Exhibit 4.3
EXECUTION COPY
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FAIRPOINT COMMUNICATIONS, INC.
11 7/8% Senior Notes due 2010
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INDENTURE
Dated as of March 6, 2003
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THE BANK OF NEW YORK
Trustee
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01 Definitions................................................................................1
SECTION 1.02 Other Definitions.........................................................................23
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.........................................24
SECTION 1.04 Rules of Construction.....................................................................24
ARTICLE II
The Securities
SECTION 2.01 Amount of Securities......................................................................25
SECTION 2.02 Form and Dating...........................................................................25
SECTION 2.03 Execution and Authentication..............................................................26
SECTION 2.04 Registrar and Paying Agent................................................................26
SECTION 2.05 Paying Agent to Hold Money in Trust.......................................................27
SECTION 2.06 Securityholder Lists......................................................................27
SECTION 2.07 Replacement Securities....................................................................27
SECTION 2.08 Outstanding Securities....................................................................27
SECTION 2.09 Temporary Securities......................................................................28
SECTION 2.10 Cancellation..............................................................................28
SECTION 2.11 Defaulted Interest........................................................................28
SECTION 2.12 CUSIP Numbers.............................................................................28
ARTICLE III
Redemption
SECTION 3.01 Notices to Trustee........................................................................29
SECTION 3.02 Selection of Securities To Be Redeemed....................................................29
SECTION 3.03 Notice of Redemption......................................................................29
SECTION 3.04 Effect of Notice of Redemption............................................................30
SECTION 3.05 Deposit of Redemption Price...............................................................30
SECTION 3.06 Securities Redeemed in Part...............................................................30
ARTICLE IV
Covenants
SECTION 4.01 Payment of Securities.....................................................................30
SECTION 4.02 SEC Reports...............................................................................31
SECTION 4.03 Limitation on Debt........................................................................31
SECTION 4.04 Limitation on Restricted Payments.........................................................32
SECTION 4.05 Limitation on Liens.......................................................................35
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SECTION 4.06 Limitation on Issuance or Sale of Capital Stock of Restricted Subsidiaries................35
SECTION 4.07 Limitation on Asset Sales.................................................................35
SECTION 4.08 Limitation on Restrictions on Distributions from Restricted Subsidiaries..................38
SECTION 4.09 Limitation on Transactions with Affiliates................................................39
SECTION 4.10 Limitation on Guarantees by Restricted Subsidiaries.......................................40
SECTION 4.11 Designation of Restricted and Unrestricted Subsidiaries...................................40
SECTION 4.12 Limitation on Sale and Leaseback Transactions.............................................41
SECTION 4.13 Limitation on Company's Business..........................................................41
SECTION 4.14 Change of Control.........................................................................41
SECTION 4.15 Compliance Certificate....................................................................42
SECTION 4.16 Further Instruments and Acts..............................................................43
ARTICLE V
Merger, Consolidation and Sale of Property
ARTICLE VI
Defaults and Remedies
SECTION 6.01 Events of Default.........................................................................44
SECTION 6.02 Acceleration..............................................................................46
SECTION 6.03 Other Remedies............................................................................46
SECTION 6.04 Waiver of Past Defaults...................................................................46
SECTION 6.05 Control by Majority.......................................................................46
SECTION 6.06 Limitation on Suits.......................................................................47
SECTION 6.07 Rights of Holders to Receive Payment......................................................47
SECTION 6.08 Collection Suit by Trustee................................................................47
SECTION 6.09 Trustee May File Proofs of Claim..........................................................47
SECTION 6.10 Priorities 48
SECTION 6.11 Undertaking for Costs.....................................................................48
SECTION 6.12 Waiver of Stay or Extension Laws..........................................................48
ARTICLE VII
Trustee
SECTION 7.01 Duties of Trustee.........................................................................48
SECTION 7.02 Rights of Trustee.........................................................................50
SECTION 7.03 Individual Rights of Trustee..............................................................50
SECTION 7.04 Trustee's Disclaimer......................................................................51
SECTION 7.05 Notice of Defaults........................................................................51
SECTION 7.06 Reports by Trustee to Holders.............................................................51
SECTION 7.07 Compensation and Indemnity................................................................51
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SECTION 7.08 Replacement of Trustee....................................................................52
SECTION 7.09 Successor Trustee by Merger...............................................................53
SECTION 7.10 Eligibility; Disqualification.............................................................53
SECTION 7.11 Preferential Collection of Claims Against Company.........................................53
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance..........................................53
SECTION 8.02 Conditions to Defeasance..................................................................54
SECTION 8.03 Application of Trust Money................................................................55
SECTION 8.04 Repayment to Company......................................................................56
SECTION 8.05 Indemnity for Government Obligations......................................................56
SECTION 8.06 Reinstatement.............................................................................56
ARTICLE IX
Amendments
SECTION 9.01 Without Consent of Holders................................................................56
SECTION 9.02 With Consent of Holders...................................................................57
SECTION 9.03 Compliance with Trust Indenture Act.......................................................58
SECTION 9.04 Revocation and Effect of Consents and Waivers.............................................58
SECTION 9.05 Notation on or Exchange of Securities.....................................................58
SECTION 9.06 Trustee To Sign Amendments................................................................59
SECTION 9.07 Payment for Consent.......................................................................59
ARTICLE X
Note Guarantees
SECTION 10.01 Note Guarantees Generally................................................................59
SECTION 10.02 Continuing Guarantees....................................................................61
SECTION 10.03 Release of Note Guarantees...............................................................61
SECTION 10.04 Waiver of Subrogation....................................................................62
SECTION 10.05 Notation Not Required....................................................................62
SECTION 10.06 Successors and Assigns of the Note Guarantors............................................62
SECTION 10.07 Execution and Delivery of Note Guarantees................................................62
SECTION 10.08 Notices..................................................................................62
ARTICLE XI
Miscellaneous
SECTION 11.01 Trust Indenture Act Controls.............................................................63
SECTION 11.02 Notices..................................................................................63
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SECTION 11.03 Communication by Holders with Other Holders..............................................63
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.......................................63
SECTION 11.05 Statements Required in Certificate or Opinion............................................64
SECTION 11.06 When Securities Disregarded..............................................................64
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar.............................................64
SECTION 11.08 Legal Holidays...........................................................................64
SECTION 11.09 Governing Law............................................................................65
SECTION 11.10 No Recourse Against Others...............................................................65
SECTION 11.11 Successors...............................................................................65
SECTION 11.12 Multiple Originals.......................................................................65
SECTION 11.13 Table of Contents; Headings..............................................................65
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CROSS-REFERENCE TABLE
TIA Section/ / Indenture Section
310 (a)(1)............................................................... 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... N.A.
(b).................................................................. 7.08; 7.10
(c).................................................................. N.A.
311 (a).................................................................. 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312 (a).................................................................. 2.06
(b).................................................................. 11.03
(c).................................................................. 11.03
313 (a).................................................................. 7.06
(b).................................................................. 7.06.
(b)(2)............................................................... 7.06
(c).................................................................. 11.02
(d).................................................................. 7.06
314 (a).................................................................. 4.02; 4.11;
4.15; 11.02
(b).................................................................. N.A
(c)(1)............................................................... 11.04
(c)(2)............................................................... 11.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 11.05
(f).................................................................. 4.11
315 (a).................................................................. 7.01
(b).................................................................. 7.05; 11.02
(c).................................................................. 7.01
(d).................................................................. 7.01
(e).................................................................. 6.11
316 (a) (last sentence).................................................. 11.06
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.07
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317 (a)(1)............................................................... 6.08
(a)(2)............................................................... 6.09
(b).................................................................. 2.05
318 (a)................................................................. 11.01
N.A. Means Not Applicable.
Note: This Cross-Reference Table shall not, for any purposes, be deemed to
be part of this
Indenture.
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EXECUTION COPY
INDENTURE dated as of March 6, 2003, between FAIRPOINT COMMUNICATIONS,
INC., a Delaware corporation (as further defined below, the "Company"), and THE
BANK OF
NEW YORK, a
New York banking corporation, as Trustee (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 Securities to be
issued, from time to time, as in this
Indenture provided.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"ADDITIONAL ASSETS" means (a) any Property (other than cash, cash
equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in a Telecommunications Business; or (b) Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary from any
Person other than an Affiliate of the Company; PROVIDED, HOWEVER, that, in the
case of clause (b), such Restricted Subsidiary is primarily engaged in a
Telecommunications Business.
"AFFILIATE" of any specified Person means (a) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (b) any other Person who is a director or
officer of (i) such specified Person, (ii) any Subsidiary of such specified
Person or (iii) any Person described in clause (a) above. 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 4.07 and 4.09 and the definition of
"Additional Assets" only, "Affiliate" shall also mean any beneficial owner of
shares representing 10.0% 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 Voting 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 SALE" means any sale, lease, transfer, issuance or other disposition
(or series of related sales, leases, transfers, issuances or dispositions) by
the Company or any Restricted Subsidiary, 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 (a) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares) or
(b) any other assets of the Company or any Restricted Subsidiary outside of the
ordinary course of business of the Company or such Restricted Subsidiary (other
than, in the case of clauses (a) and (b) above, (i) any disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) for purposes of Section 4.07 only,
(x) any disposition that
constitutes a Permitted Investment or Restricted Payment permitted under Section
4.04 and (y) contemporaneous exchanges by the Company or any Restricted
Subsidiary of Telecommunications Assets for other Telecommunications Assets in
the ordinary course of business; PROVIDED that the applicable Telecommunications
Assets received by the Company or such Restricted Subsidiary have at least
substantially equal Fair Market Value to the Company or such Restricted
Subsidiary (as evidenced by a Resolution of the Board of Directors of the
Company) and (iii) any disposition effected in compliance with the first
paragraph of Article V).
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction means,
at any date of determination, (a) if such Sale and Leaseback Transaction is a
Capital Lease Obligation, the amount of Debt represented thereby according to
the definition of "Capital Lease Obligation" and (b) in all other instances, the
greater of (i) the Fair Market Value of the Property subject to such Sale and
Leaseback Transaction and (ii) 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 and Leaseback Transaction (including any period for which such
lease has been extended).
"AVERAGE LIFE" means, as of any date of determination, with respect to any
Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of the
product of the numbers of years (rounded to the nearest one-twelfth of one year)
from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Company (or, in
the case of Section 4.09(3), the applicable Restricted Subsidiary) or any
committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
"BUSINESS DAY" means each day that is not a Legal Holiday.
"CAPITAL LEASE OBLIGATIONS" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations 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. For purposes of
Section 4.05, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an
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equity interest in such Person, including Preferred Stock, but excluding any
debt security convertible or exchangeable into such equity interest.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate cash proceeds received by
the Company from the issuance or sale (other than to a Subsidiary of the Company
or an employee stock ownership plan or trust established by the Company or any
such Subsidiary for the benefit of their employees) by the Company of its
Capital Stock (other than Disqualified Stock) after the Issue Date, 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.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) prior to the first Public Equity Offering that results in a Public
Market, the Permitted Holders cease to be the "beneficial owners" (as defined in
Rule 13d-3 under the Exchange Act, except that a Person will 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 a majority of the total voting power of the
Voting Stock of the Company, whether as a result of the issuance of securities
of the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by the Permitted Holders
or otherwise (for purposes of this clause (a), the Permitted Holders will be
deemed to beneficially own any Voting Stock of a specified corporation held by a
parent corporation so long as the Permitted Holders beneficially own, directly
or indirectly, in the aggregate a majority of the total voting power of the
Voting Stock of such parent corporation); or
(b) on or after the first Public Equity Offering that results in a Public
Market, if any "Person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a Person will 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 35.0%
or more of the total voting power of the Voting Stock of the Company; PROVIDED,
HOWEVER, that the Permitted Holders are the "beneficial owners" (as defined in
Rule 13d-3 under the Exchange Act, except that a Person will 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, in the aggregate of a lesser percentage of the
total voting power of the Voting Stock of the Company than such other Person or
group (for purposes of this clause (b), such Person or group shall be deemed to
beneficially own any Voting Stock of a corporation (the "specified corporation")
held by any other corporation (the "parent corporation") so long as such Person
or group beneficially owns, directly or indirectly, in the aggregate a majority
of the total voting power of the Voting Stock of such parent corporation); or
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(c) the sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the assets of the Company
and the Restricted Subsidiaries, considered as a whole (other than a disposition
of such assets as an entirety or virtually as an entirety to a Wholly Owned
Subsidiary or one or more Permitted Holders) shall have occurred, or the Company
merges, consolidates or amalgamates with or into any other Person (other than
one or more Permitted Holders) or any other Person (other than one or more
Permitted Holders) merges, consolidates or amalgamates with or into the Company,
in any such event pursuant to a transaction in which the outstanding Voting
Stock of the Company is reclassified into or exchanged for cash, securities or
other Property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is reclassified into or exchanged for Voting Stock of the
surviving corporation and (ii) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving corporation immediately after
such transaction and in substantially the same proportions as before the
transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment or whose nomination for election by
the shareholders of the Company (i) 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 or (ii) was pursuant to agreements among shareholders in effect on the
Issue Date) cease for any reason to constitute a majority of the Board of
Directors then in office; or
(e) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of a Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"COMPANY" means the party named as such in this
Indenture until a successor
replaces it pursuant to the applicable provisions hereof 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 CURRENT LIABILITIES" means, as of any date of determination,
the aggregate amount of liabilities of the Company and its consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (a) all intercompany
items between the Company and any Restricted Subsidiary or between Restricted
Subsidiaries and (b) all current maturities of long-term Debt.
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"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
Incurred by the Company or its Restricted Subsidiaries, without duplication, (a)
interest expense attributable to leases constituting part of a Sale and
Leaseback Transaction and to capital leases, (b) amortization of debt discount
and debt issuance cost, including commitment fees, (c) capitalized interest, (d)
non-cash interest expenses, (e) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (f) net costs associated with Hedging Obligations (including
amortization of fees), (g) Disqualified Stock Dividends, (h) Preferred Stock
Dividends, (i) interest Incurred in connection with Investments in discontinued
operations, (j) interest accruing on any Debt of any other Person to the extent
such Debt is Guaranteed by the Company or any Restricted Subsidiary and (k) the
lesser of (i) cash contributions to any employee stock ownership plan or similar
trust and (ii) the interest or fees paid by such plan or trust to any Person
(other than the Company) in connection with Debt Incurred by such plan or trust.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income (a) any net income (loss)
of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that (i) subject to the exclusion contained in clause (d)
below, there shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution, whether
or not reflected on the Company's income statement (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below and excluding any such cash dividends or other
distributions made by Financing Cooperatives that are reinvested in such
Financing Cooperatives) and (ii) the Company's equity in a net loss of any such
Person other than an Unrestricted Subsidiary for such period shall be included
in determining such Consolidated Net Income, (b) for purposes of calculating
EBITDA for purposes of Section 4.04(c)(i) only, any net income (loss) of any
Person acquired by the Company or any of its consolidated Subsidiaries in a
pooling of interests transaction for any period prior to the date of such
acquisition, (c) any net income (but not loss) of any Restricted Subsidiary, if
such Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions, directly or
indirectly, to the Company, except that, subject to the exclusion contained in
clause (d) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a dividend or
other distribution, plus the amount of income accrued during such period in
excess of such distributed cash to the extent such excess income could be
distributed on the date of determination (subject, in the case of a dividend or
other distribution to another Restricted Subsidiary, to the limitation contained
in this clause), (d) any gain (but not loss) realized upon the sale or other
disposition of any Property of the Company or any of its consolidated
Subsidiaries (including pursuant to any Sale and Leaseback Transaction) that is
not sold or otherwise disposed of in the ordinary course of business, PROVIDED
that, in the event of such a sale or other disposition of all or a portion of
the Capital Stock of a
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Financing Cooperative, any gain therefrom shall be included in Consolidated Net
Income in an amount not to exceed the amount of dividends or other distributions
from such Financing Cooperative previously excluded from Consolidated Net Income
pursuant to the parenthetical in clause (a)(i) above, (e) any extraordinary gain
or loss, (f) the cumulative effect of a change in accounting principles and (g)
any non-cash compensation expense realized for grants of performance shares,
stock options or other stock awards to officers, directors and employees of the
Company or any Restricted Subsidiary. Notwithstanding the foregoing, for
purposes of calculating EBITDA for purposes of Section 4.04(c)(i) only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted pursuant to
Section 4.04(c)(iv).
