FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 1998
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Aerial Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-28262 39-1706857
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
8410 West Bryn Mawr, Suite 1100, Chicago, Illinois 60631
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (773) 399-4200
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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This Current Report on Form 8-K is being filed for the purpose of
filing the Trust Indenture Agreement dated February 5, 1998, between the
Company, as issuer, Telephone and Data Systems, Inc., as guarantor and The First
National Bank of Chicago, as trustee related to the $219,975,000 Series B Zero
Coupon Notes Due 2008.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits
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The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
Date: April 29, 1998 AERIAL COMMUNICATIONS, INC.
(Registrant)
By: /s/ J. Clarke Smith
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J. Clarke Smith
Vice President - Finance and Administration,
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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4.1 The Trust Indenture between the Company as
issuer, Telephone and Data Systems, Inc. as
guarantor, and The First National Bank of
Chicago, as trustee for the Company's
$219,975,000 Series B Zero Coupon Notes Due
2008.
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Exhibit 4.1
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Aerial Communications, Inc.,
as Issuer
Telephone and Data Systems, Inc.,
as Guarantor
AND
The First National Bank of Chicago,
as Trustee
--------------------------------------
Indenture
Dated as of February 5, 1998
--------------------------------------
$219,975,000
Series B Zero Coupon Notes Due 2008
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TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS
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SECTION 1.1 Certain Terms Defined................................... 1
Agent Member............................................ 2
Authenticating Agent.................................... 2
Board of Directors...................................... 2
Board Resolution........................................ 2
Business Day............................................ 2
Capital Stock........................................... 2
Capitalized Rent........................................ 2
Consolidated Capitalization............................. 2
Corporate Trust Office.................................. 2
Debt ................................................... 3
Definitive Notes........................................ 3
Depositary.............................................. 3
Event of Default........................................ 3
Exchange Act............................................ 3
Funded Debt............................................. 3
Guarantee .............................................. 3
Global Note............................................. 3
Guarantor .............................................. 3
Government Obligations.................................. 3
Holder .............................................. 4
Holder of Notes......................................... 4
Noteholder.............................................. 4
IAI .............................................. 4
Indenture .............................................. 4
Indenture Obligations................................... 4
Issuer .............................................. 4
Issuer Order............................................ 4
Issue Price............................................. 4
Lien .............................................. 4
Material Adverse Effect................................. 4
Notes .............................................. 4
Notes Custodian......................................... 4
Officer .............................................. 4
Officers' Certificate................................... 4
Opinion of Counsel...................................... 5
Original Issue Discount................................. 5
Outstanding............................................. 5
Paying Agent............................................ 5
Person .............................................. 5
Principal Amount at Maturity............................ 5
QIB .............................................. 5
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Page
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Redemption Price........................................ 6
Registrar .............................................. 6
Responsible Officer..................................... 6
Sale and Leaseback Transaction.......................... 6
Secured Debt............................................ 6
SEC .............................................. 6
Securities Act.......................................... 6
Subsidiary.............................................. 6
subsidiary.............................................. 6
Successor Company....................................... 6
Tax Consolidated Subsidiary............................. 7
Transfer Restricted Notes............................... 7
Trustee .............................................. 7
Wholly Owned Subsidiary................................. 7
ARTICLE TWO
THE NOTES
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SECTION 2.1 Form and Dating............................................ 7
SECTION 2.2 Execution and Authentication............................... 8
SECTION 2.3 Registrar and Paying Agent................................. 8
SECTION 2.4 Paying Agent To Hold Money in Trust........................ 9
SECTION 2.5 Transfer and Exchange...................................... 9
SECTION 2.6 Replacement Notes.......................................... 14
SECTION 2.7 Temporary Notes and Certificated Notes..................... 14
SECTION 2.8 Cancellation............................................... 15
SECTION 2.9 CUSIP Numbers.............................................. 15
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE GUARANTOR
-----------------------------------------
SECTION 3.1 Payment of Notes........................................... 15
SECTION 3.2 Offices for Payments, etc.................................. 16
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee.......................................... 16
SECTION 3.4 Paying Agents.............................................. 16
SECTION 3.5 Written Statement to Trustee............................... 17
SECTION 3.6 Limitation on Secured Debt................................. 17
SECTION 3.7 Limitation on Sale and Leaseback........................... 19
SECTION 3.8 Voting Control of the Issuer............................... 20
SECTION 3.9 Insurance ............................................... 20
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Page
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ARTICLE FOUR
NOTEHOLDERS LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
-----------------------------
SECTION 4.1 Issuer to Furnish Trustee Names and
Addresses of Noteholders................................... 21
SECTION 4.2 Preservation and Disclosure of Noteholders Lists........... 21
SECTION 4.3 Reports by the Issuer and the Guarantor.................... 22
SECTION 4.4 Reports by the Trustee..................................... 22
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
---------------------------------------
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default......................................... 24
SECTION 5.2 Collection of Indebtedness by
Trustee; Trustee May Prove Debt........................... 26
SECTION 5.3 Application of Proceeds................................... 28
SECTION 5.4 Suits for Enforcement..................................... 28
SECTION 5.5 Restoration of Rights on Abandonment
of Proceedings................................... 28
SECTION 5.6 Limitations on Suits by Noteholders....................... 28
SECTION 5.7 Unconditional Right of Noteholders
to Institute Certain Suits................................ 29
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default......................... 29
SECTION 5.9 Control by Holders of the Notes........................... 29
SECTION 5.10 Waiver of Past Defaults................................... 30
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain Circumstances................. 30
SECTION 5.12 Right of Court to Require Filing
of Undertaking to Pay Costs............................... 30
ARTICLE SIX
CONCERNING THE TRUSTEE
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SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default................. 31
SECTION 6.2 Certain Rights of the Trustee............................. 32
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Page
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SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of the Notes or
Application of Proceeds Thereof........................... 33
SECTION 6.4 Trustee and Agents May Hold Notes;
Collections, etc.......................................... 33
SECTION 6.5 Moneys Held by Trustee.................................... 33
SECTION 6.6 Compensation and Indemnification
of Trustee and Its Prior Claim............................ 34
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc.......................................... 34
SECTION 6.8 Qualification of Trustee; Conflicting
Interests................................................. 34
SECTION 6.9 Persons Eligible for Appointment
as Trustee................................................ 39
SECTION 6.10 Resignation and Removal; Appointment
of Successor Trustee...................................... 39
SECTION 6.11 Acceptance of Appointment by
Successor Trustee......................................... 40
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee......................... 41
SECTION 6.13 Preferential Collection of Claims
Against the Issuer........................................ 42
SECTION 6.14 Appointment of Authenticating
Agent..................................................... 45
ARTICLE SEVEN
CONCERNING THE NOTEHOLDERS
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SECTION 7.1 Evidence of Action Taken by
Noteholders............................................... 46
SECTION 7.2 Proof of Execution of Instruments
and of Holding of Notes................................... 46
SECTION 7.3 Holders to be Treated as Owners........................... 46
SECTION 7.4 Notes Owned by Issuer Deemed Not
Outstanding............................................... 46
SECTION 7.5 Right of Revocation of Action Taken....................... 47
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 8.1 Supplemental Indentures Without
Consent of Noteholders.................................... 47
SECTION 8.2 Supplemental Indentures With Consent
of the Noteholders........................................ 49
SECTION 8.3 Effect of Supplemental Indenture.......................... 50
SECTION 8.4 Documents to Be Given to Trustee.......................... 50
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Page
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SECTION 8.5 Notation on Notes in Respect of
Supplemental Indentures................................... 50
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
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SECTION 9.1 Covenant of the Guarantor and the
Issuer Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions.................................. 50
SECTION 9.2 Notes to be Secured in Certain Events..................... 51
SECTION 9.3 Successor Company Substituted............................. 51
SECTION 9.4 Officers' Certificate and Opinion of
Counsel Delivered to Trustee.............................. 52
ARTICLE TEN
SATISFACTION AND DISCHARGE OF
INDENTURE; UNCLAIMED MONEYS
------------------------------
SECTION 10.1 Satisfaction and Discharge of Indenture.................. 52
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Notes......................................... 55
SECTION 10.3 Repayment of Moneys Held by Paying Agent................. 55
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years.................................. 55
SECTION 10.5 Indemnity for Government Obligations..................... 56
SECTION 10.6 Reinstatement............................................ 56
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Issuer and Guarantor Exempt from Individual Liability.... 56
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Notes..................................... 56
SECTION 11.3 Successors and Assigns of Issuer or Guarantor Bound by
Indenture................................................ 57
SECTION 11.4 Notices and Demands on Issuer, the Guarantor, Trustee
and Holders of Notes..................................... 57
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to be Contained Therein....................... 57
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.......... 58
SECTION 11.7 Illinois Law to Govern................................... 59
SECTION 11.8 Counterparts............................................. 59
SECTION 11.9 Effect of Headings....................................... 59
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Page
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ARTICLE TWELVE
REDEMPTION OF NOTES
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SECTION 12.1 Right to Redeem; Notices to Trustee...................... 59
SECTION 12.2 Notice of Redemption; Partial Redemptions................ 59
SECTION 12.3 Payment of Notes Called for Redemption................... 60
SECTION 12.4 Exclusion of Certain Notes from Eligibility for
Selection for Redemption................................. 61
ARTICLE THIRTEEN
GUARANTEE
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SECTION 13.1 Telephone and Data Systems, Inc. Guarantee............... 61
SECTION 13.2 Continuing Guarantee; No Right of Set-Off;
Independent Obligation................................... 61
SECTION 13.3 Guarantee Unconditional.................................. 62
SECTION 13.4 Right to Demand Full Performance......................... 64
SECTION 13.5 Waivers .............................................. 64
SECTION 13.6 The Guarantor Remains Obligated in the Event the Issuer
is No Longer Obligated to Discharge Indenture Obligations 65
SECTION 13.7 Subrogation.............................................. 65
SECTION 13.8 Guarantee Is In Addition to Other Security............... 65
SECTION 13.9 Release of Security Interests............................ 65
SECTION 13.10 No Bar to Further Actions................................ 66
SECTION 13.11 Failure to Exercise Rights Shall Not Operate As a Waiver;
No Suspension of Remedies................................ 66
SECTION 13.12 Release of Guarantee..................................... 66
SECTION 13.13 Execution of Guarantee................................... 66
SECTION 13.14 Guarantee Unsecured Unsubordinated Indebtedness of
Guarantor................................................ 67
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EXHIBIT A Form of Note
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THIS INDENTURE dated as of February 5, 1998 (the "Indenture")
among Aerial Communications, Inc., a Delaware corporation, as issuer (the
"Issuer"), Telephone and Data Systems, Inc., an Iowa corporation, as Guarantor
(the "Guarantor"), and The First National Bank of Chicago, as trustee (the
"Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of the Series B
Zero Coupon Notes Due February 1, 2008 (the "Notes) up to $219,975,000 principal
amount at maturity.
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Notes;
WHEREAS, the Guarantor has duly authorized the full and
unconditional guarantee by the Guarantor, when and as the same shall become due
and payable, of the Issuer's due and punctual payment of its obligations under
this Indenture and the Notes, whether at maturity, by declaration of
acceleration, upon redemption or otherwise; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Notes by
the holders thereof, the Issuer, the Guarantor and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective Holders from
time to time of the Notes as follows:
ARTICLE ONE
DEFINITIONS
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SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All
accounting terms used herein and not otherwise expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation.
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article include the plural as well
as the singular.
<PAGE>
"Agent Member" shall have the meaning set forth in Section 2.1(b).
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Board of Directors" means the Board of Directors of the Issuer or
the Guarantor, as the case may be, or any committee of such Board duly
authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Issuer or the
Guarantor, as the case may be, to have been duly adopted or consented to by the
Board of Directors of the Issuer or the Guarantor, as the case may be, and to be
in full force and effect, and delivered to the Trustee.
"Business Day" means, with respect to the Notes, a day on which,
in any city where amounts are payable on the Notes as therein specified, banking
institutions are not authorized or required by law or regulation to close.
"Capital Stock" means and includes any and all shares, interests,
participations or other equivalents (however designated) of ownership in a
corporation or other Person.
"Capitalization" means with respect to any Person the total of (a)
Funded Debt, (b) the par value or, in the case of Capital Stock with no par
value, a value stated on the books, of all outstanding shares of Capital Stock,
(c) the paid-in surplus and retained earnings (or minus the net surplus deficit,
as the case may be), (d) deferred taxes and deferred investment tax credits, (e)
Capitalized Rent and (f) minority interests in subsidiaries, of such Person.
Notwithstanding the foregoing, for purposes of the definition of "Event of
Default," "Capitalization" shall have the meaning set forth in Section 5.1
hereof.
"Capitalized Rent" means the present value (discounted
semi-annually at the yield to maturity on the Notes, calculated from the date of
issuance thereof) of the total net amount of rent payable for the remaining term
of any lease of property by the Guarantor (including any period for which such
lease has been extended); provided, however, that no such rental obligation
shall be deemed to be Capitalized Rent unless the lease resulted from a Sale and
Leaseback Transaction. The total net amount of rent payable under any lease for
any period shall be the total amount of the rent payable by the lessee with
respect to such period but shall not include amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water rates,
sewer rates and similar charges.
"Consolidated Capitalization" means the Capitalization of the
Guarantor and its Subsidiaries determined on a consolidated basis as of the end
of the Guarantor's then most recently reported fiscal year or quarter, as the
case may be, including minority interests in its Subsidiaries.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the
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date of original execution of this Indenture is located at One First National
Plaza, Suite 0126, Chicago, IL 60670, Attention: Corporate Trust Administration,
except that, with respect to presentation of the Notes for payment or
registration of transfers or exchanges and the location of the register, such
term means the office or agency of the Trustee at which at any particular time
its corporate agency business shall be conducted, which at the date of original
execution of this Indenture is located at 14 Wall Street - 8th Floor - Window 2,
New York, New York 10005.
"Debt" means with respect to a Person all obligations of such
Person for borrowed money and all such obligations of any other Person for
borrowed money guaranteed by such Person.
"Definitive Notes" shall have the meaning set forth in Section 2.1(c).
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder.
"Funded Debt" means any Debt maturing by its terms more than
one year from its date of issuance (notwithstanding that any portion of such
Debt is included in current liabilities).
"Guarantee" means the guarantee by the Guarantor of the Issuer's
obligations under this Indenture and the Notes, as provided in Article Thirteen.
"Global Note" shall have the meaning set forth in Section 2.1(a).
"Guarantor" means Telephone and Data Systems, Inc., an Iowa
corporation, and, subject to Article Nine, its successors and assigns.
"Government Obligations" means securities that are (a) direct
obligations of the United States of America, (b) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such Government Obligation or a
specific payment of principal of or interest on any such Government Obligation
held by such custodian for the account of the holder of such depository receipt,
provided that (except as provided by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of such Government
Obligation or the specific payment of principal of or interest on such
Government Obligation evidenced by such depository receipt.
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"Holder", "Holder of Notes", "Noteholder" or other similar terms means
the Person in whose name such Note is registered on the books of the Registrar.
"IAI" shall have the meaning set forth in Section 2.1(c).
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of the Notes
established, as provided hereunder.
"Indenture Obligations" means the obligations of the Issuer under
this Indenture or under the Notes to pay the Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount and Redemption Price on the Notes when
due and payable, and all other amounts due or to become due under or in
connection with this Indenture, the Notes and the performance of all other
obligations to the Trustee and the Holders under this Indenture and the Notes,
according to the terms thereof.
"Issuer" means Aerial Communications, Inc., a Delaware
corporation and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer or the Guarantor, as the case may be, signed in its name by the Chairman
of the Board of Directors, the President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after the
title "Vice President") and by the Treasurer, any Assistant Treasurer, the
Secretary, any Assistant Secretary, the Controller or any Assistant Controller
of the Issuer or the Guarantor, as the case may be.
"Issue Price" of any Note means, in connection with the original
issuance of such Note, the initial issue price as set forth on the face of the
Note.
"Lien" means any mortgage, pledge, security interest, lien, charge
or other encumbrance.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Guarantor and its Subsidiaries taken as a whole, (b) the rights and remedies of
the Holders under this Indenture or (c) the ability of the Guarantor or the
Issuer to perform its obligations under this Indenture.
