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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
NEXTLINK COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 4813 91-1738221
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
Incorporation or Organization) Classification Code Number)
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1505 FARM CREDIT DRIVE, MCLEAN, VIRGINIA 22102, (703) 547-2000
(Address, including ZIP code, and telephone number, including area code, of
the Registrant's principal executive offices)
--------------------------
GARY D. BEGEMAN, ESQ.
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 547-2000
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
--------------------------
COPY TO:
BRUCE R. KRAUS, ESQ.
WILLKIE FARR & GALLAGHER
787 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
(212) 728-8000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE OFFERING PRICE FEE(1)
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10 1/2% Senior Notes due 2009 $400,000,000 99.25% $397,000,000 $104,808(2)
12 1/8% Senior Discount Notes due 2009 $455,000,000 56.25% $255,937,500 $ 67,567.50(3)
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(1) Estimated solely for the purpose of calculating the registration fee and
calculated pursuant to Rules 457(f)(1) and 457(c).
(2) The registration fee for the 10 1/2% Senior Notes was computed on the basis
of the average of the closing high bid and low ask prices for the senior
notes on February 7, 2000, which was 99.25%.
(3) The registration fee for the 12 1/8% Senior Discount Notes was computed on
the basis of the average of the closing high bid and low ask prices for the
senior discount notes on February 7, 2000, which was 56.25%.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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[LOGO]
NEXTLINK COMMUNICATIONS, INC.
OFFER TO EXCHANGE ALL OUTSTANDING
10 1/2% SENIOR NOTES DUE 2009
AND
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
FOR
10 1/2% SENIOR NOTES DUE 2009
AND
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
You hold either unregistered NEXTLINK 10 1/2% Senior Notes or unregistered
NEXTLINK 12 1/8% Senior Discount Notes. We are offering to exchange your notes
for new, substantially identical notes that will be free of the transfer
restrictions that apply to your notes. This offer will expire at 5:00 p.m., New
York City time, on , 2000, unless we extend it. You must tender your
old notes by the deadline to obtain the liquidity benefits provided by this
exchange offer.
We agreed with the initial purchasers of the old notes to make this offer
and register the issuance of the new notes after they bought the old notes. This
offer is unconditional, and applies to any and all old notes tendered by the
deadline.
The new notes will not trade on any established exchange. The new notes have
the same financial terms and covenants as the old notes and are subject to the
same business and financial risks. A DESCRIPTION OF THOSE RISKS BEGINS ON PAGE
13.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
, 2000
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TABLE OF CONTENTS
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PAGE
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Where You Can Find More Information......................... ii
Delivery of Prospectus...................................... ii
Industry and Market Data.................................... ii
Nextlink.................................................... 1
Risk Factors................................................ 13
Use of Proceeds............................................. 21
Capitalization.............................................. 22
Business.................................................... 23
Regulation.................................................. 33
The Exchange Offer.......................................... 35
Description of the Notes.................................... 47
Book-Entry; Delivery and Form............................... 58
Material United States Federal Income Tax Considerations.... 62
Description of Other Material Indebtedness.................. 67
Plan of Distribution........................................ 77
Incorporation of Material Documents By Reference............ 78
Legal Matters............................................... 78
Experts..................................................... 79
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION OR TO MAKE ANY
REPRESENTATION TO YOU THAT IS NOT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED. YOU SHOULD NOT UNDER ANY CIRCUMSTANCES ASSUME THAT THE INFORMATION IN
THIS PROSPECTUS IS CORRECT ON ANY DATE AFTER THE DATE OF THIS PROSPECTUS.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. We have also filed a registration statement on Form
S-4 with the SEC to register the new notes being offered in this prospectus.
This prospectus, which forms part of the registration statement, does not
contain all of the information included in the registration statement. For
further information about NEXTLINK and the new notes offered in this prospectus,
you should refer to the registration statement and its exhibits.
We file our SEC materials electronically with the SEC, so you can review our
filings by accessing the web site maintained by the SEC at http:// www.sec.gov.
This site contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. You can
also read and copy any document we file with the SEC at its Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the Public Reference
Room.
Our principal executive offices are located at 1505 Farm Credit Drive,
McLean, Virginia 22102. Our telephone number is (703) 547-2000.
DELIVERY OF PROSPECTUS
We remind professional securities dealers of their obligation under the
securities laws to deliver a copy of this prospectus to anyone who buys new
notes from them until , 2000, which is the 90th day after the date of
this prospectus. Any securities dealers who were initial purchasers of the old
notes and are acting as underwriters of unsold allotments have additional
prospectus delivery requirements.
INDUSTRY AND MARKET DATA
In this prospectus, we rely on and refer to information and statistics
regarding the telecommunications industry. We obtained this information and
these statistics from various third party sources, discussions with our
customers and/or our own internal estimates. We believe that these sources and
estimates are reliable, but we have not independently verified them and cannot
guarantee their accuracy or completeness and, accordingly, we caution you not to
place undue reliance on them.
ii
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NEXTLINK
YOU SHOULD READ THIS SUMMARY TOGETHER WITH THE MORE DETAILED INFORMATION AND
FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS CONTAINED ELSEWHERE
IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THIS SUMMARY
MAY NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. WE ENCOURAGE YOU
TO READ THIS ENTIRE PROSPECTUS CAREFULLY.
Since 1996, NEXTLINK has provided high-quality telecommunications services
to the rapidly growing business market. We believe that increasing usage of both
telephone service and newer data and information services will continue to
increase demand for telecommunications capacity, or bandwidth, and for new
telecommunications services and applications.
To serve our customers' broad and expanding telecommunications needs, we
have assembled a unique collection of high-bandwidth, local and national network
assets. We intend to integrate these assets with advanced communications
technologies and services in order to become one of the nation's leading
providers of comprehensive end-to-end telecommunications services.
To accomplish this:
- we have built 31 high-bandwidth, or broadband, local networks in 19
states, generally located in the central business districts of the cities
we serve, and we are continuing to build additional networks;
- we have become the nation's largest holder of broadband fixed wireless
spectrum, with FCC licenses covering 95% of the population of the 30
largest U.S. cities, which we will use to extend the reach of our networks
to additional customers; and
- we have acquired, through a joint venture known as INTERNEXT, exclusive
interests in a national broadband network now being built to traverse over
16,000 miles and to connect more than 50 cities, including all of the
largest cities that our current and planned local networks serve.
As our networks become increasingly optimized for data transmission and
through our pending acquisition of Concentric Network Corporation, we plan to
offer our customers high-speed Internet access and additional services, such as
Internet web hosting and support for e-commerce. By web hosting, we mean support
for customers' web sites at our central offices, running either on their
computers or on ours, together with website design and maintenance services. We
also plan to build on our existing expertise in the communication of customized
information to mass-market customers and automated order fulfillment to serve
clients with e-commerce businesses, that is, businesses conducting high volume
retail transactions over the Internet.
We are now operating 31 broadband local networks in 49 cities. We provided
nearly 350,000 business telephone lines to our customers as of September 30,
1999, of which more than 65,000 were installed in the third quarter of 1999. We
are currently building additional networks, and plan to have operational
networks in most of the 30 largest U.S. cities by the end of 2000.
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Our local and national networks employ fiber optic technology, which uses
light waves to transmit signals over cables consisting of many glass fiber
strands. Each strand in these fiber optic cables has enough capacity to carry
over 100,000 times more traffic than a strand of traditionally-configured copper
wire. Rings of our fiber optic cables typically encircle a city's central
business district and connect to our central offices. These central offices
contain the switches and routers that direct calls and data traffic to their
destinations, and have space to house the additional equipment necessary for
future telecommunications services. Wherever we can, we build and own these
networks ourselves. This enables us to deliver higher quality services and will
enable us to deliver new services that we expect will increase our operating
margins.
Our goal is to provide our customers with complete voice and data network
solutions for all of their communications needs, using our own fiber, switches
and other facilities to the greatest extent possible. Today, however, we
frequently lease the existing copper telephone wires from the dominant local
telephone company to make the physical connection for the short distance between
our customers and our fiber optic networks.
To reduce our reliance on connections leased from the dominant carrier, we
intend to increase the number of customers connected directly to our networks.
In some cases, we will construct a new fiber optic extension from our network to
the customer's premises. In other cases, we will deploy a high-bandwidth
wireless connection between an antenna on the roof of the customer's premises
and an antenna attached to our fiber rings. These wireless connections offer
high-quality broadband capacity and, in many cases, cost less than fiber to
install. We expect to deploy wireless extensions in 25 markets by the end of
2000.
We are also deploying a technology called Digital Subscriber Line, or DSL,
to meet the high bandwidth needs of those customers whose connection to our
network remains over copper wire. DSL increases the effective capacity of
existing copper telephone wires. We are installing our own DSL equipment to
provide these services ourselves, and we and Concentric also resell another
provider's DSL services.
Our networks support a variety of communications technologies. This permits
us to offer customers a set of technology options to meet their changing needs,
and introduce new technologies as they become available. For example, we have
begun to add new technologies to our networks, including Internet Protocol, or
IP, routers and switches, and Asynchronous Transfer Mode, or ATM, switches. ATM
switches will enable us to meet the demands of large, high-volume customers,
while IP routers and switches will enable us to carry Internet traffic more
efficiently and to provide more services.
As IP technology evolves and matures, we believe it will gradually replace
ATM, and we therefore intend to invest heavily in optimizing our networks for
present and future IP implementations. We anticipate that future IP technologies
will enable the high-bandwidth, end-to-end national network we are building to
carry data, voice and video. Such a network should also enable us to offer our
customers entirely new classes of IP services. We intend to remain flexible in
our technology choices, to serve our customers' present needs and to take
advantage of the future opportunities that technological advances may bring.
2
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RECENT TRANSACTIONS
- In January 2000, we agreed to acquire Concentric Network Corporation for
approximately $2.9 billion in stock, and expect to close this merger in
the second quarter of 2000. Concentric provides virtual private networks,
high speed Internet access and web hosting to small and medium-sized
businesses.
- In this merger, we will also acquire the 50% of INTERNEXT we do not
already own for approximately $220.0 million in common stock.
- In January 2000, we also sold $850.0 million of convertible preferred
stock to Forstmann Little, a private equity investor.
- In February 2000, we entered into a $1,000.0 million senior secured credit
facility, bringing our pro forma cash on hand as of December 31, 1999 and
committed lines of credit to approximately $3,081.4 million.
For more information about these transactions, see "Business--Recent
Transactions."
BUSINESS STRATEGY
We have built a customer-focused, locally-oriented organization dedicated to
providing switched local and long distance telephone services at competitive
prices to small and medium-sized businesses. Our goal is to provide integrated,
end-to-end solutions for all of our customers' communications needs over our own
network. We plan to deliver these solutions primarily through equipment and
networks we own and therefore continue to be a facilities-based carrier. The key
components of our strategy to achieve this goal are to:
- BUILD BROADBAND LOCAL NETWORKS. We build high-bandwidth local networks
using fiber optic cable bundles, which are capable of carrying high
volumes of data, voice, video and Internet traffic as well as other
high-bandwidth services. In our newer markets, we install as many as 400
fiber strands in each network, with built-in capacity for future growth.
We plan to have completed broadband local networks in most of the nation's
30 largest cities by the end of 2000.
- INCREASE DIRECT CUSTOMER CONNECTIONS. We generally build our networks in
the central business districts of our markets to permit direct connections
to a high percentage of the area's commercial buildings. For buildings
where direct fiber connections to our networks are not economic, we will
use our wireless spectrum to make broadband direct connections where
appropriate.
- CREATE AN INTEGRATED, END-TO-END, FACILITIES-BASED NATIONAL NETWORK. We
will use INTERNEXT's 16,000 mile, national fiber optic network, which is
nearing completion, to offer end-to-end services over our own facilities,
rather than lines leased from others. This network will be able to operate
at very high speeds in order to meet our customers' current and future
broadband data needs.
- DEPLOY NEW TECHNOLOGY OPTIMIZED FOR IP. We are adding IP and ATM routers
and switches to our network to meet our customers' growing data needs. We
believe that future IP technologies will gradually replace ATM and enable
our network to carry all types of communications traffic: data, voice and
video, through a single protocol.
3
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- INTRODUCE NEW INTERNET SERVICES. In addition to high-speed Internet
access, we plan to offer customers secure, robust web hosting services at
our central offices, and provide extensive back-office support for their
e-commerce operations. We anticipate considerable cost savings and
increases in data services capabilities through our acquisition of
Concentric or leading Internet and data service providers.
- BUILD ON OUR CUSTOMER BASE, STAFF AND SYSTEMS TO SUCCEED IN THE DATA
SERVICES MARKET. We will combine the strategies and skills we have
developed, competing successfully in the local exchange market with the
proven skills of Concentric to compete in the expanding data services
market. These include a focus on the business customer, decentralized,
local management, close attention to customer care and effective, reliable
back-office systems.
- ATTRACT EXPERIENCED MANAGEMENT AT ALL KEY LEVELS. Under the leadership of
Craig McCaw, we have attracted highly qualified senior management.
Experienced technology industry executives will lead the implementation of
our data strategy. Seasoned industry entrepreneurs and executives run our
regional groups and operating subsidiaries and we expect to benefit from
the skills and experience of the seasoned executive, technical and
marketing personnel who will be joining us when the Concentric merger
closes.
4
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THE EXCHANGE OFFER
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The Exchange Offer........................ This is an offer to exchange our unregistered 10 1/2%
Senior Notes due 2009 and our unregistered 12 1/8%
Senior Discount Notes due 2009 for new notes of equal
principal amount in a transaction registered with the
SEC. We issued the 10 1/2% Senior Notes and the 12 1/8%
Senior Discount Notes, which we refer to collectively
as the old notes, on November 17, 1999 in a private
offering.
In order to exchange your unregistered old notes, you
must follow the instructions contained in this
prospectus and the accompanying letters of transmittal.
We will exchange all old notes validly tendered and not
validly withdrawn.
The new notes, or notes, have the same financial terms
and covenants as the old notes, and are subject to the
same business and financial risks, but will not bear
legends restricting their transfer.
There are currently $400.0 million aggregate principal
amount at maturity of old senior notes and
$455.0 million aggregate principal amount at maturity
of old senior discount notes outstanding.
Expiration and Exchange Dates............. This offer will expire at 5:00 p.m., New York City
time, on , 2000, unless we extend it, and
we will consummate the exchange on the next business
day.
Registration Rights Agreement............. You have the right to exchange the old notes that you
now hold for new notes with substantially identical
terms. This exchange offer is intended to satisfy these
rights. After the exchange offer is complete, you will
no longer be entitled to any exchange or registration
rights with respect to your notes.
Conditions................................ This offer is conditioned only upon compliance with the
securities laws. The offer applies to any and all old
notes tendered by the deadline.
Withdrawal Rights......................... You may withdraw your tender of old notes at any time
before the offer expires.
Federal Income Tax Consequences........... The exchange will not be a taxable event for United
States federal income tax purposes. You will not
recognize any taxable gain or loss or any interest
income as a result of such exchange.
Resale Without Further Registration....... You may offer for sale, sell and otherwise transfer new
notes without registration or delivery of a prospectus
under the Securities Act so long as the following
statements are true:
- you acquire the new notes issued in the exchange
offer in the ordinary course of your business;
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- you are not an "affiliate," as defined under
Rule 405 of the Securities Act, of ours; and
- you are not participating, and do not intend to
participate, and have no arrangement or understanding
with any person to participate, in the distribution
of the new notes issued to you in the exchange offer.
By tendering your notes as described below, you will be
making representations to this effect.
Transfer Restrictions on New Notes........ You may incur liability under the Securities Act if:
(1) any of the representations listed above are not
true; and
(2) you transfer any new note issued to you in the
exchange offer without
- delivering a prospectus meeting the requirements of
the Securities Act; or
- an exemption from the Securities Act's requirements
to register the sale of your new notes.
We are not assuming or indemnifying you against these
liabilities. Each broker-dealer that receives new notes
for its own account in exchange for old notes that were
acquired as a result of market-making or other trading
activities must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities
Act in connection with any resale of the new notes. A
broker-dealer may use this prospectus for an offer to
sell, sell or other transfer of the new notes issued to
it in the exchange offer.
Procedures for Tendering Old Notes........ Each holder of old notes who wishes to accept the
exchange offer must:
- complete, sign and date the accompanying letters of
transmittal, or facsimiles thereof; or
- arrange for The Depository Trust Company to transmit
the required information to the exchange agent in
connection with a book-entry transfer.
You must mail or otherwise deliver such documentation
and your old notes to the United States Trust Company
of New York, as exchange agent, at 114 West 47th
Street, New York, New York 10036, Attention: Patricia
Gallagher.
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Failure to Exchange Will Affect You
Adversely............................... If you are eligible to participate in the exchange
offer and you do not tender your old notes, you will
not have any further registration or exchange rights
and your old notes will continue to be subject to some
restrictions on transfer. If there is any trading
market for old notes after the exchange offer, old
notes are likely to trade at a discount from new notes,
due to these restrictions. We will not exchange new
notes for old notes after the exchange offer expires.
Special Procedures for Beneficial
Owners.................................. If you beneficially own old notes registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee and you wish to tender your
old notes in the exchange offer, you should contact the
registered holder promptly and instruct it to tender on
your behalf. If you wish to tender on your own behalf,
you must, before completing and executing the letters
of transmittal for the exchange offer and delivering
your old notes, either arrange to have your old notes
registered in your name or obtain a properly completed
bond power from the registered holder. The transfer of
registered ownership may take considerable time.
Guaranteed Delivery Procedures............ You may comply with the procedures described in this
prospectus under the heading "The Exchange
Offer--Guaranteed Delivery Procedures" if you wish to
tender your old notes and:
- time will not permit your required documents to reach
the exchange agent by the expiration date of the
exchange offer,
- you cannot complete the procedure for book-entry
transfer on time, or
- your old notes are not immediately available.
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THE NEW NOTES
The new notes have the same financial terms and covenants as the old notes,
which are as follows:
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Issuer................................. NEXTLINK Communications, Inc.
Maturity............................... December 1, 2009 for both the new senior notes and the
new senior discount notes.
Interest and Accretion................. Interest on the new senior notes accrues from
November 17, 1999 at the rate of 10 1/2% per year,
payable semi-annually on each June 1 and December 1,
beginning on June 1, 2000.
No cash interest will accrue on the new senior discount
notes until December 1, 2004. From November 17, 1999
through December 1, 2004, the aggregate accreted value of
the new senior discount notes will increase from
$251.4 million at a rate of 12 1/8% per year, compounded
semi-annually, to their aggregate principal amount at
stated maturity of $455.0 million. After that date, cash
interest on the new senior discount notes will accrue at
the rate of 12 1/8% per year, payable semi-annually on
June 1 and December 1 of each year, beginning on June 1,
2005.
Ranking................................ The new notes are unsecured and are not guaranteed by any
of our operating subsidiaries.
Optional Redemption.................... On or after December 1, 2004, we will have the right to
redeem any or all of the new senior notes at a redemption
price initially equal to 105.25% of their principal
amount at maturity, plus accrued interest, and the right
to redeem the new senior discount notes at a redemption
price initially equal to 106.063% of their principal
amount at maturity, plus accrued interest. The redemption
prices will decline annually after that date.
In addition, on or before December 1, 2002, we have the
right to use the net cash proceeds of qualifying equity
offerings to redeem:
- up to 33 1/3% of the new senior notes originally
outstanding at their principal amount plus accrued
interest at a redemption price equal to 110.5% of their
principal amount, provided that at least 66 2/3% of the
principal amount of the new senior notes remains
outstanding after the redemption; and
- up to 33 1/3% of the new senior discount notes at a
redemption price equal to 112.125% of their accreted
value, provided that at least 66 2/3% of the accreted
value at redemption of the new senior discount notes
remains outstanding after the redemption.
Tax Consequences of Holding Senior
Discount Notes....................... The accretion of the old senior discount notes from their
issue price to their principal amount will produce
taxable ordinary
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interest income in the amount of the accretion for
holders of the senior discount notes during the accretion
period. The Internal Revenue Code calls this original
issue discount, or OID. The new senior discount notes
will bear the same amount of OID as the old senior
discount notes.
Change of Control...................... If an event treated as a change of control of NEXTLINK
occurs, we must make an offer to purchase any and all of
the new notes then outstanding from you at the following
prices:
- New senior notes: 101% of their aggregate principal
amount, plus accrued and unpaid interest, if any, to
the date of purchase; and
- New senior discount notes: 101% of their accreted value
(if prior to December 1, 2004) or 101% of their
aggregate principal amount, plus accrued and unpaid
interest (if on or after December 1, 2004).
Covenants.............................. The indentures under which the old notes have been, and
the new senior notes and new senior discount notes are
being issued, contain covenants for your benefit which,
among other things and subject to important exceptions,
restrict our ability and the ability of our subsidiaries
to:
- borrow money;
- pay dividends on stock or purchase stock;
- make investments;
- use assets as security in other transactions; and
- sell certain assets or merge with or into other
companies.
Each indenture allows modification and amendment of these
and other covenants by a vote of holders of a majority in
aggregate principal amount of the notes issued under that
indenture, subject to exceptions described in that
indenture. Also, holders of a majority in aggregate
principal amount of the notes issued under either
indenture may waive our compliance with certain other
restrictive covenants in that indenture.
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RISK FACTORS AND ADDITIONAL INFORMATION
See "Risk Factors" beginning on page 13 for a discussion of risks relating
to the new senior notes and new senior discount notes, all of which apply to the
old notes as well. For additional information regarding the notes, see
"Description of the Notes" and "Material United States Federal Income Tax
Considerations."
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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
We have summarized below our historical consolidated financial data as of
and for the years ended December 31, 1994, 1995, 1996, 1997 and 1998. This
information is derived from and qualified by reference to our audited
Consolidated Financial Statements included in our 1998 Form 10-K, which is
incorporated in this prospectus by reference. All of the data should be read in
conjunction with and are qualified by reference to "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in our 1998
Form 10-K.
The summary historical consolidated financial data below as of
September 30, 1999 and for the three and nine-month periods ended September 30,
1998 and 1999 have been derived from our unaudited interim consolidated
financial statements. In management's opinion, the unaudited interim
consolidated financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments, which consist only of
normal recurring adjustments, necessary for a fair presentation of our financial
position and results of operations. Operating results for the three and
nine-month periods ended September 30, 1999 are not necessarily indicative of
the results that may be expected for the full year ended December 31, 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue................... $ -- $ 7,552 $ 25,686 $ 57,579 $ 139,667 $ 37,817 $ 75,059
Costs and expenses:
Operating............... 106 6,618 25,094 54,031 123,675 32,828 59,328
Selling, general and
administrative........ 232 9,563 31,353 75,732 156,929 41,565 71,322
Deferred compensation... -- 375 9,914 3,247 4,993 1,720 2,535
Depreciation and
amortization.......... 14 3,458 10,340 27,190 60,254 14,778 28,456
------- -------- -------- ---------- ---------- ---------- ----------
Loss from operations...... (352) (12,462) (51,015) (102,621) (206,184) (53,074) (86,582)
Interest expense, net..... 3 (269) (20,086) (26,383) (72,156) (15,875) (54,991)
------- -------- -------- ---------- ---------- ---------- ----------
Net loss.................. $ (349) $(12,731) $(71,101) $ (129,004) $ (278,340) $ (68,949) $ (141,573)
======= ======== ======== ========== ========== ========== ==========
Net loss applicable to
common shares........... $ (349) $(12,731) $(71,101) $ (168,324) $ (337,113) $ (84,683) $ (159,098)
======= ======== ======== ========== ========== ========== ==========
Net loss per share........ $ (0.91) $ (1.96) $ (3.13) $ (0.79) $ (1.27)
======== ========== ========== ========== ==========
OTHER DATA:
Ratio of earnings to fixed
charges(1).............. -- -- -- -- -- -- --
EBITDA(2)................. $ (338) $ (8,629) $(30,761) $ (72,184) $ (140,937) $ (36,576) $ (55,591)
Capital expenditures,
including acquisitions
of businesses (net of
cash acquired) and
investments in
affiliates (3).......... $ 600 $ 49,230 $ 85,872 $ 232,069 $ 416,445 $ 95,821 $ 140,364
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1998 1999
---------- ----------
<S> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue................... $ 96,392 $ 184,302
Costs and expenses:
Operating............... 85,448 156,395
Selling, general and
administrative........ 109,599 182,755
Deferred compensation... 3,104 4,711
Depreciation and
amortization.......... 37,141 78,606
---------- ----------
Loss from operations...... (138,900) (238,165)
Interest expense, net..... (42,934) (128,459)
---------- ----------
Net loss.................. $ (181,834) $ (366,624)
========== ==========
Net loss applicable to
common shares........... $ (224,447) $ (417,803)
========== ==========
Net loss per share........ $ (2.09) $ (3.41)
========== ==========
OTHER DATA:
Ratio of earnings to fixed
charges(1).............. -- --
EBITDA(2)................. $ (98,655) $ (154,848)
Capital expenditures,
including acquisitions
of businesses (net of
cash acquired) and
investments in
affiliates (3).......... $ 295,554 $1,235,091
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30, 1999
-------------------------------------------------------- ---------------------------
1994 1995 1996 1997 1998 ACTUAL AS ADJUSTED(4)
-------- -------- -------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and marketable
securities............................. $ 25 $ 1,350 $124,520 $ 742,357 $1,478,062 $1,643,974 $2,283,615
Pledged securities(5).................... -- -- 101,438 62,610 21,500 -- --
Working capital.......................... 14 (6,232) 137,227 744,510 1,408,501 1,536,249 2,175,890
Property and equipment, net.............. 134 29,664 97,784 253,653 594,408 953,576 953,576
Total assets............................. 690 53,461 390,683 1,219,978 2,483,106 4,026,947 4,678,366
Long-term debt........................... -- 1,590 356,262 750,000 2,013,192 3,057,067 3,708,486
Redeemable preferred stock, net of
issuance costs......................... -- -- -- 313,319 556,168 597,597 597,597
Equity units subject to redemption....... -- -- 4,950 -- -- -- --
Class B common stock subject to
redemption............................. -- -- -- 4,950 -- -- --
Total shareholders' equity (deficit)..... 672 36,719 (18,654) 71,285 (246,463) 132,396 132,396
</TABLE>
- ------------------------------
(1) For the years ended December 31, 1994, 1995, 1996, 1997 and 1998, and for
the three and nine-month periods ended September 30, 1998 and 1999, earnings
were insufficient to cover fixed charges during the periods presented by the
net loss amounts of $349, $12,731, $71,101, $129,004, $278,340, $68,949,
$141,573, $181,834 and $366,624, respectively.
(2) EBITDA consists of net loss before net interest expense, depreciation,
amortization and deferred compensation expense. EBITDA is commonly used to
analyze companies on the basis of operating performance, leverage and
liquidity. EBITDA is not a substitute for operating income or a better
measure of liquidity than cash flow from operating activities, which are
determined in accordance with generally accepted accounting principles. We
include EBITDA to provide additional information with respect to our
anticipated ability to meet future debt service, capital expenditures and
working capital requirements.
(3) Total capital expenditures, acquisitions, and investments in affiliates were
funded as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
---------------------------------------------------- ------------------- ---------------------
1994 1995 1996 1997 1998 1998 1999 1998 1999
-------- -------- -------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash expended....... $600 $35,417 $72,042 $210,545 $416,445 $ 95,821 $140,364 $289,827 $ 884,443
Debt issued and
assumed............. -- 6,554 8,228 5,000 -- -- -- -- --
Equity issued....... -- 7,259 5,602 16,524 -- -- -- 5,727 350,648
---- ------- ------- -------- -------- -------- -------- -------- ----------
Total............... $600 $49,230 $85,872 $232,069 $416,445 $ 95,821 $140,364 $295,554 $1,235,091
==== ======= ======= ======== ======== ======== ======== ======== ==========
</TABLE>
(4) As adjusted to give effect to the net proceeds to NEXTLINK of the sale of
the old notes.
(5) Pledged U.S. Treasury securities, which represented funds sufficient to
provide for payment in full of interest through April 15, 1999 on our
12 1/2% Senior Notes due April 15, 2006.
11
<PAGE>
The operating data contained in the table below include the statistics of
our Las Vegas network, which we manage and in which we have a 40% membership
interest. Terms used in this table are defined as follows:
A "route mile" measures the size of our network, and is equal to the number
of physical miles along which we have installed or leased fiber optic cable.
A "fiber strand" is an advanced fiber optic line which can carry a large
volume of data transmissions and voice communications. The number of "fiber
miles" that we have installed is equal to our estimate of the number of fiber
strands that we have installed along our network, multiplied by the number of
route miles covered by our network. It is a measure of our carrying capacity of
large volumes of data transmissions and voice communications.
"On-net buildings connected" means buildings physically connected to our
network, excluding those buildings which are connected to our network by
facilities leased from the incumbent telephone company.
"Off-net buildings connected" are those buildings connected to our network
by facilities leased from the incumbent or other carriers.
"Switches" are electronic devices that route data transmissions and voice
communications to their final destination. All switch counts include two long
distance switches acquired in 1996 as well as the switch installed in NEXTLAB,
our telecommunications and data testing facility.
An "access line" is a telephone connection between a customer purchasing
local telephone services and our facilities. This definition of access lines is
adjusted to reflect the fact that some high performance connections, known as
primary rate interface, can carry comparatively larger volumes of data and voice
communications. Lines over which primary rate interface service is provided are
counted as 23 access lines. The number of "access lines installed" represents
the number of access lines for which NEXTLINK is billing services. This number
includes access lines that are provisioned through the resale of services. We
serviced 1,916 resold access lines as of September 30, 1999.
<TABLE>
<CAPTION>
AS OF AS OF AS OF AS OF AS OF
SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1998 1998 1999 1999 1999
------------- ------------ --------- -------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Route miles........................ 2,150 2,477 2,897 3,228 3,905
Fiber miles........................ 158,987 195,531 223,463 263,559 338,705
On-net buildings connected......... 736 801 854 986 1,163
Off-net buildings connected........ 9,688 13,443 13,950 16,850 20,047
Switches installed................. 18 21 22 25 28
Access lines installed............. 134,107 174,182 224,713 284,021 349,154
Employees.......................... 2,065 2,299 2,539 2,952 3,254
</TABLE>
12
<PAGE>
RISK FACTORS
Before tendering the old notes in the exchange offer, you should consider
carefully the following risk factors. The new notes, like the old notes, entail
the following risks:
YOU MAY HAVE DIFFICULTY SELLING ANY NOTES THAT YOU DO NOT EXCHANGE
If you do not exchange your old notes for the notes offered in this exchange
offer, you will continue to be subject to the restrictions on the transfer of
your old notes. Those transfer restrictions are described in each of the
indentures governing the old notes and in the legends contained on the old
notes, and apply because we originally issued the old notes under exemptions
from, and in transactions not subject to, the registration requirements of the
Securities Act.
In general, you may offer or sell your old notes only if they are registered
under the Securities Act and applicable state securities laws, or if they are
offered and sold under an exemption from those requirements. We do not intend to
register the old notes under the Securities Act.
If a large number of old notes are exchanged for new notes in this exchange
offer, it may be more difficult for you to sell your unexchanged notes. In
addition, if you do not exchange your old notes in this exchange offer, you will
no longer be entitled to have those notes registered under the Securities Act.
WE HAVE SUBSTANTIAL EXISTING DEBT AND WILL INCUR SUBSTANTIAL ADDITIONAL DEBT, SO
WE MAY BE UNABLE TO PAY INTEREST ON THE NOTES THAT YOU HOLD
As of September 30, 1999, NEXTLINK had outstanding seven issues of senior
notes totaling $3,057.1 million in principal amount, or $3,708.5 million on a
pro forma basis to include the effect of the sale of the old notes, and
approximately $111.5 million in miscellaneous debt obligations of our
subsidiaries. On February 3, 2000, we entered into a $1,000.0 million senior
secured credit facility, of which we have drawn $375.0 million. For a
description of this credit facility, see "Description of Other Material
Indebtedness--Senior Secured Credit Facility." Because we have these substantial
obligations, we may be unable to pay interest or principal on any or all of
these outstanding notes and the notes that you hold.
For each period since our inception, we have had substantial and increasing
net losses and negative cash flow from operations. Consequently, we do not
currently generate cash flows from which we can make payments on our outstanding
notes. We cannot assure you that we will ever establish an adequate revenue base
or generate enough positive cash flow to provide future capital expenditures and
repayment of debt.
Our indentures permit us to incur substantial additional debt, and we fully
expect to borrow substantial additional funds in the next several years. This
additional indebtedness will further increase the risk of a default unless we
can establish an adequate revenue base and generate sufficient cash flow to
repay our indebtedness.
SIGNIFICANT CAPITAL EXPENDITURES WILL DIVERT FUNDS WHICH COULD BE USED TO MAKE
PAYMENTS ON THE NOTES THAT YOU HOLD
We expect to make significant capital expenditures in the future. These
expenditures will divert funds which could be used to make payments on the notes
that you hold. In addition to the expenditures required to implement our
strategy discussed under "Nextlink," additional expenditures are likely to
include the potential acquisition of other communications
13
<PAGE>
companies and the continued development and implementation of a comprehensive
information technology platform.
IF WE ARE NOT SUCCESSFUL IN RAISING ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO
BUILD AND MAINTAIN OUR NETWORKS
Building our business will require substantial additional capital spending.
Our capital spending plans have increased dramatically over time, as our
strategy has evolved and our planned network has grown larger and more robust.
Because our anticipated future capital requirements will exceed the
$1,644.0 million in cash and marketable securities we had on hand as of
September 30, 1999, the $639.6 million net proceeds we received from the sale of
the old notes and the $1,000.0 million under our senior secured credit facility,
we will be required to raise additional capital. If we fail to raise sufficient
capital, including capital raised under the senior secured credit facility, we
may be required to delay or abandon some of our planned future expansion or
expenditures, which could have a material adverse effect on our growth and our
ability to compete in the telecommunications services industry and could even
result in a payment default on our existing debt.
BECAUSE YOUR NOTES ARE STRUCTURALLY SUBORDINATED TO THE OBLIGATIONS OF OUR
SUBSIDIARIES, YOU MAY NOT BE FULLY REPAID IF WE BECOME INSOLVENT
Because our cash flows from operations arise at the subsidiary level, all of
our senior notes are structurally subordinated to the debts of our subsidiaries.
Creditors of any NEXTLINK subsidiary, including trade creditors, have and will
have claims that will be senior to your notes with respect to the assets of that
subsidiary. In addition, some of our subsidiaries are subject to capital and
other lease obligations.
OUR SUBSIDIARIES MUST MAKE PAYMENTS TO US IN ORDER FOR US TO MAKE PAYMENTS ON
THE NOTES THAT YOU HOLD
We depend upon cash payments from our subsidiaries to meet our fixed-charge
payment obligations, including our obligation to pay you as a holder of notes.
We cannot assure you that our subsidiaries will have sufficient cash to make any
payments to us, as their cash flows from operations are currently negative. Our
indentures generally permit us to invest proceeds from the sale of our debt
securities in subsidiaries and joint ventures that we manage.
BECAUSE YOUR NOTES ARE NOT SECURED, AND WE HAVE INCURRED SIGNIFICANT AMOUNTS OF
SECURED FINANCING, YOU MAY NOT BE FULLY REPAID IF WE BECOME INSOLVENT
The new notes will not be secured by any of the assets of NEXTLINK or its
subsidiaries. Therefore, you may not be fully repaid if we become insolvent. Our
$1,000.0 million senior secured credit facility is secured by the
telecommunications assets purchased using the proceeds thereof, other assets up
to $125.0 million, all intercompany receivables owed to NEXTLINK by its
subsidiaries and the stock of NEXTLINK's direct subsidiaries. If we become
insolvent, the holders of the secured debt will receive payments from the assets
used as security before you receive payments. Our indentures permit us to incur
additional debt, including an unlimited amount of secured or unsecured purchase
money debt, and the senior secured credit facility also permit us to incur
substantial additional senior secured debt.
14
<PAGE>
IF WE CANNOT QUICKLY AND EFFICIENTLY INSTALL OUR HARDWARE, WE WILL BE UNABLE TO
GENERATE REVENUE
Each of our networks consists of many different pieces of hardware,
including switches, routers, fiber optic cables, electronics and combination
radio transmitter/receivers, known as transceivers, and associated equipment,
which are difficult to install. If we cannot install this hardware quickly, the
time in which customers can be connected to our network and we can begin to
generate revenue from our network will be delayed. You should be aware that the
construction of our national fiber optic network is not under our control, but
is under the control of Level 3 Communications. If Level 3 Communications fails
to complete its network on time or if it fails to perform as specified, our
strategy of linking our local networks to one another and creating an end-to-end
national network will be delayed.
THE CONCENTRIC TRANSACTION REMAINS SUBJECT TO CONCENTRIC SHAREHOLDER APPROVAL
AND OTHER CONDITIONS
If Concentric shareholders fail to approve our proposed acquisition, or if
that transaction fails to close for any other reason, our entry into the data
services and web hosting business will be delayed, and our business will not
expand as rapidly in this significant area.
IF THE CONCENTRIC TRANSACTION CLOSES, WE WILL FACE CHALLENGES INTEGRATING OUR
BUSINESS WITH THEIRS
The Concentric transaction will be the largest acquisition we have made to
date. If we cannot quickly and efficiently integrate Concentric's personnel,
products and services with our own following the closing, we will not enjoy the
full benefits we anticipate from this transaction. Concentric officers and
employees have valuable knowledge of the data services and web hosting business
that would be difficult to replace if we do not retain the services of a
substantial portion of them.
IP TECHNOLOGY HAS NOT YET BEEN PERFECTED FOR FULL SERVICE NETWORKS LIKE OURS
We plan to rely on IP technology as the basis for our planned end-to-end
network. Although IP technology is used throughout the Internet, its extension
to support other telecommunications applications, such as voice and video, has
not yet been perfected, and IP technology currently has several deficiencies,
including poor reliability and quality. Integrating these technologies into our
network may prove difficult and may be subject to delays. We cannot assure you
that these improvements will become available in a timely fashion or at
reasonable cost, if at all, or that the technology choices we make will prove to
be cost effective and correct.
WE MAY NOT BE ABLE TO CONNECT OUR NETWORK TO THE INCUMBENT CARRIER'S NETWORK OR
TO THE INTERNET ON FAVORABLE TERMS
We require interconnection agreements with the dominant local telephone
company to connect calls between our customers and non-customers. Congress and
our industry refer to this dominant local carrier as the incumbent local
exchange carrier, or the incumbent carrier. We cannot assure you that we will be
able to negotiate or renegotiate interconnection agreements in all of our
markets on favorable terms.
If we fail to consummate the Concentric merger for any reason, we will
require peering arrangements with other ISPs, particularly the large, national
ISPs. While we anticipate that we will enter into the agreements necessary to
become an ISP, the terms and conditions of these so-called peering agreements
are becoming more restrictive as Internet service becomes
15
<PAGE>
increasingly commercialized, and we cannot be sure that these peering
arrangements would be on favorable terms.
PHYSICAL SPACE LIMITATIONS IN OFFICE BUILDINGS AND LANDLORD DEMANDS FOR FEES OR
REVENUE SHARING COULD LIMIT OUR ABILITY TO CONNECT CUSTOMERS DIRECTLY TO OUR
NETWORKS AND REDUCE OUR OPERATING MARGINS
Connecting a customer who is a tenant in an office building directly to our
network requires installation of in-building cabling through the building's
risers from the customer's office to our fiber in the street or our antenna on
the roof. In some office buildings, particularly the premier buildings in the
largest markets, the risers are already close to their maximum physical capacity
due to the entry of other competitive carriers into the market. Moreover, the
owners of these buildings are increasingly requiring competitive
telecommunications service providers like NEXTLINK to pay fees or otherwise
share revenue as a condition of access. NEXTLINK has not been required to pay
these fees in the smaller markets it has served in the past, but may be required
to do so to penetrate larger markets, which would reduce our operating margins.
In addition, some major office building owners have equity interests in, or
joint ventures with, companies offering broadband communications services over
fiber optic networks and may have an incentive to encourage their tenants to
choose those companies' services over ours or to grant those companies more
favorable terms for installation of in-building cabling.
THE REQUIREMENT THAT WE OBTAIN PERMITS AND RIGHTS-OF-WAY INCREASES OUR COST OF
DOING BUSINESS
In order for us to acquire and develop our fiber networks, we must obtain
local franchises and other permits, as well as rights-of-way and fiber capacity
from entities such as incumbent carriers and other utilities, railroads, long
distance companies, state highway authorities, local governments and transit
authorities. You should be aware that the process of obtaining these permits and
rights-of-way increases our cost of doing business.
We cannot assure you that we will be able to maintain our existing
franchises, permits and rights-of-way that we need to implement our business.
Nor can we assure you that we will be able to obtain and maintain the other
franchises, permits and rights that we require. A sustained and material failure
to obtain or maintain these rights could materially adversely affect our
business in the affected metropolitan area.
OUR DEPLOYMENT OF WIRELESS CUSTOMER CONNECTIONS COULD BE DELAYED BY A LACK OF
ACCEPTABLE EQUIPMENT AND BY INSTALLATION RISKS
The Federal Communications Commission, or FCC, licensed our broadband
wireless spectrum in what it calls the Local Multipoint Distribution Service, or
LMDS. LMDS is a newly-authorized service, and equipment vendors are only
beginning to offer radios, transceivers and related equipment designed to work
at these frequencies. We are testing several vendors' equipment, but cannot be
certain that commercial quantities of equipment meeting our standards will be
available in time to meet our development schedule.
LMDS direct connections require us to obtain access to rooftops from
building owners and to satisfy local construction and zoning rules for antennas
and transmitters. The need to obtain these authorizations could be an additional
source of delay.
16
<PAGE>
WE CANNOT ACCURATELY PREDICT THE TOTAL COST OF OUR WIRELESS DEPLOYMENT
Since we have not negotiated final contracts to purchase any LMDS equipment,
we do not know precisely how much the equipment we will need will cost.
Installation costs will vary greatly, depending on the particular
characteristics of the locations to be served. After initial installation, we
expect to incur additional costs to reconfigure, redeploy and upgrade our
wireless direct connections as technologies improve.
IN LOCAL MARKETS, WE COMPETE AGAINST THE INCUMBENT CARRIER, WHO HAS A VESTED
INTEREST IN MAKING IT DIFFICULT FOR US TO CONNECT CUSTOMERS TO OUR NETWORK
In each of the local markets served by our networks, we compete principally
with the incumbent carrier in that market.
The incumbent carriers are already established providers of local telephone
services to all or virtually all telephone subscribers within their respective
service areas. The incumbent carriers have begun to provide data services and
are seeking to provide service using DSL technology. Their physical connections
from their premises to those of their customers are expensive and difficult to
duplicate. In addition, they have long-standing relationships with regulatory
authorities at the federal and state levels.
It is expensive and difficult for us to switch a new customer to our network
because:
- a potential customer faces switching costs if it decides to become our
customer, and
- we require cooperation from the incumbent carrier.
Due to our competitors' advantages, we cannot assure you that we will be
able to compete successfully with the incumbent carriers.
WE FACE COMPETITION IN LOCAL MARKETS FROM OTHER CARRIERS, PUTTING DOWNWARD
PRESSURE ON PRICES
We also face competition from recent and potential market entrants,
including long distance carriers seeking to enter, reenter or expand entry into
the local exchange marketplace such as AT&T, MCI WorldCom and Sprint (which has
agreed to merge with MCI WorldCom). This places downward pressure on prices for
local telephone service and data services and makes it more difficult for us to
achieve positive operating cash flow. In addition, we expect competition from
other companies, such as cable television companies, electric utilities,
microwave carriers, wireless telephone system operators and private networks
built by large end-users. We cannot assure you that we will be able to compete
effectively with these industry participants.
WE FACE COMPETITION IN LONG DISTANCE MARKETS, PUTTING DOWNWARD PRESSURE ON
PRICES
We also face intense competition from long distance carriers in the
provision of long distance services, which places downward pressure on prices
for long distance services, including both voice and data services, and makes it
difficult for us to achieve positive operating cash flow. Although the long
distance market is dominated by three major competitors, AT&T, MCI WorldCom and
Sprint (which has agreed to merge with MCI WorldCom), hundreds of other
companies also compete in the long distance marketplace. We also anticipate that
the incumbent carriers will be competing in the long distance market in the near
future. We cannot assure you that we will be able to effectively compete with
any of these industry participants.
17
<PAGE>
WE ALSO FACE COMPETITION IN CREATING A NATIONAL BROADBAND NETWORK
Several of our competitors, such as AT&T, MCI WorldCom, Qwest, Level 3
Communications, IXC and Williams, have announced an intention to create
end-to-end broadband networks that would compete directly with the network we
are building. In addition, other major long distance and incumbent local
carriers have the ability to do so as well. We cannot assure you that we will be
able to successfully compete with these service providers.
OUR COMPETITORS MAY HAVE SUPERIOR RESOURCES, PLACING US AT A COST AND PRICE
DISADVANTAGE
Many of our current and potential competitors have financial, personnel and
other resources, including brand name recognition, substantially greater than
those of NEXTLINK. As a result, some of our competitors can raise capital at a
lower cost than we can. Also, our competitors' greater name recognition may
require us to price our services at lower levels in order to win business.
Finally, our competitors' cost advantages give them the ability to reduce their
prices for an extended period of time if they so choose.
OUR COMPANY AND INDUSTRY ARE HIGHLY REGULATED, IMPOSING SUBSTANTIAL COMPLIANCE
COSTS AND RESTRICTING OUR ABILITY TO COMPETE IN OUR TARGET MARKETS
We are subject to varying degrees of federal, state and local regulation.
This regulation imposes substantial compliance costs on us. It also restricts
our ability to compete. For example, in each state in which we desire to offer
our services, we are required to obtain authorization from the appropriate state
commission. We cannot assure you that we will receive authorization for markets
to be launched in the future.
THE TECHNOLOGIES THAT WE USE MAY BECOME OBSOLETE, WHICH WOULD LIMIT OUR ABILITY
TO COMPETE EFFECTIVELY
The telecommunications industry is subject to rapid and significant changes
in technology. If we do not replace or upgrade technology and equipment that
becomes obsolete, we will be unable to compete effectively because we will not
be able to meet the expectations of our customers.
The following technologies and equipment that we use or will use are subject
to obsolescence: wireline and wireless transmission technologies, circuit and
packet switching technologies and data transmission technologies, including the
Nortel DMS 500 switches, DSL, ATM and IP technologies. In addition, we cannot
assure you that the technologies that we choose to invest in will lead to
successful implementation of our business plan.
WE MAY BE REQUIRED TO PAY PATENT LICENSING FEES, WHICH WILL DIVERT FUNDS WHICH
COULD BE USED FOR OTHER PURPOSES
From time to time, we receive requests to consider licensing certain patents
held by third parties that may have bearing on our interactive voice response,
other enhanced, or data services. Should we be required to pay license fees in
the future, such payments, if substantial, could have a material adverse effect
on our results of operations.
IF WE LOSE KEY PERSONNEL AND QUALIFIED TECHNICAL STAFF, OUR ABILITY TO MANAGE
THE DAY-TO-DAY ASPECTS OF OUR COMPLEX NETWORK WILL BE WEAKENED
We believe that a critical component for our success will be the attraction
and retention of qualified professional and technical personnel. If we lose key
personnel and qualified technical staff, or are unable to recruit qualified
personnel, our ability to manage the
18
<PAGE>
day-to-day aspects of our complex network will be weakened. You should be aware
that we face significant competition in the attraction and retention of
personnel who possess the skill sets that we seek.
In addition, we must also develop and retain a large and sophisticated sales
force. If we fail to do so, there will be an adverse effect on our ability to
generate revenue and, consequently, our operating cash flow.
CRAIG O. MCCAW, WHO CONTROLS APPROXIMATELY 57% OF NEXTLINK'S VOTING POWER, MAY
HAVE INTERESTS WHICH ARE ADVERSE TO YOUR INTERESTS
Craig O. McCaw, primarily through his majority ownership and control of
Eagle River Investments, L.L.C., controls approximately 57% of NEXTLINK's total
voting power. Because Mr. McCaw has the ability to control the direction and
future operations of NEXTLINK and has interests in other companies that may
compete with NEXTLINK, he may make decisions which are adverse to your interests
and the interests of other NEXTLINK security holders.
In addition to his investment in NEXTLINK through Eagle River, Mr. McCaw has
significant investments in other communications companies, including Nextel
Communications, Teledesic Corporation, ICO Global Communications and Iridium,
L.L.C., some of which could compete with us or act as one of our suppliers of
certain telecommunications services. You should be aware that we do not have a
noncompetition agreement with either Mr. McCaw or Eagle River. Mr. McCaw is not
bound by any contracts with NEXTLINK restricting his future sales of our common
stock.
THERE IS NO PUBLIC MARKET FOR THE NEW NOTES, SO YOU MAY BE UNABLE TO SELL THE
NEW NOTES
The new notes are new securities for which there is currently no market.
Consequently, the new notes will be relatively illiquid, and you may be unable
to sell your new notes. We do not intend to apply for listing of the new notes
on any securities exchange or for the inclusion of the new notes in any
automated quotation system. Accordingly, we cannot assure you that a liquid
market for the new notes will develop.
ORIGINAL ISSUE DISCOUNT WILL BE INCLUDED IN YOUR GROSS INCOME FOR U.S. FEDERAL
INCOME TAX PURPOSES BEFORE YOU RECEIVE ANY CASH PAYMENTS ON THE NOTES.
Cash interest on the old and new senior discount notes generally will not
accrue until December 1, 2004. However, because the old senior discount notes
were issued at a substantial discount from their stated principal amount at
maturity, original issue discount will be includible in the gross income of a
holder of the old and new senior discount notes for U.S. federal income tax
purposes in advance of the receipt of cash payments on the old and new senior
discount notes.
WE MAY FACE ADDITIONAL COST AND OTHER ADVERSE EFFECTS DUE TO YEAR 2000 ISSUES
To ensure that our computer systems and applications will continue to
function properly in 2000, we have implemented a year 2000 program. As part of
this program, we conducted an inventory of network equipment and enterprise
systems that execute primary business processes, such as accounting, service
assurance, service delivery, customer service and billing. We cannot be sure
that mission critical equipment has not been overlooked.
Our determinations as to whether any systems or applications require
modification or replacement are based in part on statements made to us by
vendors used by us as to the year 2000 compliance of the systems and
applications that we use. We will not be able to independently confirm the
accuracy or completeness of these vendor representations.
19
<PAGE>
Telecommunications and data traffic between our customers who are directly
connected to one of our networks and parties who are not customers of ours are
routed over networks that we do not control. In addition, many of our customers
are connected to one of our networks through facilities of the incumbent
carrier. Consequently, our customers may not be able to complete calls or data
transmissions if the computer, telecommunications or other systems of outside
entities, including local and interexchange carriers and Internet service
providers that interchange traffic, are not year 2000 compliant. A failure by
some or all of these entities to make their systems year 2000 compliant could
create substantial disruptions, which in turn could have a material adverse
effect on our operations.
For a further discussion on our year 2000 program, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Impact
of Year 2000" in our quarterly report on Form 10-Q filed with the SEC on
November 15, 1999 incorporated by reference in this prospectus.
THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS, BUT ACTUAL RESULTS MAY
DIFFER SIGNIFICANTLY
Some statements and information contained in this prospectus are not
historical facts, but are "forward-looking statements", as such term is defined
in the Private Securities Litigation Reform Act of 1995. We wish to caution you
that these forward-looking statements are only predictions, and actual events or
results may differ materially as a result of risks that we face, including those
discussed herein under "Risk Factors." These forward-looking statements can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "plans," "may," "will," "would," "could," "should," or "anticipates"
or the negative of these words or other variations of these words or other
comparable words, or by discussions of strategy that involve risks and
uncertainties. Such forward-looking statements include, but are not limited to:
- the number of markets we expect to serve, the expected number of
addressable business lines in markets in which we currently provide
service and the markets in which we expect to provide service;
- our expectations regarding our ability to attract and retain customers;
- our beliefs regarding certain competitive advantages, including those of
our management structure and provisioning processes and systems;
- our expectation regarding the size of our sales and customer care forces;
- our belief regarding traffic flow over our networks and the effects and
benefits of high capacity networks with broad coverage based on a uniform
technology platform;
- our plans to install additional switches, data networking capabilities
such as IP and ATM facilities and high speed technologies such as DSL;
- our plans to implement wireless customer connections;
- our ability to maintain technological flexibility;
- our expectation regarding the development of a national network and the
implementation of a national network end-to-end strategy;
- our anticipated capital expenditures, funding of capital expenditures and
levels of indebtedness;
- statements made with respect to our year 2000 project; and
- statements with respect to the Concentric transaction.
20
<PAGE>
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new notes as
described in this prospectus. We will receive in exchange for the new notes, old
notes in like principal amount. The old notes surrendered in exchange for the
new notes will be retired and canceled and cannot be reissued. Accordingly, the
issuance of the new notes will not result in any change in our indebtedness.
The net proceeds from the offering of the old notes are being used to expand
our existing networks and services, provide new communications and data
services, provide electronics and equipment for our national network, develop
and acquire new networks and services, introduce new technologies, fund
operating losses and working capital and potentially may be used to acquire
other communications and data services companies.
21
<PAGE>
CAPITALIZATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth as of September 30, 1999 the actual
capitalization of NEXTLINK and the capitalization of NEXTLINK as adjusted to
give effect to the net proceeds received from NEXTLINK's sale of old notes.
This table should be read in conjunction with the Summary Historical
Consolidated Financial and Operating Data included elsewhere in this prospectus,
and the audited consolidated financial statements and the notes thereto included
in our 1998 Form 10-K, which is incorporated by reference in this prospectus.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
----------------------------
ACTUAL AS ADJUSTED
-------------- -----------
<S> <C> <C>
Cash, cash equivalents and marketable
securities................................... $1,643,974 $2,283,615
========== ==========
Current portion of long-term obligations....... $ 1,988 $ 1,988
Other long-term liabilities.................... 38,087 38,087
12 1/2% Senior Notes due 2006.................. 350,000 350,000
9 5/8% Senior Notes due 2007................... 400,000 400,000
9% Senior Notes due 2008....................... 334,430 334,430
9.45% Senior Discount Notes due 2008........... 459,368 459,368
10 3/4% Senior Notes due 2008.................. 500,000 500,000
10 3/4% Senior Notes due 2009.................. 675,000 675,000
12 1/4% Senior Discount Notes due 2009......... 338,269 338,269
10 1/2% Senior Notes due 2009.................. -- 400,000
12 1/8% Senior Discount Notes due 2009......... -- 251,419
---------- ----------
Total debt................................... 3,097,142 3,748,561
Redeemable Preferred Stock, par value $0.01 per
share, 25,000,000 shares authorized, net of
issuance costs:
14% Redeemable Preferred Shares, 8,043,386
shares issued and outstanding............ 402,999 402,999
6 1/2% Cumulative Convertible Preferred
Stock, 4,000,000 shares issued and
outstanding.............................. 194,598 194,598
Shareholders' equity (deficit):
Common stock, par value $0.02 per share,
stated at amounts paid in: Class A,
400,000,000 shares authorized, 73,939,549
issued and outstanding; Class B, 60,000,000
shares authorized, 58,746,550 shares issued
and outstanding(1)......................... 1,118,535 1,118,535
Deferred compensation........................ (89,065) (89,065)
Accumulated other comprehensive income....... 110,347 110,347
Accumulated deficit.......................... (1,007,421) (1,007,421)
---------- ----------
Total shareholders' equity................... 132,396 132,396
---------- ----------
Total capitalization......................... $3,827,135 $4,478,554
========== ==========
</TABLE>
- ------------------------------
(1) Issued and outstanding does not include 28,696,949 and 289,716 shares of
Class A common stock and Class B common stock, respectively, issuable upon
exercise of outstanding options as of September 30, 1999.
22
<PAGE>
BUSINESS
Since 1996, NEXTLINK has provided high-quality telecommunications services
to the rapidly growing business market. To serve our customers' broad and
expanding telecommunications needs, we have assembled a unique collection of
high-bandwidth, local and national network assets.
These assets include:
- 31 broadband local networks operating in 19 states, the number of which is
increasing as we continue to build additional networks;
- high-capacity fixed broadband spectrum covering 52 cities including 95% of
the population of the 30 largest U.S. cities; and
- exclusive interests, through a joint venture, in a national fiber optic
network now being built that will connect all of the largest cities that
our current and planned local networks serve.
We intend to integrate these assets into a seamless network that will
support the most advanced communications technologies available, and make us the
provider best positioned to deliver the broad variety of data and voice
applications our customers require.
OUR NETWORK
We have built, and are continuing to build, operational fiber optic networks
with robust capacity in urban centers across the country. Our IP-optimized
national network will connect these local networks to one another. Our fiber
optic and wireless customer connections will complete our goal of becoming an
end-to-end, facilities-based provider of broadband communications services.
LOCAL FIBER OPTIC NETWORKS
The core of each of our local networks is a ring of fiber optic cable in the
city's central business district that connects to our central offices. These
facilities contain the switches and routers that direct data and voice traffic
to their destinations, and also have the space to house the additional equipment
necessary for future telecommunications services.
We are now operating 31 broadband local networks in 49 cities. We serve
larger cities, such as New York, Los Angeles, Chicago, Atlanta, the San
Francisco Bay Area, Denver, Dallas and Miami, medium-sized markets, such as Salt
Lake City and Nashville, and clusters of smaller markets in Orange County,
California and central Pennsylvania.
Based on our recent successes in operating and expanding our existing
networks, as well as new opportunities in other markets, we are pursuing an
aggressive growth plan. We are currently building additional local networks, and
plan to have operational networks in most of the 30 largest U.S. cities by the
end of 2000. We launched services in San Diego, Seattle and Washington, D.C.
during the first half of 1999, in Newark, Detroit and Houston during the third
quarter of 1999, and most recently, in Phoenix, Boston, St. Louis and
Sacramento.
We build high capacity networks using a backbone density ranging between 72
and 432 strands of fiber optic cable. Each fiber strand has the capacity, or
bandwidth, to carry over 100,000 times the amount of traffic as a strand of
traditionally configured copper wire. We
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<PAGE>
believe that installing high-count fiber strands will allow us to offer a higher
volume of broadband and voice services without incurring significant additional
construction costs.
We design wide, expansive networks, rather than a simple core fiber optic
ring in a downtown metropolitan area. This design maximizes the number of
customers that can be connected directly to our networks with fiber strands that
we own. We believe that controlling direct connections is critical to being able
to meet our customers' complete communications requirements and by controlling
customer connections we enhance our ability to:
- ensure technological support for high-bandwidth communications;
- manage and control the quality of services used by our customers;
- meet the varying bandwidth needs of our customers; and
- achieve better operating margins.