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of determination,
the sum of the amounts that would appear on a consolidated balance sheet of the
Company and its consolidated Restricted Subsidiaries as the total assets (less
accumulated depreciation and amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) of the Company
and its Restricted Subsidiaries, after giving effect to purchase accounting and
after deducting therefrom Consolidated Current Liabilities and, to the extent
otherwise included, the amounts of (without duplication): (a) the excess of cost
over fair market value of assets or businesses acquired; (b) any revaluation or
other write-up in book value of assets subsequent to the last day of the fiscal
quarter of the Company immediately preceding the Issue Date as a result of a
change in the method of valuation in accordance with GAAP; (c) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (d) minority interests in
consolidated Subsidiaries held by Persons other than the Company or any
Restricted Subsidiary; (e) treasury stock; (f) cash or securities set aside and
held in a sinking or other analogous fund established for the purpose of
redemption or other retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and (g) Investments in and
assets of Unrestricted Subsidiaries.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
the end of the most recent fiscal quarter of the Company ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (a) the par or stated value of all outstanding Capital Stock of
the Company plus (b) paid-in capital or capital surplus relating to such Capital
Stock plus (c) any retained earnings or earned surplus less (i) any accumulated
deficit and (ii) any amounts attributable to Disqualified Stock.
"CREDIT FACILITY" means, the amended and restated credit agreement, dated
as of March 6, 2003, among the Company, the lenders party thereto in their
capacities as lenders thereunder, Bank of America, N.A., as syndication agent,
and Deutsche Bank Trust Company Americas, as administrative agent, together with
the related documents thereto (including, without limitation, any guarantee
agreements and security documents),
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in each case as such agreements may be amended, restated, supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder, PROVIDED that no such
increase shall result in the principal amount of Debt permitted to be Incurred
pursuant to clause (b) of the definition of "Permitted Debt" to exceed the
amount specified in such clause (b), or adding Restricted Subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion of
the debt under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a Person, any
foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (a) the principal of and premium (if any) in respect of
(i) debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (b) all Capital Lease Obligations of such
Person and all Attributable Debt in respect of Sale and Leaseback Transactions
entered into by such Person; (c) 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); (d) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (a) through (c)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (e) the amount of all obligations of such Person with respect
to the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); (f) all obligations of the type referred to in clauses (a) through
(e) 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; (g) all obligations of the type referred to in clauses (a) through
(f) of other Persons secured by any Lien on any Property 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 the amount of the
obligation so secured; and (h) to the extent not otherwise included in this
definition, Hedging Obligations of such Person. The amount of Debt 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, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date. The amount of Debt represented by a Hedging Obligation shall be equal
to (i) zero if such Hedging Obligation has been Incurred pursuant to clause (e)
of the
7
definition of "Permitted Debt" or (ii) the notional amount of such Hedging
Obligation if not Incurred pursuant to such clause.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable, in either case at the option of the holder
thereof) or otherwise (a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (b) is or may become redeemable or
repurchaseable at the option of the holder thereof, in whole or in part, or (c)
is convertible or exchangeable at the option of the holder thereof for Debt or
Disqualified Stock, on or prior to, in the case of clause (a), (b) or (c), the
first anniversary of the Stated Maturity of the Securities.
"DISQUALIFIED STOCK DIVIDENDS" means all dividends with respect to
Disqualified Stock of the Company held by Persons other than a Wholly Owned
Subsidiary. The amount of any such dividend shall be equal to the quotient of
such dividend divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the Company.
"EBITDA" means, for any period, an amount equal to, for the Company and its
consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net Income for
such period, plus the following to the extent deducted in computing Consolidated
Net Income for such period: (i) the provision for taxes based on income or
profits or utilized in computing net loss, (ii) Consolidated Interest Expense,
(iii) depreciation, (iv) amortization of intangibles and (v) any other non-cash
items (other than any such non-cash item to the extent that it represents an
accrual of or reserve for cash expenditures in any future period) minus (b) all
non-cash items increasing Consolidated Net Income for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and other non-cash charges of,
a Restricted Subsidiary 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 Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior approval of any governmental body or regulatory authority (that
has not been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its shareholders.
"EQUITY INVESTORS" means Xxxxx Investment Associates V., L.P., Xxxxx Equity
Partners V, L.P. and Xxxxxx X. Xxx Equity Fund IV, LP, and its Affiliates.
"EQUITY SALE" means (i) a Public Equity Offering following which a Public
Market exists or (ii) a Strategic Equity Investment.
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
8
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE SECURITIES" means the Company's 11 7/8% Senior Notes due 2010 to
be issued pursuant to this Indenture in exchange for Original Securities or any
additional Initial Securities issued after the Issue Date, in connection with
any Registered Exchange Offer or any Private Exchange pursuant to a Registration
Rights Agreement.
"EXISTING NOTES" means the Company's 9 1/2% Senior Subordinated Notes due
2008 and 12 1/2% Senior Subordinated Notes due 2010.
"FAIR MARKET VALUE" means, with respect to any Property, 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 undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined, except as otherwise provided, (a) if such Property has a Fair Market
Value equal to or less than $5.0 million, by any Officer of the Company or (b)
if such Property has a Fair Market Value in excess of $5.0 million, by a
majority of the Board of Directors and evidenced by a Board Resolution, dated
within 30 days of the relevant transaction, delivered to the Trustee.
"FINANCING COOPERATIVE" means CoBank ACB and Rural Telephone Finance
Cooperative.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and (d)
in the rules and regulations of the SEC or the Public Company Accounting
Oversight Board 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.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include (i) endorsements
for collection or deposit in the ordinary course of business or (ii) a
contractual commitment by one Person to invest in another Person for so long as
such Investment is reasonably expected to constitute a Permitted Investment
under clause (b) of the definition of Permitted Investments. The term
"Guarantee" used as a verb has a corresponding meaning. The term "Guarantor"
shall mean any Person Guaranteeing any obligation.
9
"HEDGING OBLIGATION" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security is
registered on the Security register described in Section 2.04.
"INCUR" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such Debt or
obligation on the balance sheet of such Person (and "Incurrence" and "Incurred"
shall have meanings correlative to the foregoing); PROVIDED, HOWEVER, that a
change in GAAP that results in an obligation of such Person that exists at such
time, and is not theretofore classified as Debt, becoming Debt shall not be
deemed an Incurrence of such Debt; PROVIDED FURTHER, HOWEVER, that solely for
purposes of determining compliance with Section 4.03, amortization of debt
discount shall not be deemed to be the Incurrence of Debt, PROVIDED that in the
case of Debt sold at a discount, the amount of such Debt Incurred shall at all
times be the accreted value of such Debt.
"INDENTURE" means this Indenture as amended or supplemented from time to
time.
"INDEPENDENT APPRAISER" means an investment banking firm of national
standing or any third party appraiser of national standing, PROVIDED that such
firm or appraiser is not an Affiliate of the Company.
"INITIAL SECURITIES" means the Company's 11 7/8% Senior Notes due 2010 to
be issued from time to time as provided for in this Indenture.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"INVESTMENT" by any Person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. For purposes
of Sections 4.04 and 4.11 and the definition of "Restricted Payment,"
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary of an amount (if
positive) equal to (a) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (b) the portion
10
(proportionate to the Company's equity interest in such Subsidiary) of the Fair
Market Value of the net assets of such Subsidiary at the time of such
redesignation. In determining the amount of any Investment made by transfer of
any Property other than cash, such Property shall be valued at its Fair Market
Value at the time of such Investment.
"ISSUE DATE" means March 6, 2003.
"LEVERAGE RATIO" means the ratio of (a) the outstanding Debt of the Company
and the Restricted Subsidiaries, on a consolidated basis, to (b) the Pro Forma
EBITDA for the last four full fiscal quarters preceding the date on which such
calculation is made.
"LIEN" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor to the
rating agency business thereof.
"NET AVAILABLE CASH" from any Asset Sale 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, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of (a) 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 Sale, (b) all payments made on any
Debt that is secured by any Property subject to such Asset Sale, in accordance
with the terms of any Lien upon or other security agreement of any kind with
respect to such Property, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, (c) all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale and (d) the deduction of appropriate amounts provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the Property disposed in such Asset Sale and retained by the
Company or any Restricted Subsidiary after such Asset Sale.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of Capital
Stock, 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.
11
"NOTE GUARANTEE" means any Guarantee of the Securities pursuant to Section
4.10 and Article X.
"NOTE GUARANTOR" means any Restricted Subsidiary of the Company that
provides a Note Guarantee, until such time as such Restricted Subsidiary shall
no longer be a Note Guarantor pursuant to this Indenture.
"OFFICER" means the Chief Executive Officer, the President, the Chief
Financial Officer, the Chief Operating Officer or any Vice President of the
Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of the
Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to the Company.
"ORIGINAL SECURITIES" means the Initial Securities in the aggregate
principal amount of $225,000,000 issued on the Issue Date.
"PERMITTED ASSET SWAP" means any transfer of property or assets by the
Company or any of its Restricted Subsidiaries in which at least 90% of the
consideration received by the transferor consists of properties or assets (other
than cash) that will be used in a Telecommunications Business; PROVIDED that the
aggregate Fair Market Value of the property or assets being transferred by the
Company or such Restricted Subsidiary is not greater than the aggregate Fair
Market Value of the property or assets received by the Company or such
Restricted Subsidiary in such exchange; PROVIDED, HOWEVER, that in the event
such aggregate Fair Market Value of the property or assets being transferred or
received by the Company is (x) less than $15.0 million, such determination shall
be made in good faith by the Board of Directors of the Company and (y) greater
than or equal to $15.0 million, such determination shall be made by an
Independent Appraiser.
"PERMITTED DEBT" means:
(a) Debt of the Company evidenced by the Original Securities and Exchange
Securities issued in exchange for the Original Securities, and any Note
Guarantee;
(b) Debt under the Credit Facility, PROVIDED that the aggregate principal
amount of all such Debt under the Credit Facility at any one time outstanding
under this clause (b) shall not exceed $300.0 million, which amount shall be
permanently reduced by the aggregate amount of Net Available Cash used to Repay
Debt under the Credit Facility since the Issue Date pursuant to Section 4.07;
(c) Debt of the Company or a Restricted Subsidiary in respect of Capital
Lease Obligations and Purchase Money Debt, PROVIDED that (i) the aggregate
principal amount of such Debt does not exceed the Fair Market Value (on the date
of the Incurrence thereof) of the Property acquired, constructed or leased and
(ii) the aggregate principal amount of all Debt Incurred and then outstanding
pursuant to this clause (c)
12
(together with all Permitted Refinancing Debt Incurred and then outstanding in
respect of Debt previously Incurred pursuant to this clause (c)) shall not
exceed $30.0 million;
(d) Debt of the Company owing to and held by any Restricted Subsidiary and
Debt of a Restricted Subsidiary owing to and held by the Company or any
Restricted Subsidiary; PROVIDED, HOWEVER, that any subsequent issue or transfer
of Capital Stock or other event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of any such
Debt (except to the Company or a Restricted Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Debt by the issuer thereof;
(e) Debt under Interest Rate Agreements entered into by the Company or a
Restricted Subsidiary for the purpose of limiting interest rate risk in the
ordinary course of the financial management of the Company or such Restricted
Subsidiary and not for speculative purposes, PROVIDED that the obligations under
such agreements are directly related to payment obligations on Debt otherwise
permitted by the terms of Section 4.03;
(f) Debt in connection with one or more standby letters of credit or
performance bonds issued by the Company or a Restricted Subsidiary in the
ordinary course of business or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;
(g) Debt outstanding on the Issue Date not otherwise described in clauses
(a) through (f) above;
(h) Debt in an aggregate principal amount outstanding at any one time not
to exceed $10.0 million; and
(i) Permitted Refinancing Debt Incurred in respect of Debt Incurred
pursuant to Section 4.03(a)(i) and clauses (a), (c) and (g) above.
"PERMITTED GUARANTEE" means a Guarantee by any Restricted Subsidiary of (1)
Senior Debt of the Company Incurred pursuant to clause (b) of the definition of
Permitted Debt, (2) Senior Debt of the Company Incurred pursuant to Section
4.03(a)(i) in an aggregate principal amount not to exceed $50.0 million at any
one time outstanding, (3) Senior Debt of the Company Incurred pursuant to
Section 4.03(a)(i) in an aggregate principal amount not to exceed 5.0% of
Consolidated Net Tangible Assets (based on the consolidated balance sheet of the
Company as of the end of the most recent fiscal quarter ending at least 45 days
prior to the date such Senior Debt shall be Incurred) less the aggregate
principal amount of Senior Debt outstanding as of the date of determination in
respect of which Permitted Guarantees were previously Incurred pursuant to this
clause (3), as determined as of the date of the Incurrence of such Guarantee by
such Restricted Subsidiary, or (4) in the case of clause (1), (2) or (3) of this
definition, Interest Rate Agreements in respect of such Senior Debt owed to
lenders under the Credit Facility and their Affiliates (even if any such Lender
ceases to be a party to the Credit Facility).
"PERMITTED HOLDERS" means Xxxxxx X. Xxxxxxxxx, XXX Communications
Associates, Inc., Xxxxx Xxxxxxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxx, Xx., Xxxx X. Xxxx, Xxxxx Investment Associates V, L.P. (and its
Affiliates), Xxxxx
13
Equity Partners V, L.P. (and its Affiliates) and Xxxxxx X. Xxx Equity Fund IV,
LP (and its Affiliates) (or any successor entity of the Equity Investors
controlled by the current principals of the Equity Investors or any entity
controlled by, or under common control with, the Equity Investors) and their
respective estates, spouses, ancestors and lineal descendants, the legal
representatives of any of the foregoing and the trustees of any bona fide trusts
of which the foregoing are the sole beneficiaries or the grantors, or any Person
of which the foregoing "beneficially owns" (as defined in Rule 13d-3 under the
Exchange Act), individually or collectively with any of the foregoing, at least
a majority of the total voting power of the Voting Stock of such Person.
"PERMITTED INVESTMENT" means any Investment by the Company or a Restricted
Subsidiary in: (a) any Restricted Subsidiary, the Company or any Person that
will, upon the making of such Investment, become a Restricted Subsidiary,
PROVIDED that the primary business of such Restricted Subsidiary is a
Telecommunications Business; (b) any Person if as a result of such Investment
such Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its Property to, the Company or a Restricted Subsidiary,
PROVIDED that such Person's primary business is a Telecommunications Business;
(c) Temporary Cash Investments; (d) receivables owing to the Company or a
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; PROVIDED,
HOWEVER, that such trade terms may include such concessionary trade terms as the
Company or such Restricted Subsidiary deems reasonable under the circumstances;
(e) 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 of the Company or
a Restricted Subsidiary; (f) loans and advances to employees made in the
ordinary course of business consistent with past practices of the Company or a
Restricted Subsidiary, as the case may be, PROVIDED that such loans and advances
do not exceed $1.0 million at any one time outstanding; (g) stock, obligations
or other securities received in settlement of debts created in the ordinary
course of business and owing to the Company or a Restricted Subsidiary or in
satisfaction of judgments; (h) Capital Stock of a Financing Cooperative made
through the reinvestment of dividends or other distributions received from such
Financing Cooperative; (i) any Person to the extent such Investment represents
the non-cash portion of the consideration received in connection with an Asset
Sale consummated in compliance with Section 4.07; and (j) other Investments made
for Fair Market Value that do not exceed $5.0 million outstanding at any one
time in the aggregate, when taken together with all other Investments made
pursuant to this clause (j) since the Issue Date.