"Notes" shall have the meaning set forth in the preamble.
"Notes Custodian" means the custodian with respect to a Global
Note (as appointed by the Depository), or any successor person thereto and shall
initially be the Trustee.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Issuer or the Guarantor, as the
case may be.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President or any Vice President (whether or not
designated by a
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number or numbers or a word or words added before or after the title "Vice
President") and by the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary, the Controller or any Assistant Controller of the Issuer or
the Guarantor, as the case may be, and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of, or counsel to, the Issuer or the Guarantor,
as the case may be. Each such opinion shall include the statements provided for
in Section 11.5, if and to the extent required thereby.
"Original Issue Discount" of any Note means the difference between
the Issue Price and the Principal Amount at Maturity of the Note as set forth on
the face of the Note.
"Outstanding", when used with reference to Notes, shall, subject to
the provisions of Section 7.4, mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Subject to Article 10, Notes, or portions thereof, for the
payment or redemption of which moneys or Government Obligations (as
provided for in Section 10.1) in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other
than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the Holders of such Notes (if the Issuer shall
act as its own Paying Agent), provided that if such Notes, or portions
thereof, are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Notes which shall have been paid or in substitution for
which other Notes shall have been authenticated and delivered pursuant
to the terms of Section 2.6 (except with respect to any such Note as to
which proof satisfactory to the Trustee is presented that such Note is
held by a Person in whose hands such Note is a legal, valid and binding
obligation of the Issuer).
"Paying Agent" shall have the meaning set forth in Section 2.3.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal Amount at Maturity" of a Note means the Principal
Amount at Maturity as set forth on the face of the Note.
"QIB" shall have the meaning set forth in Section 2.1.
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"Redemption Price" shall have the meaning set forth in paragraph 5
of the Notes.
"Registrar" shall have the meaning set forth in Section 2.3.
"Responsible Officer", when used with respect to the Trustee,
means the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any vice
president (whether or not designated by numbers or words added before or after
the title "vice president"), the cashier, the secretary, the treasurer, any
trust officer, any assistant trust officer, any assistant vice president, any
assistant cashier, any assistant secretary, any assistant treasurer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Sale and Leaseback Transaction" means any arrangement with
any Person other than a Tax Consolidated Subsidiary providing for the leasing
(as lessee) by the Guarantor of any property (except for temporary leases for a
term, including any renewal thereof, of not more than three years (provided that
any such temporary lease may be for a term of up to five years if (a) the Board
of Directors of the Guarantor reasonably finds such term to be in the best
interest of the Guarantor and (b) the primary purpose of the transaction of
which such lease is a part is not to provide funds to or financing for the
Guarantor)), which property has been or is to be sold or transferred by the
Guarantor (i) to any subsidiary of the Guarantor in contemplation of or in
connection with such arrangement or (ii) to such other Person.
"Secured Debt" means Debt of the Guarantor secured by any Lien
on property (including Capital Stock or indebtedness of Subsidiaries of the
Guarantor) owned by the Guarantor.
"SEC" shall have the meaning set forth in Section 2.1(a).
"Securities Act" shall have the meaning set forth in Section 2.1(a).
"Subsidiary" means a Person which is consolidated with the Issuer
or the Guarantor, as applicable, in accordance with generally accepted
accounting principles.
"subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more subsidiaries of such Person or (iii) one or
more subsidiaries of such Person.
"Successor Company" shall have the meaning set forth in Section 9.1.
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"Tax Consolidated Subsidiary" means a subsidiary of the Guarantor
with which, at the time a Sale and Leaseback Transaction is entered into by the
Guarantor, the Guarantor would be entitled to file a consolidated federal income
tax return.
"Transfer Restricted Notes" means Definitive Notes and Notes that
bear or are required to bear the legend set forth in Section 2.5(d).
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"Wholly Owned Subsidiary" means a Subsidiary all the capital stock
of which (other than directors' qualifying shares) is owned by the Issuer or the
Guarantor, as applicable, or another Wholly Owned Subsidiary.
ARTICLE TWO
THE NOTES
---------
SECTION 2.1 Form and Dating. The Notes 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
Notes may have notations, legends or endorsements required by law and agreements
to which the Issuer is subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Issuer). The
Notes shall be dated the date of their authentication. The terms of the Notes
set forth in Exhibit A are part of the terms of this Indenture.
(a) Global Notes. The Notes offered and sold to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) (each a
"QIB") or in reliance on Regulation S under the Securities Act ("Regulation S")
shall be issued initially in the form of one permanent global Note in
definitive, fully registered form without interest coupons with the global Note
legend and restricted Note legend set forth in Exhibit A hereto (the "Global
Note"), which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Issuer and the Guarantor and authenticated by the Trustee as
hereinafter provided. The aggregate Principal Amount at Maturity of the Global
Note 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 the Global Note deposited with or on behalf of the Depository.
The Issuer and the Guarantor shall execute and the Trustee shall, in
accordance with this Section 2.1(b), authenticate and deliver initially one
Global Note that (a) shall be registered in the name of the Depository or the
nominee of the Depository and (b) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instructions or held by the Trustee
as custodian for the Depository.
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Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to the Global Note held
on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Depository may be treated by the
Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of
the Issuer 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 the Global Note.
(c) Certificated Notes. Except as provided in this Section or
Section 2.5 or 2.7, owners of beneficial interests in the Global Note will not
be entitled to receive physical delivery of certificated Notes. Purchasers of
the Notes who are institutional "accredited investors" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (each an "IAI") and who are
not QIBs and did not purchase Notes sold in reliance on Regulation S will
receive certificated Notes bearing the restricted Note legend set forth in
Exhibit A hereto (such securities as held by an IAI are herein referred to as
"Definitive Notes"); provided, however, that upon transfer of such certificated
Notes to a QIB or in reliance on Regulation S such certificated Notes will,
unless the Global Note has previously been exchanged, be exchanged for an
interest in the Global Note pursuant to the provisions of Section 2.5.
Definitive Notes will bear the restricted Note legend set forth on Exhibit A
unless removed in accordance with Section 2.5(d).
SECTION 2.2 Execution and Authentication. Two Officers shall
sign the Notes for the Issuer by manual or facsimile signature. The Issuer's
seal shall be impressed, affixed, imprinted or reproduced on the Notes and may
be in facsimile form. The Guarantee shall be executed by one of the Officers of
the Guarantor under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee or a duly appointed Authenticating Agent manually signs the
certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee or duly appointed Authenticating Agent shall
authenticate and deliver Notes for issue in an aggregate Principal Amount at
Maturity of $219,975,000 upon a written order of the Issuer signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Issuer. Such order shall specify the amount of the Notes to be
authenticated and the date on which the issue of Notes is to be authenticated.
The aggregate Principal Amount at Maturity of Notes outstanding at any time may
not exceed $219,975,000 except as provided in Section 2.6.
SECTION 2.3 Registrar and Paying Agent. The Issuer shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where Notes
may be presented for payment
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(the "Paying Agent"). The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Issuer may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Issuer shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Issuer shall notify the Trustee of the name and address of any such
agent. If the Issuer 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 6.6. The Issuer or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
SECTION 2.4 Paying Agent To Hold Money in Trust. Prior to each
due date of payments in respect of any Note, the Issuer shall deposit with the
Paying Agent a sum sufficient to make such payments when so becoming due. The
Issuer 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 Noteholders
or the Trustee all money held by the Paying Agent for the making of payments in
respect of the Notes and shall notify the Trustee of any default by the Issuer
in making any such payments. If the Issuer or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Issuer 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 2.5 Transfer and Exchange. (a) Transfer and Exchange
of Definitive Notes. When Definitive Notes are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive Notes; or
(y) to exchange such Definitive Notes for an equal Principal
Amount at Maturity of Definitive Notes of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if the requirements of this Indenture are met; provided, however,
that the Definitive Notes surrendered for transfer or exchange:
i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Issuer
and the Registrar or co-registrar, duly executed by the Holder thereof
or such Holder's attorney duly authorized in writing; and
ii) are being transferred or exchanged pursuant to Section
2.5(b) 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 Notes are being delivered to the
Registrar by a Holder for registration in the name of such
Holder,
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without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Note); or
(B) if such Definitive Notes are being transferred
to the Issuer a certification to that effect (in the form
set forth on the reverse of the Note); or
(C) if such Definitive Notes are being transferred
pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act: (i)
a certificate to that effect (in the form set forth on the
reverse of the Note), and (ii) if the Issuer or Registrar so
requests, evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the legend set
forth in Section 2.5(d)(i).
(b) Restrictions on Transfer of a Definitive Note for a
Beneficial Interest in the Global Note. A Definitive Note may not be
exchanged for a beneficial interest in the Global Note except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
i) certification, in the form set forth on the reverse of the
Note, that such Definitive Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act or to a non-U.S. person in
accordance with Rule 904 under the Securities Act; and
ii) written instructions directing the Trustee to make, or to
direct the Notes Custodian to make, an adjustment on its books and
records with respect to such Global Note to reflect an increase in the
aggregate Principal Amount at Maturity of the Notes represented by the
Global Note,
then the Trustee shall cancel such Definitive Note and
cause, or direct the Notes Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Notes Custodian, the aggregate Principal Amount at Maturity of Notes
represented by the Global Note to be increased accordingly. If no Global Note
is then outstanding, the Issuer shall issue and the Trustee shall authenticate,
upon written order of the Issuer in the form of an Officers' Certificate,
a new Global Note in the appropriate Principal Amount at Maturity.
(c) Transfer and Exchange of Global Note.
i) The transfer and exchange of the Global Note or beneficial
interests therein shall be effected through the Depository, in
accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
therefor, if applicable.
ii) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in Section 2.7), the Global Note
may not be transferred as a
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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.
iii) In the event that the Global Note is exchanged for Notes in
definitive form pursuant to Section 2.7, such Notes may be exchanged
only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.5 (including the certification
requirements set forth on the reverse of the Notes intended to ensure
that such transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be adopted
by the Issuer.
(d) Legend.
i) Except as permitted by the following paragraph (ii), each
Note certificate evidencing the Global Note and the Definitive Notes
(and all Notes issued in exchange therefor or substitution thereof)
shall bear a legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
UNDER APPLICABLE STATE SECURITIES LAWS, AND THIS NOTE MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF
THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
When set forth on a Definitive Note, the legend will include
the following additional words:
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"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 Note
(including any Transfer Restricted Note represented by a Global Note)
pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Note
that is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Note for a
certificated Note that does not bear the legend set forth
above and rescind any restriction on the transfer of such
Transfer Restricted Note;
(B) in the case of any Transfer Restricted Note that
is represented by the Global Note, the Registrar shall permit the
Holder thereof to request the issuance of a certificated Note
that does not bear the legend set forth above and rescind any
restrictions on the transfer of such Transfer Restricted Note,
if the sale or exchange was made in reliance on Rule 144 and the
Holder certifies to that effect in writing to the Registrar
(such certification to be in the form set forth on the reverse
of the Note).
(e) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in the Global Note have either been exchanged for
certificated Notes, redeemed, repurchased or cancelled, such Global Note shall
be returned to the Depository for cancellation or retained and cancelled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in
the Global Note is exchanged for certificated Notes, redeemed, repurchased or
cancelled, the Principal Amount at Maturity of Notes represented by such Global
Note shall be reduced and an adjustment shall be made by the Trustee or the
Notes Custodian to reflect such reduction on the books and records of the Notes
Custodian for such Global Note with respect to such Global Note.
(f) Obligations with Respect to Transfers and Exchanges of Notes.
i) To permit registration of
transfers and exchanges, the Issuer and the
Guarantor shall execute and the Trustee shall
authenticate certificated Notes, Definitive
Notes and the Global Note at the Registrar's
or co-registrar's request.
ii) The Issuer may require payment
of a sum sufficient to pay all taxes,
assessments or other governmental charges in
connection with any transfer or exchange
pursuant to this Section 2.5.
iii) The Issuer shall not be required to make and the
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Registrar or co-registrar need not register
transfers or exchanges of certificated or
Definitive Notes selected for redemption
(except, in the case of any Definitive Note to
be redeemed in part, the portion thereof not
to be redeemed), or any Notes for a period of
15 days before a selection of Notes to be so
redeemed.
iv) Prior to the due presentation
for registration of transfer of any Note, the
Issuer, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and
treat the person in whose name a Note is
registered as the absolute owner of such Note
for the purpose of receiving payments in
respect of such Note and for all other
purposes whatsoever, whether or not such Note
is overdue, and none of the Issuer, the
Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice
to the contrary.
v) All Notes issued upon any
transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and
will be entitled to the same benefits under
this Indenture as the Notes surrendered upon
such transfer or exchange.
(g) No Obligation of the Trustee.
i) The Trustee shall have no
responsibility or obligation to any beneficial
owner of the Global Note, a member of, or a
participant in the Depository or other Person
with respect to the accuracy of the records of
the Depository or its nominee or of any
participant or member thereof, with respect to
any ownership interest in the Notes 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 the
payment of any amount, under or with respect
to such Notes. All notices and communications
to be given to the Holders and all payments to
be made to Holders under the Notes shall be
given or made only to or upon the order of the
registered Holders (which shall be the
Depository or its nominee in the case of the
Global Note). The rights of beneficial owners
in the Global Note 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 Note
(including any transfers between or among
Depository participants, members or beneficial
owners in the Global Note) other than to
required delivery
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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.
SECTION 2.6 Replacement Notes. If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note has
been lost, destroyed or wrongfully taken, the Issuer shall issue, the Guarantor
shall execute and the Trustee shall authenticate a replacement Note if the
Holder satisfies any reasonable requirements of the Trustee. Such Holder shall
furnish an indemnity bond sufficient in the judgment of the Issuer, the
Guarantor and the Trustee to protect the Issuer, the Guarantor, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Note is replaced. The Issuer and the Trustee may charge the
Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuer and the
Guarantor evidencing the same debt as the Note for which it is a replacement.
All Notes shall be held and owned upon the express condition that,
to the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost or
stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.7 Temporary Notes and Certificated Notes. (a) Until
definitive Notes are ready for delivery, the Issuer may prepare, the Guarantor
shall execute and the Trustee shall authenticate temporary Notes. Temporary
Notes shall be substantially in the form of definitive Notes but may have
variations that the Issuer considers appropriate for temporary Notes. Without
unreasonable delay, the Issuer shall prepare, the Guarantor shall execute and
the Trustee shall authenticate definitive Notes and deliver them in exchange for
temporary Notes.
(b) The Global Note deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated Notes
in an aggregate Principal Amount at Maturity equal to the Principal Amount at
Maturity of such Global Note, in exchange for such Global Note, only if such
transfer complies with Section 2.5 and (i) the Depository notifies the Issuer
that it is unwilling or unable to continue as Depository for such Global Note or
if at any time such Depository ceases to be a "clearing agency" registered under
the Exchange Act and a successor depository is not appointed by the Issuer
within 90 days of such notice, (ii) an Event of Default has occurred and is
continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of certificated Notes under this
Indenture.
(c) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to the
Corporate Trust
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Office of the Trustee located in the Borough of Manhattan, The City of New York,
to be so transferred, in whole or from time to time in part, without charge, and
the Trustee shall authenticate and deliver, upon such transfer of each portion
of such Global Note, an equal aggregate Principal Amount at Maturity of Notes of
authorized denominations. Any portion of the Global Note transferred 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 Note delivered in exchange for an
interest in the Global Note shall, except as otherwise provided by Section
2.5(d), bear the restricted notes legend set forth in Exhibit A hereto.
(d) Subject to the provisions of Section 2.7(c), the registered
Holder of the Global Note may grant proxies and otherwise authorize any
person, including agent members, participants and persons that may hold
interests through agent members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(e) In the event of the occurrence of any of the events specified in
Section 2.7(b), the Issuer will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form.
SECTION 2.8 Cancellation. The Issuer at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and deliver such cancelled Notes to the Issuer. The Issuer may not
issue new Notes to replace Notes it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.9 CUSIP Numbers. The Issuer in issuing the Notes
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 that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Issuer will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE GUARANTOR
-----------------------------------------
SECTION 3.1 Payment of Notes. The Issuer covenants and
agrees for the benefit of the Noteholders that it will duly and punctually make
all payments in respect of the Notes on the dates and in the manner provided in
the Notes or pursuant to this Indenture. Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount, Redemption Price and interest, if any,
shall be considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds, in accordance with this Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then due
and the Trustee or
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the Paying Agent, as the case may be, is not prohibited pursuant to the terms of
this Indenture from paying such money to the Noteholders on that date.