BROADBAND WIRELESS SPECTRUM
We intend to reduce our reliance on connections leased from the incumbent
carrier by increasing the number of customers connected directly to our
networks. In some cases, we will construct a new fiber optic extension from the
customer's premises to our network. In other cases, we will deploy a
high-bandwidth wireless connection between an antenna on the roof of the
customer's premises and an antenna attached to our fiber rings. These wireless
connections offer high-quality broadband capacity and, in many cases, cost less
to install. We expect to deploy wireless extensions in 25 markets by the end of
2000. On January 12, 2000, we announced completion of our first generation
broadband wireless field tests and the availability of commercial broadband
wireless services to a limited group of customers in Los Angeles and Dallas. We
also announced commencement of lab testing of the second generation equipment
that we plan to deploy throughout our networks this year.
Through a series of auction bids and acquisition transactions, we have
become the largest holder of broadband fixed wireless spectrum in North America.
We hold licenses to 1,150 to 1,300 MHz of LMDS spectrum in 59 cities, covering
areas where 95% of the population of the 30 largest U.S. cities live or work.
Our spectrum assets are very large in comparison to cellular and PCS licenses
(up to 30 MHz) and to other fixed wireless licenses (80-400 MHz). Our licenses
also include 150 MHz of LMDS spectrum in 13 smaller cities. We believe that, for
many locations, broadband wireless connections from customer buildings to our
local fiber optic networks will offer a lower cost solution for providing
high-quality broadband services than fiber or copper extensions.
LMDS is a newly authorized fixed broadband service that the license holder
may use to provide high-speed data transfer, wireless local telephone service,
wireless transmission of telephone calls in bulk quantity, video broadcasting
and videoconferencing, in any combination. This spectrum is not suitable for
portable telephones, but can transmit voice, data or video signals from one
fixed antenna to many others. As the word "local" in the local multipoint
distribution service name implies, the radio links provided using LMDS
frequencies are of limited distance, typically of a few miles or less, due to
the degradation of these high-frequency signals over distances greater than a
few miles.
A wireless connection typically consists of paired antennas generally placed
at a distance of approximately 2.5 miles from one another with a direct,
unobstructed line of sight. The antennas are typically installed on rooftops,
towers or windows. Point-to-multipoint technology
24
<PAGE>
allows a single hub site antenna to be used to form multiple paths with antennas
located on numerous customer buildings. As few as four hub site antennas can
provide telecommunications connections to buildings in all directions that have
line of sight visibility.
Wireless local loop technology typically utilizes millimeter wave
transmissions having narrow beam width, reducing the potential for channel
interference and allowing dense deployment and channel re-use. This means that,
like cellular technology, LMDS sites can be split into sectors in order to
increase the available capacity. The large amount of capacity in each channel
permits the simultaneous use of multiple voice and data applications. Properly
deployed, wireless local loop technology can substantially reduce the cost of
connecting customers to a network.
LMDS and other wireless broadband services require a direct line of sight
between two antennas comprising a link and are subject to distance and rain
attenuation. We expect that the average coverage radius of a base station will
be up to approximately 2.5 miles, depending on local conditions, and we expect
that our base stations will utilize power control to increase signal strength
and mitigate the effects of rain attenuation. In areas of heavy rainfall,
transmission links will be engineered for shorter distances and greater power to
maintain transmission quality. This reduction of path link distances to maintain
transmission quality requires more closely spaced transceivers and therefore
tends to increase the cost of service coverage.
Due to line of sight limitations, we currently plan to install our
transceivers and antennas on the rooftops of buildings. Line of sight and
distance limitations generally do not present problems in urban areas, provided
that suitable roof rights can be obtained, due to the existence of unobstructed
structures from which to transmit and the concentration of customers within a
limited area. Line of sight and distance limitations in non-urban areas can
arise due to lack of structures with sufficient height to clear local
obstructions. We may have to plan to construct intermediate links or use other
means to resolve line of sight and distance issues. These limitations may render
point-to-multipoint links uneconomical in certain locations.
In order to obtain the necessary access to install our transceivers and
antennas and connect our intended customers, we must secure roof and other
building access rights, or rights to access other line of sight locations,
including access to conduits and wiring from the owners of each building or
other structure on which we propose to install our equipment, and may require
construction, zoning, franchise or other governmental permits.
DSL TECHNOLOGY
We are also currently deploying DSL technology to meet the high-bandwidth
needs of those customers located less than three miles from the incumbent
carrier's central office and whose customer connection remains over copper wire.
DSL technology reduces the bottleneck in the transport of information,
particularly for data services, by increasing the data carrying capacity of
copper telephone lines.
We have arrangements with incumbent carriers with respect to more than 150
of their central offices that enable us to make direct connections to each
business or resident connected to that central office over leased lines. These
arrangements are known in our industry as colocations. We plan to introduce our
own DSL equipment and services at many of our colocation sites to provide our
customers with increased data carrying capacity.
25
<PAGE>
In January 1999, we also formed a strategic relationship with Covad
Communications, a DSL provider, under which Covad will become a preferred
provider of DSL services to us in locations where we do not provide our own DSL
service. As of January 31, 1999, Covad had established arrangements to maintain
its equipment in over 165 incumbent carrier central office spaces.
NATIONAL NETWORK
We are creating a single, end-to-end network by linking our local networks
to one another through the use of a national fiber optic backbone network
currently being constructed by Level 3 Communications. This network is expected
to cover more than 16,000 route miles with six or more conduits and connect 50
cities in the United States and Canada. INTERNEXT L.L.C., a joint venture
managed by us and currently owned 50% each by us and Eagle River, has entered
into a cost sharing agreement with Level 3 with respect to this network. Under
this agreement, INTERNEXT has:
- an exclusive interest in 24 fibers in a shared, filled conduit throughout
this network;
- an exclusive interest in one empty conduit, through which we expect to be
able to pull up to 432 fiber optic strands; and
- the right to 25% of the fibers pulled by Level 3 through the sixth and any
additional conduits in the network.
INTERNEXT expects the network build-out to occur substantially in years 2000
and 2001. When our system of local city networks is linked together by this
interstate fiber optic network, we will be able to offer our customers
integrated, end-to-end telecommunications services over facilities we control.
We have agreed to purchase Eagle River's interest in INTERNEXT for
$220.0 million of our common stock.
TECHNOLOGY
The wires, cables and spectrum that comprise the physical layer of our
networks can support a variety of communications technologies. We seek to offer
customers a set of technology options to meet their changing needs, and
introduce new technologies as necessary. Specifically, we believe that a service
platform based on Internet Protocol, or IP, will provide us with significant
future opportunities, because it will enable data, voice and video to be carried
inexpensively over our end-to-end, facilities-based network. We have, therefore,
begun to supplement our current data and voice switching technology with IP and
ATM equipment.
These technologies will enable us to offer our customers additional
services, such as high-speed Internet access, Internet web hosting, e-commerce
and other Internet services. Because they are more efficient, IP and ATM
technology increase the effective capacity of networks for these types of
applications, and in the future may become the preferred technology for voice
calls and faxes as well.
CIRCUIT SWITCHING VS. PACKET SWITCHING
There are two widely used switching technologies in currently deployed
communications networks: circuit-switching systems and packet-switching systems.
Circuit switch-based communications systems, which currently dominate the public
telephone network, establish a
26
<PAGE>
dedicated channel for each communication (such as a telephone call for voice or
fax), maintain the channel for the duration of the call, and disconnect the
channel at the conclusion of the call.
Packet switch-based communications systems, which format the information to
be transmitted into a series of shorter digital messages called "packets," are
the preferred means of data transmission. Each packet consists of a portion of
the complete message plus the addressing information to identify the destination
and return address. A key feature that distinguishes Internet architecture from
the public telephone network is that on the packet-switched Internet, a single
dedicated channel between communication points is not required.
Packet switch-based systems offer several advantages over circuit
switch-based systems, particularly the ability to commingle packets from several
communications sources together simultaneously onto a single channel. For most
communications, particularly those with bursts of information followed by
periods of "silence," the ability to commingle packets provides for superior
network utilization and efficiency, resulting in more information being
transmitted through a given communication channel.
IP technology, an open protocol that allows unrelated computer networks to
exchange data, is the technological basis of the Internet. The Internet's
explosive growth in recent years has focused intensive efforts worldwide on
developing IP-based networks and applications. In contrast to protocols like
ATM, which was the product of elaborate negotiations between the world's
monopoly telephone companies, IP is an open standard, subject to continuous
improvement.
We believe that a form of IP-based switching will eventually replace both
ATM and circuit switched technologies, and will be the foundation of integrated
networks that treat all transmissions -- including voice, fax and video --
simply as forms of data transmission. Current implementations of IP technology
over the Internet lack the necessary quality of service to support real-time
applications like voice and fax at commercially acceptable quality levels. We
fully expect that a combination of increased bandwidth and improved technology
will correct these deficiencies.
We are in the process of configuring our network to add packet switch-based
technology to our current circuit switch-based systems. Our goal is to meet the
current demands of our customers for reliable, high-quality switched telephone
connections, while also deploying the facilities, hardware and software
necessary to satisfy their growing demand for high-speed data transmission.
We believe that the IP deployment currently under way on our network will
enable us to implement new services based on current IP technology, and position
us to adopt future IP technology implementations as they evolve to support fully
integrated communications networks. We anticipate remaining flexible in our use
of technology, however, so that as underlying communications technology changes,
we will have the ability to take advantage of and implement these new
technologies.
APPLICATIONS AND SERVICES
VOICE APPLICATIONS AND SERVICES
In each market in which we operate, we currently offer the telephone
services listed below, at prices that are determined and implemented locally in
each market. These prices
27
<PAGE>
are generally 10% to 15% lower than the pricing for comparable local services
from the incumbent carrier. Our service offerings include:
- standard dial tone, including touch tone dialing, 911 and operator
assisted calling;
- multi-trunk services, including direct inward dialing, or DID, and direct
outward dialing, or DOD;
- long distance service, including 1+, 800/888 and operator services;
- voice messaging with personalized greetings, send, transfer, reply and
remote retrieval capabilities; and
- directory listings and assistance.
In each of our operational markets, we have negotiated and entered into
interconnection agreements with the incumbent carrier, and implemented permanent
local number portability, which allows customers to retain their telephone
numbers when changing telephone service providers.
Additionally, in each of our markets we offer the following services to long
distance carriers and high volume customers, which our customers use as both
primary and back-up circuits:
- special access circuits that connect end users to long distance carriers;
- special access circuits that connect long distance carriers' facilities to
one another; and
- private line circuits that connect several facilities owned by the same
end user.
DATA APPLICATIONS AND SERVICES
We currently offer customers the ability to use our networks for data
services, including facsimile and e-mail. Deploying ATM and IP facilities will
enable us to offer our customers extensive bandwidth capacity with increased
speed and reliability.
Our central offices are the hubs of our network. We expect that their
location on our network's backbone, their electrical and environmental controls
and 24-hour maintenance and technical support will make them attractive
locations for our customers to locate their larger computers (which are known as
servers) or run important applications on servers we will maintain there. This
will enable us to offer:
- WEB HOSTING: support for customers' websites, including design,
maintenance and telecommunications services;
- SERVER HOSTING: colocation of customers' servers in our central offices;
- APPLICATION HOSTING: running our customers' enterprise-wide applications
at our central offices and distributing them as needed over our network to
ensure uniformity, reduce costs and implement upgrades on a continuous and
immediate basis; and
- E-COMMERCE SUPPORT: support for high-volume purchases over the Internet,
including system design, order fulfillment and network security.
We plan to combine the capabilities of our national IP-optimized network
with the mass-market e-commerce expertise we have developed through NEXTLINK
Interactive to offer
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<PAGE>
customers a broad range of services to their e-commerce activities, including
telecommunications, web-site design, order fulfillment and back-office systems.
We expect that our acquisition of Concentric, which we expect will close in
the second quarter of 2000, will significantly accelerate implementation of our
data strategy. Concentric provides high speed Internet access, virtual private
networks and web hosting services principally to small to medium-sized
enterprises. These services combine the cost advantages, nationwide access and
standard protocols of public networks with the customization, high performance,
reliability and security of private networks.
Through our NEXTLINK Interactive subsidiary, we currently provide a number
of voice response, speech recognition and e-commerce services for Fortune 100
companies. These systems offer consumer-oriented businesses telephone and
Internet-based automated systems that process orders and supply information to
their customers about their products. We design and operate voice and
Internet-based systems to meet these clients' needs by integrating existing
third-party software applications. These service offerings, however, are not
integrated with our local networks at this time. Examples of systems that we
have developed and operated for our clients include:
- systems that help our clients' customers locate the nearest dealer, office
or other location;
- systems that give our clients' customers information, including cost
information, about the clients' products and services and automate their
purchases; and
- automated order entry systems.
SHARED TENANT SERVICES
Through our NEXTLINK One subsidiary (formerly known as Start Technologies)
acquired in November 1997, we provide shared tenant services. Shared tenant
services are telecommunications management services provided to groups of small
and medium-sized businesses located in the same office building. This service
enables businesses too small to justify hiring their own telecommunications
managers to benefit from the efficiencies, including volume discounts, normally
available only to larger enterprises.
NEXTLINK One installs an advanced telecommunications system throughout each
building it serves, leasing space for on-site sales and service, and offers
tenants products and services such as telephones, voice mail, local calling
lines, discounted long distance and high speed Internet connections, all on a
single, detailed invoice.
GROWTH IN CUSTOMER BASE
We have been successful in attracting customers in the markets that we
serve. Our customer base has been growing rapidly, as the following table of
access lines installed on our networks illustrates:
<TABLE>
<CAPTION>
MARKETS IN TOTAL ACCESS
DATE SERVICE LINES INSTALLED
- ---- ---------- ---------------
<S> <C> <C>
December 31, 1996.................... 7 8,511
December 31, 1997.................... 25 50,131
December 31, 1998.................... 37 174,182
September 30, 1999................... 45 349,154
</TABLE>
29
<PAGE>
In addition, we have increased the rate at which we install access lines
each quarter. The following table illustrates this improvement:
<TABLE>
<CAPTION>
ACCESS LINE
INSTALLATIONS
PERIOD PER QUARTER
- ------ -------------
<S> <C>
Fourth Quarter 1996.............................. 1,604
Fourth Quarter 1997.............................. 19,187
Fourth Quarter 1998.............................. 40,075
Third Quarter 1999............................... 65,133
</TABLE>
We also have successfully developed and deployed order entry/provisioning,
billing/ collection and other back-office systems for each market in which we
operate. We anticipate that we will continue to develop and deploy new
back-office systems to improve our capabilities as we add new technologies and
services to our networks.
RECENT TRANSACTIONS
On February 3, 2000, we entered into a $1,000.0 million senior secured
credit facility underwritten by a syndicate of banks and other financial
institutions. The credit facility consists of a $387.5 million tranche A term
loan facility, a $225.0 million tranche B term loan facility and a
$387.5 million revolving credit facility. We have borrowed $375.0 million under
this facility. For more information, see "Description Of Other Material
Indebtedness--Senior Secured Credit Facility."
In January 2000, we agreed to acquire Concentric for approximately
$2.9 billion in stock and expect to close this merger in the second quarter of
2000. In this transaction both NEXTLINK and Concentric will merge into a
newly-formed company, to be renamed NEXTLINK Communications, Inc., which will
assume all of NEXTLINK's obligations, including its obligations under the old
notes and the new notes. Each outstanding NEXTLINK share would be converted into
a share of the corporation surviving this merger, and each share of Concentric
common stock would be converted into $45.00 worth of stock of the surviving
corporation (based on the trading price of NEXTLINK common stock prior to the
effective time), subject to a collar. The actual number of shares of NEXTLINK
common stock to be exchanged for each Concentric Network common share will not
be less than 0.495 (if NEXTLINK's average stock price exceeds $90.91), or more
than 0.650 (if NEXTLINK's average stock price is less than $69.23).
This transaction is intended to be tax-free to the NEXTLINK and Concentric
Network shareholders and has been unanimously approved by both the NEXTLINK and
Concentric Network Boards of Directors, but remains subject to approval by
Concentric Network's stockholders. Eagle River, the holder of a majority of
NEXTLINK's voting power, has agreed to approve the transaction. The parties
expect to obtain consent of Concentric's bond and preferred stock holders to
this transaction, but have reserved the right to restructure the transaction so
that these consents will not be required. The transaction is subject to other
customary closing conditions, including regulatory approvals.
The Concentric acquisition also implements our previously announced
acquisition of the 50% of INTERNEXT LLC we do not already own from Eagle River
for $220.0 million of our common stock, representing approximately 4.1 million
shares, based on the closing sale price of our common stock of $53.50 on
December 6, 1999.
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<PAGE>
The actual number of shares of our common stock to be issued is subject to
adjustment in the event that the average price of our common stock at the time
of the closing of the transaction is more than $64.20, in which case Eagle River
will receive approximately 3.4 million shares, or less than $42.80, in which
case Eagle River will receive approximately 5.1 million shares.
In January 2000, affiliates of Forstmann Little & Co. invested
$850.0 million in NEXTLINK to be used to expand our networks and services,
introduce new technologies and fund our business plan. Forstmann Little's
investment was in the form of convertible preferred stock with a conversion
price of $63.25 per share and a 3.75% dividend. Under the agreement, Forstmann
Little may convert to and transfer the common stock after one year, and we may
call the preferred stock after five years. Forstmann Little will also have the
option of requiring redemption of the preferred stock after 10 years. The
investment represents ownership of approximately 7% of our fully diluted common
shares. Nicholas C. Forstmann and Sandra J. Horbach, both general partners at
Forstmann Little, have joined our board of directors.
In December 1999, NEXTLINK International Inc., one of our subsidiaries,
entered into a shareholder's agreement with Wispra Networks, Inc., a broadband
wireless venture in Canada. The other participants in the venture are Wispra
Inc., a long-time participant in Canada's broadband wireless marketplace, and TD
Capital Group, a leading Canadian private equity investor in the communications
and media industry.
This new venture was made in connection with the submission by Wispra
Networks of its completed broadband wireless 24/38 GHz spectrum license
documents and initial license payment to Industry Canada after being named
provisional winner of six fixed broadband wireless licenses. The licenses cover
areas where 14.3 million people live or work in Toronto, Montreal, Vancouver,
Ottawa, Edmonton, Calgary and surrounding areas. Wispra Networks will pay a
total of $50.1 million ($74.0 million in Canadian dollars) for 400 MHz of
spectrum in the six market areas. Wispra Networks expects that Industry Canada
will issue licenses for the spectrum this year after it has paid the balance of
the license fee due and has made additional filings.
MANAGEMENT TEAM
We believe that the quality of our management team and their extensive
experience in the telecommunications industry is one of our competitive
advantages and a critical factor in the successful implementation of our
strategy. The following key members of our management team each has 16 or more
years of experience in leading companies in competitive segments of the
telecommunications industry:
- CRAIG O. MCCAW - our founder, largest and controlling shareholder and
member of our Board of Directors, who, prior to founding NEXTLINK, was the
founder of McCaw Cellular Communications, Inc., which became the nation's
largest cellular telephone company.
- DAN AKERSON - our Chairman of the Board and Chief Executive Officer since
September 1999, who had been Chairman and Chief Executive Officer of
Nextel Communications, Inc. since 1996. Mr. Akerson came to Nextel from
Forstmann Little & Co., a private investment company, where he was a
General Partner. While at Forstmann Little, Mr. Akerson also served as
Chairman and Chief Executive Officer of
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General Instrument Corporation, a technology company acquired by Forstmann
Little. From 1983 to 1993, Mr. Akerson held various senior management
positions with MCI Communications Corporation, including President and
Chief Operating Officer. Mr. Akerson serves as a director on the boards of
American Express Company and America Online Inc.
- NATE DAVIS - our President and Chief Operating Officer since January 2000,
was formerly Executive Vice President of Technical Services of Nextel
Communications, Inc. Prior thereto, he was Chief Financial Officer of MCI
Telecommunications and Chief Operating Officer of MCI Metro.
The presidents of our operating subsidiaries and our other senior officers
have an average of 18 years of experience in the telecommunications industry.
The members of our senior management team who will lead our design and
implementation of technologies include:
- DOUG CARTER - our Senior Vice President, Chief Technology Officer, who was
the Senior Vice President of Network Operations of AT&T Wireless Services
prior to joining NEXTLINK.
- JOHN CURRAN - our Vice President, Internet Technology and head of our
Cambridge, MA - based IP Design Center, who was Chief Technology Officer
of GTE Internetworking prior to joining NEXTLINK.
- NICK KAUSER - a member of our Board of Directors, who was the Chief
Technology Officer of AT&T Wireless Services prior to joining NEXTLINK.
In addition, we believe that the executive officers and key employees of
Concentric will bring us valuable experience and expertise in the data services
business, which is an important element of our strategy.
PROPERTIES
We recently relocated our headquarters to McLean, Virginia, where we are
currently leasing 9,500 square feet of office space on an interim basis. We
still maintain some operation in the 45,000 square feet in Bellevue, Washington,
leased for our former headquarters.
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REGULATION
The Federal Telecommunications Act of 1996 opened local telephone markets to
competition from companies like NEXTLINK. Prior to that time, states typically
granted an exclusive franchise in each local service area to a single dominant
carrier, often a former subsidiary of AT&T known as a "Baby Bell," which owned
and operated the entire local exchange network. The 1996 Act preserved state and
local jurisdiction over many aspects of local telephone service, and, as a
result, NEXTLINK is subject to varying degrees of federal, state and local
regulation. FCC and state regulators, and other legislative or judicial
initiatives relating to the telecommunications industry, could help or hinder
our business.
We are not currently required to obtain FCC authorization for the
installation, acquisition or operation of our wireline network facilities. We
are required to hold and we have obtained FCC authorizations for the operation
of our wireless facilities. In each state in which we desire to offer our
services, we also must first obtain authorization from the appropriate state
commission. Although we currently hold the required state authorizations in each
of our operational markets, we cannot be certain that we will receive the
necessary state authorizations for markets to be launched in the future.
Unlike the incumbent carriers, we are not currently subject to price cap or
rate of return regulation, which leaves us more free to set our own pricing
policies. However, the FCC is currently considering whether to regulate switched
interstate access services provided by non-incumbent service providers like
NEXTLINK. The FCC requires us to file tariffs on an ongoing basis for interstate
and international interexchange traffic. An FCC order that would have exempted
us from any requirement to file tariffs for interstate long distance service has
been stayed pending further judicial review, and, as a result, we currently file
tariffs for this service. Our intrastate services are also generally subject to
state certification and tariff or price list filing requirements.
The 1996 Act gave the FCC significant responsibility for its implementation,
especially in the areas of universal service, access charges, numbering, number
portability and price caps. The details of the rules adopted by the FCC, and the
extent to which they are upheld by the courts reviewing the FCC's rules, will
have a significant effect on when and to what extent barriers to competition in
local services are removed. For example, the FCC recently granted incumbent
carriers the flexibility to set prices for interstate dedicated access and
interstate switched access services on a customer-by-customer basis in
geographic areas where the incumbent carrier faces defined levels of competitive
entry. In addition, the FCC is considering allowing incumbent carriers to
provide advanced services on an unregulated basis if the incumbent carrier
provides those services through a separate subsidiary.
The 1996 Act provides incentives to most of the incumbent carriers to enter
into interconnection agreements with carriers like NEXTLINK. We need
interconnection agreements to gain access to the incumbent carriers' networks.
Although we have interconnection agreements in all of our currently operational
markets, we cannot be certain that incumbent carriers in new markets we seek to
enter will negotiate quickly with us or that any resulting agreements will be on
terms favorable to us.
In January 1999, the U.S. Supreme Court upheld key provisions of the FCC
rules implementing the 1996 Act, in a decision that was generally favorable to
competitive telephone companies like NEXTLINK. In two earlier decisions, the
United States Court of Appeals for the Eighth Circuit had invalidated these
rules. The Supreme Court's decision
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reinstated all but one of the FCC rules invalidated by the Eighth Circuit. The
Supreme Court held that the FCC has general jurisdiction to implement the 1996
Act's local competition provisions, including pricing and enforcement
jurisdiction. Significantly, the Court upheld the FCC's "pick and choose" rule,
which allows competitors to choose which provisions of other carriers'
interconnection agreements they wish to incorporate in their own interconnection
agreements with that incumbent carrier.
A key provision of the 1996 Act requires incumbent carriers to make elements
of their networks available to competing carriers like NEXTLINK at reasonable
rates. The Supreme Court broadly affirmed these provisions, but held that the
FCC did not correctly determine precisely which network elements must be
unbundled and made available to competitors like NEXTLINK.
The FCC responded to the Supreme Court's mandate on November 5, 1999,
reaffirming its requirement that incumbent local carriers provide access to, or
"unbundle," the following six of the seven network elements specified in its
1996 order:
(i) loops, including loops used to provide high-capacity and advanced
telecommunications services;
(ii) network interface devices;
(iii) local circuit switching (except for larger business customers in major
urban markets);
(iv) dedicated and (except where unbundled local circuit switching is
unavailable) shared transport;
(v) signaling and call-related databases; and
(vi) operations support systems.
The seventh element of the original list, access to operator and directory
assistance services, was not included in the revised list, nor was any
requirement that incumbent carriers unbundle facilities used to provide
high-speed Internet access and other data services, except under limited
circumstances. We do not expect these aspects of the order to affect us
adversely.
The FCC's order also added requirements not contained in its 1996 order.
Incumbent carriers must now provide access to:
(i) subloops;
(ii) loop dark fiber;
(iii) dark fiber transport; and
(iv) combinations of elements if currently combined in their networks.
The FCC declined to address whether incumbent carriers are required to
combine and unbundle network elements not currently combined, since that issue
is pending before the Eighth Circuit Court of Appeals.
The Supreme Court decision did not address or resolve the incumbent
carriers' challenge to the FCC's forward-looking pricing methodology for
unbundled network elements. The incumbent carriers have challenged this
methodology, claiming that any correct procedure would take into account
historical costs. If the incumbent carriers succeed in this contention, we would
have to pay more to gain access to network elements, which could significantly
increase our cost of doing business.
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THE EXCHANGE OFFER
BACKGROUND
We originally sold the outstanding 10 1/2% Senior Notes due 2009 and the
12 1/8% Senior Discount Notes due 2009 on November 17, 1999 in a transaction
exempt from the registration requirements of the Securities Act. Goldman, Sachs
& Co., Salomon Smith Barney Inc., Credit Suisse First Boston Corporation, TD
Securities (USA) Inc., Barclays Capital Inc., Chase Securities Inc., Banc of
America Securities LLC, BancBoston Robertson Stephens Inc., Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc. and PNC Capital Markets, Inc., as
the initial purchasers, subsequently resold the notes to qualified institutional
buyers in reliance on Rule 144A and under Regulation S under the Securities Act.
As of the date of this prospectus, $400.0 million aggregate principal amount of
unregistered senior notes and $455.0 million aggregate principal amount at
maturity of senior discount notes are outstanding.
NEXTLINK and the initial purchasers entered into an exchange and
registration rights agreement under which we agreed that we would, at our own
cost:
- file an exchange offer registration statement under the Securities Act
within 90 days after November 17, 1999, the original issue date of the old
notes, and
- use its reasonable best efforts to cause the exchange offer registration
statement to become effective under the Securities Act at the earliest
possible time, but no later than 120 days following November 17, 1999.
The summary in this prospectus of provisions of the exchange and
registration rights agreement does not purport to be complete and is subject to,
and is qualified in its entirety by, all the provisions of the exchange and
registration rights agreement, a copy of which is filed as an exhibit to the
registration statement of which this prospectus is a part.
RESALE OF THE NEW NOTES
Based on no-action letters issued by the staff of the Securities and
Exchange Commission to third parties, we believe that a holder of old notes, but
not a holder who is an affiliate of NEXTLINK within the meaning of Rule 405 of
the Securities Act, who exchanges old notes for new notes in the exchange offer,
generally may offer the new notes for resale, sell the new notes and otherwise
transfer the new notes without further registration under the Securities Act and
without delivery of a prospectus that satisfies the requirements of Section 10
of the Securities Act. This does not apply, however, to a holder who is an
affiliate of NEXTLINK within the meaning of Rule 405 of the Securities Act. We
also believe that a holder may offer, sell or transfer the new notes only if the
holder acquires the new notes in the ordinary course of its business and is not
participating, does not intend to participate and has no arrangement or
understanding with any person to participate in a distribution of the new notes.
Any holder of old notes using the exchange offer to participate in a
distribution of new notes cannot rely on the no-action letters referred to
above. This includes a broker-dealer that acquired old notes directly from
NEXTLINK, but not as a result of market-making activities or other trading
activities. Consequently, the holder must comply with the registration and
prospectus delivery requirements of the Securities Act in the absence of an
exemption from such requirements.
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Each broker-dealer that receives new notes for its own account in exchange
for old notes, where such old notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities may be a
statutory underwriter and must acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with the resale of
new notes received in exchange for old notes. The letters of transmittal which
accompany this prospectus state that by so acknowledging and by delivering a
prospectus, a participating broker-dealer will not be deemed to admit that it is
an underwriter within the meaning of the Securities Act. A participating
broker-dealer may use this prospectus, as it may be amended from time to time,
in connection with resales of new notes it receives in exchange for old notes in
the exchange offer. NEXTLINK will make this prospectus available to any
participating broker-dealer in connection with any resale of this kind for a
period of 30 days after the expiration date of the exchange offer. For more
information, see "Plan of Distribution."
Each holder of the old notes who wishes to exchange old notes for new notes
in the exchange offer will be required to represent and acknowledge, for the
holder and for each beneficial owner of such old notes, whether or not the
beneficial owner is the holder, in the letters of transmittal that:
- the new notes to be acquired by the holder and each beneficial owner, if
any, are being acquired in the ordinary course of business,
- neither the holder nor any beneficial owner is an affiliate, as defined in
Rule 405 of the Securities Act, of NEXTLINK or any of its subsidiaries,
- any person participating in the exchange offer with the intention or
purpose of distributing new notes received in exchange for old notes,
including a broker-dealer that acquired old notes directly from NEXTLINK,
but not as a result of market-making activities or other trading
activities cannot rely on the no-action letters referenced above and must
comply with the registration and prospectus delivery requirements of the
Securities Act, in connection with a secondary resale of the new notes
acquired by such person,
- if the holder is not a broker-dealer, the holder and each beneficial
owner, if any, are not participating, do not intend to participate and
have no arrangement or understanding with any person to participate in any
distribution of the new notes received in exchange for old notes, and
- if the holder is a broker-dealer that will receive new notes for the
holder's own account in exchange for old notes, the old notes to be so
exchanged were acquired by the holder as a result of market-making or
other trading activities and the holder will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
such new notes received in the exchange offer. However, by so representing
and acknowledging and by delivering a prospectus, the holder will not be
deemed to admit that it is an underwriter within the meaning of the
Securities Act.
SHELF REGISTRATION STATEMENT
If applicable law or interpretations of the staff of the SEC are changed so
that the new notes received by holders who make all of the above representations
in the letters of
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transmittal are not or would not be, upon receipt, transferrable by each such
holder without restriction under the Securities Act, we will, at its cost:
- file a shelf registration statement covering resales of the old notes,
- use its reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act at the earliest possible
time, but no later than 120 days after November 17, 1999, and
- use its reasonable best efforts to keep effective the shelf registration
statement until the earlier of two years after November 17, 1999 or the
time when all of the applicable old notes are no longer outstanding.
We will, if and when we file the shelf registration statement, provide to
each holder of the old notes copies of the prospectus which is a part of the
shelf registration statement, notify each holder when the shelf registration
statement has become effective and take other actions as are required to permit
unrestricted resales of the old notes. A holder that sells old notes pursuant to
the shelf registration statement generally must be named as a selling
security-holder in the related prospectus and must deliver a prospectus to
purchasers, will be subject to civil liability provisions under the Securities
Act in connection with these sales and will be bound by the provisions of the
exchange and registration rights agreement which are applicable to the holder,
including certain indemnification obligations. In addition, each holder of old
notes must deliver information to be used in connection with the shelf
registration statement and provide comments on the shelf registration statement
in order to have its old notes included in the shelf registration statement and
benefit from the provisions regarding any liquidated damages described below.
INCREASE IN INTEREST RATE
If we are required to file the shelf registration statement and
(1) either
- the shelf registration statement has not become effective or been declared
effective on or before the 120th calendar day following November 17, 1999,
or
- the shelf registration statement has been declared effective and such
shelf registration statement ceases to be effective, except as
specifically permitted in the exchange and registration rights agreement,
without being succeeded promptly by an additional registration statement
filed and declared effective, or
(2) the shelf registration statement has not become effective or been
declared effective on or before the 165th day after November 17, 1999, the
interest rate borne by the old notes will be increased in accordance with the
following table:
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<TABLE>
<CAPTION>
INITIAL INCREASE
EVENT IN INTEREST RATE
- ----- ----------------
<S> <C> <C>
1. Shelf registration statement not declared 0.5% per annum following this 120-day
effective on or prior to 120th day period, determined daily, on the principal
following November 17, 1999 or shelf amount of the senior notes and prior to
registration statement ceases to be December 1, 2004, on the Accreted Value of
effective the senior discount notes, from the date of
the event, until the date it is cured.
2. Shelf registration statement has not become Additional 0.25% for each subsequent 90-day
effective or been declared effective on or period
before the 165th day after November 17,
1999
</TABLE>
However, in no event will the interest rate borne by the outstanding notes
be increased by an aggregate of more than 1.0%.
The sole remedy available to the holders of the old notes will be the
immediate assessment of cash interest on the old notes as described above. Any
amounts of additional interest due as described above will be payable in cash on
the same interest payments dates as the old notes.
TERMS OF THE EXCHANGE OFFER
Upon the exchange offer registration statement being declared effective,
NEXTLINK will offer the new notes in exchange for surrender of the old notes.
NEXTLINK will keep the exchange offer open for at least 30 days, or longer if
required by applicable law, after the date notice of the exchange offer is
mailed to the holders of the old notes.
Upon the terms and subject to the conditions contained in this prospectus
and in the letters of transmittal which accompany this prospectus, NEXTLINK will
accept any and all old notes validly tendered and not withdrawn before 5:00
p.m., New York City time, on the expiration date of the exchange offer. NEXTLINK
will issue an equal principal amount of new notes in exchange for the principal
amount of old notes accepted in the exchange offer. Holders may tender some or
all of their old notes under the exchange offer. Old notes may be tendered only
in integral multiples of $1,000.
The form and terms of the new notes will be the same as the form and terms
of the old notes except that:
(1) the new notes will have been registered under the Securities Act and
therefore will not bear legends restricting their transfer, and
(2) the new notes will not contain certain terms providing for an increase
in the interest rate on the old notes under specific circumstances which
are described in the exchange and registration rights agreement.
The new notes will evidence the same debt as the old notes and will be entitled
to the benefits of each of the indentures governing the old notes.
In connection with the exchange offer, holders of old notes do not have any
appraisal or dissenters' rights under law or either of the indentures governing
the old notes. NEXTLINK intends to conduct the exchange offer in accordance with
the applicable requirements of the
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Exchange Act and the rules and regulations of the Securities and Exchange
Commission related to such offers.
NEXTLINK shall be deemed to have accepted validly tendered old notes when,
as and if NEXTLINK has given oral or written notice of acceptance to United
States Trust Company, exchange agent for the exchange offer. The exchange agent
will act as agent for the tendering holders for the purpose of receiving the new
notes from NEXTLINK.
If any tendered old notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events specified in this
prospectus or if old notes are submitted for a greater principal amount than the
holder desires to exchange, the certificates for the unaccepted old notes will
be returned without expense to the tendering holder. If old notes were tendered
by book-entry transfer in the exchange agent account at The Depository Trust
Company in accordance with the book-entry transfer procedures described below,
these non-exchanged old notes will be credited to an account maintained with The
Depositary Trust Company as promptly as practicable after the expiration date of
the exchange offer.
NEXTLINK will pay all charges and expenses, other than transfer taxes in
certain circumstances, in connection with the exchange offer. For more
information, see "--Fees and Expenses." Holders who tender old notes in the
exchange offer will therefore not need to pay brokerage commissions or fees or,
subject to the instructions in the letters of transmittal, transfer taxes with
respect to the exchange of old notes in the exchange offer.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date of the exchange offer is 5:00 p.m., New York City time,
on , 2000, unless NEXTLINK, in its reasonable discretion, extends the
exchange offer, in which case the expiration date shall be the latest date and
time to which the exchange offer is extended.
In order to extend the exchange offer, NEXTLINK will notify the exchange
agent of any extension by oral or written notice and will make a public
announcement of the extension before 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date.
NEXTLINK reserves the right, in its reasonable discretion:
- to delay accepting any old notes, to extend the exchange offer or to
terminate the exchange offer if, in its reasonable judgement, any of the
conditions described below under "--Conditions" shall not have been
satisfied, by giving oral or written notice of the delay, extension or
termination to the exchange agent, or
- to amend the terms of the exchange offer in any manner.
NEXTLINK will promptly announce any such event making a timely release to
Dow Jones News Service and may or may not do so by other means as well.
PROCEDURES FOR TENDERING
You may tender your own old notes in the exchange offer. To tender in the
exchange offer, a holder must do the following:
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- complete, sign and date the applicable letter of transmittal, or a
facsimile of such letter of transmittal,
- have the signatures thereon guaranteed if required by the applicable
letter of transmittal, and
- except as discussed in "--Guaranteed Delivery Procedures," mail or
otherwise deliver such letter of transmittal, or facsimile, together with
the old notes and any other required documents, to the exchange agent
prior to 5:00 p.m., New York City time, on the expiration date of the
exchange offer.
The exchange agent must receive the old notes, a completed letter of
transmittal and all other required documents at the address listed below under
"--Exchange Agent" before 5:00 p.m., New York City time, on the expiration date
for the tender to be effective. You may deliver your old notes by using the
book-entry transfer procedures described below, as long as the exchange agent
receives confirmation of the book-entry transfer before the expiration date.
The Depository Trust Company has authorized its participants that hold old
notes on behalf of beneficial owners of old notes through The Depository Trust
Company to tender their old notes as if they were holders. To effect a tender of
old notes, The Depository Trust Company participants should either:
(1) complete and sign the applicable letter of transmittal (or a manually
signed facsimile of such letter), have the signature thereon guaranteed
if required by the instructions to such letter of transmittal, and mail
or deliver such letter of transmittal (or the manually signed facsimile)
to the exchange agent according to the procedures described above in the
first paragraph under the heading "--Procedures for Tendering" or
(2) transmit their acceptance to The Depository Trust Company through its
automated tender offer program for which the transaction will be eligible
and follow the procedure for book-entry transfer as described in "Book
Entry; Delivery and Form."
By tendering, each holder will make the representations contained in the
fourth paragraph above under the heading "--Resale of the New Notes." Each
participating broker-dealer must acknowledge that it will deliver a prospectus
in connection with any resale of such new notes. For more information, see "Plan
Of Distribution."
The tender by a holder and the acceptance of the tender by NEXTLINK will
constitute the agreement between the holder and NEXTLINK set forth in this
prospectus and in the applicable letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE APPLICABLE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH
TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, HOLDERS SHOULD
ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES OR BOOK-ENTRY
CONFIRMATION SHOULD BE SENT TO NEXTLINK. HOLDERS MAY REQUEST THEIR RESPECTIVE
BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE
ABOVE TRANSACTIONS ON THEIR BEHALF.
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<PAGE>
Any beneficial owner whose old notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered holder promptly and instruct it to tender on the
beneficial owner's behalf. For more information, see "Instructions to Registered
Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner"
included with the applicable letter of transmittal. If the beneficial owner
wishes to tender on his own behalf, such owner must, prior to completing and
executing the applicable letter of transmittal and delivering such beneficial
owner's old notes, either make appropriate arrangements to register ownership of
the old notes in such owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible guarantor institution (within the meaning of Rule 17A
d-5 under the Exchange Act) unless the old notes are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the
applicable letter of transmittal, or
- for the account of an eligible guarantor institution.
If signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, the guarantee must be by a member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an eligible guarantor institution.
If a letter of transmittal is signed by a person other than the registered
holder of any old notes listed in the applicable letter of transmittal, the old
notes must be endorsed or accompanied by a properly completed bond power and
signed by the registered holder as the registered holder's name appears on the
old notes.
If a letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless we waive it, evidence
satisfactory to us of their authority to so act must be submitted with the
applicable letter of transmittal.
Promptly after the date of this prospectus, the exchange agent will
establish a new account or utilize an existing account with respect to the old
notes at the book-entry transfer facility, The Depository Trust Company, for the
purpose of facilitating the exchange offer. Subject to the establishment of the
accounts, any financial institution that is a participant in the book-entry
transfer facility's system may make book-entry delivery of old notes by causing
the book-entry transfer facility to transfer the old notes into the exchange
agent's account with respect to the old notes in accordance with that facility's
procedures. Although delivery of the old notes may be effected through
book-entry transfer into the exchange agent's account at the book-entry transfer
facility, an appropriate letter of transmittal properly completed and duly
executed or an agent's message with any required signature guarantee and all
other required documents must be delivered to the exchange agent at its address
listed below on or before the expiration date of the exchange offer, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under such
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<PAGE>
procedures. Delivery of documents to the book-entry transfer facility does not
constitute delivery to the exchange agent.
The term "agent's message" means a message transmitted by The Depositary
Trust Company to, and received by, the exchange agent, which states that The
Depository Trust Company has received an express acknowledgment from the
participant in The Depository Trust Company tendering the old notes stating:
- the aggregate principal amount of old notes which have been tendered by
such participant,
- that such participant has received and agrees to be bound by the term of
the applicable letter of transmittal, and
- that NEXTLINK may enforce such agreement against the participant.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered old notes and withdrawal of tendered old notes
will be determined by us in our sole discretion, which determination will be
final and binding. NEXTLINK reserves the absolute right to reject any and all
old notes not properly tendered or any old notes NEXTLINK's acceptance of which
would, in the opinion of counsel for NEXTLINK, be unlawful. NEXTLINK also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular old notes. NEXTLINK's interpretation of the terms and
conditions of the exchange offer, including the instructions in the applicable
letter of transmittal, will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of old notes must be
cured within a period of time that NEXTLINK shall determine.
Neither NEXTLINK, the exchange agent nor any other person shall incur any
liability for failure to give notice of any defect or irregularity with respect
to any tender of old notes. Tenders of old notes will not be deemed to have been
made until such defects or irregularities mentioned above have been cured or
waived. Any old notes received by the exchange agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the exchange agent to the tendering holders, unless
otherwise provided in the applicable letter of transmittal, as soon as
practicable following the expiration date of the exchange offer.
GUARANTEED DELIVERY PROCEDURES
A holder who wishes to tender its old notes and:
- whose old notes are not immediately available,
- who cannot deliver the holder's old notes, the letter of transmittal or
any other required documents to the exchange agent prior to the expiration
date, or
- who cannot complete the procedures for book-entry transfer, before the
expiration date,
may effect a tender if:
- the tender is made through an eligible guarantor institution,
- before the expiration date, the exchange agent receives from the eligible
guarantor institution a properly completed and duly executed notice of
guaranteed delivery by
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facsimile transmission, mail or hand delivery, the name and address of the
holder, the certificate number(s) of the old notes and the principal
amount of old notes tendered, stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange
trading days after the expiration date, the letter of transmittal (or
facsimiles thereof) together with the certificate(s) representing the old
notes (or a confirmation of book-entry transfer of the old notes into the
exchange agent's account at the book-entry transfer facility), and any
other documents required by the letter of transmittal will be deposited by
the eligible guarantor institution with the exchange agent, and
- the exchange agent receives, within three New York Stock Exchange trading
days after the expiration date, a properly completed and executed letter
of transmittal or facsimile, as well as the certificate(s) representing
all tendered old notes in proper form for transfer or a confirmation of
book-entry transfer of such old notes into the exchange agent's account at
the book-entry transfer facility, and all other documents required by the
applicable letter of transmittal.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, tenders of old notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration
date of the exchange offer.
To withdraw a tender of old notes in the exchange offer, a letter or
facsimile transmission notice of withdrawal must be received by the exchange
agent at its address set forth below prior to 5:00 p.m., New York City time, on
the expiration date. Any notice of withdrawal must:
- specify the name of the person having deposited the old notes to be
withdrawn,
- identify the old notes to be withdrawn including the certificate number(s)
and principal amount of such old notes or, in the case of old notes
transferred by book-entry transfer, the name and number of the account at
the book-entry transfer facility to be credited and otherwise comply with
the procedures of the transfer agent,
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered, including
any required signature guarantees, or be accompanied by documents of
transfer sufficient to have the trustee under the indentures governing the
old notes register the transfer of the old notes into the name of the
person withdrawing the tender, and
- specify the name in which any such old notes are to be registered, if
different from that of the person who deposited the notes.
If certificates for old notes have been delivered or otherwise identified to
the exchange agent, then, before the release of the certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an eligible guarantor institution unless the holder is an eligible
guarantor institution.
All questions as to the validity, form and eligibility, including time of
receipt, of such notices will be determined by NEXTLINK, whose determination
shall be final and binding on
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all parties. Any old notes so withdrawn will be deemed not to have been validly
tendered for purposes of the exchange offer, and no new notes will be issued,
unless the old notes so withdrawn are validly retendered. Any old notes which
have been tendered but which are not accepted for exchange will be returned to
the holder of the notes without cost to the holder as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. Properly
withdrawn old notes may be retendered by following the procedures described
above under "--Procedures for Tendering" at any time before the expiration date.
CONDITIONS
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange new notes for, any old notes and may terminate
the exchange offer as provided in this prospectus before the acceptance of the
old notes, if:
(1) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our reasonable judgment, might materially impair our ability to
proceed with the exchange offer or materially impair the contemplated
benefits of the exchange offer to us, or any material adverse development
has occurred in any existing action or proceeding with respect to us or
any of our subsidiaries;
(2) any change, or any development involving a prospective change, in the
business or financial affairs of NEXTLINK or any of its subsidiaries has
occurred which, in our reasonable judgment, might materially impair our
ability to proceed with the exchange offer or materially impair the
contemplated benefits of the exchange offer to us;
(3) any law, statute, rule or regulation is proposed, adopted or enacted,
which in our reasonable judgment, might materially impair our ability to
proceed with the exchange offer or materially impair the contemplated
benefits of the exchange offer to us; or
(4) any governmental approval has not been obtained, which approval we, in
our reasonable discretion, shall deem necessary for the consummation of
the exchange offer as contemplated by this prospectus.
The conditions listed above are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any of these conditions. We may
waive these conditions in our reasonable discretion in whole or in part at any
time and from time to time. Our failure at any time to exercise any of these
rights shall not be deemed a waiver of such right and such right shall be deemed
an ongoing right which may be asserted at any time and from time to time.
If we determine in our reasonable discretion that any of the conditions are
not satisfied, we may:
(1) refuse to accept any old notes and return all tendered old notes to the
tendering holders,
(2) extend the exchange offer and retain all old notes tendered before the
expiration of the exchange offer, subject, however, to the rights of
holders to withdraw these old notes (See "--Withdrawal of Tenders" above)
or
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(3) waive unsatisfied conditions with respect to the exchange offer and
accept all properly tendered old notes which have not been withdrawn. If
this waiver constitutes a material change to the exchange offer, we will
promptly disclose the waiver by means of a prospectus supplement that
will be distributed to the registered holders. We will also extend the
exchange offer for a period of five to ten business days, depending upon
the significance of the waiver and the manner of disclosure to the
registered holders, if the exchange offer would otherwise expire during
such five to ten business day period.
EXCHANGE AGENT
United States Trust Company has been appointed as exchange agent for the
exchange offer. Questions and requests for assistance and requests for
additional copies of this prospectus or of the applicable letter of transmittal
should be directed to United States Trust Company addressed as follows:
For Information by Telephone:
(800) 548-6565
By Hand or Overnight Delivery Service:
United States Trust Company
114 West 47th Street
New York, New York 10036
Attention: Patricia Gallagher,
Reorganization Section
By Facsimile Transmission:
(212) 780-0592
(Telephone Confirmation)
(800) 548-6565
United States Trust Company also acts as trustee under each of the
indentures governing the notes.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. We have not retained any
dealer-manager in connection with the exchange offer and will not make any
payments to brokers, dealers or others soliciting acceptances of the exchange
offer. However, we will pay the exchange agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection with providing the services.
We will pay cash expenses to be incurred in connection with the exchange
offer. Such expenses include fees and expenses of United States Trust Company as
exchange agent and as trustee under each of the indentures governing the notes,
accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The new notes will be recorded at the same carrying value as the old notes
in our accounting records on the date of exchange. Accordingly, no gain or loss
for accounting
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purposes will be recognized by NEXTLINK. The expenses of the exchange offer and
the unamortized expenses related to the issuance of the old notes will be
amortized over the term of the notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of old notes who are eligible to participate in the exchange offer
but who do not tender their old notes will not have any further registration
rights, and their old notes will continue to be subject to restrictions on
transfer. Accordingly, such old notes may be resold only:
- to NEXTLINK, upon redemption of these notes or otherwise,
- so long as the old notes are eligible for resale pursuant to Rule 144A
under the Securities Act, to a person inside the United States whom the
seller reasonably believes is a qualified institutional buyer within the
meaning of Rule 144A in a transaction meeting the requirements of Rule
144A,
- in accordance with Rule 144 under the Securities Act, or under another
exemption from the registration requirements of the Securities Act, and
based upon an opinion of counsel reasonably acceptable to us,
- outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or
- under an effective registration statement under the Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States.
REGULATORY APPROVALS
We do not believe that the receipt of any material federal or state
regulatory approval will be necessary in connection with the exchange offer,
other than the effectiveness of the exchange offer registration statement under
the Securities Act.
OTHER
Participation in the exchange offer is voluntary and holders of old notes
should carefully consider whether to accept the terms and conditions of this
offer. Holders of the old notes are urged to consult their financial and tax
advisors in making their own decisions on what action to take with respect to
the exchange offer.
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DESCRIPTION OF THE NOTES
The new senior notes, like the old senior notes, and the new senior discount
notes, like the old senior discount notes, will be issued under two separate
indentures, dated as of November 17, 1999, between NEXTLINK and United States
Trust Company, as trustee. The new notes are the same as the old notes except
that the new notes:
- will not bear legends restricting their transfer, and
- will not contain certain terms providing for an increase in the
interest rate under the circumstances described in the exchange and
registration rights agreement.
Since many provisions of the indentures are identical, they are described
together below, but the provisions of each indenture apply only to the notes
outstanding thereunder. The indentures contain the full legal text of the
matters described in this section. A copy of each of the indentures has been
filed with the SEC as part of our Registration Statement. See "Where You Can
Find More Information" on page ii for information on how to obtain copies.
Because this section is a summary, it does not describe every aspect of the
notes. This summary is subject to and qualified in its entirety by reference to
all the provisions of each of the indentures, including definitions of some
terms used in each of the indentures. For example, in this section we use
capitalized words to signify defined terms that have been given special meaning
in each of the indentures. We describe the meaning for only the more important
terms, under "--Definitions." We also include references in parentheses to
certain sections of each of the indentures.
Whenever we refer to particular sections or defined terms of the indentures
in this prospectus, these sections or defined terms are incorporated by
reference into this prospectus.
In this description of notes, the term "NEXTLINK" refers to NEXTLINK
Communications, Inc. and does not include its subsidiaries except for purposes
of financial data determined on a consolidated basis.
BRIEF DESCRIPTION OF THE NOTES
THESE SENIOR NOTES:
- will be senior obligations of NEXTLINK;
- will be limited to $400,000,000 aggregate principal amount;
- will mature on December 1, 2009; and
- will bear interest at the rate of 10 1/2% per annum to be paid
semi-annually on June 1 and December 1 of each year, commencing
June 1, 2000, to the registered holder at the close of business on the
preceding May 15 or November 15, as the case may be.
THESE SENIOR DISCOUNT NOTES:
- will be senior obligations of NEXTLINK;
- will be issued at a discount from their aggregate principal amount at
stated maturity to generate gross proceeds of approximately
$251,419,350;
- will mature on December 1, 2009;
- will not accrue cash interest prior to December 1, 2004;
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- will accrete at a rate of 12 1/8% per annum, compounded semi-annually
to an aggregate principal amount of $455,000,000; and
- beginning on December 1, 2004 will bear cash interest at the rate of
12 1/8% per annum to be paid semi-annually on June 1 and December 1 of
each year, commencing June 1, 2005, to the registered holder at the
close of business on the preceding May 15 or November 15, as the case
may be.
In a NEXTLINK bankruptcy, holders of senior discount notes would have a
claim measured by their notes' accreted value, not their principal amount.
Interest on the senior and senior discount notes will be computed on the
basis of a 360 day year of twelve 30-day months. (SectionSection 301, 307 and
310)
METHODS OF RECEIVING PAYMENTS ON THE NOTES
NEXTLINK will pay interest, principal and any other money due on the senior
and senior discount notes at the corporate trust office of the trustee in New
York City. That office is currently located at 114 West 47th Street, New York,
New York 10036. You must make arrangements to have your payments picked up at or
wired from that office. NEXTLINK may also choose to pay interest by mailing
checks. (SectionSection 301, 305 and 1002)
The senior and senior discount notes will be issued only in fully registered
form, without coupons, in denominations of $1,000 and any integral multiple of
$1,000. (Section 302) You will not be required to pay a service charge to
transfer or exchange notes, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. (Section 305)
RANKING
The notes:
- will be senior obligations of NEXTLINK;
- will rank equally in right of payment with each other and all existing
and future senior obligations of NEXTLINK, including our 9% Notes,
9 5/8% Notes, 12 1/2% Notes, 9.45% Senior Discount Notes, 10 3/4% Notes
due 2008, 10 3/4% Notes due 2009 and 12 1/4% Senior Discount Notes; and
- will rank senior in right of payment to all future subordinated
obligations of NEXTLINK.
Holders of secured obligations of NEXTLINK will, however, have claims that
are prior to the claims of the holders of the senior and senior discount notes
with respect to the assets securing those other obligations.
NEXTLINK's principal operations are conducted through its Subsidiaries, and
NEXTLINK is therefore dependent upon the cash flow of its Subsidiaries to meet
its obligations. NEXTLINK's Subsidiaries will have no obligation to guarantee or
otherwise pay amounts due under the senior and senior discount notes. Therefore,
the senior and senior discount notes will be effectively subordinated to all
indebtedness and other liabilities and commitments, including trade payables, of
NEXTLINK's Subsidiaries. Any right of NEXTLINK to receive assets of any
Subsidiary upon any liquidation or reorganization of that Subsidiary (and the
consequent right of holders of the senior and senior discount notes to
participate in those assets) will be effectively subordinated to the claims of
the Subsidiary's
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creditors, except to the extent that NEXTLINK itself is recognized as a creditor
of the Subsidiary.
As of September 30, 1999:
- the total amount of outstanding consolidated liabilities of NEXTLINK
and its Subsidiaries, including trade payables, was approximately
$3,297.0 million, of which $14.2 million were secured obligations; and
- the total amount of outstanding liabilities of NEXTLINK's Subsidiaries,
including trade payables, was $111.5 million, of which $4.0 million
were secured obligations.
In February, 2000, we entered into a $1,000.0 million of senior secured
credit facility, which is secured by liens on the assets purchased with the
proceeds thereof and $125 million of other assets, as well as a pledge of the
shares of NEXTLINK's direct subsidiaries.
For more information, see "Description of Other Material Indebtedness" and
"Summary Historical Consolidated Financial and Operating Data."
OPTIONAL REDEMPTION
SENIOR NOTES
NEXTLINK may opt to redeem the senior notes, in whole or in part, at any
time on or after December 1, 2004, at the redemption prices set forth below,
plus accrued and unpaid interest to but excluding the redemption date. If
NEXTLINK chooses this optional redemption, it is required to mail a notice of
the redemption not less than 30 and not more than 60 days prior to the date of
redemption to each holder of senior notes to be redeemed at the holder's address
as it appears in the note register.
The following table states the applicable redemption prices:
<TABLE>
<CAPTION>
YEAR BEGINNING DECEMBER 1, REDEMPTION PRICE
- -------------------------- ----------------
<S> <C>
2004........................................................ 105.250%
2005........................................................ 103.500%
2006........................................................ 101.750%
2007 and thereafter......................................... 100.000%
</TABLE>
The prices are expressed as percentages of the principal amount. NEXTLINK
may only redeem the senior notes in amounts of $1,000 principal amount or an
integral multiple of $1,000. (SectionSection 203, 1101, 1105 and 1107)
In addition, if on or before December 1, 2002, NEXTLINK receives net
proceeds from a sale of its Common Equity, NEXTLINK may opt to use all or a
portion of any such net proceeds to redeem senior notes in a principal amount of
up to 33 1/3% of the original principal amount of the senior notes at a
redemption price of 110.5% of their principal amount plus accrued and unpaid
interest to but excluding the redemption date so long as:
- at least 66 2/3% of the principal amount of the senior notes remains
outstanding after the redemption; and
- the redemption occurs on a redemption date within 90 days of the sale
of its Common Equity and NEXTLINK mails not less than 30 and not more
than 60 days prior to the date of redemption a notice to each holder of
senior notes to be redeemed.
If less than all of the senior notes are to be redeemed, the trustee shall
select the particular notes to be redeemed or any portion thereof that is an
integral multiple of $1,000.
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The trustee shall make this selection on a pro rata basis, by lot or by such
other method as it shall deem fair and appropriate.
SENIOR DISCOUNT NOTES
NEXTLINK may opt to redeem the senior discount notes, in whole or in part,
at any time on or after December 1, 2004 at the redemption prices set forth
below, plus accrued and unpaid interest to but excluding the redemption date. If
NEXTLINK chooses this optional redemption, it is required to mail a notice of
the redemption not less than 30 and not more than 60 days prior to the date of
the redemption to each holder of senior discount notes to be redeemed at the
holder's address as it appears in the note register.