"PERMITTED LIENS" means:
(a) Liens to secure Debt permitted to be Incurred under clause (b) of the
definition of "Permitted Debt" and Interest Rate Agreements in respect of such
Debt owed to lenders under the Credit Facility and their Affiliates (even if
such lender ceases to be a party to the Credit Facility);
(b) Liens to secure Debt permitted to be Incurred under clause (c) of the
definition of "Permitted Debt", provided that any such Lien may not extend to
any Property of the Company or any Restricted Subsidiary, other than the
Property acquired,
14
constructed or leased with the proceeds of such Debt and any improvements or
accessions to such Property;
(c) Liens for taxes, assessments or governmental charges or levies on the
Property of the Company or any Restricted Subsidiary if the same shall not at
the time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings promptly instituted and
diligently concluded, PROVIDED that any reserve or other appropriate provision
that shall be required in conformity with GAAP shall have been made therefor;
(d) Liens imposed by law, such as carriers', warehousemen's and mechanics'
Liens and other similar Liens, on the Property of the Company or any Restricted
Subsidiary arising in the ordinary course of business and securing payment of
obligations that are not more than 60 days past due or are being contested in
good faith and by appropriate proceedings;
(e) Liens on the Property of the Company or any Restricted Subsidiary
Incurred in the ordinary course of business to secure performance of obligations
with respect to statutory or regulatory requirements, performance or
return-of-money bonds, surety bonds or other obligations of a like nature and
Incurred in a manner consistent with industry practice, in each case which are
not Incurred in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of Property and
which do not in the aggregate impair in any material respect the use of Property
in the operation of the business of the Company and the Restricted Subsidiaries
taken as a whole;
(f) Liens on Property at the time the Company or any Restricted Subsidiary
acquired such Property, including any acquisition by means of a merger or
consolidation with or into the Company or any Restricted Subsidiary; PROVIDED,
HOWEVER, that any such Lien may not extend to any other Property of the Company
or any Restricted Subsidiary; pROVIDED FURTHER, HOWEVER, that such Liens shall
not have been Incurred in anticipation of or in connection with the transaction
or series of transactions pursuant to which such Property was acquired by the
Company or any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such Person becomes a
Restricted Subsidiary; PROVIDED, HOWEVER, that any such Lien may not extend to
any other Property of the Company or any other Restricted Subsidiary that is not
a direct Subsidiary of such Person; PROVIDED FURTHER, HOWEVER, that any such
Lien was not Incurred in anticipation of or in connection with the transaction
or series of transactions pursuant to which such Person became a Restricted
Subsidiary;
(h) pledges or deposits by the Company or any Restricted Subsidiary under
workmen'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 Debt) or leases to which the Company or any Restricted
Subsidiary is party, or deposits to secure public or statutory obligations of
the Company, or deposits for the payment of rent, in each case Incurred in the
ordinary course of business;
15
(i) utility easements, building restrictions and such other encumbrances or
charges against real Property as are of a nature generally existing with respect
to properties of a similar character;
(j) Liens existing on the Issue Date not otherwise described in clauses (a)
through (i) above;
(k) Liens on the Property of the Company or any Restricted Subsidiary to
secure any Refinancing, in whole or in part, of any Debt secured by Liens
referred to in clause (b), (f), (g) or (j) above; PROVIDED, HOWEVER, that any
such Lien shall be limited to all or part of the same Property that secured the
original Lien (together with improvements and accessions to such Property) and
the aggregate principal amount of Debt that is secured by such Lien shall not be
increased to an amount greater than the sum of (i) the outstanding principal
amount, or, if greater, the committed amount, of the Debt secured by Liens
described under clause (b), (f), (g) or (j) above, as the case may be, at the
time the original Lien became a Permitted Lien under this Indenture and (ii) an
amount necessary to pay any fees and expenses, including premiums and defeasance
costs, incurred by the Company or such Restricted Subsidiary in connection with
such Refinancing;
(l) Liens securing Debt in an aggregate principal amount not to exceed
$50.0 million at any one time outstanding and permitted to be Incurred under
Section 4.03(a)(i) and Interest Rate Agreements in respect of such Debt owed to
lenders under the Credit Facility and their Affiliates (even if such lender
ceases to be a party to the Credit Facility);
(m) Liens granted to secure the Securities pursuant to Section 4.05; and
(n) Liens not otherwise permitted by clauses (a) through (m) above
encumbering assets having an aggregate Fair Market Value not in excess of 5.0%
of Consolidated Net Tangible Assets, as determined based on the consolidated
balance sheet of the Company as of the end of the most recent fiscal quarter
ending at least 45 days prior to the date any such Lien shall be Incurred.
"PERMITTED REFINANCING DEBT" means any Debt that Refinances any other Debt,
including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced; PROVIDED, HOWEVER, that Permitted Refinancing
Debt shall not include (x) Debt of a Subsidiary that Refinances Debt of the
Company or (y) Debt of the Company or a Restricted Subsidiary that Refinances
Debt of an Unrestricted Subsidiary.
16
"PERSON" means any individual, corporation, company (including any limited
liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PREFERRED STOCK" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of any other class of
Capital Stock issued by such Person.
"PREFERRED STOCK DIVIDENDS" means all dividends with respect to Preferred
Stock of Restricted Subsidiaries held by Persons other than the Company or a
Wholly Owned Subsidiary. The amount of any such dividend shall be equal to the
quotient of such dividend divided by the difference between one and the maximum
statutory federal income tax rate (expressed as a decimal number between 1 and
0) then applicable to the issuer of such Preferred Stock.
"PRINCIPAL" of any Indebtedness (including the Securities) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"PRO FORMA" means, with respect to any calculation made or required to be
made pursuant to the terms hereof, a calculation performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of the Company, as the case may be.
"PRO FORMA EBITDA" means, for any period, the EBITDA of the Company and its
consolidated Restricted Subsidiaries, after giving effect to the following: if
(a) since the beginning of such period, the Company or any Restricted Subsidiary
shall have made any Asset Sale, Investment (by merger or otherwise) in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of Property, (b) the transaction giving rise to the need to
calculate Pro Forma EBITDA is such an Asset Sale, Investment or acquisition or
(c) since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made such an Asset
Sale, Investment or acquisition, EBITDA for such period shall be calculated
after giving pro forma effect to such Asset Sale, Investment or acquisition as
if such Asset Sale, Investment or acquisition occurred on the first day of such
period.
For purposes of this definition, notwithstanding the definition of "pro
forma," EBITDA shall be calculated on a pro forma basis after giving effect to
cost savings resulting from employee terminations, facilities consolidations and
closings, standardization of employee benefits and compensation practices,
consolidation of property, casualty and other insurance coverage and policies,
standardization of sales representation commissions and other contract rates,
and reductions in taxes other than
17
income taxes (collectively, "Cost Savings Measures"), which cost savings the
Company reasonably believes in good faith would have been achieved during the
period for which such calculation is being made as a result of acquisitions of
Property (regardless of whether such Cost Savings Measures could then be
reflected in pro forma financial statements under GAAP, Regulation S-X
promulgated by the SEC or any other regulation or policy of the SEC), PROVIDED
that both (i) such cost savings and Cost Savings Measures were identified and
such cost savings were quantified in an Officers' Certificate delivered to the
Trustee at the time of the consummation of an acquisition of Property and such
Officers' Certificate states that such officers believe in good faith that
actions will be commenced or initiated within 90 days of such acquisition of
Property to effect such Cost Savings Measures and (ii) with respect to each
acquisition of Property completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by the Company or any of its
Restricted Subsidiaries within 90 days of such acquisition of Property to effect
the Cost Savings Measures identified in such Officers' Certificate (regardless,
however, of whether the corresponding cost savings have been achieved).
"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 public offering of common
stock of the Company pursuant to an effective registration statement under the
Securities Act.
"PUBLIC MARKET" means any time after (a) a Public Equity Offering has been
consummated and (b) at least 15.0% of the total issued and outstanding common
stock of the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
"PURCHASE MONEY DEBT" means Debt (a) consisting of the deferred purchase
price of property, conditional sale obligations, obligations under any title
retention agreement, other purchase money obligations and obligations in respect
of industrial revenue bonds, in each case where the maturity of such Debt does
not exceed the anticipated useful life of the Property being financed, and (b)
Incurred to finance the acquisition, construction or lease by the Company or a
Restricted Subsidiary of such Property, including additions and improvements
thereto; PROVIDED, HOWEVER, that such Debt is Incurred within 180 days after the
acquisition, construction or lease of such Property by the Company or such
Restricted Subsidiary.
"REFINANCE" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other
Debt, in exchange or replacement for, such Debt. "Refinanced" and "Refinancing"
shall have correlative meanings.
"REPAY" means, in respect of any Debt, to repay, prepay, repurchase,
redeem, legally defease or otherwise retire such Debt. "Repayment" and "Repaid"
shall have
18
correlative meanings. For purposes of Section 4.07 and clause (b) of the
definition of "Permitted Debt", Debt shall be considered to have been Repaid
only to the extent the related loan commitment, if any, shall have been
permanently reduced in connection therewith, without the right on the part of
the Company or any of its Subsidiaries, pursuant to an agreement in effect at
the time of such Repayment, to cause such commitment to be reinstated or
replaced with a substantially similar commitment.
"RESTRICTED PAYMENT" means: (a) any dividend or distribution (whether made
in cash, securities or other Property) declared or paid on or with respect to
any shares of Capital Stock of the Company or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Company or any Restricted Subsidiary), except for any dividend or
distribution that is made solely to the Company or a Restricted Subsidiary (and,
if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
shareholders of such Restricted Subsidiary on a pro rata basis or on a basis
that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a PRO RATA
basis) or any dividend or distribution payable solely in shares of Capital Stock
(other than Disqualified Stock) of the Company; (b) the purchase, repurchase,
redemption, acquisition or retirement for value of any Capital Stock of the
Company or any Affiliate of the Company (other than from the Company or a
Restricted Subsidiary) or any securities exchangeable for or convertible into
any such Capital Stock, including the exercise of any option to exchange any
Capital Stock (other than for or into Capital Stock of the Company that is not
Disqualified Stock); (c) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity, sinking fund
or amortization or other installment payment, of any Subordinated Obligation
(other than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a scheduled maturity, sinking
fund or amortization or other installment obligation, in each case due within
one year of the date of acquisition); (d) any Investment (other than Permitted
Investments) in any Person; or (e) the issuance, sale or other disposition of
Capital Stock of any Restricted Subsidiary to a Person other than the Company or
another Restricted Subsidiary if the result thereof is that such Restricted
Subsidiary shall cease to be a Restricted Subsidiary, in which event the amount
of such "Restricted Payment" shall be the Fair Market Value of the remaining
interest, if any, in such former Restricted Subsidiary held by the Company and
the other Restricted Subsidiaries.
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company unless such
Subsidiary shall be designated as an Unrestricted Subsidiary in the definition
of the term "Unrestricted Subsidiary" or shall have been designated an
Unrestricted Subsidiary as permitted or required pursuant to Section 4.11 and
(b) an Unrestricted Subsidiary that is redesignated as a Restricted Subsidiary
as permitted pursuant to Section 4.11.
"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement relating to Property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
19
transfers such Property to another Person and the Company or a Restricted
Subsidiary, within two years of such transfer, leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Original Securities, any additional Initial
Securities issued after the Issue Date and the Exchange Securities, treated as a
single class.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (a) the Securities; (b) all obligations consisting of
the principal, premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not post-filing interest is
allowed in such proceeding) in respect of (i) Debt of the Company for borrowed
money (including all monetary obligations of the Company under the Credit
Facility) and (ii) Debt of the Company evidenced by notes, debentures, bonds or
other similar instruments permitted under this Indenture for the payment of
which the Company is responsible or liable; (c) all Capital Lease Obligations of
the Company and all Attributable Debt in respect of Sale and Leaseback
Transactions entered into by the Company; (d) all obligations of the Company (i)
for the reimbursement of any obligor on any letter of credit, bankers'
acceptance or similar credit transaction, (ii) under Hedging Obligations or
(iii) issued or assumed as the deferred purchase price of Property and all
conditional sale obligations of the Company and all obligations under any title
retention agreement permitted under this Indenture; and (e) all obligations of
other Persons of the type referred to in clauses (a), (b) and (c) for the
payment of which the Company is responsible or liable as Guarantor; PROVIDED,
HOWEVER, that Senior Debt shall not include (A) any Debt of the Company that is
by its terms subordinate or junior in right of payment to the Securities or any
other Debt of the Company; (B) any Debt Incurred in violation of the provisions
of this Indenture (but, as to any such obligation, no such violation shall be
deemed to exist for purposes of this clause (B) if the holders of such
obligation or their representative and the Trustee shall have received an
Officers' Certificate of the Company to the effect that the Incurrence of such
Debt does not (or, in the case of revolving credit indebtedness, that the
Incurrence of the entire committed amount thereof at the date on which the
initial borrowing thereunder is made would not) violate such provisions of this
Indenture); (C) accounts payable or any other obligations of the Company to
trade creditors created or assumed by the Company in the ordinary course of
business in connection with the obtaining of materials or services (including
Guarantees thereof or instruments evidencing such liabilities); (D) any
liability for Federal, state, local or other taxes owed or owing by the Company;
(E) any obligation of the Company to any Subsidiary; or (F) any obligations with
respect to any Capital Stock of the Company.
"SENIOR LEVERAGE RATIO" means the ratio of (a) the outstanding Debt
(excluding Subordinated Obligations) of the Company and the outstanding Debt of
the Restricted Subsidiaries, on a consolidated basis, to (b) Pro Forma EBITDA
for the last four fiscal quarters preceding the date on which such calculation
is made.
20
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "Significant
Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"STATED MATURITY" means, with respect to any security, the date specified
in such security as the fixed date on which the 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).
"STRATEGIC EQUITY INVESTMENT" means an equity investment made by a
Strategic Investor in the Company in an aggregate amount of at least $25.0
million and that results in such Strategic Investor becoming the owner of at
least 15.0% of the total issued and outstanding common stock of the Company.
"STRATEGIC INVESTOR" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80.0% or more
of the Voting Stock of which is owned by a Person that has, an equity market
capitalization, at the time of its initial investment in the Company, in excess
of $2.0 billion.
"SUBORDINATED OBLIGATION" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) that is subordinate or
junior in right of payment to the Securities pursuant to a written agreement to
that effect (which shall include the subordination section of any document
governing such Debt).
"SUBSIDIARY" means, in respect of any Person, any corporation, company
(including any limited liability company), association, partnership, joint
venture or other business entity of which a majority of the total voting power
of the Voting Stock is at the time owned or controlled, directly or indirectly,
by (a) such Person, (b) such Person and one or more Subsidiaries of such Person
or (c) one or more Subsidiaries of such Person.
"TELECOMMUNICATIONS ASSETS" means any Property, including licenses and
applications, bids and agreements to acquire licenses, or other authority to
provide telecommunications services, previously granted, or to be granted, by
the Federal Communications Commission, used or intended for use primarily in
connection with a Telecommunications Business.