SECTION 3.2 Offices for Payments, etc. So long as Notes are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Notes may be presented for
payment or for exchange as provided in this Indenture and where the Notes may be
presented for registration of transfer as provided in this Indenture.
The Issuer and the Guarantor will maintain in the Borough of
Manhattan, The City of New York, an office or agency where notices and demands
to or upon the Issuer or the Guarantor in respect of the Notes or this Indenture
may be served.
The Issuer and the Guarantor will give to the Trustee written notice
of the location of each such office or agency and of any change of location
thereof. In case the Issuer or the Guarantor shall fail to maintain any office
or agency required by this Section to be located in the Borough of Manhattan,
The City of New York, or shall fail to give such notice of the location or of
any change in the location of any of the above offices or agencies,
presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
offices or agencies where the Notes may be presented for payment, where the
Notes may be presented for exchange as provided in this Indenture and where the
Notes may be presented for registration of transfer as provided in this
Indenture, and the Issuer may from time to time rescind any such designation;
provided, however, that no such designation or rescission shall in any manner
relieve the Issuer of its obligation to maintain any office or agency required
to be provided for in this Section. The Issuer will give to the Trustee prompt
written notice of any such designation or rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.
The Issuer, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section
6.10, a Trustee, so that there shall at all times be a Trustee with respect to
the Notes hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
Paying Agent other than the Trustee with respect to Notes, it will cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section:
(a) that it will hold all sums received by it as such agent
for payments in respect of the Notes (whether such sums have
been paid to it by the Issuer or the Guarantor) in trust for the
benefit of the Holders of the Notes or of the Trustee, and
(b) that it will give the Trustee notice of any failure by
the Issuer or the Guarantor to make any payments in respect of
the Notes when the same shall be due and payable, and
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(c) that at any time during the continuance of any such
failure referred to in the foregoing paragraph (b), it will upon
written request of the Trustee forthwith pay to the Trustee all
sums so held in trust by such agent.
The Issuer will, on or prior to each due date of payments in respect
of any Notes, deposit with the Paying Agent a sum sufficient to make such
payment so becoming due, and (unless such Paying Agent is the Trustee) the
Issuer will promptly notify the Trustee of any failure to take such action.
If the Issuer shall act as its own Paying Agent with respect to the
Notes, it will, on or before each due date of payments in respect of any Notes,
set aside, segregate and hold in trust for the benefit of the Holders of the
Notes a sum sufficient to pay such payment so becoming due. The Issuer will
promptly notify the Trustee of any failure to take such action.
Anything in this section to the contrary notwithstanding, but subject
to Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Notes hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for the
Notes by the Issuer or any Paying Agent hereunder, as required by this Section,
such sums to be held by the Trustee upon the trust herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Guarantor will
deliver to the Trustee on or before April 30 in each year (beginning with April
30, 1998) an Officers' Certificate (which need not comply with Section 11.5)
stating that in the course of the performance by the signers of their duties as
officers of the Guarantor they would normally have knowledge of any default by
the Guarantor in the performance of any covenants contained in this Indenture,
stating whether or not they have knowledge of any such default and, if so,
specifying each such default of which the signers have knowledge and the nature
thereof.
SECTION 3.6 Limitation on Secured Debt. So long as any of the
Notes remain Outstanding, the Guarantor will not create or incur any Secured
Debt without in any such case effectively providing concurrently with the
creation or incurrence of any such Secured Debt that the Notes then Outstanding
(together with, if the Guarantor shall so determine, any other Debt of or
guarantee by the Guarantor ranking equally with the Guarantee and then existing
or thereafter created) shall be secured equally and ratably with (or, at the
option of the Guarantor, prior to) such Secured Debt, unless immediately after
the incurrence of such Secured Debt (and after giving effect to the application
of the proceeds, if any, therefrom), the aggregate principal amount of all such
Secured Debt, together with the aggregate amount of Capitalized Rent in respect
of Sale and Leaseback Transactions (other than Sale and Leaseback Transactions
described in clauses (a) to (e), inclusive, of Section 3.7), would not exceed
10% of Consolidated Capitalization; provided, however, that the foregoing
restrictions shall not apply to, and there shall be excluded in computing
Secured Debt for the purpose of
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such restrictions, Secured Debt secured by:
(a) Liens on property existing at the time of acquisition of such
property by the Guarantor, or Liens to secure the payment of all or any
part of the purchase price of property acquired or constructed by the
Guarantor (including any improvements to existing property) created at
the time of or within 270 days following the acquisition of such
property by the Guarantor, or Liens to secure any Secured Debt incurred
by the Guarantor prior to, at the time of or within 270 days following
the acquisition of such property, which Secured Debt is incurred for
the purpose of financing all or any part of the purchase price thereof;
provided, however, that in the case of any such acquisition, the Lien
shall not apply to any property theretofore owned by the Guarantor
(including property transferred by the Guarantor to any subsidiary of
the Guarantor in contemplation of or in connection with the creation of
such Lien) or to any property of the Guarantor other than the property
so acquired (other than, in the case of construction or improvement,
any theretofore unimproved real property or portion thereof on which
the property so constructed, or the improvement, is located);
(b) Liens on property of a Person (i) existing at the time such
Person is merged into or consolidated with the Guarantor or at the time
of a sale, lease or other disposition of the properties of a Person as
an entirety or substantially as an entirety to the Guarantor, (ii)
resulting from such merger, consolidation, sale, lease or disposition
by virtue of any Lien on property granted by the Guarantor prior to
such merger, consolidation, sale, lease or disposition (and not in
contemplation thereof or in connection therewith) which applies to
after-acquired property of the Guarantor or (iii) resulting from such
merger, consolidation, sale, lease or disposition pursuant to a Lien or
contractual provision granted or entered into by such Person prior to
such merger, consolidation, sale, lease or disposition (and not at the
request of the Guarantor); provided, however, that any such Lien
referred to in clause (i) shall not apply to any property of the
Guarantor other than the property subject thereto at the time such
Person or properties were acquired and any such Lien referred to in
clause (ii) or (iii) shall not apply to any property of the Guarantor
other than the property so acquired;
(c) Liens existing on the date of this Indenture;
(d) Liens in favor of a government or governmental
entity to secure partial progress, advance or other payments, or
other obligations, pursuant to any contract or statute or to secure
any Debt incurred for the purpose of financing all or any part of
the cost of acquiring, constructing or improving the property
subject to such Liens (including, without limitation, Liens
incurred in connection with pollution control, industrial revenue,
private activity bond or similar financing);
(e) Liens arising by reason of deposits with, or the giving of
any form of security to, any governmental agency or any body created
or approved by law or governmental regulation, which Lien is required
by law or governmental regulation as a condition to the transaction of
any business or the exercise of any privilege, franchise, license
or permit;
(f) Liens for taxes, assessments or governmental charges or
levies not yet delinquent or governmental charges or levies
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already delinquent, the validity of which charge or levy is being
contested in good faith and for which any reserves required in
accordance with generally accepted accounting principles have been
established;
(g) Liens (including judgment liens) arising in connection with
legal proceedings so long as such proceedings are being contested
in good faith and, in the case of judgment liens, execution thereon
is stayed and for which any reserves required in accordance with
generally accepted accounting principles have been established; and
(h) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in the foregoing clauses (a) to (g), inclusive; provided,
however, that the principal amount of Secured Debt secured thereby
shall not exceed the principal amount of Secured Debt secured thereby
at the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a part of
the property which secured the Lien so extended, renewed or replaced
(plus improvements to such property).
SECTION 3.7 Limitation on Sale and Leaseback. The Guarantor
will not enter into any Sale and Leaseback Transaction unless immediately
thereafter (and after giving effect to the application of the proceeds, if any,
therefrom), the aggregate amount of Capitalized Rent in respect of Sale and
Leaseback Transactions, together with the aggregate principal amount of all
Secured Debt (other than Secured Debt described in clauses (a) to (h),
inclusive, of Section 3.6), would not exceed 10% of Consolidated Capitalization;
provided, however, that the foregoing restrictions shall not apply to, and there
shall be excluded in computing the aggregate amount of Capitalized Rent for the
purpose of such restrictions, the following Sale and Leaseback Transactions:
(a) any Sale and Leaseback Transaction entered into to finance the
payment of all or any part of the purchase price of property acquired
or constructed by the Guarantor (including any improvements to existing
property) or entered into prior to, at the time of or within 270 days
after the acquisition or construction of such property, which Sale and
Leaseback Transaction is entered into for the purpose of financing all
or part of the purchase or construction price thereof; provided,
however, that in the case of any such acquisition, such Sale and
Leaseback Transaction shall not involve any property transferred by the
Guarantor to any subsidiary of the Guarantor in contemplation of or in
connection with such Sale and Leaseback Transaction or involve any
property of the Guarantor other than the property so acquired (other
than, in the case of construction or improvement, any theretofore
unimproved real property or portion thereof on which the property so
constructed, or the improvement, is located);
(b) any Sale and Leaseback Transaction involving property of a
Person existing at the time such Person is merged into or consolidated
with the Guarantor or at the time of a sale, lease or other disposition
of the properties of a Person as an entirety or substantially as an
entirety to the Guarantor;
(c) any Sale and Leaseback Transaction in which the lessor is a
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government or governmental entity and which Sale and Leaseback
Transaction is entered into to secure partial progress, advance or
other payments, or other obligations, pursuant to any contract or
statute or to secure any Debt incurred for the purpose of financing all
or any part of the cost of constructing or improving the property
subject to such Sale and Leaseback Transaction (including, without
limitation, Sale and Leaseback Transactions incurred in connection with
pollution control, industrial revenue, private activity bond or similar
financing);
(d) any Sale and Leaseback Transaction involving the extension,
renewal or replacement (or successive extensions, renewals or
replacements) in whole or in part of a lease pursuant to a Sale and
Leaseback Transaction referred to in the foregoing clauses (a) to (c),
inclusive; provided, however, that such lease extension, renewal or
replacement shall be limited to all or any part of the same property
leased under the lease so extended, renewed or replaced (plus
improvements to such property); and
(e) any Sale and Leaseback Transaction the net proceeds of which
are at least equal to the fair value (as determined by the Board of
Directors) of the property leased pursuant to such Sale and Leaseback
Transaction, so long as within 270 days of the effective date of such
Sale and Leaseback Transaction, the Guarantor applies (or irrevocably
commits to an escrow account for the purpose or purposes hereinafter
mentioned) an amount equal to the net proceeds of such Sale and
Leaseback Transaction to either (x) the purchase of other property
having a fair value at least equal to the fair value of the property
leased in such Sale and Leaseback Transaction and having a similar
utility and function, or (y) the retirement or repayment (other than
any mandatory retirement or repayment at maturity) of (i) the Notes,
(ii) other Funded Debt of the Guarantor which ranks prior to or on a
parity with the Notes or (iii) indebtedness of any subsidiary of the
Guarantor maturing by its terms more than one year from its date of
issuance (notwithstanding that any portion of such indebtedness is
included in current liabilities) or preferred stock of any subsidiary
of the Guarantor (other than any such indebtedness owed to or preferred
stock owned by the Guarantor or any subsidiary of the Guarantor);
provided, however, that in lieu of applying an amount equivalent to all
or any part of such net proceeds to such retirement or repayment (or
committing such an amount to an escrow account for such purpose), the
Guarantor may deliver to the Trustee Outstanding Notes and thereby
reduce the amount to be applied pursuant to (y) of this clause (e) by
an amount equivalent to the aggregate Principal Amount at Maturity of
the Notes so delivered.
SECTION 3.8 Voting Control of the Issuer. The Guarantor shall at
all times maintain beneficial ownership, directly or indirectly through one or
more Subsidiaries, of that number of shares of Capital Stock of the Issuer (or
any entity into which the Issuer is merged or consolidated in accordance with
Article Nine) with at least a majority of the total voting power of the Issuer
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors (or persons performing similar functions).
SECTION 3.9 Insurance. The Guarantor shall, and shall cause
each of its Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to its respective properties and businesses
against such casualties and
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contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or similar businesses and similarly
situated.
ARTICLE FOUR
NOTEHOLDERS LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
-----------------------------
SECTION 4.1 Issuer to Furnish Trustee Names and Addresses of
Noteholders. The Issuer covenants and agrees that it will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Notes:
(a) at least semi-annually on October 15 and April 15, and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such
request, as of a date not more than 15 days prior to the time
such information is furnished,
provided that if and so long as the Trustee shall be the Registrar for such
Notes and such Notes are registered on the register of the Registrar, such list
shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Noteholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of the
Notes (i) contained in the most recent list furnished to it as provided in
Section 4.1, (ii) received by it in the capacity of Registrar, if so acting, and
(iii) filed with it within two preceding years pursuant to Section 4.4(c)(ii).
The Trustee may destroy any list furnished to it as provided in Section 4.1 upon
receipt of a new list so furnished.
(b) In case three or more Holders of Notes (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Note for a period of at
least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders of Notes,
then the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access
to the information preserved at the time by
the Trustee in accordance with the provisions
of subsection (a) of this Section, or
(ii) inform such applicants as to
the approximate number of Holders of all the
Notes whose names and addresses appear in the
information preserved at the time by the
Trustee, in accordance
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with the provisions of such subsection (a) and
as to the approximate cost of mailing to such
Holders the form of proxy or other
communication, if any, specified in such
application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to all Holders of the Notes, whose name and address appears in
the information preserved at the time by the Trustee in accordance with the
provisions of such subsection (a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of the Notes or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion.
(c) Each and every Holder of Notes by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Notes in accordance with the provisions of subsection (b) of
this Section, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under such subsection (b).
(d) The Issuer shall upon written request to the Trustee (or, if
applicable, the Registrar) be entitled to receive a list of the Holders of any
and all of the Notes.
SECTION 4.3 Reports by the Issuer and the Guarantor. The Issuer
and the Guarantor covenant:
(a) to file with the Trustee, within 15 days after either the Issuer
or the Guarantor is required to file the same with the SEC, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC
may from time to time by rules and regulations prescribe) which
either the Issuer or the Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;
and
(b) to transmit by mail to the Holders of Notes within 30 days after
the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information,
documents and reports required to be filed by either the Issuer or the
Guarantor pursuant to subsection (a) of this Section as may be required
to be transmitted to such Holders by rules and regulations prescribed
from time to time by the SEC.
SECTION 4.4 Reports by the Trustee. (a) Within 60 days after
May 15 of each year, commencing with the year 1998, the Trustee shall transmit
by mail to the Holders of the Notes, as provided in subsection (c) of this
Section, a brief report dated as of such May 15 with respect to
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(i) its eligibility under Section 6.9 and its qualification under
Section 6.8, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under such Sections, a written
statement to such effect;
(ii) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report and for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Notes, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid at any time aggregate not more than 1/2 of 1% of the
Principal Amount at Maturity of the Notes Outstanding on the date of
such report;
(iii) the amount, interest rate and maturity date of all other
indebtedness owing by the Issuer or the Guarantor to the Trustee in its
individual capacity on the date of such report, with a brief
description of any property held as collateral security therefor,
except any indebtedness based upon a creditor relationship arising in
any manner described in Section 6.13 (b) (2), (3), (4) or (6);
(iv) the property and funds, if any, physically in the possession of
the Trustee (as such) on the date of such report; and
(v) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in
its opinion materially affects the Notes, except action in respect of a
default, notice of which has been or is to be withheld by it in
accordance with the provisions of Section 5.11.
(b) The Trustee shall transmit to the Holders of the Notes, as
provided in subsection (c) of this Section, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee, as such,
since the date of the last report transmitted pursuant to the provisions of
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Notes, on property or
funds held or collected by it as Trustee and which it has not previously
reported pursuant to this subsection (b), except that the Trustee shall not be
required (but may elect) to report such advances if such advances remaining at
any time aggregate 10% or less of the Principal Amount at Maturity of the Notes
Outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) Reports pursuant to this Section shall be
transmitted by mail:
(i) to all Holders of the Notes, as the names and addresses of such
Holders appear upon the registry books of the Registrar;
(ii) to such other Holders of Notes as have,
within two years preceding such transmission, filed their names and addresses
with the Trustee for that purpose; and
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(iii) except in the case of reports pursuant
to subsection (b), to each Holder of a Note whose name and address are
preserved at the time by the Trustee as provided in Section 4.2(a).