The following table states the applicable redemption prices:
<TABLE>
<CAPTION>
YEAR BEGINNING DECEMBER 1, REDEMPTION PRICE
- -------------------------- ----------------
<S> <C>
2004........................................................ 106.063%
2005........................................................ 104.042%
2006........................................................ 102.021%
2007 and thereafter......................................... 100.000%
</TABLE>
The prices are expressed as percentages of the principal amount. NEXTLINK
may only redeem the senior discount notes in amounts of $1,000 principal amount
or an integral multiple of $1,000. (SectionSection 203, 1101, 1105 and 1107)
In addition, if on or before December 1, 2002, NEXTLINK receives net
proceeds from a sale of its Common Equity, NEXTLINK may opt to use all or a
portion of any such net proceeds to redeem senior discount notes in a principal
amount of up to 33 1/3% of the Accreted Value of the senior discount notes at a
redemption price of 112.125% of the Accreted Value of the senior discount notes
plus accrued and unpaid interest to but excluding the redemption date so long
as:
- at least 66 2/3% of the Accreted Value at the date of redemption of the
senior discount notes remains outstanding after the redemption; and
- the redemption occurs on a redemption date within 90 days of the sale
of its Common Equity and NEXTLINK mails not less than 30 and not more
than 60 days prior to the date of redemption a notice to each holder of
senior discount notes to be redeemed.
If less than all of the senior discount notes are to be redeemed, the
trustee shall select the particular notes to be redeemed or any portion thereof
that is an integral multiple of $1,000. The trustee shall make this selection on
a pro rata basis, by lot or by such other method as it shall deem fair and
appropriate.
MANDATORY REDEMPTION; SINKING FUND
Except as described under "--Covenants--Limitation on Asset Dispositions"
and "--Covenants--Change of Control" below, NEXTLINK is not required to purchase
or make mandatory redemption payments or sinking fund payments with respect to
the senior or senior discount notes.
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COVENANTS
In each of the indentures, NEXTLINK has agreed to certain restrictions that
limit its and its Restricted Subsidiaries' ability to:
(1) Incur additional Debt;
(2) issue Preferred Stock;
(3) pay dividends, acquire shares of Capital Stock of NEXTLINK, make
Investments or redeem Debt of NEXTLINK which is subordinate in right of
payment to the senior or senior discount notes;
(4) restrict the ability of any Restricted Subsidiary to pay dividends,
to make loans or advances to NEXTLINK or any other Restricted Subsidiary or
to transfer any of its property or assets to NEXTLINK or any other
Restricted Subsidiary;
(5) create liens;
(6) engage in sale and leaseback transactions;
(7) make Asset Dispositions;
(8) issue or sell shares of Capital Stock of Restricted Subsidiaries;
and
(9) enter into transactions with Affiliates and Related Persons.
In addition, if a Change of Control occurs, each holder of notes will have
the right to require NEXTLINK to repurchase all or part of such holder's notes
at a price equal to: (1) in the case of senior notes, 101% of their principal
amount plus accrued and unpaid interest to the date of purchase or (2) in the
case of senior discount notes, 101% of their Accreted Value (if the Offer to
Purchase is made on or prior to December 1, 2004) or 101% of their principal
amount plus accrued and unpaid interest to the date of purchase (if such Offer
to Purchase is consummated thereafter). The above limitations are "restrictive
covenants" that are promises that we make to you about how we will run our
business, or business actions that we promise not to take. A more detailed
description of the restrictive covenants and the exceptions to them follows
below.
LIMITATION ON CONSOLIDATED DEBT
NEXTLINK may not, and may not permit any Restricted Subsidiary to, Incur any
Debt unless either:
(1) the ratio of:
(a) the aggregate consolidated principal amount of Debt of NEXTLINK
outstanding as of the most recent available quarterly or annual balance
sheet, after giving pro forma effect to the Incurrence of such Debt and
any other Debt Incurred since such balance sheet date and the receipt and
application of the proceeds thereof
to
(b) Consolidated Cash Flow Available for Fixed Charges for the four
full fiscal quarters next preceding the Incurrence of such Debt for which
consolidated financial statements are available, determined on a pro
forma basis as if
(x) any such Debt had been Incurred and the proceeds thereof
had been applied at the beginning of such four fiscal quarters;
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(y) the net income (or loss) for such period of any Person or
related to any assets disposed of by NEXTLINK or a Restricted
Subsidiary prior to the end of such period had been excluded from
Consolidated Net Income; and
(z) the net income (or loss) for such period of any Person or
related to any assets acquired by NEXTLINK or any Restricted
Subsidiary prior to the end of such period had been included in
Consolidated Net Income;
would be less than 5.5 to 1 for such four quarter periods ending on or
prior to December 31, 1999 and 5.0 to 1 for such periods ending
thereafter;
or
(2) NEXTLINK's Consolidated Capital Ratio as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect
to the Incurrence of such Debt, any issuance of capital stock (other than
Disqualified Stock) since such balance sheet date, any increase in
paid-in-capital (other than in respect of Disqualified Stock) since such
balance sheet date and the Incurrence of any other Debt since such balance
sheet date and the receipt and application of the proceeds thereof, is less
than 2.0 to 1.
Notwithstanding the foregoing limitation, NEXTLINK and any Restricted
Subsidiary may Incur the following:
(1) Debt under any one or more Bank Credit Agreements or Vendor
Financing Facilities in an aggregate principal amount at any one time not to
exceed the greater of:
(a) $250 million and
(b) 85% of the Eligible Receivables, and any renewal, extension,
refinancing or refunding thereof in an amount which, together with any
principal amount remaining outstanding or available under all Bank Credit
Agreements and Vendor Financing Facilities of NEXTLINK and its Restricted
Subsidiaries, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of any Bank Credit
Agreement so refinanced plus the amount of expenses incurred in
connection with such refinancing, does not exceed the aggregate principal
amount outstanding or available under all such Bank Credit Agreements and
Vendor Financing Facilities of NEXTLINK and its Restricted Subsidiaries
immediately prior to such renewal, extension, refinancing or refunding;
(2) Purchase Money Debt Incurred to finance the construction,
acquisition or improvement of Telecommunications Assets, provided that the
net proceeds of such Purchase Money Debt do not exceed 100% of the cost of
construction, acquisition or improvement price of the applicable
Telecommunications Assets;
(3) Debt owed by NEXTLINK to any Restricted Subsidiary of NEXTLINK or
Debt owed by a Restricted Subsidiary to NEXTLINK or a Restricted Subsidiary
of NEXTLINK; provided, however, that upon either
(a) the transfer or other disposition by such Restricted Subsidiary
or NEXTLINK of any Debt so permitted to a Person other than NEXTLINK or
another Restricted Subsidiary of NEXTLINK; or
(b) the issuance (other than directors' qualifying shares), sale,
lease, transfer or other disposition of shares of Capital Stock
(including by consolidation or merger) of such Restricted Subsidiary, as
a result of which the obligor of such Debt ceases to be a Restricted
Subsidiary, the provisions of this clause (3) shall no longer be
applicable
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to such Debt and such Debt shall be deemed to have been Incurred at the
time of such transfer or other disposition;
(4) Debt Incurred to renew, extend, refinance or refund (each, a
"refinancing") Debt outstanding at the date of the indentures or incurred
pursuant to the preceding paragraph or clause (2) of this paragraph or the
senior or senior discount notes in an aggregate principal amount not to
exceed the aggregate principal amount of and accrued interest on the Debt so
refinanced plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of the Debt so refinanced or the
amount of any premium reasonably determined by NEXTLINK as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the amount of expenses of NEXTLINK incurred in
connection with such refinancing; provided, however, that Debt the proceeds
of which are used to refinance the senior or senior discount notes or Debt
which is PARI PASSU to the senior or senior discount notes or debt which is
subordinate in right of payment to the senior or senior discount notes shall
only be permitted if:
(a) in the case of any refinancing of the senior or senior discount
notes or Debt which is PARI PASSU to the senior or senior discount notes,
the refinancing Debt is made PARI PASSU to the senior or senior discount
notes or subordinated to the senior or senior discount notes, and, in the
case of any refinancing of Debt which is subordinated to the senior or
senior discount notes, the refinancing Debt constitutes Subordinated
Debt; and
(b) in either case, the refinancing Debt by its terms, or by the
terms of any agreement or instrument pursuant to which such Debt is
issued,
(x) does not provide for payments of principal of such Debt at
the stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by NEXTLINK (including any
redemption, retirement or repurchase which is contingent upon events
or circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon any event of default thereunder), in
each case prior to the time the same are required by the terms of
the Debt being refinanced; and
(y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by NEXTLINK) of such debt at
the option of the holder thereof prior to the final stated maturity
of the Debt being refinanced, other than a redemption or other
retirement at the option of the holder of such Debt (including
pursuant to an offer to purchase made by NEXTLINK) which is
conditioned upon a change substantially similar to those described
under "--Change of Control" or which is pursuant to provisions
substantially similar to those described under "--Limitation on
Asset Dispositions";
(5) Debt consisting of Permitted Interest Rate or Currency Protection
Agreements;
(6) Debt outstanding under the senior or senior discount notes;
(7) Subordinated Debt invested by:
(a) a group of employees of NEXTLINK, which includes the Chief
Executive Officer of NEXTLINK, who own, directly or indirectly, through
an employee stock ownership plan or arrangement, shares of NEXTLINK's
Capital Stock or
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(b) any other Person that controls NEXTLINK:
(x) on the Issue Date or
(y) after a Change of Control, provided that NEXTLINK is not in
default with respect to its obligations described under "--Change of
Control" below;
(8) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license obligations of
NEXTLINK or a Restricted Subsidiary, or in respect of a letter of credit
obtained to secure such performance; and
(9) Debt not otherwise permitted to be Incurred pursuant to clauses
(1) through (8) above, which, together with any other outstanding Debt
Incurred pursuant to this clause (9), has an aggregate principal amount or,
in the case of Debt issued at a discount, an accreted amount (determined in
accordance with generally accepted accounting principles) at the time of
Incurrence not in excess of $10 million at any time outstanding.
For purposes of determining compliance with this "Limitation on Consolidated
Debt" covenant, if an item of Debt meets the criteria of more than one of the
types of Debt NEXTLINK is permitted to incur pursuant to the foregoing clauses
(1) through (9) or the first unnumbered paragraph of this "Limitation on
Consolidated Debt," NEXTLINK shall have the right, in its sole discretion, to
classify such item of Debt and shall only be required to include the amount and
type of such Debt under the clause or paragraph permitting the Debt as so
classified. The determination of any particular amount of Debt under such
covenant shall be made without duplication for Guarantees or Liens supporting
Debt otherwise included in the determination of a particular amount. (Section
1007)
LIMITATION ON DEBT AND PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
NEXTLINK may not permit any Restricted Subsidiary (other than a Restricted
Subsidiary that has fully and unconditionally Guaranteed the notes on an
unsubordinated basis) to Incur or suffer to exist any Debt or issue any
Preferred Stock except:
(1) Debt or Preferred Stock outstanding on the date of the indentures
after giving effect to the application of the proceeds of the senior or
senior discount notes;
(2) Debt Incurred or Preferred Stock issued to and held by NEXTLINK or
a Restricted Subsidiary of NEXTLINK (provided that such Debt or Preferred
Stock is at all times held by NEXTLINK or a Restricted Subsidiary of
NEXTLINK);
(3) Debt Incurred or Preferred Stock issued by a Person prior to the
time:
(a) such Person became a Restricted Subsidiary of NEXTLINK,
(b) such Person merges into or consolidates with a Restricted
Subsidiary of NEXTLINK or
(c) another Restricted Subsidiary of NEXTLINK merges into or
consolidates with such Person (in a transaction in which such Person
becomes a Restricted Subsidiary of NEXTLINK), which Debt or Preferred
Stock was not Incurred or issued in anticipation of such transaction and
was outstanding prior to such transaction;
(4) Debt consisting of Permitted Interest Rate and Currency Protection
Agreements;
(5) Debt or Preferred Stock of a Joint Venture;
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(6) Debt under any one or more Bank Credit Agreements or Vendor
Financing Facilities (and renewals, extensions, refinancings or refundings
thereof) which is permitted to be outstanding under clause (1) of
"--Limitation on Consolidated Debt";
(7) Debt consisting of Guarantees of the senior or senior discount
notes;
(8) Debt or Preferred Stock which is exchanged for, or the proceeds of
which are used to refinance, refund or redeem, any Debt or Preferred Stock
permitted to be outstanding pursuant to clauses (1), (3) and (9) hereof (or
any extension or renewal thereof) (for purposes hereof, a "refinancing"), in
an aggregate principal amount, in the case of Debt, or with an aggregate
liquidation preference, in the case of Preferred Stock, not to exceed the
aggregate principal amount of the Debt so refinanced or the aggregate
liquidation preference of the Preferred Stock so refinanced, plus the amount
of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Debt or Preferred Stock so refinanced or the
amount of any premium reasonably determined by NEXTLINK as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the amount of expenses of NEXTLINK and the
Restricted Subsidiary incurred in connection therewith and provided the Debt
or Preferred Stock incurred or issued upon such refinancing by its terms, or
by the terms of any agreement or instrument pursuant to which such Debt or
Preferred Stock is Incurred or issued,
(a) does not provide for payments of principal or liquidation value
at the stated maturity of such Debt or Preferred Stock or by way of a
sinking fund applicable to such Debt or Preferred Stock or by way of any
mandatory redemption, defeasance, retirement or repurchase of such Debt
or Preferred Stock by NEXTLINK or any Restricted Subsidiary of NEXTLINK
(including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by
virtue of acceleration of such Debt upon an event of default thereunder),
in each case prior to the time the same are required by the terms of the
Debt or Preferred Stock being refinanced and
(b) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by NEXTLINK or a Restricted
Subsidiary) of such Debt or Preferred Stock at the option of the holder
thereof prior to the stated maturity of the Debt or Preferred Stock being
refinanced, other than a redemption or other retirement at the option of
the holder of such Debt or Preferred Stock (including pursuant to an
offer to purchase made by NEXTLINK or a Restricted Subsidiary) which is
conditioned upon the change of control of NEXTLINK pursuant to provisions
substantially similar to those described under "--Change of Control" or
which is pursuant to provisions substantially similar to those described
under "--Limitation on Asset Dispositions," and provided, further, that
in the case of any exchange or redemption of Preferred Stock of a
Restricted Subsidiary, such Preferred Stock may only be exchanged for or
redeemed with Preferred Stock of such Restricted Subsidiary;
(9) Purchase Money Debt Incurred to finance the construction,
acquisition or improvement of Telecommunications Assets, provided that the
net proceeds of such Purchase Money Debt do not exceed 100% of the cost of
construction, acquisition or improvement price of the applicable
Telecommunications Assets;
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(10) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license obligations of
NEXTLINK or a Restricted Subsidiary, or in respect of a letter of credit
obtained to secure such performance; and
(11) Debt not otherwise permitted to be incurred pursuant to clauses
(1) through (10) above, which, together with any other outstanding Debt
incurred pursuant to this clause (11), has an aggregate principal amount
(or, in the case of Debt issued at a discount, an accreted amount
(determined in accordance with generally accepted accounting principles) at
the time of Incurrence) not in excess of $10 million at any time
outstanding. (Section 1008)
For purposes of determining compliance with this "Limitation on Debt and
Preferred Stock of Restricted Subsidiaries" covenant, in the event that an item
of Debt meets the criteria of more than one of the types of Debt a Restricted
Subsidiary is permitted to incur pursuant to the foregoing clauses (1) through
(11), NEXTLINK shall have the right, in its sole discretion, to classify such
item of Debt and shall be only required to include the amount and type of such
Debt under the clause permitting the Debt as so classified. The determination of
any particular amount of Debt under such covenant shall be made without
duplication for Guarantees or Liens supporting Debt or otherwise included in the
determination of a particular amount. (Section 1008)
LIMITATION ON RESTRICTED PAYMENTS
NEXTLINK may not:
(1) directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders thereof (in
their capacity as such), excluding any dividends or distributions payable
solely in shares of its Capital Stock (other than Disqualified Stock) or in
options, warrants or other rights to acquire its Capital Stock (other than
Disqualified Stock);
(2) permit any Restricted Subsidiary to purchase, redeem, or otherwise
retire or acquire for value:
(a) any Capital Stock of NEXTLINK or any Related Person of NEXTLINK;
or
(b) any options, warrants or rights to purchase or acquire shares of
Capital Stock of NEXTLINK or any Related Person of NEXTLINK or any
securities convertible or exchangeable into shares of Capital Stock of
NEXTLINK or any Related Person of NEXTLINK;
(3) make, or permit any Restricted Subsidiary to make, any Investment
in, or payment on a Guarantee of any obligation of, any Person, other than
NEXTLINK or a Restricted Subsidiary of NEXTLINK, except for Permitted
Investments; and
(4) permit any Restricted Subsidiary to, redeem, defease, repurchase,
retire or otherwise acquire or retire for value, prior to any scheduled
maturity, repayment or sinking fund payment, Debt of NEXTLINK which is
subordinate in right of payment to the Notes (each of clauses (1) through
(4) being a "Restricted Payment")
if:
(a) a Default or an Event of Default shall have occurred and is
continuing; or
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(b) upon giving effect to such Restricted Payment, NEXTLINK could
not Incur at least $1.00 of additional Debt pursuant to the terms of the
indentures described in the first paragraph of "--Limitation on
Consolidated Indebtedness" above; or
(c) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments from April 25, 1996 exceeds the sum of:
(A) 50% of cumulative Consolidated Net Income (or, in the case
Consolidated Net Income shall be negative, less 100% of such
deficit) since the end of the last full fiscal quarter prior to
April 25, 1996 through the last day of the last full fiscal quarter
ending immediately preceding the date of such Restricted Payment;
plus
(B) $5 million; plus
(C) 100% of the net reduction in Investments in any
Unrestricted Subsidiary since the end of the last full fiscal
quarter prior to April 25, 1996 resulting from payments of interest
on Debt, dividends, repayments of loans or advances, or other
transfers of assets, in each case to NEXTLINK or any Restricted
Subsidiary of NEXTLINK from such Unrestricted Subsidiary (except to
the extent that any such payment is included in the calculation of
Consolidated Net Income) or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries; PROVIDED that the amount
included in this clause (C) shall not exceed the amount of
Investments previously made by NEXTLINK and its Restricted
Subsidiaries in such Unrestricted Subsidiary;
PROVIDED, FURTHER, that NEXTLINK or a Restricted Subsidiary of NEXTLINK may
make any Restricted Payment with the aggregate net proceeds received after
April 25, 1996, including the fair value of property other than cash
(determined in good faith by the Board of Directors of NEXTLINK, as
conclusively evidenced by a Board Resolution filed with the trustee), as
capital contributions to NEXTLINK or from the issuance (other than to a
Restricted Subsidiary) of Capital Stock (other than Disqualified Stock) of
NEXTLINK and warrants, rights or options on Capital Stock (other than
Disqualified Stock) of NEXTLINK and the principal amount of Debt of NEXTLINK
that has been converted into Capital Stock (other than Disqualified Stock
and other than by a Restricted Subsidiary) of NEXTLINK after April 25, 1996.
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BOOK-ENTRY; DELIVERY AND FORM
The new notes will initially be represented by one or more permanent global
notes in definitive, fully registered book-entry form, without interest coupons
that will be deposited with, or on behalf of, The Depository Trust Company, or
DTC. The new notes will be registered in the name of DTC or its nominee, on
behalf of the acquirers of new notes represented thereby for credit to the
respective accounts of the acquirers, or to such other accounts as they may
direct, at DTC, or Morgan Guaranty Trust Company of New York, Brussels Office,
as operator of the Euroclear System, or Cedel Bank, societe anonyme.
Except as set forth below, the global notes may be transferred, in whole and
not in part, solely to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the global notes may not be exchanged for notes
in physical, certificated form except in the limited circumstances described
below.
All interests in the global notes, including those held through Euroclear or
Cedel, may be subject to the procedures and requirements of DTC. Those interests
held through Euroclear or Cedel may also be subject to the procedures and
requirements of such systems.
CERTAIN BOOK-ENTRY PROCEDURES FOR THE GLOBAL NOTES
The descriptions of the operations and procedures of DTC, Euroclear and
Cedel set forth below are provided solely as a matter of convenience. These
operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. NEXTLINK
does not take any responsibility for these operations or procedures, and you are
urged to contact the relevant system or its participants directly to discuss
these matters.
DTC has advised NEXTLINK that it is
(1) a limited purpose trust company organized under the laws of the State of
New York,
(2) a "banking organization" within the meaning of the New York Banking Law,
(3) a member of the Federal Reserve System,
(4) a "clearing corporation" within the meaning of the Uniform Commercial
Code, as amended, and
(5) a "clearing agency" registered pursuant to Section 17A of the Exchange
Act.
DTC was created to hold securities for its participants and facilitates the
clearance and settlement of securities transactions between participants through
electronic book-entry changes to the accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates. DTC's
participants include securities brokers and dealers, banks and trust companies,
clearing corporations and certain other organizations. Indirect access to DTC's
system is also available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Investors who are not participants
may beneficially own securities held by or on behalf of DTC only through
participants or indirect participants.
NEXTLINK expects that, pursuant to procedures established by DTC, ownership
of the new notes will be shown on, and the transfer of ownership thereof will be
effected only
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through, records maintained by DTC (with respect to the interests of
participants) and the records of participants and the indirect participants
(with respect to the interests of persons other than participants).
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Accordingly, the ability to transfer interests in the new notes represented by a
global note to such persons may be limited. In addition, because DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in new notes represented by a global note to pledge or transfer such interest to
persons or entities that do not participate in DTC's system, or to otherwise
take actions in respect of such interest, may be affected by the lack of a
physical definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
or such nominee, as the case may be, will be considered the sole owner or holder
of the notes represented by the global note for all purposes under each of the
indentures. Except as provided below, owners of beneficial interests in a global
note
- will not be entitled to have new notes represented by such global note
registered in their names,
- will not receive or be entitled to receive physical delivery of
certificated new notes, and
- will not be considered the owners or holders thereof under either of the
indentures for any purpose, including with respect to the giving of any
direction, instruction or approval to the trustee thereunder.
Accordingly, each holder owning a beneficial interest in a global note must rely
on the procedures of DTC and, if such holder is not a participant or an indirect
participant, on the procedures of the participant through which such holder owns
its interest, to exercise any rights of a holder of notes under either of the
indentures or such global note. NEXTLINK understands that under existing
industry practice, in the event that NEXTLINK requests any action of holders of
notes, or a holder that is an owner of a beneficial interest in a global note
desires to take any action that DTC, as the holder of such global note, is
entitled to take, DTC would authorize the participants to take such action and
the participants would authorize holders owning through such participants to
take such action or would otherwise act upon the instruction of such holders.
Neither NEXTLINK nor the trustees under the indentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of notes by DTC, or for maintaining, supervising or
reviewing any records of DTC relating to such new notes.
Payments with respect to the principal of, and premium, if any, and interest
on, any new notes represented by a global note registered in the name of DTC or
its nominee on the applicable record date will be payable by the trustees to or
at the direction of DTC or its nominee in its capacity as the registered holder
of the global note representing the new notes under each of the indentures.
Under the terms of each of the indentures, NEXTLINK and the trustees may treat
the persons in whose names the new notes, including the global notes, are
registered as the owners thereof for the purpose of receiving payment thereon
and for any and all other purposes whatsoever. Accordingly, neither NEXTLINK nor
the trustees have or will have any responsibility or liability for the payment
of such amounts to owners of
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beneficial interests in a global note (including principal, premium, if any,
liquidated damages, if any, and interest). Payments by the participants and the
indirect participants to the owners of beneficial interests in a global note
will be governed by standing instructions and customary industry practice and
will be the responsibility of the participants or the indirect participants and
DTC.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Cedel will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Cross-market transfers between the participants in DTC, on the one hand, and
Euroclear or Cedel participants, on the other hand, will be effected through DTC
in accordance with DTC's rules on behalf of Euroclear or Cedel, as the case may
be, by its respective depositary; however, such cross-market transactions will
require delivery of instructions to Euroclear or Cedel, as the case may be, by
the counterpart in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
Cedel, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant global notes in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC.
Euroclear participants and Cedel participants may not deliver instructions
directly to the depositaries for Euroclear or Cedel.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a global note from a participant in
DTC will be credited, and any such crediting will be reported to the relevant
Euroclear or Cedel participant, during the securities settlement processing day
(which must be a business day for Euroclear and Cedel) immediately following the
settlement date of DTC. Cash received in Euroclear or Cedel as a result of sales
of interest in a global note by or through a Euroclear or Cedel participant to a
participant in DTC will be received with value on the settlement date of DTC but
will be available in the relevant Euroclear or Cedel cash account only as of the
business day for Euroclear or Cedel following DTC's settlement date.
Although DTC, Euroclear and Cedel have agreed to the foregoing procedures to
facilitate transfers of interests in the global notes among participants in DTC,
Euroclear and Cedel, they are under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither NEXTLINK nor the trustees will have any responsibility for the
performance by DTC, Euroclear or Cedel or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
CERTIFICATED NOTES
If:
- NEXTLINK notifies the respective trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation,
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- NEXTLINK, at its option, notifies the respective trustee in writing that
it elects to cause the issuance of notes in definitive form under the
respective indenture or
- upon the occurrence of certain other events as provided in the indentures,
then, upon surrender by DTC of the global notes, certificated notes will be
issued to each person that DTC identifies as the beneficial owner of the notes
represented by the global notes. Upon any such issuance, the trustee is required
to register such certificated notes in the name of such person or persons (or
the nominee of any thereof) and cause the same to be delivered thereto.
Neither NEXTLINK nor the trustees shall be liable for any delay by DTC or
any participant or indirect participant in identifying the beneficial owners of
the related notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes (including with
respect to the registration and delivery, and the respective principal amounts,
of the notes to be issued).
YEAR 2000
DTC management is aware that some computer applications, systems and the
like for processing data that are dependent upon calendar dates, including dates
before, on and after January 1, 2000, may encounter "year 2000 problems." DTC
has informed its participants and other members of the financial community that
it has developed and is implementing a program so that its systems, as the same
relate to the timely payment of distributions (including principal and income
payments) to securityholders, book-entry deliveries and settlement of trades
within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third-party vendors from whom DTC licenses software and hardware, and
third-party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the industry that it is contacting (and will
continue to contact) third-party vendors from whom DTC acquires services to:
- impress upon them the importance of such services being year 2000
compliant; and
- determine the extent of their efforts for year 2000 remediation (and, as
appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as it
deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the industry for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of United States federal income tax
consequences of the exchange of old notes for new notes by note holders. It only
applies to note holders who acquire the new notes in the exchange offer, and it
does not purport to be a complete analysis of all potential tax effects. The
discussion is based on the tax law as it exists today although it could change
at any time, and any change could be applied retroactively in a manner that
could adversely affect a holder of the notes. This discussion does not address
the special rules applicable to note holders such as insurance companies and
other financial institutions, dealers in securities, tax-exempt organizations,
traders in securities that elect to mark to market, persons whose functional
currency is not the U.S. dollar, and persons holding the notes as part of a
"straddle," "hedge" or "conversion transaction," and it deals only with notes
held as "capital assets" within the meaning of Section 1221 of the Internal
Revenue Code.
PERSONS CONSIDERING THE EXCHANGE OF OLD NOTES FOR NEW NOTES SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE TAX CONSIDERATIONS
DISCUSSED BELOW TO THEIR PARTICULAR SITUATIONS AS WELL AS THE APPLICATION OF ANY
STATE, LOCAL, FOREIGN OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS.
For purposes of this discussion, a U.S. holder is any of the following:
- citizens and residents of the United States for U.S. federal income
tax purposes;
- corporations, partnerships, and other entities created or organized
in or under the laws of the United States or any political subdivision
thereof;
- estates, if the income of the estate is subject to U.S. federal
income taxation regardless of its sources, and trusts, if a U.S. court can
exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of
the trust; and
- other persons whose worldwide income or gain is otherwise subject to
U.S. federal income taxation on a net income basis.
A non-U.S. holder is any note holder who or that is not a U.S. person for
U.S. federal income tax purposes.
THE EXCHANGE OFFER
The exchange of old notes for new notes under the exchange offer should be
treated as a continuation of the corresponding old notes because the terms of
the new notes are substantially the same as the terms of the old notes.
Accordingly, the exchange should not constitute a taxable event to holders and,
therefore:
- no gain or loss should be realized by holders upon receipt of a new note;
- the holding period of the new note should include the holding period of
the old note; and
- the adjusted tax basis of the new note should be the same as the adjusted
tax basis of the old note immediately before the exchange.
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CONSEQUENCES TO U.S. HOLDERS
INTEREST ON SENIOR NOTES
Cash basis taxpayers, including most individuals, will recognize ordinary
interest income when they receive interest payments on the senior notes. Accrual
basis taxpayers will recognize ordinary interest income as interest on the
senior notes accrues.
ORIGINAL ISSUE DISCOUNT ON SENIOR DISCOUNT NOTES
The senior discount notes were issued with original issue discount ("OID").
In general, holding senior discount notes will result in taxable ordinary
interest income in an amount equal to the accretion on the senior discount notes
during their accretion period and the interest that accrues on their principal
amount thereafter. Thus, even cash basis taxpayers will have to recognize
interest income on the senior discount notes as it accrues throughout the period
they hold them, whether or not interest is payable in cash.
OID is defined as the excess of:
(1) the stated redemption price at maturity of a senior discount note
over
(2) its issue price.
The "stated redemption price at maturity" of a senior discount note is the
sum of all payments (including cash interest) provided by the senior discount
note. The "issue price" of a senior discount note is the first price at which a
substantial amount of the senior discount notes are sold to the public for cash
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity as underwriters, placement agents or wholesalers).
A note holder is required to include OID in income as ordinary interest as
it accrues under the constant yield method, regardless of the note holder's
regular method of accounting. Because OID is defined to include cash interest
payments, they need not be reported separately as taxable income.
In general, the amount of OID included in income by the holder of a senior
discount note is the sum of the daily portions of OID for each day during the
taxable year or portion of the taxable year on which such holder held such
senior discount note. The "daily portion" is determined by allocating the OID
for the actual period ratably to each day in that accrual period. The "accrual
period" for a senior discount note may be of any length and may vary in length
over the term of a senior discount note, provided that each accrual period is no
longer than one year and each scheduled payment of principal or interest occurs
either on the first or final day of an accrual period.
The amount of OID for an accrual period is generally equal to the product of
the senior discount note's adjusted issue price at the beginning of such accrual
period and its yield to maturity. The "adjusted issue price" of a senior
discount note at the beginning of any accrual period is the sum of the issue
price of the senior discount note plus the amount of OID allocable to all prior
accrual periods minus the amount of any prior payments on the senior discount
note. Under the constant yield method of determining OID, a note holder
generally will have to include increasingly greater amounts of OID in income in
successive accrual periods during the accretion period. Following the accretion
period, a U.S. holder generally will accrue OID equal to the cash payments being
made on the senior discount notes.
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SALE, EXCHANGE AND RETIREMENT OF NOTES
A note holder will recognize gain or loss upon the sale, retirement or other
taxable disposition of a note. Such gain or loss will generally equal the
difference between:
- the amount of cash and the fair market value of property received
for the note (other than amounts representing accrued but unpaid interest)
and
- the holder's adjusted tax basis in the note.
A holder's adjusted tax basis in senior notes will generally equal the
holder's purchase price; a holder's adjusted tax basis in senior discount notes
will generally equal the holder's purchase price, increased by any accrued OID,
and reduced by any cash payments on the senior discount notes. Gain or loss
generally will be capital gain or loss and will be long-term capital gain or
loss, if the holder has held such notes for more than one year. Long-term
capital gain of a non-corporate note holder is generally subject to a maximum
tax rate of 20%. There are limits on the deductibility of capital losses. Any
amounts paid with respect to accrued but unpaid interest generally will be
taxable as ordinary interest income. Gain or loss realized on the sale,
retirement or other taxable disposition of a note derived by a note holder
generally will be treated as U.S. source income or loss for foreign tax credit
purposes.
CONSEQUENCES TO NON-U.S. HOLDERS
INTEREST ON NOTES
Generally, interest paid on the notes to a non-U.S. holder will not be
subject to U.S. federal income tax if:
- the interest is not effectively connected with the conduct of a trade or
business within the U.S. by the non-U.S. holder;
- the non-U.S. holder does not actually or constructively own 10% or more of
the total voting power of all classes of NEXTLINK stock entitled to vote
and is not a controlled foreign corporation with respect to which NEXTLINK
is a "related person" within the meaning of the Internal Revenue Code; and
- the beneficial owner, under penalty of perjury, certifies that the owner
is not a U.S. person and provides the owner's name and address.
The certification described in the last clause above may be provided by a
securities clearing organization, a bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business and
holds the notes and certifies under penalty of perjury that it has received a
similar statement from the non-U.S. holder or from a similar financial
institution between the non-U.S. holder and it, and has furnished the payor with
a copy. Under recently adopted U.S. Treasury regulations, which generally are
effective for payments made after December 31, 2000, the certification may also
be provided:
- directly by the non-U.S. holder;
- in the case of a non-U.S. holder that is treated as a partnership or other
fiscally transparent entity, by the partners, shareholders or other
beneficiaries of the entity; or
- qualified financial institutions or other qualified entities on behalf of
the non-U.S. holder.
A holder that is not exempt from tax under these rules will be subject to
U.S. federal income tax withholding at a rate of 30% unless the interest is
effectively connected with the conduct of a U.S. trade or business, in which
case the interest will be subject to the U.S.
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federal income tax on net income that applies to U.S. persons generally.
Corporate non-U.S. holders that receive interest income that is effectively
connected with the conduct of a trade or business within the U.S. may also be
subject to an additional "branch profits" tax on such income. Non-U.S. holders
should consult applicable income tax treaties, which may provide different
rules.
SALE, EXCHANGE AND RETIREMENT OF NOTES
A non-U.S. holder generally will not be subject to U.S. federal income tax
on gain recognized upon the sale or other disposition of the notes unless:
- the gain is, or is treated as, effectively connected with the conduct of a
trade or business within the U.S. by the non-U.S. holder; or
- in the case of a non-U.S. holder who is a nonresident alien individual and
holds the notes as a capital asset, the holder is present in the U.S. for
183 or more days in the taxable year.
FEDERAL ESTATE TAXES
A note beneficially owned by an individual who is a non-U.S. holder at the
time of his or her death generally will not be subject to U.S. federal estate
tax as a result of the individual's death, provided that:
- the individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of NEXTLINK stock entitled to
vote within the meaning of Section 871(h)(3) of the Internal Revenue Code;
and
- interest payments with respect to such note would not have been, if
received at the time of the individual's death, effectively connected with
the conduct of a U.S. trade or business by the individual.
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. HOLDERS
Information reporting and backup withholding may apply to payments of
principal or interest, the accrual of OID, or the proceeds of the sale or other
disposition of the notes made by NEXTLINK or another payor with respect to
non-corporate U.S. holders. These holders generally will be subject to backup
withholding at a rate of 31% unless the recipient of the payment supplies a
taxpayer identification number and other information, certified under penalties
of perjury, or otherwise establishes, in the manner prescribed by law, an
exemption from backup withholding. Any amount withheld under backup withholding
is allowable as a credit against the U.S. holder's federal income tax, upon
furnishing the required information to the Internal Revenue Service.
NON-U.S. HOLDERS
Generally, information reporting and backup withholding of U.S. federal
income tax at a rate of 31% may apply to payments of principal or interest, the
accrual of OID, and premium, if any, to a non-U.S. holder if the holder fails to
certify that the holder is a non-U.S. person.
The payment of the proceeds on the disposition of notes to or through the
U.S. office of a U.S. or foreign broker will be subject to information reporting
and backup withholding unless the owner provides the certification described
above or otherwise establishes an exemption. The proceeds of the disposition by
a non-U.S. holder of notes to or through a foreign office of a broker will not
be subject to backup withholding. However, if the broker is
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a U.S. person, a controlled foreign corporation for U.S. tax purposes, or a
foreign person 50% or more of whose gross income from all sources is from
activities that are effectively connected with a U.S. trade or business or,
after December 31, 2000, a foreign partnership, if at any time during its tax
year, (i) one or more of its partners are U.S. persons also, in the aggregate,
hold more than 50% of the income or capital interest in the partnership or (ii)
it is engaged in the conduct of a trade or business in the United States,
information reporting will apply unless:
- the broker has documentary evidence in its files of the owner's foreign
status; or
- the owner otherwise establishes an exemption.
Both backup withholding and information reporting will apply to the proceeds
from dispositions if the broker has actual knowledge that the holder is a U.S.
holder.
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DESCRIPTION OF OTHER MATERIAL INDEBTEDNESS
DESCRIPTION OF THE 12 1/2% NOTES
GENERAL. NEXTLINK and NEXTLINK Capital, Inc. (a wholly owned subsidiary of
NEXTLINK) together issued $350 million of 12 1/2% Senior Notes Due April 15,
2006 pursuant to an indenture among NEXTLINK, NEXTLINK Capital and United States
Trust Company of New York, as trustee. On September 6, 1996, NEXTLINK and
NEXTLINK Capital consummated an offer to exchange these notes for $350 million
of 12 1/2% Senior Notes Due April 15, 2006 that had been registered under the
Securities Act.
PRINCIPAL, MATURITY AND INTEREST. The 12 1/2% Notes are limited in
aggregate principal amount to $350 million and will mature on April 15, 2006.
Interest on the 12 1/2% Notes accrues at 12 1/2% per annum and is payable
semi-annually in arrears on April 15 and October 15 of each year.
RANKING. The 12 1/2% Notes are unsecured senior obligations of the issuers,
will rank equally in right of payment with all existing and future senior
obligations of the issuers and will rank senior in right of payment to all
future subordinated obligations of the issuers.
REDEMPTION. The 12 1/2% Notes are redeemable on or after April 15, 2001, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on April 15 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2001........................................................ 106.250%
2002........................................................ 104.167%
2003........................................................ 102.083%
2004 and thereafter......................................... 100.000%
</TABLE>
Except in connection with a Change of Control or an Asset Disposition (as
defined in the indenture relating to the 12 1/2% Notes) of NEXTLINK, the issuers
are not required to make mandatory redemption or sinking fund payments with
respect to the 12 1/2% Notes.
COVENANTS. The indenture relating to the 12 1/2% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted payments, incur certain liens to secure debt
which is subordinated to or ranks equally with the 12 1/2% Notes, engage in any
sale and leaseback transaction, sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of NEXTLINK, enter into
certain transactions with affiliates, or incur indebtedness that is subordinate
in right of payment to any senior indebtedness and senior in right of payment to
the 12 1/2% Notes. The indenture relating to the 12 1/2% Notes permits, under
certain circumstances, NEXTLINK's subsidiaries to be deemed unrestricted
subsidiaries and thus not subject to the restrictions of the indenture.
EVENTS OF DEFAULT. The indenture relating to the 12 1/2% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
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- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
DESCRIPTION OF THE 9 5/8% NOTES
GENERAL. NEXTLINK issued $400 million of 9 5/8% Senior Notes Due 2007
pursuant to an indenture between NEXTLINK and United States Trust Company of New
York, as trustee. The 9 5/8% Notes have been registered under the Securities
Act.
PRINCIPAL, MATURITY AND INTEREST. The 9 5/8% Notes are limited in aggregate
principal amount to $400 million and will mature on October 1, 2007. Interest on
the 9 5/8% Notes accrues at 9 5/8% per annum and is payable semi-annually in
arrears on April 1 and October 1 of each year.
RANKING. The 9 5/8% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
REDEMPTION. The 9 5/8% Notes are redeemable on or after October 1, 2002, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on October 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2002........................................................ 104.813%
2003........................................................ 103.208%
2004........................................................ 101.604%
2005 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before October 1, 2000, NEXTLINK may redeem
up to 33 1/3% of the original aggregate principal amount of the 9 5/8% Notes
with the net proceeds of a sale of common equity at a redemption price equal to
109% of the principal amount thereof, plus accrued interest, provided that at
least $266.7 million in aggregate principal amount of 9 5/8% Notes remains
outstanding after such redemption. Except in connection with a Change of Control
or an Asset Disposition (as defined in the indenture relating to the 9 5/8%
Notes) of NEXTLINK, NEXTLINK is not required to make mandatory redemption or
sinking fund payments with respect to the 9 5/8% Notes.
COVENANTS. The indenture relating to the 9 5/8% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted payments, incur certain liens to secure debt
which is subordinated to or ranks equally with the 9 5/8% Notes, engage in any
sale and leaseback transaction, sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of NEXTLINK, enter into
certain transactions with affiliates, or incur indebtedness that is subordinate
in right of payment to any senior indebtedness and senior in right of payment to
the 9 5/8% Notes. The indenture relating to the 9 5/8% Notes permits, under
certain circumstances, NEXTLINK's subsidiaries to be deemed unrestricted
subsidiaries and thus not subject to the restrictions of the indenture.
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<PAGE>
EVENTS OF DEFAULT. The indenture relating to the 9 5/8% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
DESCRIPTION OF THE 9% NOTES
GENERAL. NEXTLINK issued $335 million of 9% Senior Notes Due 2008 pursuant
to an indenture between NEXTLINK and United States Trust Company of New York, as
trustee. On July 15, 1998, NEXTLINK consummated an offer to exchange such notes
for $335 million of 9% Senior Notes Due 2008 that had been registered under the
Securities Act.
PRINCIPAL, MATURITY AND INTEREST. The 9% Notes are limited in aggregate
principal amount to $335 million and will mature on March 15, 2008. Interest on
the 9% Notes accrues at 9% per annum and is payable semi-annually in arrears on
March 15 and September 15 of each year.
RANKING. The 9% Notes are unsecured senior obligations of NEXTLINK, will
rank equally in right of payment with all existing and future senior obligations
of NEXTLINK and will rank senior in right of payment to all future subordinated
obligations of NEXTLINK.
REDEMPTION. The 9% Notes are redeemable on or after March 15, 2003, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on March 15 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003........................................................ 104.500%
2004........................................................ 103.000%
2005........................................................ 101.500%
2006 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before March 15, 2001, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 9% Notes with the
net proceeds of a sale of common equity at a redemption price equal to 109% of
the principal amount thereof, plus accrued interest, provided that at least
66 2/3% of the original aggregate principal amount of the 9% Notes remains
outstanding after such redemption. Except in connection with a Change of Control
or an Asset Disposition (as defined in the indenture relating to the 9% Notes)
of NEXTLINK, NEXTLINK is not required to make mandatory redemption or sinking
fund payments with respect to the 9% Notes.
COVENANTS. The indenture relating to the 9% Notes restricts, among other
things, NEXTLINK's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, incur certain liens to secure debt which
is subordinated to or ranks equally with the 9% Notes, engage in any sale and
leaseback transaction, sell, assign, transfer,
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lease, convey or otherwise dispose of substantially all of the assets of
NEXTLINK, enter into certain transactions with affiliates, or incur indebtedness
that is subordinate in right of payment to any senior indebtedness and senior in
right of payment to the 9% Notes. The indenture relating to the 9% Notes
permits, under certain circumstances, NEXTLINK's subsidiaries to be deemed
unrestricted subsidiaries and thus not subject to the restrictions of the
indenture.
EVENTS OF DEFAULT. The indenture relating to the 9% Notes contains standard
events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
DESCRIPTION OF THE 9.45% NOTES
GENERAL. NEXTLINK issued $636,974,000 aggregate principal amount at stated
maturity of 9.45% Senior Discount Notes Due 2008 under an indenture between
NEXTLINK and United States Trust Company of New York, as trustee. On August 24,
1998, NEXTLINK consummated an offer to exchange such notes for $636,974,000 in
aggregate principal amount at stated maturity of 9.45% Senior Discount Notes Due
2008 that have been registered under the Securities Act.
PRINCIPAL, MATURITY AND INTEREST. The 9.45% Notes are limited to
$636,974,000 aggregate principal amount at stated maturity and will mature on
April 15, 2008. The 9.45% Notes were issued at a discount from their principal
amount to generate aggregate gross proceeds of approximately $400.0 million. The
9.45% Notes accrete at a rate of 9.45% compounded semi-annually to an aggregate
principal amount of $636,974,000 by April 15, 2003. No interest will accrue on
the 9.45% Notes prior to April 15, 2003. The 9.45% Notes bear interest at 9.45%
per annum payable semi-annually on April 15 and October 15 of each year,
commencing October 15, 2003, accruing from April 15, 2003, or from the most
recent interest payment date to which interest has been paid or provided.
RANKING. The 9.45% Notes are unsecured senior obligations of NEXTLINK, will
rank equally in right of payment with all existing and future senior obligations
of NEXTLINK and will rank senior in right of payment to all future subordinated
obligations of NEXTLINK.
REDEMPTION. The 9.45% Notes are redeemable on or after April 15, 2003, at
NEXTLINK's option, in whole or in part, and prior to maturity in amounts of
$1,000 principal amount at maturity or an integral multiple of $1,000 at the
following redemption
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prices (expressed as percentages of the principal amount) plus accrued interest,
if redeemed during the twelve-month period beginning on April 15 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003........................................................ 104.725%
2004........................................................ 103.150%
2005........................................................ 101.575%
2006 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before April 15, 2001, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 9.45% Notes with
the net proceeds of a sale of common equity, at a redemption price equal to
109.45% of the Accreted Value (as defined in the indenture relating to the 9.45%
Notes), provided that at least 66 2/3% of the original aggregate principal
amount of the 9.45% Notes remains outstanding after such redemption. Except in
connection with a Change of Control or an Asset Disposition (as defined in the
indenture relating to the 9.45% Notes) of NEXTLINK, NEXTLINK is not required to
make mandatory redemption or sinking fund payments with respect to the 9.45%
Notes.
COVENANTS. The indenture relating to the 9.45% Notes restricts, among other
things, NEXTLINK's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, incur certain liens to secure debt which
is subordinated to or ranks equally with the 9.45% Notes, engage in any sale and
leaseback transaction, sell, assign, transfer, lease, convey or otherwise
dispose of substantially all of the assets of NEXTLINK, enter into certain
transactions with affiliates, or incur indebtedness that is subordinate in right
of payment to any senior indebtedness and senior in right of payment to the
9.45% Notes. The indenture relating to the 9.45% Notes permits, under certain
circumstances, NEXTLINK's subsidiaries to be deemed unrestricted subsidiaries
and thus not subject to the restrictions of such indenture.
EVENTS OF DEFAULT. The indenture relating to the 9.45% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
DESCRIPTION OF THE 10 3/4% NOTES DUE 2008
GENERAL. NEXTLINK issued $500 million principal amount of 10 3/4% Senior
Notes Due 2008 under an indenture between NEXTLINK and United States Trust
Company of New York, as trustee. On May 14, 1999, NEXTLINK consummated an offer
to exchange such notes for $500 million of 10 3/4% Senior Notes Due 2008 that
had been registered under the Securities Act.
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<PAGE>
PRINCIPAL, MATURITY AND INTEREST. The 10 3/4% Notes are limited in
aggregate principal amount to $500 million and will mature on November 15, 2008.
Interest on the 10 3/4% Notes accrues at 10 3/4% per annum and is payable
semi-annually in arrears on May 15 and November 15 of each year.
RANKING. The 10 3/4% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
REDEMPTION. The 10 3/4% Notes are redeemable on or after November 15, 2003,
at NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) described below plus accrued
interest, if redeemed during the twelve-month period beginning on November 15 of
the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003........................................................ 105.375%
2004........................................................ 103.583%
2005........................................................ 101.792%
2006 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before November 15, 2001, NEXTLINK may redeem
up to 33 1/3% of the original aggregate principal amount of the 10 3/4% Notes
with the net proceeds of a sale of common equity at a redemption price equal to
112.75% of the principal amount thereof, plus accrued interest, provided that at
least 66 2/3% of the original aggregate principal amount of 10 3/4% Notes
remains outstanding after such redemption. Except in connection with a Change of
Control or an Asset Disposition (as defined in the indenture relating to the
10 3/4% Notes) of NEXTLINK, NEXTLINK is not required to make mandatory
redemption or sinking fund payments with respect to the 10 3/4% Notes.
COVENANTS. The indenture relating to the 10 3/4% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted payments, incur certain liens to secure debt
which is subordinated to or ranks equally with the 10 3/4% Notes, engage in any
sale and leaseback transaction, sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of NEXTLINK, enter into
certain transactions with affiliates, or incur indebtedness that is subordinate
in right of payment to any senior indebtedness and senior in right of payment to
the 10 3/4% Notes. The indenture relating to the 10 3/4% Notes permits, under
certain circumstances, NEXTLINK's subsidiaries to be deemed unrestricted
subsidiaries and thus not subject to the restrictions of the indenture.
EVENTS OF DEFAULT. The indenture relating to the 10 3/4% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
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DESCRIPTION OF THE 12 1/4% NOTES DUE 2009
GENERAL. NEXTLINK issued $588,926,000 aggregate principal amount at stated
maturity of 12 1/4% Senior Discount Notes Due 2009 under an indenture between
NEXTLINK and United States Trust Company of New York, as trustee.
PRINCIPAL, MATURITY AND INTEREST. The 12 1/4% Notes are limited to
$588,926,000 aggregate principal amount at stated maturity and will mature on
June 1, 2009. The 12 1/4% Notes were issued at a discount from their principal
amount to generate aggregate gross proceeds of approximately $325 million. The
12 1/4% Notes accrete at a rate of 12 1/4% compounded semi-annually to an
aggregate principal amount of $588,926,000 by June 1, 2004. No interest will
accrue on the 12 1/4% Notes prior to June 1, 2004. The 12 1/4% Notes bear
interest at 12 1/4% per annum payable semi-annually on June 1 and December 1 of
each year, commencing December 1, 2004, accruing from June 1, 2004, or from the
most recent interest payment date to which interest has been paid or provided.
RANKING. The 12 1/4% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
REDEMPTION. The 12 1/4% Notes are redeemable on or after June 1, 2004, at
NEXTLINK's option, in whole or in part, and prior to maturity in amounts of
$1,000 principal amount at maturity or an integral multiple of $1,000 at the
following redemption prices (expressed as percentages of the principal amount)
plus accrued interest, if redeemed during the twelve-month period beginning on
June 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004........................................................ 106.125%
2005........................................................ 104.083%
2006........................................................ 102.042%
2007 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before June 1, 2002, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 12 1/4% Notes with
the net proceeds of a sale of common equity at a redemption price equal to
112.25% of the Accreted Value (as defined in the indenture relating to the
12 1/4% Notes), plus accrued and unpaid interest, provided that at least 66 2/3%
of the original principal amount of the 12 1/4% Notes remains outstanding after
such redemption. Except in connection with a Change of Control or an Asset
Disposition (as defined in the indenture relating to the 12 1/4% Notes) of
NEXTLINK, NEXTLINK is not required to make mandatory redemption or sinking fund
payments with respect to the 12 1/4% Notes.
COVENANTS. The indenture relating to the 12 1/4% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, issue
preferred stock, pay dividends or make certain other restricted payments, incur
certain liens to secure debt which is subordinated to or ranks equally with the
12 1/4% Notes, engage in any sale and leaseback transaction, sell, assign,
transfer, lease, convey or otherwise dispose of substantially all of the assets
of NEXTLINK, enter into certain transactions with affiliates, or incur
indebtedness that is subordinate in right of payment to any senior indebtedness
and senior in right of payment to the 12 1/4% Notes. The indenture relating to
the 12 1/4% Notes permits, under certain
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circumstances, NEXTLINK's subsidiaries to be deemed unrestricted subsidiaries
and thus not subject to the restrictions of such indenture.
EVENTS OF DEFAULT. The indenture relating to the 12 1/4% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
DESCRIPTION OF THE 10 3/4% NOTES DUE 2009
GENERAL. NEXTLINK issued $675 million principal amount of 10 3/4% Senior
Notes Due 2009 under an indenture between NEXTLINK and United States Trust
Company of New York, as trustee.
PRINCIPAL, MATURITY AND INTEREST. The 10 3/4% Notes are limited in
aggregate principal amount to $675 million and will mature on June 1, 2009.
Interest on the 10 3/4% Notes accrues at 10 3/4% per annum and is payable
semi-annually in arrears on June 1 and December 1 of each year, commencing on
December 1, 1999.
RANKING. The 10 3/4% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
REDEMPTION. The 10 3/4% Notes are redeemable on or after June 1, 2004, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on June 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004........................................................ 105.375%
2005........................................................ 103.583%
2006........................................................ 101.792%
2007 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time on or before June 1, 2002, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 10 3/4% Notes with
the net proceeds of a sale of common equity at a redemption price equal to
110.75% of the principal amount thereof, plus accrued interest, provided that at
least 66 2/3% of the original aggregate principal amount of 10 3/4% Notes
remains outstanding after such redemption. Except in connection with a Change of
Control or an Asset Disposition (as defined in the indenture relating to the
10 3/4% Notes) of NEXTLINK, NEXTLINK is not required to make mandatory
redemption or sinking fund payments with respect to the 10 3/4% Notes.
COVENANTS. The indenture relating to the 10 3/4% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other
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restricted payments, incur certain liens to secure debt which is subordinated to
or ranks equally with the 10 3/4% Notes, engage in any sale and leaseback
transaction, sell, assign, transfer, lease, convey or otherwise dispose of
substantially all of the assets of NEXTLINK, enter into certain transactions
with affiliates, or incur indebtedness that is subordinate in right of payment
to any senior indebtedness and senior in right of payment to the 10 3/4% Notes.
The indenture relating to the 10 3/4% Notes permits, under certain
circumstances, NEXTLINK's subsidiaries to be deemed unrestricted subsidiaries
and thus not subject to the restrictions of the indenture.
EVENTS OF DEFAULT. The indenture relating to the 10 3/4% Notes contains
standard events of default, including:
- defaults in the payment of principal, premium or interest;
- defaults in the compliance with covenants contained in the indenture;
- cross defaults on more than $10 million of other indebtedness;
- failure to pay more than $10 million of judgments; and
- certain events of its subsidiaries.
SENIOR SECURED CREDIT FACILITY
In February, 2000, NEXTLINK entered into a $1,000.0 million senior secured
credit facility underwritten by a syndicate of banks and other financial
institutions. The credit facility consists of a $387.5 million tranche A term
loan facility, a $225.0 million tranche B term loan facility and a
$387.5 million revolving credit facility. NEXTLINK borrowed $375.0 million under
this facility at the closing.
All obligations under the credit facility are secured by the
telecommunications assets purchased using the proceeds thereof, other assets up
to $125.0 million, all intercompany receivables owed to NEXTLINK by its
subsidiaries and the stock of NEXTLINK's direct subsidiaries. NEXTLINK's
subsidiaries have guaranteed $125.0 million of the obligations allocated ratably
among the credit facility.
Both the revolving credit facility and the tranche A term loan facility
mature on December 31, 2006, and the tranche B term loan facility matures on
June 30, 2007. The maturity date for each of the facilities is expected to
automatically be accelerated to October 31, 2005 unless we have refinanced our
$350.0 million 12 1/2% Senior Notes by April 15, 2005.
Amounts drawn under the revolving credit facility and the term loans bear
interest, at the option of NEXTLINK, at the alternate base rate or
reserve-adjusted London Interbank Offered Rate (LIBOR) plus, in each case,
applicable margins.
The credit agreement contains customary negative covenants restricting and
limiting our ability to engage in certain activities, including but not limited
to:
- limitations on indebtedness, guarantee obligations and the incurrence of
liens,
- restrictions on sale lease back transactions, consolidations, mergers,
liquidations, dissolutions, leases, sale of assets, transactions with
affiliates, loans, advances and investments,
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- restrictions on issuance of preferred stock, dividends and distributions
on capital stock and other similar distributions, and
- optional payments and modifications of other debt instruments,
transactions with affiliates, changes in fiscal year, and engaging in any
business other than the telecommunications and data and voice transmission
business (including enhanced services delivered over data and/or
telecommunications networks).
The secured credit facility contains customary events of default, including
an event of default upon certain changes of control.
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PLAN OF DISTRIBUTION
Each holder desiring to participate in the exchange offer will be required
to represent, among other things, that
(1) it is not an "affiliate" (as defined in Rule 405 of the Securities
Act) of NEXTLINK,
(2) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the new notes, and
(3) it is acquiring the new notes in the ordinary course of its
business.
A holder unable to make the above representations is referred to as a restricted
holder. A restricted holder will not be able to participate in the exchange
offer, and may only sell its old notes pursuant to a registration statement
containing the selling securityholder information required by Item 507 of
Regulation S-K of the Securities Act, or pursuant to an exemption from the
registration requirement of the Securities Act.
Each participating broker-dealer is required to acknowledge in the letter of
transmittal that it acquired the old notes as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with the resale of such new notes. Based upon interpretations by the
staff of the Securities and Exchange Commission, NEXTLINK believes that new
notes issued pursuant to the exchange offer to participating broker-dealers may
be offered for resale, resold, and otherwise transferred by a participating
broker-dealer upon compliance with the prospectus delivery requirements, but
without compliance with the registration requirements, of the Securities Act.
NEXTLINK has agreed that for a period of 30 days following consummation of the
exchange offer, they will make this prospectus available to participating
broker-dealers for use in connection with any such resale. During such period of
time, delivery of this prospectus, as it may be amended or supplemented, will
satisfy the prospectus delivery requirements of a participating broker-dealer
engaged in market making or other trading activities.
NEXTLINK will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by participating broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the new notes or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
participating broker-dealer and/or the purchasers of any such new notes. Any
participating broker-dealer that resells new notes that were received by it for
its own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of new notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a participating broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
77
<PAGE>
NEXTLINK has agreed to pay all expenses incidental to the exchange offer
other than commissions and concessions of any brokers or dealers and will
indemnify holders of the notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act, as set forth in the
exchange and registration rights agreement.
INCORPORATION OF MATERIAL DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means we can disclose
important information to you by referring you to those documents. The
information included in the following documents is incorporated by reference and
is considered to be a part of this prospectus. The most recent information that
we file with the Securities and Exchange Commission automatically updates and
supersedes more dated information. We have previously filed the following
documents with the Securities and Exchange Commission and are incorporating them
by reference into this prospectus, as well as the identified documents (other
than the financial statements included therein) filed by Concentric Network
Corporation with the Securities and Exchange Commission:
1. Our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed on March 29, 1999.
2. Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, filed on November 15, 1999.
3. Our Current Reports on 8-K filed on January 19, 1999, April 1, 1999,
May 11, 1999, November 18, 1999, December 10, 1999, January 11, 2000 and
January 24, 2000.
4. Concentric's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed on February 1, 1999.
5. Concentric's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, filed on November 15, 1999.
We also incorporate by reference all documents subsequently filed by us and
Concentric pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
until all of the old notes are exchanged for new notes.
We will provide without charge to each person, including any person having a
control relationship with that person, to whom a prospectus is delivered, a copy
of any or all of the information that has been incorporated by reference in this
prospectus but not delivered with this prospectus. If you would like to obtain
this information from us, please direct your request, either in writing or by
telephone to Gary D. Begeman, Senior Vice President, General Counsel and
Secretary, NEXTLINK Communications, Inc., 1505 Farm Credit Drive, McLean,
Virginia 22102, (703) 547-2000. In order to insure timely delivery of the
documents, any request should be made five days before , 2000, which is
when the exchange offer expires.