"TELECOMMUNICATIONS BUSINESS" means any business substantially all the
revenues of which are derived from (a) transmitting, or providing services
relating to the transmission of, voice, video or data through owned or leased
wireline or wireless facilities, (b) the sale or provision of phone cards, "800"
services, voice mail, switching, enhanced telecommunications services, telephone
directory or telephone number information services or telecommunications network
intelligence or (c) any business ancillary or directly related to the businesses
referred to in clause (a) or (b), PROVIDED that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors.
21
"TEMPORARY CASH INVESTMENTS" means any of the following: (a) Investments in
U.S. Government Obligations maturing within one year of such Investment; (b)
Investments in time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued by a
bank or trust company organized under the laws of the United States of America
or any State thereof having capital, surplus and undivided profits aggregating
in excess of $500.0 million and whose long-term debt is rated "A3" or "A-" or
higher according to Xxxxx'x or S&P (or such similar equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)); (c) Investments in repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) entered into with a bank meeting the qualifications
described in clause (b) above; (d) Investments in commercial paper, maturing not
more than 90 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 with a rating at the time as of which any
Investment therein is made of "P-1" (or higher) according to Xxxxx'x or "A-1"
(or higher) according to S&P (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule 436
under the Securities Act)); and (e) direct obligations (or certificates
representing an ownership interest in such obligations) of any State of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of such State is pledged and
which are not callable or redeemable at the issuer's option, PROVIDED that (i)
the long-term debt of such State is rated "A3" or "A-"or higher according to
Xxxxx'x or S&P (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)) and (ii) such obligations mature within 180 days of the date of
acquisition thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture; PROVIDED, HOWEVER,
that, in the event the TIA is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendments, the Trust Indenture Act of
1939 as so amended.
"TRUSTEE" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"TRUST OFFICER" means any officer within the Corporate Trust Administration
department of the Trustee (or any successor group of the trustee) with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"UNIFORM COMMERCIAL CODE" means the
New York Uniform Commercial Code as in
effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (a) FairPoint Carrier Services, Inc.
(formerly known as FairPoint Communications Solutions Corp.); (b) any Subsidiary
of an Unrestricted Subsidiary; and (c) any Subsidiary of the Company that is
designated after the Issue Date as an Unrestricted Subsidiary as permitted or
required pursuant to Section 4.11
22
and not thereafter redesignated as a Restricted Subsidiary as permitted pursuant
thereto.
"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 or redeemable at the issuer's option.
"VOTING STOCK" of any 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, at any time, a Restricted Subsidiary all
the Voting Stock of which (except directors' qualifying shares) is at such time
owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in Section
------------------------------------------------------------ ------------------
"Affiliate Transaction"..................................... 4.09
"Allocable Excess Proceeds"................................. 4.07
"Bankruptcy Law"............................................ 6.01
"Change of Control Offer"................................... 4.14
"Change of Control Payment Date"............................ 4.14
"Change of Control Purchase Price".......................... 4.14
"covenant defeasance option"................................ 8.01
"Custodian"................................................. 6.01
"Event of Default".......................................... 6.01
"Excess Proceeds............................................ 4.07
"Global Security"........................................... Appendix A
"Guaranteed Obligations".................................... 10.01
"legal defeasance option"................................... 8.01
"Legal Holiday"............................................. 11.08
"Offer Amount".............................................. 4.07
"Offer Period".............................................. 4.07
"Other Debt"................................................ 4.10
"Paying Agent".............................................. 2.04
"Prepayment Offer".......................................... 4.07
"Private Exchange".......................................... Appendix A
"Purchase Date"............................................. 4.07
"Registered Exchange Offer"................................. Appendix A
"Registrar"................................................. 2.04
"Shelf Registration Statement".............................. Appendix A
"Securities Custodian"...................................... Appendix A
"Surviving Person".......................................... Article V
23
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.
"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;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any non-interest 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; and
(8) the principal amount of any Preferred Stock shall be the greater
of (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.
24
ARTICLE II
THE SECURITIES
SECTION 2.01 AMOUNT OF SECURITIES. The Securities shall be known and
designated as the "11 7/8% Senior Notes due 2010" of the Company. The aggregate
principal amount of Securities that may be authenticated and delivered and
outstanding under this Indenture is not limited, except as provided in Section
4.03. All such Securities shall be substantially identical in all respects other
than issue price and issuance date. All Securities issued under this Indenture
will vote and consent together on all matters as one class, and none of the
Securities shall have the right to vote or consent as a separate class from one
another on any matter.
Subject to Section 2.03, the Trustee shall authenticate Original Securities
for original issue on the Issue Date in an aggregate principal amount of
$225,000,000. With respect to any Securities issued after the Issue Date (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, Original Securities pursuant to Section 2.07,
2.08, 2.09 or 3.06 or Appendix A), there shall be established in or pursuant to
a resolution of the Board of Directors and, subject to Section 2.03, set forth,
or determined in the manner provided in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of such
Securities:
(1) the aggregate principal amount of such Securities that may be
authenticated and delivered under this Indenture;
(2) the issue price and issuance date of such Securities;
(3) if applicable, that such Securities shall be issuable in whole or
in part in the form of one or more Global Securities and, in such case, the
respective depositories for such Global Securities, the form of any legend
or legends that shall be borne by any such Global Security in addition to
or in lieu of that set forth in Exhibit 1 to Appendix A and any
circumstances in addition to or in lieu of those set forth in Section 2.3
of Appendix A in which any such Global Security may be exchanged in whole
or in part for Securities registered, and any transfer of such Global
Security in whole or in part may be registered, in the name or names of
Persons other than the depository for such Global Security or a nominee
thereof; and
(4) if applicable, that such Securities shall not be issued in the
form of Initial Securities subject to Appendix A, but shall be issued in
the form of Exchange Securities as set forth in Exhibit A.
SECTION 2.02 FORM AND DATING. Provisions relating to the Initial Securities
and the Exchange Securities are set forth in Appendix A, 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 Appendix A, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
25
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 reasonably acceptable to the Company. Each
Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of the
terms of this Indenture.
SECTION 2.03 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.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a written order of the Company in the
form of an Officers' Certificate for the authentication and delivery of such
Securities, and the Trustee in accordance with such written order of the Company
shall authenticate and deliver such Securities. Such order shall specify the
principal amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and whether the Securities
are to be Initial Securities or Exchange Securities.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee 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 2.04 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"), one of which offices will be
maintained for such purpose in The City of
New York. 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.
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
26
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
of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Securities.
SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST. Prior to 12:00 p.m.,
New
York City time, on 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 Wholly Owned 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 2.06 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 as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.07 REPLACEMENT SECURITIES. If a mutilated Security is surrendered
to the Registrar or if the Holder of a Security claims that such 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 that 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. 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
27
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.
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, and the Paying
Agent is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
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
dispose of all Securities surrendered for registration of transfer, exchange,
payment or cancellation in accordance with its normal procedures unless the
Company directs the Trustee 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 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" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that neither the Company nor the Trustee shall have any responsibility
for any defect in the "CUSIP" number that appears on any Security, check, advice
of payment or redemption notice, and 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
28
or omission of such numbers. The Company shall promptly notify the Trustee of
any change in the "CUSIP" numbers.
ARTICLE III
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 that such redemption is being made pursuant to paragraph 5 of the
Securities.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 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 considers
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries 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 of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $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.
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;
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(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, 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, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of redemption
in 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 at least
45 days before the redemption date.
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 and in
accordance with the terms thereof. 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 that is on or prior to the date of redemption). 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. Prior to the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest (subject to the
right of Holders of record on the relevant record date to receive interest due
on the related interest payment date that is on or prior to the date of
redemption) on all Securities to be redeemed on that date other than Securities
or portions of Securities called for redemption that 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 IV
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES. The Company shall promptly pay in
immediately available funds 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 and the Trustee or the
Paying Agent, as the case may be, is not prohibited from
30
paying such money to the Securityholders on that date pursuant to the terms of
this Indenture.
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 rate borne by the Securities to the extent lawful.
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 shall file with the SEC and provide the Trustee and Holders of
Securities 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 reports to be so filed and provided at the times specified for the
filing of such information, documents and reports under such Sections; PROVIDED,
HOWEVER, that the Company shall not be so obligated to file such information,
documents and reports with the SEC if the SEC does not permit such filings. The
Company also shall comply with the other provisions of TIA Section 314(a). So
long as any of the Securities are "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities Act, the Company will, during any period in
which it is not subject to or in compliance with Section 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03 LIMITATION ON DEBT.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, Incur, directly or indirectly, any Debt unless, after giving effect to the
application of the proceeds thereof, no Default or Event of Default would occur
as a consequence of such Incurrence or be continuing following such Incurrence
and either (i) after giving effect to the Incurrence of such Debt and the
receipt and application of the proceeds thereof, the Leverage Ratio of the
Company and the Restricted Subsidiaries (on a consolidated basis) would not
exceed 6.5 to 1.0 or (ii) such Debt is Permitted Debt, PROVIDED that, in either
case, neither the Company nor any Restricted Subsidiary shall Incur, directly or
indirectly, any Debt (other than any Subordinated Obligation of the Company
Incurred pursuant to clause (i) or (ii) above) unless, after giving effect to
the Incurrence of such Debt and the receipt and application of the proceeds
thereof, the Senior Leverage Ratio of the Company and the Restricted
Subsidiaries (on a consolidated basis) would not exceed 4.0 to 1.0.
(b) Notwithstanding the foregoing, (i) the Company shall not Incur any Debt
pursuant to this Section 4.03 if the proceeds thereof are used, directly or
indirectly, to
31
Refinance any Subordinated Obligations unless such Debt shall be subordinated to
the Securities to at least the same extent as such Subordinated Obligations, and
(ii) the Company shall not permit any Restricted Subsidiary to Incur any Debt
pursuant to this Section 4.03 if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations of the Company.
(c) For purposes of determining compliance with this Section 4.03, (i) in
the event that an item of Debt (including Debt issued by the Company to the
lenders that are party to the Credit Facility) meets the criteria of more than
one of the types of Debt described in Section 4.03(a)(i) and in the definition
of "Permitted Debt", the Company, in its sole discretion, will classify such
item of Debt and only be required to include the amount and type of such Debt in
either Section 4.03(a)(i) or in one of the clauses in the definition of
"Permitted Debt" and (ii) an item of Debt (including Debt issued by the Company
to the lenders that are party to the Credit Facility) may be divided and
classified in more than one of the types of Debt described in the definition of
"Permitted Debt" and Section 4.03(a)(i).
SECTION 4.04 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not make,
and shall not permit any Restricted Subsidiary to make, directly or indirectly,
any Restricted Payment if at the time of, and after giving effect to, such
proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be continuing or
would result therefrom,
(b) the Company could not Incur at least $1.00 of additional Debt pursuant
to Section 4.03(a)(i) or
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value) would exceed an amount equal to the sum of:
(i) an amount (whether positive or negative) equal to the Company's
EBITDA from the first date of the fiscal quarter in which the Issue Date
occurs to the end of the Company's most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment, taken as a
single accounting period, less the product of 1.7 times the Company's
Consolidated Interest Expense from the first date of the fiscal quarter in
which the Issue Date occurs to the end of the Company's most recent fiscal
quarter ending at least 45 days prior to the date of such Restricted
Payment, taken as a single accounting period,
(ii) Capital Stock Sale Proceeds,
(iii) the sum of (A) the aggregate net cash proceeds received by the
Company or any Restricted Subsidiary from the issuance or sale after the
Issue Date of convertible or exchangeable Debt that has been converted into
or exchanged for Capital Stock (other than Disqualified Stock) of the
Company and (B) the aggregate amount by which Debt (other than Subordinated
Obligations) of
32
the Company or any Restricted Subsidiary is reduced on the Company's
consolidated balance sheet on or after the Issue Date upon the conversion
or exchange of any Debt issued or sold on or prior to the Issue Date that
is convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (excluding, in the case of clause (A) or (B), (x) any
such Debt issued or sold to the Company or a Subsidiary of the Company or
an employee stock ownership plan or trust established by the Company or any
such Subsidiary for the benefit of their employees and (y) the aggregate
amount of any cash or other Property distributed by the Company or any
Restricted Subsidiary upon any such conversion or exchange),
(iv) an amount equal to the sum of (A) the net reduction in
Investments in any Person (other than the Company or a Restricted
Subsidiary) resulting from dividends, repayments of loans or advances or
other transfers of Property, in each case to the Company or any Restricted
Subsidiary from such Person, and (B) the portion (proportionate to the
Company's equity interest in an Unrestricted Subsidiary) of the Fair Market
Value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; PROVIDED,
HOWEVER, that the foregoing sum shall not exceed, in the case of any
Person, the amount of Investments previously made (and treated as a
Restricted Payment) by the Company or any Restricted Subsidiary in such
Person, and
(v) $15.0 million.
Notwithstanding the foregoing limitation, the Company may:
(1) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could
have been paid in compliance with this Indenture; PROVIDED, HOWEVER,
that at the time of such payment of such dividend, no other Default or
Event of 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;
(2) purchase, repurchase, redeem, legally defease, acquire or
retire for value Capital Stock of the Company or Subordinated
Obligations in exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to
a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any such Subsidiary for the
benefit of their employees); PROVIDED, HOWEVER, that (i) such
purchase, repurchase, redemption, legal defeasance, acquisition or
retirement shall be excluded in the calculation of the amount of
Restricted Payments and (ii) the Capital Stock Sale Proceeds from such
exchange or sale shall be excluded from the calculation pursuant to
clause (c)(ii) above;
33
(3) purchase, repurchase, redeem, legally defease, acquire or
retire for value any Subordinated Obligations in exchange for, or out
of the proceeds of the substantially concurrent sale of, Permitted
Refinancing Debt; provided, HOWEVER, that such purchase, repurchase,
redemption, legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of Restricted Payments;
(4) repurchase shares of, or options to purchase shares of,
common stock of the Company or any of its Subsidiaries from current or
former officers, directors or employees of the Company or any of its
Subsidiaries (or permitted transferees of such current or former
officers, directors or employees), 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 common stock; PROVIDED, HOWEVER, that (i) the aggregate
amount of such repurchases shall not exceed $5.0 million in any fiscal
year, (ii) such repurchases shall be included in the calculation of
the amount of Restricted Payments and (iii) at the time of any such
repurchase, no Default or Event of Default shall have occurred and be
continuing (or result therefrom);
(5) pay the fees and expenses described in Section 4.09(5),
PROVIDED, HOWEVER, that any such fees or expenses paid in excess of
$1.0 million per fiscal year shall be included in the calculation of
the amount of Restricted Payments;
(6) following the first Public Equity Offering that results in a
Public Market, pay dividends on the common stock of the Company of up
to 6.0% per annum of the cash proceeds (net of underwriters' fees,
discounts or commissions) of such first Public Equity Offering;
PROVIDED, HOWEVER, that (i) such dividends shall be (x) paid PRO RATA
to the holders of all classes of common stock of the Company and (y)
included in the calculation of the amount of Restricted Payments and
(ii) at the time of payment of any such dividend, no Default or Event
of Default shall have occurred and be continuing (or result
therefrom); and
(7) on the Issue Date, (x) purchase shares of the Company's
Series A Preferred Stock (together with accrued and unpaid dividends
thereon to the Issue Date) for an aggregate purchase price not to
exceed $8,650,000 and (y) purchase Existing Notes for an aggregate
purchase price not to exceed $14,000,000 (plus pay accrued and unpaid
interest thereon to the Issue Date), PROVIDED that each such purchase
shall be excluded from the calculation of the amount of Restricted
Payments.
