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EXHIBIT 4.1
EXECUTION COPY
CAPROCK COMMUNICATIONS CORP.,
AS ISSUER
AND
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION,
AS SUCCESSOR TRUSTEE
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FIRST SUPPLEMENTAL INDENTURE
DATED AS OF NOVEMBER 1, 2000
TO INDENTURE
DATED AS OF JULY 16, 1998,
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$150,000,000
12% SENIOR NOTES DUE 2008
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FIRST SUPPLEMENTAL INDENTURE, dated as of November 1, 2000, by and between
CAPROCK COMMUNICATIONS CORP., a Texas corporation, (the "Issuer"), and CHASE
MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, as successor Trustee, (the
"Trustee").
WITNESSETH
WHEREAS the Issuer has heretofore executed and delivered to the Trustee an
Indenture dated as of July 16, 1998, (the "Indenture"), providing for the
issuance of an aggregate principal amount of up to $150,000,000 of 12% Senior
Notes due 2008 (the "Notes");
WHEREAS, the Issuer has commenced a solicitation of consents (the "Consent
Solicitation") from the Holders to certain amendments to the Indenture as set
forth in the Consent Solicitation Statement of the Issuer dated October 11,
2000, (the "Proposed Amendment");
WHEREAS, pursuant to the Consent Solicitation, the Holders of at least a
majority in aggregate principal amount of the Notes outstanding have consented
(the "Requisite Consents") to the amendments effected by this First Supplemental
Indenture in accordance with the provisions of the Indenture;
WHEREAS, this First Supplemental Indenture evidences the Proposed
Amendments described in the Consent Solicitation Statement;
WHEREAS, Section 9.02 of the Indenture provides, among other things, that
with the written consent of Holders holding not less than a majority of the
aggregate principal amount of the Notes then outstanding, the Issuer may from
time to time amend or supplement the Indenture, subject to certain exceptions
specified in Section 9.02 of the Indenture;
WHEREAS, on October 11, 2000, the Issuer mailed or otherwise delivered a
Consent Solicitation Statement to each Holder of record as of October 6, 2000,
and has obtained the Requisite Consents;
WHEREAS, this First Supplemental Indenture has been duly authorized by all
necessary corporate action on the part of the Issuer; and
WHEREAS, the Issuer has delivered, or caused to be delivered, to the
Trustee an Officers' Certificate and an Opinion of Counsel meeting the
requirements of Sections 1.04 and 10.09 of the Indenture and stating that all
conditions precedent (including any covenants compliance with which constitutes
a condition precedent), if any, provided for in the Indenture relating to this
First Supplemental Indenture have been satisfied.
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NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Issuer, and
the Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Notes as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. When used herein, the following terms will have
the respective meanings set forth below.
"Covenant Amendments" means the amendments to the Indenture listed in
Article III of this First Supplemental Indenture.
"McLeodUSA" means McLeodUSA Incorporated, a Delaware corporation.
"McLeodUSA Merger" means any merger of the Issuer with McLeodUSA or any
wholly-owned subsidiary of McLeodUSA pursuant to, or any other transaction
contemplated by, that certain Agreement and Plan of Merger dated as of October
2, 2000 by and among McLeodUSA, Cactus Acquisition Corp., a Delaware
corporation, and the Issuer, or any amendment thereto and any related
agreements.
"Merger Amendments" means the amendments to the Indenture listed in Article
II of this First Supplemental Indenture.
ARTICLE II
MERGER AMENDMENTS
SECTION 2.01. Effective Time of Merger Amendments. The Merger Amendments
shall become effective upon execution of this First Supplemental Indenture by
the Trustee and the Issuer.