LEGAL MATTERS
The validity of the new notes will be passed upon for NEXTLINK by Willkie
Farr & Gallagher, New York, New York.
78
<PAGE>
EXPERTS
The audited financial statements included in the NEXTLINK's Annual Report on
Form 10-K, filed on March 29, 1999, which is incorporated herein by reference,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
79
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OFFER TO EXCHANGE
10 1/2% SENIOR NOTES DUE 2009
AND
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
FOR OUTSTANDING
10 1/2% SENIOR NOTES DUE 2009
AND
12 1/8 SENIOR DISCOUNT NOTES DUE 2009
------------------
P R O S P E C T U S
DATED FEBRUARY 14, 2000
------------------------
[LOGO]
NEXTLINK COMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. In its Certificate of Incorporation,
the Company has adopted the provisions of Section 102(b)(7) of the Delaware
General Corporation Law (the "Delaware Law"), which enables a corporation in its
original certificate of incorporation or an amendment thereto to eliminate or
limit the personal liability of a director for monetary damages for breach of
the director's fiduciary duty, except (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) pursuant to Section 174 of the Delaware law (providing for
liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions) or (iv) for any transaction from which a director will
personally receive a benefit in money, property or services to which the
director is not legally entitled.
The Company has also adopted indemnification provisions pursuant to Section
145 of the Delaware Law, which provides that a corporation may indemnify any
persons, including officers and directors, who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that such person was an officer, director, employee or agent of the corporation,
or is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided such officer, director, employee or
agent acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests and, with respect to criminal
proceedings, had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify officers or directors in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against expenses
(including attorney's fees) that such officer or director actually and
reasonably incurred.
The Company has entered into indemnification agreements with each of the
Company's officers and directors.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS:
<TABLE>
<C> <C> <S>
1 -- Purchase Agreement by and among NEXTLINK Communications,
Inc. and the Initial Purchasers.
3.1 -- Certificate of Incorporation of NEXTLINK Communications,
Inc.(1)
3.1(i) -- Certificate of Amendment of Certificate of Incorporation of
NEXTLINK Communications, Inc., dated August 25, 1999. (15)_
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
3.2 -- By-laws of NEXTLINK Communications, Inc.(1)
3.3 -- Articles of Incorporation of NEXTLINK Capital, Inc.(2)
3.4 -- By-laws of NEXTLINK Capital, Inc.(2)
4.1(i) -- Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee, relating to the 10 1/2% Senior Notes due
2009.
4.1(ii) -- Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of
Texas, as Trustee, relating to the 12 1/8% Senior Discount
Notes due 2009.
4.2 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 14% Senior Exchangeable Redeemable Preferred Shares and
Qualifications, Limitations and Restrictions Thereof.(1)
4.3 -- Form of stock certificate of 14% Senior Exchangeable
Redeemable Preferred Shares.(3)
4.4 -- Certificate of Designation of Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 6 1/2% Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.(1)
4.5 -- Form of stock certificate of 6 1/2% Cumulative Convertible
Preferred Stock.(12)
4.6 -- Form of stock certificate of Class A common stock.(9)
4.7 -- Indenture, dated as of April 25, 1996, by and among NEXTLINK
Communications, Inc., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee, relating to
12 1/2% Senior Notes due April 15, 2006, including form of
global note.(2)
4.8 -- First Supplemental Indenture, dated as of January 31, 1997,
by and among NEXTLINK Communications, Inc., NEXTLINK
Communications, L.L.C., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee.(3)
4.9 -- Indenture dated September 25, 1997 between United States
Trust Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9 5/8% Senior Notes due 2007.(12)
4.10 -- Indenture, dated March 3, 1998, between United States Trust
Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9% Senior Notes due 2008.(5)
4.11 -- Indenture, dated April 1, 1998, between United States Trust
Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9.45% Senior Discount Notes due 2008.(5)
4.12 -- Second Supplemental Indenture, dated June 3, 1998, amending
Indenture dated April 25, 1996, by and among NEXTLINK
Communications, Inc., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee.(1)
4.13 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated September 25, 1997, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee.(1)
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <C> <S>
4.14 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated March 3, 1998, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee.(1)
4.15 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated April 1, 1998, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee.(1)
4.16 -- Indenture, dated November 12, 1998, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as trustee relating to the 10 3/4% Senior Notes due
2008. (7)
4.17 -- Indenture, dated June 1, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee, relating to the 12 1/4% Senior Notes due
2009. (15)
4.18 -- Indenture, dated June 1, 1999, by and among NEXTLINK
Communications Inc. and United States Trust Company of
Texas, as Trustee, related to the 10 3/4% Senior Discount
Notes due 2009. (15)
5.1 -- Opinion of Willkie Farr & Gallagher.*
8.1 -- Tax Opinion of Willkie Farr & Gallagher.*
10.1 -- Stock Option Plan of NEXTLINK Communications, Inc. as
amended.(1)
10.2 -- Employee Stock Purchase Plan of NEXTLINK Communications,
Inc.(1)
10.3 -- Registration Rights Agreement dated as of January 15, 1997,
between NEXTLINK Communications, Inc. and the signatories
listed therein(3).
10.4 -- Preferred Exchange and Registration Rights Agreement, dated
as of January 31, 1997, by and among NEXTLINK
Communications, Inc. and the Initial Purchasers(3).
10.5 -- Exchange and Registration Rights Agreement dated as of
November 17, 1999 between the Company, and the Initial
Purchasers.
10.6 -- Fiber Lease and Innerduct Use Agreement, dated February 23,
1998, by and between NEXTLINK Communications, Inc. and
Metromedia Fiber Network, Inc. (5)
10.7 -- Amendment No. 1 to Fiber Lease and Innerduct Use Agreement,
dated March 4, 1998, by and between NEXTLINK Communications,
Inc. and Metromedia Fiber Network, Inc. (5)
10.8 -- Cost sharing and IRU Agreement, dated July 18, 1998, between
Level 3 Communications, LLC and INTERNEXT LLC. (13)
10.9 -- Guaranty Agreement, dated July 18, 1998, between NEXTLINK
Communications, Inc. and Level 3 Communications, LLC. (13)
10.10 -- Agreement and Plan of Merger, dated as of January 14, 1999,
among NEXTLINK Communications, Inc., WNP Communications,
Inc. and PCO Acquisition Corp. (14)
10.11 -- Registration Rights Agreement, dated January 14, 1999,
between NEXTLINK Communications, Inc. and the Holders
referred to therein. (14)
10.12 -- Consent and Indemnity Agreement of Stockholders, dated
January 14, 1999, by and among NEXTLINK Communications,
Inc., WNP Communications, Inc. and certain holders of
non-voting and voting common stock of WNP Communications,
Inc. (10)
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <C> <S>
10.13 -- Consent and Indemnity Agreement of Preferred Stockholders,
dated January 14, 1999, by and among NEXTLINK
Communications, Inc., and WNP Communications, Inc. (11)
10.14 -- Employment Agreement, effective September 21, 1999, by and
between Daniel Akerson and NEXTLINK Communications, Inc.
(15)
10.15 -- Credit and Guaranty Agreement, dated as of February 3, 2000,
between NEXTLINK Communications, Inc. and various lenders.*
21 -- Subsidiaries of the Registrant.(4)
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Willkie Farr & Gallagher (included in their
opinion filed as Exhibit 5.1 and Exhibit 8.1).*
25 -- Statement on Form T-1 of Eligibility of Trustee.*
99.1 -- Form of Letter of Transmittal for the 10 1/2% Senior Notes
due 2009.
99.1(i) -- Form of Letter of Transmittal for the 12 1/8% Senior
Discount Notes due 2009.
99.2 -- Form of Notice of Guaranteed Delivery for the 10 1/2% Senior
Notes due 2009.
99.2(i) -- Form of Notice of Guaranteed Delivery for the 12 1/8% Senior
Discount Notes due 2009.
99.3 -- Form of Letter to Clients.
99.4 -- Form of Letter to Nominees.
</TABLE>
- ------------------------
* To be filed by amendment.
(1) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File No.
333-53975).
(2) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, L.L.C. (the predecessor of
NEXTLINK Communications, Inc.) and NEXTLINK Capital, Inc. (Commission File
No. 333-4603).
(3) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1996 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Commission File Nos.
33-04603 and 333-04603-01).
(4) Incorporated here by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File No.
333-32003).
(5) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1997 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Communication File Nos.
333-04603 and 333-04603-01).
(6) Incorporated herein by reference to the exhibit filed with the quarterly
report on Form 10-Q for the quarterly period ended March 31, 1998 of
NEXTLINK Communications, Inc. (Commission File No. 000-22939).
(7) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File
No. 333-71749).
(8) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-3 of NEXTLINK Communications, Inc. (Commission File
No. 333-77819).
II-4
<PAGE>
(9) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File
No. 333-32001).
(10) Incorporated herein by reference to the exhibits filed with the
Registration Statement on Form S-4 of NEXTLINK Communications, Inc.
(Commission File No. 333-75923).
(11) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on April 1, 1999 (Commission File No. 000-22939).
(12) Incorporated herein by reference to the exhibits filed with the
Registration Statement on Form S-3 of NEXTLINK Communications, Inc.
(Commission File No. 333-77577).
(13) Incorporated herein by reference to the exhibit filed with the quarterly
report on Form 10-Q for the quarterly period ended September 30, 1998 of
NEXTLINK Communications, Inc. and NEXTLINK Capital, Inc. (Commission File
No. 000-22939).
(14) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on January 19, 1999 (Commission File No.
000-22939).
(15) Incorporated herein by reference to the exhibits filed with the quarterly
report on Form 10-Q for the quarterly period ended September 30, 1999 of
NEXTLINK Communications, Inc. (Commission File No. 000-22939).
(B) FINANCIAL STATEMENT SCHEDULES:
None.
ITEM 22. UNDERTAKINGS.
Insofar as indemnifications for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 20 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the option of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of this Registration Statement through the date
of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
II-5
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing a Form S-4 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of McLean, State of Virginia, on the 14th day of February, 2000.
<TABLE>
<S> <C> <C>
NEXTLINK COMMUNICATIONS, INC.
By: /s/ GARY D. BEGEMAN
--------------------------------------
Gary D. Begeman
SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
</TABLE>
We, the undersigned officers and directors of NEXTLINK Communications, Inc.,
hereby severally and individually constitute and appoint Daniel F. Akerson,
Gary D. Begeman and Richard A. Montfort, Jr. and each of them, as the true and
lawful attorneys-in-fact for the undersigned, in any and all capacities, with
full power of substitution, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to file the same with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact, or either of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Chairman of the Board and
/s/ DANIEL F. AKERSON Chief Executive Officer February 14,
------------------------------------------- (Principal Executive 2000
Daniel F. Akerson Officer)
Acting Chief Financial
/s/ WILLIAM A. HOGLUND Officer (Principal
------------------------------------------- Financial Officer and February 14,
William A. Hoglund Principal Accounting 2000
Officer and Director)
/s/ NICHOLAS C. FORSTMANN
------------------------------------------- Director February 14,
Nicholas C. Forstmann 2000
/s/ SANDRA J. HORBACH
------------------------------------------- Director February 14,
Sandra J. Horbach 2000
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ NICOLAS KAUSER
------------------------------------------- Director February 14,
Nicolas Kauser 2000
/s/ CRAIG O. MCCAW
------------------------------------------- Director February 14,
Craig O. McCaw 2000
/s/ SHARON L. NELSON
------------------------------------------- Director February 14,
Sharon L. Nelson 2000
/s/ JEFFREY S. RAIKES
------------------------------------------- Director February 14,
Jeffrey S. Raikes 2000
/s/ DENNIS WEIBLING
------------------------------------------- Director February 14,
Dennis Weibling 2000
</TABLE>
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS PAGE
- --------------------- --------
<C> <C> <S> <C>
1 -- Purchase Agreement by and among NEXTLINK Communications,
Inc. and the Initial Purchasers.............................
3.1 -- Certificate of Incorporation of NEXTLINK Communications,
Inc.(1).....................................................
3.1(i) -- Certificate of Amendment of Certificate of Incorporation of
NEXTLINK Communications, Inc., dated August 25, 1999(15)....
3.2 -- By-laws of NEXTLINK Communications, Inc.(1).................
3.3 -- Articles of Incorporation of NEXTLINK Capital, Inc.(2)......
3.4 -- By-laws of NEXTLINK Capital, Inc.(2)........................
4.1(i) -- Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee, relating to the 10 1/2% Senior Notes due
2009........................................................
4.1(ii) -- Indenture, dated November 17, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of
Texas, as Trustee, relating to the 12 1/8% Senior Discount
Notes due 2009..............................................
4.2 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 14% Senior Exchangeable Redeemable Preferred Shares and
Qualifications, Limitations and Restrictions Thereof(1).....
4.3 -- Form of stock certificate of 14% Senior Exchangeable
Redeemable Preferred Shares(3)..............................
4.4 -- Certificate of Designation of Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 6 1/2% Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof(1).....
4.5 -- Form of stock certificate of 6 1/2% Cumulative Convertible
Preferred Stock(12).........................................
4.6 -- Form of stock certificate of Class A common stock(9)........
4.7 -- Indenture, dated as of April 25, 1996, by and among NEXTLINK
Communications, Inc., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee, relating to
12 1/2% Senior Notes due April 15, 2006, including form of
global note(2)..............................................
4.8 -- First Supplemental Indenture, dated as of January 31, 1997,
by and among NEXTLINK Communications, Inc., NEXTLINK
Communications, L.L.C., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee(3).............
4.9 -- Indenture dated September 25, 1997 between United States
Trust Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9 5/8% Senior Notes due 2007(12)............
4.10 -- Indenture, dated March 3, 1998, between United States Trust
Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9% Senior Notes due 2008(5).................
4.11 -- Indenture, dated April 1, 1998, between United States Trust
Company, as Trustee and NEXTLINK Communications, Inc.,
relating to the 9.45% Senior Discount Notes due 2008(5).....
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS PAGE
- --------------------- --------
<C> <C> <S> <C>
4.12 -- Second Supplemental Indenture, dated June 3, 1998, amending
Indenture dated April 25, 1996, by and among NEXTLINK
Communications, Inc., NEXTLINK Capital, Inc. and United
States Trust Company of New York, as Trustee(1).............
4.13 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated September 25, 1997, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee(1).........................................
4.14 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated March 3, 1998, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee(1).........................................
4.15 -- First Supplemental Indenture, dated June 3, 1998, amending
Indenture dated April 1, 1998, by and between NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee(1).........................................
4.16 -- Indenture, dated November 12, 1998, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as trustee relating to the 10 3/4% Senior Notes due
2008(7).....................................................
4.17 -- Indenture, dated June 1, 1999, by and among NEXTLINK
Communications, Inc. and United States Trust Company of New
York, as Trustee, relating to the 12 1/4% Senior Notes due
2009(15)....................................................
4.18 -- Indenture, dated June 1, 1999, by and among NEXTLINK
Communications Inc. and United States Trust Company of
Texas, as Trustee, related to the 10 3/4% Senior Discount
Notes due 2009(15)..........................................
5.1 -- Opinion of Willkie Farr & Gallagher*........................
8.1 -- Tax Opinion of Willkie Farr & Gallagher*....................
10.1 -- Stock Option Plan of NEXTLINK Communications, Inc. as
amended(1)..................................................
10.2 -- Employee Stock Purchase Plan of NEXTLINK Communications,
Inc.(1).....................................................
10.3 -- Registration Rights Agreement dated as of January 15, 1997,
between NEXTLINK Communications, Inc. and the signatories
listed therein(3)...........................................
10.4 -- Preferred Exchange and Registration Rights Agreement, dated
as of January 31, 1997, by and among NEXTLINK
Communications, Inc. and the Initial Purchasers(3)..........
10.5 -- Exchange and Registration Rights Agreement dated as of
November 17, 1999 between the Company, and the Initial
Purchasers..................................................
10.6 -- Fiber Lease and Innerduct Use Agreement, dated February 23,
1998, by and between NEXTLINK Communications, Inc. and
Metromedia Fiber Network, Inc.(5)...........................
10.7 -- Amendment No. 1 to Fiber Lease and Innerduct Use Agreement,
dated March 4, 1998, by and between NEXTLINK Communications,
Inc. and Metromedia Fiber Network, Inc.(5)..................
10.8 -- Cost sharing and IRU Agreement, dated July 18, 1998, between
Level 3 Communications, LLC and INTERNEXT LLC.(13)..........
10.9 -- Guaranty Agreement, dated July 18, 1998, between NEXTLINK
Communications, Inc. and Level 3 Communications, LLC.(13)...
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS PAGE
- --------------------- --------
<C> <C> <S> <C>
10.10 -- Agreement and Plan of Merger, dated as of January 14, 1999,
among NEXTLINK Communications, Inc., WNP Communications,
Inc. and PCO Acquisition Corp.(14)..........................
10.11 -- Registration Rights Agreement, dated January 14, 1999,
between NEXTLINK Communications, Inc. and the Holders
referred to therein.(14)....................................
10.12 -- Consent and Indemnity Agreement of Stockholders, dated
January 14, 1999, by and among NEXTLINK Communications,
Inc., WNP Communications, Inc. and certain holders of
non-voting and voting common stock of WNP Communications,
Inc.(10)....................................................
10.13 -- Consent and Indemnity Agreement of Preferred Stockholders,
dated January 14, 1999, by and among NEXTLINK
Communications, Inc., and WNP Communications, Inc.(11)......
10.14 -- Employment Agreement, effective September 21, 1999, by and
between Daniel Akerson and NEXTLINK Communications,
Inc.(15)....................................................
10.15 -- Credit and Guaranty Agreement, dated as of February 3, 2000,
between NEXTLINK Communications, Inc. and various
lenders*....................................................
21 -- Subsidiaries of the Registrant(4)...........................
23.1 -- Consent of Arthur Andersen LLP..............................
23.2 -- Consent of Willkie Farr & Gallagher (included in their
opinion filed as Exhibit 5.1 and Exhibit 8.1)*..............
25 -- Statement on Form T-1 of Eligibility of Trustee*............
99.1 -- Form of Letter of Transmittal for the 10 1/2% Senior Notes
due 2009....................................................
99.1(i) -- Form of Letter of Transmittal for the 12 1/8% Senior
Discount Notes due 2009.....................................
99.2 -- Form of Notice of Guaranteed Delivery for the 10 1/2% Senior
Notes due 2009..............................................
99.2(i) -- Form of Notice of Guaranteed Delivery for the 12 1/8% Senior
Discount Notes due 2009.....................................
99.3 -- Form of Letter to Clients...................................
99.4 -- Form of Letter to Nominees..................................
</TABLE>
- ------------------------
* To be filed by amendment.
(1) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File No.
333-53975).
(2) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, L.L.C. (the predecessor of
NEXTLINK Communications, Inc.) and NEXTLINK Capital, Inc. (Commission File
No. 333-4603).
(3) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1996 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Commission File Nos.
33-04603 and 333-04603-01).
(4) Incorporated here by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File No.
333-32003).
(5) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1997 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Communication File Nos.
333-04603 and 333-04603-01).
<PAGE>
(6) Incorporated herein by reference to the exhibit filed with the quarterly
report on Form 10-Q for the quarterly period ended March 31, 1998 of
NEXTLINK Communications, Inc. (Commission File No. 000-22939).
(7) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File
No. 333-71749).
(8) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-3 of NEXTLINK Communications, Inc. (Commission File
No. 333-77819).
(9) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File
No. 333-32001).
(10) Incorporated herein by reference to the exhibits filed with the
Registration Statement on Form S-4 of NEXTLINK Communications, Inc.
(Commission File No. 333-75923).
(11) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on April 1, 1999 (Commission File No. 000-22939).
(12) Incorporated herein by reference to the exhibits filed with the
Registration Statement on Form S-3 of NEXTLINK Communications, Inc.
(Commission File No. 333-77577).
(13) Incorporated herein by reference to the exhibit filed with the quarterly
report on Form 10-Q for the quarterly period ended September 30, 1998 of
NEXTLINK Communications, Inc. and NEXTLINK Capital, Inc. (Commission File
No. 000-22939).
(14) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on January 19, 1999 (Commission File No.
000-22939).
(15) Incorporated herein by reference to the exhibits filed with the quarterly
report on Form 10-Q for the quarterly period ended September 30, 1999 of
NEXTLINK Communications, Inc. (Commission File No. 000-22939).
<PAGE>
Exhibit 1
NEXTLINK COMMUNICATIONS, INC.
10 1/2% SENIOR NOTES DUE 2009
121/8% SENIOR DISCOUNT NOTES DUE 2009
PURCHASE AGREEMENT
New York, New York
November 12, 1999
Goldman, Sachs & Co.,
Salomon Smith Barney Inc.,
Credit Suisse First Boston,
TD Securities (USA) Inc.,
Barclays Capital Inc.,
Chase Securities Inc.,
BancBoston Robertson Stephens Inc.,
Banc of America Securities LLC,
Deutsche Banc Securities Inc.,
J.P. Morgan Securities Inc.,
PNC Capital Markets, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
NEXTLINK Communications, Inc., a corporation organized under the laws
of the State of Delaware (the "Company"), proposes to issue and sell to the
parties named in Schedule I hereto (the "Initial Purchasers") an aggregate of
$400,000,000 principal amount of its 10 1/2% Senior Notes due 2009 (the "Senior
Notes") and $455,000,000 aggregate principal amount at stated maturity of 121/8%
Senior Discount Notes due 2009 (the "Senior Discount Notes" and, together with
the Senior Notes, the "Securities"). The Securities are to be issued under an
indenture relating to the Senior Notes to be dated as of November 17, 1999, and
an indenture relating to the Senior Discount Notes to be dated as of November
17, 1999 (collectively, the "Indentures"), between the Company and United States
Trust Company of New York, as trustee. If you are the only Initial Purchasers,
all references herein to the Representatives shall be deemed to be to the
Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Act"), in reliance upon exemptions from the registration
requirements of the Act. You have advised the Company that the Initial
Purchasers will offer and sell the Securities purchased by them hereunder in
accordance with Section 3 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Company will prepare
an offering circular, dated November 15, 1999, including any and all exhibits
thereto and any and all documents
<PAGE>
incorporated by reference therein (the "Offering Circular") subject to the
approval of the Initial Purchasers, which approval will not be unreasonably
withheld or delayed. References herein to the Offering Circular or to any
amendment or supplement thereto shall also mean information incorporated by
reference therein. References herein to the Offering Circular as of November 15,
1999 refer to information contained in the documents to be incorporated by
reference therein. The Offering Circular will set forth certain information
concerning the Company and the Securities. The Company hereby confirms that it
has authorized the use of the Offering Circular, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Offering
Circular are to the Offering Circular dated November 15, 1999 (as defined below)
and are not meant to include any amendment or supplement subsequent to November
15, 1999.
The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Exchange and Registration
Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed,
among other things, to file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the Securities or the Exchange Securities (as defined in the
Registration Rights Agreement) under the Act.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each of the Initial
Purchasers as set forth below in this Section 1:
(i) CONTENTS OF OFFERING CIRCULAR. The Offering Circular, at
the Closing Date (as defined below), will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will
not), contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representation or warranty
as to the information contained in or omitted from the Offering
Circular, or any amendment or supplement thereto, in reliance upon and
in conformity with information furnished in writing to the Company by
or on behalf of the Initial Purchasers through Goldman, Sachs & Co.
specifically for inclusion therein. The documents incorporated by
reference in the Offering Circular, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Offering Circular or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
2
<PAGE>
to the Company by an Initial Purchaser through Goldman, Sachs & Co.
expressly for use therein;
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements included in the Offering Circular or
incorporated by reference therein are independent certified public
accountants with respect to the Company and its subsidiaries within the
meaning of Regulation S-X under the Act;
(iii) FINANCIAL STATEMENTS. The financial statements, together
with the related notes, included or incorporated by reference in the
Offering Circular present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the
statement of operations, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The selected
financial data and the summary financial information included in the
Offering Circular present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included or incorporated by reference in the Offering
Circular;
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Offering
Circular, except as otherwise stated therein, (1) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise (a "Material Adverse
Effect"), whether or not arising in the ordinary course of business,
(2) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (3) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock except for those declared,
paid or made on the Company's 6 1/2% Cumulative Convertible Preferred
Stock, including any interest and associated penalty payments thereon,
and the Company's 14% Senior Exchangeable Redeemable Preferred Stock;
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation under the laws of
the State of Delaware and has power and authority to own, lease and
operate its properties and to conduct its business as described in the
Offering Circular and to enter into and perform its obligations under
this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect;
(vi) GOOD STANDING OF DESIGNATED SUBSIDIARIES. Each
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) (each a "Designated Subsidiary" and,
collectively, the "Designated Subsidiaries") has been duly organized
and is validly existing and in good standing, where applicable, as a
corporation,
3
<PAGE>
limited liability company or limited partnership, as the case may be,
under the laws of the jurisdiction of its formation, has power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Circular and is duly qualified as
a foreign corporation, limited liability company or limited
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Offering Circular, all of the issued and
outstanding capital stock or other equity interest of each Designated
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and at least 99% thereof is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock or other equity interest of the
Designated Subsidiaries was issued in violation of any preemptive or
similar rights arising by operation of law, or under the constituting
or operative document or agreement of any Designated Subsidiary or
under any agreement to which the Company or any Designated Subsidiary
is a party;
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Circular
as of the dates indicated therein. The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company, as applicable;
(viii) AUTHORIZATION OF PURCHASE AGREEMENT AND REGISTRATION
RIGHTS AGREEMENT. This Agreement has been duly authorized, executed and
delivered by the Company; the Registration Rights Agreement has been
duly authorized by the Company and, when executed and delivered by the
Company as of the Closing Date, will constitute a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(ix) AUTHORIZATION AND DESCRIPTION OF THE SECURITIES AND THE
INDENTURES. The Securities, when issued, will be in the forms
contemplated by the Indentures. The Securities and the Exchange
Securities (as defined in the Registration Rights Agreement) have each
been duly and validly authorized by the Company and, when executed by
the Company, authenticated by the Trustee in accordance with the
provisions of the Indentures and, in the case of the Securities, when
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, and, in the case of the Exchange
Securities, when the Indentures have been duly qualified under the
Trust Indenture Act and the Exchange Securities have been exchanged for
the Securities pursuant to the Registration Rights Agreement, will
constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indentures, and enforceable against the
Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights
4
<PAGE>
and to general equity principles; the Indentures have been duly
authorized and when executed and delivered by the Company and the
Trustee, will constitute valid and legally binding instruments,
enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indentures will conform
in all material respects to the descriptions thereof in the Offering
Circular and will be in substantially the form previously delivered to
the Initial Purchasers;
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor
any of its subsidiaries is in violation of its constituting or
operative document or agreement or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party, or by which any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; the execution, delivery and
performance of this Agreement, the Indentures, the Securities, the
Registration Rights Agreement and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated hereby, thereby or in
the Offering Circular and the consummation of the transactions
contemplated herein, therein and in the Offering Circular (including
the issuance and sale of the Securities by the Company hereunder), the
compliance by the Company with its obligations hereunder and under the
Indentures, the Securities and the Registration Rights Agreement have
been duly authorized by all necessary action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or a
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, the
Agreements and Instruments except for such conflicts, breaches or
defaults or liens, charges or encumbrances that, singly or in the
aggregate, would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the constituting or
operative document or agreement of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their assets or
properties; PROVIDED that no representation is made with respect to the
agreement, dated October 20, 1999, between the Company and Goldman
Sachs Credit Partners L.P., TD Securities (USA) Inc., Toronto Dominion
(Texas), Inc., Barclays Bank PLC and The Chase Manhattan Bank (the
"Commitment Letter"). As used herein, a "Repayment Event" means any
event or condition which gives the holder of any material note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or
any of its subsidiaries;
(xi) POSSESSION OF LICENSES AND PERMITS. Except as set forth
in or contemplated by the Offering Circular with respect to systems
under development and the offering of dial tone service, each of the
Company and its Designated Subsidiaries has all material certificates,
consents, exemptions, orders, permits, licenses, authorizations,
franchises or
5
<PAGE>
other material approvals (each, an "Authorization") of and from, and
has made all material declarations and filings with, all Federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or
appropriate for the Company and its Designated Subsidiaries to own,
lease, license, use and construct its properties and assets and to
conduct its business in the manner described in the Offering Circular,
except to the extent that the failure to obtain any such Authorizations
or make any such declaration or filing would not, singly or in the
aggregate, result in a Material Adverse Effect. Except as set forth in
or contemplated by the Offering Circular, all such Authorizations are
in full force and effect with respect to the Company and its Designated
Subsidiaries; to the best knowledge of the Company, no event has
occurred that management of the Company reasonably believes is likely
to result in the revocation, termination or modification of any such
Authorization; the Company and its Designated Subsidiaries are in
compliance in all material respects with the terms and conditions of
all such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with
respect thereto; and, except as set forth in the Offering Circular, the
Company has no knowledge that any person is contesting or intends to
contest the granting of any material Authorization; and neither the
execution and delivery of this Agreement, the Indentures or the
Securities, nor the consummation of the transactions contemplated
hereby and thereby nor compliance with the terms, conditions and
provisions hereof and thereof by the Company or any of its Designated
Subsidiaries will cause any suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any Authorization;
(xii) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing labor disturbance by the employees of any of its or any of
its subsidiaries' principal suppliers, manufacturers, customers or
contractors, which, in either case, would reasonably be expected to
result in a Material Adverse Effect;
(xiii) ABSENCE OF PROCEEDINGS. Except as disclosed in the
Offering Circular, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
which could reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company or any of its
subsidiaries or the consummation of this Agreement or the performance
by the Company of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary thereof is a party or of which any of their respective
property or assets is the subject which are not described in the
Offering Circular, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect;
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual
6
<PAGE>
Property") necessary to carry on the business now operated by them, and
except as otherwise described in the Offering Circular neither the
Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect;
(xv) TITLE TO PROPERTY. The Company and its subsidiaries have
good and marketable title to all real property owned by them and good
title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Offering Circular or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Offering Circular, are
in full force and effect, and neither the Company nor any of its
subsidiaries has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any of
its subsidiaries under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or any subsidiary
thereof to the continued possession of the leased or subleased premises
under any such lease or sublease;
(xvi) TAX RETURNS. The Company and its subsidiaries have filed
all federal, state, foreign and, to the extent material, local tax
returns that are required to be filed or have duly requested extensions
thereof and have paid all taxes required to be paid by any of them and
any related assessments, fines or penalties, except for any such tax,
assessment, fine or penalty that is being contested in good faith and
by appropriate proceedings; and adequate charges, accruals and reserves
have been provided for in the financial statements referred to in
Section 1(a)(iii) above in respect of all federal, state, local and
foreign taxes for all periods as to which the tax liability of the
Company or any of its subsidiaries has not been finally determined or
remains open to examination by applicable taxing authorities;
(xvii) ENVIRONMENTAL LAWS. Except as described in the Offering
Circular and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
7
<PAGE>
(collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or, to the Company's
knowledge, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and
(D) there are no events or circumstances that would reasonably be
expected to form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or governmental body
or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or Environmental Laws;
(xviii) INVESTMENT COMPANY ACT. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Circular will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act");
(xix) CERTAIN DISCLOSURES IN OFFERING CIRCULAR. The statements
set forth in the Offering Circular under the caption "Description of
Notes", insofar as they purport to constitute a summary of the terms of
the Securities, and under the caption "Plan of Distribution", and under
the caption "Regulation" when considered together with the statements
under the caption "Business--Regulatory Overview" in the Company's
Annual Report on Form 10-K, filed on March 29, 1999, which is
incorporated therein by reference, insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate and complete in all material respects; and the statements set
forth in the Offering Circular under the caption "Material United
States Federal Income Tax Consequences", insofar as such statements
purport to summarize certain United States federal income and estate
tax consequences of the ownership and disposition of the Securities by
certain U.S. Holders and non-U.S. Holders (as such terms are defined in
the Offering Circular) of the Securities, provide a fair summary of
such consequences under current law;
(xx) CUBA. Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xxi) NO MANIPULATION OR STABILIZATION. Neither the Company
nor, to its knowledge, any of its officers, directors or affiliates has
taken and will take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities;
(xxii) OTHER LISTED SECURITIES. No securities of the Company
or any subsidiary that are of the same class (within the meaning of
Rule 144A under the Act) as the Securities are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
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(xxiii) NO GENERAL SOLICITATION OR DIRECTED SELLING EFFORTS.
Neither the Company nor any of its Affiliates (as defined in Rule
501(b) of Regulation D under the Act ("Regulation D")), nor any person
(excluding the Initial Purchasers, as to the actions of which the
Company makes no representation or warranty) acting on its or their
behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Act or, with respect to Securities sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902
under the Act and the Company, any Affiliate of the Company and any
person acting on its or their behalf has complied with and will
implement the "offering restriction" within the meaning of such Rule
902;
(xxiv) ELIGIBILITY OF SECURITIES. The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the Act;
(xxv) COMPLIANCE WITH EXCHANGE ACT. The Company is subject
to and in full compliance with the reporting requirements of Section
13 or Section 15(d) of the Exchange Act;
(xxvi) OTHER AGENTS. The Company has not paid or agreed to pay
to any person any compensation for soliciting another to purchase any
securities of the Company (except as contemplated by this Agreement);
and
(xxvii) ADDITIONAL ISSUER INFORMATION. The information
provided by the Company pursuant to Section 4(f) hereof will not, at
the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company to each
Initial Purchaser as to the matters covered thereby.
2. SALE AND DELIVERY TO INITIAL PURCHASERS.
(a) SECURITIES. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Initial Purchaser, severally and not jointly, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Company, the
principal amount of the Senior Notes set forth opposite such Initial Purchaser's
name in Schedule I hereto at a purchase price of 98.37500% of the principal
amount thereof, plus accrued interest, if any, from November 17, 1999 to the
Closing Date and the principal amount of the Senior Discount Notes set forth
opposite such Initial Purchaser's name in Schedule I hereto, at a purchase price
of 54.15186% of the principal amount thereof at stated maturity, plus accrued
interest, if any, from November 17, 1999 to the Closing Date.
(b) CLOSING AND PAYMENT. (i) The Securities to be purchased by each
Initial Purchaser hereunder, in definitive form, and in such authorized
denominations and registered in such names as Goldman, Sachs & Co. may request
upon at least forty-eight hours' prior notice to the Company
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shall be delivered by or on behalf of the Company to the Initial Purchasers,
through the facilities of The Depository Trust Company ("DTC") (unless the
Initial Purchasers shall otherwise instruct) for the account of such Initial
Purchaser, against payment by or on behalf of such Initial Purchaser of the
purchase price therefor by wire transfer or certified or official bank check or
checks, payable to the order of the Company in immediately available (same day)
funds. The Company will cause the certificates representing the Securities to be
made available for checking and packaging at least twenty-four hours prior to
the Closing Time (as defined below) with respect thereto at the offices of DTC
or its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 10:00 a.m. on November 17, 1999 (the "Closing
Date"), or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing, and such time and date for delivery of the Securities is
herein called the "Closing Time".
(ii) The documents to be delivered at the Closing Time by or on behalf
of the parties hereto pursuant to Section 6 hereof, including the cross receipt
for the Securities and any additional documents requested by the Initial
Purchasers pursuant to Section 6(i) hereof, will be delivered at the offices of
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 (the "Closing
Location"), and the Securities will be delivered at the Designated Office, all
at the Closing Time. A meeting will be held at the Closing Location at 2:00 p.m.
on the New York Business Day next preceding the Closing Time, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes of
this Section 2, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
3. OFFERING OF SECURITIES. Upon the authorization by you of the release
of the Securities, the Initial Purchasers propose to offer the Securities for
sale upon the terms and conditions set forth in this Agreement and the Offering
Circular and each Initial Purchaser hereby represents and warrants to, and
agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is a QIB; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. COVENANTS. The Company covenants and agrees with each Initial
Purchaser:
(a) PREPARATION OF OFFERING CIRCULAR; NOTICES. To prepare the Offering
Circular in a form approved by the Initial Purchasers; to make no amendment or
any supplement to the Offering Circular which shall be disapproved by the
Initial Purchasers promptly after reasonable notice thereof; and to furnish the
Initial Purchasers with copies thereof;
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(b) COPIES OF AND AMENDMENTS TO OFFERING CIRCULAR AND SUPPLEMENTS. To
furnish the Initial Purchasers with copies in such quantities as the Initial
Purchasers may from time to time reasonably request of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and if, at any
time prior to the expiration of nine months after the Execution Date, any event
shall have occurred as a result of which the Offering Circular as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify the Initial Purchasers and upon the request of the
Initial Purchasers to prepare and furnish without charge to each Initial
Purchaser and to any dealer in securities as many copies as the Initial
Purchasers may from time to time reasonably request of an amended Offering
Circular or a supplement to the Offering Circular which will correct such
statement or omission or effect such compliance;
(c) LOCK-UP. During the period beginning from the Execution Date and
continuing to and including the date 90 days after the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of, directly or indirectly,
or announce an offering of, except as provided hereunder any debt securities of
the Company in an offering to the public (or in a private offering where holders
of the debt securities are granted rights to have such debt securities
registered under the Act, or to exchange such debt securities for other debt
securities that are so registered) without the prior written consent of Goldman,
Sachs & Co.;
(d) INVESTMENT COMPANY. Not to be or become, at any time prior to the
expiration of three years after the Closing Date, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the 1940 Act;
(e) PORTAL. To use its reasonable best efforts to cause the Securities
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(f) INFORMATION TO HOLDERS OF SECURITIES. At any time when the Company
is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of
holders from time to time of Securities, to furnish at its expense, upon
request, to holders of Securities and prospective purchasers of Securities
information (the "Additional Issuer Information") satisfying the requirements of
subsection (d)(4)(i) of Rule 144A under the Act;
(g) INITIAL PURCHASERS. During a period of five years from the
Execution Date, to furnish to the Initial Purchasers copies of all reports or
other communications (financial or other) furnished to stockholders of the
Company, and to deliver to the Initial Purchasers (i) copies of any reports and
financial statements furnished to or filed with the Commission or any securities
exchange on which the Securities or any class of securities of the Company is
listed promptly upon such furnishing or filing; and (ii) such additional
information concerning the business and financial condition of the Company as
the Initial Purchasers may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its
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subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(h) RESALES BY COMPANY AND AFFILIATES. Until such time as the Exchange
Offer (as defined in the Registration Rights Agreement) is completed and all
Securities have been exchanged for Exchange Securities, during the period of two
years after the Closing Date, the Company will not, and will not permit any of
its "affiliates" (as defined in Rule 144 under the Act) to, resell any of the
Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them;
(i) EXCHANGE REGISTRATION. The Company shall file and use its best
efforts to cause to be declared or become effective under the Act, on or prior
to 120 days after the Closing Date, a registration statement on Form S-4
providing for the registration of the Exchange Securities and the exchange of
the Securities for the Exchange Securities, all in a manner which will permit
persons who acquire the Exchange Securities to resell the Exchange Securities
pursuant to Section 4(1) of the Act;
(j) USE OF PROCEEDS. To use the net proceeds received by it from the
sale of the Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds";
(k) MANNER OF SALE. Neither the Company nor any of its Affiliates nor
any person acting on its or their behalf will offer or sell the Securities by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Act or, with respect to Securities sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by means of
any directed selling efforts within the meaning of Rule 902 under the Act and
the Company, any Affiliate of the Company and any person acting on its or their
behalf will comply with and will implement the "offering restriction" within the
meaning of such Rule 902; and
(l) DTC. The Company will cooperate with the Representatives and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through DTC.
5. EXPENSES. The Company covenants and agrees with the Initial
Purchasers that the Company will pay or cause to be paid all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the fees, disbursements and expenses of the Company's counsel
and accountants and all other expenses in connection with the preparation, word
processing, printing or other production of the Offering Circular and amendments
and supplements thereto; (ii) the cost of word processing, printing or
reproducing this Agreement, the Agreement Among Underwriters, the Selling
Agreement, the Indentures, the Registration Rights Agreement, the Securities,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all arrangements relating to the delivery to the Initial Purchasers and
dealers of copies of the foregoing documents; (iv) the costs and charges of any
transfer agent or registrar and of DTC; (v) reasonable expenses in connection
with any meetings with prospective investors in the Securities; (vi) fees and
expenses of the Trustee including fees and expenses of counsel for the Trustee;
(vii) all expenses and listing fees incurred in
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connection with the application for quotation of the Securities on the PORTAL
market; and (viii) any fees charged by investment rating agencies for the rating
of the Securities. It is understood, however, that, except as provided in this
Section, and Sections 7, 8 and 11 hereof, the Initial Purchasers will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
If this Agreement is terminated by the Initial Purchasers in accordance
with the provisions of Section 6 or Section 10 hereof, the Company shall
reimburse the Initial Purchasers for all of their out of pocket expenses,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Time,
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) OPINION OF COUNSEL FOR COMPANY. At the Closing Time, the Initial
Purchasers shall have received the favorable opinions, dated as of the Closing
Date, of Willkie Farr & Gallagher, counsel for the Company, and of the General
Counsel or Securities Counsel of the Company, in form and substance satisfactory
to counsel for the Initial Purchasers, to the effect set forth in Exhibits A-1
and A-2 hereto, respectively, and to such further effect as counsel to the
Initial Purchasers may reasonably request;
(b) OPINION OF COUNSEL FOR INITIAL PURCHASERS. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Date, of Sullivan & Cromwell, counsel for the Initial Purchasers, with
respect to the incorporation of the Company, the Indentures, the validity of the
Securities being delivered at the Closing Time, the Offering Circular and such
other related matters as the Initial Purchasers may reasonably request. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Initial Purchasers. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials;
(c) OFFICERS' CERTIFICATE. At such Closing Time, there shall not have
been, since the Execution Date or since the date of the most recent financial
statements included in the Offering Circular (exclusive of any supplement
thereto), any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising from
transactions in the ordinary course of business except as set forth in the
Offering Circular (exclusive of any supplement thereto), and the Initial
Purchasers shall have received certificates of the Chairman of the Board, the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, satisfactory to the Initial Purchasers, to
the effect that, at and as of such Closing
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Time, (i) they have carefully examined the Offering Circular and any supplements
thereto and this Agreement, (ii) there has been no such material adverse change,
(iii) the representations and warranties of the Company in Section 1 hereof are
true and correct in all material respects at and as of the Closing Time with the
same force and effect as though expressly made at and as of such Closing Time,
and (iv) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to such Closing
Time;
(d) ACCOUNTANT'S COMFORT LETTER. At the Closing Time, the Initial
Purchasers shall have received from Arthur Andersen LLP a letter or letters
dated as of the Closing Date, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Circular;
(e) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates
as of which information is given in the Offering Circular, except as otherwise
stated therein, (1) there has been no Material Adverse Effect, whether or not
arising in the ordinary course of business, (2) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, (3) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock except for the Company's 6 1/2% Cumulative Convertible
Preferred Stock and 14% Senior Exchangeable Redeemable Preferred Stock, which
dividend (if any) shall be the customary dividend on such stock, and (4) there
has been no change or decrease specified in the letter referred to in
subsections 6(d) above, the effect of which, in any case referred to in clauses
(1) through (4) above, is, in the sole judgment of the Initial Purchasers, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Offering
Circular (exclusive of any amendment thereof or supplement thereto);
(f) MAINTENANCE OF RATING. At the Closing Date, the Securities shall be
rated at least B by Standard & Poor's Corporation and B3 by Moody's Investors
Service Inc. and, on or after the Execution Date, there shall not have occurred
a downgrading in the rating assigned to the Company's debt securities or
preferred stock by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of any of the Company's debt securities
or preferred stock;
(g) OFFERING CIRCULAR. The Offering Circular shall be in form and
substance reasonably satisfactory to the Initial Purchasers. The Company shall
have complied with the provisions of Section 4(a) hereof with respect to the
furnishing of Offering Circulars as soon as practicable but in no event later
than 2:00 p.m. on November 16, 1999;
(h) ADEQUATE DISCLOSURE OF LITIGATION. There is no litigation or
governmental or other action, suit, claim, proceeding or investigation before
any court or any public, regulatory or governmental agency or body, pending or,
to the best of the Company's knowledge, threatened against the Company or any of
its subsidiaries or any of their respective officers (in their capacity as
officers of the Company or such subsidiaries) or any of the properties, assets,
business or rights
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of the Company or such subsidiaries which is of a character required to be
disclosed in the Offering Circular which is not disclosed therein;
(i) ADDITIONAL DOCUMENTS. At the Closing Time: (i) the Company shall
have furnished to the Initial Purchasers such further information, certificates
and documents as the Initial Purchasers may reasonably request; (ii) counsel for
the Initial Purchasers shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and (iii) all
proceedings taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Initial Purchasers and counsel for the Initial Purchasers;
(j) COMMITMENT LETTER CONSENTS. The financial institutions signatory to
the Commitment Letter shall have consented to the execution, delivery and
performance of this Agreement and the transactions contemplated hereby, and the
Company shall have furnished to the Initial Purchasers evidence of such consent
satisfactory to the Initial Purchasers (such consent also being a condition to
the obligations of the Company hereunder); and
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
5 and except that Sections 1, 7 and 8 shall survive any such termination and
remain in full force and effect.
7. INDEMNIFICATION.
(a) INDEMNIFICATION OF INITIAL PURCHASERS. The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any and all losses, liabilities (joint or
several), claims, damages and expenses whatsoever, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Offering Circular (or any amendment or supplement
thereto), or arise out of or are based upon the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchaser through the Initial Purchasers specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
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(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, each of
its directors (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Company) and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act against any and all losses,
liabilities (joint or several), claims, damages and expenses described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to written information furnished to the Company by such Initial
Purchaser through Goldman, Sachs & Co. specifically for inclusion in the
documents referred to in the foregoing indemnity. The Company acknowledges that
the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, the paragraph related to stabilization on the
reverse of the cover page and, under the heading "Plan of Distribution," the
paragraph related to stabilization in the Offering Circular constitute the only
information furnished in writing by or on behalf of the several Initial
Purchasers for inclusion in such Offering Circular.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give written notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out
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of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
8. CONTRIBUTION. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities pursuant to this Agreement
(provided that in no case shall any Initial Purchaser (except as may be provided
in any agreement among Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Initial Purchaser
hereunder) or (ii) if the allocation provided by clause (i) is unavailable for
any reason, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Initial Purchasers, in each case as set forth in the Offering Circular.
The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
17
<PAGE>
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the number of Securities set forth opposite their respective names in
Schedule I hereto and not joint.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement, or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchasers.
10. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, by notice
given to the Company prior to delivery of and payment for the Securities, if at
any time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or The Nasdaq Stock Market, Inc. ("Nasdaq") or
trading in securities generally on the New York Stock Exchange or the Nasdaq
shall have been suspended or limited or minimum prices shall have been
established on such Exchange or Nasdaq, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred subsequent to the signing hereof any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Initial Purchasers, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Offering Circular (exclusive of any supplement thereto).
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof, and provided further that Sections
1, 7 and 8 shall survive such termination and remain in full force and effect.
11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS. If any one or
more of the Initial Purchasers shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Initial Purchaser or Initial
Purchasers hereunder and such failure to purchase shall constitute a default in
the performance of its or their obligations under this Agreement, the remaining
Initial Purchasers shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set forth opposite their
names in Schedule I hereto bears to the aggregate amount of Securities set forth
opposite the names of all the remaining Initial Purchasers) the Securities which
the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities,
18
<PAGE>
and if such nondefaulting Initial Purchasers do not purchase all of the
Securities, this Agreement will terminate without liability to any nondefaulting
Initial Purchaser or the Company. In the event of a default by any Initial
Purchaser as set forth in this Section 11, the Closing Time shall be postponed
for such period, not exceeding five Business Days, as the Initial Purchasers
shall determine in order that the required changes in the Offering Circular or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Initial Purchaser of its liability,
if any, to the Company and any nondefaulting Initial Purchaser for damages
occasioned by its default hereunder.
12. RELIANCE; NOTICES. In all dealings hereunder, the Initial
Purchasers shall act on behalf of each of the Initial Purchasers, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Initial Purchaser made or given by the
Initial Purchasers jointly or by Goldman, Sachs & Co. on their behalf.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Initial Purchasers shall be delivered or sent by mail,
telex or facsimile transmission to the Initial Purchasers in care of Goldman,
Sachs & Co., Attention: Registration Department (fax no. (212) 357- 1557) and
confirmed to Goldman, Sachs & Co., 32 Old Slip, 21st Floor, New York, New York
10005, Attention: Registration Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Offering Circular, Attention: General Counsel;
PROVIDED, HOWEVER, that any notice to an Initial Purchaser pursuant to Section
7(c) hereof shall be delivered or sent by mail, telex or facsimile transmission
to such Initial Purchaser at its address set forth in its Initial Purchasers'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Initial Purchasers upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers, the Company and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their respective heirs, executors,
administrators, successors and assigns any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Initial Purchasers, the Company and said
controlling persons and officers and directors and their respective heirs,
executors, administrators, successors and assigns, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
14. TIME OF THE ESSENCE. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS THEREOF. SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
19
<PAGE>
16. EFFECT OF HEADINGS. The Section and sub-section headings herein are
for convenience only and shall not affect the construction hereof.
17. COUNTERPARTS. This Agreement may be executed by any one of more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
20
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, and upon
the acceptance hereof by Goldman, Sachs & Co., on behalf of each of the Initial
Purchasers, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Initial Purchasers and the Company. It is
understood that your acceptance of this letter on behalf of each of the Initial
Purchasers is pursuant to the authority set forth in a form of Agreement among
Initial Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
NEXTLINK Communications, Inc.
By /s/ Richard A. Montfort, Jr.
--------------------------------
Name: Richard A. Montfort, Jr.
Title: Assistant Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
Credit Suisse First Boston
TD Securities (USA) Inc.
Barclays Capital Inc.
Chase Securities Inc.
BancBoston Robertson Stephens Inc.
Banc of America Securities LLC
Deutsche Banc Securities Inc.
JP Morgan Securities Inc.
PNC Capital Markets, Inc.
By: Goldman, Sachs & Co.
/s/ Goldman, Sachs & Co.
- ------------------------------------
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
AGGREGATE
AGGREGATE PRINCIPAL AMOUNT
PRINCIPAL AMOUNT OF
OF SENIOR DISCOUNT
SENIOR NOTES TO BE NOTES-TO-BE
INITIAL PURCHASER PURCHASED PURCHASED
---------------------- --------------------------- -------------------------
<S> <C> <C>
Goldman, Sachs & Co. ................................... $140,000,000 $159,250,000
Salomon Smith Barney Inc. .............................. 120,000,000 136,500,000
Credit Suisse First Boston.............................. 20,000,000 22,750,000
TD Securities (USA) Inc................................. 20,000,000 22,750,000
Barclays Capital Inc.................................... 20,000,000 22,750,000
Chase Securities, Inc. ................................. 20,000,000 22,750,000
BancBoston Robertson Stephens Inc....................... 12,000,000 13,650,000
Banc of America Securities LLC.......................... 12,000,000 13,650,000
Deutsche Banc Securities Inc............................ 12,000,000 13,650,000
J.P. Morgan Securities Inc.............................. 12,000,000 13,650,000
PNC Capital Markets, Inc................................ --------------------------- -------------------------
Total......................................... $400,000,000 $455,000,000
--------------------------- -------------------------
--------------------------- -------------------------
</TABLE>
22
<PAGE>
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. The Initial Purchasers represent that they have offered and sold the
Securities, and will offer and sell the Securities (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S or Rule 144A under the Act. Accordingly, the Initial
Purchasers agree that neither they nor any persons acting on their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and they have complied and will comply with the offering
restrictions requirement of Regulation S. The Initial Purchasers agree that, at
or prior to confirmation of sale of Securities (other than a sale pursuant to
Rule 144A), they will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
"THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED AND SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME
OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF
THE OFFERING AND THE CLOSING DATE, EXCEPT IN EITHER CASE IN ACCORDANCE
WITH REGULATION S (OR RULE 144A IF AVAILABLE) UNDER THE SECURITIES ACT.
TERMS USED ABOVE HAVE THE MEANING GIVEN TO THEM BY REGULATION S."
Terms used in this paragraph have the meanings given to them by Regulation S.
The Initial Purchasers further agree that they have not entered and
will not enter into any contractual arrangement with respect to the distribution
or delivery of the Securities, except with their affiliates or with the prior
written consent of the Company.
(2) The Initial Purchasers further agree, on behalf of themselves and
their affiliates, that (a) they have not offered or sold and, prior to the date
six months after the date of issue of the Securities, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (b) they have complied, and will comply,
with all applicable provisions of the Financial Services Act 1996 of Great
Britain with respect to anything done by them in relation to the Securities in,
from or otherwise involving the United Kingdom and (c) they have only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by them in connection with the issuance of the Securities to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 of Great Britain or is a
person to whom the document may otherwise lawfully be issued or passed on.
23
<PAGE>
Exhibit A-1
FORM OF OPINION OF WILLKIE FARR & GALLAGHER
TO BE DELIVERED PURSUANT TO SECTION 6(a)
(i) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Delaware.
(ii) The Company has power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering Circular
and to enter into and perform its obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Circular as of the dates indicated
therein; the shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
(v) Each Designated Subsidiary has been duly formed and is validly
existing as a corporation, limited liability company or limited partnership in
good standing, as applicable, under the laws of the jurisdiction of its
formation, and has power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Circular; all of the
issued and outstanding shares, membership interests or partnership interests of
each Designated Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and, except as otherwise set forth in the Offering
Circular in respect of the minority interests described therein, are owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(vi) The Purchase Agreement and the Registration Rights Agreement
have been duly authorized, executed and delivered by the Company, and the
Registration Rights Agreement constitutes a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, PROVIDED that such counsel
need express no opinion as to the enforceability of provisions with respect to
indemnity for liabilities arising under the Securities Act of 1933, as amended.
(vii) The Indentures have been duly authorized, executed and
delivered; and, assuming due execution by the Trustee, the Indentures constitute
valid and legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
A-1-1
<PAGE>
(viii) The Securities have been duly authorized and executed by the
Company and authenticated, issued and delivered in accordance with the
Indentures and constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indentures, subject, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. In rendering the opinion set forth in this
paragraph (viii), as to authentication we have relied solely on a certificate of
the Trustee as to the authentication of the Securities by a duly authorized
representative of the Trustee and have assumed that the Securities so
authenticated have been delivered to you and paid for by you in accordance with
the Purchase Agreement. The Securities and the Indentures conform in all
material respects to the descriptions thereof in the Offering Circular;
(ix) The Exchange Securities have been duly and validly authorized
by the Company and, when executed by the Company, authenticated by the Trustee
in accordance with the provisions of the Indentures and when the Indentures have
been duly qualified under the Trust Indenture Act and the Exchange Securities
have been exchanged for the Securities pursuant to the Registration Rights
Agreement, will constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indentures, and enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(x) The information in the Offering Circular under the caption
"Description of the Notes", to the extent that it constitutes a summary of the
terms of the Securities, and under the caption "Plan of Distribution", and under
the caption "Regulation" when considered together with the information under the
caption "Business--Regulatory Overview" included in the Company's Annual Report
on Form 10-K, filed on March 29, 1999, which is incorporated therein by
reference, to the extent that it constitutes matters of law, summaries of legal
matters, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xi) The statements set forth in the Offering Circular under the
caption "Material United States Federal Income Tax Consequences", insofar as
such statements purport to summarize certain United States federal income and
estate tax consequences of the ownership and dispensation of the Securities by
certain U.S. Holders and non-U.S. Holders (as such terms are defined therein) of
the Securities, provide a fair summary of such consequences under current law.
(xii) All descriptions in the Offering Circular of contracts and
other documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments that would be required to be described in the Offering
Circular that are not described or referred to in the Offering Circular other
than those described or referred to therein and the descriptions thereof or
references thereto are correct in all material respects.
A-1-2
<PAGE>
(xiii) The documents incorporated by reference in the Offering
Circular (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), as of the date of the Offering
Circular, complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission thereunder.
(xiv) To our best knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or other constituting or
operative document or agreement and, to the best of our knowledge, no default by
the Company or any of its subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the Offering
Circular.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Company
of its obligations under the Purchase Agreement, the Registration Rights
Agreement or the Indentures, in connection with the offering, issuance or sale
of the Securities hereunder or thereunder or the consummation of the actions
contemplated by the Purchase Agreement, the Registration Rights Agreement or the
Indentures, except such as may be required under the Act and the Trust Indenture
Act in connection with the Exchange Offer.
(xvi) The issue and sale of the Securities, the execution, delivery
and performance of the Purchase Agreement, the Indentures, the Securities, the
Registration Rights Agreement and any other agreement or instrument entered into
or issued or to be entered into or issued by the Company in connection with the
transactions contemplated hereby, thereby or in the Offering Circular, and the
consummation of the transactions contemplated herein, therein and in the
Offering Circular (including the issuance and sale of the Securities by the
Company hereunder), the compliance by the Company with its obligations hereunder
and thereunder have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or a Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries, pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease, or any other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any subsidiaries thereof is
subject, except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a Material
Adverse Effect, nor will such action result in any violation of the provisions
of the constituting or operative document or agreement of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets or properties.
(xvii) The Company is not, and upon the issuance and sale of the
Securities and the application of the net proceeds therefrom will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
A-1-3
<PAGE>
Such counsel shall also state that although such counsel does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Circular, except for those referred to, and
to the extent stated, in subsections (x), (xi) and (xii) of this opinion,
nothing has come to the attention of such counsel that would lead them to
believe that, as of its date, the Offering Circular or any further amendment or
supplement thereto made by the Company prior to each Closing Time or any
documents incorporated by reference therein (other than the financial statements
and related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading or that, as of such Closing Time, the
Offering Circular or any further amendment or supplement thereto made by the
Company prior to such Closing Time or any documents incorporated by reference
therein (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel (A) may rely (i) as to matters
involving the application of the laws of the State of Washington, upon the
opinion of the General Counsel or Securities Counsel of the Company (which
opinion shall be dated and furnished to the Initial Purchasers at the Closing
Time, shall be satisfactory in form and substance to counsel for the Initial
Purchasers and shall expressly state that the Initial Purchasers may rely on
such opinion as if it were addressed to them), provided that Willkie Farr &
Gallagher shall state in their opinion that they believe that they and the
Initial Purchasers are justified in relying upon such opinion, and (ii) as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials and (B) may state that they express no opinion as to the laws of any
jurisdiction outside the United States. Such opinion shall not state that it is
to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-1-4
<PAGE>
Exhibit A-2
FORM OF OPINION OF GENERAL COUNSEL OR SECURITIES COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 6(a)
(i) There is not pending or, to the best of my knowledge, threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary thereof is a party, or to which the property of the Company or
any subsidiary thereof is subject, before or brought by any court or
governmental agency or body, which could reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement, the Indentures, the
Registration Rights Agreement or the Securities or the performance by the
Company of its obligations thereunder or the transactions contemplated by the
Offering Circular.