In computing Consolidated Net Income of the Company under clauses (a), (b)
and (c) above, (x) the Company shall use audited financial statements for the
portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based
34
on the books and records of the Company for the remaining portion of such period
and (y) the Company shall be permitted to rely in good faith on the financial
statements and other financial data derived from the books and records of the
Company that are available on the date of determination. If the Company makes a
Restricted Payment that, at the time of the making of such Restricted Payment,
would in the good faith determination of the Company be permitted under the
requirements of this Indenture, such Restricted Payment shall be deemed to have
been made in compliance with this Indenture notwithstanding any subsequent
adjustments made in good faith to the Company's financial statements affecting
Consolidated Net Income of the Company for any period.
SECTION 4.05 LIMITATION ON LIENS. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to
exist, any Lien (other than Permitted Liens) upon any of its Property (including
Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, or any interest therein or any income or profits therefrom,
unless (a) if such Lien secures Senior Debt, the Securities are secured on an
equal and ratable basis with such Debt and (b) if such Lien secures any other
Debt, such Lien shall be subordinated to a Lien securing the Securities in the
same Property as that securing such other Debt (and if such Lien secures a
Subordinated Obligation, such Lien shall be subordinated to a Lien securing the
Securities to at least the same extent as such Subordinated Obligation is
subordinated to the Securities).
SECTION 4.06 LIMITATION ON ISSUANCE OR SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Company shall not (a) sell, transfer, convey or otherwise
dispose of any shares of Capital Stock of a Restricted Subsidiary or (b) permit
any Restricted Subsidiary to, directly or indirectly, issue, sell, transfer,
convey or otherwise dispose of any shares of its Capital Stock, other than (i)
directors' qualifying shares, (ii) to the Company or a Wholly Owned Subsidiary,
or (iii) if, immediately after giving effect to such disposition, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary;
PROVIDED, HOWEVER, that, in the case of this clause (iii), such issuance, sale
or disposition is effected in compliance with Section 4.07.
SECTION 4.07 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale unless (i) the Company or
such Restricted Subsidiary receives consideration at the time of such Asset Sale
at least equal to the Fair Market Value of the Property subject to such Asset
Sale; (ii) at least 75.0% of the consideration paid to the Company or such
Restricted Subsidiary in connection with such Asset Sale (except for a Permitted
Asset Swap) is in the form of cash or cash equivalents or the assumption by the
purchaser of liabilities of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Securities) as a result
of which the Company and the Restricted Subsidiaries are no longer obligated
with respect to such liabilities; and (iii) the Company delivers an Officers'
Certificate to the Trustee certifying that such Asset Sale complies with the
foregoing clauses (i) and (ii).
35
(b) The Net Available Cash (or any portion thereof) from Asset Sales may be
applied by the Company or a Restricted Subsidiary, to the extent that the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt): (a) to Repay Senior Debt of the Company (excluding any Debt owed to an
Affiliate of the Company); or (b) subject to Section 4.04, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary). Pending such application, and subject in all respects to
the procedures set forth below, the Company may, to the extent such use would
not constitute a Repayment, use such Net Available Cash to temporarily reduce
Debt.
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within 270 days from the date of the receipt of
such Net Available Cash or that is not (to the extent not used to temporarily
reduce Debt without reducing related loan commitments) segregated from the
general funds of the Company for investment in identified Additional Assets in
respect of a project that shall have been commenced, and for which binding
contractual commitments have been entered into, prior to the end of such 270-day
period and that shall not have been completed or abandoned shall constitute
"Excess Proceeds"; PROVIDED, HOWEVER, that the amount of any Net Available Cash
that ceases to be so segregated as contemplated above and any Net Available Cash
that is segregated in respect of a project that is abandoned or completed shall
also constitute "Excess Proceeds" at the time any such Net Available Cash ceases
to be so segregated or at the time the relevant project is so abandoned or
completed, as applicable. When the aggregate amount of Excess Proceeds exceeds
$5.0 million (taking into account income earned on such Excess Proceeds, if
any), the Company will be required to make an offer to purchase (the "Prepayment
Offer") the Securities which offer shall be in the amount of the Allocable
Excess Proceeds, on a PRO RATA basis according to principal amount, at a
purchase price equal to 100.0% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the purchase date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the procedures (including prorating
in the event of oversubscription) set forth herein. To the extent that any
portion of the amount of Net Available Cash remains after compliance with the
preceding sentence and provided that all Holders of Securities have been given
the opportunity to tender their Securities for purchase in accordance with
Section 4.07(d), the Company or such Restricted Subsidiary may use such
remaining amount for any purpose permitted by this Indenture and the amount of
Excess Proceeds will be reset to zero. The term "Allocable Excess Proceeds" will
mean the product of (i) the Excess Proceeds and (ii) a fraction, the numerator
of which is the aggregate principal amount of the Securities outstanding on the
date of the Prepayment Offer and the denominator of which is the sum of the
aggregate principal amount of the Securities outstanding on the date of the
Prepayment Offer and the aggregate principal amount of other Debt of the Company
outstanding on the date of the Prepayment Offer that is PARI PASSU in right of
payment with the Securities and subject to terms and conditions in respect of
Asset Sales similar in all material respects to this Section and requiring the
Company to make an offer to purchase such Debt at substantially the same time as
the Prepayment Offer.
36
(d) (i) Within five Business Days after the Company is obligated to make a
Prepayment Offer as described in Section 4.07(c), the Company shall send a
written notice, by first-class mail, to the Holders of Securities,
accompanied by such information regarding the Company and its Subsidiaries
as the Company in good faith believes will enable such Holders to make an
informed decision with respect to such Prepayment Offer. Such notice shall
state, among other things, the purchase price and the purchase date, which
shall be, subject to any contrary requirements of applicable law, a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed (the "Purchase Date").
(ii) Not later than the date upon which written notice of a Prepayment
Offer is delivered to the Trustee as provided above, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the amount of the
Prepayment Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Prepayment Offer
is being made and (iii) the compliance of such allocation with the
provisions of Section 4.07(b). On or before the Purchase Date, the Company
shall also irrevocably deposit with the Trustee or with the Paying Agent
(or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) in Temporary Cash Investments (other than in
those enumerated in clause (b) of the definition of 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. Upon the expiration of the period for which
the Prepayment Offer remains open (the "Offer Period"), the Company shall
deliver to the Trustee for cancellation the Securities or portions thereof
that have been properly tendered to and are to be accepted by the Company.
The Trustee or the Paying Agent shall, on the Purchase Date, mail or
deliver 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, the
Trustee or the Paying Agent shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section.
(iii) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company or its agent 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 one Business Day 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 that was delivered for purchase by the
Holder and a statement that such Holder is withdrawing its election to have
such Security purchased. If at the expiration of the Offer Period the
aggregate principal amount of Securities surrendered by Holders exceeds the
Offer Amount, the Company shall select the Securities to be purchased on a
PRO RATA basis for all Securities (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased
37
only in part shall be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered.
(iv) At the time the Company delivers Securities to the Trustee that
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 or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.
(e) The Company will 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 will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.08 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distributions on or
in respect of its Capital Stock, or pay any Debt or other obligation owed, to
the Company or any other Restricted Subsidiary, (b) make any loans or advances
to the Company or any other Restricted Subsidiary or (c) transfer any of its
Property to the Company or any other Restricted Subsidiary. The foregoing
limitations will not apply (i) with respect to clauses (a), (b) and (c), to
restrictions (A) arising under agreements of the Company and any Restricted
Subsidiary (as of the Issue Date) that were in effect on the Issue Date, (B)
relating to Debt of a Restricted Subsidiary and existing at the time it became a
Restricted Subsidiary if such restriction was not created in connection with or
in anticipation of the transaction or series of transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company or another Restricted Subsidiary, (C) that result from the Refinancing
of Debt Incurred pursuant to an agreement referred to in clause (i)(A) or (B)
above or in clause (ii)(A) or (B) below, PROVIDED such restriction is no more
restrictive than those under the agreement evidencing the Debt so Refinanced, or
(D) any restriction required by any governmental body or regulatory authority
having jurisdiction over the Company or any Restricted Subsidiary or any of
their businesses; and (ii) with respect to clause (c) only, to restrictions (A)
relating to Debt that is permitted to be Incurred and secured without also
securing the Securities pursuant to Sections 4.03 and 4.05 that limit the right
of the debtor to dispose of the Property securing such Debt, (B) encumbering
Property at the time such Property was acquired by the Company or any Restricted
Subsidiary, so long as such restriction relates solely to the Property so
acquired and was not created in connection with or in anticipation of such
acquisition, (C) resulting from customary provisions restricting subletting or
assignment of leases or customary provisions in other agreements that restrict
assignment of such agreements or rights thereunder or (D) customary restrictions
contained in asset sale agreements limiting the transfer of such Property
pending the closing of such sale.
38
SECTION 4.09 LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
conduct any business or enter into or suffer to exist any transaction or series
of transactions (including the purchase, sale, transfer, assignment, lease,
conveyance or exchange of any Property or the rendering of any service) with, or
for the benefit of, any Affiliate of the Company (an "Affiliate Transaction"),
unless (a) the terms of such Affiliate Transaction are (i) set forth in writing,
(ii) in the best interest of the Company or such Restricted Subsidiary, as the
case may be, and (iii) no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's-length transaction with a Person that is not an Affiliate of
the Company, (b) if such Affiliate Transaction involves aggregate payments or
value in excess of $1.0 million, two Officers of the Company approve such
Affiliate Transaction, and in the good faith judgment of such Officers, believe
that such Affiliate Transaction complies with clauses (a)(ii) and (iii) of this
paragraph as evidenced by an Officers' Certificate promptly delivered to the
Trustee, (c) if such Affiliate Transaction involves aggregate payments or value
in excess of $5.0 million, the Board of Directors (including a majority of the
disinterested members of the Board of Directors) approves such Affiliate
Transaction, and in its good faith judgment, believes that such Affiliate
Transaction complies with clauses (a)(ii) and (iii) of this paragraph as
evidenced by a Board Resolution promptly delivered to the Trustee and (d) if
such Affiliate Transaction involves aggregate payments or value in excess of
$10.0 million, the Company obtains a written opinion from an Independent
Appraiser to the effect that the consideration to be paid or received in
connection with such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary, as the case may be.
Notwithstanding the foregoing limitation, the Company or any Restricted
Subsidiary may enter into or suffer to exist the following:
(1) any transaction or series of transactions between the Company and
one or more Restricted Subsidiaries or between two or more Restricted
Subsidiaries, PROVIDED that no more than 5.0% of the total voting power of
the Voting Stock (on a fully diluted basis) of any such Restricted
Subsidiary is owned by an Affiliate of the Company (other than a Restricted
Subsidiary);
(2) any Restricted Payment permitted to be made pursuant to Section
4.04;
(3) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of the Company or any of the Restricted Subsidiaries, so long
as such payments are pursuant to a policy (i) established by the Board of
Directors in good faith and (ii) evidenced by a resolution of the Board of
Directors that establishes standards to ensure that the terms and amount of
such compensation are fair consideration for the services to be performed;
(4) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Company or such
Restricted
39
Subsidiary, as the case may be, PROVIDED that such loans and advances do
not exceed $1.0 million in the aggregate at any one time outstanding;
(5) the payment, in compliance with clause (a) of this Section 4.09,
of fees and expenses to the Equity Investors during any fiscal year not in
excess of 1.0% of EBITDA for such year, PROVIDED that no Default or Event
of Default exists at the time of such payment or would result therefrom;
(6) any sale or other issuance of Capital Stock (other than
Disqualified Stock) of the Company; or
(7) the payment of customary legal fees and expenses to Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP.
SECTION 4.10 LIMITATION ON GUARANTEES BY RESTRICTED SUBSIDIARIES. The
Company shall not cause or permit any of its Restricted Subsidiaries, directly
or indirectly, to Incur any Guarantee of any Debt of the Company ("Other Debt")
(other than a Permitted Guarantee) unless such Restricted Subsidiary, the
Company and the Trustee simultaneously execute and deliver a supplemental
indenture to this Indenture providing a Guarantee by such Restricted Subsidiary
of the Guaranteed Obligations on the terms and subject to the conditions set
forth in Article X, whereupon such Restricted Subsidiary shall become a Note
Guarantor for all purposes of this Indenture. If such Other Debt is (i) Senior
Debt, the Note Guarantee of such Note Guarantor shall rank PARI PASSU in right
of payment with the guarantee of such Other Debt, or (ii) Debt other than Senior
Debt, the Note Guarantee of such Note Guarantor shall be senior in right of
payment to the guarantee of such Other Debt (which guarantee of such Other Debt
shall provide by its terms that such guarantee is subordinated in right of
payment to the Note Guarantee of such Note Guarantor (and if such Other Debt is
a Subordinated Obligation, such guarantee shall be subordinated to such Note
Guarantee to the same extent and in the same manner as such Other Debt is
subordinated in right of payment to the Securities)).
SECTION 4.11 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The
Board of Directors may designate any Subsidiary of the Company to be an
Unrestricted Subsidiary if (a) the Subsidiary to be so designated does not own
any Capital Stock or Debt of, or own or hold any Lien on any Property of, the
Company or any other Restricted Subsidiary, (b) the Subsidiary to be so
designated is not obligated under any Debt, Lien or other obligation that, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Debt of the Company or of any Restricted Subsidiary and (c)
either (i) the Subsidiary to be so designated has total assets of $1,000 or less
or (ii) such designation is effective immediately upon such entity becoming a
Subsidiary of the Company. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company will be classified as a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Subsidiary shall not be
designated a Restricted Subsidiary and shall be automatically classified as an
Unrestricted Subsidiary if either of the requirements set forth in clauses (x)
and (y) of the immediately following paragraph will not be satisfied after
giving pro forma effect to such classification. Except as
40
provided in the first sentence of this paragraph, no Restricted Subsidiary may
be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Company could Incur at least $1.00 of additional Debt
pursuant to Section 4.03(a)(i) and (y) no Default or Event of Default shall have
occurred and be continuing or would result therefrom.
Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Company in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Company's fiscal year, within 90 days
after the end of such fiscal year).
SECTION 4.12 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale and Leaseback Transaction with respect to any Property unless (a) the
Company or such Restricted Subsidiary would be entitled to (i) Incur Debt in an
amount equal to the Attributable Debt with respect to such Sale and Leaseback
Transaction pursuant to Section 4.03 and (ii) create a Lien on such Property
securing such Attributable Debt without also securing the Securities pursuant to
Section 4.05 and (b) such Sale and Leaseback Transaction is effected in
compliance with Section 4.07.
SECTION 4.13 LIMITATION ON COMPANY'S BUSINESS. The Company shall not, and
shall not permit any Restricted Subsidiary, to, directly or indirectly, engage
in any business other than the Telecommunications Business.
SECTION 4.14 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Securities
shall have the right to require the Company to repurchase all or any part of
such Holder's Securities pursuant to the offer described below (the "Change of
Control Offer") at a purchase price (the "Change of Control Purchase Price")
equal to 101.0% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).
(b) Within 30 days following any Change of Control, the Company shall (i)
cause a notice of the Change of Control Offer to be sent at least once to the
Dow Xxxxx News Service or similar business news service in the United States and
(ii) send, by first-class mail, with a copy to the Trustee, to each Holder of
Securities, at such Holder's address appearing in the Security Register, a
notice stating: (A) that a Change of Control Offer is being made pursuant to
this Section 4.14 and that all Securities timely tendered will be
41
accepted for payment; (B) the Change of Control Purchase Price and the purchase
date, which shall be, subject to any contrary requirements of applicable law, a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date"); (C) the circumstances
and relevant facts regarding the Change of Control (including information known
by the Company, if any, with respect to pro forma historical income, cash flow
and capitalization after giving effect to the Change of Control); and (D) the
procedures that Holders of Securities must follow in order to tender their
Securities (or portions thereof) for payment, and the procedures that Holders of
Securities must follow in order to withdraw an election to tender Securities (or
portions thereof) for payment.
