereby agree to hold
5
(and return to the [ ] upon request) any payments received by us on the
Temporary Regulation S Global Security with respect to the portion thereof for
which we have not received the applicable certificates from our Member
Organizations.]
We understand that this certification is required in connection with
certain securities laws of the United States of America. In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocable
authorized you to produce this certification to any interested party in such
proceedings.
Dated: (1)
[XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, Brussels office, as
operator of the Euroclear System
or
CLEARSTREAM BANKING, societe anonyme]
By:
-----------------------------
Name:
Title:
-------------------
1. Insert dated of expiration of Restricted Period or
payment date, as the case may be.