(ii) To the best of my knowledge and except as set forth in or
contemplated by the Offering Circular with respect to systems under development,
(a) each of the Company and its Designated Subsidiaries has all Authorizations
of and from, and has made all declarations and filings with, all Federal, state,
local and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, which are necessary or appropriate for the
Company and its Designated Subsidiaries to own, lease, license, use and
construct its properties and assets and to conduct its business in the manner
described in the Offering Circular, except to the extent that the failure to
obtain any such Authorizations or make any such declaration or filing would not,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (b) all such Authorizations are in full force and effect with
respect to the Company and its Designated Subsidiaries, (c) no event has
occurred that management of the Company reasonably believes is likely to result
in the revocation, termination or modification of any such Authorization and (d)
the Company and its Designated Subsidiaries are in compliance in all material
respects with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto.
(iii) To the best of my knowledge, neither the execution and delivery
of the Purchase Agreement, the Indentures, the Registration Rights Agreement or
the Securities, nor the consummation by the Company of the transactions
contemplated hereby or thereby will cause any suspension, revocation,
impairment, forfeiture, nonrenewal or termination of any Authorization.
In rendering such opinion, such counsel (A) may rely as to matters of
fact (but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of the Company and public officials and (B)
may state that he expresses no opinion as to the laws of any jurisdiction
outside the United States. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
A-2-1
<PAGE>
Exhibit 4.1(i)
- --------------------------------------------------------------------------------
NEXTLINK COMMUNICATIONS, INC.
TO
UNITED STATES TRUST COMPANY OF NEW YORK
TRUSTEE
------------------------------------
Indenture
Dated as of November 17, 1999
------------------------------------
$400,000,000
10 1/2% SENIOR NOTES DUE 2009
- --------------------------------------------------------------------------------
<PAGE>
NEXTLINK COMMUNICATIONS, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ----------
<S> <C>
Section 310(a)(1) ..................................................... 609
(a)(2) ..................................................... 609
(a)(3) ..................................................... Not
Applicable
(a)(4) ..................................................... Not
Applicable
(b) ..................................................... 608
610
Section 311(a) ..................................................... 613
(b) ..................................................... 613
Section 312(a) ..................................................... 701
(b) ..................................................... 702
(c) ..................................................... 702
Section 313(a) ..................................................... 703
(b) ..................................................... 703
(c) ..................................................... 703
(d) ..................................................... 703
Section 314(a) ..................................................... 704
1018
(b) ..................................................... Not
Applicable
(c)(1) ..................................................... 102
(c)(2) ..................................................... 102
(c)(3) ..................................................... Not
Applicable
(d) ..................................................... Not
Applicable
(e) ..................................................... 102
Section 315(a) ..................................................... 601
(b) ..................................................... 602
(c) ..................................................... 601
(d) ..................................................... 601
(e) ..................................................... 514
Section 316(a)(1)(A) ..................................................... 502
512
(a)(1)(B) ..................................................... 513
</TABLE>
- ---------------
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
-i-
<PAGE>
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ----------
<S> <C>
(a)(2) ..................................................... Not
Applicable
(b) ..................................................... 508
(c) ..................................................... 104
Section 317(a)(1) ..................................................... 503
(a)(2) ..................................................... 504
(b) ..................................................... 1003
Section 318(a) ..................................................... 107
</TABLE>
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purpose, be deemed to be a part of the Indenture.
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TABLE OF CONTENTS
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RECITALS OF THE COMPANY................................................................................. 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions........................................................................... 1
Acquired Debt......................................................................... 2
Act................................................................................... 2
Additional Interest................................................................... 2
Affiliate............................................................................. 2
Agent Member.......................................................................... 3
Applicable Procedures................................................................. 3
Asset Disposition..................................................................... 3
Attributable Value.................................................................... 3
Bank Credit Agreement................................................................. 4
Board of Directors.................................................................... 4
Board Resolution...................................................................... 4
Business Day.......................................................................... 4
Capital Lease Obligation.............................................................. 4
Capital Stock......................................................................... 5
Cedel................................................................................. 5
Change of Control..................................................................... 5
Commission............................................................................ 5
Common Equity......................................................................... 5
Company............................................................................... 5
Company Request....................................................................... 5
Company Order......................................................................... 5
Consolidated Capital Ratio............................................................ 5
Consolidated Cash Flow Available for
Fixed Charges.................................................................. 6
Consolidated Income Tax Expense....................................................... 6
Consolidated Interest Expense......................................................... 6
Consolidated Net Income............................................................... 7
Consolidated Net Worth................................................................ 7
Consolidated Tangible Assets.......................................................... 8
Corporate Trust Office................................................................ 8
corporation........................................................................... 8
Debt.................................................................................. 8
Default............................................................................... 9
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Defaulted Interest.................................................................... 9
Depositary............................................................................ 9
Disqualified Stock.................................................................... 9
DTC...................................................................................10
Eagle River...........................................................................10
Eligible Institution..................................................................10
Eligible Receivables..................................................................10
Euroclear.............................................................................10
Event of Default......................................................................10
Exchange Act..........................................................................11
Exchange Offer........................................................................11
Exchange Registration Statement.......................................................11
Exchange Security.....................................................................11
Expiration Date.......................................................................11
Global Security.......................................................................11
Government Securities.................................................................11
Guarantee.............................................................................11
Holder................................................................................12
Incur.................................................................................12
Indenture.............................................................................12
Interest Payment Date.................................................................12
Interest Rate or Currency Protection
Agreement......................................................................12
Investment............................................................................13
Issue Date............................................................................13
Joint Venture.........................................................................13
Lien..................................................................................13
Marketable Securities.................................................................13
Maturity..............................................................................14
Net Available Proceeds................................................................14
Offer to Purchase.....................................................................15
Officers' Certificate.................................................................18
Opinion of Counsel....................................................................18
Original Securities...................................................................18
Outstanding...........................................................................18
Paying Agent..........................................................................19
Permitted Interest Rate or Currency
Protection Agreement...........................................................19
Permitted Investment..................................................................19
Permitted Liens.......................................................................20
Person................................................................................20
Predecessor Security..................................................................21
Preferred Dividends...................................................................21
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Preferred Stock.......................................................................21
Purchase Agreement....................................................................21
Purchase Date.........................................................................21
Purchase Money Debt...................................................................21
Purchasers............................................................................22
readily marketable cash equivalents...................................................22
Receivables...........................................................................22
Receivables Sale......................................................................22
Redemption Date.......................................................................23
Redemption Price......................................................................23
Registered Securities.................................................................23
Regular Record Date...................................................................23
Regulation S..........................................................................23
Regulation S Certificate..............................................................23
Regulation S Global Security..........................................................23
Regulation S Legend...................................................................23
Regulation S Securities...............................................................23
Related Person........................................................................23
Resale Registration Statement.........................................................23
Responsible Officer...................................................................23
Restricted Global Security............................................................24
Restricted Period.....................................................................24
Restricted Securities.................................................................24
Restricted Securities Certificate.....................................................24
Restricted Securities Legend..........................................................24
Restricted Subsidiary.................................................................24
Rule 144A.............................................................................24
Rule 144A Securities..................................................................24
Sale and Leaseback Transaction........................................................24
SEC Reports...........................................................................25
Securities............................................................................25
Securities Act........................................................................25
Securities Act Legend.................................................................25
Security Register.....................................................................25
Security Registrar....................................................................25
Significant Subsidiary................................................................25
Special Record Date...................................................................25
Stated Maturity.......................................................................25
Step-Down Date........................................................................25
Step-Up...............................................................................25
Subordinated Debt.....................................................................26
Subsidiary............................................................................27
Successor Security....................................................................27
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Telecommunications Assets.............................................................27
Telecommunications Business...........................................................27
Trustee...............................................................................27
Trust Indenture Act...................................................................28
Unrestricted Securities Certificate...................................................28
Unrestricted Subsidiary...............................................................28
Vendor Financing Facility.............................................................29
Vice President........................................................................29
Voting Stock..........................................................................29
Wholly-Owned Restricted Subsidiary....................................................29
SECTION 102. Compliance Certificates and Opinions..................................................29
SECTION 103. Form of Documents Delivered to Trustee................................................30
SECTION 104. Acts of Holders; Record Dates.........................................................31
SECTION 105. Notices, Etc., to Trustee and Company.................................................34
SECTION 106. Notice to Holders; Waiver.............................................................34
SECTION 107. Application of Trust Indenture Act....................................................35
SECTION 108. Effect of Headings and Table of Contents..............................................35
SECTION 109. Successors and Assigns................................................................35
SECTION 110. Separability Clause...................................................................35
SECTION 111. Benefits of Indenture.................................................................35
SECTION 112. Governing Law.........................................................................36
SECTION 113. Legal Holidays........................................................................36
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.......................................................................36
SECTION 202. Form of Face of Security..............................................................37
SECTION 203. Form of Reverse of Security...........................................................42
SECTION 204. Additional Provisions Required in Global
Security...................................................................47
SECTION 205. Form of Trustee's Certificate of
Authentication.............................................................47
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.......................................................................48
SECTION 302. Denominations.........................................................................50
SECTION 303. Execution, Authentication, Delivery
and Dating.................................................................50
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SECTION 304. Temporary Securities..................................................................51
SECTION 305. Registration, Registration of
Transfer and Exchange......................................................52
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities..........................................................57
SECTION 307. Payment of Interest; Interest
Rights Preserved...........................................................58
SECTION 308. Persons Deemed Owners.................................................................60
SECTION 309. Cancellation..........................................................................60
SECTION 310. Computation of Interest...............................................................61
SECTION 311. CUSIP Numbers.........................................................................61
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture...............................................61
SECTION 402. Application of Trust Money............................................................63
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.....................................................................63
SECTION 502. Acceleration of Maturity; Rescission
and Annulment..............................................................66
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.................................................67
SECTION 504. Trustee May File Proofs of Claim......................................................68
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities...................................................69
SECTION 506. Application of Money Collected........................................................69
SECTION 507. Limitation on Suits...................................................................70
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest............................................71
SECTION 509. Restoration of Rights and Remedies....................................................71
SECTION 510. Rights and Remedies Cumulative........................................................71
SECTION 511. Delay or Omission Not Waiver..........................................................72
SECTION 512. Control by Holders....................................................................72
SECTION 513. Waiver of Past Defaults...............................................................72
SECTION 514. Undertaking for Costs.................................................................73
SECTION 515. Waiver of Stay or Extension Laws......................................................73
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities...................................................74
SECTION 602. Notice of Defaults....................................................................74
SECTION 603. Certain Rights of Trustee.............................................................74
SECTION 604. Not Responsible for Recitals
or Issuance of Securities..................................................76
SECTION 605. May Hold Securities...................................................................76
SECTION 606. Money Held in Trust...................................................................77
SECTION 607. Compensation and Reimbursement........................................................77
SECTION 608. Disqualification; Conflicting Interests...............................................78
SECTION 609. Corporate Trustee Required; Eligibility...............................................78
SECTION 610. Resignation and Removal; Appointment
of Successor...............................................................79
SECTION 611. Acceptance of Appointment by Successor................................................80
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business..................................................81
SECTION 613. Preferential Collection
of Claims Against the Company..............................................81
SECTION 614. Appointment of Authenticating Agent...................................................81
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
SECTION 701. Company to Furnish Trustee
Names and Addresses of Holders.............................................83
SECTION 702. Preservation of Information;
Communications to Holders..................................................84
SECTION 703. Reports by Trustee....................................................................84
SECTION 704. Reports by Company....................................................................85
SECTION 705. Officers' Certificate with Respect
to Change in Interest Rates................................................85
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers, Consolidations and Certain
Sales of Assets............................................................86
SECTION 802. Successor Substituted.................................................................87
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ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures
Without Consent of Holders.................................................88
SECTION 902. Supplemental Indentures
with Consent of Holders....................................................89
SECTION 903. Execution of Supplemental Indentures..................................................90
SECTION 904. Effect of Supplemental Indentures.....................................................90
SECTION 905. Conformity with Trust Indenture Act...................................................90
SECTION 906. Reference in Securities
to Supplemental Indentures.................................................90
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and
Interest....................................................................91
SECTION 1002. Maintenance of Office or Agency.......................................................91
SECTION 1003. Money for Security Payments to be
Held in Trust...............................................................92
SECTION 1004. Existence.............................................................................94
SECTION 1005. Maintenance of Properties and Insurance...............................................94
SECTION 1006. Payment of Taxes and Other Claims.....................................................95
SECTION 1007. Limitation on Consolidated Debt.......................................................95
SECTION 1008. Limitation on Debt and Preferred Stock
of Restricted Subsidiaries.................................................100
SECTION 1009. Limitation on Restricted Payments....................................................103
SECTION 1010. Limitation on Dividend and Other
Payment Restrictions Affecting
Restricted Subsidiaries....................................................106
SECTION 1011. Limitation on Liens..................................................................108
SECTION 1012. Limitation on Sale and Leaseback
Transactions...............................................................110
SECTION 1013. Limitation on Asset Dispositions.....................................................110
SECTION 1014. Limitation on Issuances and Sales of Capital
Stock of Restricted Subsidiaries...........................................113
SECTION 1015. Transactions with Affiliates
and Related Persons........................................................114
SECTION 1016. Change of Control....................................................................115
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SECTION 1017. Provision of Financial Information...................................................117
SECTION 1018. Statement by Officers as to Default..................................................117
SECTION 1019. Waiver of Certain Covenants..........................................................117
SECTION 1020. Limitation on Use of Proceeds........................................................118
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption..................................................................118
SECTION 1102. Applicability of Article.............................................................119
SECTION 1103. Election to Redeem; Notice to Trustee................................................119
SECTION 1104. Securities to Be Redeemed Pro Rata...................................................120
SECTION 1105. Notice of Redemption.................................................................120
SECTION 1106. Deposit of Redemption Price..........................................................121
SECTION 1107. Securities Payable on Redemption Date................................................122
SECTION 1108. Securities Redeemed in Part..........................................................122
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or
Covenant Defeasance........................................................123
SECTION 1202. Defeasance and Discharge.............................................................123
SECTION 1203. Covenant Defeasance..................................................................124
SECTION 1204. Conditions to Defeasance or
Covenant Defeasance........................................................124
SECTION 1205. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions.............................................127
SECTION 1206. Reinstatement........................................................................128
SECTION 1207. Repayment to Company.................................................................128
ANNEX A - Form of Regulation S Certificate
ANNEX B - Form of Restricted Securities Certificate
ANNEX C - Form of Unrestricted Securities Certificate
</TABLE>
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<PAGE>
INDENTURE, dated as of November 17, 1999, between NEXTLINK
Communications, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), having its principal office at 500 108th Avenue N.E.,
Suite 2200, Bellevue, Washington 98004, and United States Trust Company of New
York, duly organized and existing under the laws of the State of New York, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
$400,000,000 aggregate principal amount of its 10 1/2% Senior Notes due 2009
(the "Securities") of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture. The Securities may consist of Original Securities
and/or Exchange Securities, each as defined herein. The Original Securities and
the Exchange Securities shall rank pari passu in right of payment with all
existing and future senior obligations of the Company.
All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by
<PAGE>
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles (whether or not such is indicated herein) and,
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles
as are generally accepted as consistently applied by the Company at the
date of such computation; and
(4) 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.
Certain terms, used principally in Article Six, are defined in
that Article.
"Acquired Debt" means, with respect to any specified Person,
(i) Debt of any other Person existing at the time such Person merges with or
into or consolidates with or becomes a Restricted Subsidiary of such specified
Person and (ii) Debt secured by a Lien encumbering any asset acquired by such
specified Person, which Debt was not Incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" has the meaning set forth in the form of
Security contained in Section 202. Unless the context otherwise requires,
references herein to "interest" on the Securities shall include Additional
Interest.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in,
the Depository.
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"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, Euroclear and Cedel,
in each case to the extent applicable to such transaction and as in effect from
time to time.
"Asset Disposition" by the Company or any Restricted
Subsidiary means any transfer, conveyance, sale, lease or other disposition
(other than a creation of a Lien) by such Person (including a consolidation or
merger or other sale of any such Restricted Subsidiary with, into or to another
Person in a transaction in which such Restricted Subsidiary ceases to be a
Restricted Subsidiary of the Company, but excluding a disposition by a
Restricted Subsidiary of the Company to the Company or a Restricted Subsidiary
of the Company or by the Company to a Restricted Subsidiary of the Company) of
(i) shares of Capital Stock or other ownership interests of a Restricted
Subsidiary of the Company (including the issuance of Capital Stock by a
Restricted Subsidiary), other than as permitted by the provisions of Section
1008 or pursuant to a transaction in compliance with Section 801, (ii)
substantially all of the assets of the Company or any of its Restricted
Subsidiaries representing a division or line of business (other than as part of
a Permitted Investment) or (iii) other assets or rights of the Company or any of
its Restricted Subsidiaries other than (A) in the ordinary course of business or
(B) that constitutes a Restricted Payment which is permitted by the provisions
of Section 1009; PROVIDED that a transaction described in clauses (i), (ii) and
(iii) shall constitute an Asset Disposition only if the aggregate consideration
for such transfer, conveyance, sale, lease or other disposition is equal to $5
million or more in any 12-month period.
"Attributable Value" means, as to any particular lease under
which any Person is at the time liable other than a Capital Lease Obligation,
and at any date as of which the amount thereof is to be determined, the total
net amount of rent required to be paid by such Person under such lease during
the initial term thereof as determined in accordance with generally accepted
accounting principles, discounted from the last date of such initial term to the
date of determination at a rate per annum equal to the discount rate which would
be applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of penalty, such net
-3-
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amount shall also include the lesser of the amount of such penalty (in which
case no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the rent
which would otherwise be required to be paid if such lease is not so terminated.
"Attributable Value" means, as to a Capital Lease Obligation, the principal
amount thereof.
"Bank Credit Agreement" means any one or more credit
agreements (which may include or consist of revolving credits) between the
Company or any Restricted Subsidiary of the Company and one or more banks or
other financial institutions providing financing for the business of the Company
and its Restricted Subsidiaries.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The Borough of
Manhattan, The City of New York, New York are authorized or obligated by law or
executive order to close.
"Capital Lease Obligation" of any Person means the obligation
to pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles (a "Capital Lease"). The stated
maturity of such obligation shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. The principal
amount of such obligation shall be the capitalized amount thereof that would
appear on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock or other equity participations, including partnership interests, whether
general or limited, of such Person.
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"Cedel" means Cedel Bank, S.A. (or any successor
securities clearing agency).
"Change of Control" has the meaning specified in
Section 1016.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Equity" of any Person means Capital Stock of such
Person that is not Disqualified Stock, and a "sale of Common Equity" includes
any sale of Common Equity effected by private sale or public offering.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by (i) the Chief Executive Officer,
the President, an Executive Vice President or a Vice President of the Company,
and (ii) the Treasurer, Assistant Treasurer or Secretary of the Company, and
delivered to the Trustee.
"Consolidated Capital Ratio" of any Person as of any date
means the ratio of (i) the aggregate consolidated principal amount of Debt (or
in the case of Debt issued at a discount the accreted amount thereof) of such
Person then outstanding (which amount of Debt shall be reduced by any amount of
cash or cash equivalent collateral securing on a perfected basis and dedicated
for disbursement exclusively to the payment of principal of and interest on such
Debt) to (ii) the aggregate consolidated Capital Stock (other than Disqualified
Stock) and paid in capital (other than in respect of Disqualified Stock) of such
Person as of such date.
"Consolidated Cash Flow Available for Fixed Charges" for any
period means the Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period increased by the sum of (i) Consolidated Interest
Expense of the Company and its Restricted Subsidiaries for such period, plus
(ii) Consolidated Income Tax Expense of the Company and its Restricted
Subsidiaries for such period, plus (iii) the consolidated depreciation and
amortization expense included in the income statement of the
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Company and its Restricted Subsidiaries for such period, plus (iv) any noncash
expense for such period (excluding any noncash charge to the extent that it
requires an accrual of or a reserve for cash disbursements in any future
period), plus (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Debt prior to its stated maturity;
PROVIDED, HOWEVER, that there shall be excluded therefrom the Consolidated Cash
Flow Available for Fixed Charges (if positive) of any Restricted Subsidiary of
the Company (calculated separately for such Restricted Subsidiary in the same
manner as provided above for the Company) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"Consolidated Income Tax Expense" for any period means the
consolidated provision for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means for any period the
consolidated interest expense included in a consolidated income statement
(excluding interest income) of the Company and its Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance with generally
accepted accounting principles, including without limitation or duplication (or,
to the extent not so included, with the addition of), (i) the amortization of
Debt discounts; (ii) any payments or fees with respect to letters of credit,
bankers' acceptances or similar facilities; (iii) fees with respect to interest
rate swap or similar agreements or foreign currency hedge, exchange or similar
agreements; (iv) Preferred Dividends of the Company and its Restricted
Subsidiaries (other than dividends paid in shares of Preferred Stock that is not
Disqualified Stock) declared and paid or payable; (v) accrued Disqualified Stock
dividends of the Company and its Restricted Subsidiaries, whether or not
declared or paid; (vi) interest on Debt guaranteed by the Company and its
Restricted Subsidiaries; and (vii) the portion of any Capital Lease Obligation
paid or accrued during such period that is allocable to interest expense.
"Consolidated Net Income" for any period means the
consolidated net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with generally
accepted accounting principles; PROVIDED that there shall be excluded therefrom
(a) the net income (or loss) of any Person acquired by the Company or a
Restricted Subsidiary of the Company in a pooling-of-interests transaction for
any period prior to the date of such transaction, (b) the net income (or loss)
of any Person
-6-
<PAGE>
that is not a Restricted Subsidiary of the Company except to the extent of the
amount of dividends or other distributions actually paid to the Company or a
Restricted Subsidiary of the Company by such Person during such period, (c)
gains or losses on Asset Dispositions by the Company or its Restricted
Subsidiaries, (d) all extraordinary gains and extraordinary losses, (e) the
cumulative effect of changes in accounting principles, (f) non-cash gains or
losses resulting from fluctuations in currency exchange rates, (g) any non-cash
gain or loss realized on the termination of any employee pension benefit plan
and (h) the tax effect of any of the items described in clauses (a) through (g)
above; PROVIDED, FURTHER, that for purposes of any determination pursuant to the
provisions of Section 1009 there shall further be excluded therefrom the net
income (but not net loss) of any Restricted Subsidiary of the Company that is
subject to a restriction which prevents the payment of dividends or the making
of distributions to the Company or another Restricted Subsidiary of the Company
to the extent of such restriction.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Disqualified Stock of such Person; PROVIDED that, with respect
to the Company, adjustments following the date of this Indenture to the
accounting books and records of the Company in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of the Company by another
Person shall not be given effect to.
"Consolidated Tangible Assets" of any Person means the total
amount of assets (less applicable reserves and other properly deductible items)
which under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Restricted Subsidiaries after
deducting therefrom all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet; PROVIDED that, with respect to the Company, adjustments following
the date of this Indenture to the accounting books and records of the Company in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.
"Corporate Trust Office" means the principal office of the
Trustee in the Borough of Manhattan, The City of New York, New York, at which at
any particular time its corporate trust
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business shall be administered, which at the date hereof is located at 114 West
47th Street, New York, New York 10036.
"corporation" means a corporation, association, company,
limited liability company, joint-stock company or business trust.
"Debt" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including any such obligations Incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith), (v) every Capital Lease Obligation of such Person,
(vi) all Receivables Sales of such Person, together with any obligation of such
Person to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith, (vii) all obligations to
redeem Disqualified Stock issued by such Person, (viii) every obligation under
Interest Rate or Currency Protection Agreements of such Person and (ix) every
obligation of the type referred to in clauses (i) through (viii) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has Guaranteed. The "amount" or "principal amount" of Debt at any
time of determination as used herein represented by (a) any Debt issued at a
price that is less than the principal amount at maturity thereof, shall be the
amount of the liability in respect thereof determined in accordance with
generally accepted accounting principles, (b) any Receivables Sale, shall be the
amount of the unrecovered capital or principal investment of the purchaser
(other than the Company or a Wholly-Owned Restricted Subsidiary of the Company)
thereof, excluding amounts representative of yield or interest earned on such
investment, (c) any Disqualified Stock, shall be the maximum fixed redemption or
repurchase price in respect thereof, (d) any Capital Lease Obligation, shall be
determined in accordance with the definition thereof, or (e) any Permitted
Interest Rate or Currency Protection Agreement, shall be zero. In no event shall
Debt include any liability for taxes.
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"Default" means an event that with the passing of time or the
giving of notice or both shall constitute an Event of Default.
"Defaulted Interest" has the meaning specified in
Section 307.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in the form of one or more Global Securities, DTC for
so long as it shall be a clearing agency registered under the Exchange Act, or
such successor (which shall be a clearing agency registered under the Exchange
Act) as the Company shall designate from time to time in an Officers'
Certificate delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of
such Person (other than Capital Stock outstanding on the Issue Date) which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Securities (or, if earlier, the date
as of which the Securities have been paid in full); PROVIDED, HOWEVER, that any
Preferred Stock which would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require the Company to repurchase or
redeem such Preferred Stock upon the occurrence of an asset sale or a Change of
Control occurring prior to the final Stated Maturity of the Securities shall not
constitute Disqualified Stock if the asset sale or change of control provisions
applicable to such Preferred Stock are no more favorable to the holders of such
Preferred Stock than the provisions applicable to the Securities contained in
Section 1013 or Section 1016 and such Preferred Stock specifically provides that
the Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Securities as are required
to be repurchased pursuant to Section 1013 or Section 1016.
"DTC" means The Depository Trust Company.
"Eagle River" means Eagle River Investments, L.L.C., a limited
liability company formed under the laws of the State of Washington.
"Eligible Institution" means a commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated "A-3" or higher, "A" or
higher or "A" or higher according to Moody's Investors Service, Inc., Standard &
Poor's
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Ratings Group or Duff & Phelps Credit Rating Co. (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)) respectively, at the time as
of which any investment or rollover therein is made.
"Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent
quarterly consolidated balance sheet of the Company as at a date at least 45
days prior to such time arising in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company.
"Euroclear" means the Euroclear Clearance System (or
any successor securities clearing agency).
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act) and the rules and regulations thereunder.
"Exchange Offer" has the meaning set forth in the form
of the Securities contained in Section 202.
"Exchange Registration Statement" has the meaning set forth in
the form of the Securities contained in Section 202.
"Exchange Security" means any Security issued in exchange for
an Original Security or Original Securities pursuant to the Exchange Offer or
otherwise registered under the Securities Act and any Security with respect to
which the next preceding Predecessor Security of such Security was an Exchange
Security.
"Expiration Date" has the meaning set forth in the definition
of "Offer to Purchase" in this Section 101.
"Global Security" means a Security in the form prescribed in
Section 204 evidencing all or part of the Securities, issued to the Depositary
or its nominee, and registered in the name of such Depositary or its nominee.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States is
pledged and which have a remaining weighted average life to maturity of not more
than 18 months from the date of Investment therein.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purpose of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that the Guarantee by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business; and PROVIDED, FURTHER, that
the incurrence by a Restricted Subsidiary of the Company of a lien permitted
under clause (iv) of the second paragraph of Section 1011 shall not be deemed to
constitute a Guarantee by such Restricted Subsidiary of any Purchase Money Debt
of the Company secured thereby.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Debt or other
obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Debt or other obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that a change in generally
accepted accounting principles that results in an obligation of such Person that
exists at such time becoming Debt shall not be deemed an Incurrence of such Debt
and that neither the accrual of interest nor the accretion of original issue
discount shall be deemed an Incurrence of Debt; PROVIDED, FURTHER, HOWEVER, that
the Company may elect to treat all or any portion of revolving credit debt of
the Company or a Subsidiary as being incurred from and after any date beginning
the date the revolving credit commitment is extended to the Company or a
Subsidiary, by furnishing notice thereof to the Trustee, and any borrowings or
reborrowings by the Company or a Subsidiary under such commitment up to the
amount of such commitment designated by the Company as Incurred shall not be
deemed to be new Incurrences of Debt by the Company or such Subsidiary.
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<PAGE>
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Interest Rate or Currency Protection Agreement" of any Person
means any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person, including any payment on a
Guarantee of any obligation of such other Person, but excluding any loan,
advance or extension of credit to an employee of the Company or any of its
Restricted Subsidiaries in the ordinary course of business, accounts receivable
and other commercially reasonable extensions of trade credit.
"Issue Date" means the date on which the Securities are first
authenticated and delivered under this Indenture.
"Joint Venture" means a corporation, partnership or other
entity engaged in one or more Telecommunications Businesses as to which the
Company (directly or through one or more Restricted Subsidiaries) exercises
managerial control and in which the Company owns (i) a 50% or greater interest,
or (ii) a 30% or greater interest, together with options or other contractual
rights, exercisable not more than seven years after the Company's initial
Investment in such Joint Venture, to increase its interest to not less than 50%.
"Lien" means, with respect to any property or assets, any
mortgage or deed of trust, pledge, hypothecation, assignment, Receivables Sale,
deposit arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
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"Marketable Securities" means: (i) Government Securities; (ii)
any time deposit account, money market deposit and certificate of deposit
maturing not more than 365 days after the date of acquisition issued by, or time
deposit of, an Eligible Institution; (iii) commercial paper maturing not more
than 365 days after the date of acquisition issued by a corporation (other than
an Affiliate of the Company) with a rating, at the time as of which any
investment therein is made, of "P-1" or higher according to Moody's Investors
Service, Inc., "A-1" or higher according to Standard & Poor's Ratings Group or
"A-1" or higher according to Duff & Phelps Credit Rating Co. (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)); (iv) any
banker's acceptances or money market deposit accounts issued or offered by an
Eligible Institution; (v) repurchase obligations with a term of not more than 7
days for Government Securities entered into with an Eligible Institution; (vi)
auction-rate preferred stocks of any corporation maturing within 90 days after
the date of acquisition by the Company thereof, having a rating of at least AA
by Standard & Poor's; and (vii) any fund investing exclusively in investments of
the types described in clauses (i) through (vi) above.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Net Available Proceeds" from any Asset Disposition by any
Person means cash or readily marketable cash equivalents received (including by
way of sale or discounting of a note, installment receivable or other
receivable, but excluding any other consideration received in the form of
assumption by the acquiror of Debt or other obligations relating to such
properties or assets) therefrom by such Person, net of (i) all legal, title and
recording tax expenses, commissions and other fees and expenses Incurred and all
federal, state, provincial, foreign and local taxes (including taxes payable
upon payment or other distribution of funds from a foreign subsidiary to the
Company or another subsidiary of the Company) required to be accrued as a
liability as a consequence of such Asset Disposition, (ii) all payments made by
such Person or its Restricted Subsidiaries on any Debt which is secured by such
assets in accordance with the terms of any Lien upon or with respect to such
assets or which must by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition or by applicable law, be repaid out
of the proceeds from such Asset Disposition, (iii) all distributions and other
payments made to minority interest holders in Restricted Subsidiaries of such
Person or joint
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<PAGE>
ventures as a result of such Asset Disposition, (iv) appropriate amounts to be
provided by such Person or any Restricted Subsidiary thereof, as the case may
be, as a reserve in accordance with generally accepted accounting principles
against any liabilities associated with such assets and retained by such Person
or any Restricted Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition, in each case as determined by the Board
of Directors, in its reasonable good faith judgment evidenced by a Board
Resolution filed with the Trustee; PROVIDED, HOWEVER, that any reduction in such
reserve within twelve months following the consummation of such Asset
Disposition will be treated for all purposes of this Indenture and the
Securities as a new Asset Disposition at the time of such reduction with Net
Available Proceeds equal to the amount of such reduction, and (v) any
consideration for an Asset Disposition (which would otherwise constitute Net
Available Proceeds) that is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, but amounts under this
clause (v) shall become Net Available Proceeds at such time and to the extent
such amounts are released to such Person.
"Offer to Purchase" means a written offer (the "Offer") sent
by the Company by first class mail, postage prepaid, to each Holder at his
address appearing in the Security Register on the date of the Offer offering to
purchase up to the principal amount of Securities specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Securities within five Business Days after
the Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain information concerning the business of the Company and its Subsidiaries
which the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at a minimum will
include (i) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the Trustee
pursuant to this Indenture (which requirements may be satisfied by delivery of
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such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Offer to Purchase), (iii) if
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase and
(iv) any other information required by applicable law to be included therein).
The Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase. The Offer shall
also state:
(a) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(b) the Expiration Date and the Purchase Date;
(c) the aggregate principal amount of the Outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which such has
been determined pursuant to Section 1013 or 1016) (the "Purchase
Amount");
(d) the purchase price to be paid by the Company for each
$1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(e) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;
(f) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(g) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(h) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(i) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of
business on the Expiration
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<PAGE>
Date (such Security being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing);
(j) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the Expiration Date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
tendered, the certificate number of the Security the Holder tendered
and a statement that such Holder is withdrawing all or a portion of his
tender;
(k) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (b) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased);
(l) that in the case of any Holder whose Security is purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered;
and
(m) the CUSIP number or numbers of the Securities offered to
be purchased by the Company pursuant to the Offer to Purchase.
Any Offer to Purchase shall be governed by and effected in accordance with the
Offer for such Offer to Purchase.
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"Officers' Certificate" means a certificate signed by (i) the
Chief Executive Officer, President, an Executive Vice President or a Vice
President, and (ii) the Treasurer, Assistant Treasurer, Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee and containing
the statements provided for in Section 102. One of the officers signing an
Officers' Certificate given pursuant to Section 1018 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of legal counsel,
who may be counsel for the Company, and who shall be acceptable to the Trustee,
and containing the statements provided for in Section 102.
"Original Securities" means all Securities other than
Exchange Securities.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; PROVIDED that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed
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not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities 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
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company. The Trustee is hereby authorized by the Company to act as
a "Paying Agent" for the purposes of this Indenture, until such time as the
Company notifies the Trustee in writing that such authorization is revoked.
"Permitted Interest Rate or Currency Protection Agreement" of
any Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
"Permitted Investment" means (i) any Investment in a Joint
Venture (including the purchase or acquisition of any Capital Stock of a Joint
Venture), provided the aggregate amount of all outstanding Investments pursuant
to this clause (i) in Joint Ventures in which the Company owns, directly or
indirectly, a less than 50% interest shall not exceed $25 million, (ii) any
Investment in any Person as a result of which such Person becomes a Restricted
Subsidiary, or, subject to the proviso to clause (i) of this definition, becomes
a Joint Venture of the Company, (iii) any Investment in Marketable Securities,
(iv) Investments in Permitted Interest Rate or Currency Protection Agreements,
(v) Investments made as a result of the receipt of noncash consideration from an
Asset Disposition that was made pursuant to and in compliance with Section 1013
of this Indenture and (vi) other Investments in an aggregate amount not to
exceed the aggregate net proceeds received by the Company or any Restricted
Subsidiary after the date of this Indenture from the sale or liquidation of any
Unrestricted Subsidiary or any interest therein (except to the extent that any
such amount is included in the calculation of Consolidated Net Income).
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"Permitted Liens" means (a) Liens for taxes, assessments,
governmental charges or claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with generally
accepted accounting principles shall have been made therefor; (b) other Liens
incidental to the conduct of the Company's and its Restricted Subsidiaries'
business or the ownership of its property and assets not securing any Debt, and
which do not in the aggregate materially detract from the value of the Company's
and its Restricted Subsidiaries' property or assets when taken as a whole, or
materially impair the use thereof in the operation of its business; (c) Liens
with respect to assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company to secure Debt owing to the Company; (d) pledges and
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of statutory obligations
(including to secure government contracts); (e) deposits made to secure the
performance of tenders, bids, leases, and other obligations of like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (f) zoning restrictions, servitudes, easements,
rights-of-way, restrictions and other similar charges or encumbrances incurred
in the ordinary course of business which, in the aggregate, do not materially
detract from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Company or its Restricted Subsidiaries;
(g) Liens arising out of judgments or awards against the Company or any
Restricted Subsidiary with respect to which the Company or such Restricted
Subsidiary is prosecuting an appeal or proceeding for review and the Company or
such Restricted Subsidiary is maintaining adequate reserves in accordance with
generally accepted accounting principles; (h) any interest or title of a lessor
in the property subject to any lease other than a Capital Lease; and (i) any
statutory warehousemen's, materialmen's or other similar Liens for sums not then
due and payable (or which, if due and payable, are being contested in good faith
and with respect to which adequate reserves are being maintained to the extent
required by generally accepted accounting principles).
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Predecessor Security" of any particular Security means every
previous Security issued before, and evidencing all or a portion of the same
debt as that evidenced by, such particular Security; and, for the purposes of
this definition, any Security
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authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Dividends" for any Person means for any period the
quotient determined by dividing the amount of dividends and distributions paid
or accrued (whether or not declared) on Preferred Stock of such Person during
such period calculated in accordance with generally accepted accounting
principles, by 1 minus the maximum statutory income tax rate then applicable to
the Company (expressed as a decimal).
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Purchase Agreement" means the Purchase Agreement, dated as of
November 12, 1999, between the Company and the Purchasers, as such agreement may
be amended from time to time.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" in this Section 101.
"Purchase Money Debt" means (i) Acquired Debt Incurred in
connection with the acquisition of Telecommunications Assets and (ii) Debt of
the Company or of any Restricted Subsidiary of the Company (including, without
limitation, Debt represented by Bank Credit Agreements, Capital Lease
Obligations, Vendor Financing Facilities, mortgage financings and purchase money
obligations) Incurred for the purpose of financing all or any part of the cost
of construction, acquisition or improvement by the Company or any Restricted
Subsidiary of the Company or any Joint Venture of any Telecommunications Assets
of the Company, any Restricted Subsidiary of the Company or any Joint Venture,
and including any related notes, Guarantees, collateral documents, instruments
and agreements executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.
"Purchasers" means Goldman, Sachs & Co., Salomon Smith Barney
Inc., Credit Suisse First Boston Corporation, TD Securities (USA) Inc., Barclays
Capital Inc., Chase Securities Inc., Banc of America Securities LLC, BancBoston
Robertson Stephens Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities
Inc. and PNC Capital Markets, Inc.
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"readily marketable cash equivalents" means (i) marketable
securities issued or directly and unconditionally guaranteed by the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof and, at the time of
acquisition, having the highest rating obtainable from either Standard & Poor's
Rating Group or Moody's Investors Service, Inc.; (iii) commercial paper maturing
no more than 180 days from the date of acquisition thereof and, at the time of
acquisition, having a rating of P-1 according to Moody's Investors Service,
Inc., "A-1" or higher according to Standard & Poor's Ratings Group or "A-1" or
higher according to Duff & Phelps Credit Rating Co. (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)); and (iv) certificates of
deposit or bankers' acceptance maturing within one year from the date of
acquisition thereof issued by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
having unimpaired capital and surplus of not less than $100,000,000.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
in respect of the sale of goods or services.
"Receivables Sale" of any Person means any sale of Receivables
of such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person relating
thereto or a disposition of defaulted Receivables for purpose of collection and
not as a financing arrangement.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Securities" means the Exchange Securities and all
other Securities sold or otherwise disposed of pursuant to an effective
registration statement under the Securities Act, together with their respective
Successor Securities.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the May 15 or November 15 (whether or
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not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Regulation S" means Regulation S under the Securities Act (or
any successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate
substantially in the form set forth in Annex A.
"Regulation S Global Security" has the meaning
specified in Section 201.
"Regulation S Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 202 to be
placed upon each Regulation S Security.
"Regulation S Securities" means all Securities required
pursuant to Section 305(c) to bear a Regulation S Legend. Such
term includes the Regulation S Global Security.
"Related Person" of any Person means any other Person directly
or indirectly owning (a) 10% or more of the Outstanding Common Equity of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person) or (b) 10% or more of the combined voting
power of the Voting Stock of such Person.
"Resale Registration Statement" has the meaning set forth in
the Form of the Securities contained in Section 202.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Global Security" has the meaning specified
in Section 201.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which
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Securities are first offered to persons other than distributors (as defined in
Regulation S) in reliance on Regulation S and (ii) the original issuance date of
the Securities.
"Restricted Securities" means all Securities required
pursuant to Section 305(c) to bear any Restricted Securities
Legend. Such term includes the Restricted Global Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the
legends substantially in the forms of the legends required in the form of
Security set forth in Section 202 to be placed upon each Restricted Security.
"Restricted Subsidiary" of the Company means any Subsidiary,
whether existing on or after the date of this Indenture, unless such Subsidiary
is an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the
Purchasers from the Company pursuant to the Purchase Agreement, other than the
Regulation S Securities.
"Sale and Leaseback Transaction" of any Person means an
arrangement with any lender or investor or to which such lender or investor is a
party providing for the leasing by such Person of any property or asset of such
Person which has been or is being sold or transferred by such Person more than
365 days after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset. The stated maturity of such arrangement
shall be the date of the last payment of rent or any other amount due under such
arrangement prior to the first date on which such arrangement may be terminated
by the lessee without payment of a penalty.
"SEC Reports" has the meaning specified in Section 704.
"Securities" means the Exchange Securities and the
Original Securities.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
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"Securities Act Legend" means a Restricted Securities
Legend or a Regulation S Legend.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Significant Subsidiary" means a Restricted Subsidiary that is
a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
interest, as the case may be, is due and payable.
"Step-Down Date" has the meaning set forth in the form
of the Security contained in Section 202.
"Step-Up" has the meaning set forth in the form of the
Security contained in Section 202.
"Subordinated Debt" means Debt of the Company as to which the
payment of principal of (and premium, if any) and interest and other payment
obligations in respect of such Debt shall be subordinate to the prior payment in
full of the Securities to at least the following extent: (i) no payments of
principal of (or premium, if any) or interest on or otherwise due in respect of
such Debt may be permitted for so long as any default in the payment of
principal (or premium, if any) or interest on the Securities exists; (ii) in the
event that any other default that with the passing of time or the giving of
notice, or both, would constitute an Event of Default exists with respect to the
Securities, upon notice by 25% or more in principal amount of the Securities to
the Trustee, the Trustee shall have the right to give notice to the Company and
the holders of such Debt (or trustees or agents therefor) of a payment blockage,
and thereafter no payments of principal of (or premium, if any) or interest on
or otherwise due in respect of such Debt may be made for a period of 179 days
from the date of such notice or for the period until such default has been cured
or waived or ceased to exist and any acceleration of the Securities has been
rescinded or annulled, whichever period is shorter (which Debt may provide that
(A) no new period of payment blockage may be commenced by a payment blockage
notice unless and until 360 days have elapsed since the effectiveness of the
immediately prior notice, (B) no nonpayment default that existed
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or was continuing on the date of delivery of any payment blockage notice to such
holders (or such agents or trustees) shall be, or be made, the basis for a
subsequent payment blockage notice and (C) failure of the Company to make
payment on such Debt when due or within any applicable grace period, whether or
not on account of such payment blockage provisions, shall constitute an event of
default thereunder); and (iii) such Debt may not (x) provide for payments of
principal of such Debt at the stated maturity thereof or by way of a sinking
fund applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any redemption,
retirement or repurchase which is contingent upon events or circumstances, but
excluding any retirement required by virtue of acceleration of such Debt upon an
event of default thereunder), in each case prior to the final Stated Maturity of
the Securities or (y) permit redemption or other retirement (including pursuant
to an offer to purchase made by the Company) of such other Debt at the option of
the holder thereof prior to the final Stated Maturity of the Securities, other
than a redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Company) which is
conditioned upon a change of control of the Company pursuant to provisions
substantially similar to those of Section 1016 (and which shall provide that
such Debt will not be repurchased pursuant to such provisions prior to the
Company's repurchase of the Securities required to be repurchased by the Company
pursuant to the provisions of Section 1016.
"Subsidiary" of any Person means (i) a corporation more than
50% of the combined voting power of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and affairs
thereof.
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Telecommunications Assets" means all assets, rights
(contractual or otherwise) and properties, whether tangible or
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intangible, used or intended for use in connection with a Telecommunications
Business.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii) creating,
developing or marketing communications related network equipment, software and
other devices for use in a Telecommunication Business or (iii) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in (i) or (ii) above and shall, in any event,
include all businesses in which the Company or any of its Subsidiaries are
engaged on the Issue Date; PROVIDED that the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board of
Directors, which determination shall be conclusive.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"Unrestricted Subsidiary" means (1) any Subsidiary of the
Company designated as such by the Board of Directors as set forth below where
(a) neither the Company nor any of its other Subsidiaries (other than another
Unrestricted Subsidiary) (i) provides credit support for, or Guarantee of, any
Debt of such Subsidiary or any Subsidiary of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Debt) or (ii) is directly
or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary, and (b) no default with respect to any Debt of such Subsidiary or
any Subsidiary of such Subsidiary (including any right which the holders thereof
may have to take enforcement action against such Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt of the Company and
its Restricted Subsidiaries to declare a default on such other Debt or cause the
payment thereof to be accelerated or payable prior to its final scheduled
maturity and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Subsidiary
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to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock
of, or owns or holds any Lien on any property of, any other Subsidiary of the
Company which is not a Subsidiary of the Subsidiary to be so designated or
otherwise an Unrestricted Subsidiary, PROVIDED that either (x) the Subsidiary to
be so designated has total assets of $1,000 or less or (y) immediately after
giving effect to such designation, the Company could Incur at least $1.00 of
additional Debt pursuant to the first paragraph of Section 1007 and PROVIDED,
FURTHER, that the Company could make a Restricted Payment in an amount equal to
the greater of the fair market value and the book value of such Subsidiary
pursuant to Section 1009 and such amount is thereafter treated as a Restricted
Payment for the purpose of calculating the aggregate amount available for
Restricted Payments thereunder. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary, PROVIDED that if such
Unrestricted Subsidiary has Debt outstanding at such time, either (a)
immediately after giving effect to such designation, the Company could Incur at
least $1.00 of additional Debt pursuant to the first paragraph of Section 1007
or (b) the Company or such Restricted Subsidiary could Incur such Debt hereunder
(other than as Acquired Debt).
"Vendor Financing Facility" means any agreements between the
Company or a Restricted Subsidiary of the Company and one or more vendors or
lessors of equipment or other capital assets to the Company or any of its
Restricted Subsidiaries (or any affiliate of any such vendor or lessor)
providing financing for the acquisition by the Company or any such Restricted
Subsidiary of equipment or other capital assets from any such vendor or lessor.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly-Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person 99% or more of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person or by such Person and one or more
Wholly-Owned Restricted Subsidiaries of such Person.
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SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act and under this Indenture. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate of an officer of the Company may be based,
insofar as it relates to legal matters, upon an opinion of counsel submitted
therewith, unless such officer knows, or in the exercise of reasonable care
should know, that the opinion with respect to the matters upon which his
certificate is based is erroneous. Any opinion of counsel may be based, insofar
as it relates to factual matters, upon a certificate of an officer or officers
of the Company submitted therewith stating the information on which counsel is
relying, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate with respect to such matters is erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing pursuant to this Section 104 may be proved by the
affidavit of a witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
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The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities, PROVIDED that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If not set by the Company prior to the first solicitation of
a Holder made by any Person in respect of any such matter referred to in the
foregoing sentence, the record date for any such matter shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first solicitation. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to take
the relevant action, whether or not such Holders remain Holders after such
record date; PROVIDED that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 106.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities
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entitled to join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction
referred to in Section 512. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
PROVIDED that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Trustee, at the Company's expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Company in writing and to each Holder of Securities in the
manner set forth in Section 106.
With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
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SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder if delivered in
writing to the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to the Company at the address of its
principal office specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Trustee by
the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if (i) in the case of a Global Security, in writing by
facsimile and/or by overnight mail to the Depositary, and (ii) in the case of
securities other than Global Securities, in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders 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 regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
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SECTION 107. APPLICATION OF TRUST INDENTURE ACT.
The Trust Indenture Act shall apply as a matter of contract to
this Indenture for purposes of interpretation, construction and defining the
rights and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
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SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
Purchase Date or at the Stated Maturity, PROVIDED that no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of
authentication thereof shall be in substantially the forms set forth in this
Article, with such appropriate legends, insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
Upon their original issuance, Rule 144A Securities shall be
issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee and deposited with the Trustee, as custodian for
the Depositary, for credit by the Depositary to the respective accounts of
beneficial owners of the Securities represented thereby (or such other accounts
as they may direct). Such Global Securities, together with their Successor
Securities which are Global Securities other than the Regulation S Global
Security, are collectively herein called the "Restricted Global Security". Upon
their original issuance, Regulation S Securities shall be issued in the form of
one or more Global Securities registered in the name of the Depositary, or its
nominee and deposited with the Trustee, as custodian for the Depositary, for
credit to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), PROVIDED that
upon such deposit all such Securities shall be credited to or through accounts
maintained at the Depositary by or on behalf
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of Euroclear or Cedel. Such Global Securities, together with their Successor
Securities which are Global Securities other than the Restricted Global
Security, are collectively herein called the "Regulation S Global Security".
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
In certain cases described elsewhere herein, the legends set
forth in Section 202 may be omitted from Securities issued hereunder.
SECTION 202. FORM OF FACE OF SECURITY.
[If the Security is a Global Security, insert the
legends required by Section 204 of the Indenture]
[If Restricted Securities, then insert -- THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR
SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT
ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER
CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR
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(2) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (O)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT.]
[If a Regulation S Security, then insert -- THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS SECURITY IS REGISTERED UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS
AVAILABLE.]
NEXTLINK Communications, Inc.
10 1/2% SENIOR NOTES DUE 2009
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. ]
[IF ANY REGULATION S SECURITY - CUSIP NO. ]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. ]
No. ______ $____________
NEXTLINK Communications, Inc., a corporation organized under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to_____________, or registered assigns,
the principal sum of _____________ Dollars [if this Security is a Global
Security, then insert: (which principal amount may from time to time be
increased or decreased to such other principal amounts (which, taken together
with the principal amounts of all other Outstanding Securities, shall not exceed
$400,000,000 in the aggregate at any time) by adjustments made on the records of
the Trustee hereinafter referred to in accordance with the Indenture)] on
December 1, 2009, and to pay interest thereon from November 17, 1999 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 1 and December 1 in each year, commencing
June 1, 2000 at the rate of 10 1/2% per annum, until the principal hereof is
paid or made available for payment. [If Original Securities, then insert:
PROVIDED, HOWEVER, that if (i) the Company has not filed a registration
statement (the "Exchange Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), registering a security substantially
identical to this Security (except that such Security will not contain terms
with respect to the Additional Interest payments described below or transfer
restrictions)
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pursuant to an exchange offer (the "Exchange Offer") (or, in lieu thereof, a
registration statement registering this Security for resale (a "Resale
Registration Statement")) by February 15, 2000, or (ii) the Exchange
Registration Statement relating to the Exchange Offer or, if applicable, the
Resale Registration Statement has not become or been declared effective by March
16, 2000, or (iii) the Exchange Offer has not been completed within 45 days
after the date on which the Exchange Registration Statement has become or been
declared effective initially (if the Exchange Offer is then required to be made
pursuant to the Exchange and Registration Rights Agreement (the "Exchange and
Registration Rights Agreement"), dated as of November 17, 1999, by and between
the Company, the Purchasers (as defined therein) and the Holders from time to
time of the Securities) or (iv) either the Exchange Registration Statement or,
if applicable, the Resale Registration Statement is filed and declared effective
(except as specifically permitted therein) but shall thereafter cease to be
effective without being succeeded promptly by an additional registration
statement filed and declared effective, in each case (i) through (iv) upon the
terms and conditions set forth in the Exchange and Registration Rights Agreement
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), then interest will accrue (in addition to any stated interest on the
Securities) (the "Step-Up") at a rate of 0.5% per annum, determined daily, on
the principal amount of the Securities, for the period from the occurrence of
the Registration Default until such time (the "Step-Down Date") as no
Registration Default is in effect and, PROVIDED, FURTHER, that if either the
Exchange Offer has not been consummated or, if applicable, the Resale
Registration Statement has not become or been declared effective, in each case
by April 30, 2000, then the per annum rate of such Additional Interest shall
increase (the "Subsequent Step-Up") by an additional 0.25% per annum for each
subsequent 90-day period (provided that the Step-Up and all Subsequent Step-Up
interest rates shall not exceed 1.0% per annum in the aggregate) and Additional
Interest will be payable at such increased rate until such time (the "Subsequent
Step Down Date") as the Company consummates the Exchange Offer or, if
applicable, the Resale Registration Statement becomes or has been declared
effective (after which such interest rate will be restored to its initial rate).
Interest accruing as a result of the Step-Up or the Subsequent Step-Up (which
shall be computed on the basis of a 365-day year) is referred to herein as
"Additional Interest." Accrued Additional Interest, if any, shall be paid
semi-annually on June 1 and December 1, in each year; and the amount of accrued
Additional Interest shall be determined on the basis of the number of days
actually elapsed. Any accrued and unpaid interest (including Additional
Interest) on this Security upon the issuance of an Exchange Security (as
defined in the Indenture) in exchange for this Security shall cease to be
payable to the Holder hereof but such accrued and unpaid interest (including
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Additional Interest) shall be payable on the next Interest Payment Date for such
Exchange Security to the Holder thereof on the related Regular Record Date.] The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
May 15 or November 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
In the case of a default in payment of principal and premium,
if any, upon acceleration or redemption, interest shall be payable pursuant to
the preceding paragraph on such overdue principal (and premium, if any), such
interest shall be payable on demand and, if not so paid on demand, such interest
shall itself bear interest at the rate of 10 1/2% per annum (to the extent that
the payment of such interest shall be legally enforceable), and shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest on unpaid interest shall
also be payable on demand.
If this Security is issued in the form of a Global Security,
payments of the principal of (and premium, if any) and interest on this Security
shall be made in immediately available funds to the Depositary. If this Security
is issued in certificated form, payment of the principal of (and premium, if
any) and interest on this Security will be made at the corporate trust office of
the Trustee and at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, New York, and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
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Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: November 17, 1999.
NEXTLINK Communications, Inc.
By______________________________
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities
of the Company designated as its 10 1/2% Senior Notes Due 2009 (the
"Securities") issued under an Indenture, dated as of November 17, 1999 (herein
called the "Indenture"), between the Company and United States Trust Company of
New York, as trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture). The Securities are limited in aggregate
principal amount to $400,000,000. Reference is hereby made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities are subject to redemption upon not less than 30
nor more than 60 days' notice by mail to each Holder of
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Securities to be redeemed at such Holder's address appearing in the Security
Register, in amounts of $1,000 or an integral multiple of $1,000, at any time on
or after December 1, 2004 and prior to maturity, as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount) plus accrued and unpaid interest to but
excluding the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment that
is on or prior to the Redemption Date), if redeemed during the 12-month period
beginning December 1, of each of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ------
<S> <C>
2004 105.250%
2005 103.500%
2006 101.750%
</TABLE>
and thereafter at a Redemption Price equal to 100.000% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
The Securities are further subject to redemption on or prior
to December 1, 2002 only in the event that on or before December 1, 2002 the
Company receives net proceeds from a sale of its Common Equity, in which case
the Company may, at its option, use all or a portion of any such net proceeds to
redeem Securities in a principal amount of up to an aggregate amount equal to
33 1/3% of the original principal amount of the Securities, at a Redemption
Price of 110.5% of their principal amount plus accrued and unpaid interest of
the Securities to be redeemed to but excluding the Redemption Date (subject
to the right of Holders of record to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date); PROVIDED, HOWEVER,
that Securities in an amount equal to at least 66 2/3% of the original
aggregate principal amount of the Securities remain Outstanding after such
redemption and such redemption occurs on a Redemption Date within 90 days of
any such sale of the Company's Common Equity and upon not less than 30 nor
more than 60 days' notice by mail to each Holder of Securities to be redeemed
at such Holder's address appearing in the Security Register. The Company may
only redeem the Securities in amounts of $1,000 or an integral multiple of
$1,000.
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<PAGE>
In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Securities do not have the benefit of any sinking fund
obligations.
The Indenture provides that, subject to certain conditions, if
(i) a Change of Control occurs or (ii) certain Net Available Proceeds are
available to the Company as a result of any Asset Disposition, the Company shall
be required to make an Offer to Purchase for all or a specified portion of the
Securities.
[If not a Global Security -- In the event of redemption or
purchase pursuant to an Offer to Purchase of this Security in part only, a new
Security or Securities of like tenor for the unredeemed or unpurchased portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
[If a Global Security insert -- In the event of a deposit or
withdrawal of an interest in this Security (including upon an exchange,
transfer, redemption or repurchase of this Security in part only) effected in
accordance with the Applicable Procedures, the Security Registrar, upon receipt
of notice of such event from the Depositary's custodian for this Security, shall
make an adjustment on its records to reflect an increase or decrease of the
Outstanding principal amount of this Security resulting from such deposit or
withdrawal, as the case may be.]
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security, or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
Unless the context otherwise requires, the Original Securities
(as defined in the Indenture) and the Exchange Securities (as defined in the
Indenture) shall constitute one series for all purposes under the Indenture,
including without limitation, amendments, waivers, redemptions and Offers to
Purchase.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of
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the rights and obligations of the Company and the rights of the Holders of the
Securities under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Outstanding Securities a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
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the Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and like tenor and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like tenor and aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
Interest [If an Original Security, then insert: (other than
Additional Interest)] on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its
entirety by the Company pursuant to Section 1013 or 1016 of the Indenture, check
the box:
/ /
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If you want to elect to have only a part of this Security
purchased by the Company pursuant to Section 1013 or 1016 of the Indenture,
state the amount: $___________
Dated:________________ Your Signature __________________
(Sign exactly as name
appears on the other side of
this Security)
Signature Guarantee:________________________________________
Notice: Signature(s) must be guaranteed by
an "eligible guarantor institution" meeting
the requirements of the Trustee, which
requirements will include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Trustee in addition to, or
in substitution for STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
SECTION 204. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203, bear a legend in substantially the
following form:
[If a Global Security, insert -- THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[If a Global Security to be held by the Depository Trust
Company, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS
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<PAGE>
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 A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.]
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION.
This is one of the Securities referred to in the
within-mentioned Indenture.
United States Trust Company of New York,
as Trustee
By ____________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $400,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906 or 1108 or in connection with an Offer to Purchase pursuant to
Section 1013 or 1016.