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
---------------------------------------
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default", wherever used herein, means each of the
following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be 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):
(a) default in the payment of all or any part of the Principal Amount
at Maturity, Issue Price, accrued Original Issue Discount or Redemption
Price on any Note as and when the same shall become due and payable,
whether at maturity, upon any redemption, by declaration or otherwise;
or
(b) failure on the part of the Guarantor or the Issuer duly to observe
or perform any other of the covenants or agreements on the part of the
Guarantor or the Issuer, as the case may be, in the Notes or in this
Indenture contained for a period of 90 days after the date on which
written notice specifying such failure, stating that such notice is a
"Notice of Default" hereunder and demanding that the Guarantor or the
Issuer, as the case may be, remedy the same, shall have been given (i)
(A) in person to the Chairman, the President, the Executive Vice
President - Finance or the Treasurer of the Guarantor and the Issuer,
promptly followed by notice by registered or certified mail, return
receipt requested, by the Trustee, or (B) by registered or certified
mail, return receipt requested, to the Guarantor and the Issuer by the
Trustee, or (ii) by registered or certified mail, return receipt
requested, to the Guarantor, the Issuer and the Trustee by the Holders
of not less than 25% in aggregate Principal Amount at Maturity of the
Outstanding Notes; or
(c) the Guarantor shall fail to pay any principal of, premium or
interest on or any other amount payable in respect of any Debt of the
Guarantor that is outstanding in an aggregate principal amount equal to
or greater than 2% of Consolidated Capitalization, when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any default occurs
under any instrument under which there is at the time outstanding, or
by which there may be secured or evidenced, any such Debt of the
Guarantor that is outstanding in an aggregate principal amount equal to
or greater than 2% of Consolidated Capitalization which results in
acceleration (whether by declaration or automatically) of such Debt;
provided, however, that it shall not constitute an Event of Default
hereunder as long as the Guarantor is contesting such
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default or acceleration in good faith and by appropriate proceedings
and no actual acceleration of such Debt of the Guarantor shall have
occurred; or
(d) the Guarantee ceases to be in full force and effect or the
Guarantor or any Person acting on behalf of the Guarantor shall deny or
disaffirm the Guarantor's obligations under the Guarantee; or
(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Guarantor or the Issuer in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Guarantor or the Issuer or for any substantial part of
the property of the Guarantor or the Issuer, or ordering the winding up
or liquidation of the affairs of the Guarantor or the Issuer, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(f) the Guarantor or the Issuer shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of the Guarantor or the
Issuer or for any substantial part of the property of the Guarantor or
the Issuer, or make any general assignment for the benefit of
creditors.
If an Event of Default (other than an Event of Default described in clause
5.1(e) or 5.1(f)) shall have occurred and be continuing, then, and in each and
every such case, unless the principal of all of the Notes shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate Principal Amount at Maturity of the Notes then Outstanding, by
notice in writing to the Guarantor and the Issuer (and to the Trustee if given
by such Holders), may declare the Issue Price of all the Notes then Outstanding
and the Original Issue Discount accrued to the date of such declaration to be
due and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause 5.1(e)
or 5.1(f) shall have occurred and be continuing, the Issue Price on all the
Notes then Outstanding and the Original Issue Discount accrued thereon shall
thereby become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Noteholders.
The foregoing paragraph, however, is subject to the condition that if,
at any time after the Issue Price and accrued Original Issue Discount of the
Notes shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Guarantor or the Issuer shall pay or shall deposit
with the Trustee a sum sufficient to pay the principal including accrued
Original Issue Discount of all Notes which shall have become due otherwise than
by such declaration or acceleration (with interest upon such amounts, to the
extent that payment of such interest is enforceable under applicable law, at the
same rate as the yield to maturity on the Notes to the date of such payment or
deposit) and such amount as shall be sufficient to cover reasonable compensation
to the Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of negligence or bad faith, and if any and all Events of Default under this
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Indenture, other than the non-payment of amounts on the Notes which shall have
become due by such declaration or acceleration, shall have been cured, waived or
otherwise remedied as provided herein--then, and in every such case, the Holders
of a majority in aggregate Principal Amount at Maturity of all the Notes then
Outstanding, by written notice to the Guarantor and the Issuer and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For purposes of the definition of "Event of Default," "Capitalization"
shall mean the total of (a) Debt, (b) the par value or, in the case of Capital
Stock with no par value, a value stated on the books, of all outstanding shares
of Capital Stock, (c) the paid-in surplus and retained earnings (or minus the
net surplus deficit, as the case may be), (d) deferred taxes and deferred
investment tax credits, (e) Capitalized Rent and (f) minority interests in
Subsidiaries.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Issuer covenants that (a) in case default shall be made in the
payment of any part of the Principal Amount at Maturity, Issue Price, including
accrued Original Issue Discount or Redemption Price on the Notes as and when the
same shall become due and payable, whether at maturity, upon redemption, by
declaration or otherwise -- then, upon demand of the Trustee, the Issuer will
pay to the Trustee for the benefit of the Holders of the Notes the whole amount
that then shall have become due and payable on all the Notes (with interest to
the date of such payment upon the overdue amounts, at the same rate as the yield
to maturity on the Notes); and in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made by the Trustee,
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may make
payments in respect of the Notes to the Holders, whether or not the Notes are
overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or the Guarantor upon the Notes
and collect in the manner provided by law out of the property of the Issuer or
the Guarantor upon the Notes, wherever situated the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Issuer or
the Guarantor upon the Notes under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or the Guarantor or its property,
or in case of any other comparable judicial proceedings relative to the Issuer
or the Guarantor, or to the creditors or property of the Issuer or the
Guarantor, the Trustee, irrespective of whether the Principal Amount at
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Maturity, Issue Price, accrued Original Issue Discount or Redemption Price of
the Notes shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the amount of the Issue
Price on the Notes then Outstanding and the Original Issue Discount
accrued thereon owing and unpaid in respect of such Notes, and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and its agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee, except as a result of
negligence or bad faith) and of the Noteholders allowed in any judicial
proceedings relative to the Issuer or the Guarantor or to the creditors
or property of the Issuer or the Guarantor.
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Noteholders and of the Trustee on
their behalf; and any trustee, receiver, liquidator, custodian or other
similar official is hereby authorized by each of the Noteholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Noteholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, and its agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by
the Trustee except as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
All rights of action and of asserting claims under this Indenture, or
under the Notes, may be enforced by the Trustee without the possession of any of
the Notes or the production thereof on any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee and its agents, attorneys and counsel, shall be for the ratable
benefit of the Holders of the Notes.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
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of the Notes, and it shall not be necessary to make any Holders of the Notes
parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by
the Trustee pursuant to this Article in respect of the Notes shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys upon presentation of the Notes in respect of
which moneys have been collected and stamping (or otherwise noting) thereon the
payment, or issuing Notes in reduced Principal Amounts at Maturity in exchange
for the presented Notes if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of collection
applicable to such series, including reasonable compensation to the
Trustee and its agents, attorneys and counsel and of all expenses and
liabilities incurred, and all advances made, by the Trustee except as a
result of negligence or bad faith;
SECOND: To the payment of the whole amount then owing and
unpaid upon the Notes for Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount or Redemption Price, with interest upon
the overdue amounts at the same rate as the yield to maturity on the
Notes; and in case such moneys shall be insufficient to pay in full the
whole amount so due and unpaid upon the Notes, then to the payment of
such amount without preference or priority, ratably to the aggregate of
such amount; and
THIRD: To the payment of the remainder, if any, to the Issuer or
any other person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default
has occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then, and in every such
case, the Issuer, the Guarantor and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Guarantor, the Trustee and the Noteholders shall
continue as though no such proceedings had been taken.
SECTION 5.6 Limitations on Suits by Noteholders. No Holder of
the Notes shall have any right by virtue or by availing of any provision of this
Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a trustee, receiver, liquidator, custodian or other similar
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official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not less than
25% in aggregate Principal Amount at Maturity of the Notes then Outstanding
(determined as provided in Section 5.1 and voting as one class) shall have made
written request upon the Trustee to institute such action or proceedings in
its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed
to institute any such action or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section
5.9; it being understood and intended, and being expressly covenanted by the
taker and Holder of every Note with every other taker and Holder and the
Trustee, that no one or more Holders of the Notes shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holder of the Notes, or to
obtain or seek to obtain priority over or preference to any other such Holder
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of the
Notes. For the protection and enforcement of the provisions of this Section,
each and every Noteholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 5.7 Unconditional Right of Noteholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of the Notes, the right of any Holder of the Notes to receive payments
in respect of such Notes on or after the due dates for such payments, or to
institute suit for the enforcement of any such payment on or after such dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in the last sentence of Section 2.6
and subject to Section 5.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of the Notes is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of the Notes to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.6, every power and remedy given by this
Indenture or by law to the Trustee or to the Holders of the Notes may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders of the Notes.
SECTION 5.9 Control by Holders of the Notes. The Holders of a
majority in aggregate Principal Amount at Maturity of the Outstanding Notes
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee with respect to the Notes by this Indenture;
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provided that such direction shall not be otherwise than in accordance with
law and the provisions of this Indenture and provided, further, that (subject
to the provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, its executive
committee or a trust committee of directors or Responsible Officers of the
Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or that the actions or forbearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Notes not joining in the giving of said direction,
it being understood that (subject to Section 6.1) the Trustee shall have no duty
to ascertain whether or not such actions or forbearances are unduly prejudicial
to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Noteholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of
acceleration of the maturity of the Notes as provided in Section 5.1, the
Holders of a majority in aggregate Principal Amount at Maturity of the
Outstanding Notes may on behalf of all the Holders waive any past default or
Event of Default and its consequences with respect to the Notes, as described in
Section 5.1, except a default or an Event of Default in respect of a covenant or
provision hereof or of the Notes which cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver, the Issuer,
the Guarantor, the Trustee and the Holders of all the Notes shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances. The Trustee shall, within 90 days after the occurrence
of a default with respect to the Notes, give notice of all such defaults known
to the Trustee to all the Holders of the Notes in the manner and to the extent
provided in Section 4.4(c), unless in each case such defaults shall have been
cured before the mailing of such notice (the term "default" for the purpose of
this Article being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default described in Section 5.1(a), the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors or
trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Noteholders.
SECTION 5.12 Right of Court to Require Filing of Undertaking to
Pay Costs. All parties to this Indenture agree, and each Holder of the Notes by
his acceptance thereof shall be deemed to have agreed, that any court may in its
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discretion require, 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, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder or group of Noteholders
holding in the aggregate more than 10% in aggregate Principal Amount at Maturity
of the Notes, or to any suit instituted by any Noteholder for the enforcement of
the payment of the Principal Amount at Maturity, Issue Price, accrued Original
Issue Discount or Redemption Price of the Notes when the same shall become due
and payable.
ARTICLE SIX
CONCERNING THE TRUSTEE
----------------------
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
Default with respect to the Notes and after the curing or waiving of all Events
of Default which may have occurred with respect to the Notes, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default with respect to the Notes has occurred
(which has not been cured or waived), the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect
to the Notes and after the curing or waiving of all such Events of
Default which may have occurred with respect to the Notes:
(i) the duties and obligations of
the Trustee with respect to the Notes shall be
determined solely by the express provisions of
this Indenture, and the Trustee shall not be
liable except for the performance of such
duties and obligations as are specifically set
forth in this Indenture, and no implied
covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on
the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any statements,
certificates or opinions furnished to the
Trustee and conforming to the requirements of
this Indenture; but in the case of any such
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statements, certificates or opinions which by
any provision hereof are specifically required
to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with an
appropriate direction of the Holders pursuant to Section 5.9 relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer or the
Guarantor mentioned herein shall be sufficiently evidenced by an
Officers' Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors of either the Issuer or the Guarantor may be evidenced to the
Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Issuer or the Guarantor, as applicable;
(c) the Trustee may consult with counsel and any written
advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities which
might be incurred therein or thereby;
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(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default with respect
to the Notes and after the curing or waiving of all such Events of
Default, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or
document unless requested in writing so to do by the Holders of not
less than a majority in aggregate Principal Amount at Maturity of the
then Outstanding Notes; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such costs, expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Issuer or, if paid by the
Trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ, and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
the Notes or Application of Proceeds Thereof. The recitals contained herein and
in the Notes, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Notes. The Trustee shall not
be accountable for the use or application by the Issuer of the Notes or of the
proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Notes; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of the Notes with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive, collect,
hold and retain collections from the Issuer with the same rights it would have
if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions
of Section 10.4, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
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SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Issuer covenants and agrees to pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Issuer also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section to compensate and indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
the Notes, and the Notes are hereby subordinated to such senior claim. The
Company's payment obligations pursuant to this Section 6.6 shall survive the
discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of an Event of Default specified in Section 5.1(e) or (f), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof is herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture in reliance thereon.
SECTION 6.8 Qualification of Trustee; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, it shall, within 90 days after ascertaining
that it has such conflicting interest, either eliminate such conflicting
interest or resign in the manner and with the effect specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within 10 days
after the expiration of such 90 day period, transmit by mail notice of such
failure to the Noteholders in the manner and to the extent required by Section
4.4(c).
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Notes if the Notes are
in default and:
(i) the Trustee is a trustee under another indenture under
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which any other securities, or certificates of
interest or participation in any other
securities, of the Issuer or the Guarantor are
outstanding, unless such other indenture is a
collateral trust indenture under which the
only collateral consists of the Notes issued
under this Indenture; provided that there
shall be excluded from the operation of this
paragraph such other indenture or indentures
under which other securities, or certificates
of interest or participation in other
securities, of the Issuer or the Guarantor are
outstanding, if
(1) this Indenture and such other
indenture or indentures are wholly unsecured
and such other indenture or indentures are
hereafter qualified under the Trust Indenture
Act of 1939, unless the SEC shall have found
and declared by order pursuant to Section
305(b) or Section 307(c) of the Trust
Indenture Act of 1939 that differences exist
between the provisions of this Indenture and
the provisions of such other indenture or
indentures, as applicable, which are so likely
to involve a material conflict of interest as
to make it necessary in the public interest or
for the protection of investors to disqualify
the Trustee from acting as such under this
Indenture and such other indenture or
indentures, or
(2) the Issuer shall have sustained
the burden of proving, on application to the
SEC and after opportunity for hearing thereon,
that trusteeship under this Indenture and such
other indenture or indentures, is not so
likely to involve a material conflict of
interest as to make it necessary in the public
interest or for the protection of investors to
disqualify the Trustee from acting as such
under this Indenture and such other indenture
or indentures;
(ii) the Trustee or any of its directors or executive officers is an
obligor upon the Notes issued under this Indenture or an underwriter
for the Issuer or the Guarantor;
(iii) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with the Issuer or the Guarantor or an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of
the Issuer, or of an underwriter (other than the Trustee itself) for
the Issuer or the Guarantor who is currently engaged in the business of
underwriting, except that (x) one individual may be a director or an
executive officer, or both, of the Trustee and a director or an
executive officer, or both, of the Issuer or the Guarantor, but may not
be at the same time an executive officer of both the Trustee and the
Issuer; (y) if and so long as the number of directors of the Trustee in
office is more than nine, one additional individual may be a director
or an executive officer, or both, of the Trustee and a director of the
Issuer; and (z) the Trustee may be designated by the Issuer or by any
underwriter for the Issuer to act in the
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capacity of transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent or depositary, or in any other similar capacity,
or, subject to the provisions of (c)(i) of this Section, to act as
trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Issuer or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons;
or 10% or more of the voting securities of the Trustee is beneficially
owned either by an underwriter for the Issuer or by any director,
partner or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (x) 5% or more of the
voting securities, or 10% or more of any other class of security of the
Issuer, not including the Notes issued under this Indenture and
securities issued under any other indenture under which the Trustee is
also trustee, or (y) 10% or more of any class of security of an
underwriter for the Issuer;
(vii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, 5% or more of the
voting securities of any person who, to the knowledge of the Trustee,
owns 10% or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the
Issuer;
(viii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, 10% or more of any
class of security of any person who, to the knowledge of the Trustee,
owns 50% or more of the voting securities of the Issuer; or
(ix) the Trustee, on the date of default upon the Notes or
anniversary of such default while such default on the Notes remains
outstanding, in the capacity of executor, administrator, testamentary
or inter vivos trustee, guardian, committee or conservator, or in any
other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under clause (vi), (vii) or (viii) of this
subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator or testamentary
trustee of an estate which included them, the provisions of the
preceding sentence shall not apply, for a period of two years from the
date of such acquisition, to the extent that such securities included
in such estate do not exceed 25% of such voting securities or 25% of
any such class of security. Promptly after the dates of any such
default upon the Notes and annually in each succeeding year that the
Notes remain in default, the Trustee shall make a check of its holdings
of such securities in any of the above-mentioned capacities as of such
dates. If the Issuer fails to make payment in full of principal of or
interest on any of the Notes when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of
the above-mentioned capacities
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as of the date of the expiration of such 30-day period, and after such
date, notwithstanding the foregoing provisions of this paragraph, all
such securities so held by the Trustee, with sole or joint control over
such securities vested in it, shall, but only so long as such failure
shall continue, be considered as though beneficially owned by the
Trustee for the purposes of clauses (vi), (vii) and (viii) of this
subsection.