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SECTION 2.02. Amendment and Restatement of the Definition of "Change of
Control". The definition of "Change of Control" in Section 1.01 of the Indenture
is hereby amended and restated in its entirety to read as set forth below:
" "Change of Control" shall be deemed to occur if, after the
Transaction occurs:
(i) the sale, conveyance, transfer or lease of all or substantially
all of the assets of the Issuer to any Person or "group" (as such term is
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, including any
group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than to one or more Permitted Holders and/or one or more Restricted
Subsidiaries, shall have occurred,
(ii) any Person or "group" (as such term is used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act), other than any Permitted Holder (or
group that includes a Permitted Holder), becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total
voting power of all classes of the Voting Stock of the Issuer (including
any warrants, options or rights to acquire such Voting Stock), calculated
on a fully diluted basis,
(iii) during any period of two consecutive years, individuals (OTHER
THAN THOSE APPOINTED BY MCLEODUSA) who at the beginning of such period
constituted the Board of Directors of the Issuer (together with any
directors whose election or appointment by the Board of Directors of the
Issuer or whose nomination for election by the stockholders of the Issuer
was approved by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of the Issuer then in
office or
(iv) EXCEPT FOR THE MCLEODUSA MERGER, the merger, amalgamation or
consolidation of the Issuer with or into another Person or the merger of
another Person with or into the Issuer shall have occurred, and the
securities of the Issuer that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Issuer are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such securities
are changed into or exchanged for, in addition to any other consideration,
securities of the surviving Person that represent, immediately after giving
effect to such transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving Person."
SECTION 2.03. Amendment and Restatement of the Definition of "Permitted
Holders". The definition of "Permitted Holders" in Section 1.01 of the Indenture
is hereby amended and restated in its entirety to read as set forth below:
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" "Permitted Holders" means MCLEODUSA, Xxxx X. Xxxxxxxx, Xx., Xxxx X.
Xxxxxxxx, Xx., Xxxx Xxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxxx and Xxxxxxxx X. Xxxxxxxx and any corporation, limited liability
company, partnership, joint venture or other entity controlled by any one
or more of them."
SECTION 2.04. Amendment and Restatement of Section 8.01. Section 8.01 of
the Indenture is hereby amended and restated in its entirety to read as set
forth below:
"Section 8.01. Issuer May Consolidate, etc., Only on Certain Terms.
The Issuer will not consolidate with, or merge with or into or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of
its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to any Person or permit
any Person to merge with or into the Issuer, other than in connection with
THE MCLEODUSA MERGER, the Transaction or the Special Partnership
Transactions (WHICH EVENTS ARE HEREBY EXPRESSLY PERMITTED), unless:
(a) the Issuer shall be the continuing Person, or the Person (if other
than the Issuer) formed by such consolidation or into which the Issuer is
merged or that acquired or leased such property and assets of the Issuer
shall be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof, and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee,
all of the obligations of the Issuer on all of the Notes and under the
Indenture;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Issuer, or any Person becoming the successor obligor of the
Notes, as the case may be, could Incur at least $1.00 of Indebtedness under
clause (i) of Section 10.11(a) hereof; provided, however, that this clause
(c) shall not apply to a consolidation or merger with or into a Wholly
Owned Restricted Subsidiary with a positive net worth, provided that in
connection with any such merger or consolidation, no consideration (except
Capital Stock (other than Redeemable Stock) in the surviving Person or the
Issuer (or a Person that owns directly or indirectly all of the Capital
Stock of the surviving Person or the Issuer immediately following such
transaction) or cash paid to satisfy dissenter or appraisal rights;
provided that such rights are exercised with respect to no more than 5% of
the outstanding Capital Stock of the Issuer or other Person) shall be
issued or distributed to the stockholders of the Issuer; and
(d) the Issuer delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clause (c) above) and an Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with; provided, however,
that clauses (b) and (c) above do not apply if, in the good faith
determination of the Board of Directors of the Issuer, whose determination
shall be evidenced by a Board
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Resolution, the principal purpose of such transaction is to change the
state of incorporation of the Issuer; and provided further that any such
transaction shall not have as one of its purposes the evasion of the
foregoing limitations."
ARTICLE III
COVENANT AMENDMENTS
SECTION 3.01. Deletion and Addition of Certain Definitions. Upon the
occurrence of (i) the execution of this First Supplemental Indenture by the
Trustee and the Issuer and (ii) the later of (a) the effective time of the
McLeodUSA Merger and (b) twenty (20) business days following commencement by
McLeodUSA of an exchange offer to acquire all of the outstanding Notes in
exchange for notes of McLeodUSA having the same interest rate, payment, maturity
and redemption terms as the Notes but otherwise having terms substantially
similar to the 8 1/8% Senior Notes due 2009 of McLeodUSA ("Covenant Amendment
Effective Time"), Sections 1.01 and 1.02 of the Indenture shall be amended by
deleting the definition of each term that is used in the Indenture only in the
Articles, Sections or Subsections thereof that are deleted pursuant to Section
3.02 hereof, and by adding the following to Section 1.01:
" "Covenant Amendment Effective Time" shall have the meaning set forth
in Section 3.01 of the First Supplemental Indenture."