The Company may issue Exchange Securities from time to time
pursuant to an Exchange Offer or otherwise, in each case pursuant to a Board
Resolution, subject to Section 303, included in an Officers' Certificate
delivered to the Trustee, in authorized denominations in exchange for a like
principal amount of Original Securities. Upon any such exchange the Original
Securities shall be canceled in accordance with Section 309 and shall no longer
be deemed Outstanding for any purpose. In no event shall the aggregate principal
amount of Original Securities and Exchange Securities Outstanding exceed
$400,000,000.
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The Securities shall be known and designated as the "10 1/2%
Senior Notes due 2009" of the Company. The Stated Maturity of the Securities
shall be December 1, 2009. The Securities shall bear interest at the rate of
10 1/2% per annum, from November 17, 1999 or from the most recent Interest
Payment Date thereafter to which interest has been paid or duly provided for,
as the case may be, payable semi-annually on June 1 and December 1,
commencing June 1, 2000, until the principal thereof is paid or made
available for payment; PROVIDED, HOWEVER, with respect to Original
Securities, if there has been a Registration Default, a Step-Up will occur
and the Original Securities will from then bear Additional Interest until the
Step-Down Date and, if either the Exchange Offer has not been consummated or,
if applicable, the Resale Registration Statement has not become or been
declared effective, in each case, by April 30, 2000, a Subsequent Step-Up
will occur and the Original Securities will from then bear Additional
Interest until the Subsequent Step-Down Date. Accrued Additional Interest, if
any, shall be paid in cash in arrears semi-annually on June 1 and December 1
in each year, and the amount of accrued Additional Interest shall be
determined on the basis of the number of days actually elapsed. In connection
with the cash payment of any Additional Interest, the Company shall notify
the Trustee (the "Additional Interest Notice") on or before the later to
occur of (i) the Regular Record Date preceding such payment of any Additional
Interest, and (ii) the date on which any such Additional Interest begins to
accrue, of the amount of Additional Interest to be paid by the Company on the
next Interest Payment Date. In the event of the occurrence of a Step-Down
Date during the period between the date on which the Additional Interest
Notice is given and the next Interest Payment Date, the Company shall so
notify the Trustee and shall provide the Trustee with the revised amount of
Additional Interest to be paid by the Company on such Interest Payment Date.
In the case of a default in payment of principal and premium,
if any, upon acceleration or redemption, interest shall be payable pursuant to
the preceding paragraph on such overdue principal (and premium, if any), such
interest shall be payable on demand and, if not so paid on demand, such interest
shall itself bear interest at the rate of 10 1/2% per annum (to the extent that
the payment of such interest shall be legally enforceable), and shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest on unpaid interest shall
also be payable on demand.
If this Security is issued in the form of a Global Security,
payments of the principal of (and premium, if any) and interest on this Security
shall be made in immediately available funds to the Depositary. If the
Securities are issued in
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certificated form, the principal of and premium, if any, and interest on the
Securities shall be payable at the corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, New York, maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Securities shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Sections 1013 and 1016.
The Securities shall be redeemable as provided in Article
Eleven.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities shall be subject to defeasance at the option of
the Company as provided in Article Twelve.
Unless the context otherwise requires, the Original Securities
and the Exchange Securities shall constitute one series for all purposes under
the Indenture, including without limitation, amendments, waivers, redemptions
and Offers to Purchase.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY
AND DATING.
The Securities shall be executed on behalf of the Company by
its Chief Executive Officer, its President, its Executive Vice President or one
of its Vice Presidents and attested by its Secretary or Assistant Secretary. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to
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the authentication and delivery of such Securities or did not hold such offices
at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
At any time and from time to time after the execution and
delivery of this Indenture and after the effectiveness of a Registration
Statement under the Securities Act with respect thereto, the Company may deliver
Exchange Securities executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Exchange Securities and a like principal amount of Original Securities for
cancellation in accordance with Section 309 of this Indenture, and the Trustee
in accordance with the Company Order shall authenticate and deliver such
Securities. In authenticating such Exchange Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) that such Exchange Securities have been duly and validly
issued in accordance with the terms of the Indenture, and are entitled
to all the rights and benefits set forth herein; and
(b) that the issuance of the Exchange Securities in exchange
for the Original Securities has been effected in compliance with the
Securities Act of 1933, as amended.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
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SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company
may execute, and upon a Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like tenor and principal amount
of definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. REGISTRATION, REGISTRATION OF
TRANSFER AND EXCHANGE.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as they may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers and exchanges of Securities as herein
provided.
Such Security Register shall distinguish between
Original Securities and Exchange Securities.
Subject to the other provisions of this Indenture regarding
restrictions on transfer, upon surrender for registration of transfer of any
Security at an office or agency of the Company designated pursuant to Section
1002 for such purpose in accordance with the terms hereof, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new
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Securities of any authorized denominations and of a like tenor and aggregate
principal amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder and subject to the other
provisions of this Section 305, Securities may be exchanged for other Securities
of any authorized denominations and of a like tenor and aggregate principal
amount and bearing the applicable legends set forth in Section 202, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and (subject to the provisions in the Original Securities
regarding the payment of Additional Interest) entitled to the same benefits
under this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 305, 906 or 1108 or in
accordance with any Offer to Purchase pursuant to Section 1013 or 1016 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
(b) CERTAIN TRANSFERS AND EXCHANGES. Notwithstanding any other
provision of this Indenture or the Securities,
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transfers and exchanges of Securities and beneficial interests in a Global
Security of the kinds specified in this Section 305(b) shall be made only in
accordance with this Section 305(b).
(i) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY. If the owner of a beneficial interest in the Restricted
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this Clause (b)(i)
and Clause (b)(iv) below and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Security Registrar, of (A) an order given by
the Depositary or its authorized representative directing that a
beneficial interest in the Regulation S Global Security in a specified
principal amount be credited to a specified Agent Member's account and
that a beneficial interest in the Restricted Global Security in an
equal principal amount be debited from another specified Agent Member's
account and (B) a Regulation S Certificate, satisfactory to the Trustee
and duly executed by the owner of such beneficial interest in the
Restricted Global Security or his attorney duly authorized in writing,
then the Trustee, as Security Registrar but subject to Clause (b)(vii)
below, shall reduce the principal amount of the Restricted Global
Security and increase the principal amount of the Regulation S Global
Security by such specified principal amount.
(ii) REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL
SECURITY. If the owner of a beneficial interest in the Regulation S
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to the
Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Restricted
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited
from another specified Agent Member's account and (B) if such transfer
is to occur during the Restricted Period, a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by the owner
of such beneficial interest in the Regulation S Global Security or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar, shall reduce the principal amount of the Regulation S Global
Security and increase the principal
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amount of the Restricted Global Security by such specified principal
amount.
(iii) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A Security
that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is
not a Global Security as provided in Section 305(a), PROVIDED that, if
the Security to be transferred in whole or in part is a Restricted
Security, or is a Regulation S Security and the transfer is to occur
during the Restricted Period, then the Trustee shall have received (A)
a Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in
the form of a Restricted Security, or (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the transferor Holder
or his attorney duly authorized in writing, in which case the
transferee Holder shall take delivery in the form of a Regulation S
Security (subject in every case to Section 305(c)).
(iv) REGULATION S GLOBAL SECURITY TO BE HELD THROUGH
EUROCLEAR OR CEDEL DURING RESTRICTED PERIOD. The Company shall use its
best efforts to cause the Depositary to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Security may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent Members
acting for the account thereof), and no person shall be entitled to
effect any transfer or exchange that would result in any such interest
being held otherwise than in or through such an account; PROVIDED that
this Clause (b)(iv) shall not prohibit any transfer or exchange of such
an interest in accordance with Clause (b)(ii) above.
(v) EXCHANGES OF BOOK-ENTRY SECURITIES FOR CERTIFICATED
SECURITIES. A beneficial interest in a Global Security may not be
exchanged for a Security in certificated form unless (i) DTC (x)
notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Security or (y) has ceased to be a clearing
agency registered under the Exchange Act and in either case the Company
thereupon fails to appoint a successor Depositary, (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the
issuance of the Securities in certificated form or (iii) there shall
have occurred and be continuing an Event of Default or any event which
after notice or lapse of time or both would be an Event of Default with
respect to the Securities. In all cases, certificated Securities
delivered in exchange for any
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Global Security or beneficial interests therein will be registered in
the names, and issued in any approved denominations, requested by or on
behalf of the Depositary (in accordance with its customary procedures).
Any certificated Security issued in exchange for an interest in a
Global Security will bear the legend restricting transfers that is
borne by such Global Security. Any such exchange will be effected
through the DWAC System and an appropriate adjustment will be made in
the records of the Security Registrar to reflect a decrease in the
principal amount of the relevant Global Security.
(c) SECURITIES ACT LEGENDS. Rule 144A Securities and their
Successor Securities shall bear a Restricted Securities Legend, and the
Regulation S Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:
(i) subject to the following Clauses of this Section
305(c), a Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Security or any portion thereof
shall bear the Securities Act Legend borne by such Global Security
while represented thereby;
(ii) subject to the following Clauses of this Section
305(c), a new Security which is not a Global Security and is issued in
exchange for another Security (including a Global Security) or any
portion thereof, upon transfer or otherwise, shall bear the Securities
Act Legend borne by such other Security, PROVIDED that, if such new
Security is required pursuant to Section 305(b)(v) or (vi) to be issued
in the form of a Restricted Security, it shall bear a Restricted
Securities Legend and, if such new Security is so required to be issued
in the form of a Regulation S Security, it shall bear a Regulation S
Legend;
(iii) Registered Securities shall not bear a Securities
Act Legend;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Security which does not bear a Securities Act Legend may be
issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if the
Trustee has received an Unrestricted Securities Certificate,
satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and after
such date and receipt of such certificate, the Trustee shall
authenticate and deliver such
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a new Security in exchange for or in lieu of such other Security as
provided in this Article Three;
(v) a new Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a new
Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this
Section 305(c), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article Three.
SECTION 306. MUTILATED, DESTROYED, LOST AND
STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in the discretion
of the Company may, instead of issuing a new Security, pay such Security.
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Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST
RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest (including Additional Interest) on any Security
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall (a) bear
interest at the rate per annum stated in the form of Security included herein
(to the extent that the payment of such interest shall be legally enforceable),
and (b) forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security
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and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of
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any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and premium,
if any, and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption,
registration of transfer, exchange or pursuant to any Offer to Purchase pursuant
to Section 1013 or 1016 shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of in accordance with its standard procedures
or as directed by a Company Order; PROVIDED, HOWEVER, that the Trustee shall not
be required to destroy such Securities.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months, except that Additional Interest shall be
computed on the basis of a 365-day year.
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SECTION 311. CUSIP NUMBERS.
The Company in issuing Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use) in addition to serial numbers; if so, the
Trustee shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers
in notices of redemption and repurchase as a convenience to Holders; PROVIDED
that any such notice may state that no representation is made as to the
correctness of such CUSIP and ISIN numbers either as printed on the Securities
or as contained in any notice of a redemption or repurchase and that reliance
may be placed only on the serial or other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected by any
defect in or omission of such CUSIP and ISIN numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect as to all
outstanding Securities (except as to (i) rights of registration of transfer and
exchange and the Company's right of optional redemption, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders of Securities to receive payment of principal of and premium,
if any, and interest on the Securities, (iv) rights, obligations and immunities
of the Trustee under the Indenture and (v) rights of the holders of the
Securities as beneficiaries of the Indenture with respect to any property
deposited with the Trustee payable to all or any of them), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) the Company will have paid or caused to be paid
the principal of and premium, if any, and interest on the
Securities as and when the same will have become due and
payable; or
(B) all outstanding Securities (except lost, stolen
or destroyed Securities which have been replaced or paid) have
been delivered to the Trustee for cancellation;
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and the Company, in the case of (A) above, has deposited or
caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal of and premium, if any, and interest to the date of
such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) the Company has delivered to the Trustee 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
(4) the Trustee shall have received such other documents and
assurances as the Trustee shall have reasonably requested.
Notwithstanding the satisfaction and discharge of this Indenture, (i) the
obligations of the Company to the Trustee under Section 607, (ii) substitution
of apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders of Securities to receive payment of principal of and premium,
if any, and interest on the Securities, (iv) rights, obligations and immunities
of the Trustee under this Indenture (including, if money shall have been
deposited with the Trustee pursuant to subclause (B) of Clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003), and (v) rights of holders of the Securities as beneficiaries
of this Indenture with respect to any property deposited with the Trustee
payable to all or any of them, shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled
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thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (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):
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security when due; or
(3) default in the payment of principal and interest upon any
Security required to be purchased pursuant to an Offer to Purchase
pursuant to Sections 1013 or 1016 when due and payable; or
(4) default in the performance, or breach, of
Section 801; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or in any Security (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) a default or defaults under any bond(s), debenture(s),
note(s) or other evidence(s) of Debt by the Company or any Significant
Subsidiary of the
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Company or under any mortgage(s), indenture(s) or instrument(s) under
which there may be issued or by which there may be secured or evidenced
any Debt of such type by the Company or any such Significant Subsidiary
with a principal amount then outstanding, individually or in the
aggregate, in excess of $10 million, whether such Debt now exists or
shall hereafter be created, which default or defaults shall constitute
a failure to pay such Debt when due at the final maturity thereof, or
shall have resulted in such Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable; or
(7) a final judgment or final judgments (not subject to
appeal) for the payment of money are entered against the Company or any
Significant Subsidiary in an aggregate amount in excess of $10 million
by a court or courts of competent jurisdiction, which judgments remain
undischarged or unstayed for a period (during which execution shall not
be effectively stayed) of 45 days after the right to appeal all such
judgments has expired; or
(8) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(9) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the
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entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing
of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Subsidiary or
of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION
AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 501(8) or (9) with respect to the Company) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities may declare
the Default Amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such Default Amount and any accrued interest, together
with all other amounts due under this Indenture, shall become immediately due
and payable. If an Event of Default specified in Section 501(8) or (9) with
respect to the Company occurs, the Default Amount of and any accrued interest on
the Securities then Outstanding, together with all other amounts due under this
Indenture, shall ipso facto become immediately due and payable without any
declaration or other Act on the part of the Trustee or any Holder.
The "Default Amount" in respect of any particular Security as
of any particular date of acceleration shall equal the principal amount of the
Security plus accrued and unpaid interest to such date.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for
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payment of the money due based on acceleration has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required
to have been purchased on the Purchase Date pursuant to an
Offer to Purchase made by the Company) and interest thereon at
the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the applicable rate
borne by the Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS
FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof or, with
respect to any Security required to have been purchased pursuant to an
Offer to Purchase made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
provided by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses incurred by the Trustee
under this Indenture, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any
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moneys, securities or other property payable or deliverable upon the exchange of
the Securities or upon any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities 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;
PROVIDED, HOWEVER, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
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FIRST: To the payment of all amounts due the
Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
The Trustee, upon prior written notice to the Company, may fix a record date and
payment date for any payment to the Holders pursuant to this Section 506.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered and, if requested,
provided to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer and, if requested, provision of indemnity has failed
to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or
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by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS
TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date or, in the case of an Offer to Purchase made by the Company and
required to be accepted as to such Security, on the Purchase Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders 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
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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.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities 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 on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or expose the Trustee to personal liability
(as determined in the sole discretion of the Trustee), and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
The Trustee may refuse, however, to follow any direction that the Trustee, in
its sole discretion, determines may be unduly prejudicial to the rights of
another Holder or that may subject the Trustee to any liability or expense if
the Trustee determines, in its sole discretion, that it lacks indemnification
against such loss or expense.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all the
Securities by written notice to the Trustee waive any past default hereunder and
its consequences, except a default
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(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to
have been purchased pursuant to an Offer to Purchase which has been
made by the Company), or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected or
(3) arising from failure to purchase any Security tendered
pursuant to Sections 1013 and 1016.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any Default
hereunder as and to the extent provided by the Trust Indenture Act, unless such
Default has been cured or waived; PROVIDED, HOWEVER, that in the case of any
Default of the character specified in Section 501(5), no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness 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 or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or a Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction reasonably
satisfactory to the Trustee;
(f) 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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(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 and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith which the Trustee reasonably
believed to have been authorized or within its rights or powers.
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SECTION 604. NOT RESPONSIBLE FOR RECITALS
OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar (if
other than the Trustee) or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar or
such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense,
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disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation, expenses and disbursements of its agents, accountants,
experts and counsel) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
enforcing this Indenture against the Company (including, without
limitation, this Section 607) and of defending itself against any claim
(whether asserted by any Holder or the Company) or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The provisions of this Section 607 shall survive any
termination of this Indenture and the resignation or removal of the
Trustee.
As security for the performance of the obligations of the
Company under this Section 607, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities. The Trustee's right to receive payment of any
amounts due under this Section 607 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Securities may be so
subordinated).
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 501(8) or (9) occurs, the expenses and the
compensation for such services are intended to constitute expenses of
administration under Title 11, U.S. Code, or any similar Federal state or
foreign law for the relief of debtors.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in the Borough of Manhattan, The City of New York, New York. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of a Federal, State, Territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT
OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 611, at which time the retiring Trustee shall be fully discharged from
its obligations hereunder.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver 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,
then, in any such case, (i) the Company, by Board Resolution, may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee under Section 607, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION
OR SUCCESSION TO BUSINESS.
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 all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED that such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION
OF CLAIMS AGAINST THE COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the
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Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities 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 hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or 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
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an 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 such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper
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or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the
within-mentioned Indenture.
United States Trust Company of New York,
AS TRUSTEE
By......................................,
AS AUTHENTICATING AGENT
By.......................................
AUTHORIZED SIGNATORY
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
SECTION 701. COMPANY TO FURNISH TRUSTEE
NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION;
COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company, the
Trustee or any agent of any of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
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SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act and in the manner set
forth in Section 1017; PROVIDED that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act ("SEC Reports") shall be filed with the Trustee within 15 days
after the same is so required to be filed with the Commission. In the event the
Company shall cease to be required to file SEC Reports pursuant to the Exchange
Act, the Company will nonetheless continue to file such reports with the
Commission (unless the Commission will not accept such a filing) and the Trustee
and to furnish copies of such SEC Reports to the Holders of Securities at the
time the Company is required to file such reports with the Trustee and will make
such information available to investors who request it in writing.
SECTION 705. OFFICERS' CERTIFICATE WITH RESPECT
TO CHANGE IN INTEREST RATES.
Within five days after any Step-Up, Subsequent Step-Up,
Step-Down Date or Subsequent Step-Down Date, the Company shall deliver an
Officers' Certificate to the Trustee stating the new interest rate and the date
on which it became effective.
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ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. MERGERS, CONSOLIDATIONS AND CERTAIN
SALES OF ASSETS.
(a) The Company may not, in a single transaction or a series
of related transactions, (i) consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into the Company (other
than a consolidation or merger of a Wholly-Owned Restricted Subsidiary organized
under the laws of a State of the United States into the Company), or (ii)
directly or indirectly, transfer, sell, lease or otherwise dispose of all or
substantially all of its assets (determined on a consolidated basis for the
Company and its Restricted Subsidiaries taken as a whole and provided that the
creation of a Lien on or in any of its assets shall not in and of itself
constitute the transfer, sale, lease or disposition of the assets subject to the
Lien), unless: (1) in a transaction in which the Company does not survive or in
which the Company sells, leases or otherwise disposes of all or substantially
all of its assets to any other Person, the successor entity to the Company shall
be a corporation organized under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's obligations under this
Indenture; (2) immediately after giving pro forma effect to such transaction as
if such transaction had occurred at the beginning of the last full fiscal
quarter immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction being included in such
pro forma calculation and treating any Debt which becomes an obligation of the
Company or a Subsidiary as a result of such transaction as having been Incurred
by the Company or such Subsidiary at the time of the transaction, no Default or
Event of Default shall have occurred and be continuing; (3) immediately after
giving effect to such transaction, the Consolidated Net Worth of the Company (or
other successor entity to the Company) is equal to or greater than that of the
Company immediately prior to the transaction; (4) if, as a result of any such
transaction, property or assets of the Company would become subject to a Lien
prohibited by the provisions of Section 1011, the Company or the successor
entity to the Company shall have secured the Securities as required by Section
1011;(5) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel, each in form and substance satisfactory to the Trustee
stating that such consolidation,
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merger, conveyance, transfer, lease or acquisition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with, and, with
respect to such Officer's Certificate, setting forth the manner of determination
of the Consolidated Net Worth in accordance with Clause (3) of Section 801, of
the Company or, if applicable, of the Successor Company as required pursuant to
the foregoing.
(b) In the event of any transaction (other than a lease)
described in and complying with the immediately preceding paragraph in which the
Company is not the surviving Person and the surviving Person assumes all the
obligations of the Company under the Securities and this Indenture pursuant to a
supplemental indenture, such surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Company, and the
Company will be discharged from its obligations under this Indenture and the
Securities; PROVIDED that solely for the purpose of calculating amounts under
Section 1009(3), any such surviving Person shall only be deemed to have
succeeded to and be substituted for the Company with respect to the period
subsequent to the effective time of such transaction, and the Company (before
giving effect to such transaction) shall be deemed to be the "Company" for such
purposes for all prior periods.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the
Company with or into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES
WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when
authorized by Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Securities pursuant to the requirements of
Section 1011 or otherwise; or
(4) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to comply with any
requirement of the Commission in order to effect qualification of this
Indenture under the Trust Indenture Act in connection with the issuance
of Exchange Securities or thereafter to maintain the qualification of
this Indenture under the Trust Indenture Act;
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, PROVIDED that such action
pursuant to this Clause (5) shall not adversely affect the legal rights
of the Holders; or
(6) to provide for uncertificated Securities in addition to or
in place of certificated Securities.
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SECTION 902. SUPPLEMENTAL INDENTURES
WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, and consistent with Section 513, the
Company, when authorized by Board Resolution, and the Trustee may 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 modifying in any manner the rights of the Holders under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
thereon, or change the place of payment where, or the coin or currency
in which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or, in the case of an
Offer to Purchase which has been made, on or after the applicable
Purchase Date, or
(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1019, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) following the mailing of an Offer with respect to an Offer
to Purchase pursuant to Section 1013 or 1016 and until the Expiration
Date of such Offer to Purchase, modify the provisions of this Indenture
with respect to such Offer to Purchase in a manner materially adverse
to such Holder.
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It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
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.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES
TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
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ARTICLE TEN
Covenants
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND
INTEREST.
The Company will duly and punctually pay the principal of and
premium, if any, and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The
City of New York, New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan, The City of
New York, New York) where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
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SECTION 1003. MONEY FOR SECURITY
PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee in writing of its action or failure so to act. As provided in
Section 504, upon any bankruptcy or reorganization proceeding relative to the
Company, the Trustee shall serve as the Paying Agent for the Securities.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee in writing of its action or failure so to act. As
provided in Section 504, upon any bankruptcy or reorganization proceeding
relative to the Company the Trustee shall serve as the Paying Agent for the
Securities.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest;
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
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(4) acknowledge, accept and agree to comply in all respects
with the provisions of this Indenture relating to the duties, rights
and obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on the Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct
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of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.
SECTION 1005. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary, to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, as determined in the good faith judgment of the Board of
Directors evidenced by a Board Resolution, desirable in the conduct of its
business or, in the case of the Company, the business of any Subsidiary, and not
disadvantageous in any material respect to the Holders.
The Company shall, and shall cause the Subsidiaries of the
Company to, keep at all times all of their properties which are of an insurable
nature insured against loss or damage with insurers believed by the Company to
be responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in
accordance with good business practice.
SECTION 1006. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent,
(1) all taxes, assessments and governmental charges levied or imposed
upon the Company or any Subsidiaries of the Company or upon the income, profits
or property of the Company or any Subsidiaries, and
(2) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon the property of the Company or any
Subsidiaries of the Company; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability
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or validity is being contested in good faith by appropriate proceedings.
SECTION 1007. LIMITATION ON CONSOLIDATED DEBT.
The Company may not, and may not permit any
Restricted Subsidiary of the Company to, Incur any Debt
unless either
(a) the ratio of:
(i) the aggregate consolidated principal amount of Debt of the
Company outstanding as of the most recent available quarterly or annual balance
sheet, after giving pro forma effect to the Incurrence of such Debt and any
other Debt Incurred since such balance sheet date and the receipt and
application of the proceeds thereof
to
(ii) Consolidated Cash Flow Available for Fixed Charges for
the four full fiscal quarters next preceding the Incurrence of such Debt for
which consolidated financial statements are available, determined on a pro forma
basis as if
(x) any such Debt had been Incurred and the
proceeds thereof had been applied at the beginning of such
four fiscal quarters;
(y) the net income (or loss) for such period
of any Person or related to any assets disposed of by the Company or a
Restricted Subsidiary of the Company prior to the end of such period had been
excluded from Consolidated Net Income; and
(z) the net income (or loss) for such period
of any Person or related to any assets acquired by the Company or any Restricted
Subsidiary prior to the end of such period had been included in Consolidated Net
Income,
would be less than 5.5 to 1 for such four-quarter periods ending on or prior to
December 31, 1999 and 5.0 to 1 for such periods ending thereafter;
or
(b) the Company's Consolidated Capital Ratio as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such
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Debt, any issuance of Capital Stock (other than Disqualified Stock) since such
balance sheet date, any increase in paid in-capital (other than in respect of
Disqualified Stock) since such balance sheet date and the Incurrence of any
other Debt since such balance sheet date and the receipt and application of the
proceeds thereof, is less than 2.0 to 1.
Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur the following:
(i) Debt under any one or more Bank Credit Agreements or Vendor
Financing Facilities in an aggregate principal amount at any one time
not to
exceed the greater of:
(x) $250 million and
(y) 85% of the Eligible Receivables, and any renewal,
extension, refinancing or refunding thereof in an amount which, together with
any principal amount remaining outstanding or available under all Bank Credit
Agreements and Vendor Financing Facilities of the Company and its Restricted
Subsidiaries, plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of any Bank Credit Agreement so
refinanced plus the amount of expenses incurred in connection with such
refinancing, does not exceed the aggregate principal amount outstanding or
available under all such Bank Credit Agreements and Vendor Financing Facilities
of the Company and its Restricted Subsidiaries immediately prior to such
renewal, extension, refinancing or refunding;
(ii) Purchase Money Debt Incurred to finance the construction,
acquisition or improvement of Telecommunications Assets, PROVIDED that
the net proceeds of such Purchase Money Debt do not exceed 100% of the
cost of construction, acquisition or improvement price of the
applicable Telecommunications Assets;
(iii) Debt owed by the Company to any Restricted Subsidiary of the
Company or Debt owed by a Restricted Subsidiary of the Company to the
Company or a Restricted Subsidiary of the Company; PROVIDED, HOWEVER,
that upon either
(x) the transfer or other disposition by such Restricted
Subsidiary or the Company of any Debt so permitted to a Person other than the
Company or another Restricted Subsidiary of the Company or
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(y) the issuance (other than directors' qualifying shares),
sale, lease, transfer or other disposition of shares of Capital Stock (including
by consolidation or merger) of such Restricted Subsidiary as a result of which
the obligor of such Debt ceases to be a Restricted Subsidiary, the provisions of
this clause (iii) shall no longer be applicable to such Debt and such Debt shall
be deemed to have been Incurred at the time of such transfer or other
disposition;
(iv) Debt Incurred to renew, extend, refinance or refund (each, a
"refinancing") Debt outstanding at the date of this Indenture or
Incurred pursuant to the preceding paragraph or clause (ii) of this
paragraph or the Securities in an aggregate principal amount not to
exceed the aggregate principal amount of and accrued interest on the
Debt so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Debt
so refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the amount of
expenses of the Company incurred in connection with such refinancing;
PROVIDED, HOWEVER, that Debt the proceeds of which are used to
refinance the Securities or Debt which is PARI PASSU to the Securities
or debt which is subordinate in right of payment to the Securities
shall only be permitted if:
(A) in the case of any refinancing of the Securities or Debt
which is PARI PASSU to the Securities, the refinancing Debt is made PARI PASSU
to the Securities or subordinated to the Securities, and, in the case of any
refinancing of Debt which is subordinated to the Securities, the refinancing
Debt constitutes Subordinated Debt and
(B) in either case, the refinancing Debt by its terms, or by
the terms of any agreement or instrument pursuant to which such Debt is issued,
(x) does not provide for payments of
principal of such Debt at the stated maturity thereof or by way of a sinking
fund applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any redemption,
retirement or repurchase which is contingent upon events or circumstances, but
excluding any retirement required by virtue of acceleration of such Debt upon
any event of default thereunder), in each case prior to the time the same are
required by the terms of the Debt being refinanced and
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(y) does not permit redemption or other
retirement (including pursuant to an offer to purchase made by the Company) of
such Debt at the option of the holder thereof prior to the final stated maturity
of the Debt being refinanced, other than a redemption or other retirement at the
option of the holder of such Debt (including pursuant to an offer to purchase
made by the Company) which is conditioned upon a change substantially similar to
the provisions of Section 1016 or which is pursuant to provisions substantially
similar to the provisions of Section 1013;
(v) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vi) Debt outstanding under the Securities;
(vii) Subordinated Debt invested by:
(a) a group of employees of the Company, which includes the
Chief Executive Officer of the Company, who own, directly or indirectly, through
an employee stock ownership plan or arrangement, shares of the Company's Capital
Stock or
(b) any other Person that controls the Company
(i) on the Issue Date or
(ii) after a Change of Control, PROVIDED that
the Company is not in default with respect to its
obligations under Section 1016;
(viii) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(ix) Debt not otherwise permitted to be Incurred pursuant to
clauses (i) through (viii) above, which, together with any other
outstanding Debt Incurred pursuant to this clause (ix), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
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For purposes of determining compliance with this Section 1007,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt the Company is permitted to incur pursuant to the foregoing
clauses (i) through (ix) or the first paragraph of this Section 1007, the
Company shall have the right, in its sole discretion, to classify such item of
Debt and shall only be required to include the amount and type of such Debt
under the clause or paragraph permitting the Debt as so classified. The
determination of any particular amount of Debt under such covenant shall be made
without duplication for Guarantees or Liens supporting Debt otherwise included
in the determination of a particular amount.
SECTION 1008. LIMITATION ON DEBT AND PREFERRED STOCK
OF RESTRICTED SUBSIDIARIES.
The Company may not permit any Restricted Subsidiary of the
Company (other than a Restricted Subsidiary that has fully and unconditionally
Guaranteed the Securities on an unsubordinated basis) to Incur or suffer to
exist any Debt or issue any Preferred Stock except:
(i) Debt or Preferred Stock outstanding on the date of this
Indenture after giving effect to the application of the proceeds of the
Securities;
(ii) Debt Incurred or Preferred Stock issued to and held by the
Company or a Restricted Subsidiary of the Company (provided that such
Debt or Preferred Stock is at all times held by the Company or a
Restricted Subsidiary of the Company);
(iii) Debt Incurred or Preferred Stock issued by a
Person prior to the time:
(A) such Person became a Restricted Subsidiary of
the Company,
(B) such Person merges into or consolidates with a Restricted
Subsidiary of the Company or
(C) another Restricted Subsidiary of the Company merges into
or consolidates with such Person (in a transaction in which such Person becomes
a Restricted Subsidiary of the Company), which Debt or Preferred Stock was not
Incurred or issued in anticipation of such transaction and was outstanding prior
to such transaction;
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(iv) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(v) Debt or Preferred Stock of a Joint Venture;
(vi) Debt under any one or more Bank Credit Agreements or Vendor
Financing Facilities (and renewals, extensions, refinancings or
refundings thereof) which is permitted to be outstanding under clause
(i) of Section 1007;
(vii) Debt consisting of Guarantees of the
Securities;
(viii) Debt or Preferred Stock which is exchanged for, or the
proceeds of which are used to refinance, refund or redeem, any Debt or
Preferred Stock permitted to be outstanding pursuant to clauses (i),
(iii) and (ix) hereof (or any extension or renewal thereof) (for
purposes hereof, a "refinancing"), in an aggregate principal amount, in
the case of Debt, or with an aggregate liquidation preference, in the
case of Preferred Stock, not to exceed the aggregate principal amount
of the Debt so refinanced or the aggregate liquidation preference of
the Preferred Stock so refinanced, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Debt or Preferred Stock so refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish
such refinancing by means of a tender offer or privately negotiated
repurchase, plus the amount of expenses of the Company and the
Restricted Subsidiary incurred in connection therewith and provided the
Debt or Preferred Stock incurred or issued upon such refinancing by its
terms, or by the terms of any agreement or instrument pursuant to which
such Debt or Preferred Stock is Incurred or issued,
(x) does not provide for payments of principal or liquidation
value at the stated maturity of such Debt or Preferred Stock or by way of a
sinking fund applicable to such Debt or Preferred Stock or by way of any
mandatory redemption, defeasance, retirement or repurchase of such Debt or
Preferred Stock by the Company or any Restricted Subsidiary of the Company
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each case
prior to the time the same are
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required by the terms of the Debt or Preferred Stock being refinanced and
(y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company or a Restricted Subsidiary
of the Company) of such Debt or Preferred Stock at the option of the holder
thereof prior to the stated maturity of the Debt or Preferred Stock being
refinanced, other than a redemption or other retirement at the option of the
holder of such Debt or Preferred Stock (including pursuant to an offer to
purchase made by the Company or a Restricted Subsidiary of the Company) which is
conditioned upon the change of control of the Company pursuant to provisions
substantially similar to the provisions of Section 1016 or which is pursuant to
provisions substantially similar to the provisions of Section 1013, and
PROVIDED, FURTHER, that in the case of any exchange or redemption of Preferred
Stock of a Restricted Subsidiary of the Company, such Preferred Stock may only
be exchanged for or redeemed with Preferred Stock of such Restricted Subsidiary;
(ix) Purchase Money Debt Incurred to finance the construction,
acquisition or improvement of Telecommunications Assets, PROVIDED that
the net proceeds of such Purchase Money Debt do not exceed 100% of the
cost of construction, acquisition or improvement price of the
applicable Telecommunications Assets; and
(x) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(xi) Debt not otherwise permitted to be incurred pursuant to
clauses (i) through (x) above, which, together with any other
outstanding Debt incurred pursuant to this clause (xi), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
For purposes of determining compliance with this Section 1008, in the
event that an item of Debt meets the criteria of more than one of the types of
Debt a Restricted Subsidiary of the Company is permitted to incur pursuant to
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the foregoing clauses (i) through (xi), the Company shall have the right, in its
sole discretion, to classify such item of Debt and shall be only required to
include the amount and type of such Debt under the clause permitting the Debt as
so classified. The determination of any particular amount of Debt under such
covenant shall be made without duplication for Guarantees or Liens supporting
Debt otherwise included in the determination of a particular amount.
SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS.
The Company:
(i) may not, directly or indirectly, declare or pay any dividend, or
make any distribution, in respect of its Capital Stock or to the holders thereof
(in their capacity as such), excluding any dividends or distributions payable
solely in shares of its Capital Stock (other than Disqualified Stock) or in
options, warrants or other rights to acquire its Capital Stock (other than
Disqualified Stock);
(ii) may not, and may not permit any Restricted Subsidiary to,
purchase, redeem, or otherwise retire or acquire for value:
(a) any Capital Stock of the Company or any
Related Person of the Company;
or
(b) any options, warrants or rights to purchase or acquire
shares of Capital Stock of the Company or any Related Person of the Company or
any securities convertible or exchangeable into shares of Capital Stock of the
Company or any Related Person of the Company;
(iii) may not make, or permit any Restricted Subsidiary to make, any
Investment in, or payment on a Guarantee of any obligation of, any Person, other
than the Company or a Restricted Subsidiary of the Company, except for Permitted
Investments; and
(iv) may not, and may not permit any Restricted Subsidiary to, redeem,
defease, repurchase, retire or otherwise acquire or retire for value, prior to
any scheduled maturity, repayment or sinking fund payment, Debt of the Company
which is subordinate in right of payment to
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the Securities (each of clauses (i) through (iv) being a "Restricted Payment")
if:
(1) a Default or an Event of Default shall have
occurred and is continuing; or
(2) upon giving effect to such Restricted Payment, the Company
could not Incur at least $1.00 of additional Debt pursuant to the provisions of
the first paragraph of Section 1007; or
(3) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments from April 25, 1996 exceeds the sum of:
(a) 50% of cumulative Consolidated Net Income
(or, in the case Consolidated Net Income shall be negative, less 100% of such
deficit) since the end of the last full fiscal quarter prior to April 25, 1996
through the last day of the last full fiscal quarter ending immediately
preceding the date of such Restricted Payment; plus
(b) $5 million; plus
(c) 100% of the net reduction in Investments
in any Unrestricted Subsidiary since the end of the last full fiscal quarter
prior to April 25, 1996 resulting from payments of interest on Debt, dividends,
repayments of loans or advances, or other transfers of assets, in each case to
the Company or any Restricted Subsidiary of the Company from such Unrestricted
Subsidiary (except to the extent that any such payment is included in the
calculation of Consolidated Net Income) or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries; PROVIDED that the amount included in
this clause (c) shall not exceed the amount of Investments previously made by
the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary;
PROVIDED, FURTHER, that the Company or a Restricted Subsidiary of the Company
may make any Restricted Payment with the aggregate net proceeds received after
April 25, 1996, including the fair value of property other than cash (determined
in good faith by the Board of Directors, as conclusively evidenced by a Board
Resolution filed with the Trustee), as capital contributions to the Company or
from the issuance (other than to a Restricted Subsidiary) of Capital Stock
(other than Disqualified Stock) of the Company and warrants, rights or options
on Capital Stock (other than Disqualified Stock) of the Company and the
principal amount of Debt of the Company that has been converted into Capital
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Stock (other than Disqualified Stock and other than by a Restricted Subsidiary)
of the Company after April 25, 1996.
Notwithstanding the foregoing, the Company may
(i) pay any dividend on Capital Stock of any class within 60 days after
the declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions;
(ii) repurchase any shares of its Common Equity or options to acquire
its Common Equity from Persons who were formerly officers or employees of the
Company, PROVIDED that the aggregate amount of all such repurchases made
pursuant to this clause (ii) shall not exceed $2 million, plus the aggregate
cash proceeds received by the Company since April 25, 1996 from issuances of its
Common Equity or options to acquire its Common Equity to members, officers,
managers, directors and employees of the Company or any of its Subsidiaries;
(iii) the Company and its Restricted Subsidiaries may refinance any
Debt otherwise permitted by clause (iv) of the second paragraph of Section 1007;
and
(iv) the Company and its Restricted Subsidiaries may retire or
repurchase any Capital Stock or Subordinated Debt of the Company in exchange
for, or out of the proceeds of the substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of, Capital Stock (other than
Disqualified Stock) of the Company. If the Company makes a Restricted Payment
which, at the time of the making of such Restricted Payment, would in the good
faith determination of the Company be permitted under this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company financial statements affecting Consolidated Net Income for any period.
In determining the aggregate amount expended or available for
Restricted Payments in accordance with clause (3) of the first paragraph above,
(1) no amounts expended under clauses (iii) or (iv) of the
immediately preceding paragraph shall be included,
(2) 100% of the amounts expended under clauses (i)
and (ii) of the immediately preceding paragraph shall be
included, and
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(3) no amount shall be credited in respect of issuances of
Capital Stock in transactions under clause (iv) of the immediately preceding
paragraph.
SECTION 1010. LIMITATION ON DIVIDEND AND OTHER
PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
The Company may not, and may not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company
(i) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by the Company or any other
Restricted Subsidiary of the Company or pay any Debt or other obligation owed to
the Company or any other Restricted Subsidiary;
(ii) to make loans or advances to the Company or any
other Restricted Subsidiary; or
(iii) to transfer any of its property or assets to the
Company or any other Restricted Subsidiary.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary to, suffer to exist any such encumbrance or restriction:
(a) pursuant to any agreement in effect on the
Issue Date;
(b) pursuant to an agreement relating to any Acquired Debt,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired and its
Subsidiaries;
(c) pursuant to any one or more Bank Credit Agreements or
Vendor Financing Facilities (and renewals, extensions, refinancings or
refundings thereof) which is permitted to be outstanding under clause (i) or
(ii) of Section 1007 or clause (vi) or (ix) of Section 1008, PROVIDED that such
restriction is consistent with, and not materially more restrictive (as
conclusively determined in good faith by the Chief Financial Officer of the
Company), taken as a whole, than, comparable provisions included in similar
agreements or facilities extended to comparable credits engaged in the
Telecommunications Business and
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PROVIDED FURTHER that, in the case of any such Bank Credit Agreement or Vendor
Financing Facility entered into by a Restricted Subsidiary under clause (ii) of
Section 1007 or clause (ix) of Section 1008, such encumbrances or restrictions
do not prohibit dividends, distributions, loans or advances by such Restricted
Subsidiary to the Company or another Restricted Subsidiary to the extent that
the failure to make such distribution, loan or advance would result in the
Company defaulting in the payment of principal or interest on its indebtedness;
(d) pursuant to an agreement effecting a renewal, refunding or
extension of Debt Incurred pursuant to an agreement referred to in clause (a) or
(b) above or (e) below, PROVIDED, HOWEVER, that the provisions contained in such
renewal, refunding or extension agreement relating to such encumbrance or
restriction are not materially more restrictive (as conclusively determined in
good faith by the Chief Financial Officer of the Company), taken as a whole,
than the provisions contained in the agreement the subject thereof;
(e) in the case of clause (iii) above, restrictions contained
in any security agreement (including a Capital Lease Obligation) securing Debt
of the Company or a Restricted Subsidiary otherwise permitted under this
Indenture, but only to the extent such restrictions restrict the transfer of the
property subject to such security agreement;
(f) in the case of clause (iii) above, customary nonassignment
provisions entered into in the ordinary course of business in leases and other
agreements;
(g) any restriction with respect to a Restricted Subsidiary of
the Company imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary, provided that consummation of such transaction
would not result in a Default or an Event of Default, that such restriction
terminates if such transaction is not consummated and that such consummation or
abandonment of such transaction occurs within one year of the date such
agreement was entered into;
(h) pursuant to applicable law or regulations;
(i) pursuant to this Indenture and the Securities;
or
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(j) any restriction on the sale or other disposition of assets
or property securing Debt as a result of a Permitted Lien on such assets or
property.
SECTION 1011. LIMITATION ON LIENS.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, Incur or suffer to exist any Lien on or with
respect to any property or assets now owned or hereafter acquired to secure any
Debt without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities:
(x) equally and ratably with (or prior to) such Debt as to such
property for so long as such Debt will be so secured or
(y) in the event such Debt is Debt of the Company which is subordinate
in right of payment to the Securities, prior to such Debt as to such property
for so long as such Debt will be so secured.
The foregoing restrictions shall not apply to:
(i) Liens existing on the Issue Date and securing Debt outstanding on
the Issue Date or securing the Securities or Liens securing Debt Incurred
pursuant to any Bank Credit Agreement or Vendor Financing Facility (whether or
not such Bank Credit Agreement or Vendor Financing Facility was outstanding on
the Issue Date);
(ii) Liens securing Debt in an amount which, together with the
aggregate amount of Debt then outstanding or available under the Bank Credit
Agreement and Vendor Financing Facility (or under refinancings or amendments of
such agreements), does not exceed 1.5 times the Company's Consolidated Cash Flow
Available for Fixed Charges for the four full fiscal quarters preceding the
Incurrence of such Lien for which consolidated financial statements are
available, determined on a pro forma basis as if such Debt had been Incurred and
the proceeds thereof had been applied at the beginning of such four fiscal
quarters;
(iii) Liens in favor of the Company or any Wholly-Owned
Restricted Subsidiary of the Company;
(iv) Liens on real or personal property of the Company or a Restricted
Subsidiary of the Company acquired, constructed or constituting improvements
made after the Issue Date to secure Purchase Money Debt which is Incurred
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for the construction, acquisition and improvement of Telecommunications Assets
and is otherwise permitted under this Indenture, PROVIDED, HOWEVER, that
(a) the net proceeds of any Debt secured by such a Lien does
not exceed 100% of such purchase price or cost of construction or improvement of
the property subject to such Lien,
(b) such Lien attaches to such property prior to, at the time
of or within 180 days after the acquisition, completion of construction or
commencement of operation of such property and
(c) such Lien does not extend to or cover any property other
than the property (or identifiable portions thereof) acquired, constructed or
constituting the improvements made with the proceeds of such Purchase Money Debt
(it being understood and agreed that all Debt owed to any single lender or group
of lenders or outstanding under any single credit facility shall be considered a
single Purchase Money Debt, whether drawn at one time or from time to time);
(v) Liens to secure Acquired Debt, PROVIDED, HOWEVER,
that
(a) such Lien attaches to the acquired asset prior
to the time of the acquisition of such asset and
(b) such Lien does not extend to or cover any
other asset;
(vi) Liens to secure Debt Incurred to extend, renew, refinance or
refund (or successive extensions, renewals, refinancings or refundings), in
whole or in part, Debt secured by any Lien referred to in the foregoing clauses
(i), (ii), (iv) and (v) so long as such Lien does not extend to any other
property and the principal amount of Debt so secured is not increased except as
otherwise permitted under clause (iv) of Section 1007;
(vii) Liens securing Debt not otherwise permitted by the foregoing
clauses (i) through (vi) in an amount not to exceed 5% of the Company's
Consolidated Tangible Assets determined as of the most recent available
quarterly or annual balance sheet; and
(viii) Permitted Liens.
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SECTION 1012. LIMITATION ON SALE AND LEASEBACK
TRANSACTIONS.
The Company may not, and may not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless
(i) the Company or such Restricted Subsidiary would be entitled to
Incur a Lien to secure Debt by reason of the provisions of Section 1011, equal
in amount to the Attributable Value of the Sale and Leaseback Transaction
without equally and ratably securing the Securities; or
(ii) the Sale and Leaseback Transaction is treated as an Asset
Disposition and all of the conditions of Section 1013 (including the provisions
concerning the application of Net Available Proceeds) are satisfied with respect
to such Sale and Leaseback Transaction, treating all of the consideration
received in such Sale and Leaseback Transaction in the same manner as
consideration in respect of an Asset Disposition for purposes of such covenant.
SECTION 1013. LIMITATION ON ASSET DISPOSITIONS.
(a) The Company may not, and may not permit any Restricted
Subsidiary to, make any Asset Disposition in one or more related transactions
occurring within any 12-month period unless:
(i) the Company or the Restricted Subsidiary,
as the case may be, receives consideration for such disposition at least equal
to the fair market value for the assets sold or disposed of as determined by the
Board of Directors in good faith and evidenced by a Board Resolution filed with
the Trustee, which determination shall be conclusive;
(ii) at least 75% of the consideration for
such disposition consists of:
(1) cash or readily marketable cash
equivalents or the assumption of Debt or other obligations of the Company (other
than Debt that is subordinated to the Securities) or of the Restricted
Subsidiary and release from all liability on the Debt or other obligations
assumed;
(2) Telecommunications Assets; or
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(3) shares of publicly-traded Voting Stock
of any Person engaged in the Telecommunications Business in the United States;
and
(iii) all Net Available Proceeds, less any
amounts invested in Telecommunications Assets (within 180 days prior to and 360
days following such disposition), are applied within 360 days of such
disposition
(1) first, to the permanent repayment or
reduction of Debt then outstanding under any Bank Credit Agreement or Vendor
Financing Facility, to the extent such agreements would require such application
or prohibit payments pursuant to clause (2) following,
(2) second, to the extent of remaining Net
Available Proceeds, to make an Offer to Purchase outstanding Securities at 100%
of their principal amount plus accrued interest to the date of purchase and, to
the extent required by the terms thereof, any other Debt of the Company that is
PARI PASSU with the Securities at a price no greater than 100% of the principal
amount thereof plus accrued interest to the date of purchase (or 100% of the
accreted value in the case of original issue discount Debt) and
(3) third, to the extent of any remaining
Net Available Proceeds following the completion of the Offer to Purchase, to the
repayment of other Debt of the Company or Debt of a Restricted Subsidiary of the
Company, to the extent permitted under the terms thereof. To the extent any Net
Available Proceeds remain after such uses, the Company and its Restricted
Subsidiaries may use such amounts for any purposes not prohibited by this
Indenture.
(b) The Company will mail the Offer for an Offer to Purchase
required pursuant to Section 1013(a) not more than 360 days after consummation
of the disposition referred to in Section 1013(a). The aggregate principal
amount of the Securities to be offered to be purchased pursuant to the Offer to
Purchase shall equal the Net Available Proceeds available therefor pursuant to
Clause (iii)(2) of Section 1013(a) (rounded down to the next lowest integral
multiple of $1,000). Each Holder shall be entitled to tender all or any portion
of the Securities owned by such Holder pursuant to the Offer to Purchase,
subject to the requirement that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount.
The Company shall not be entitled to any credit against its
obligations under this Section 1013 for the
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principal amount of any Securities acquired or redeemed by the Company otherwise
than pursuant to the Offer to Purchase pursuant to this Section 1013.
(c) Not later than the date of the Offer with respect to an
Offer to Purchase pursuant to this Section 1013, the Company shall deliver to
the Trustee an Officers' Certificate as to
(i) the Purchase Amount,
(ii) the allocation of the Net Available
Proceeds from the Asset Disposition pursuant to which such Offer is being made,
including, if amounts are invested in Telecommunication Assets, the amount of
the assets acquired and
(iii) the compliance of such allocation with
the provisions of Section 1013(a).
The Company and the Trustee shall perform their respective
obligations specified in the Offer for the Offer to Purchase. On or prior to the
Purchase Date, the Company shall
(i) accept for payment (on a pro rata basis, if necessary) Securities
or portions thereof tendered pursuant to the Offer,
(ii) deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 1003) money
sufficient to pay the purchase price of all Securities or portions thereof so
accepted and
(iii) deliver or cause to be delivered to the Trustee all Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent (or the
Company, if so acting) shall promptly mail or deliver to Holders of Securities
so accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Security
of like tenor equal in principal amount to any unpurchased portion of the
Security surrendered. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof.
(d) Notwithstanding the foregoing, this Section 1013 shall not
apply to any Asset Disposition which constitutes a transfer, conveyance, sale,
lease or other
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disposition of all or substantially all of the Company's properties or assets
within the meaning of Section 801 hereof.
SECTION 1014. LIMITATION ON ISSUANCES AND SALES OF
CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, issue, transfer, convey, sell or otherwise dispose
of any shares of Capital Stock of a Restricted Subsidiary of the Company or
securities convertible or exchangeable into, or options, warrants, rights or any
other interest with respect to, Capital Stock of a Restricted Subsidiary of the
Company to any person other than the Company or a Wholly-Owned Restricted
Subsidiary of the Company except
(i) in a transaction that complies with the provisions
of Section 1013;
(ii) if required, the issuance, transfer, conveyance, sale or other
disposition of directors' qualifying shares;
(iii) in a transaction in which, or in connection with which, the
Company or a Restricted Subsidiary acquires at the same time sufficient Capital
Stock of such Restricted Subsidiary to at least maintain the same percentage
ownership interest it had prior to such transaction;
(iv) constituting the issuance of Preferred Stock permitted by the
provisions of Section 1008; and
(v) Disqualified Stock issued in exchange for, or upon conversion of,
or the proceeds of the issuance of which are used to redeem, refinance, replace
or refund shares of Disqualified Stock of such Restricted Subsidiary, provided
that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being exchanged, converted, redeemed, refinanced, replaced or
refunded.
SECTION 1015. TRANSACTIONS WITH AFFILIATES
AND RELATED PERSONS.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, enter into any transaction (or series of related
transactions) with an
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Affiliate or Related Person of the Company (other than the Company or a
Wholly-Owned Restricted Subsidiary of the Company), including any Investment,
but excluding transactions pursuant to employee compensation arrangements
approved by the Board of Directors, either directly or indirectly, unless such
transaction is on terms no less favorable to the Company or such Restricted
Subsidiary than those that could reasonably be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or Related
Person and is in the best interests of such Company or such Restricted
Subsidiary. For any transaction that involves in excess of $1 million but less
than or equal to $15 million, the Chief Executive Officer of the Company shall
determine that the transaction satisfies the above criteria and shall evidence
such a determination by an Officer's Certificate filed with the Trustee. For any
transaction that involves in excess of $15 million, the Company shall also
either
(x) obtain the approval of the transaction from the Board of Directors
including a majority of the disinterested members of the Board of Directors or
(y) obtain an opinion from a nationally recognized investment bank or
other expert with experience in appraising the terms and conditions, taken as a
whole, of the type of transaction (or series of related transactions) for which
the opinion is required stating that such transaction (or series of related
transactions) is on terms and conditions, taken as a whole, no less favorable to
the Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate or
Related Person of the Company, which opinion shall be filed with the Trustee.
This covenant shall not apply to Investments by an Affiliate or a Related Person
of the Company in the Capital Stock (other than Disqualified Stock) of the
Company or any Restricted Subsidiary of the Company.
SECTION 1016. CHANGE OF CONTROL.
(a) Within 30 days of the occurrence of a Change of Control,
the Company will be required to make an Offer to Purchase all Outstanding
Securities at a purchase price equal to 101% of their principal amount plus
accrued and unpaid interest to the date of purchase.
(b) The Company and Trustee shall perform their respective
obligations specified in the Offer for the Offer
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to Purchase. On or prior to the Purchase Date, the Company shall
(i) accept for payment Securities or portions
thereof tendered pursuant to the Offer,
(ii) deposit with the Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the purchase price of all
Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the
Trustee all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Security or
Securities equal in principal amount to any unpurchased portion of the Security
surrendered as requested by the Holder. Any Security not accepted for payment
shall be promptly mailed or delivered by the Company to the Holder thereof.
(c) A "Change of Control" will be deemed to have occurred at
such time as either
(a) any Person or any Persons acting together
that would constitute a "group" (a "Group") for purposes of Section 13(d) of the
Exchange Act, or any successor provision thereto (other than Eagle River, Mr.
Craig O. McCaw and their respective Affiliates or an underwriter engaged in a
firm commitment underwriting on behalf of the Company), shall beneficially own
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision thereto) more than 50% of the aggregate voting power of all classes of
Voting Stock of the Company; or
(b) neither Mr. Craig O. McCaw nor any person
designated by him to the Company as acting on his behalf
shall be a director of the Company; or
(c) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors whose election by the Board of
Directors or whose nomination for election by the shareholders of the Company
was proposed by a vote of a majority of the directors of the Company then still
in office who were either directors at
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the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office.
(d) In the event that the Company makes an Offer to Purchase
the Securities, the Company intends to comply with any applicable securities
laws and regulations, including any applicable requirements of Section 14(e) of,
and Rule 14e-1 under, the Exchange Act.
(e) Unless the Company defaults in the payment of the Purchase
Price, any Security accepted for payment pursuant to an Offer to Purchase shall
cease to accrue interest after the Purchase Date.
SECTION 1017. PROVISION OF FINANCIAL INFORMATION.
The Company has agreed to file with the Trustee, within 15
days after it files them with the Commission, copies of the SEC Reports. In the
event the Company shall cease to be required to file SEC Reports pursuant to the
Exchange Act, the Company will nevertheless continue to file such reports with
the Commission (unless the Commission will not accept such a filing) and the
Trustee. The Company will furnish copies of the SEC Reports to the Holders of
Securities at the time the Company is required to file the same with the Trustee
and will make such information available to investors who request it in writing.
SECTION 1018. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, within 90 days
after the end of each quarter of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
and if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as
possible and in any event within 10 days after the Company becomes aware of the
occurrence of a Default or an Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default and the action which the
Company proposes to take with respect thereto.
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SECTION 1019. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1004 to 1017, inclusive, if
before or after the time for such compliance the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
SECTION 1020. LIMITATION ON USE OF PROCEEDS.
The Company will apply all except $150,000,000 of the net
proceeds received from the issuance and sale of the Securities (the "Securities
Net Proceeds") toward the construction, improvement, and acquisition by the
Company or one or more Restricted Subsidiaries of the Company or Joint Ventures
of Telecommunications Assets of the Company, such Restricted Subsidiaries or
Joint Ventures (or will advance such net proceeds to such Restricted
Subsidiaries of the Company or Joint Ventures for such purpose); provided,
however, pending such application, the Securities Net Proceeds may be invested
in Marketable Securities.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Securities may be redeemed on or prior to December 1,
2002 only in the event that on or before December 1, 2002 the Company receives
net proceeds from a sale of its Common Equity, in which case the Company may, at
its option, use all or a portion of any such net proceeds to redeem Securities
in a principal amount of up to an aggregate amount equal to 33 1/3% of the
original principal amount of the Securities at a Redemption Price of 110.50% of
their principal amount plus accrued and unpaid interest, if any, to but
excluding the Redemption Date (subject to the
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right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date); PROVIDED, HOWEVER, that Securities in an amount equal to at least 66 2/3%
of the original aggregate principal amount of the Notes remain outstanding after
such redemption and such redemption occurs on a Redemption Date within 90 days
of any such sale of the Company's Common Equity and upon not less than 30 nor
more than 60 days' notice by mail to each Holder of Securities to be redeemed at
such Holder's address appearing in the Security Register. The Company may only
redeem the Securities in amounts of $1,000 or an integral multiple of $1,000.
(b) The Securities further may be redeemed, as a whole or in
part, at the election of the Company, at any time on or after December 1, 2004
and prior to maturity, upon not less than 30 nor more than 60 days' notice by
mail to each Holder of Securities to be redeemed at such Holder's address
appearing in the Security Register, in amounts of $1,000 or an integral multiple
of $1,000, at the Redemption Prices specified in the form of Security
hereinbefore set forth, together with accrued and unpaid interest to, but
excluding, the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date).
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant
to Section 1101 shall be evidenced by Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere
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in this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
SECTION 1104. SECURITIES TO BE REDEEMED PRO RATA.
If less than all the Securities are to be redeemed in any
redemption, the Securities to be redeemed shall be selected by the Trustee by
prorating, as nearly as may be practicable, the principal amount of Securities
to be redeemed. In any proration pursuant to this Section, the Trustee shall
make such adjustments, reallocations and eliminations as it shall deem proper
(and in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed) to the end that the
principal amount of Securities so prorated shall be $1,000 or a multiple
thereof, by increasing or decreasing or eliminating the amount which would be
allocable to any Holder on the basis of exact proportion by an amount not
exceeding $1,000. The Trustee in its discretion may determine the particular
Securities (if there are more than one) registered in the name of any Holder
which are to be redeemed, in whole or in part.