The specification of percentages in clauses (v) to (ix), inclusive, of
this subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of clause (iii) or
(vii) of this subsection.
For the purposes of clauses (vi), (vii), (viii) and (ix) of this
subsection only,
(i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to
evidence an obligation to repay moneys lent to a person by one or more
banks, trust companies or banking firms, or any certificate of interest
or participation in any such note or evidence of indebtedness;
(ii) an obligation shall be deemed to be "in default" when a default
in payment of principal or interest shall have continued for 30 days or
more and shall not have been cured; and
(iii) the Trustee shall not be deemed to be the owner or holder of
(x) any security which it holds as collateral security, as trustee or
otherwise, for an obligation which is not in default as defined in
clause (ii) above, or (y) any security which it holds as collateral
security under this Indenture, irrespective of any default hereunder,
or (z) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.
Except as provided above, the word "security" or "securities," as
used in this Section, shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights or, in general, any interest or
instrument commonly known as a "security," or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section:
(i) the term "underwriter," when used with reference to the Issuer,
shall mean every person who, within three years prior to the time as of
which the determination is made, has purchased from the Issuer with a
view to, or has offered or sold for the Issuer in connection with, the
distribution of any security of the Issuer outstanding at such time, or
has participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
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shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization, whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof; as used in this clause, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the Notes; and
(vi) the term "executive officer" shall mean the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization, whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(i) a specified percentage of the voting securities of the Trustee, the
Issuer or any other person referred to in this Section (each of whom is
referred to as a "person" in this subsection) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting securities of
such person are entitled to cast in the direction or management of the
affairs of such person;
(ii) a specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the
class outstanding;
(iii) the term "amount," when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares and the number of units
if relating to any other kind of security;
(iv) the term "outstanding" means issued and not held by or for the
account of the issuer; the following securities shall not be deemed
outstanding within the meaning of this definition:
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(A) securities of an issuer held in
a sinking fund relating to securities of the
issuer of the same class;
(B) securities of an issuer held in
a sinking fund relating to another class of
securities of the issuer, if the obligation
evidenced by such other class of securities is
not in default as to principal or interest or
otherwise;
(C) securities pledged by the issuer
thereof as security for an obligation of the
issuer not in default as to principal or
interest or otherwise; and
(D) securities held in escrow if placed in escrow by the
issuer thereof;
provided that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof; and
(v) a security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided that, in the
case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and provided, further, that,
in the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient
to constitute them securities of different classes, whether or not they
are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. There
shall at all times be a Trustee hereunder which shall be a corporation organized
and doing business under the laws of the United States of America or of any
State thereof or the District of Columbia having a combined capital and surplus
of at least $50,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal,
State or District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign by giving written notice of resignation to the
Issuer and by mailing notice of such resignation to the Holders of the then
Outstanding Notes at their addresses as they shall appear on the register of the
Registrar. Upon receiving such notice of resignation, the Issuer shall
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promptly appoint a successor trustee or trustees with respect to the applicable
series by written instrument, in duplicate, executed by authority of the Board
of Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed and shall have accepted appointment within
30 days after the mailing of such notice of resignation, the resigning trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Holder who has been a bona fide Holder of a Note for
at least six months may, subject to the provisions of Section 5.12, on behalf of
such Holder and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
6.8 after written request therefor by the Issuer or by any Holder who
has been a bona fide Holder of a Note for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written
request therefor by the Issuer or by any such Holder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
or
(iv) the Issuer shall elect to remove the Trustee, provided that no
Event of Default, or event which following notice or the passage of
time or both would constitute an Event of Default, shall then exist
with respect to the Notes and such removal does not adversely affect
the interests of any Holder of the Notes;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee or trustees, or,
subject to the provisions of Section 5.12, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of such Holder and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, remove the
Trustee and appoint a successor trustee.
(c) Any resignation or removal of the Trustee and any
appointment of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall execute,
acknowledge and
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deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, trusts and duties of its predecessor hereunder, with like effect as if
originally named as trustee hereunder; but, nevertheless, on the written request
of the Issuer or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 10.4, pay over to
the successor trustee all moneys at the time held by it hereunder for the
benefit of such applicable series and shall execute, acknowledge and deliver an
instrument transferring to such successor trustee all such rights, powers,
trusts and duties. Upon request of any such successor trustee, the Issuer shall
execute and acknowledge any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights,
powers and trusts. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee for the
benefit of the Notes to secure any amounts then due it pursuant to the
provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.8 and eligible under the provisions
of Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section, the Issuer shall give notice thereof to the Holders of
the Notes by mailing such notice to such Holders at their addresses as they
shall appear on the register of the Registrar. If the acceptance of appointment
is substantially contemporaneous with the resignation, then the notice called
for by the preceding sentence may be combined with the notice called for by
Section 6.10. If the Issuer fails to give such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession
to Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.8 and eligible
under the provisions of Section 6.9, without the execution or filing of a paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
In case at the time of such succession to the Trustee any of the Notes
shall have been authenticated but not delivered, any such successor trustee may
adopt the certificate of authentication of any predecessor trustee and deliver
the Notes so authenticated; and, in case at that time any of the Notes shall not
have been authenticated, any successor trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of such successor
trustee; and in all such cases such certificate of authentication shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of authentication of the Trustee shall have; provided that the
right to adopt the certification of any predecessor trustee or to authenticate
the Notes in the name of any predecessor trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
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SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Notes and the
holders of other indenture securities (as defined in such subsection (c)):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three months' period
and valid as against the Issuer and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in clause (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have exercised
if a petition in bankruptcy had been filed by or against the Issuer
upon the date of such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property
if disposed of, subject, however, to the rights, if any, of the Issuer
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any person (other than the Issuer) who is liable
thereon, (ii) the proceeds of the bona fide sale of any such claim by
the Trustee to a third person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or
applicable state law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of
such four months' period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default as defined in subsection (c) of this Section would occur within
three months; or
(D) to receive payment on any claim referred to in clause (B) or
(C) of this subsection, against the release of any property held as
security for such claim as provided in such clause (B) or (C), as the
case may be, to the extent of the fair value of such property,
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For the purposes of clauses (B), (C) and (D), property substituted
after the beginning of three months period for property held as security at the
time of such substitution shall to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such clauses is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such preexisting claim.
If the Trustee shall be required to account, the fund and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Issuer of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, the Holders and the holders of other indenture securities dividends on
claims filed against the Issuer in bankruptcy or receivership or in proceedings
for reorganization pursuant to Title 11 of the United States Code or applicable
State law, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceeding for reorganization is pending shall
have jurisdiction (i) to apportion among the Trustee, the Holders and the
holders of other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and the proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee, the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning
of such three-months' period shall be subject to the provisions of this
subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four-months'
period, it shall be subject to the provisions of this subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such
three-months' period; and
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(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of this Section a
creditor relationship arising from:
(1) ownership or acquisition of securities issued under any
indenture or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Noteholders at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c)(3)
of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c)(4) of this Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure to make payment
in full of the principal or interest in respect of the Notes when such
payment becomes due and payable or principal and interest upon the
other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" shall mean securities
upon which the Issuer is an obligor (as defined in the Trust Indenture
Act of 1939) outstanding under any other indenture (i) under which the
Trustee is also trustee, (ii) which contains provisions substantially
similar to the provisions of subsection (a) of this Section and (iii)
under which a default exists at the time of the apportionment of the
funds and property held in said special account;
(3) the term "cash transaction" shall mean any transaction in
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which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" shall mean any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Issuer for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with
the Issuer arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor upon the Notes.
SECTION 6.14 Appointment of Authenticating Agent. As long as
any Note remains Outstanding, the Trustee may, by an instrument in writing,
appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of, but
subject to the direction of, the Trustee to authenticate Notes including Notes
issued upon exchange, registration of transfer, partial redemption or pursuant
to Section 2.6. Notes so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee. Whenever reference is made in the Indenture to the
authentication and delivery of Notes by the Trustee or to the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
for such series and a certificate of authentication executed on behalf of the
Trustee by such Authenticating Agent. Such Authenticating Agent shall at all
times be a corporation organized and doing business under the laws of the United
States of America or of any State thereof or of the District of Columbia
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $5,000,000 (determined as provided in Section
6.9 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a part or any corporation succeeding to the
corporate agency or corporate trust business of any Authenticating Agent, shall
be the successor to such Authenticating Agent with respect to the Notes without
the execution or filing of any paper or any further act on the part of the
Trustee or such Authenticating Agent.
Any Authenticating Agent may at any time, and if it shall cease to be
eligible hereunder shall, resign by giving written notice of resignation to the
Trustee and to the Issuer. The Trustee may at any time terminate the agency of
any Authenticating Agent by giving written notice thereof to such Authenticating
Agent and the Issuer. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
upon
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receipt of an Issuer Order appoint a successor Authenticating Agent and shall
provide notice of such appointment to all the Holders of the Notes in the manner
and to the extent provided in Section 6.11 with respect to the appointment of a
successor trustee. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers and duties of
its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.
Sections 6.2, 6.3, 6.4, 6.6 (except for the last sentence thereof) and
7.3 shall be applicable to any Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE NOTEHOLDERS
--------------------------
SECTION 7.1 Evidence of Action Taken by Noteholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in aggregate Principal Amount at Maturity of the Holders of the Notes may be
evidenced by one or more instruments of substantially similar tenor signed by
such specified percentage of Holders in person or by agent or proxy duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Notes. Subject to Sections 6.1 and 6.2, proof of the execution of any instrument
by a Holder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. Subject to Sections 6.1 and
6.2, proof of the holding by any Person of any Note shall be sufficient if the
ownership of the Notes is proved by the register maintained by the Registrar
pursuant to Section 2.3 or by a certificate of the Registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee
may deem and treat the Person in whose name any Note shall be registered upon
the register maintained by the Registrar pursuant to Section 2.3 as the absolute
owner of such Note (whether or not such Note shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payments of or on account of the Note and for all other
purposes; and none of the Issuer, the Guarantor, the Trustee and any agent of
the Issuer, the Guarantor or the Trustee shall be affected by any notice to the
contrary. All such payments so made to any such Person, or upon his order, shall
be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Note.
SECTION 7.4 Notes Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate Principal Amount
at Maturity of Outstanding Notes have concurred in any direction, consent or
waiver under this Indenture, Notes which are owned by the Issuer, the Guarantor
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer or the Guarantor shall be
disregarded and deemed not to be Outstanding for the purposes of any such
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determination, except that for the purpose of determining whether the Trustee
shall be protected relying on any such direction, consent or waiver, only Notes
which the Trustee knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Issuer or the
Guarantor upon such Notes or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or the
Guarantor. In case of a dispute as to such right, the advice of counsel shall be
full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all Notes, if
any, known by the Issuer to be owned or held by or for the account of any of the
above described Persons; and, subject to Sections 6.1 and 6.2, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Notes not listed therein are
Outstanding for the purposes of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the requisite percentage in
aggregate Principal Amount at Maturity of the Notes specified in this Indenture
in connection with such action, any Holder of a Note the serial number of which
is shown by the evidence to be included among the serial numbers of the Notes
the Holders of which have consented to such action may, by filing written notice
at the Corporate Trust Office and upon proof of ownership as provided in Section
7.2, revoke such action so far as concerns such Note. Except as aforesaid, any
such action taken by the Holder of a Note shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Note and of any Notes
issued in exchange or substitution therefor or on registration of transfer
thereof, irrespective of whether or not any notation in regard thereto is made
upon any such Note. Any action taken by the Holders of the requisite percentage
in aggregate Principal Amount at Maturity of the Notes specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Guarantor, the Trustee and the Holders of all the Notes.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above. If a record date is fixed, then
notwithstanding the immediately preceding paragraph those Persons who were
Holders of Notes 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 with respect to such Notes,
whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 120 days after such
record date.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 8.1 Supplemental Indentures Without Consent of
Noteholders. The Issuer and the Guarantor, when authorized by a resolution of
their respective Boards of Directors (which resolution may provide general terms
or parameters for such action
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and may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) subject to Section 3.6, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes any
property or assets;
(b) to add guarantees with respect to the Notes;
(c) to evidence the succession of another corporation to the
Issuer or the Guarantor, or successive successions, and the assumption
by the successor corporation of the covenants, agreements and
obligations of the Issuer or the Guarantor, as applicable pursuant to
Article Nine;
(d) to add to the covenants of the Issuer or the Guarantor such
further covenants, restrictions, conditions or provisions as the
Issuer, the Guarantor and the Trustee shall consider to be for the
protection of the Holders of the Notes, and to make the occurrence, or
the occurrence and continuance, of a default in complying with any such
additional covenant, restriction, condition or provision an Event of
Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; in respect of
any such additional covenant, restriction, condition or provision, such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate Principal Amount at
Maturity of the Notes to waive such an Event of Default;
(e) to cure any ambiguity, defect, omission or inconsistency or
to correct or supplement any provision contained herein or in any
supplemental indenture which may be defective or inconsistent with any
other provision contained herein or in any supplemental indenture, or
to make such other provisions as the Issuer or the Guarantor may deem
necessary or desirable, provided that no such action shall adversely
affect the interests of the Holders of the Notes;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee, as provided in Section 6.11; and
(g) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f)
of the Internal Revenue Code of 1986, as amended, or in a manner such
that the uncertificated Notes are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended.
The Trustee is hereby authorized to join with the Issuer and the
Guarantor in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer, assignment, mortgage or pledge of any
property or assets thereunder, but the Trustee
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shall not be obligated to enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of the Notes at the
time Outstanding, notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of the
Noteholders. With the consent (evidenced as provided in Article Seven) of the
Holders of not less than a majority in aggregate Principal Amount at Maturity of
the Outstanding Notes affected by such supplemental indenture, the Issuer and
the Guarantor, when authorized by a resolution of their respective Boards of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in manner the rights of the Holders of the Notes;
provided that no such supplemental indenture shall, without the consent of each
Holder affected thereby (a) reduce the Principal Amount at Maturity, the Issue
Price or the Redemption Price with respect to any Note, the amount thereof that
would be due and payable upon an acceleration of the maturity of the Notes
pursuant to Section 5.1, or the amount thereof provable in bankruptcy pursuant
to Section 5.2, or extend the maturity of any Note, or alter the manner or rate
of accrual of Original Issue Discount, or make any Note payable in money or
securities other than that stated in the Note; (b) reduce the percentage in
Principal Amount at Maturity of the Outstanding Notes whose Holders must consent
to any such supplemental indenture or any waiver provided for in this Indenture;
or (c) impair the right to institute suit for the enforcement of any payment
with respect to the Notes.