(c) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
or its agent at the address specified in the notice at least three Business Days
prior to the Change of Control Payment Date. Holders shall be entitled to
withdraw their election if the Trustee or the Company receives not later than
one Business Day prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security that was delivered for purchase by the Holder
and a statement that such Holder is withdrawing its election to have such
Security purchased.
(d) On or prior to the Change of Control Payment Date, the Company shall
irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Purchase Price payable to the Holders entitled thereto, to be held for payment
in accordance with the provisions of this Section. On the Change of Control
Payment Date, the Company shall deliver to the Trustee the Securities or
portions thereof that have been properly tendered to and are to be accepted by
the Company for payment. The Trustee or the Paying Agent shall, on the Change of
Control Payment Date, mail or deliver payment to each tendering Holder of the
Change of Control Purchase Price. In the event that the aggregate Change of
Control Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Change of
Control Payment Date.
(e) The Company will 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 purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.15 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 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
42
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
Section 314(a)(4).
SECTION 4.16 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee or
as necessary, 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 V
MERGER, CONSOLIDATION AND SALE OF PROPERTY
The Company shall not merge, consolidate or amalgamate with or into any
other Person (other than a merger of a Wholly Owned Subsidiary into the Company)
or sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless: (a) the Company shall be the surviving Person (the "Surviving Person")
or the Surviving Person (if other than the Company) formed by such merger,
consolidation or amalgamation or to which such sale, transfer, assignment,
lease, conveyance or disposition is made shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia; (b) the Surviving Person (if other than the Company)
expressly assumes, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such Surviving Person, the due
and punctual payment of the principal of, and premium, if any, and interest on,
all the Securities, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be performed by the Company; (c) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all the Property
of the Company, such Property shall have been transferred as an entirety or
virtually as an entirety to one Person; (d) immediately before and after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (d) and clauses (e) and (f) below, any
Debt that becomes, or is anticipated to become, an obligation of the Surviving
Person or any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person or such Restricted
Subsidiary at the time of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be continuing; (e)
immediately after giving effect to such transaction or series of transactions on
a pro forma basis, the Company or the Surviving Person, as the case may be,
would be able to Incur at least $1.00 of additional Debt under Section
4.03(a)(i); (f) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Surviving Person shall have a
Consolidated Net Worth in an amount that is not less than the Consolidated Net
Worth of the Company immediately prior to such transaction or series of
transactions; and (g) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture, if any, in respect thereto comply
with this Article V and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
43
The Surviving Person 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 sale, transfer, assignment, lease,
conveyance or other disposition shall not be released from its obligations under
this Indenture and the Securities (except the predecessor company shall be so
released in the case of the sale, transfer, assignment, conveyance or other
disposition, but not the lease, of the assets as an entirety or virtually as an
entirety).
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT. The following events shall be "Events of
Default":
(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;
(2) the Company defaults in the payment of any principal of, or
premium, if any, on any Security when the same becomes due and payable at
its Stated Maturity, upon acceleration, redemption, optional redemption,
required repurchase or otherwise;
(3) the Company fails to comply with Section 4.14 or Article V hereof;
(4) the Company fails to comply with any other covenant or agreement
in the Securities or in this Indenture (other than a failure that is the
subject of the foregoing clause (1), (2) or (3)) and such failure continues
for 30 days after written notice is given to the Company as specified
below;
(5) a default by the Company or any Restricted Subsidiary under any
Debt of the Company or any Restricted Subsidiary that results in
acceleration of the maturity of such Debt, or the failure to pay any such
Debt at maturity, in an aggregate amount in excess of $5,000,000 or its
foreign currency equivalent at the time;
(6) the Company or any Significant Subsidiary 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
44
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(7) 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
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or
(D) grants any similar relief under any foreign laws;
and in each such case the order or decree remains unstayed and in effect
for 30 days;
(8) any judgment or judgments for the payment of money in an aggregate
amount in excess of $5,000,000 or its foreign currency equivalent at the
time is entered against the Company or any Restricted Subsidiary and shall
not be waived, satisfied or discharged for any period of 60 consecutive
days during which a stay of enforcement shall not be in effect; or
(9) any Note Guarantee by a Note Guarantor that is a Significant
Subsidiary fails to be in full force or effect.
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 clause (4) is not an Event of Default until the Trustee or
the Holders of at least 25.0% in aggregate principal amount of the Securities
then outstanding notify the Company (and in the case of such notice by Holders,
the Trustee) 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".
The Company shall deliver to the Trustee promptly, and in any event, within
10 days after the occurrence thereof, written notice in the form of an Officers'
Certificate of any Event of Default and any event that with the giving of notice
or the lapse of time
45
would become an Event of Default, 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(6) or (7) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities then outstanding, by
notice to the Company and the Trustee, may declare the principal of and accrued
and unpaid interest to the date of acceleration 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(6) or
(7) with respect to the Company occurs, the principal of and accrued and unpaid
interest to the date of acceleration on all the Securities shall, automatically
and without any action by the Trustee or any Holder, become immediately due and
payable. After any such acceleration but before a judgment or decree based on
acceleration is obtained by the Trustee, the Holders of a majority in aggregate
principal amount of the outstanding Securities by notice to the Trustee and the
Company may rescind and annul any declaration of acceleration if all existing
Events of Default have been cured or waived, except nonpayment of principal,
premium or interest that has become due solely because of the 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. Subject to Section 6.02, the Holders
of a majority in aggregate principal amount of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security or (ii) 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 aggregate
principal amount of the Securities then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee with respect to the
Securities. 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,
46
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 reasonable indemnification against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06 LIMITATION ON SUITS. A Security holder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding shall have made a written request, and such
Holder or Holders shall have offered reasonable indemnity satisfactory to
the Trustee, to the Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has not
received from the Holders of at least a majority in aggregate principal
amount of the Securities outstanding a direction inconsistent with such
request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a Securityholder
shall not apply to a suit instituted by a Holder of Securities for the
enforcement of payment of the principal of, and premium, if any, or interest on
such Security on or after the applicable due date specified in such Security. 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
47
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 VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to 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 and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in aggregate 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, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and 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 VII
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 Indenture and use the
same degree of care and skill in its exercise as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs.
48
(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,
in the case of certificates or opinions specifically required by any
provision hereof to be furnished to it, 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 willful 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.
(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.
(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 and the provisions
of this Article VII shall apply to the Trustee in its role as Registrar, Paying
Agent and Securities Custodian.
(i) The Trustee shall not be deemed to have notice of a Default or an Event
of Default unless (a) the Trustee has received written notice thereof from the
Company or any Holder or (b) a Trust Officer shall have actual knowledge
thereof.
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SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on any document (whether in original
or facsimile form) 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. The Trustee may, however, in its discretion make
such further inquiry or investigation into such facts or matters as it may see
fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(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 that it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute
willful 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.
(f) The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty unless so specified herein.
(g) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar or co registrar may do
the same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
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SECTION 7.04 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for
and makes no representation as to the validity, priority 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 or Event of Default occurs
and is continuing and if it is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default or Event of Default within 90 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default or Event of Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding 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 May 15, 2004, and in any event prior to July 15
in each year, the Trustee shall mail to each Securityholder a brief report dated
as of July 15 each year as and if required by TIA Section 313(a) if and to the
extent required by such subsection. The Trustee also shall comply with TIA
Section 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 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, claim, damage or expense (including reasonable attorneys' fees and
expenses) incurred by it in connection with the acceptance and 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 reasonable 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. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld. All indemnifications and releases from liability
granted hereunder to the Trustee shall extend to its officers, directors,
employees, agents, successors and assigns.
51
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 resignation or removal of the Trustee and the discharge of this Indenture.
When the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(6) or (7) with respect to the Company, the expenses are intended to
constitute expenses of administration under the Bankruptcy Law.
The provisions of this Section 7.07 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.
SECTION 7.08 REPLACEMENT OF TRUSTEE. The Trustee may resign at any time by
so notifying the Company. The Holders of a majority in aggregate principal
amount of the Securities then outstanding 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 aggregate principal amount of the Securities then outstanding 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 upon payment of its charges hereunder 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 aggregate principal amount of the Securities then outstanding may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder who
has been a bona fide Holder of a Security for at least six months may petition
any court of
52
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 or banking association 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
such successor to the Trustee may authenticate such Securities 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 that
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 Section 310(a). The Trustee shall have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall have) a combined capital and surplus of at least
$50,000,000 as set forth in its (or its related bank holding company's) most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b), subject to the penultimate paragraph thereof; PROVIDED, HOWEVER,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article III
and the Company irrevocably deposits
53
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.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.14, the
operation of Sections 6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of
Sections 6.01(6) and (7), with respect only to Restricted Subsidiaries) and the
limitations contained in clauses (e) and (f) of Article V ("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. 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) (with
respect to the covenants of Article IV identified in the immediately preceding
paragraph), 6.01(5), 6.01(6), 6.01(7) and 6.01(8) (with respect only to
Restricted Subsidiaries in the case of Sections 6.01(6) and 6.01(7)) or because
of the failure of the Company to comply with the limitations contained in
clauses (e) and (f) of Article V.
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 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 shall survive until
the Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.07 and 8.05 shall survive any satisfaction and discharge.
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
or U.S. Government 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 certified public accountants
expressing their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times
and in such amounts as
54
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 Section 6.01(6) or (7) with respect to the
Company occurs that is continuing at the end of the period;
(4) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) 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;
(7) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from the Internal Revenue Service a ruling, or (ii) 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;
(8) 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
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities have been complied with as
required by this Indenture.
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 III.
SECTION 8.03 APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
VIII. It shall apply the deposited money and the money from 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.
55
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 solely to the
Company for payment as general creditors.
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 U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.06 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article
VIII 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 VIII until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article VIII; 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 or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
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 V;
(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;
(4) to provide for or confirm the issuance of additional Securities
pursuant to this Indenture;
56
(5) to add Guarantees with respect to the Securities (including Note
Guarantees pursuant to Section 4.10 and Article X) or to secure the
Securities;
(6) 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;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(8) 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 (including consents obtained in connection with a tender
offer or exchange offer for the Securities) of the Holders of at least a
majority in aggregate principal amount of the Securities outstanding. 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 or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Securities on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Securities;
(5) (i) reduce the amount payable upon the redemption or repurchase of
any Security under Article III or Section 4.07 or 4.14, (ii) change the
time at which any Security may be redeemed in accordance with Article III
or (iii) at any time after a Change of Control has occurred or at any time
after the Company is obligated to make a Prepayment Offer with the Excess
Proceeds from Asset Sales, change the time at which any Change of Control
Offer or Prepayment Offer must be made or at which the Securities must be
repurchased pursuant to such Change of Control Offer or Prepayment Offer.
(6) make any Security payable in money other than that stated in the
Security;
57
(7) make any change with respect to the ranking of the Securities or
any Note Guarantee relative to any other Debt or other obligations of the
Company or any Note Guarantor, as the case may be;
(8) release any security interest that may have been granted in favor
of the Holders other than pursuant to the terms of such security interest;
or
(9) 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, and no such consent shall be valid or effective for more than
120 days after such record date.
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 such Security to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return such Security 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
58
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 IX if the amendment does not
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 shall
be provided with, 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 X
NOTE GUARANTEES
SECTION 10.01 NOTE GUARANTEES GENERALLY.
(a) NOTE GUARANTEES. Each Note Guarantor from time to time party to this
Indenture, as primary obligor and not merely as surety, hereby jointly and
severally, irrevocably and fully and unconditionally Guarantees, on a senior
basis, the punctual payment when due, whether at Stated Maturity, by
acceleration or otherwise, of all monetary obligations of the Company under this
Indenture and the Securities, whether for principal or premium (if any) of, or
interest on, the Securities (all such obligations guaranteed by such Note
Guarantors being herein called the "GUARANTEED OBLIGATIONS"). Failing payment
when due of any amount so guaranteed (after giving effect to any applicable cure
period), each Note Guarantor shall be obligated to pay or cause the payment of
the same immediately.
Any term or provision of this Indenture notwithstanding, each Note
Guarantee shall not exceed the maximum amount that can be guaranteed by the
applicable Note Guarantor without rendering the Note Guarantee, as it relates to
such Note Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) FURTHER AGREEMENTS OF ANY NOTE GUARANTOR.
(i) Each Note Guarantor from time to time party hereto hereby waives
(to the fullest extent permitted by law) the benefit of diligence,
presentment, demand of payment, filing of claims with a court in the event
of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that (except as
59
otherwise provided in Section 10.03) its Note Guarantee will not be
discharged except by complete performance of the obligations contained in
the Securities, this Indenture and its Note Guarantee. Such Note Guarantee
is a guarantee of payment and not of collection. Each Note Guarantor
further agrees (to the fullest extent permitted by law) that, as between
it, on the one hand, and the Holders of Securities and the Trustee, on the
other hand, subject to this Article X, (1) the maturity of the obligations
guaranteed by its Note Guarantee may be accelerated as and to the extent -
provided in Article VI for the purposes of such Note Guarantee
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed by such Note
Guarantee, and (2) in the event of any - acceleration of such obligations
as provided in Article VI, such obligations (whether or not due and
payable) shall forthwith become due and payable by such Note Guarantor in
accordance with the terms of this Section 10.01 for the purpose of such
Note Guarantee. Neither the Trustee nor any other Person shall have any
obligation to enforce or exhaust any rights or remedies or to take any
other steps under any security for the Guaranteed Obligations or against
the Company or any other Person or any property of the Company or any other
Person before the Trustee or any Holder is entitled to demand payment and
performance by any or all Note Guarantors of their obligations under their
respective Note Guarantees or under this Indenture.
(ii) Until terminated in accordance with Section 10.03, any Note
Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of the Company's assets, and
shall, to the fullest extent permitted by law, continue to be effective or
be reinstated, as the case may be, if at any time payment and performance
of the Securities are, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee on such
Securities, whether as a "voidable preference," "fraudulent transfer" or
otherwise, all as though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Securities shall, to the fullest extent permitted
by law, be reinstated and deemed reduced only by such amount paid and not
so rescinded, reduced, restored or returned.
(c) Each Note Guarantor that makes a payment or distribution under any Note
Guarantee shall have the right to seek contribution from the Company or any
non-paying Note Guarantor that has also Guaranteed the Guaranteed Obligations in
respect of which such payment or distribution is made, so long as the exercise
of such right does not impair the rights of the Holders under this Note
Guarantee.
(d) Each Note Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its Note Guarantee and the waiver set forth in Section 10.04 is
knowingly made in contemplation of such benefits.
60
(e) Each Note Guarantor hereby agrees that (to the fullest extent permitted
by law) its Guarantee of the Guaranteed Obligations shall be unconditional,
irrespective of the validity, regularity or enforceability of this Indenture,
the Securities or the obligations of the Company or any other Note Guarantor to
the Holders or the Trustee hereunder or thereunder, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, any release of any other Note Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a notation concerning its respective Note Guarantee is affixed to
any particular Security, any set-off or counterclaim or other reduction
whatsoever (whether for taxes or otherwise), or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
SECTION 10.02 CONTINUING GUARANTEES. Each Note Guarantee shall be a
continuing Guarantee and shall (i) remain in full force and effect until payment
in full of the principal amount of all outstanding Securities (whether by
payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other Guaranteed Obligations then due and owing, unless
earlier terminated as provided in Section 10.03, (ii) be binding upon such Note
Guarantor and (iii) inure to the benefit of and be enforceable by the Trustee,
the Holders and their permitted successors, transferees and assigns.
SECTION 10.03 RELEASE OF NOTE GUARANTEES. Notwithstanding the provisions of
Section 10.02, any Note Guarantee will be subject to termination and discharge
under the circumstances described in this Section 10.03.