The Trustee shall promptly notify the Company and each
Security Registrar (other than the Trustee) in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at such Holder's
address appearing in the Security Register.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) whether the redemption is being made pursuant to Section
1101(a) or (b) and, if being made pursuant to Section 1101(a), a brief
statement setting forth the Company's right to effect such redemption
and the Company's basis therefor,
(4) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(5) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
(7) that in the case that a Security is only redeemed in part,
the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities in an aggregate amount equal to the unredeemed
portion of the Security,
(8) the aggregate principal amount of Securities being
redeemed, and
(9) the CUSIP number or numbers of the Securities being
redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, if request is made to
the Trustee no less than 35 days prior to the Redemption Date, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the
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Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued and unpaid interest on, all the Securities which are to be redeemed on
that date.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued and unpaid interest to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate provided
by the Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, such new Security shall
also be a Global Security.
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ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution at any time
(subject to 10-day prior written notification to the Trustee), elect to have
either Section 1202 or Section 1203 applied to the Outstanding Securities upon
compliance with the conditions set forth below in this Article Twelve.
SECTION 1202. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the option provided in Section
1201 applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder:
(A) the rights of Holders of Outstanding Securities to receive, solely
from the trust fund described in Section 1204 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any) and
interest on such Securities when such payments are due,
(B) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003,
(C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and
(D) this Article Twelve. Subject to compliance with this Article
Twelve, the Company may exercise its option under this Section 1202
notwithstanding the prior exercise of its option under Section 1203.
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SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided
in Section 1201 applicable to this Section
(i) the Company shall be released from its
obligations under Sections 1005 through 1017, inclusive, and
Clauses (3) and (4) of Section 801,
(ii) the occurrence of an event specified in
Sections 501(3), 501(4) (with respect to Clauses (3) and (4) of Section 801),
and 501 (5) (with respect to Sections 1005 through 1017, inclusive) shall not be
deemed to be an Event of Default, on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or Article, whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
SECTION 1204. CONDITIONS TO DEFEASANCE OR
COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or
(B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, money in an amount, or
(C) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent
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certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee to pay and discharge, the principal of, premium, if any, and each
installment of interest on the Securities on the Stated Maturity of such
principal or installment of interest on the day on which such payments are due
and payable in accordance with the terms of this Indenture and of such
Securities. For this purpose, "U.S. Government Obligations" means securities
that are
(x) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or
(y) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by 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 depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the holder of such depositary receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depositary receipt.
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections
501(8) and (9) are concerned, at any time during the period ending on
the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of
such period).
(3) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 608 and
for purposes of the Trust Indenture Act with respect to any securities
of the Company.
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(4) Such defeasance or 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 the Company is a party or
by which it is bound.
(5) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1202 or the covenant defeasance under Section 1203 (as
the case may be) have been complied with.
(6) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or
(y) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities 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.
(7) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities 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 covenant defeasance had not
occurred.
(8) The Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that such deposit and defeasance or covenant
defeasance shall not result in the trust arising from such deposit
constituting an investment company as defined in the Investment Company
Act of 1940, as amended, or such trust shall be qualified under such
act or exempt from regulation thereunder.
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SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee--collectively, for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1204 which, in the opinion of a nationally recognized
accounting firm expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
SECTION 1206. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 1202 or 1203 by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Twelve until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section
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1202 and 1203; PROVIDED, HOWEVER, that if the Company makes any payment of
principal of (and premium, if any) any Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.
SECTION 1207. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Security and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such security
shall thereafter, as a creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
------------------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, and the Trustee has caused its seal
to be hereunto affixed and attested, all as of the day and year first above
written.
NEXTLINK Communications, Inc.
By /s/ R. Bruce Easter, Jr.
----------------------------------
Name: R. Bruce Easter, Jr.
Title: Vice President, General
Counsel and Secretary
Attest:
/s/ Richard A. Montfort, Jr.
- -------------------------------------
Name: Richard A. Montfort, Jr.
Title: Assistant Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK
By
---------------------------------
Name:
Title:
[SEAL]
Attest:
- ----------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, and the Trustee has caused its seal
to be hereunto affixed and attested, all as of the day and year first above
written.
NEXTLINK Communications, Inc.
By
----------------------------------
Name:
Title:
Attest:
- -------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By /s/ Gerard F. Ganey
---------------------------------
Name: Gerard F. Ganey
Title: Authorized Signatory
[SEAL]
Attest:
/s/ Patricia Gallagher
- ----------------------------------
Name: Patricia Gallagher
Title: Authorized Signatory
<PAGE>
STATE OF WASHINGTON )
ss.:
COUNTY OF KING )
On this __th day of November, 1999, before me personally
appeared R. Bruce Easter, Jr., to me known, who, being duly sworn, did depose
and say that he/she is the Vice President of NEXTLINK Communications, Inc.,
one of the corporations described in and which executed the foregoing
instrument, and duly acknowledged to me that he/she executed the same by
authority of the Board of Directors of said corporation.
/s/ Kirsten P. Abboud
------------------------------
Notary Public
- -------------------
KIRSTEN P. ABBOUD
NOTARY PUBLIC
STATE OF WASHINGTON
COMMISSION EXPIRES
AUGUST 19, 2002
- -------------------
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this __th day of November, 1999, before me personally
appeared ____________, to me known, who, being duly sworn, did depose and say
that he/she is the _______________ of United States Trust Company of New
York, one of the corporations described in and which executed the foregoing
instrument, and duly acknowledged to me that he/she executed the same by
authority of the Board of Directors of said corporation.
------------------------------
Notary Public
<PAGE>
STATE OF WASHINGTON )
ss.:
COUNTY OF )
On this __th day of November, 1999, before me personally
appeared _______________, to me known, who, being duly sworn, did depose and
say that he/she is the _____________ of NEXTLINK Communications, Inc., one of
the corporations described in and which executed the foregoing instrument,
and duly acknowledged to me that he/she executed the same by authority of the
Board of Directors of said corporation.
------------------------------
Notary Public
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this 17th day of November, 1999, before me personally
appeared GERARD F. GANEY, to me known, who, being duly sworn, did depose and
say that he/she is the AUTHORIZED SIGNATORY of United States Trust Company of
New York, one of the corporations described in and which executed the
foregoing instrument, and duly acknowledged to me that he/she executed the
same by authority of the Board of Directors of said corporation.
/s/ Christopher Grell
------------------------------
Notary Public
CHRISTOPHER GRELL
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01GR5012466
QUALIFIED IN NEW YORK COUNTY
COMMISSION EXPIRES JUNE 15, 2001
<PAGE>
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 305(b)(i), (iii) and (v)
of the Indenture)
United States Trust Company of New York,
as Trustee
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 10 1/2% Senior Notes due 2009
of NEXTLINK Communications, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications, Inc. (the "Company")
and United States Trust Company of New York, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933, as amended (the "Securities Act") are used herein as so
defined.
This certificate relates to U.S. $____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
A-1
<PAGE>
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) RULE 904 TRANSFERS. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Company or any such distributor or a
person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof;
(E) if the Owner is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of the Specified Securities, and the transfer is to
occur during
A-2
<PAGE>
the Restricted Period, then the requirements of
Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(2) RULE 144 TRANSFERS. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least two years has elapsed since the Specified
Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is
not, and during the preceding three months has not been, an
affiliate of the Company.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
---------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
A-3
<PAGE>
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 305(b)(ii), (iii), (iv) and (v)
of the Indenture)
United States Trust Company of New York,
as Trustee
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 10 1/2% Senior Notes due 2009
of NEXTLINK Communications, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications, Inc. (the "Company")
and United States Trust Company of New York, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933, as amended (the "Securities Act") are used herein as so
defined.
This certificate relates to U.S. $_____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Restricted Security. In
B-1
<PAGE>
connection with such transfer, the Owner hereby certifies that, unless such
transfer is being effected pursuant to an effective registration statement under
the Securities Act, it is being effected in accordance with Rule 144A or Rule
144 under the Securities Act and all applicable securities laws of the states of
the United States and other jurisdictions. Accordingly, the Owner hereby further
certifies as follows:
(1) RULE 144A TRANSFERS. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) RULE 144 TRANSFERS. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least two years has elapsed since the Specified
Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is
not, and during the preceding three months has not been, an
affiliate of the Company.
B-2
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
---------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
B-3
<PAGE>
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 305(c))
United States Trust Company of New York,
as Trustee
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 10 1/2% Senior Notes due 2009
of NEXTLINK Communications, Inc.
(the "Securities")
--------------------------------
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications, Inc. (the "Company")
and United States Trust Company of New York, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933, as amended (the "Securities Act") are used herein as so
defined.
This certificate relates to U.S. $_____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be
exchanged for Securities bearing no Securities Act Legend pursuant to Section
305(c) of the Indenture. In connection with such exchange, the Owner hereby
certifies
C-1
<PAGE>
that the exchange is occurring after a holding period of at least two years
(computed in accordance with paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Company or from an affiliate of
the Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
---------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
C-2
<PAGE>
Exhibit 4.1(ii)
- -------------------------------------------------------------------------------
NEXTLINK COMMUNICATIONS, INC.
TO
U.S. TRUST COMPANY OF TEXAS
TRUSTEE
--------
------------------------------------
Indenture
Dated as of November 17, 1999
------------------------------------
$455,000,000
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
- -------------------------------------------------------------------------------
<PAGE>
NEXTLINK COMMUNICATIONS, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
section.310(a)(1) ................................................................ 609
(a)(2) ................................................................ 609
(a)(3) ................................................................ Not Applicable
(a)(4) ................................................................ Not Applicable
(b) ................................................................ 608
610
section.311(a) ................................................................... 613
(b) ................................................................... 613
section.312(a) ................................................................... 701
(b) ................................................................... 702
(c) ................................................................... 702
section.313(a) ................................................................... 703
(b) ................................................................... 703
(c) ................................................................... 703
(d) ................................................................... 703
section.314(a) ................................................................... 704
1018
(b) ................................................................... Not Applicable
(c)(1) ................................................................ 102
(c)(2) ................................................................ 102
(c)(3) ................................................................ Not Applicable
(d) ................................................................... Not Applicable
(e) ................................................................... 102
section.315(a) ................................................................... 601
(b) ................................................................... 602
(c) ................................................................... 601
(d) ................................................................... 601
(e) ................................................................... 514
section.316(a)(1)(A) ............................................................. 502
512
(a)(1)(B) ............................................................. 513
(a)(2) ................................................................ Not Applicable
(b) ................................................................... 508
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
(c) ................................................................... 104
section. 317(a)(1) ................................................................ 503
(a)(2) ................................................................ 504
(b) ................................................................... 1003
section. 318(a) ................................................................... 107
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY..................................................................................1
</TABLE>
ARTICLE ONE
Definitions and Other Provisions
of General Application
<TABLE>
<CAPTION>
<S> <C>
SECTION 101. Definitions .........................................................................2
Accreted Value ......................................................................2
Acquired Debt .......................................................................3
Act .................................................................................3
Additional Interest .................................................................3
Affiliate ...........................................................................3
Agent Member ........................................................................4
Applicable Procedures ...............................................................4
Asset Disposition ...................................................................4
Attributable Value ..................................................................5
Bank Credit Agreement ...............................................................5
Board of Directors ..................................................................6
Board Resolution ....................................................................6
Business Day ........................................................................6
Capital Lease Obligation ............................................................6
Capital Stock .......................................................................6
Cedel................................................................................6
Change of Control....................................................................6
Commission ..........................................................................7
Common Equity .......................................................................7
Company .............................................................................7
Company Request .....................................................................7
Company Order .......................................................................7
Consolidated Capital Ratio ..........................................................7
Consolidated Cash Flow Available for
Fixed Charges ...................................................................7
Consolidated Income Tax Expense .....................................................8
Consolidated Interest Expense .......................................................8
Consolidated Net Income .............................................................9
Consolidated Net Worth .............................................................10
Consolidated Tangible Assets .......................................................10
Corporate Trust Office .............................................................11
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
corporation ........................................................................11
Debt ...............................................................................11
Default ............................................................................12
Defaulted Interest ..................................................................13
Depositary ..........................................................................13
Disqualified Stock ..................................................................13
DTC .................................................................................13
Eagle River .........................................................................13
Eligible Instituti on ...............................................................14
Eligible Receivables ................................................................14
Euroclear ...........................................................................14
Event of Default ....................................................................14
Exchange Act ........................................................................14
Exchange Offer ......................................................................14
Exchange Registration Statement .....................................................14
Exchange Security ...................................................................14
Expiration Date .....................................................................15
Global Security .....................................................................15
Government Securities ...............................................................15
Guarantee ...........................................................................15
Holder ..............................................................................16
Incur ...............................................................................16
Indenture ...........................................................................16
Interest Payment Date ...............................................................16
Interest Rate or Currency Protection
Agreement .......................................................................17
Investment ..........................................................................17
Issue Date ..........................................................................17
Joint Venture .......................................................................17
Lien ................................................................................17
Marketable Securities ...............................................................18
Maturity ............................................................................18
Net Available Proceeds ..............................................................19
Offer to Purchase ...................................................................20
Officers' Certificate ...............................................................23
Opinion of Counsel ..................................................................23
Original Securities .................................................................23
Outstanding .........................................................................23
Paying Agent ........................................................................25
Permitted Interest Rate or Currency
Protection Agreement ..............................................................25
Permitted Investment ................................................................25
Permitted Liens .....................................................................26
Person ..............................................................................27
Predecessor Security ................................................................27
Preferred Dividends .................................................................27
Preferred Stock .....................................................................28
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Purchase Agreement ..................................................................28
Purchase Date .......................................................................28
Purchase Money Debt .................................................................28
Purchasers ..........................................................................28
readily marketable cash equivalents .................................................29
Receivables .........................................................................29
Receivables Sale ....................................................................29
Redemption Date .....................................................................29
Redemption Price ....................................................................30
Registered Securities ...............................................................30
Regular Record Date .................................................................30
Regulation S ........................................................................30
Regulation S Certificate ............................................................30
Regulation S Global Security ........................................................30
Regulation S Legend .................................................................30
Regulation S Securities .............................................................30
Related Person ......................................................................30
Resale Registration Statement .......................................................31
Responsible Officer .................................................................31
Restricted Global Security ..........................................................31
Restricted Period ...................................................................31
Restricted Securities ...............................................................31
Restricted Securities Certificate ...................................................31
Restricted Securities Legend ........................................................31
Restricted Subsidiary ...............................................................32
Rule 144A ...........................................................................32
Rule 144A Securities ................................................................32
Sale and Leaseback Transaction ......................................................32
SEC Reports .........................................................................32
Securities ..........................................................................32
Securities Act ......................................................................32
Securities Act Legend ...............................................................32
Security Register ...................................................................32
Security Registrar ..................................................................32
Significant Subsidiary ..............................................................33
Special Record Date .................................................................33
Stated Maturity .....................................................................33
Step-Down Date ......................................................................33
Step-Up .............................................................................33
Subordinated Debt ...................................................................33
Subsidiary ..........................................................................35
Successor Security ..................................................................35
Telecommunications Assets ...........................................................35
Telecommunications Business .........................................................35
Trustee .............................................................................36
Trust Indenture Act .................................................................36
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
Unrestricted Securities Certificate .................................................36
Unrestricted Subsidiary .............................................................36
Vendor Financing Facility ...........................................................37
Vice President ......................................................................38
Voting Stock ........................................................................38
Wholly-Owned Restricted Subsidiary ..................................................38
SECTION 102. Compliance Certificates and Opinions.................................................38
SECTION 103. Form of Documents Delivered to Trustee...............................................39
SECTION 104. Acts of Holders; Record Dates........................................................40
SECTION 105. Notices, Etc., to Trustee and Company................................................43
SECTION 106. Notice to Holders; Waiver............................................................44
SECTION 107. Application of Trust Indenture Act...................................................44
SECTION 108. Effect of Headings and Table of Contents.............................................45
SECTION 109. Successors and Assigns...............................................................45
SECTION 110. Separability Clause..................................................................45
SECTION 111. Benefits of Indenture................................................................45
SECTION 112. Governing Law........................................................................46
SECTION 113. Legal Holidays.......................................................................46
</TABLE>
ARTICLE TWO
Security Forms
<TABLE>
<S> <C> <C>
SECTION 201. Forms Generally......................................................................46
SECTION 202. Form of Face of Security.............................................................47
SECTION 203. Form of Reverse of Security..........................................................53
SECTION 204. Additional Provisions Required in Global
Security.............................................................................58
SECTION 205. Form of Trustee's Certificate of
Authentication.......................................................................59
</TABLE>
ARTICLE THREE
The Securities
<TABLE>
<S> <C> <C>
SECTION 301. Title and Terms......................................................................59
SECTION 302. Denominations........................................................................62
SECTION 303. Execution, Authentication, Delivery and
Dating...............................................................................62
SECTION 304. Temporary Securities.................................................................63
SECTION 305. Registration, Registration of Transfer
and Exchange................................................................64
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities...........................................................................70
</TABLE>
-vi-
<PAGE>
<TABLE>
PAGE
----
<S> <C> <C>
SECTION 307. Payment of Interest; Interest Rights
Preserved............................................................................71
SECTION 308. Persons Deemed Owners................................................................73
SECTION 309. Cancellation.........................................................................73
SECTION 310. Computation of Interest..............................................................73
SECTION 311. CUSIP and ISIN Numbers...............................................................74
</TABLE>
ARTICLE FOUR
Satisfaction and Discharge
<TABLE>
<S> <C> <C>
SECTION 401. Satisfaction and Discharge of Indenture..............................................74
SECTION 402. Application of Trust Money...........................................................76
</TABLE>
ARTICLE FIVE
Remedies
<TABLE>
<S> <C> <C>
SECTION 501. Events of Default....................................................................76
SECTION 502. Acceleration of Maturity; Rescission and
Annulment............................................................................78
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee...............................................................80
SECTION 504. Trustee May File Proofs of Claim.....................................................81
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities....................................................82
SECTION 506. Application of Money Collected.......................................................82
SECTION 507. Limitation on Suits..................................................................83
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest......................................................84
SECTION 509. Restoration of Rights and Remedies...................................................84
SECTION 510. Rights and Remedies Cumulative.......................................................84
SECTION 511. Delay or Omission Not Waiver.........................................................85
SECTION 512. Control by Holders...................................................................85
SECTION 513. Waiver of Past Defaults..............................................................86
SECTION 514. Undertaking for Costs................................................................86
SECTION 515. Waiver of Stay or Extension Laws.....................................................87
</TABLE>
ARTICLE SIX
The Trustee
<TABLE>
<S> <C> <C>
SECTION 601. Certain Duties and Responsibilities..................................................87
</TABLE>
-vii-
<PAGE>
ARTICLE SIX
The Trustee
<TABLE>
<S> <C> <C>
SECTION 602. Notice of Defaults...................................................................87
SECTION 603. Certain Rights of Trustee............................................................88
SECTION 604. Not Responsible for Recitals or
Issuance of Securities......................................................89
SECTION 605. May Hold Securities..................................................................89
SECTION 606. Money Held in Trust..................................................................90
SECTION 607. Compensation and Reimbursement.......................................................90
SECTION 608. Disqualification; Conflicting Interests..............................................91
SECTION 609. Corporate Trustee Required; Eligibility..............................................91
SECTION 610. Resignation and Removal; Appointment of
Successor............................................................................92
SECTION 611. Acceptance of Appointment by Successor...............................................93
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business...............................................................94
SECTION 613. Preferential Collection of Claims
Against the Company.........................................................95
SECTION 614. Appointment of Authenticating Agent..................................................95
</TABLE>
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
<TABLE>
Page
-----
<S> <C> <C>
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders........................................................97
SECTION 702. Preservation of Information;
Communications to Holders............................................... ...97
SECTION 703. Reports by Trustee................................................................ ..98
SECTION 704. Reports by Company...................................................................98
SECTION 705. Officers' Certificate with Respect
to Change in Interest Rates.................................................99
</TABLE>
ARTICLE EIGHT
Merger, Consolidation, Etc.
<TABLE>
Page
-----
<S> <C> <C>
SECTION 801. Mergers, Consolidations and Certain
Sales of Assets.............................................................99
SECTION 802. Successor Substituted...............................................................101
</TABLE>
ARTICLE NINE
Supplemental Indentures
-viii-
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 901. Supplemental Indentures Without
Consent of Holders.........................................................101
SECTION 902. Supplemental Indentures with Consent
of Holders.................................................................102
SECTION 903. Execution of Supplemental Indentures................................................104
SECTION 904. Effect of Supplemental Indentures...................................................104
SECTION 905. Conformity with Trust Indenture Act.................................................104
SECTION 906. Reference in Securities to Supplemental
Indentures..........................................................................104
</TABLE>
ARTICLE TEN
Covenants
<TABLE>
<S> <C> <C>
SECTION 1001. Payment of Principal, Premium and
Interest...................................................................105
SECTION 1002. Maintenance of Office or Agency.....................................................105
SECTION 1003. Money for Security Payments to be
Held in Trust..............................................................106
SECTION 1004. Existence...........................................................................108
SECTION 1005. Maintenance of Properties and Insurance.............................................108
SECTION 1006. Payment of Taxes and Other Claims...................................................109
SECTION 1007. Limitation on Consolidated Debt.....................................................109
SECTION 1008. Limitation on Debt and Preferred Stock
of Restricted Subsidiaries.................................................114
SECTION 1009. Limitation on Restricted Payments...................................................118
SECTION 1010. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries........................................................................121
SECTION 1011. Limitation on Liens.................................................................123
SECTION 1012. Limitation on Sale and Leaseback
Transactions...............................................................125
SECTION 1013. Limitation on Asset Dispositions....................................................126
SECTION 1014. Limitation on Issuances and Sales
of Capital Stock of Restricted
Subsidiaries...............................................................129
SECTION 1015. Transactions with Affiliates and Related
Persons.............................................................................130
SECTION 1016. Change of Control...................................................................131
SECTION 1017. Provision of Financial Information..................................................133
SECTION 1018. Statement by Officers as to Default.................................................133
SECTION 1019. Waiver of Certain Covenants.........................................................134
SECTION 1020. Limitation on Use of Proceeds.......................................................134
</TABLE>
-ix-
<PAGE>
ARTICLE ELEVEN
Redemption of Securities
<TABLE>
<S> <C> <C>
SECTION 1101. Right of Redemption.................................................................134
SECTION 1102. Applicability of Article............................................................135
SECTION 1103. Election to Redeem; Notice to Trustee...............................................135
SECTION 1104. Securities to Be Redeemed Pro Rata..................................................136
SECTION 1105. Notice of Redemption................................................................136
SECTION 1106. Deposit of Redemption Price.........................................................138
SECTION 1107. Securities Payable on Redemption Date...............................................138
SECTION 1108. Securities Redeemed in Part.........................................................138
</TABLE>
ARTICLE TWELVE
Defeasance and Covenant Defeasance
<TABLE>
<S> <C> <C>
SECTION 1201. Company's Option to Effect Defeasance or
Covenant Defeasance.................................................................139
SECTION 1202. Defeasance and Discharge............................................................139
SECTION 1203. Covenant Defeasance.................................................................140
SECTION 1204. Conditions to Defeasance or Covenant
Defeasance..........................................................................141
SECTION 1205. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions............................................................144
SECTION 1206. Reinstatement.......................................................................144
SECTION 1207. Repayment to Company................................................................145
ANNEX A - Form of Regulation S Certificate
ANNEX B - Form of Restricted Securities Certificate
ANNEX C - Form of Unrestricted Securities Certificate
</TABLE>
-x-
<PAGE>
INDENTURE, dated as of November 17, 1999, between NEXTLINK
Communications, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), having its principal office at 500 108th Avenue N.E.,
Suite 2200, Bellevue, Washington 98004, and U.S. Trust Company of Texas, duly
organized and existing under the laws of the State of Texas, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
$455,000,000 aggregate principal amount of its 12 1/8% Senior Discount Notes due
2009 (the "Securities") of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture. The Securities may consist of Original Securities
and/or Exchange Securities, each as defined herein. The Original Securities and
the Exchange Securities shall rank pari passu in right of payment with all
existing and future senior obligations of the Company.
All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
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(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles (whether or not such is indicated herein) and,
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles
as are generally accepted as consistently applied by the Company at the
date of such computation; and
(4) 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.
Certain terms, used principally in Article Six, are defined in
that Article.
"Accreted Value" means, (x) as of any date prior to December
1, 2004, an amount per $1,000 principal amount at maturity of Securities that is
equal to the sum of
(a) the offering price ($552.57 per $1,000 principal amount at
maturity of Securities) of such Securities and
(b) the portion of the excess of the principal amount of such
Securities over such offering price which shall have been
amortized on a daily basis and compounded semi-annually on
each June 1 and December 1 at the rate of 12 1/8% per annum
from the date of original issue of the Securities through the
date of determination computed on the basis of a 360-day year
of twelve 30-day months, and
(y) as of any date on or after December 1, 2004, the principal amount
of each Security.
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"Acquired Debt" means, with respect to any
specified Person,
(i) Debt of any other Person existing at the time such Person merges
with or into or consolidates with or becomes a Restricted Subsidiary of such
specified Person and
(ii) Debt secured by a Lien encumbering any asset acquired by such
specified Person, which Debt was not Incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" has the meaning set forth in the form of
Security contained in Section 202. Unless the context otherwise requires,
references herein to "interest" on the Securities shall include Additional
Interest.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant
in, the Depository.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, Euroclear and Cedel,
in each case to the extent applicable to such transaction and as in effect from
time to time.
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"Asset Disposition" by the Company or any Restricted
Subsidiary means any transfer, conveyance, sale, lease or other disposition
(other than a creation of a Lien) by such Person, (including a consolidation or
merger or other sale of any such Restricted Subsidiary with, into or to another
Person in a transaction in which such Restricted Subsidiary ceases to be a
Restricted Subsidiary of the Company, but excluding a disposition by a
Restricted Subsidiary of the Company to the Company or a Restricted Subsidiary
of the Company or by the Company to a Restricted Subsidiary of the Company) of
(i) shares of Capital Stock or other ownership interests of a
Restricted Subsidiary of the Company, (including the issuance of Capital Stock
by a Restricted Subsidiary) other than as permitted by the provisions of Section
1008 or pursuant to a transaction in compliance with Section 801,
(ii) substantially all of the assets of the Company or any of its
Restricted Subsidiaries representing a division or line of business (other than
as part of a Permitted Investment) or
(iii) other assets or rights of the Company or any of
its Restricted Subsidiaries other than
(A) in the ordinary course of business or
(B) that constitutes a Restricted Payment which is permitted
by the provisions of Section 1009; PROVIDED that a transaction described in
clauses (i), (ii) and (iii) shall constitute an Asset Disposition only if the
aggregate consideration for such transfer, conveyance, sale, lease or other
disposition is equal to $5 million or more in any 12-month period.
"Attributable Value" means, as to any particular lease under
which any Person is at the time liable other than a Capital Lease Obligation,
and at any date as of which the amount thereof is to be determined, the total
net amount of rent required to be paid by such Person under such lease during
the initial term thereof as determined in accordance with generally accepted
accounting principles, discounted from the last date of such initial term to the
date of determination at a rate per annum equal to the discount rate which would
be applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under
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any such lease for any such period shall be the aggregate amount of rent payable
by the lessee with respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility, operating and labor
costs and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of penalty, such net amount shall also include the
lesser of the amount of such penalty (in which case no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated) or the rent which would otherwise be required to be
paid if such lease is not so terminated. "Attributable Value" means, as to a
Capital Lease Obligation, the principal amount thereof.
"Bank Credit Agreement" means any one or more credit
agreements (which may include or consist of revolving credits) between the
Company or any Restricted Subsidiary of the Company and one or more banks or
other financial institutions providing financing for the business of the Company
and its Restricted Subsidiaries.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The Borough of
Manhattan, The City of New York, New York are authorized or obligated by law or
executive order to close.
"Capital Lease Obligation" of any Person means the obligation
to pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles (a "Capital Lease"). The stated
maturity of such obligation shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee
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without payment of a penalty. The principal amount of such obligation shall be
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock or other equity participations, including partnership interests, whether
general or limited, of such Person.
"Cedel" means Cedel Bank, S.A. (or any successor
securities clearing agency).
"Change of Control" has the meaning specified in
Section 1016.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Equity" of any Person means Capital Stock of such
Person that is not Disqualified Stock, and a "sale of Common Equity" includes
any sale of Common Equity effected by private sale or public offering.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by (i) the Chief Executive Officer,
the President, an Executive Vice President or a Vice President of the Company,
and (ii) the Treasurer, Assistant Treasurer or Secretary of the Company, and
delivered to the Trustee.
"Consolidated Capital Ratio" of any Person as of
any date means the ratio of
(i) the aggregate consolidated principal amount of Debt (or in the case
of Debt issued at a discount the accreted amount thereof) of such Person then
outstanding (which amount of Debt shall be reduced by any amount of cash or
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cash equivalent collateral securing on a perfected basis and dedicated for
disbursement exclusively to the payment of principal of and interest on such
Debt) to
(ii) the aggregate consolidated Capital Stock (other than Disqualified
Stock) and paid in capital (other than in respect of Disqualified Stock) of such
Person as of such date.
"Consolidated Cash Flow Available for Fixed Charges" for any
period means the Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period increased by the sum of
(i) Consolidated Interest Expense of the Company and
its Restricted Subsidiaries for such period, plus
(ii) Consolidated Income Tax Expense of the Company and
its Restricted Subsidiaries for such period, plus
(iii) the consolidated depreciation and amortization expense included
in the income statement of the Company and its Restricted Subsidiaries for such
period, plus
(iv) any noncash expense for such period (excluding any noncash charge
to the extent that it requires an accrual of or a reserve for cash disbursements
in any future period), plus
(v) any charge related to any premium or penalty paid in connection
with redeeming or retiring any Debt prior to its stated maturity; PROVIDED,
HOWEVER, that there shall be excluded therefrom the Consolidated Cash Flow
Available for Fixed Charges (if positive) of any Restricted Subsidiary of the
Company (calculated separately for such Restricted Subsidiary in the same manner
as provided above for the Company) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"Consolidated Income Tax Expense" for any period means the
consolidated provision for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means for any period the
consolidated interest expense included in a
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consolidated income statement (excluding interest income) of the Company and its
Restricted Subsidiaries for such period calculated on a consolidated basis in
accordance with generally accepted accounting principles, including without
limitation or duplication (or, to the extent not so included, with the addition
of),
(i) the amortization of Debt discounts;
(ii) any payments or fees with respect to letters of
credit, bankers' acceptances or similar facilities;
(iii) fees with respect to interest rate swap or similar agreements or
foreign currency hedge, exchange or similar agreements;
(iv) Preferred Dividends of the Company and its Restricted Subsidiaries
(other than dividends paid in shares of Preferred Stock that is not Disqualified
Stock) declared and paid or payable;
(v) accrued Disqualified Stock dividends of the Company
and its Restricted Subsidiaries, whether or not declared or
paid;
(vi) interest on Debt guaranteed by the Company and its
Restricted Subsidiaries; and
(vii) the portion of any Capital Lease Obligation paid or accrued
during such period that is allocable to interest expense.
"Consolidated Net Income" for any period means the
consolidated net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with generally
accepted accounting principles; PROVIDED that there shall be excluded therefrom
(a) the net income (or loss) of any Person acquired by the Company or a
Restricted Subsidiary of the Company in a pooling-of-interests transaction for
any period prior to the date of such transaction,
(b) the net income (or loss) of any Person that is not a Restricted
Subsidiary of the Company except to the extent of the amount of dividends or
other distributions actually paid to the Company or a Restricted Subsidiary of
the Company by such Person during such period,
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(c) gains or losses on Asset Dispositions by the
Company or its Restricted Subsidiaries,
(d) all extraordinary gains and extraordinary losses,
(e) the cumulative effect of changes in accounting
principles,
(f) non-cash gains or losses resulting from
fluctuations in currency exchange rates,
(g) any non-cash gain or loss realized on the
termination of any employee pension benefit plan and
(h) the tax effect of any of the items described in clauses (a) through
(g) above; PROVIDED, FURTHER, that for purposes of any determination pursuant to
the provisions of Section 1009 there shall further be excluded therefrom the net
income (but not net loss) of any Restricted Subsidiary of the Company that is
subject to a restriction which prevents the payment of dividends or the making
of distributions to the Company or another Restricted Subsidiary of the Company
to the extent of such restriction.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Disqualified Stock of such Person; PROVIDED that, with respect
to the Company, adjustments following the date of this Indenture to the
accounting books and records of the Company in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of the Company by another
Person shall not be given effect to.
"Consolidated Tangible Assets" of any Person means the total
amount of assets (less applicable reserves and other properly deductible items)
which under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Restricted Subsidiaries after
deducting therefrom all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet; PROVIDED that, with respect to the Company, adjustments following
the date of this Indenture to the accounting books and records of the Company in
accordance with Accounting Principles Board
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Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise resulting
from the acquisition of control of the Company by another Person shall not be
given effect to.
"Corporate Trust Office" means the principal office of the
United States Trust Company of New York in the Borough of Manhattan, The City of
New York, New York, at which at any particular time its corporate trust business
shall be administered, which at the date hereof is located at 114 West 47th
Street, New York, New York 10036.
"corporation" means a corporation, association, company,
limited liability company, joint-stock company or business trust.
"Debt" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent,
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including any such obligations Incurred in
connection with the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person,
(iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business which are not overdue or which are being
contested in good faith),
(v) every Capital Lease Obligation of such Person,
(vi) all Receivables Sales of such Person, together with any obligation
of such Person to pay any discount, interest, fees, indemnities, penalties,
recourse, expenses or other amounts in connection therewith,
(vii) all obligations to redeem Disqualified Stock
issued by such Person,
(viii) every obligation under Interest Rate or Currency
Protection Agreements of such Person and
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(ix) every obligation of the type referred to in clauses (i) through
(viii) of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed.
The "amount" or "principal amount" of Debt at any time of
determination as used herein represented by
(a) any Debt issued at a price that is less than the principal amount
at maturity thereof, shall be the amount of the liability in respect thereof
determined in accordance with generally accepted accounting principles,
(b) any Receivables Sale, shall be the amount of the unrecovered
capital or principal investment of the purchaser (other than the Company or a
Wholly-Owned Restricted Subsidiary of the Company) thereof, excluding amounts
representative of yield or interest earned on such investment,
(c) any Disqualified Stock, shall be the maximum fixed
redemption or repurchase price in respect thereof,
(d) any Capital Lease Obligation, shall be determined
in accordance with the definition thereof, or
(e) any Permitted Interest Rate or Currency Protection
Agreement, shall be zero. In no event shall Debt include
any liability for taxes.
"Default" means an event that with the passing of time or the
giving of notice or both shall constitute an Event of Default.
"Defaulted Interest" has the meaning specified in
Section 307.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in the form of one or more Global Securities, DTC for
so long as it shall be a clearing agency registered under the Exchange Act, or
such successor (which shall be a clearing agency registered under the Exchange
Act) as the Company shall designate from time to time in an Officers'
Certificate delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of
such Person (other than Capital Stock outstanding on the Issue Date) which, by
its terms (or by
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the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final Stated Maturity of the Securities (or, if earlier, the date as of which
the Securities have been paid in full); PROVIDED, HOWEVER, that any Preferred
Stock which would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require the Company to repurchase or redeem
such Preferred Stock upon the occurrence of an asset sale or a Change of Control
occurring prior to the final Stated Maturity of the Securities shall not
constitute Disqualified Stock if the asset sale or change of control provisions
applicable to such Preferred Stock are no more favorable to the holders of such
Preferred Stock than the provisions applicable to the Securities contained in
Section 1013 or Section 1016 and such Preferred Stock specifically provides that
the Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Securities as are required
to be repurchased pursuant to Section 1013 or Section 1016.
"DTC" means The Depository Trust Company.
"Eagle River" means Eagle River Investments, L.L.C., a limited
liability company formed under the laws of the State of Washington.
"Eligible Institution" means a commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated "A-3" or higher, "A" or
higher or "A" or higher according to Moody's Investors Service, Inc., Standard &
Poor's Ratings Group or Duff & Phelps Credit Rating Co. (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)) respectively,
at the time as of which any investment or rollover therein is made.
"Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent
quarterly consolidated balance sheet of the Company as at a date at least 45
days prior to such time arising in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company.
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"Euroclear" means the Euroclear Clearance System
(or any successor securities clearing agency).
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act) and the rules and regulations thereunder.
"Exchange Offer" has the meaning set forth in the
form of the Securities contained in Section 202.
"Exchange Registration Statement" has the meaning
set forth in the form of the Securities contained in
Section 202.
"Exchange Security" means any Security issued in exchange for
an Original Security or Original Securities pursuant to the Exchange Offer or
otherwise registered under the Securities Act and any Security with respect to
which the next preceding Predecessor Security of such Security was an Exchange
Security.
"Expiration Date" has the meaning set forth in the definition
of "Offer to Purchase" in this Section 101.
"Global Security" means a Security in the form prescribed in
Section 204 evidencing all or part of the Securities, issued to the Depositary
or its nominee, and registered in the name of such Depositary or its nominee.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States is
pledged and which have a remaining weighted average life to maturity of not more
than 18 months from the date of Investment therein.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person,
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to
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advance or supply funds for the purchase of) any security for the payment of
such Debt,
(ii) to purchase property, securities or services for
the purpose of assuring the holder of such Debt of the
payment of such Debt, or
(iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Debt (and "Guaranteed", "Guaranteeing" and
"Guarantor" shall have meanings correlative to the foregoing); PROVIDED,
HOWEVER, that the Guarantee by any Person shall not include endorsements by such
Person for collection or deposit, in either case, in the ordinary course of
business; and PROVIDED, FURTHER, that the incurrence by a Restricted Subsidiary
of the Company of a lien permitted under clause (iv) of the second paragraph of
Section 1011 shall not be deemed to constitute a Guarantee by such Restricted
Subsidiary of any Purchase Money Debt of the Company secured thereby.
"Holder" means a Person in whose name a Security
is registered in the Security Register.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Debt or other
obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Debt or other obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that a change in generally
accepted accounting principles that results in an obligation of such Person that
exists at such time becoming Debt shall not be deemed an Incurrence of such Debt
and that neither the accrual of interest nor the accretion of original issue
discount shall be deemed an Incurrence of Debt; PROVIDED, FURTHER, HOWEVER, that
the Company may elect to treat all or any portion of revolving credit debt of
the Company or a Subsidiary as being incurred from and after any date beginning
the date the revolving credit commitment is extended to the Company or a
Subsidiary, by furnishing notice thereof to the Trustee, and any borrowings or
reborrowings by the Company or a Subsidiary under such commitment up to the
amount of such commitment designated by the Company as Incurred shall
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not be deemed to be new Incurrences of Debt by the Company or such Subsidiary.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity
of an installment of interest on the Securities.
"Interest Rate or Currency Protection Agreement" of any Person
means any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person, including any payment on a
Guarantee of any obligation of such other Person, but excluding any loan,
advance or extension of credit to an employee of the Company or any of its
Restricted Subsidiaries in the ordinary course of business, accounts receivable
and other commercially reasonable extensions of trade credit.
"Issue Date" means the date on which the Securities are first
authenticated and delivered under this Indenture.
"Joint Venture" means a corporation, partnership or other
entity engaged in one or more Telecommunications Businesses as to which the
Company (directly or through one or more Restricted Subsidiaries) exercises
managerial control and in which the Company owns
(i) a 50% or greater interest, or
(ii) a 30% or greater interest, together with options or other
contractual rights, exercisable not more than seven years after the Company's
initial Investment in such Joint Venture, to increase its interest to not less
than 50%.
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"Lien" means, with respect to any property or assets, any
mortgage or deed of trust, pledge, hypothecation, assignment, Receivables Sale,
deposit arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Marketable Securities" means:
(i) Government Securities;
(ii) any time deposit account, money market deposit and certificate of
deposit maturing not more than 365 days after the date of acquisition issued by,
or time deposit of, an Eligible Institution;
(iii) commercial paper maturing not more than 365 days after the date
of acquisition issued by a corporation (other than an Affiliate of the Company)
with a rating, at the time as of which any investment therein is made, of "P-1"
or higher according to Moody's Investors Service, Inc., "A-1" or higher
according to Standard & Poor's Ratings Group or "A-1" or higher according to
Duff & Phelps Credit Rating Co. (or such similar equivalent rating by at least
one "nationally recognized statistical rating organization" (as defined in Rule
436 under the Securities Act));
(iv) any banker's acceptances or money market deposit
accounts issued or offered by an Eligible Institution;
(v) repurchase obligations with a term of not more than 7 days for
Government Securities entered into with an Eligible Institution;
(vi) auction-rate preferred stocks of any corporation maturing within
90 days after the date of acquisition by the Company thereof, having a rating of
at least AA by Standard & Poor's; and
(vii) any fund investing exclusively in investments of the types
described in clauses (i) through (vi) above.
"Maturity", when used with respect to any Security, means the
date on which the principal of such
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Security becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Net Available Proceeds" from any Asset Disposition by any
Person means cash or readily marketable cash equivalents received (including by
way of sale or discounting of a note, installment receivable or other
receivable, but excluding any other consideration received in the form of
assumption by the acquiror of Debt or other obligations relating to such
properties or assets) therefrom by such Person, net of
(i) all legal, title and recording tax expenses, commissions and other
fees and expenses Incurred and all federal, state, provincial, foreign and local
taxes (including taxes payable upon payment or other distribution of funds from
a foreign subsidiary to the Company or another subsidiary of the Company)
required to be accrued as a liability as a consequence of such Asset
Disposition,
(ii) all payments made by such Person or its Restricted Subsidiaries on
any Debt which is secured by such assets in accordance with the terms of any
Lien upon or with respect to such assets or which must by the terms of such
Lien, or in order to obtain a necessary consent to such Asset Disposition or by
applicable law, be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments made to minority interest
holders in Restricted Subsidiaries of such Person or joint ventures as a result
of such Asset Disposition,
(iv) appropriate amounts to be provided by such Person or any
Restricted Subsidiary thereof, as the case may be, as a reserve in accordance
with generally accepted accounting principles against any liabilities associated
with such assets and retained by such Person or any Restricted Subsidiary
thereof, as the case may be, after such Asset Disposition, including, without
limitation, liabilities under any indemnification obligations and severance and
other employee termination costs associated with such Asset Disposition, in each
case as determined by the Board of Directors, in its reasonable good faith
judgment evidenced by a Board Resolution filed with the Trustee; PROVIDED,
HOWEVER, that any reduction in such reserve within twelve months following the
consummation of such Asset Disposition will be treated for all purposes of this
Indenture and the
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Securities as a new Asset Disposition at the time of such reduction with Net
Available Proceeds equal to the amount of such reduction, and (v) any
consideration for an Asset Disposition (which would otherwise constitute Net
Available Proceeds) that is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, but amounts under this
clause
(v) shall become Net Available Proceeds at such time and to the extent
such amounts are released to such Person.
"Offer to Purchase" means a written offer (the "Offer") sent
by the Company by first class mail, postage prepaid, to each Holder at his
address appearing in the Security Register on the date of the Offer offering to
purchase up to the principal amount of Securities specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Securities within five Business Days after
the Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain information concerning the business of the Company and its Subsidiaries
which the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at a minimum will
include (i) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the Trustee
pursuant to this Indenture (which requirements may be satisfied by delivery of
such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Offer to Purchase), (iii) if
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase and
(iv) any other information required by
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applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such Holders to tender Securities pursuant to
the Offer to Purchase. The Offer shall also state:
(a) the Section of this Indenture pursuant to
which the Offer to Purchase is being made;
(b) the Expiration Date and the Purchase Date;
(c) the aggregate principal amount of the Outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which such has
been determined pursuant to Section 1013 or 1016) (the "Purchase
Amount");
(d) the purchase price to be paid by the Company for each
$1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(e) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;
(f) the place or places where Securities are to
be surrendered for tender pursuant to the Offer to
Purchase;
(g) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(h) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(i) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Company or
the Trustee so requires, duly endorsed by, or accompanied by a written
instrument of
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transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in
writing);
(j) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the Expiration Date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
tendered, the certificate number of the Security the Holder tendered
and a statement that such Holder is withdrawing all or a portion of his
tender;
(k) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (b) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased);
(l) that in the case of any Holder whose Security is purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered;
and
(m) the CUSIP number or numbers of the Securities offered to
be purchased by the Company pursuant to the Offer to Purchase.
Any Offer to Purchase shall be governed by and effected in accordance with the
Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by (i) the
Chief Executive Officer, President, an Executive Vice President or a Vice
President, and (ii) the Treasurer, Assistant Treasurer, Secretary or an
Assistant Secretary, of
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the Company, and delivered to the Trustee and containing the statements provided
for in Section 102. One of the officers signing an Officers' Certificate given
pursuant to Section 1018 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of legal counsel,
who may be counsel for the Company, and who shall be acceptable to the Trustee,
and containing the statements provided for in Section 102.
"Original Securities" means all Securities other
than Exchange Securities.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for
cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; PROVIDED that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securi-
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ties or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities 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 Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company. The Trustee is hereby authorized by the Company to act as
a "Paying Agent" for the purposes of this Indenture, until such time as the
Company notifies the Trustee in writing that such authorization is revoked.
"Permitted Interest Rate or Currency Protection Agreement" of
any Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
"Permitted Investment" means
(i) any Investment in a Joint Venture (including the purchase or
acquisition of any Capital Stock of a Joint Venture), provided the aggregate
amount of all outstanding Investments pursuant to this clause (i) in Joint
Ventures in which the Company owns, directly or indirectly, a less than 50%
interest shall not exceed $25 million,
(ii) any Investment in any Person as a result of which such Person
becomes a Restricted Subsidiary, or, subject to the proviso to clause (i) of
this definition, becomes a Joint Venture of the Company,
(iii) any Investment in Marketable Securities,
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(iv) Investments in Permitted Interest Rate or Currency
Protection Agreements,
(v) Investments made as a result of the receipt of noncash
consideration from an Asset Disposition that was made pursuant to and in
compliance with Section 1013 of this Indenture and
(vi) other Investments in an aggregate amount not to exceed the
aggregate net proceeds received by the Company or any Restricted Subsidiary
after the date of this Indenture from the sale or liquidation of any
Unrestricted Subsidiary or any interest therein (except to the extent that any
such amount is included in the calculation of Consolidated Net Income).
"Permitted Liens" means
(a) Liens for taxes, assessments, governmental charges or claims which
are not yet delinquent or which are being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required in conformity with generally accepted accounting principles shall have
been made therefor;
(b) other Liens incidental to the conduct of the Company's and its
Restricted Subsidiaries' business or the ownership of its property and assets
not securing any Debt, and which do not in the aggregate materially detract from
the value of the Company's and its Restricted Subsidiaries' property or assets
when taken as a whole, or materially impair the use thereof in the operation of
its business;
(c) Liens with respect to assets of a Restricted Subsidiary granted by
such Restricted Subsidiary to the Company to secure Debt owing to the Company;
(d) pledges and deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
statutory obligations (including to secure government contracts);
(e) deposits made to secure the performance of tenders, bids, leases,
and other obligations of like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);
(f) zoning restrictions, servitudes, easements, rights-of-way,
restrictions and other similar charges or
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encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the Company or
its Restricted Subsidiaries;
(g) Liens arising out of judgments or awards against the Company or any
Restricted Subsidiary with respect to which the Company or such Restricted
Subsidiary is prosecuting an appeal or proceeding for review and the Company or
such Restricted Subsidiary is maintaining adequate reserves in accordance with
generally accepted accounting principles;
(h) any interest or title of a lessor in the property
subject to any lease other than a Capital Lease; and
(i) any statutory warehousemen's, materialmen's or other similar Liens
for sums not then due and payable (or which, if due and payable, are being
contested in good faith and with respect to which adequate reserves are being
maintained to the extent required by generally accepted accounting principles).
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Predecessor Security" of any particular Security means every
previous Security issued before, and evidencing all or a portion of the same
debt as that evidenced by, such particular Security; and, for the purposes of
this definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Preferred Dividends" for any Person means for any period the
quotient determined by dividing the amount of dividends and distributions paid
or accrued (whether or not declared) on Preferred Stock of such Person during
such period calculated in accordance with generally accepted accounting
principles, by 1 minus the maximum statutory income tax rate then applicable to
the Company (expressed as a decimal).
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<PAGE>
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Purchase Agreement" means the Purchase Agreement, dated as of
November 12, 1999, between the Company and the Purchasers, as such agreement may
be amended from time to time.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" in this Section 101.
"Purchase Money Debt" means
(i) Acquired Debt Incurred in connection with the
acquisition of Telecommunications Assets and
(ii) Debt of the Company or of any Restricted Subsidiary of the Company
(including, without limitation, Debt represented by Bank Credit Agreements,
Capital Lease Obligations, Vendor Financing Facilities, mortgage financings and
purchase money obligations) Incurred for the purpose of financing all or any
part of the cost of construction, acquisition or improvement by the Company or
any Restricted Subsidiary of the Company or any Joint Venture of any
Telecommunications Assets of the Company, any Restricted Subsidiary of the
Company or any Joint Venture, and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified or restated from
time to time.
"Purchasers" means Goldman, Sachs & Co., Salomon
Smith Barney Inc., Credit Suisse First Boston Corporation,
TD Securities (USA) Inc., Barclays Capital Inc., Chase
Securities Inc., BancBoston Robertson Stephens Inc., Banc of
America Securities LLC, Deutsche Bank Securities Inc., J.P.
Morgan Securities Inc. and PNC Capital Markets, Inc.
"readily marketable cash equivalents" means (i) marketable
securities issued or directly and unconditionally guaranteed by the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States; (ii) marketable direct obligations issued by
any state of the United States of
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<PAGE>
America or any political subdivision of any such state or any public
instrumentality thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Rating Group or Moody's
Investors Service, Inc.; (iii) commercial paper maturing no more than 180 days
from the date of acquisition thereof and, at the time of acquisition, having a
rating of P-1 according to Moody's Investors Service, Inc., "A-1" or higher
according to Standard & Poor's Ratings Group or "A-1" or higher according to
Duff & Phelps Credit Rating Co. (or such similar equivalent rating by at least
one "nationally recognized statistical rating organization" (as defined in Rule
436 under the Securities Act)); and (iv) certificates of deposit or bankers'
acceptance maturing within one year from the date of acquisition thereof issued
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia having unimpaired capital and
surplus of not less than $100,000,000.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
in respect of the sale of goods or services.
"Receivables Sale" of any Person means any sale of Receivables
of such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person relating
thereto or a disposition of defaulted Receivables for purpose of collection and
not as a financing arrangement.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Securities" means the Exchange Securities and all
other Securities sold or otherwise disposed of pursuant to an effective
registration statement under the Securities Act, together with their respective
Successor Securities.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the May 15 or November 15
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(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or
any successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate
substantially in the form set forth in Annex A.
"Regulation S Global Security" has the meaning
specified in Section 201.
"Regulation S Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 202 to be
placed upon each Regulation S Security.
"Regulation S Securities" means all Securities
required pursuant to Section 305(c) to bear a Regulation S
Legend. Such term includes the Regulation S Global
Security.
"Related Person" of any Person means any other
Person directly or indirectly owning
(a) 10% or more of the Outstanding Common Equity of such Person (or, in
the case of a Person that is not a corporation, 10% or more of the equity
interest in such Person) or
(b) 10% or more of the combined voting power of the
Voting Stock of such Person.
"Resale Registration Statement" has the meaning
set forth in the Form of the Securities contained in
Section 202.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with
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respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Global Security" has the meaning
specified in Section 201.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which Securities are
first offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the original issuance date of the Securities.
"Restricted Securities" means all Securities
required pursuant to Section 305(c) to bear any Restricted
Securities Legend. Such term includes the Restricted Global
Security.
"Restricted Securities Certificate" means a
certificate substantially in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the
legends substantially in the forms of the legends required in the form of
Security set forth in Section 202 to be placed upon each Restricted Security.
"Restricted Subsidiary" of the Company means any Subsidiary,
whether existing on or after the date of this Indenture, unless such Subsidiary
is an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the
Purchasers from the Company pursuant to the Purchase Agreement, other than the
Regulation S Securities.
"Sale and Leaseback Transaction" of any Person means an
arrangement with any lender or investor or to which such lender or investor is a
party providing for the leasing by such Person of any property or asset of such
Person which has been or is being sold or transferred by such Person more than
365 days after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or investor on the
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security of such property or asset. The stated maturity of such arrangement
shall be the date of the last payment of rent or any other amount due under such
arrangement prior to the first date on which such arrangement may be terminated
by the lessee without payment of a penalty.
"SEC Reports" has the meaning specified in
Section 704.
"Securities" means the Exchange Securities and the
Original Securities.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
"Securities Act Legend" means a Restricted
Securities Legend or a Regulation S Legend.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 305(b).
"Significant Subsidiary" means a Restricted Subsidiary that is
a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
interest, as the case may be, is due and payable.
"Step-Down Date" has the meaning set forth in the
form of the Security contained in Section 202.
"Step-Up" has the meaning set forth in the form of
the Security contained in Section 202.
"Subordinated Debt" means Debt of the Company as to which the
payment of principal of (and premium, if any) and interest and other payment
obligations in respect of such Debt shall be subordinate to the prior payment in
full of the Securities to at least the following extent:
<PAGE>
(i) no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Debt may be permitted for so long as any
default in the payment of principal (or premium, if any) or interest on the
Securities exists;
(ii) in the event that any other default that with the passing of time
or the giving of notice, or both, would constitute an Event of Default exists
with respect to the Securities, upon notice by 25% or more in principal amount
of the Securities to the Trustee, the Trustee shall have the right to give
notice to the Company and the holders of such Debt (or trustees or agents
therefor) of a payment blockage, and thereafter no payments of principal of (or
premium, if any) or interest on or otherwise due in respect of such Debt may be
made for a period of 179 days from the date of such notice or for the period
until such default has been cured or waived or ceased to exist and any
acceleration of the Securities has been rescinded or annulled, whichever period
is shorter (which Debt may provide that
(A) no new period of payment blockage may be commenced by a
payment blockage notice unless and until 360 days have elapsed since the
effectiveness of the immediately prior notice,
(B) no nonpayment default that existed or was continuing on
the date of delivery of any payment blockage notice to such holders (or such
agents or trustees) shall be, or be made, the basis for a subsequent payment
blockage notice and
(C) failure of the Company to make payment on such Debt when
due or within any applicable grace period, whether or not on account of such
payment blockage provisions, shall constitute an event of default thereunder);
and
(iii) such Debt may not (x) provide for payments of principal of such
Debt at the stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance, retirement or
repurchase thereof by the Company (including any redemption, retirement or
repurchase which is contingent upon events or circumstances, but excluding any
retirement required by virtue of acceleration of such Debt upon an event of
default thereunder), in each case prior to the final Stated Maturity of the
Securities or (y) permit redemption or other retirement (including pursuant to
an offer to purchase made by the Company) of such other Debt at the option of
the
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holder thereof prior to the final Stated Maturity of the Securities, other than
a redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Company) which is
conditioned upon a change of control of the Company pursuant to provisions
substantially similar to those of Section 1016 (and which shall provide that
such Debt will not be repurchased pursuant to such provisions prior to the
Company's repurchase of the Securities required to be repurchased by the Company
pursuant to the provisions of Section 1016.
"Subsidiary" of any Person means
(i) a corporation more than 50% of the combined voting power of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or
(ii) any other Person (other than a corporation) in which such Person,
or one or more other Subsidiaries of such Person or such Person and one or more
other Subsidiaries thereof, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Telecommunications Assets" means all assets, rights
(contractual or otherwise) and properties, whether tangible or intangible, used
or intended for use in connection with a Telecommunications Business.
"Telecommunications Business" means the business
of
(i) transmitting, or providing services relating to the transmission
of, voice, video or data through owned or leased transmission facilities,
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(ii) creating, developing or marketing communications related network
equipment, software and other devices for use in a Telecommunication Business or
(iii) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in (i) or (ii) above
and shall, in any event, include all businesses in which the Company or any of
its Subsidiaries are engaged on the Issue Date; PROVIDED that the determination
of what constitutes a Telecommunications Business shall be made in good faith by
the Board of Directors, which determination shall be conclusive.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"Unrestricted Subsidiary" means
(1) any Subsidiary of the Company designated as such by the Board of
Directors as set forth below where
(a) neither the Company nor any of its other
Subsidiaries (other than another Unrestricted Subsidiary)
(i) provides credit support for, or Guarantee
of, any Debt of such Subsidiary or any Subsidiary of such
Subsidiary (including any undertaking, agreement or
instrument evidencing such Debt) or
(ii) is directly or indirectly liable for any
Debt of such Subsidiary or any Subsidiary of such
Subsidiary, and
(b) no default with respect to any Debt of such Subsidiary or
any Subsidiary of such Subsidiary (including
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any right which the holders thereof may have to take enforcement action against
such Subsidiary) would permit (upon notice, lapse of time or both) any holder of
any other Debt of the Company and its Restricted Subsidiaries to declare a
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity and
(2) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Subsidiary to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary,
PROVIDED that either
(x) the Subsidiary to be so designated has total
assets of $1,000 or less or
(y) immediately after giving effect to such designation, the
Company could Incur at least $1.00 of additional Debt pursuant to the first
paragraph of Section 1007 and PROVIDED, FURTHER, that the Company could make a
Restricted Payment in an amount equal to the greater of the fair market value
and the book value of such Subsidiary pursuant to Section 1009 and such amount
is thereafter treated as a Restricted Payment for the purpose of calculating the
aggregate amount available for Restricted Payments thereunder. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, PROVIDED that if such Unrestricted Subsidiary has Debt outstanding
at such time, either
(a) immediately after giving effect to such
designation, the Company could Incur at least $1.00 of additional Debt pursuant
to the first paragraph of Section 1007 or
(b) the Company or such Restricted Subsidiary could
Incur such Debt hereunder (other than as Acquired Debt).