Upon the request of the Issuer and the Guarantor, accompanied by
a Board Resolution from each of the Issuer and the Guarantor complying with the
first paragraph of this Section and evidence of the consent of the Holders of
the Notes as aforesaid and such other documents, if any, as may be required by
Section 7.1, the Trustee shall join with the Issuer and the Guarantor in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer, the Guarantor and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall give notice thereof (i) to the Holders of then
Outstanding Notes, by mailing a notice thereof by first-class mail to such
Holders at their addresses as they shall appear on the register of the
Registrar. Any failure of the Trustee to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
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SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Issuer, the Guarantor
and the Holders of the Notes of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article complies with the
applicable provision of this Indenture.
SECTION 8.5 Notation on Notes in Respect of Supplemental
Indentures. Notes of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to the provisions of this Article may
bear a notation form approved by the Trustee as to any matter provided for by
such supplemental indenture. If a supplemental indenture changes the terms of a
Note, the Trustee may require the Holder of such Note to deliver it to the
Trustee, and the Trustee may place an appropriate notation on the Note regarding
the changed terms and return it to such Holder. A failure to make any such
notation shall not, however, in any way impair or affect the validity of any
such supplemental indenture or any such Note the terms of which are changed.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-----------------------------------------
SECTION 9.1 Covenant of the Guarantor and the Issuer Not to
Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions.
Neither the Guarantor nor the Issuer shall consolidate with, or merge with or
into, any other Person or Persons (whether or not affiliated with the Guarantor
or the Issuer), or be a party to successive consolidations or mergers to which
the Guarantor or the Issuer, as the case may be, or its successor or successors
shall be a party or parties, or sell, lease or convey the property of the
Guarantor or the Issuer as an entirety or substantially as an entirety, unless
(and in the case of the Issuer, subject to the provisions of Section 3.8): (a)
upon any such consolidation, merger, sale, lease or conveyance, the due and
punctual payment of the Principal Amount at Maturity, Issue Price, accrued
Original Issue Discount and Redemption Price on all the Notes, and the due and
punctual performance and observance of all of the covenants, conditions and
other obligations of this Indenture and the Notes to be performed or observed by
the Guarantor or the Issuer, as the case may be, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person formed by such consolidation, or into
which the Guarantor or the Issuer, as the case may be, shall have been merged,
or which shall have acquired such property (the "Successor Company"); (b) the
Successor Company shall be either (i) a Person organized and existing under the
laws of the United States, any state thereof or the District of Columbia or (ii)
a Person organized and
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existing under the laws of Canada, Japan, Australia, New Zealand, any nation in
Western Europe or of any political subdivision of any thereof and such Person
undertakes to pay to the Holders of the Notes any additional amounts as may be
necessary in order that every net payment of Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount and Redemption Price on the Notes, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon such Holder (except for a tax, assessment or
charge imposed solely as a result of a connection between the recipient and the
jurisdiction imposing such tax assessment or charge) by reason of or as a result
of such payment being made by a Person which is not a Person existing under the
laws of the United States or any state thereof or the District of Columbia, will
not be less than the amount provided for in the Notes to be then due and
payable; (c) immediately after giving effect to such transaction (and treating
any Secured Debt or Sale and Leaseback Transaction which becomes an obligation
of the Successor Company as a result of such transaction as having been incurred
or entered into by the Successor Company at the time of such transaction), no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing; and (d)
in the case of any such transaction with respect to the Issuer, the Guarantor
consents to such transaction and reaffirms the Guarantee.
SECTION 9.2 Notes to be Secured in Certain Events. If, upon any
such consolidation or merger of the Guarantor or the Issuer or upon any such
sale, lease or conveyance of the property of the Guarantor or the Issuer as an
entirety or substantially as an entirety to any other Person, any property owned
by the Guarantor immediately prior thereto would thereupon become subject to any
Lien (unless the Secured Debt in respect of such Lien could have been incurred
by the Guarantor without its being required by the provisions of Section 3.6 to
secure the Notes equally and ratably with (or prior to) such Secured Debt), the
Guarantor, prior to any such consolidation, merger, sale, lease or conveyance,
will by indenture supplemental hereto secure the Notes (together with, if the
Guarantor shall so determine, any other Debt incurred, assumed or guaranteed by
the Guarantor ranking equally with, or prior to, the Guarantee, whether then
existing or thereafter created) by direct Lien on such property, prior to all
Liens other than any theretofore existing thereon.
SECTION 9.3 Successor Company Substituted. In case of any
consolidation, merger, sale, lease or conveyance referred to in Section 9.1, and
following such an assumption by the Successor Company, such Successor Company
shall succeed to and be substituted for the Guarantor or the Issuer, as the case
may be, with the same effect as if it had been named herein.
Such Successor Company may cause to be signed, and may issue
either in its own name or in the name of the Guarantor or the Issuer, as the
case may be, prior to such succession, any or all of the Notes issuable
hereunder which theretofore shall not have been signed by the Guarantor or the
Issuer, as the case may be, and delivered to the Trustee; and, upon the order of
such Successor Company, instead of the Guarantor or the Issuer, as the case may
be, and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Notes which
previously shall have been signed and delivered by the officers of the Guarantor
or the Issuer, as the case may be, to the Trustee for authentication, and any
Notes which such Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Notes so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Notes
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theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease), the Guarantor or the Issuer or any Successor
Company which shall theretofore have become such in the manner described in this
Article shall be discharged from all obligations and covenants under this
Indenture and the Notes and may be liquidated and dissolved.
SECTION 9.4 Officers' Certificate and Opinion of Counsel
Delivered to Trustee. The Trustee, subject to the provisions of Sections 6.1 and
6.2, may receive an Officers' Certificate and an Opinion of Counsel each stating
that any such consolidation, merger, sale, lease or conveyance, that any such
assumption, that any such supplemental indenture and that any such liquidation
or dissolution, complies with the applicable provisions of this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF
INDENTURE; UNCLAIMED MONEYS
-----------------------------
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at
any time (a) the Issuer shall have paid or caused to be paid the Principal
Amount at Maturity due and payable in respect of all the Notes theretofore
authenticated (other than Notes which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.6), in accordance with
the terms of this Indenture and such Notes or (b) as to Notes not so paid, the
Issuer shall have delivered to the Trustee for cancellation all the Notes
theretofore authenticated (other than any Notes which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided in Section
2.6) or (c) as to Notes not so paid or delivered for cancellation, (i) all the
Notes shall have become due and payable, and (ii) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) to pay the Principal Amount
at Maturity on all the Notes; and if, in the case of (a), (b) or (c), the Issuer
shall also pay or cause to be paid all other sums payable hereunder by the
Issuer, then this Indenture shall, subject to Section 10.6, cease to be of
further effect (except as to (i) rights of registration of transfer and exchange
of the Notes and the Issuer's right of optional redemption, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Notes, (iii) the rights of Holders
of the Notes to receive payments thereon upon the original stated due dates
therefor (but not upon acceleration), (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of Holders of the Notes as
beneficiaries hereof with respect to the property so deposited with the Trustee
and payable to all or any of them, (vi) the obligations of the Issuer under
Sections 3.2, 3.3, 3.4, 4.1 and 9.3 and clauses (a) and (b) of Section 9.1 and
(vii) this Article 10 pertinent to such continuing obligations); and the
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Trustee, on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction and discharge of this Indenture;
provided that the rights of Holders of the Notes to receive amounts in respect
of the Principal Amount at Maturity or redemption, as the case may be, on the
Notes held by them shall not be delayed longer than required by then applicable
mandatory rules or policies of any national securities exchange upon which the
Notes are listed. The Issuer agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
(B) In addition to discharge of this Indenture pursuant to the next
preceding paragraph (A), the Issuer shall be deemed to have paid and discharged
the entire indebtedness on all the Notes on the 123rd day after the date of the
deposit referred to in subparagraph (a) below, and the provisions of this
Indenture with respect to the Notes shall, subject to Section 10.6, no longer be
in effect (except as to (i) rights of registration of transfer and exchange of
the Notes and the Issuer's right of optional redemption, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Notes, (iii) the rights of Holders
of the Notes to receive payments thereon upon the original stated due dates
therefor (but not upon acceleration), solely from the trust fund referred to in
subparagraph (a) below, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of Holders of the Notes as beneficiaries
hereof with respect to the property so deposited with the Trustee and payable to
all or any of them, (vi) the respective obligations of the Issuer under Sections
3.2, 3.3, 3.4, 4.1 and 9.3 and clauses (a) and (b) of Section 9.1 and (vii) this
Article 10 pertinent to such continuing obligations); and the Trustee, at the
cost and expense of the Issuer, shall, at the Issuer's request, execute proper
instruments acknowledging the same, if:
(a) the Issuer shall have irrevocably deposited or caused to be
irrevocably deposited with the Trustee as a trust fund specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Notes (i) cash in an amount, or (ii) Government
Obligations, maturing as to principal and interest at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the
Principal Amount at Maturity on all the Notes on each date that such
amount is due and payable;
(b) no Event of Default or event which, with notice or lapse of
time or both, would become an Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such deposit
or, insofar as clauses (e) and (f) of Section 5.1 are concerned, at any
time during the period ending on the 123rd day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(c) such deposit, defeasance and discharge shall not result in
a breach or violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which either the Issuer or the
Guarantor is a party or by which either is bound;
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(d) the Issuer shall have delivered to the Trustee an Opinion of
Counsel (which counsel, for the purpose of clause (ii), shall be
counsel selected by the Issuer with national recognition in matters of
federal income tax law) to the effect that (i) such deposit shall not
result in the Issuer, the Guarantor, the Trustee or such trust
constituting an "investment company" under the Investment Company Act
of 1940, as amended, and (ii) either (A) there has been a change in the
applicable Federal income tax law or (B) the Issuer has received from,
or there has been published by, the Internal Revenue Service a ruling
to the effect that, and in any such case referred to in clause (A) or
(B) such Opinion of Counsel shall confirm that based thereon, the
Holders of the Notes then Outstanding will not recognize income, gain
or loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge 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 deposit, defeasance and discharge had not
occurred; and
(e) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated
by this paragraph have been complied with.
(C) The Issuer and the Guarantor shall be released from their
respective obligations under Sections 3.5, 3.6, 3.7, 3.8 and 3.9 and Article
Nine (other than clauses (a), (b) and (d) of Section 9.1 with respect to the
Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"). Covenant defeasance means that, with
respect to the Outstanding Notes, the Issuer and the Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in Sections 3.5, 3.6, 3.7, 3.8 and 3.9 and Article Nine
(other than Section 9.1(a), (b) and (d)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or Article, by
reason of any reference in such Section or Article to any other provision herein
or by reason of any reference to any such Section or Article in any other
document, and such omission to comply shall not constitute an Event of Default
under Section 5.1 with respect to the Outstanding Notes, but the remainder of
this Indenture shall be unaffected thereby. The following shall be the
conditions to application of this paragraph (C):
(a) the Issuer shall have irrevocably deposited or caused to be
irrevocably deposited with the Trustee as a trust fund specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Notes, (i) cash in an amount, or (ii) Government
Obligations, maturing as to principal and interest at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the
Principal Amount at Maturity on all the Notes on each date that such
amount is due and payable;
(b) no Event of Default or event which, with notice or lapse of
time or both, would become an Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such deposit
or, insofar as clauses (e) and (f) of Section 5.1 are concerned, at any
time during the period ending on the 123rd day after
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the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(c) such deposit and covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture
or any other agreement or instrument to which either the Issuer or the
Guarantor is a party or by which either is bound;
(d) the Issuer shall have delivered to the Trustee an Opinion of
Counsel (which counsel, for the purpose of clause (ii), shall be
counsel selected by the Issuer with national recognition in matters of
federal income tax law) to the effect that (i) such deposit shall not
result in the Issuer, the Guarantor, the Trustee or such trust
constituting an "investment company" under the Investment Company Act
of 1940, as amended, and (ii) the Holders of the Notes then Outstanding
will not recognize income, gain or loss for Federal income tax purposes
as a result of such deposit and 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 deposit and covenant
defeasance had not occurred; and
(e) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such covenant defeasance have
been complied with.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Notes. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 10.1 in respect of the Outstanding Notes shall be held in
trust and applied by it to the payment, either directly or through any Paying
Agent (including the Issuer acting as its own Paying Agent), to the Holders of
the Notes of all sums due and to become due thereon for the Principal Amount at
Maturity, but such money need not be segregated from other funds except to the
extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent under the provisions of the
Indenture shall, upon demand of the Issuer, be paid to the Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee
or any Paying Agent for the payment of any amount on any Note and not applied
but remaining unclaimed for two years after the date upon which such amount
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee or
such Paying Agent, and the Holder of the Notes shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Issuer for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any Paying Agent
with respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such Paying Agent,
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before being required to make any such repayment with respect to moneys
deposited with it for any payment, shall at the expense of the Issuer, mail by
first-class mail to Holders of such Notes at their addresses as they shall
appear on the register of the Registrar, notice that such moneys remain and
that, after a date specified therein, which shall not be less than 30 days from
the date of such mailing, any unclaimed balance of such moneys then remaining
will be repaid to the Issuer.
SECTION 10.5 Indemnity for Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the Government Obligations deposited pursuant to Section
10.1 or the principal or interest received in respect of such Government
Obligations, other than any such tax, fee or other charge which by law is for
the account of the Holders of the Notes for whose benefit such Government
Obligations are held.
SECTION 10.6 Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or Government Obligation in accordance with this
Article 10 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 Issuer's and the Guarantor's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 10 until such time as
the Trustee or Paying Agent is permitted to apply all such money or Government
Obligations in accordance with this Article 10; provided, however, that, if the
Issuer or the Guarantor has made any payment of principal in respect of any
Notes because of the reinstatement of its obligations, the Issuer or the
Guarantor, as applicable, shall be entitled, at its election, (a) to receive
from the Trustee or Paying Agent, as applicable, that portion of such money or
Government Obligations equal to the amount of such payment or (b) to be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or Government Obligations held by the Trustee or Paying Agent.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 11.1 Incorporators, Stockholders, Officers and Directors
of Issuer and Guarantor Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
the Notes, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such, or against any past, present or future
stockholder, officer or director, as such, of the Issuer or the Guarantor or of
any successor, either directly or through the Issuer or the Guarantor or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Notes by the Holders thereof and as part of the consideration
for the issue of the Notes.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Notes. Nothing in this Indenture or in the Notes,
expressed or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties
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hereto and their successors and the Holders of the Notes, any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and of the Holders of the Notes.
SECTION 11.3 Successors and Assigns of Issuer or Guarantor
Bound by Indenture. All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Issuer or the Guarantor, as the
case may be, shall bind any successors and assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, the Guarantor,
Trustee and Holders of Notes. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by the Trustee or
by any Holder of Notes to or upon the Issuer or the Guarantor may be given or
served in person or by being deposited postage prepaid in the United States
mail, first-class mail (except as otherwise specifically provided herein),
addressed (until another address of the Issuer or the Guarantor is filed by the
Issuer or the Guarantor with the Trustee) to Aerial Communications, Inc., 8410
West Bryn Mawr Avenue, Suite 1100, Chicago, Illinois 60631-3486, Attention:
Chief Financial Officer, and to Telephone and Data Systems, Inc., Suite 4000, 30
North LaSalle Street, Chicago, Illinois 60602, Attention: Treasurer. Any notice,
direction, request or demand by the Issuer or the Guarantor or any Holder of
Notes to or upon the Trustee may be given or served in person or by being
deposited postage prepaid in the United States mail, first-class mail (except as
otherwise specifically provided herein), addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, IL 60670, Attention:
Corporate Trust Office. Any notice required or permitted to be given or served
by the Issuer, the Guarantor or by the Trustee to or upon any Holders of Notes,
may be given or served by being deposited in the United States mail, first-class
mail (except as otherwise specifically provided herein), addressed at their
addresses as they shall appear on the register of the Registrar.
In any case where notice to the Noteholders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to be Contained Therein. Upon any application or demand by the
Issuer or the Guarantor to the Trustee to take any action under any of the
provisions of this Indenture, the
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Issuer or the Guarantor, as the case may be, shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion of or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Issuer or the Guarantor, as the case may be,
upon the certificate, statement or opinion of or representations by an officer
or officers of the Issuer or the Guarantor, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or the
Guarantor or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or
firm of accountants in the employ of the Issuer or the Guarantor, as the case
may be, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of principal of the Notes or the date fixed
for redemption or repayment of the Notes shall not be a Business Day, then
payment of amounts due on the Notes need not be made on such date, but may be
made on the next succeeding Business Day
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with the same force and effect as if made on the date of maturity or the date
fixed for redemption or repayment and no interest shall accrue for the period
after such date.