(a) Any Note Guarantor will automatically and unconditionally be released
from all obligations under its Note Guarantee, and such Note Guarantee shall
thereupon terminate and be discharged and of no further force or effect:
(1) concurrently with any sale or other disposition (by merger or
otherwise) of any Note Guarantor or any interest therein in accordance with
the terms of this Indenture (including Section 4.07) by the Company or a
Restricted Subsidiary, following which such Note Guarantor is no longer a
Restricted Subsidiary of the Company;
(2) at any time that such Note Guarantor is released from all of its
obligations under all of its Guarantees of Debt of the Company (other than
Permitted Guarantees); or
(3) upon the merger or consolidation of such Note Guarantor with and
into the Company or another Note Guarantor that is the surviving Person in
such merger or consolidation;
and in each case, in compliance with the other provisions of the Indenture.
(b) Upon any such occurrence specified in this Section 10.03, the Trustee
shall execute any documents reasonably required in order to evidence such
release, discharge and termination in respect of such Note Guarantor's Note
Guarantee.
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SECTION 10.04 WAIVER OF SUBROGATION. Each Note Guarantor hereby irrevocably
waives any claim or other rights that it may now or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of the Company's obligations under the Securities and this Indenture or such
Note Guarantor's obligations under its Note Guarantee and this Indenture,
including any right of subrogation, reimbursement, exoneration, indemnification,
and any right to participate in any claim or remedy of any Holder against the
Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, until this Indenture is discharged and all of
the Securities and other Guaranteed Obligations are discharged and paid in full.
If any amount shall be paid to a Note Guarantor in violation of the preceding
sentence and the Securities and other Guaranteed Obligations shall not have been
paid in full, such amount shall have been deemed to have been paid to such Note
Guarantor for the benefit of, and held in trust for the benefit of, the Holders
of the Securities, and shall forthwith be paid to the Trustee for the benefit of
the Holders to be credited and applied upon the Securities, whether matured or
unmatured, in accordance with the terms of this Indenture.
SECTION 10.05 NOTATION NOT REQUIRED. Neither the Company nor any Note
Guarantor shall be required to make a notation on the Securities to reflect any
Note Guarantee or any release, termination or discharge thereof.
SECTION 10.06 SUCCESSORS AND ASSIGNS OF THE NOTE GUARANTORS. All covenants
and agreements in this Indenture by each Note Guarantor shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 10.07 EXECUTION AND DELIVERY OF NOTE GUARANTEES. The Company shall
cause each Restricted Subsidiary that is required to become a Note Guarantor
pursuant to Section 4.10 to execute and deliver to the Trustee a supplemental
indenture substantially in the form set forth in Exhibit B to this Indenture
evidencing its Note Guarantee on the terms and subject to the conditions set
forth in this Article X. Concurrently therewith, the Company shall deliver to
the Trustee an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and that,
subject to the applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and other laws now or
hereafter in effect affecting creditors' rights or remedies generally and
general principles of equity, whether considered in a proceeding at law or at
equity, such supplemental indenture is a valid and binding agreement of such
Restricted Subsidiary, enforceable against such Restricted Subsidiary in
accordance with its terms.
SECTION 10.08 NOTICES. Notice to any Note Guarantor shall be sufficient if
addressed to the Company or such Note Guarantor in care of the Company at the
address, and place and in the manner provided in Section 11.02.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision that is required
to be included in this Indenture by the TIA, the required provision shall
control.
SECTION 11.02 NOTICES. Any notice or communication shall be in writing and
delivered in person or mailed by first class mail or sent by facsimile (with a
hard copy delivered in person or by mail promptly thereafter) and addressed as
follows:
if to the Company:
FairPoint Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000 Xxxxxxxxx, XX 00000 Facsimile: 000-000-0000
Attention: Chief Financial Officer
if to the Trustee:
The Bank of
New York
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
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 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
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(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 11.05 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 11.06 WHEN SECURITIES DISREGARDED. 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 that 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 11.07 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 or coregistrar may make reasonable rules for
their functions.
SECTION 11.08 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. 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.
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SECTION 11.09 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 11.10 NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall 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 11.11 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 11.12 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 sufficient to prove
this Indenture.
SECTION 11.13 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.
65
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
FAIRPOINT COMMUNICATIONS, INC.
By /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
THE BANK OF
NEW YORK,
as Trustee,
By /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
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APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A, TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATIONS AND, SUBJECT TO THE APPLICABLE
PURCHASE AGREEMENT, TO INSTITUTIONAL ACCREDITED INVESTORS.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix A the following terms shall have the
meanings indicated below (terms used in this Appendix A without definition have
the meanings assigned to them in the Indenture):
"APPLICABLE PROCEDURES" means, with respect to any transfer or transaction
involving a Temporary Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depository, Euroclear and Clearstream
for such a Temporary Regulation S Global Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"CLEARSTREAM" means Clearstream Banking, societe anonyme, or any successor
securities clearing agency.
"DEFINITIVE SECURITY" means a certificated Initial Security or Exchange
Security bearing, if required, the restricted securities legend set forth in
Section 2.3(e) of this Appendix A.
"DEPOSITORY" means The Depository Trust Company, its nominees and their
respective successors.
"EUROCLEAR" means the Euroclear Bank S.A./N.V. or any successor securities
clearing agency.
"EXCHANGE OFFER REGISTRATION STATEMENT" means a registration statement of
the Company on an appropriate form under the Securities Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"INITIAL PURCHASERS" means (1) with respect to the Original Notes, Credit
Suisse First Boston LLC, Xxxxxxx Xxxxx Xxxxxx Inc., Banc of America Securities
LLC,
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Deutsche Bank Securities Inc. and Wachovia Securities, Inc. and (2) with respect
to each issuance of additional Initial Securities after the Issue Date, the
Persons purchasing such Initial Securities under the related Purchase Agreement.
"PRIVATE EXCHANGE" means the offer by the Company, pursuant to Section 2 of
the Registration Rights Agreement dated March 3, 2003, or pursuant to any
similar provision of any other Registration Rights Agreement, to issue and
deliver to certain purchasers, in exchange for the Initial Securities held by
such purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"PRIVATE EXCHANGE SECURITIES" means the 11 7/8% Senior Notes due 2010 to be
issued pursuant to this Indenture in connection with a Private Exchange pursuant
to a Registration Rights Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement dated March 3, 2003,
between the Company and the Initial Purchasers relating to the Original
Securities, or any similar agreement relating to any future sale of Initial
Securities by the Company.
"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 the Registration Rights Agreement
dated March 3, 2003, between the Company and the Initial Purchasers relating to
the Original Securities, or any similar agreement relating to any additional
Initial Securities.
"RESTRICTED PERIOD" means, with respect to any Initial Securities, the
period of 40 consecutive days beginning on and including the later of (a) the
date on which such Securities were first offered to persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S, and (b) the first date on which such Securities are originally
issued.
"SECURITIES CUSTODIAN" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto who
shall initially be the Trustee.
"SHELF REGISTRATION STATEMENT" means a registration statement issued by the
Company in connection with the offer and sale of Initial Securities or Exchange
Securities pursuant to a Registration Rights Agreement.
"TRANSFER RESTRICTED SECURITIES" means Definitive Securities and any other
Securities that bear or are required to bear the legend set forth in Section
2.3(e) hereto.
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1.2 OTHER DEFINITIONS
Term Defined in Section
"Agent Members"........................................... 2.1(b)
"Global Security"......................................... 2.1(a)
"Regulation S"............................................ 2.1
"Rule 144A"............................................... 2.1
"Temporary Regulation S Global Security".................. 2.1(a)
2. THE SECURITIES
2.1 FORM AND DATING
The Initial Securities will be offered and sold by the Company, from time
to time, pursuant to one or more Purchase Agreements. The Initial Securities
will be resold, initially only to QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and in reliance on Regulation S under the
Securities Act ("Regulation S"). Initial Securities may thereafter be
transferred to, among others, QIBs, purchasers in reliance on Regulation S and
IAIs under Rule 501(a)(1),(2),(3) or (7) under the Securities Act.
(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 (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 with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial 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 this Indenture. Beneficial ownership interests in the Temporary
Regulation S Global Security will not be exchangeable for interests in the Rule
144A Global Security, a permanent global security (the "Permanent Regulation S
Global Security"), or any other security without a legend containing
restrictions on transfer of such Security prior to the expiration of the
Restricted Period and then only upon certification in form reasonably
satisfactory to the Trustee that beneficial ownership interests in such
Temporary Regulation S Global Security are owned either by non-U.S. persons or
U.S. persons who purchased such interests in a transaction that did not require
registration under the Securities Act. The Rule 144A Global Securities,
Temporary Regulation S Global Security and Permanent Regulation S Global
Security are collectively referred to herein as "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.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b) and pursuant to a written order of the Company in the form of an
Officers'
69
Certificate for the authentication and delivery of such Securities, 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 Securities Custodian.
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 or by the Trustee as Securities Custodian or under such
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee 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) DEFINITIVE SECURITIES. Except as provided in Section 2.3 or 2.4 of
this Appendix A, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver: (1)
Original Securities for original issue on the Issue Date in an aggregate
principal amount of $225,000,000, (2) additional Initial Securities from time to
time for original issue in an aggregate principal amount specified by the
Company and (3) Exchange Securities for issue only in a Registered Exchange
Offer or a Private Exchange pursuant to a Registration Rights Agreement, for a
like principal amount of Initial Securities, upon a written order of the Company
in the form of an Officer's Certificate for the authentication and delivery of
such Securities. Such order shall specify the principal amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities or
Exchange Securities.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for registration
of transfer or exchange:
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(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section 2.3(b)
hereto or pursuant to clause (A), (B) or (C) below, and are accompanied by
the following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act, to a QIB in accordance with Rule 144A, to an IAI
that has furnished to the Trustee a signed letter, or outside the
United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act,
(i) a certification to that effect and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in Section 2.3(e)(i) of this Appendix A.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by a written instrument of transfer in
form reasonably satisfactory to the Company and the Registrar or co-registrar,
together with:
(i) certification that such Definitive Security is being transferred
(A) to a QIB in accordance with Rule 144A or (B) outside the United States
in an offshore transaction within the meaning of Regulation S and in
compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase,
the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate
71
principal amount of Securities represented by the Global Security to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged pursuant to Section 2.4 of this Appendix A, the Company
shall issue and the Trustee shall authenticate, upon written order of the
Company in the form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of beneficial interest in Global
Securities 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 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 and such account shall be
credited in accordance with such instructions with a beneficial interest in
the Global Security and the account of the Person making the transfer shall
be debited by an amount equal to the beneficial interest in the Global
Security being transferred. In the case of a transfer of a beneficial
interest in a Global Security to an IAI, the transferee must furnish a
signed letter to the Trustee containing certain representations and
agreements (the form of which letter can be obtained from the Trustee or
the Company).
(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 Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A (other
than the provisions set forth in Section 2.4 of this Appendix A), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such Successor
Depository.
(iv) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 of this Appendix A
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
72
with the provisions of this Section 2.3 of this Appendix A (including the
certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A,
Regulation S or such other applicable exemption from registration under the
Securities Act, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(d) RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S GLOBAL SECURITIES.
During the Restricted Period, beneficial ownership interests in Temporary
Regulation S Global Securities may only be sold, pledged or transferred through
Euroclear or Clearstream in accordance with the Applicable Procedures and only
(i) to the Company, (ii) so long as such security is eligible for resale
pursuant to Rule 144A, to a person whom the selling holder reasonably believes
is a QIB as defined in Rule 144A that purchases for its own account or for the
account of a QIB to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, (iii) in an offshore transaction in
accordance with Regulation S, (iv) pursuant to an exemption from registration
provided by Rule 144 (if applicable) under the Securities Act, or (v) pursuant
to an effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States. During the Restricted Period, interests in the Temporary Regulation S
Global Security may not be transferred to institutions that are "Accredited
Investors" (but not QIBs) as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii), (iii), (iv)
and (vi), each Security certificate evidencing the Global Securities and
the Definitive Securities (and all Securities issued in exchange therefor
or in substitution thereof) shall bear a legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
NOTE, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS NOTE MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY
73
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE),
(3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS NOTE), (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY)
THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR
THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE,
(5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT ANY TRANSFER BY IT OF THIS NOTE COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS NOTE FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER
THE SECURITIES ACT."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
74
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security
that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legends set forth above and
rescind any restriction on the transfer of such Transfer Restricted
Security,
(C) in either case, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on
Rule 144 (such certification to be in the form set forth on the
reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the period of
the effectiveness of a Shelf Registration Statement with respect to such
Initial Securities, all requirements pertaining to legends on such Initial
Securities will cease to apply, the requirements requiring that any such
Initial Security be issued in global form will continue to apply, and
Initial Securities in global form without legends will be available to the
transferee of the Holder of such Initial Securities upon exchange of such
transferring Holder's Initial Securities. Upon the occurrence of any of the
circumstances described in this paragraph, the Company will deliver an
Officers' Certificate to the Trustee instructing the Trustee to issue
Securities without legends.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities pursuant to which certain Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities be issued in global form will continue to apply, and
Exchange Securities in global form without legends will be available to
Holders that exchange such Initial Securities in such Registered Exchange
Offer. Upon the occurrence of any of the circumstances described in this
paragraph, the Company will deliver an Officers Certificate to the Trustee
instructing the Trustee to issue Securities without legends.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
continue to apply, and Private Exchange Securities in global form will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
75
(vi) Upon a sale or transfer of any Initial Security acquired pursuant
to Regulation S, all requirements pertaining to legends on such Initial
Security will cease to apply, the requirements requiring any such Initial
Security be issued in global form will cease to apply, and an Initial
Security in certificated or global form without the Restricted Security
Legend will be available to the transferee of the Holder of such Initial
Securities.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depository to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
certificated or Definitive Securities, redeemed, repurchased 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 Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.
(g) 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,
Definitive 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
Section 3.06, 4.07, 4.14 or 9.05 of this Indenture).
(iii) The Registrar or co-registrar shall not be required to register
the transfer or exchange of any Security for a period beginning 15 days
before the mailing of a notice of redemption or any repurchase of
Securities or 15 days before an interest payment date.
(iv) Prior to the due presentation for registration 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 registration of transfer or
exchange pursuant to the terms of this Indenture shall evidence the same
debt and shall be
76
entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
(h) 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 any 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, beneficial owner or other Person
(other than the Depository) of any notice (including any notice of
redemption or repurchase) 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 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 this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 CERTIFICATED SECURITIES
(a) A Global Security deposited with the Depository or with the Trustee as
Securities Custodian pursuant to Section 2.1 of this Appendix A 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 of this Appendix A and (i) the Depository
notifies the Company that it is unwilling or unable to continue as a Depository
for such Global Security or if at any time the 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, or (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 this Indenture.
77
(b) Any Global Security that may be exchanged for certificated registered
Securities in the names of or is transferable to the beneficial owners thereof
pursuant to this Section 2.4 shall be surrendered by the Depository to the
Trustee, to be so exchanged, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such exchange of
each portion of such Global Security, an equal aggregate principal amount of
certificated Securities of authorized denominations. Any portion of a Global
Security exchanged pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depository shall direct. Any certificated
Initial Security delivered in exchange for an interest in the Global Security
shall, except as otherwise provided by Section 2.3(e) of this Appendix A, bear
the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) of this Appendix A, the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii) of this Appendix A, the Company will promptly
make available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
78
EXHIBIT 1
To APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC 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 NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE
HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
79
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS NOTE), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY
AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY
IT OF THIS NOTE COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT
IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2)
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS NOTE FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
[Temporary Regulation S Global Security Legend]
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE
WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A GLOBAL NOTE OR THE
PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN
THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING
RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY DISTRIBUTION
COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903 OF REGULATION S UNDER THE
SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY
TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S.
PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID
NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH THE
EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, S.A. AND ONLY (A) TO THE COMPANY, (B)
TO
80
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, OTHER THAN IN CANADA OR TO OR
FOR THE BENEFIT OF A RESIDENT OF CANADA PURSUANT TO A PROSPECTUS QUALIFYING THE
NOTES FOR SALE UNDER THE SECURITIES LAW IN ANY PROVINCE OR TERRITORY OF CANADA
IN WHICH THE PURCHASER RESIDES OR PURSUANT TO AN EXEMPTION FROM THE PROSPECTUS
REQUIREMENTS OF SUCH LAWS, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF APPLICABLE), OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. DURING SUCH
40-DAY DISTRIBUTION COMPLIANCE PERIOD, INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL NOTE MAY NOT BE TRANSFERRED TO INSTITUTIONS THAT ARE "ACCREDITED
INVESTORS" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT BUT NOT QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE
WILL NOTIFY ANY PURCHASER OF SUCH RESALE RESTRICTIONS, IF THEN APPLICABLE.
[Definitive Security Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
81
[FORM OF FACE OF INITIAL SECURITY]
No.
11 7/8% Senior Note due 2010
CUSIP No.
FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to
______________, or registered assigns, on March 1, 2010, the principal sum as
set forth on the Schedule of Increases and Decreases annexed hereto.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
82
Additional provisions of this Security are set forth on the other side of
this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
Dated:
FAIRPOINT COMMUNICATIONS, INC.
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
----------------------------------
Authorized Signatory
83
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
11 7/8% Senior Note due 2010
1. INTEREST
(a) FairPoint 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 semi-annually on March 1 and September 1 of each year
commencing September 1, 2003. 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 March 6, 2003. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the rate borne by the
Securities to the extent lawful.
(b) Additional Interest. The holder of this Security is entitled to the
benefits of a Registration Rights Agreement, dated March 3, 2003, among the
Company and the Initial Purchasers named therein (the "Registration Rights
Agreement"). Capitalized terms used in this paragraph (b) but not defined herein
have the meanings assigned to them in the Registration Rights Agreement. In the
event that (i) neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been filed with the Commission on or prior to the
90th day following the date of the original issuance of the Securities, (ii) the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 180th day following the date of the original issuance of the
Securities, (iii) neither the Registered Exchange Offer has been consummated nor
the Shelf Registration Statement has been declared effective on or prior to the
210th day following the date of the original issuance of the Securities, or (iv)
after either the Exchange Offer Registration Statement or the Shelf Registration
Statement has been declared effective, such Registration Statement thereafter
ceases to be effective or usable (subject to certain exceptions) in connection
with resales of the Securities at any time that the Company is obligated to
maintain the effectiveness thereof pursuant to the Registration Rights Agreement
(each such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), interest (the "Additional Interest") shall
accrue (in addition to stated interest on the Securities) from and including the
date on which the first such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured, at a rate per annum
equal to 0.50% of the principal amount of the Securities; provided, however,
that such rate per annum shall increase by 0.25% per annum from and including
the 91st day after the first such Registration Default (and each successive 91st
day thereafter) unless and until all Registration Defaults have been cured;
provided further, however, that in no event shall the Additional Interest accrue
at a rate in excess of 1.50% per annum. The Additional Interest will be payable
in cash semi-annually in arrears each March 1 and September 1.
84
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the Persons who are
registered holders of Securities at the close of business on the February 15 or
August 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Defaulted interest will be paid in the manner set forth in the Indenture.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States of America 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 Trust Company. 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 the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States 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, The Bank of New York (the "Trustee") will act as Paying Agent
and Registrar. 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 March 6,
2003 (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. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). 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 TIA for a statement of
those terms.
The Securities are general unsecured senior obligations of the Company,
unlimited in aggregate principal amount at any one time outstanding. This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Original Securities in an aggregate principal amount of
$225,000,000, additional Initial Securities issued under the Indenture in
aggregate principal amount specified by the Company and any Exchange Securities
issued in exchange for the Initial Securities. The Original Securities, the
additional Initial Securities and the Exchange Securities are
85
treated as a single class of securities under the Indenture and vote and consent
together on all matters as one class under the Indenture.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Securities may not be redeemed prior to
March 1, 2007. On and after that date, the Company may redeem the Securities, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
in percentages of principal amount), plus accrued and unpaid interest, if any,
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 that is on or prior to the date of redemption), if redeemed during the
12-month period beginning on March 1 of the years set forth below:
Year Price
---- -----
2007 105.938%
2008 102.969%
2009 and thereafter 100.000%
Notwithstanding the foregoing, on or prior to March 1, 2006, the Company
may redeem up to 35% of the aggregate principal amount of all Securities
theretofore issued, with proceeds of an Equity Sale, at a redemption price of
111.875% of the principal amount thereof plus accrued and unpaid interest, if
any, 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 that is on or prior to the date of redemption), PROVIDED, HOWEVER, that at
least 65% of the aggregate principal amount of the Original Securities (and
Exchange Securities issued in exchange therefor) remains outstanding after the
occurrence of such redemption and PROVIDED, FURTHER, that such redemption shall
be made within 75 days of such Equity Sale upon not less than 30 nor more than
60 days' notice.
6. SINKING FUND.
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $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.
8. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL.
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or
86
any part of the Securities of such Holder at a purchase price equal to 101.0% of
the principal amount of the Securities to be repurchased 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 due on the relevant
interest payment date that is on or prior to the date of purchase) as provided
in, and subject to the terms of, the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of 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 transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. 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 written 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.
12. DISCHARGE AND DEFEASANCE.
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
13. AMENDMENT, WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended without prior notice to any Securityholder but
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder of Securities, the Company and the Trustee may amend
the Indenture or the Securities (i) to cure any ambiguity, omission, defect or
87
inconsistency; (ii) to comply with Article V of the Indenture; (iii) to provide
for uncertificated Securities in addition to or in place of certificated
Securities; (iv) to provide for or confirm the issuance of additional
Securities; (v) to add Guarantees with respect to the Securities; (vi) to secure
the Securities; (vii) to add additional covenants or to surrender rights and
powers conferred on the Company; (viii) to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the
TIA; or (ix) to make any change that does not adversely affect the rights of any
Securityholder.
14. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the Securities then
outstanding, subject to certain limitations, may declare all the Securities to
be immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Securities being immediately due and
payable upon the occurrence of such Events of Default without any further act of
the Trustee or any Holder. Holders of Securities 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 reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Trustee and the Company, may rescind any declaration of
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 the acceleration.
15. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, 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 wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. 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 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.
88
17. 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.
18. 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).
19. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK 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.
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. 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.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS SECURITY.
89
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 __________________________________as agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him or her.
Date: _________________________
Your Signature:
--------------------------------------------------
Sign exactly as your name appears on the other side of this 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 of 1933 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
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 in compliance with Rule
904 under the Securities Act of 1933; or
90
5. to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has
furnished to the Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from the Trustee
or the Company); or
6. pursuant to another available 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), (5) or (6) is checked, the Trustee may 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.
---------------------------------
Your Signature
Signature Guarantee:
Date: __________________ ---------------------------------
Signature of Signature Guarantee
Signature must be guaranteed by a participant in a Guarantee recognized
signature guaranty medallion program or other signature guarantor acceptable to
the Trustee
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.
Date: __________________ ----------------------------------
NOTICE: To be executed by an
executive officer
91
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $___________. The
following increases or decreases in this Global Security have been made:
Principal Amount of
Amount of decrease in Amount of increase in this Global Security Signature of authorized
Principal Amount of Principal Amount of following such decrease signatory of Trustee or
Date of Exchange this Global Security this Global Security or increase Securities Custodian
92
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.07 or 4.14 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 4.07 or 4.14 of the Indenture, state the amount: $_________
Date: __________________
Your Signature:
-------------------------------------------------
(Sign exactly as your name appears on the other side of the Security)
Signature
Guarantee:
----------------------------------------------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
93
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY]
No.
11 7/8% Senior Note due 2010
CUSIP No.
FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to
________________, or registered assigns, on March 1, 2010, the principal sum as
set forth on the Schedule of Increases and Decreases annexed hereto.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
94
Additional provisions of this Security are set forth on the other side of
this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
Dated:
FAIRPOINT COMMUNICATIONS, INC.
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
---------------------------------
Authorized Signatory
*/ 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".
95
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
11 7/8% Senior Note due 2010
1. INTEREST.
FairPoint 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 semi-annually on March 1 and September 1 of each year commencing
September 1, 2003. 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
March 6, 2003. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at the
rate borne by the Securities plus 1% per annum, and it shall pay interest on
overdue installments of interest at the rate borne by the Securities to the
extent lawful.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the Persons who are
registered holders of Securities at the close of business on February 15 or
August 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Defaulted interest will be paid in the manner set forth in the Indenture.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States of America 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 Trust Company. 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 the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States 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, The Bank of New York (the "Trustee") will act as Paying Agent
and Registrar. 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.
96
4. INDENTURE.
The Company issued the Securities under an Indenture dated as of March 6,
2003 (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. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). 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 TIA for a statement of
those terms.
The Securities are general unsecured senior obligations of the Company,
unlimited in aggregate principal amount at any one time outstanding. This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Original Securities in an aggregate principal amount of
$225,000,000, any additional Initial Securities issued under the Indenture in
aggregate principal amount specified by the Company and any Exchange Securities
issued in exchange for the Initial Securities. The Original Securities, any
additional Initial Securities and the Exchange Securities are treated as a
single class of securities under the Indenture and will vote and consent
together on all matters as one class under the Indenture.
5. OPTIONAL REDEMPTION.
Except as set forth below, the Securities may not be redeemed prior to
March 1, 2007. On and after that date, the Company may redeem the Securities, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
in percentages of principal amount), plus accrued and unpaid interest, if any,
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 that is on or prior to the date of redemption), if redeemed during the
12-month period beginning on March 1 of the years set forth below:
Year Price
---- -----
2007 105.938%
2008 102.969%
2009 and thereafter 100.000%
Notwithstanding the foregoing, on or prior to March 1, 2006, the Company
may redeem up to 35% of the aggregate principal amount of all Securities
theretofore issued, with proceeds of an Equity Sale, at a redemption price of
111.875% of the principal amount thereof plus accrued and unpaid interest, if
any, 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 that is on or prior to the date of redemption), PROVIDED, HOWEVER, that at
least 65% of the aggregate principal amount of the Original Securities (and
Exchange Securities issued in exchange therefor) remains outstanding after the
occurrence of such redemption and PROVIDED, FURTHER, that such redemption shall
be made within 75 days of such Equity Sale upon not less than 30 nor more than
60 days' notice.
97
6. SINKING FUND.
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $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.
8. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL.
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101.0% of the principal amount of the Securities to be
repurchased 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 due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of 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 transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. 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 written request unless an abandoned property law designates another Person.
After any such
98
payment, Holders entitled to the money must look only to the Company and not to
the Trustee for payment.
12. DISCHARGE AND DEFEASANCE.
Subject to certain conditions, the Company at any time may terminate some
of or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. AMENDMENT, WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended without prior notice to any Securityholder but
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder of Securities, the Company and the Trustee may amend
the Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency; (ii) to comply with Article V of the Indenture; (iii) to provide
for uncertificated Securities in addition to or in place of certificated
Securities; (iv) to provide for or confirm the issuance of additional
Securities; (v) to add Guarantees with respect to the Securities; (vi) to secure
the Securities; (vii) to add additional covenants or to surrender rights and
powers conferred on the Company; (viii) to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the
TIA; or (ix) to make any change that does not adversely affect the rights of any
Securityholder.
14. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the Securities then
outstanding, subject to certain limitations, may declare all the Securities to
be immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Securities being immediately due and
payable upon the occurrence of such Events of Default without any further act of
the Trustee or any Holder. Holders of Securities 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 reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power under the Indenture. The Holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Trustee and the Company, may rescind any declaration of
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 the acceleration.
99
15. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, 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 wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. 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 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.
17. 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.
18. 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).
19. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK 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.
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. 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.
100
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS SECURITY.
101
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 ______________________________________ as agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him or her.
Date: ____________________
Your Signature:
----------------------------------------------------
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
102
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.07 or 4.14 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 4.07 or 4.14 of the Indenture, state the amount:
$__________________
Date: __________________
Your Signature:
---------------------------------------------------
(Sign exactly as your name appears on the other side of the Security)
Signature
Guarantee:
----------------------------------------------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
103
EXHIBIT B
Form of Supplemental Indenture in Respect of Note Guarantee
SUPPLEMENTAL INDENTURE, dated as of [_________] (this "SUPPLEMENTAL
INDENTURE"), among [name of [Note Guarantor[s] ] (the "NOTE GUARANTOR[S]"),
FairPoint Communications, Inc., a Delaware corporation (together with its
successors and assigns, the "Company"), and The Bank of New York, as Trustee
(the "TRUSTEE") under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee are parties to an Indenture, dated as
of March 6, 2003 (as amended, supplemented, waived or otherwise modified, the
"INDENTURE"), providing for the issuance of 11 7/8% Senior Notes due 2010 of the
Company (the "SECURITIES");
WHEREAS, Section 4.10 of the Indenture provides that the Company is
required to cause the Note Guarantor[s] to execute and deliver to the Trustee a
supplemental indenture pursuant to which the Note Guarantor[s] shall guarantee
the Securities pursuant to [a] Note Guarantee[s] on the terms and conditions set
forth herein and in Article X of the Indenture;
WHEREAS, [the][each] Note Guarantor desires to enter into this Supplemental
Indenture for good and valuable consideration, including substantial economic
benefit in that the financial performance and condition of such Note Guarantor
is dependent on the financial performance and condition of the Company; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the parties hereto are
authorized to execute and deliver this Supplemental Indenture to amend the
Indenture, without the consent of any Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Note
Guarantor[s], the Company and the Trustee mutually covenant and agree for the
benefit of the Holders of the Securities as follows:
1. DEFINED TERMS. As used in this Supplemental Indenture, terms defined
in the Indenture or in the preamble or recital hereto are used herein as therein
defined. The words "herein," "hereof" and "hereby" and other words of similar
import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2. AGREEMENT TO GUARANTEE. [The] [Each] Note Guarantor hereby agree[s],
jointly and severally with [all] [any] other Note Guarantor[s], fully and
unconditionally, to guarantee the Guaranteed Obligations under the Indenture and
the Securities on the
104
terms and subject to the conditions set forth in Article X of the Indenture and
to be bound by (and shall be entitled to the benefits of) all other applicable
provisions of the Indenture as a Note Guarantor.
3. TERMINATION, RELEASE AND DISCHARGE. [The] [Each] Note Guarantor's Note
Guarantee shall terminate and be of no further force or effect, and [the] [each]
Note Guarantor shall be released and discharged from all obligations in respect
of its Note Guarantee, only as and when provided in Section 10.03 of the
Indenture.
4. PARTIES. Nothing in this Supplemental Indenture is intended or shall
be construed to give any Person, other than the Holders and the Trustee, any
legal or equitable right, remedy or claim under or in respect of [the] [each]
Note Guarantor's Note Guarantee or any provision contained herein or in Article
X of the Indenture.
5. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO THE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
6. 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. This 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. The Trustee makes no
representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.
7. COUNTERPARTS. The parties hereto may sign one or more copies of this
Supplemental Indenture in counterparts, all of which together shall constitute
one and the same agreement.
8. HEADINGS. The section headings herein are for convenience of reference
only and shall not be deemed to alter or affect the meaning or interpretation of
any provisions hereof.
105
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NAME OF NOTE GUARANTOR], as
Note Guarantor
By:
---------------------------------
Name:
Title:
FAIRPOINT COMMUNICATIONS, INC.
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Name:
Title:
106