SECTION 3.02. Deletion of Certain Sections. Upon the occurrence of the
Covenant Amendment Effective Time, the text of each of the following Articles,
Sections or Subsections of the Indenture shall be deleted in its entirety and
replaced, in each case, by the words "Intentionally Omitted":
Section 7.04. Reports by Issuer
Article 8 Consolidation, Merger, Sale of Assets, etc.
Section 10.04. Corporate Existence
Section 10.05. Payment of Taxes and Other Claims
Section 10.06. Maintenance of Properties
Section 10.07. Insurance
Section 10.10. Repurchase of Notes Upon a Change of Control
Section 10.11. Limitation on Indebtedness
Section 10.13. Limitation on Restricted Payments
Section 10.14. Limitation on Transactions with Stockholders and
Affiliates
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Section 10.15. Limitation on Asset Sales
Section 10.16. Limitation on Liens
Section 10.18. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries
Section 10.19. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries
Section 10.20. Limitation on Sale-Leaseback Transactions
Section 10.22. Commission Reports and Reports to Holders
Section 10.23. Limitation on Issuances of Guarantees by
Restricted Subsidiaries
SECTION 3.03. Amendment of Section 5.01(c). Section 5.01(c) is hereby
amended and restated in its entirety to read as set forth below:
"(c) the failure to make or consummate an Offer to Purchase in
accordance with Section 10.21."
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. Upon the execution and delivery of this
First Supplemental Indenture by the Issuer and the Trustee, this First
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every holder of Notes heretofore or hereafter authenticated and delivered shall
be bound hereby. Any and all references, whether within the Indenture or in any
notice, certificate or other instrument or document, shall be deemed to include
a reference to this First Supplemental Indenture (whether or not made), unless
the context shall otherwise require.
SECTION 4.02. Governing Law; Governance, Etc. THIS FIRST SUPPLEMENTAL
INDENTURE 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. This First Supplemental Indenture shall
be governed and construed in accordance with the applicable terms and provisions
of the Indenture as amended hereby, which terms and provisions are incorporated
herein by reference, as if this First Supplemental Indenture were the
"Indenture" referred to therein.
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SECTION 4.03. Trustee Makes No Representation. The recitals contained
herein shall be taken as the statements of the Issuer and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this First Supplemental Indenture.
SECTION 4.04. Counterparts. The parties may sign any number of copies of
this First Supplemental Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
SECTION 4.05. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction thereof.
SECTION 4.06. Terms. Certain capitalized terms used but not defined herein
have the meanings assigned to them in the Indenture.
SECTION 4.07. Entire Agreement. This First Supplemental Indenture, together
with the Indenture as amended hereby and the Notes, contains the entire
agreement of the parties, and supersedes all other representations, warranties,
agreements and understandings between the parties, oral or otherwise, with
respect to the matters contained herein and therein.
SECTION 4.08. Benefits of First Supplemental Indenture. Nothing in this
First Supplemental Indenture, the Indenture, or the Notes, express or implied,
shall give to any Person, other than the parties hereto and thereto and their
successors hereunder and thereunder, and the Holders, any benefit of any legal
or equitable right, remedy or claim under the Indenture, the First Supplemental
Indenture or the Notes.
SECTION 4.09. Notation on Notes. Pursuant to Section 9.06 of the Indenture,
new Notes reflecting the amendments to the Indenture made hereby shall not be
issued; however, corresponding changes to the Notes to reflect the amendments
made hereby shall be deemed to be made to the Notes as of the date of this First
Supplemental Indenture. The Trustee may, but shall not be required to, place an
appropriate notation as to this First Supplemental Indenture on any Note
hereafter authenticated in accordance with Section 9.06 of the Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first above written.
CAPROCK COMMUNICATIONS CORP.
By /s/ XXXX X. XXXXXXXX, XX.
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Name: Xxxx X. Xxxxxxxx, Xx.
Title: Chairman of the Board and
Chief Executive Officer
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION,
as Trustee
By /s/ XXXX X. XXXXXXXXX
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Name: Xxxx X. XxXxxxxxx
Title: Vice President
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