SECTION 11.7 Illinois Law to Govern. This Indenture and the
Notes shall be deemed to be a contract under the laws of the State of Illinois,
and for all purposes shall be construed in accordance with the laws of such
State, except as may otherwise be required by mandatory provisions of law.
SECTION 11.8 Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.9 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF NOTES
-------------------
SECTION 12.1 Right to Redeem; Notices to Trustee. The Issuer,
at its option, may redeem the Notes in accordance with the provisions of
paragraphs 5 and 6 of the Notes. If the Issuer elects to redeem Notes pursuant
to paragraph 5 of the Notes, it shall notify the Trustee in writing of the
redemption date, the Principal Amount at Maturity of Notes to be redeemed and
the Redemption Price. The Issuer shall give the notice to the Trustee provided
for in this Section 12.1 at least 70 days before the redemption date (unless a
shorter notice shall be satisfactory to the Trustee).
SECTION 12.2 Notice of Redemption; Partial Redemptions. (a)
Notice of redemption to the Holders of the Notes to be redeemed as a whole or in
part shall be given by mailing notice of such redemption by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the date
fixed for redemption, to such Holders at their last addresses as they shall
appear upon the register of the Registrar. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice. Failure to give notice by mail,
or any defect in the notice to the Holder of any Note designated for redemption
as a whole or in part, shall not affect the validity of the proceedings for the
redemption of any other Note.
(b) The notice of redemption to each such Holder shall specify
the Principal Amount at Maturity of each Note held by such Holder to be
redeemed, the date fixed for redemption, the Redemption Price, the place or
places of payment and that payment will be made upon presentation and surrender
of such Note, that on and after said date Original Issue Discount and interest,
if any, will cease to accrue (unless the Issuer defaults in making such
redemption payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture) and that no representation is made as
to the correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Notes. In case any Note is to be redeemed in part only
the notice of redemption shall state the portion of the
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Principal Amount at Maturity thereof to be redeemed and shall state that on and
after the date fixed for redemption, upon surrender of such Note, a new Note or
Notes in authorized denominations for an aggregate Principal Amount at Maturity
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note.
(c) The notice of redemption of Notes to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer, in which case the
Issuer will provide the Trustee with the information required to be included in
such notice by the preceding paragraph.
(d) On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with the
Trustee or with one or more Paying Agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the redemption date all the
Notes so called for redemption at the applicable Redemption Price. In the case
of any partial redemption, selection of the Notes for redemption will be made by
the Trustee on a pro rata basis, by lot or by a method that complies with the
applicable legal and securities exchange requirements, if any, and that the
Trustee considers fair and appropriate and in accordance with the methods
generally used at the time of selection by fiduciaries in similar circumstances.
Notes may be redeemed in part in multiples equal to $1,000 Principal Amount at
Maturity or any integral multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Notes selected for redemption. For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to the
redemption of Notes shall relate, in the case of any Note redeemed or to be
redeemed only in part, to the portion of the Principal Amount at Maturity of
such Note which has been or is to be redeemed.
SECTION 12.3 Payment of Notes Called for Redemption. If notice
of redemption has been given as provided in Section 12.2, the Notes or portions
of the Notes specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable Redemption Price, and
on and after said date (unless the Issuer shall default in the payment of such
Notes at the applicable Redemption Price) the Original Issue Discount and
interest, if any, on the Notes or portions of Notes so called for redemption
shall cease to accrue, and, except as provided in Sections 6.5 and 10.4, such
Notes shall cease from and after the date fixed for redemption to be entitled to
any benefit or security under this Indenture, and the Holders thereof shall have
no right in respect of such Notes except the right to receive the applicable
Redemption Price thereof. On presentation and surrender of such Notes at a place
of payment specified in said notice, such Notes or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable Redemption
Price.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the yield to
maturity borne by the Notes.
Upon presentation of any Note redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Note or Notes, of
authorized denominations, in Principal Amount at Maturity equal to the
unredeemed portion of the Note so presented.
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SECTION 12.4 Exclusion of Certain Notes from Eligibility for
Selection for Redemption. Notes shall be excluded from eligibility for selection
for redemption if they are identified by registration and certificate number in
an Officers' Certificate delivered to the Trustee at least 40 days prior to the
last date on which notice of redemption may be given as being owned of record
and beneficially by, and not pledged or hypothecated by: (a) the Issuer; (b) the
Guarantor; or (c) an entity specifically identified in such Officers'
Certificate as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer or the Guarantor.
ARTICLE THIRTEEN
GUARANTEE
---------
SECTION 13.1 Telephone and Data Systems, Inc. Guarantee. For
value received, the Guarantor, in accordance with this Article Thirteen, hereby
absolutely, fully, unconditionally and irrevocably guarantees to the Trustee and
the Holders, as if the Guarantor were the principal debtor, the full and prompt
payment when due of all Indenture Obligations (which for purposes of this
Guarantee shall also be deemed to include all commissions, fees, charges, costs
and other expenses (including, without limitation, all court costs and
reasonable legal fees and disbursements of counsel) arising out of, or incurred
by the Trustee or the Holders in connection with, the enforcement of this
Guarantee).
SECTION 13.2 Continuing Guarantee; No Right of Set-Off;
Independent Obligation. (a) This Guarantee shall be a continuing guarantee of
the payment of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Without limiting the generality of the foregoing, the
Guarantor's liability shall extend to all amounts which constitute part of the
Indenture Obligations and would be owed by the Issuer under this Indenture and
the Notes but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Issuer.
(b) The Guarantor hereby guarantees that the Indenture
Obligations will be paid to the Trustee without set-off or counterclaim or other
reduction whatsoever (whether for taxes, withholding or otherwise) in lawful
currency of the United States of America.
(c) The Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to the Guarantor in the manner prescribed in Section 11.4 hereof.
(d) Except as provided herein, the provisions of this Article
Thirteen cover all agreements between the parties hereto relative to this
Guarantee and none of
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the parties shall be bound by any representation, warranty or promise made by
any Person relative thereto which is not embodied herein; and it is specifically
acknowledged and agreed that this Guarantee has been delivered by the Guarantor
free of any conditions whatsoever and that no representations, warranties or
promises have been made to the Guarantor affecting its liabilities hereunder,
and that the Trustee shall not be bound by any representations, warranties or
promises now or at any time hereafter made by the Issuer to the Guarantor.
(e) This Guarantee is a guarantee of payment and not of
collectibility and is in no way conditioned or contingent upon any attempt to
collect from or enforce performance or compliance by the Issuer or upon any
other event or condition whatsoever.
(f) The obligations of the Guarantor set forth herein constitute
the full recourse obligations of the Guarantor enforceable against it to the
full extent of all its assets and properties.
SECTION 13.3 Guarantee Unconditional. The obligations of the
Guarantor hereunder are independent of the obligations of the Issuer under the
Notes and this Indenture and a separate action or actions may be brought and
prosecuted against the Guarantor whether or not an action or proceeding is
brought against the Issuer and whether or not the Issuer is joined in any such
action or proceeding. The liability of the Guarantor hereunder is irrevocable,
absolute and unconditional and (to the extent permitted by law) the liability
and obligations of the Guarantor hereunder shall not be released, discharged,
mitigated, waived, impaired or affected in whole or in part by:
(a) any lack of validity or enforceability in respect of any
indebtedness or other obligation of the Issuer or any other Person
under this Indenture or the Notes, or any agreement or instrument
relating to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences,
releases, discharges or modifications which the Trustee or the Holders
may extend to, or make with, the Issuer, the Guarantor or any other
Person, or any change in the time, manner or place of payment of, or in
any other term of, all or any of the Indenture Obligations, or any
other amendment or waiver of, or any consent to or departure from, this
Indenture or the Notes, including any increase or decrease in the
Indenture Obligations;
(c) the taking of security from the Issuer, the Guarantor or any
other Person, and the release, discharge or alteration of, or other
dealing with, such security;
(d) the abstention from taking security from the Issuer, the
Guarantor or any other Person or from perfecting, continuing to keep
perfected or taking advantage of any security;
(e) any loss, diminution of value or lack of enforceability of
any security received from the Issuer, the Guarantor or any other
Person, and including any other guarantees received by the Trustee;
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(f) any other dealings by the Issuer or the Guarantor with any
other Person, or with any security;
(g) the Trustee's or the Holders' acceptance of compositions
from the Issuer or the Guarantor;
(h) the application by the Holders or the Trustee of all monies
at any time and from time to time received from the Issuer, the
Guarantor or any other Person on account of any indebtedness and
liabilities owing by the Issuer or the Guarantor to the Trustee or the
Holders, in such manner as the Trustee or the Holders deems best and
the changing of such application in whole or in part and at any time or
from time to time, or any manner of application of collateral, or
proceeds thereof, to all or any of the Indenture Obligations, or the
manner of sale of any collateral;
(i) the release or discharge of the Issuer or the Guarantor or
of any other guarantor of the Notes or of any Person liable directly as
surety or otherwise by operation of law or otherwise for the Notes,
other than an express release in writing given by the Trustee, on
behalf of the Holders, of the liability and obligations of the
Guarantor hereunder;
(j) any change in the name, business, capital structure or
governing instrument of the Issuer or the Guarantor or any refinancing
or restructuring of any of the Indenture Obligations;
(k) the sale of the Issuer's or the Guarantor's business or any
part thereof;
(l) any merger or consolidation, arrangement or
reorganization of the Issuer, the Guarantor, any Person resulting from
the merger or consolidation of the Issuer or the Guarantor with any
other Person or any other successor to such Person or merged or
consolidated Person or any other change in the corporate existence,
structure or ownership of the Issuer or the Guarantor or any change in
the corporate relationship between the Issuer and the Guarantor, or any
termination of such relationship;
(m) the insolvency, bankruptcy, liquidation, winding-up,
dissolution, receivership, arrangement, readjustment, assignment for
the benefit of creditors or distribution of the assets of the Issuer or
its assets or any resulting discharge of any obligations of the Issuer
(whether voluntary or involuntary) or of the Guarantor (whether
voluntary or involuntary) or the loss of corporate existence;
(n) any arrangement or plan of reorganization affecting the
Issuer or the Guarantor;
(o) any failure, omission or delay on the part of the Issuer to
conform or comply with any term of this Indenture;
(p) any limitation on the liability or obligations of the Issuer
or
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any other person under this Indenture, or any discharge, termination,
cancellation, distribution, irregularity, invalidity or
unenforceability in whole or in part, of this Indenture;
(q) any other circumstance that might otherwise constitute a
defense available to, or discharge of, the Issuer or the Guarantor; or
(r) any modification, compromise, settlement or release by the
Trustee, or by operation of law or otherwise, of the Indenture
Obligations or the liability of the Issuer or any other obligor under
the Notes, or of any collateral, in whole or in part, and any refusal
of payment by the Trustee, in whole or in part, from any other obligor
or other guarantor in connection with any of the Indenture Obligations,
whether or not with notice to, or further assent by, or any reservation
of rights against, the Guarantor.
SECTION 13.4 Right to Demand Full Performance. In the event of
any demand for payment by the Trustee from the Guarantor hereunder, the Trustee
or the Holders shall have the right to demand its full claim and to receive all
payments in respect thereof until the Indenture Obligations have been paid in
full, and the Guarantor shall continue to be liable hereunder for any balance
which may be owing to the Trustee or the Holders by the Issuer under this
Indenture and the Notes. The retention by the Trustee or the Holders of any
security, prior to the realization by the Trustee or the Holders of its rights
to such security upon foreclosure thereon, shall not, as between the Trustee and
the Guarantor, be considered as a purchase of such security, or as payment,
satisfaction or reduction of the Indenture Obligations due to the Trustee or the
Holders by the Issuer or any part thereof. The Guarantor, promptly after demand,
will reimburse the Trustee and the Holders for all costs and expenses of
collecting such amount under, or enforcing this Guarantee, including, without
limitation, the reasonable fees and expenses of counsel.
SECTION 13.5 Waivers. (a) The Guarantor hereby expressly
waives (to the extent permitted by law) notice of the acceptance of this
Guarantee and notice of the incurrence, existence, renewal, extension or the
non-performance, non-payment, or non-observance on the part of the Issuer of
any of the terms, covenants, conditions and provisions of this Indenture or the
Notes or any other notice whatsoever to or upon the Issuer or the Guarantor with
respect to the Indenture Obligations, whether by statute, rule of law or
otherwise. The Guarantor hereby acknowledges communication to it of the terms of
this Indenture and the Notes and all of the provisions therein contained and
consents to and approves the same. The Guarantor hereby expressly waives (to the
extent permitted by law) diligence, presentment, protest and demand for payment
with respect to (i) any notice of any sale, transfer or other disposition of any
right, title to or interest in the Notes by the Holders or in this Indenture,
(ii) any release of the Guarantor from its obligations hereunder resulting from
any loss by it of its rights of subrogation hereunder and (iii) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against the Guarantor.
(b) Without prejudice to any of the rights or recourses which
the Trustee or the Holders may have against the Issuer, the Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) enforce, assert, exercise, initiate or exhaust any rights,
remedies or
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recourse against the Issuer, the Guarantor or any other Person under
this Indenture or otherwise;
(ii) value, realize upon, or dispose of any security of
the Issuer or any other Person held by the Trustee or the Holders;
(iii) initiate or exhaust any other remedy which the
Trustee or the Holders may have in law or equity; or
(iv) mitigate the damages resulting from any default under this
Indenture;
before requiring or becoming entitled to demand payment from the Guarantor under
this Guarantee.
SECTION 13.6 The Guarantor Remains Obligated in the Event the
Issuer is No Longer Obligated to Discharge Indenture Obligations. It is the
express intention of the Trustee and the Guarantor that if for any reason the
Issuer has no legal existence, is or becomes under no legal obligation to
discharge the Indenture Obligations owing to the Trustee or the Holders by the
Issuer or if any of the Indenture Obligations owing by the Issuer to the Trustee
or the Holders becomes irrecoverable from the Issuer by operation of law or for
any reason whatsoever, this Guarantee and the covenants, agreements and
obligations of the Guarantor contained in this Article Thirteen shall
nevertheless be binding upon the Guarantor, until such time as all such
Indenture Obligations have been paid in full to the Trustee and all Indenture
Obligations owing to the Trustee or the Holders by the Issuer have been
discharged, or such earlier time as Section 10.1 shall apply to the Notes and
the Guarantor shall be responsible for the payment thereof to the Trustee or the
Holders upon demand.
SECTION 13.7 Subrogation. The Guarantor will not exercise any
rights that it may now or hereafter acquire against the Issuer or any other
guarantor that arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under the Guarantee including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Holders or the Trustee against the Issuer or any other guarantor, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Issuer or any other guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Indenture Obligations and
all other amounts payable under this Guarantee shall have been paid in full in
cash.
SECTION 13.8 Guarantee Is In Addition to Other Security. This
Guarantee shall be in addition to and not in substitution for any other
guarantees or other security which the Trustee may now or hereafter hold in
respect of the Indenture Obligations owing to the Trustee or the Holders by the
Issuer and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of the Guarantor any other guarantees or other
security or any moneys or other assets which the Trustee may be entitled to
receive or upon which the Trustee or the Holders may have a claim.
SECTION 13.9 Release of Security Interests. Without limiting
the generality of the foregoing and except as otherwise provided in this
Indenture, the Guarantor hereby
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consents and agrees, to the fullest extent permitted by applicable law, that the
rights of the Trustee hereunder, and the liability of the Guarantor hereunder,
shall not be affected by any and all releases for any purpose of any collateral,
if any, from the Liens and security interests created by any collateral document
and that this Guarantee shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Indenture Obligations is
rescinded or must otherwise be returned by the Trustee upon the insolvency,
bankruptcy or reorganization of the Issuer or otherwise, all as though such
payment had not been made.
SECTION 13.10 No Bar to Further Actions. Except as provided by
law, no action or proceeding brought or instituted under this Article Thirteen
and this Guarantee and no recovery or judgment in pursuance thereof shall be a
bar or defense to any further action or proceeding which may be brought under
this Article Thirteen and this Guarantee by reason of any further default or
defaults under Article Thirteen and this Guarantee or in the payment of any of
the Indenture Obligations owing by the Issuer.
SECTION 13.11 Failure to Exercise Rights Shall Not Operate As
a Waiver; No Suspension of Remedies. (a) No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, power,
privilege or remedy under this Article Thirteen and this Guarantee shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power, privilege or remedy preclude any other or further exercise thereof, or
the exercise of any other right, powers, privileges or remedies. The rights and
remedies herein provided for are cumulative and not exclusive of any rights or
remedies provided in law or equity.
(b) Nothing contained in this Article Thirteen shall limit the
right of the Trustee or the Holders to take any action to accelerate the
maturity of the Notes pursuant to Article Five or to pursue any rights or
remedies hereunder or under applicable law.
SECTION 13.12 Release of Guarantee. Concurrently with the
payment in full of all of the Indenture Obligations, then the Guarantor shall be
released from and relieved of its obligations under this Article Thirteen. Upon
the delivery by the Issuer to the Trustee of an Officers' Certificate and, if
requested by the Trustee, an Opinion of Counsel to the effect that the
transaction giving rise to the release of this Guarantee was made by the Issuer
in accordance with the provisions of this Indenture and the Notes, the Trustee
shall execute any documents reasonably required in order to evidence the release
of the Guarantor from its obligations under this Guarantee. If any of the
Indenture Obligations are revived and reinstated after the termination of this
Guarantee, then all of the obligations of the Guarantor under this Guarantee
shall be revived and reinstated as if this Guarantee had not been terminated
until such time as the Indenture Obligations are paid in full, and the Guarantor
shall enter into an amendment to this Guarantee, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.
SECTION 13.13 Execution of Guarantee. To evidence the
Guarantee, the Guarantor hereby agrees to execute a notation relating to the
Guarantee substantially in the form set forth in Exhibit A, to be endorsed on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of the Guarantor by its Chairman of the Board, its
President or one of its Vice Presidents. The signature of any of these officers
on the Notes may be manual or facsimile.
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If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates a Note on which this
Guarantee is endorsed, such Guarantee shall be valid nevertheless.
The Guarantor hereby agrees that the Guarantee shall remain in
full force and effect notwithstanding any failure to include on each Note a
notation relating to the Guarantee. The delivery of any Note by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of the
Guarantee set forth in this Indenture on behalf of the Guarantor.
SECTION 13.14 Guarantee Unsecured Unsubordinated Indebtedness
of Guarantor. The indebtedness represented by this Guarantee is an unsecured
unsubordinated obligation of the Guarantor and in all respects shall rank pari
passu with all existing and future unsecured unsubordinated indebtedness of the
Guarantor.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and delivered as of February 5, 1998.
AERIAL COMMUNICATIONS, INC.,
as Issuer
By:_________________________________________
Name:
Title:
TELEPHONE AND DATA SYSTEMS, INC.,
as Guarantor
By:_________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:________________________________________
Name:
Title:
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EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Note 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 ISSUER 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 NOTE 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 NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.*
[Restricted Note Legend]
"THIS NOTE (OR ITS PREDECESSOR) HAS BEEN ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND UNDER APPLICABLE
STATE SECURITIES LAWS, AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES
_______________
* This legend should only be added if the Note is issued in global form.
<PAGE>
ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE."
["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.]**
____________________
** Include on a Definitive Note to be held by an institutional
"accredited investor" (as defined in Rule 501(a), (1), (2), (3) or (7)
under the Securities Act).
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<PAGE>
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, RELATING TO "ORIGINAL ISSUE DISCOUNT," THE ISSUE DATE
OF THIS NOTE IS FEBRUARY 5, 1998, THE ISSUE PRICE FOR EACH $1,000 OF PRINCIPAL
AMOUNT PAYABLE AT MATURITY IS $454.60, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
EACH $1,000 OF PRINCIPAL AMOUNT PAYABLE AT MATURITY IS $545.40, AND THE YIELD TO
MATURITY IS 8.05% PER ANNUM, COMPOUNDED SEMI-ANNUALLY.
AERIAL COMMUNICATIONS, INC.
Fully and Unconditionally Guaranteed by
TELEPHONE AND DATA SYSTEMS, INC.
No. CUSIP: 007655AA1
Issue Date: February 5, 1998
Issue Price: $454.60 Original Issue Discount:
(for each $1,000 Principal $545.40 (for each $1,000
Amount at Maturity) Principal Amount at Maturity)
Series B Zero Coupon Note Due 2008
Aerial Communications, Inc., a Delaware corporation, promises
to pay to or registered assigns, the Principal Amount at
Maturity of Dollars ($_________) on February 1, 2008.
This Note shall not bear interest except as specified on the
other side of this Note. Original Issue Discount will accrue as specified on the
other side of this Note.
Additional provisions of this Note are set forth on the other
side of this Note.
AERIAL COMMUNICATIONS, INC.
by
[Seal]
______________________________
Title:
______________________________
Title:
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<PAGE>
Dated: February 5, 1998
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee, certifies
that this is one of the
Notes referred to
in the Indenture.
by ____________________
Authorized Signatory
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<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
AERIAL COMMUNICATIONS, INC.
Fully and Unconditionally Guaranteed by
TELEPHONE AND DATA SYSTEMS, INC.
Series B Zero Coupon Note Due 2008
1. Interest
--------
This Note shall not bear interest, except that if the
Principal Amount at Maturity hereof or any portion of such Principal Amount at
Maturity is not paid when due (whether upon acceleration pursuant to Section 5.1
of the Indenture, upon the date set for payment of the Redemption Price pursuant
to paragraph 5 hereof or upon the stated maturity of this Note), then in each
such case the overdue amount shall bear interest at the yield to maturity on the
Notes, compounded semi-annually, which interest, including interest thereon at
the same rate, compounded semi-annually (to the extent that the payment of such
interest shall be legally enforceable), shall accrue from the date such overdue
amount was due to the date of payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.
Original Issue Discount (the difference between the Issue
Price and the Principal Amount at Maturity of the Note), in the period during
which a Note remains outstanding, shall accrue at 8.05% per annum, on a
semi-annual bond equivalent basis using a 360-day year composed of twelve 30-day
months, commencing on the Issue Date of this Note.
2. Method of Payment
-----------------
Subject to the terms and conditions of the Indenture, the
Issuer will make payments in respect of the Notes to the persons who are
registered Holders of Notes at the close of business on the Business Day
preceding the redemption date or stated maturity, as the case may be. Holders
must surrender Notes to a Paying Agent to collect such payments in respect of
the Notes. The Issuer will pay cash amounts in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Issuer may make such cash payments payable by check payable in such
money.
3. Paying Agent and Registrar
--------------------------
Initially, The First National Bank of Chicago (the "Trustee"),
will act as Paying Agent and Registrar. The Issuer may appoint and change any
Paying Agent, Registrar or co-registrar without notice, other than notice to the
Trustee. The Issuer or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
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<PAGE>
4. Indenture
---------
The Issuer issued the Notes under an Indenture dated as of
February 5, 1998 (the "Indenture"), among the Issuer, Telephone and Data
Systems, Inc., an Iowa corporation (the "Guarantor") and the Trustee. The terms
of the Notes include those stated in the Indenture. Capitalized terms used
herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Noteholders are referred
to the Indenture for a statement of those terms.
The Notes are unsecured unsubordinated obligations of the
Issuer, ranking pari passu with all other unsecured unsubordinated indebtedness
of the Issuer and limited to $219,975,000 aggregate Principal Amount at Maturity
(subject to Section 2.6 of the Indenture). The Indenture imposes certain
limitations on, among other things, the creation of Secured Debt by the
Guarantor and the participation by the Guarantor in certain Sale and Leaseback
transactions.
5. Optional Redemption
-------------------
No sinking fund is provided for the Notes. The Notes may not
be redeemed prior to February 1, 2003. On and after that date, the Issuer may
redeem the Notes in whole or in part at any time at the Redemption Prices
specified below.
The table below shows Redemption Prices of a Note per $1,000
Principal Amount at Maturity on February 1, 2003, at each February 1 thereafter
prior to maturity and at maturity on February 1, 2008, which prices reflect the
accrued Original Issue Discount calculated at each such date. The Redemption
Price of a Note redeemed between such dates would include an additional amount
reflecting the additional Original Issue Discount accrued since the next
preceding date in the table.
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<PAGE>
(1) (2) (3)
Original
Issue Redemption
Redemption Discount at Price
Date Issue Price 8.05% (1) +(2)
---------- ----------- ----------- ----------------
February 1, 2003 $454.60 $219.30 $ 673.90
February 1, 2004 454.60 274.70 729.30
February 1, 2005 454.60 334.60 789.20
February 1, 2006 454.60 399.40 854.00
February 1, 2007 454.60 469.50 924.10
February 1, 2008 454.60 545.40 1000.00
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at the Holder's registered address. Securities in denominations larger
than $1,000 Principal Amount at Maturity may be redeemed in part but only in
integral multiples of $1,000 Principal Amount at Maturity. If money sufficient
to pay the redemption price of all the Notes (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 Original Issue Discount ceases to accrue on such Notes (or such
portions thereof) called for redemption.
7. Guarantee
---------
Payment and performance of the Indenture Obligations of the
Issuer in connection with the Indenture and the Notes are fully, unconditionally
and absolutely guaranteed by the Guarantor in accordance with the terms of
Article Thirteen of the Indenture.
8. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in
denominations of $1,000 Principal Amount at Maturity (or, in the case of Notes
sold to institutional "accredited investors" as described in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act in a transaction intended to be exempt
from registration under the Securities Act, minimum denominations of $100,000)
and integral multiples of $1,000 Principal Amount at Maturity. A Holder may
transfer or exchange Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Notes selected for redemption (except, in the case of a Note to be redeemed in
part,
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<PAGE>
the portion of the Note not to be redeemed) or any Securities for a period of 15
days before a selection of Notes to be redeemed.
9. Persons Deemed Owners
---------------------
The registered holder of this Note may be treated as the owner
of it for all purposes. Owners of a beneficial interest in the Global Note will
not be considered the owners or Holders of any Note. So long as the Depository,
or its nominee, is the Holder of the Global Note, the Depository or such
nominee, as the case may be, will be considered the sole owner and Holder of the
Notes represented by the Global Notes for all purposes under the Indenture and
this Note.
10. Unclaimed Money
---------------
If money for the payment of any amount with respect to the
Notes remains unclaimed for two years, the Trustee or Paying Agent shall pay the
money back to the Issuer at its request unless the applicable abandoned property
law designates another person. After any such payment, Holders entitled to the
money must look only to the Issuer and not to the Trustee for payment.
11. Defeasance
----------
Subject to certain conditions, the Issuer at any time may
terminate some or all of its obligations under the Notes and the Indenture if
the Issuer deposits with the Trustee money or Government Obligations for the
payment of the Principal Amount at Maturity on all the Notes.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture may be amended with the written consent of the Holders of at least
a majority in Principal Amount at Maturity Outstanding of the Notes and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in Principal Amount at Maturity Outstanding
of the Notes. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Issuer, the Guarantor and the Trustee may
amend the Indenture to cure any ambiguity, omission, defect or inconsistency,
provided that no such action adversely affects Holders of the Notes, or to add
guarantees with respect to the Securities, or to provide for uncertificated
Notes in addition to or in place of certificated Notes, or to add additional
covenants, or to secure the Notes.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (a) default in
any payment
A-8
<PAGE>
of the Principal Amount at Maturity, Issue Price, accrued Original Issue
Discount or Redemption Price on the Notes when the same becomes due and payable;
(b) failure on the part of the Guarantor or the Issuer to comply with other
agreements in the Notes or in the Indenture, subject to notice and lapse of
time; (c) certain accelerations (including failure to pay within any grace
period after final maturity) of other indebtedness if the amount accelerated (or
so unpaid) equals or exceeds 2% of Consolidated Capitalization of the Guarantor;
(d) the Guarantee ceases to be in full force and effect or the Guarantor or any
person acting on behalf of the Guarantor shall deny or disaffirm the Guarantor's
obligations under the Guarantee; or (e) certain events of bankruptcy or
insolvency of the Guarantor or the Issuer.
If an Event of Default shall have occurred and be continuing,
then, unless the principal amount of all of the Notes shall have previously
become due and payable, either the Trustee or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Notes then Outstanding may declare
all the Notes to be immediately due and payable. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount at
Maturity of the Notes at the time Outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Noteholders notice
of any continuing Default (except a Default in payment of amounts specified in
clause (a) above) if it determines that withholding notice is in their
interests.
14. Trustee Dealings with the Issuer
--------------------------------
Subject to certain limitations, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuer or its affiliates and may otherwise deal with the Issuer or its
affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
--------------------------
A director, officer, employee, stockholder or incorporator, as
such, of the Issuer or the Guarantor shall not have any liability for any
obligations of the Issuer or the Guarantor under the Notes or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Noteholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
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<PAGE>
16. Authentication
--------------
This Note 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 Note.
17. Abbreviations
-------------
Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with rights of survivorship
and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to
Minors Act).
18. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Issuer has caused CUSIP numbers
to be printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
-------------
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF ILLINOIS, EXCEPT AS MAY OTHERWISE BE REQUIRED BY
MANDATORY PROVISIONS OF LAW.
The Issuer will furnish to any Noteholder upon written request
and without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Chief Financial Officer
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<PAGE>
FORM OF NOTATION ON NOTE RELATING
TO GUARANTEE
The Guarantor (which term includes any successor person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent
set forth in the Indenture and subject to the provisions in the Indenture, the
complete and punctual payment and performance by the Issuer of the Indenture
Obligations in connection with the Indenture and the Notes, and further agrees
to pay any and all expenses (including, without limitation, all court costs and
reasonable fees and disbursements of counsel) which may be paid or incurred by
the Trustee or the Holders in enforcing their rights under the Guarantee. The
indebtedness evidenced by the Guarantees is an unsecured unsubordinated
obligation of the Guarantor and in all respects shall rank pari passu with all
existing and future unsecured unsubordinated indebtedness of the Guarantor.
The obligations of the Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth in
Article Thirteen of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.
TELEPHONE AND DATA
SYSTEMS, INC.
[SEAL]
By________________________
Title:
Attest:___________________
Title:
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<PAGE>
________________________________________________________________________________
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
And irrevocably appoint agent to transfer this
Note on the books of the Issuer. The agent may substitute another
to act for him.
________________________________________________________________________________
Date:__________________ Your Signature:_________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee: ________________________________________
(Signature must be guaranteed by an
"eligible guarantor institution" that is,
a bank, stockbroker, savings and loan
association or credit union meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Securities Transfer
Agents Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP.)
A-12
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF RESTRICTED NOTE
This certificate relates to $_________ Principal Amount at Maturity of Notes
held in (check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
|_| has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
|_| has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
The undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
(1) |_| acquired for the undersigned's own account,
without transfer (in satisfaction of Section 2.5
(a)(ii)(A) of the Indenture); or
(2) |_| transferred to the Issuer; or
(3) |_| transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as
amended; or
(4) |_| transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as
amended; or
(5) |_| transferred pursuant to and in compliance with
Rule 144 under the Securities Act of 1933, as
amended; or
(6) |_| transferred pursuant to an effective
registration statement under the Securities Act of
1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes 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 Issuer or the Trustee may require evidence reasonably satisfactory
to them as to the compliance with the restrictions set forth in the legend on
the face of this Security.
A-13
<PAGE>
________________________________
Signature
Signature Guarantee:
___________________________________________
(Signature must be guaranteed by an
"eligible guarantor institution", that is,
a bank, stockbroker, saving and loan
association or credit union meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such
other signature guarantee program as may be
determined by the Registrar in addition to,
or in substitution for, STAMP.)
A-14
<PAGE>
[TO BE ATTACHED TO GLOBAL NOTE]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
================================================================================
Amount of Amount of Principal Amount Signature
decrease increase in at Maturity of of authorized
in Principal Principal Amount this Global Note signatory of
Amount at at Maturity following such Trustee or
Date of Maturity of this of this decrease or Notes
Exchange Global Note Global Note increase Custodian
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<PAGE>
================================================================================
A-16
<PAGE>