"Vendor Financing Facility" means any agreements between the
Company or a Restricted Subsidiary of the Company and one or more vendors or
lessors of equipment or other capital assets to the Company or any of its
Restricted Subsidiaries (or any affiliate of any such vendor or lessor)
providing financing for the acquisition by the Company or
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any such Restricted Subsidiary of equipment or other capital assets from any
such vendor or lessor.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly-Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person 99% or more of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person or by such Person and one or more
Wholly-Owned Restricted Subsidiaries of such Person.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act and under this Indenture. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation
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upon which the statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate of an officer of the Company may be based,
insofar as it relates to legal matters, upon an opinion of counsel submitted
therewith, unless such officer knows, or in the exercise of reasonable care
should know, that the opinion with respect to the matters upon which his
certificate is based is erroneous. Any opinion of counsel may be based, insofar
as it relates to factual matters, upon a certificate of an officer or officers
of the Company submitted therewith stating the information on which counsel is
relying, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate with respect to such matters is erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
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SECTION 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing pursuant to this Section 104 may be proved by the
affidavit of a witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
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The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities, PROVIDED that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If not set by the Company prior to the first solicitation of
a Holder made by any Person in respect of any such matter referred to in the
foregoing sentence, the record date for any such matter shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first solicitation. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to take
the relevant action, whether or not such Holders remain Holders after such
record date; PROVIDED that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 106.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such notice,
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<PAGE>
declaration, request or direction, whether or not such Holders remain Holders
after such record date; PROVIDED that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Trustee, at the Company's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
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SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if
delivered in writing to the Trustee at its Corporate
Trust Office, Attention: Corporate Trust
Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to the Company at the address of its
principal office specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Trustee by
the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if (i) in the case of a Global Security, in writing by
facsimile and/or by overnight mail to the Depositary, and (ii) in the case of
securities other than Global Securities, in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders 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.
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<PAGE>
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. APPLICATION OF TRUST INDENTURE ACT.
The Trust Indenture Act shall apply as a matter of contract to
this Indenture for purposes of interpretation, construction and defining the
rights and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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<PAGE>
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
Purchase Date or at the Stated Maturity, PROVIDED that no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of
authentication thereof shall be in substantially the forms set forth in this
Article, with such appropriate legends, insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
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<PAGE>
Upon their original issuance, Rule 144A Securities shall be
issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee and deposited with the Trustee, as custodian for
the Depositary, for credit by the Depositary to the respective accounts of
beneficial owners of the Securities represented thereby (or such other accounts
as they may direct). Such Global Securities, together with their Successor
Securities which are Global Securities other than the Regulation S Global
Security, are collectively herein called the "Restricted Global Security". Upon
their original issuance, Regulation S Securities shall be issued in the form of
one or more Global Securities registered in the name of the Depositary, or its
nominee and deposited with the Trustee, as custodian for the Depositary, for
credit to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), PROVIDED that
upon such deposit all such Securities shall be credited to or through accounts
maintained at the Depositary by or on behalf of Euroclear or Cedel. Such Global
Securities, together with their Successor Securities which are Global Securities
other than the Restricted Global Security, are collectively herein called the
"Regulation S Global Security".
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
In certain cases described elsewhere herein, the legends set
forth in Section 202 may be omitted from Securities issued hereunder.
SECTION 202. FORM OF FACE OF SECURITY.
[If Restricted Securities, then insert -- THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR
SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT
ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
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TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (O)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.]
[If a Regulation S Security, then insert -- THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS SECURITY IS REGISTERED UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS
AVAILABLE.]
[If the Security is a Global Security, insert the
legends required by Section 204 of the Indenture]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS 55.257% OF ITS
PRINCIPAL AMOUNT, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $447.43 PER $1,000 OF
STATED FACE AMOUNT, THE ISSUE DATE IS NOVEMBER 17, 1999 AND THE YIELD TO
MATURITY IS 12 1/8%.
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NEXTLINK Communications, Inc.
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 65333H AN 3]
[IF ANY REGULATION S SECURITY - CUSIP NO. U6500E AE 8]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. USU6500EAE87]
No. ______ $_______________
NEXTLINK Communications, Inc., a corporation organized under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of __________ Dollars [if this Security is a Global Security, then
insert: (which principal amount may from time to time be increased or decreased
to such other principal amounts (which, taken together with the principal
amounts of all other Outstanding Securities, shall not exceed $455,000,000 in
the aggregate at any time) by adjustments made on the records of the Trustee
hereinafter referred to in accordance with the Indenture)] on December 1, 2009,
and to pay interest thereon from December 1, 2004 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 1 and December 1 in each year, commencing June 1, 2005, at
the rate of 12 1/8% per annum until the principal hereof is paid or made
available for payment. [If Original Securities, then insert: PROVIDED, HOWEVER,
that if (i) the Company has not filed a registration statement (the "Exchange
Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), registering a security substantially identical to this
Security (except that such Security will not contain terms with respect to the
Additional Interest payments described below or transfer restrictions) pursuant
to an exchange offer (the "Exchange Offer") (or, in lieu thereof, a registration
statement registering this Security for resale (a "Resale Registration
Statement")) by February 15, 2000, or (ii) the Exchange Registration Statement
relating to the Exchange Offer or, if applicable, the Resale Registration
Statement has not become or been declared effective by March 16, 2000, or (iii)
the Exchange Offer has not been completed within 45 days after the date on which
the Exchange Registration Statement has become or been declared effective
initially (if the Exchange Offer is then required to be made pursuant to the
Exchange and Registration Rights Agreement (the "Exchange and Registration
Rights Agreement"), dated as of November 17, 1999, by and
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between the Company, the Purchasers (as defined therein) and the Holders from
time to time of the Securities) or (iv) either the Exchange Registration
Statement or, if applicable, the Resale Registration Statement is filed and
declared effective (except as specifically permitted therein) but shall
thereafter cease to be effective without being succeeded promptly by an
additional registration statement filed and declared effective, in each case (i)
through (iv) upon the terms and conditions set forth in the Exchange and
Registration Rights Agreement (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then interest will accrue (in addition
to the original issue discount and any stated interest on the Securities) (the
"Step-Up") at a rate of 0.5% per annum, determined daily, on the principal
amount of the Securities, for the period from the occurrence of the Registration
Default until such time (the "Step-Down Date") as no Registration Default is in
effect and, PROVIDED, FURTHER, that if either the Exchange Offer has not been
consummated or, if applicable, the Resale Registration Statement has not become
or been declared effective, in each case by April 30, 2000, then the per annum
rate of such Additional Interest shall increase (the "Subsequent Step-Up") by an
additional 0.25% per annum for each subsequent 90-day period (provided that the
Step-Up and all Subsequent Step-Up interest rates shall not exceed 1.0% per
annum in the aggregate) and Additional Interest will be payable at such
increased rate until such time (the "Subsequent Step Down Date") as the Company
consummates the Exchange Offer or, if applicable, the Resale Registration
Statement becomes or has been declared effective (after which such interest rate
will be restored to its initial rate). Interest accruing as a result of the
Step-Up or the Subsequent Step-Up (which shall be computed on the basis of a
365-day year) is referred to herein as "Additional Interest." Accrued Additional
Interest, if any, shall be paid semi-annually on June 1 and December 1 in each
year; and the amount of accrued Additional Interest shall be determined on the
basis of the number of days actually elapsed. Any accrued and unpaid interest
(including Additional Interest) on this Security upon the issuance of an
Exchange Security (as defined in the Indenture) in exchange for this Security
shall cease to be payable to the Holder hereof but such accrued and unpaid
interest (including Additional Interest) shall be payable on the next Interest
Payment Date for such Exchange Security to the Holder thereof on the related
Regular Record Date.] The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be May 15 or November 15 (whether or
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not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
The principal of this Security shall not accrue interest until
December 1, 2004, except in the case of a default in payment of principal and
premium, if any, upon acceleration or redemption, in which case interest shall
be payable pursuant to the preceding paragraph on such overdue principal (and
premium, if any), such interest shall be payable on demand and, if not so paid
on demand, such interest shall itself bear interest at the rate of 12 1/8% per
annum (to the extent that the payment of such interest shall be legally
enforceable), and shall accrue from the date of such demand for payment to the
date payment of such interest has been made or duly provided for, and such
interest on unpaid interest shall also be payable on demand.
If this Security is issued in the form of a Global Security,
payments of the principal of (and premium, if any) and interest on this Security
shall be made in immediately available funds to the Depositary. If this Security
is issued in certificated form, payment of the principal of (and premium, if
any) and interest on this Security will be made at the corporate trust office of
the Trustee and at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, New York, and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: November 17, 1999.
NEXTLINK Communications, Inc.
By______________________________
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities
of the Company designated as its 12 1/8% Senior Discount Notes Due 2009 (the
"Securities") issued under an Indenture, dated as of November 17, 1999 (herein
called the "Indenture"), between the Company and U.S. Trust Company of Texas, as
trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture). The Securities are limited in aggregate principal amount
to $455,000,000. Reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Securities are subject to redemption upon not less than 30
nor more than 60 days' notice by mail to each Holder of Securities to be
redeemed at such Holder's address appearing in the Security Register, in amounts
of $1,000 or an integral multiple of $1,000, at any time on or after December 1,
2004 and prior to maturity, as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount) plus accrued and unpaid interest to but excluding
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the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment that is on or
prior to the Redemption Date), if redeemed during the 12-month period beginning
December 1 of each of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ------
<S> <C>
2004 106.063%
2005 104.042%
2006 102.021%
</TABLE>
and thereafter at a Redemption Price equal to 100.000% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
The Securities are further subject to redemption on or prior
to December 1, 2002 only in the event that on or before December 1, 2002 the
Company receives net proceeds from a sale of its Common Equity, in which case
the Company may, at its option, use all or a portion of any such net proceeds to
redeem Securities in a principal amount of up to 33 1/3% of the Accreted Value
of the Securities at a Redemption Price of 112.125% of the Accreted Value of the
Securities to be redeemed to but excluding the Redemption Date; PROVIDED,
HOWEVER, that Securities in an amount equal to at least 66 2/3% of the Accreted
Value of the Securities remain Outstanding after such redemption and such
redemption occurs on a Redemption Date within 90 days of any such sale of the
Company's Common Equity and upon not less than 30 nor more than 60 days' notice
by mail to each Holder of Securities to be redeemed at such Holder's address
appearing in the Security Register. The Company may only redeem the Securities
in amounts of $1,000 or an integral multiple of $1,000.
In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Securities do not have the benefit of any sinking fund
obligations.
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The Indenture provides that, subject to certain conditions, if
(i) a Change of Control occurs or (ii) certain Net Available Proceeds are
available to the Company as a result of any Asset Disposition, the Company shall
be required to make an Offer to Purchase for all or a specified portion of the
Securities.
[If not a Global Security -- In the event of redemption or
purchase pursuant to an Offer to Purchase of this Security in part only, a new
Security or Securities of like tenor for the unredeemed or unpurchased portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
[If a Global Security insert -- In the event of a deposit or
withdrawal of an interest in this Security (including upon an exchange,
transfer, redemption or repurchase of this Security in part only) effected in
accordance with the Applicable Procedures, the Security Registrar, upon receipt
of notice of such event from the Depositary's custodian for this Security, shall
make an adjustment on its records to reflect an increase or decrease of the
Outstanding principal amount of this Security resulting from such deposit or
withdrawal, as the case may be.]
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security, or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
Unless the context otherwise requires, the Original Securities
(as defined in the Indenture) and the Exchange Securities (as defined in the
Indenture) shall constitute one series for all purposes under the Indenture,
including without limitation, amendments, waivers, redemptions and Offers to
Purchase.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities
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at the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Securities
at the time Outstanding, on behalf of the Holders of all the Securities, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Outstanding Securities a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized denominations
and like tenor and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
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The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like tenor and aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
Interest [If an Original Security, then insert: (other than
Additional Interest)] on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its
entirety by the Company pursuant to Section 1013 or 1016 of the Indenture, check
the box:
/ /
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If you want to elect to have only a part of this Security
purchased by the Company pursuant to Section 1013 or 1016 of the Indenture,
state the amount: $___________
Dated:________________ Your Signature __________________
(Sign exactly as name
appears on the other side of
this Security)
Signature Guarantee:________________________________________
Notice: Signature(s) must be guaranteed by
an "eligible guarantor institution" meeting
the requirements of the Trustee, which
requirements will include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Trustee in addition to, or
in substitution for STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
SECTION 204. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL
SECURITY.
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203, bear a legend in substantially the
following form:
[If a Global Security, insert -- THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[If a Global Security to be held by the Depository Trust
Company, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
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PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
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 A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION.
This is one of the Securities referred to in the
within-mentioned Indenture.
U.S. Trust Company of Texas,
as Trustee
By ____________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $455,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906 or 1108 or in connection with an Offer to Purchase pursuant to
Section 1013 or 1016.
The Company may issue Exchange Securities from time to time
pursuant to an Exchange Offer or otherwise, in each case pursuant to a Board
Resolution, subject to Section 303, included in an Officers' Certificate
delivered to the Trustee, in authorized denominations in exchange for a like
principal amount of Original Securities. Upon any such exchange the Original
Securities shall be canceled in accordance with Section 309 and shall no longer
be deemed Outstanding for any purpose. In no event shall the aggregate principal
amount of Original Securities and Exchange Securities Outstanding exceed
$455,000,000.
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The Securities shall be known and designated as the "12 1/8%
Senior Discount Notes due 2009" of the Company. The Stated Maturity of the
Securities shall be December 1, 2009. The Securities shall bear interest at the
rate of 12 1/8% per annum, from December 1, 2004 or from the most recent
Interest Payment Date thereafter to which interest has been paid or duly
provided for, as the case may be, payable semi-annually on June 1 and December
1, commencing June 1, 2005, until the principal thereof is paid or made
available for payment; PROVIDED, HOWEVER, with respect to Original Securities,
if there has been a Registration Default, a Step-Up will occur and the Original
Securities will from then bear Additional Interest until the Step-Down Date and,
if either the Exchange Offer has not been consummated or, if applicable, the
Resale Registration Statement has not become or been declared effective, in each
case, by April 30, 2000, a Subsequent Step-Up will occur and the Original
Securities will from then bear Additional Interest until the Subsequent
Step-Down Date. Accrued Additional Interest, if any, shall be paid in cash in
arrears semi-annually on May 15 and November 15 in each year, and the amount of
accrued Additional Interest shall be determined on the basis of the number of
days actually elapsed. In connection with the cash payment of any Additional
Interest, the Company shall notify the Trustee (the "Additional Interest
Notice") on or before the later to occur of (i) the Regular Record Date
preceding such payment of any Additional Interest, and (ii) the date on which
any such Additional Interest begins to accrue, of the amount of Additional
Interest to be paid by the Company on the next Interest Payment Date. In the
event of the occurrence of a Step-Down Date during the period between the date
on which the Additional Interest Notice is given and the next Interest Payment
Date, the Company shall so notify the Trustee and shall provide the Trustee with
the revised amount of Additional Interest to be paid by the Company on such
Interest Payment Date.
In the case of a default in payment of principal and premium,
if any, upon acceleration or redemption, interest shall be payable pursuant to
the preceding paragraph on such overdue principal (and premium, if any), such
interest shall be payable on demand and, if not so paid on demand, such interest
shall itself bear interest at the rate of 12.125% per annum (to the extent that
the payment of such interest shall be legally enforceable), and shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest on unpaid interest shall
also be payable on demand.
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If this Security is issued in the form of a Global Security,
payments of the principal of (and premium, if any) and interest on this Security
shall be made in immediately available funds to the Depositary. If the
Securities are issued in certificated form, the principal of and premium, if
any, and interest on the Securities shall be payable at the corporate trust
office of the Trustee in the Borough of Manhattan, The City of New York, New
York, maintained for such purpose and at any other office or agency maintained
by the Company for such purpose; PROVIDED, HOWEVER, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
The Securities shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Sections 1013 and 1016.
The Securities shall be redeemable as provided in Article
Eleven.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities shall be subject to defeasance at the option of
the Company as provided in Article Twelve.
Unless the context otherwise requires, the Original Securities
and the Exchange Securities shall constitute one series for all purposes under
the Indenture, including without limitation, amendments, waivers, redemptions
and Offers to Purchase.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY
AND DATING.
The Securities shall be executed on behalf of the Company by
its Chief Executive Officer, its President, its Executive Vice President or one
of its Vice Presidents and attested by its Secretary or Assistant Secretary. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper
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officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
At any time and from time to time after the execution and
delivery of this Indenture and after the effectiveness of a Registration
Statement under the Securities Act with respect thereto, the Company may deliver
Exchange Securities executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Exchange Securities and a like principal amount of Original Securities for
cancellation in accordance with Section 309 of this Indenture, and the Trustee
in accordance with the Company Order shall authenticate and deliver such
Securities. In authenticating such Exchange Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) that such Exchange Securities have been duly and validly
issued in accordance with the terms of the Indenture, and are entitled
to all the rights and benefits set forth herein; and
(b) that the issuance of the Exchange Securities in exchange
for the Original Securities has been effected in compliance with the
Securities Act of 1933, as amended.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence,
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and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company
may execute, and upon a Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like tenor and principal amount
of definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. REGISTRATION, REGISTRATION OF
TRANSFER AND EXCHANGE.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as they may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers and exchanges of Securities as herein
provided. Such Security Register shall distinguish between Original Securities
and Exchange Securities.
Subject to the other provisions of this Indenture
regarding restrictions on transfer, upon surrender for
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registration of transfer of any Security at an office or agency of the Company
designated pursuant to Section 1002 for such purpose in accordance with the
terms hereof, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like tenor and aggregate
principal amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder and subject to the other
provisions of this Section 305, Securities may be exchanged for other Securities
of any authorized denominations and of a like tenor and aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and (subject to the provisions in the Original Securities
regarding the payment of Additional Interest) entitled to the same benefits
under this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 305, 906 or 1108 or in
accordance with any Offer to Purchase pursuant to Section 1013 or 1016 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so
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selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(b) CERTAIN TRANSFERS AND EXCHANGES. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 305(b) shall be made only in accordance with this Section
305(b).
(i) RESTRICTED GLOBAL SECURITY TO REGULATION S
GLOBAL SECURITY. If the owner of a beneficial interest in the Restricted Global
Security wishes at any time to transfer such interest to a Person who wishes to
acquire the same in the form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected only in accordance with the provisions
of this Clause (b)(i) and Clause (b)(iv) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A) an order
given by the Depositary or its authorized representative directing that a
beneficial interest in the Regulation S Global Security in a specified principal
amount be credited to a specified Agent Member's account and that a beneficial
interest in the Restricted Global Security in an equal principal amount be
debited from another specified Agent Member's account and (B) a Regulation S
Certificate, satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in the Restricted Global Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but subject to
Clause (b)(vii) below, shall reduce the principal amount of the Restricted
Global Security and increase the principal amount of the Regulation S Global
Security by such specified principal amount.
(ii) REGULATION S GLOBAL SECURITY TO RESTRICTED
GLOBAL SECURITY. If the owner of a beneficial interest in the Regulation S
Global Security wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial interest in the
Restricted Global Security, such transfer may be effected only in accordance
with this Clause (b)(ii) and subject to the Applicable Procedures. Upon receipt
by the Trustee, as Security Registrar, of (A) an order given by the Depositary
or its authorized representative directing that a beneficial interest in the
Restricted Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited from
another specified Agent Member's account and (B) if such transfer is to occur
during the Restricted Period, a Restricted Securities Certificate, satisfactory
to the
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Trustee and duly executed by the owner of such beneficial interest in the
Regulation S Global Security or his attorney duly authorized in writing, then
the Trustee, as Security Registrar, shall reduce the principal amount of the
Regulation S Global Security and increase the principal amount of the Restricted
Global Security by such specified principal amount.
(iii) NON-GLOBAL SECURITY TO NON-GLOBAL
SECURITY. A Security that is not a Global Security may be transferred, in whole
or in part, to a Person who takes delivery in the form of another Security that
is not a Global Security as provided in Section 305(a), PROVIDED that, if the
Security to be transferred in whole or in part is a Restricted Security, or is a
Regulation S Security and the transfer is to occur during the Restricted Period,
then the Trustee shall have received (A) a Restricted Securities Certificate,
satisfactory to the Trustee and duly executed by the transferor Holder or his
attorney duly authorized in writing, in which case the transferee Holder shall
take delivery in the form of a Restricted Security, or (B) a Regulation S
Certificate, satisfactory to the Trustee and duly executed by the transferor
Holder or his attorney duly authorized in writing, in which case the transferee
Holder shall take delivery in the form of a Regulation S Security (subject in
every case to Section 305(c)).
(iv) REGULATION S GLOBAL SECURITY TO BE HELD
THROUGH EUROCLEAR OR CEDEL DURING RESTRICTED PERIOD. The Company shall use its
best efforts to cause the Depositary to ensure that, until the expiration of the
Restricted Period, beneficial interests in the Regulation S Global Security may
be held only in or through accounts maintained at the Depositary by Euroclear or
Cedel (or by Agent Members acting for the account thereof), and no person shall
be entitled to effect any transfer or exchange that would result in any such
interest being held otherwise than in or through such an account; PROVIDED that
this Clause (b)(iv) shall not prohibit any transfer or exchange of such an
interest in accordance with Clause (b)(ii) above.
(v) EXCHANGES OF BOOK-ENTRY SECURITIES FOR
CERTIFICATED SECURITIES. A beneficial interest in a Global Security may not be
exchanged for a Security in certificated form unless (i) DTC (x) notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Security or (y) has ceased to be a clearing agency registered under the Exchange
Act and in either case the Company thereupon fails to appoint a successor
Depositary, (ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of the Securities in certificated form or
(iii) there shall have occurred and be
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continuing an Event of Default or any event which after notice or lapse of time
or both would be an Event of Default with respect to the Securities. In all
cases, certificated Securities delivered in exchange for any Global Security or
beneficial interests therein will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures). Any certificated Security issued in
exchange for an interest in a Global Security will bear the legend restricting
transfers that is borne by such Global Security. Any such exchange will be
effected through the DWAC System and an appropriate adjustment will be made in
the records of the Security Registrar to reflect a decrease in the principal
amount of the relevant Global Security.
(c) SECURITIES ACT LEGENDS. Rule 144A Securities and their
Successor Securities shall bear a Restricted Securities Legend, and the
Regulation S Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:
(i) subject to the following Clauses of this Section
305(c), a Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Security or any portion thereof
shall bear the Securities Act Legend borne by such Global Security
while represented thereby;
(ii) subject to the following Clauses of this Section
305(c), a new Security which is not a Global Security and is issued in
exchange for another Security (including a Global Security) or any
portion thereof, upon transfer or otherwise, shall bear the Securities
Act Legend borne by such other Security, PROVIDED that, if such new
Security is required pursuant to Section 305(b)(v) or (vi) to be issued
in the form of a Restricted Security, it shall bear a Restricted
Securities Legend and, if such new Security is so required to be issued
in the form of a Regulation S Security, it shall bear a Regulation S
Legend;
(iii) Registered Securities shall not bear a Securities
Act Legend;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Security which does not bear a Securities Act Legend may be
issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if the
Trustee has received
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an Unrestricted Securities Certificate, satisfactory to the Trustee and
duly executed by the Holder of such legended Security or his attorney
duly authorized in writing, and after such date and receipt of such
certificate, the Trustee shall authenticate and deliver such a new
Security in exchange for or in lieu of such other Security as provided
in this Article Three;
(v) a new Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a new
Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this
Section 305(c), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article Three.
SECTION 306. MUTILATED, DESTROYED, LOST AND
STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
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In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in the discretion
of the Company may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST
RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest (including Additional Interest) on any Security
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall (a) bear
interest at the rate per annum stated in the form of Security included herein
(to the extent that the payment of such interest shall be legally enforceable),
and (b) forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Prede-
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cessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of
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any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and premium,
if any, and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption,
registration of transfer, exchange or pursuant to any Offer to Purchase pursuant
to Section 1013 or 1016 shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of in accordance with its standard procedures
or as directed by a Company Order; PROVIDED, HOWEVER, that the Trustee shall not
be required to destroy such Securities.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months, except that Additional Interest shall be
computed on the basis of a 365-day year.
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SECTION 311. CUSIP AND ISIN NUMBERS.
The Company in issuing Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use) in addition to serial numbers; if so, the
Trustee shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers
in notices of redemption and repurchase as a convenience to Holders; PROVIDED
that any such notice may state that no representation is made as to the
correctness of such CUSIP and ISIN numbers either as printed on the Securities
or as contained in any notice of a redemption or repurchase and that reliance
may be placed only on the serial or other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected by any
defect in or omission of such CUSIP and ISIN numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect as to all
outstanding Securities (except as to (i) rights of registration of transfer and
exchange and the Company's right of optional redemption, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders of Securities to receive payment of principal of and premium,
if any, and interest on the Securities, (iv) rights, obligations and immunities
of the Trustee under the Indenture and (v) rights of the holders of the
Securities as beneficiaries of the Indenture with respect to any property
deposited with the Trustee payable to all or any of them), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) the Company will have paid or caused to be paid
the principal of and premium, if any, and interest on the
Securities as and when the same will have become due and
payable; or
(B) all outstanding Securities (except lost, stolen
or destroyed Securities which have been replaced or paid) have
been delivered to the Trustee for cancellation;
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and the Company, in the case of (A) above, has deposited or
caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal of and premium, if any, and interest to the date of
such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) the Company has delivered to the Trustee 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
(4) the Trustee shall have received such other documents and
assurances as the Trustee shall have reasonably requested.
Notwithstanding the satisfaction and discharge of this Indenture, (i) the
obligations of the Company to the Trustee under Section 607, (ii) substitution
of apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders of Securities to receive payment of principal of and premium,
if any, and interest on the Securities, (iv) rights, obligations and immunities
of the Trustee under this Indenture (including, if money shall have been
deposited with the Trustee pursuant to subclause (B) of Clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003), and (v) rights of holders of the Securities as beneficiaries
of this Indenture with respect to any property deposited with the Trustee
payable to all or any of them, shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest
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for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (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):
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security when due; or
(3) default in the payment of principal and interest upon any
Security required to be purchased pursuant to an Offer to Purchase
pursuant to Sections 1013 or 1016 when due and payable; or
(4) default in the performance, or breach, of Section 801; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or in any Security (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) a default or defaults under any bond(s), debenture(s),
note(s) or other evidence(s) of Debt by the Company or any Significant
Subsidiary of the Company or under any mortgage(s), indenture(s) or
instrument(s) under which there may be issued or by
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which there may be secured or evidenced any Debt of such type by the
Company or any such Significant Subsidiary with a principal amount then
outstanding, individually or in the aggregate, in excess of $10
million, whether such Debt now exists or shall hereafter be created,
which default or defaults shall constitute a failure to pay such Debt
when due at the final maturity thereof, or shall have resulted in such
Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable; or
(7) a final judgment or final judgments (not subject to
appeal) for the payment of money are entered against the Company or any
Significant Subsidiary in an aggregate amount in excess of $10 million
by a court or courts of competent jurisdiction, which judgments remain
undischarged or unstayed for a period (during which execution shall not
be effectively stayed) of 45 days after the right to appeal all such
judgments has expired; or
(8) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(9) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or
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State bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial part
of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company or any Significant Subsidiary in furtherance of
any such action.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION
AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 501(8) or (9) with respect to the Company) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities may declare
the Default Amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such Default Amount and any accrued interest, together
with all other amounts due under this Indenture, shall become immediately due
and payable. If an Event of Default specified in Section 501(8) or (9) with
respect to the Company occurs, the Default Amount of and any accrued interest on
the Securities then Outstanding, together with all other amounts due under this
Indenture, shall ipso facto become immediately due and payable without any
declaration or other Act on the part of the Trustee or any Holder.
The "Default Amount" in respect of any particular Security as
of any particular date of acceleration on or before December 1, 2004 shall equal
the Accreted Value of the Security on such date and as of any particular date of
acceleration thereafter, shall equal the principal amount of the Security plus
accrued and unpaid interest to such date.
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At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due based on
acceleration has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required
to have been purchased on the Purchase Date pursuant to an
Offer to Purchase made by the Company) and interest thereon at
the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the applicable rate
borne by the Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS
FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof or, with
respect to any Security required to have been purchased pursuant to an
Offer to Purchase made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
provided by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses incurred by the Trustee
under this Indenture, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys, securities or other property payable or deliverable
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upon the exchange of the Securities or upon any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities 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;
PROVIDED, HOWEVER, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607; and
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SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
The Trustee, upon prior written notice to the Company, may fix a record date and
payment date for any payment to the Holders pursuant to this Section 506.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered and, if requested,
provided to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer and, if requested, provision of indemnity has failed
to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture,
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except in the manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO
RECEIVE PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date or, in the case of an Offer to Purchase made by the Company and
required to be accepted as to such Security, on the Purchase Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders 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.
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SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities 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 on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or expose the Trustee to personal liability
(as determined in the sole discretion of the Trustee), and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
The Trustee may refuse, however, to follow any direction that the Trustee, in
its sole discretion, determines may be unduly prejudicial to the rights of
another Holder or that may subject the Trustee to any liability or expense if
the Trustee determines, in its sole discretion, that it lacks indemnification
against such loss or expense.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all the
Securities by written notice to the Trustee waive any past default hereunder and
its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to
have been purchased pursuant to an Offer to Purchase which has been
made by the Company), or
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(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected or
(3) arising from failure to purchase any Security tendered
pursuant to Sections 1013 and 1016.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any Default
hereunder as and to the extent provided by the Trust Indenture Act, unless such
Default has been cured or waived; PROVIDED, HOWEVER, that in the case of any
Default of the character specified in Section 501(5), no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness 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 or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or a Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction reasonably
satisfactory to the Trustee;
(f) 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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(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 and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith which the Trustee reasonably
believed to have been authorized or within its rights or powers.
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SECTION 604. NOT RESPONSIBLE FOR RECITALS
OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar (if
other than the Trustee) or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar or
such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
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(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation, expenses and disbursements of its agents, accountants,
experts and counsel) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
enforcing this Indenture against the Company (including, without
limitation, this Section 607) and of defending itself against any claim
(whether asserted by any Holder or the Company) or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The provisions of this Section 607 shall survive any
termination of this Indenture and the resignation or removal of the
Trustee.
As security for the performance of the obligations of the
Company under this Section 607, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities. The Trustee's right to receive payment of any
amounts due under this Section 607 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Securities may be so
subordinated).
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 501(8) or (9) occurs, the expenses and the
compensation for such services are intended to constitute expenses of
administration under Title 11, U.S. Code, or any similar Federal state or
foreign law for the relief of debtors.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in the Borough of Manhattan, The City of New
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York, New York. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal, State, Territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT
OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 611, at which time the retiring Trustee shall be fully discharged from
its obligations hereunder.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
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control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by Board Resolution, may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee under Section 607, execute and deliver an
instrument transferring to such successor Trustee all the
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rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION
OR SUCCESSION TO BUSINESS.
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 all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED that such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated
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shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or 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 and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an 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 such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the
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manner provided in Section 106 to all Holders of Securities. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the
within-mentioned Indenture.
United States Trust Company of New York,
AS TRUSTEE
By......................................,
AS AUTHENTICATING AGENT
By......................................
AUTHORIZED SIGNATORY
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
SECTION 701. COMPANY TO FURNISH TRUSTEE
NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by
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the Company of any such request, a list of similar form and content as
of a date not more than 15 days prior to the time such list is
furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION;
COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company, the
Trustee or any agent of any of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act and in the manner set
forth in Section 1017; PROVIDED that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act ("SEC Reports") shall be filed with the Trustee within 15 days
after the same is so required to be filed with the Commission. In the event the
Company shall cease to be required to file SEC Reports pursuant to the Exchange
Act, the Company will nonetheless continue to file such reports with the
Commission (unless the Commission will not accept such a filing) and the Trustee
and to furnish copies of such SEC Reports to the Holders of Securities at the
time the Company is required to file such reports with the Trustee and will make
such information available to investors who request it in writing.
SECTION 705. OFFICERS' CERTIFICATE WITH RESPECT
TO CHANGE IN INTEREST RATES.
Within five days after any Step-Up, Subsequent Step-Up,
Step-Down Date or Subsequent Step-Down Date, the Company shall deliver an
Officers' Certificate to the Trustee stating the new interest rate and the date
on which it became effective.
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. MERGERS, CONSOLIDATIONS AND CERTAIN
SALES OF ASSETS.
(a) The Company may not, in a single transaction or a series
of related transactions, (i) consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into the Company (other
than a consolidation or merger of a Wholly-Owned Restricted Subsidiary organized
under the laws of a State of the United States into the Company), or (ii)
directly or indirectly, transfer, sell, lease or otherwise dispose of all or
substantially all of its assets (determined on a consolidated basis for the
Company and its Restricted Subsidiaries taken as a whole and provided that the
creation of a Lien on or in any of its assets shall not in and of itself
constitute the
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transfer, sale, lease or disposition of the assets subject to the Lien), unless:
(1) in a transaction in which the Company does not survive or in which the
Company sells, leases or otherwise disposes of all or substantially all of its
assets to any other Person, the successor entity to the Company shall be a
corporation organized under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's obligations under this
Indenture; (2) immediately after giving pro forma effect to such transaction as
if such transaction had occurred at the beginning of the last full fiscal
quarter immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction being included in such
pro forma calculation and treating any Debt which becomes an obligation of the
Company or a Subsidiary as a result of such transaction as having been Incurred
by the Company or such Subsidiary at the time of the transaction, no Default or
Event of Default shall have occurred and be continuing; (3) immediately after
giving effect to such transaction, the Consolidated Net Worth of the Company (or
other successor entity to the Company) is equal to or greater than that of the
Company immediately prior to the transaction; (4) if, as a result of any such
transaction, property or assets of the Company would become subject to a Lien
prohibited by the provisions of Section 1011, the Company or the successor
entity to the Company shall have secured the Securities as required by Section
1011;(5) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel, each in form and substance satisfactory to the Trustee
stating that such consolidation, merger, conveyance, transfer, lease or
acquisition and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, complies with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with, and, with respect to such Officer's Certificate, setting
forth the manner of determination of the Consolidated Net Worth in accordance
with Clause (3) of Section 801, of the Company or, if applicable, of the
Successor Company as required pursuant to the foregoing.
(b) In the event of any transaction (other than a lease)
described in and complying with the immediately preceding paragraph in which the
Company is not the surviving Person and the surviving Person assumes all the
obligations of the Company under the Securities and this Indenture pursuant to a
supplemental indenture, such surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Company, and the
Company will be discharged from its obligations under
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this Indenture and the Securities; PROVIDED that solely for the purpose of
calculating amounts under Section 1009(3), any such surviving Person shall only
be deemed to have succeeded to and be substituted for the Company with respect
to the period subsequent to the effective time of such transaction, and the
Company (before giving effect to such transaction) shall be deemed to be the
"Company" for such purposes for all prior periods.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the
Company with or into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES
WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when
authorized by Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Securities pursuant to the requirements of
Section 1011 or otherwise; or
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(4) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to comply with any
requirement of the Commission in order to effect qualification of this
Indenture under the Trust Indenture Act in connection with the issuance
of Exchange Securities or thereafter to maintain the qualification of
this Indenture under the Trust Indenture Act;
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, PROVIDED that such action
pursuant to this Clause (5) shall not adversely affect the legal rights
of the Holders; or
(6) to provide for uncertificated Securities in addition to or
in place of certificated Securities.
SECTION 902. SUPPLEMENTAL INDENTURES
WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, and consistent with Section 513, the
Company, when authorized by Board Resolution, and the Trustee may 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 modifying in any manner the rights of the Holders under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
thereon, or change the place of payment where, or the coin or currency
in which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or, in the case of an
Offer to Purchase which has been made, on or after the applicable
Purchase Date, or
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(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1019, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) following the mailing of an Offer with respect to an Offer
to Purchase pursuant to Section 1013 or 1016 and until the Expiration
Date of such Offer to Purchase, modify the provisions of this Indenture
with respect to such Offer to Purchase in a manner materially adverse
to such Holder.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
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.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES
TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of and
premium, if any, and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The
City of New York, New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan, The City of
New York, New York) where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. MONEY FOR SECURITY PAYMENTS
TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee in writing of its action or failure so to act. As provided in
Section 504, upon any bankruptcy or reorganization proceeding relative to the
Company, the Trustee shall serve as the Paying Agent for the Securities.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee in writing of its action or failure so to act. As
provided in Section 504, upon any bankruptcy or reorganization proceeding
relative to the Company the Trustee shall serve as the Paying Agent for the
Securities.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities in trust for the
benefit of
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the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest;
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(4) acknowledge, accept and agree to comply in all respects
with the provisions of this Indenture relating to the duties, rights
and obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of
(and premium, if any) or interest on any Security and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on the Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City
of New York, New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publi-
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cation, any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary, to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, as determined in the good faith judgment of the Board of
Directors evidenced by a Board Resolution, desirable in the conduct of its
business or, in the case of the Company, the business of any Subsidiary, and not
disadvantageous in any material respect to the Holders.
The Company shall, and shall cause the Subsidiaries of the
Company to, keep at all times all of their properties which are of an insurable
nature insured against loss or damage with insurers believed by the Company to
be responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in
accordance with good business practice.
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SECTION 1006. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent,
(1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiaries of the Company or upon the income,
profits or property of the Company or any Subsidiaries, and
(2) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiaries of the Company; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1007. LIMITATION ON CONSOLIDATED DEBT.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, Incur any Debt unless either:
(a) the ratio of:
(i) the aggregate consolidated principal amount of Debt
of the Company outstanding as of the most recent available quarterly or
annual balance sheet, after giving pro forma effect to the Incurrence
of such Debt and any other Debt Incurred since such balance sheet date
and the receipt and application of the proceeds thereof
to
(ii) Consolidated Cash Flow Available for Fixed Charges
for the four full fiscal quarters next preceding the Incurrence of such
Debt for which consolidated financial statements are available,
determined on a pro forma basis as if
(x) any such Debt had been Incurred and the proceeds
thereof had been applied at the beginning of such four fiscal
quarters;
(y) the net income (or loss) for such period of any
Person or related to any assets disposed of by the Company or
a Restricted Subsidiary of
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the Company prior to the end of such period had been excluded
from Consolidated Net Income; and
(z) the net income (or loss) for such period of any
Person or related to any assets acquired by the Company or any
Restricted Subsidiary prior to the end of such period had been
included in Consolidated Net Income,
would be less than 5.5 to 1 for such four-quarter periods ending on or prior to
December 31, 1999 and 5.0 to 1 for such periods ending thereafter;
or
(b) the Company's Consolidated Capital Ratio as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt, any issuance of Capital Stock (other than
Disqualified Stock) since such balance sheet date, any increase in paid
in-capital (other than in respect of Disqualified Stock) since such balance
sheet date and the Incurrence of any other Debt since such balance sheet date
and the receipt and application of the proceeds thereof, is less than 2.0 to 1.
Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur the following:
(i) Debt under any one or more Bank Credit Agreements
or Vendor Financing Facilities in an aggregate principal amount at any
one time not to
exceed the greater of:
(x) $250 million and
(y) 85% of the Eligible Receivables, and any renewal,
extension, refinancing or refunding thereof in an amount
which, together with any principal amount remaining
outstanding or available under all Bank Credit Agreements and
Vendor Financing Facilities of the Company and its Restricted
Subsidiaries, plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms
of any Bank Credit Agreement so refinanced plus the amount of
expenses incurred in connection with such refinancing, does
not exceed the aggregate principal amount outstanding or
available under all such Bank Credit Agreements and Vendor
Financing Facilities of the Company and its Restricted
Subsidiaries immediately prior to such renewal, extension,
refinancing or refunding;
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(ii) Purchase Money Debt Incurred to finance the
construction, acquisition or improvement of Telecommunications Assets,
PROVIDED that the net proceeds of such Purchase Money Debt do not
exceed 100% of the cost of construction, acquisition or improvement
price of the applicable Telecommunications Assets;
(iii) Debt owed by the Company to any Restricted
Subsidiary of the Company or Debt owed by a Restricted Subsidiary of
the Company to the Company or a Restricted Subsidiary of the Company;
PROVIDED, HOWEVER, that upon either
(x) the transfer or other disposition by such
Restricted Subsidiary or the Company of any Debt so permitted
to a Person other than the Company or another Restricted
Subsidiary of the Company or
(y) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition of shares
of Capital Stock (including by consolidation or merger) of
such Restricted Subsidiary as a result of which the obligor of
such Debt ceases to be a Restricted Subsidiary, the provisions
of this clause (iii) shall no longer be applicable to such
Debt and such Debt shall be deemed to have been Incurred at
the time of such transfer or other disposition;
(iv) Debt Incurred to renew, extend, refinance or refund
(each, a "refinancing") Debt outstanding at the date of this Indenture
or Incurred pursuant to the preceding paragraph or clause (ii) of this
paragraph or the Securities in an aggregate principal amount not to
exceed the aggregate principal amount of and accrued interest on the
Debt so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Debt
so refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the amount of
expenses of the Company incurred in connection with such refinancing;
PROVIDED, HOWEVER, that Debt the proceeds of which are used to
refinance the Securities or Debt which is PARI PASSU to the Securities
or debt which is subordinate in right of payment to the Securities
shall only be permitted if:
(A) in the case of any refinancing of the Securities
or Debt which is PARI PASSU to the Securities, the refinancing
Debt is made
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PARI PASSU to the Securities or subordinated to the
Securities, and, in the case of any refinancing of Debt which
is subordinated to the Securities, the refinancing Debt
constitutes Subordinated Debt and
(B) in either case, the refinancing Debt by its
terms, or by the terms of any agreement or instrument pursuant
to which such Debt is issued,
(x) does not provide for payments of principal of
such Debt at the stated maturity thereof or by way of a
sinking fund applicable thereto or by way of any mandatory
redemption, defeasance, retirement or repurchase thereof by
the Company (including any redemption, retirement or
repurchase which is contingent upon events or circumstances,
but excluding any retirement required by virtue of
acceleration of such Debt upon any event of default
thereunder), in each case prior to the time the same are
required by the terms of the Debt being refinanced and
(y) does not permit redemption or other retirement
(including pursuant to an offer to purchase made by the
Company) of such Debt at the option of the holder thereof
prior to the final stated maturity of the Debt being
refinanced, other than a redemption or other retirement at the
option of the holder of such Debt (including pursuant to an
offer to purchase made by the Company) which is conditioned
upon a change substantially similar to the provisions of
Section 1016 or which is pursuant to provisions substantially
similar to the provisions of Section 1013;
(v) Debt consisting of Permitted Interest Rate
and Currency Protection Agreements;
(vi) Debt outstanding under the Securities;
(vii) Subordinated Debt invested by:
(a) a group of employees of the Company, which
includes the Chief Executive Officer of the Company, who own,
directly or indirectly, through an employee stock ownership
plan or arrangement, shares of the Company's Capital Stock or
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(b) any other Person that controls the
Company
(i) on the Issue Date or
(ii) after a Change of Control, PROVIDED that the
Company is not in default with respect to its obligations under Section
1016;
(viii) Debt consisting of performance and other similar
bonds and reimbursement obligations Incurred in the ordinary course of
business securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(ix) Debt not otherwise permitted to be Incurred
pursuant to clauses (i) through (viii) above, which, together with any
other outstanding Debt Incurred pursuant to this clause (ix), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
For purposes of determining compliance with this Section 1007,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt the Company is permitted to incur pursuant to the foregoing
clauses (i) through (ix) or the first paragraph of this Section 1007, the
Company shall have the right, in its sole discretion, to classify such item of
Debt and shall only be required to include the amount and type of such Debt
under the clause or paragraph permitting the Debt as so classified. The
determination of any particular amount of Debt under such covenant shall be made
without duplication for Guarantees or Liens supporting Debt otherwise included
in the determination of a particular amount.
SECTION 1008. LIMITATION ON DEBT AND PREFERRED STOCK
OF RESTRICTED SUBSIDIARIES.
The Company may not permit any Restricted Subsidiary of the
Company (other than a Restricted Subsidiary that has fully and unconditionally
Guaranteed the Securities on an unsubordinated basis) to Incur or suffer to
exist any Debt or issue any Preferred Stock except:
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(i) Debt or Preferred Stock outstanding on the date of
this Indenture after giving effect to the application of the proceeds
of the Securities;
(ii) Debt Incurred or Preferred Stock issued to and held
by the Company or a Restricted Subsidiary of the Company (provided that
such Debt or Preferred Stock is at all times held by the Company or a
Restricted Subsidiary of the Company);
(iii) Debt Incurred or Preferred Stock issued by
a Person prior to the time:
(A) such Person became a Restricted
Subsidiary of the Company,
(B) such Person merges into or consolidates with a
Restricted Subsidiary of the Company or
(C) another Restricted Subsidiary of the Company
merges into or consolidates with such Person (in a transaction
in which such Person becomes a Restricted Subsidiary of the
Company), which Debt or Preferred Stock was not Incurred or
issued in anticipation of such transaction and was outstanding
prior to such transaction;
(iv) Debt consisting of Permitted Interest Rate
and Currency Protection Agreements;
(v) Debt or Preferred Stock of a Joint
Venture;
(vi) Debt under any one or more Bank Credit Agreements
or Vendor Financing Facilities (and renewals, extensions, refinancings
or refundings thereof) which is permitted to be outstanding under
clause (i) of Section 1007;
(vii) Debt consisting of Guarantees of the
Securities;
(viii) Debt or Preferred Stock which is exchanged for, or
the proceeds of which are used to refinance, refund or redeem, any Debt
or Preferred Stock permitted to be outstanding pursuant to clauses (i),
(iii) and (ix) hereof (or any extension or renewal thereof) (for
purposes hereof, a "refinancing"), in an aggregate principal amount, in
the case of Debt, or with an aggregate liquidation preference, in the
case of
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Preferred Stock, not to exceed the aggregate principal amount of the
Debt so refinanced or the aggregate liquidation preference of the
Preferred Stock so refinanced, plus the amount of any premium required
to be paid in connection with such refinancing pursuant to the terms of
the Debt or Preferred Stock so refinanced or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated
repurchase, plus the amount of expenses of the Company and the
Restricted Subsidiary incurred in connection therewith and provided the
Debt or Preferred Stock incurred or issued upon such refinancing by its
terms, or by the terms of any agreement or instrument pursuant to which
such Debt or Preferred Stock is Incurred or issued,
(x) does not provide for payments of principal or
liquidation value at the stated maturity of such Debt or Preferred
Stock or by way of a sinking fund applicable to such Debt or Preferred
Stock or by way of any mandatory redemption, defeasance, retirement or
repurchase of such Debt or Preferred Stock by the Company or any
Restricted Subsidiary of the Company (including any redemption,
retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each
case prior to the time the same are required by the terms of the Debt
or Preferred Stock being refinanced and
(y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company or a Restricted
Subsidiary of the Company) of such Debt or Preferred Stock at the
option of the holder thereof prior to the stated maturity of the Debt
or Preferred Stock being refinanced, other than a redemption or other
retirement at the option of the holder of such Debt or Preferred Stock
(including pursuant to an offer to purchase made by the Company or a
Restricted Subsidiary of the Company) which is conditioned upon the
change of control of the Company pursuant to provisions substantially
similar to the provisions of Section 1016 or which is pursuant to
provisions substantially similar to the provisions of Section 1013, and
PROVIDED, FURTHER, that in the case of any exchange or redemption of
Preferred Stock of a Restricted Subsidiary of the Company, such
Preferred Stock may only be exchanged for or redeemed with Preferred
Stock of such Restricted Subsidiary;
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(ix) Purchase Money Debt Incurred to finance the
construction, acquisition or improvement of Telecommunications Assets,
PROVIDED that the net proceeds of such Purchase Money Debt do not
exceed 100% of the cost of construction, acquisition or improvement
price of the applicable Telecommunications Assets; and
(x) Debt consisting of performance and other similar
bonds and reimbursement obligations Incurred in the ordinary course of
business securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(xi) Debt not otherwise permitted to be incurred
pursuant to clauses (i) through (x) above, which, together with any
other outstanding Debt incurred pursuant to this clause (xi), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
For purposes of determining compliance with this Section 1008,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt a Restricted Subsidiary of the Company is permitted to incur
pursuant to the foregoing clauses (i) through (xi), the Company shall have the
right, in its sole discretion, to classify such item of Debt and shall be only
required to include the amount and type of such Debt under the clause permitting
the Debt as so classified. The determination of any particular amount of Debt
under such covenant shall be made without duplication for Guarantees or Liens
supporting Debt otherwise included in the determination of a particular amount.
SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS.
The Company:
(i) may not, directly or indirectly, declare or pay any
dividend, or make any distribution, in respect of its Capital Stock or
to the holders thereof (in their capacity as such), excluding any
dividends or distributions payable solely in shares of its Capital
Stock (other than Disqualified Stock) or in options, warrants or other
rights to acquire its Capital Stock (other than Disqualified Stock);
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(ii) may not, and may not permit any Restricted Subsidiary to,
purchase, redeem, or otherwise retire or acquire for value:
(a) any Capital Stock of the Company or any
Related Person of the Company;
or
(b) any options, warrants or rights to purchase or acquire
shares of Capital Stock of the Company or any Related Person of the
Company or any securities convertible or exchangeable into shares of
Capital Stock of the Company or any Related Person of the Company;
(iii) may not make, or permit any Restricted Subsidiary to make, any
Investment in, or payment on a Guarantee of any obligation of, any Person, other
than the Company or a Restricted Subsidiary of the Company, except for Permitted
Investments; and
(iv) may not, and may not permit any Restricted Subsidiary to, redeem,
defease, repurchase, retire or otherwise acquire or retire for value, prior to
any scheduled maturity, repayment or sinking fund payment, Debt of the Company
which is subordinate in right of payment to the Securities (each of clauses (i)
through (iv) being a "Restricted Payment")
if:
(1) a Default or an Event of Default shall have
occurred and is continuing; or
(2) upon giving effect to such Restricted Payment, the Company
could not Incur at least $1.00 of additional Debt pursuant to the
provisions of the first paragraph of Section 1007; or
(3) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments from April 25, 1996 exceeds the
sum of:
(a) 50% of cumulative Consolidated Net Income (or, in
the case Consolidated Net Income shall be negative, less 100%
of such deficit) since the end of the last full fiscal quarter
prior to April 25, 1996 through the last day of the last full
fiscal quarter ending immediately preceding the date of such
Restricted Payment; plus
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(b) $5 million; plus
(c) 100% of the net reduction in Investments in any
Unrestricted Subsidiary since the end of the last full fiscal
quarter prior to April 25, 1996 resulting from payments of
interest on Debt, dividends, repayments of loans or advances,
or other transfers of assets, in each case to the Company or
any Restricted Subsidiary of the Company from such
Unrestricted Subsidiary (except to the extent that any such
payment is included in the calculation of Consolidated Net
Income) or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries; PROVIDED that the amount included in
this clause (c) shall not exceed the amount of Investments
previously made by the Company and its Restricted Subsidiaries
in such Unrestricted Subsidiary; PROVIDED, FURTHER, that the
Company or a Restricted Subsidiary of the Company may make any
Restricted Payment with the aggregate net proceeds received
after April 25, 1996, including the fair value of property
other than cash (determined in good faith by the Board of
Directors, as conclusively evidenced by a Board Resolution
filed with the Trustee), as capital contributions to the
Company or from the issuance (other than to a Restricted
Subsidiary) of Capital Stock (other than Disqualified Stock)
of the Company and warrants, rights or options on Capital
Stock (other than Disqualified Stock) of the Company and the
principal amount of Debt of the Company that has been
converted into Capital Stock (other than Disqualified Stock
and other than by a Restricted Subsidiary) of the Company
after April 25, 1996.
Notwithstanding the foregoing, the Company may
(i) pay any dividend on Capital Stock of any class within 60 days after
the declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions;
(ii) repurchase any shares of its Common Equity or options to acquire
its Common Equity from Persons who were formerly officers or employees of the
Company, PROVIDED that the aggregate amount of all such repurchases made
pursuant to this clause (ii) shall not exceed $2 million, plus the aggregate
cash proceeds received by the Company since April 25, 1996 from issuances of its
Common Equity or options to acquire its Common Equity to members, officers,
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managers, directors and employees of the Company or any of its Subsidiaries;
(iii) the Company and its Restricted Subsidiaries may refinance any
Debt otherwise permitted by clause (iv) of the second paragraph of Section 1007;
and (iv) the Company and its Restricted Subsidiaries may retire or repurchase
any Capital Stock or Subordinated Debt of the Company in exchange for, or out of
the proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, Capital Stock (other than Disqualified Stock) of
the Company. If the Company makes a Restricted Payment which, at the time of the
making of such Restricted Payment, would in the good faith determination of the
Company be permitted under this Indenture, such Restricted Payment shall be
deemed to have been made in compliance with this Indenture notwithstanding any
subsequent adjustments made in good faith to the Company financial statements
affecting Consolidated Net Income for any period.
In determining the aggregate amount expended or available for
Restricted Payments in accordance with clause (3) of the first paragraph above,
(1) no amounts expended under clauses (iii) or (iv) of the
immediately preceding paragraph shall be included,
(2) 100% of the amounts expended under clauses (i) and (ii) of
the immediately preceding paragraph shall be included, and
(3) no amount shall be credited in respect of issuances of
Capital Stock in transactions under clause (iv) of the immediately
preceding paragraph.
SECTION 1010. LIMITATION ON DIVIDEND AND OTHER
PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
The Company may not, and may not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company
(i) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by the Company or any other
Restricted Subsidiary of the Company or pay any Debt or other obligation owed to
the Company or any other Restricted Subsidiary;
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(ii) to make loans or advances to the Company or any
other Restricted Subsidiary; or
(iii) to transfer any of its property or assets to the Company or
any other Restricted Subsidiary.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary to, suffer to exist any such encumbrance or restriction:
(a) pursuant to any agreement in effect on the
Issue Date;
(b) pursuant to an agreement relating to any Acquired Debt,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired and its
Subsidiaries;
(c) pursuant to any one or more Bank Credit Agreements or
Vendor Financing Facilities (and renewals, extensions, refinancings or
refundings thereof) which is permitted to be outstanding under clause (i) or
(ii) of Section 1007 or clause (vi) or (ix) of Section 1008, PROVIDED that such
restriction is consistent with, and not materially more restrictive (as
conclusively determined in good faith by the Chief Financial Officer of the
Company), taken as a whole, than, comparable provisions included in similar
agreements or facilities extended to comparable credits engaged in the
Telecommunications Business and PROVIDED FURTHER that, in the case of any such
Bank Credit Agreement or Vendor Financing Facility entered into by a Restricted
Subsidiary under clause (ii) of Section 1007 or clause (ix) of Section 1008,
such encumbrances or restrictions do not prohibit dividends, distributions,
loans or advances by such Restricted Subsidiary to the Company or another
Restricted Subsidiary to the extent that the failure to make such distribution,
loan or advance would result in the Company defaulting in the payment of
principal or interest on its indebtedness;
(d) pursuant to an agreement effecting a renewal, refunding or
extension of Debt Incurred pursuant to an agreement referred to in clause (a) or
(b) above or (e) below, PROVIDED, HOWEVER, that the provisions contained in such
renewal, refunding or extension agreement relating to such encumbrance or
restriction are not materially more restrictive (as conclusively determined in
good faith by the Chief Financial Officer of the Company), taken as a whole,
than the provisions contained in the agreement the subject thereof;
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(e) in the case of clause (iii) above, restrictions contained
in any security agreement (including a Capital Lease Obligation) securing Debt
of the Company or a Restricted Subsidiary otherwise permitted under this
Indenture, but only to the extent such restrictions restrict the transfer of the
property subject to such security agreement;
(f) in the case of clause (iii) above, customary nonassignment
provisions entered into in the ordinary course of business in leases and other
agreements;
(g) any restriction with respect to a Restricted Subsidiary of
the Company imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary, provided that consummation of such transaction
would not result in a Default or an Event of Default, that such restriction
terminates if such transaction is not consummated and that such consummation or
abandonment of such transaction occurs within one year of the date such
agreement was entered into;
(h) pursuant to applicable law or regulations;
(i) pursuant to this Indenture and the Securities;
or
(j) any restriction on the sale or other disposition of assets
or property securing Debt as a result of a Permitted Lien on such assets or
property.
SECTION 1011. LIMITATION ON LIENS.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, Incur or suffer to exist any Lien on or with
respect to any property or assets now owned or hereafter acquired to secure any
Debt without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities:
(x) equally and ratably with (or prior to) such Debt as to
such property for so long as such Debt will be so secured or
(y) in the event such Debt is Debt of the Company which is
subordinate in right of payment to the Securities, prior to such Debt
as to such property for so long as such Debt will be so secured.
The foregoing restrictions shall not apply to:
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(i) Liens existing on the Issue Date and securing Debt
outstanding on the Issue Date or securing the Securities or Liens
securing Debt Incurred pursuant to any Bank Credit Agreement or Vendor
Financing Facility (whether or not such Bank Credit Agreement or Vendor
Financing Facility was outstanding on the Issue Date);
(ii) Liens securing Debt in an amount which, together with the
aggregate amount of Debt then outstanding or available under the Bank
Credit Agreement and Vendor Financing Facility (or under refinancings
or amendments of such agreements), does not exceed 1.5 times the
Company's Consolidated Cash Flow Available for Fixed Charges for the
four full fiscal quarters preceding the Incurrence of such Lien for
which consolidated financial statements are available, determined on a
pro forma basis as if such Debt had been Incurred and the proceeds
thereof had been applied at the beginning of such four fiscal quarters;
(iii) Liens in favor of the Company or any Wholly- Owned
Restricted Subsidiary of the Company;
(iv) Liens on real or personal property of the Company or a
Restricted Subsidiary of the Company acquired, constructed or
constituting improvements made after the Issue Date to secure Purchase
Money Debt which is Incurred for the construction, acquisition and
improvement of Telecommunications Assets and is otherwise permitted
under this Indenture, PROVIDED, HOWEVER, that
(a) the net proceeds of any Debt secured by such a
Lien does not exceed 100% of such purchase price or cost of
construction or improvement of the property subject to such Lien,
(b) such Lien attaches to such property prior to, at
the time of or within 180 days after the acquisition, completion of
construction or commencement of operation of such property and
(c) such Lien does not extend to or cover any
property other than the property (or identifiable portions thereof)
acquired, constructed or constituting the improvements made with the
proceeds of such Purchase Money Debt (it being understood and agreed
that all Debt owed to any single lender or group of lenders or
outstanding under any single credit facility shall be considered a
single Purchase Money Debt, whether drawn at one time or from time to
time);
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(v) Liens to secure Acquired Debt, PROVIDED, HOWEVER, that
(a) such Lien attaches to the acquired asset prior to
the time of the acquisition of such asset and
(b) such Lien does not extend to or cover any other
asset;
(vi) Liens to secure Debt Incurred to extend, renew, refinance
or refund (or successive extensions, renewals, refinancings or
refundings), in whole or in part, Debt secured by any Lien referred to
in the foregoing clauses (i), (ii), (iv) and (v) so long as such Lien
does not extend to any other property and the principal amount of Debt
so secured is not increased except as otherwise permitted under clause
(iv) of Section 1007;
(vii) Liens securing Debt not otherwise permitted by the
foregoing clauses (i) through (vi) in an amount not to exceed 5% of the
Company's Consolidated Tangible Assets determined as of the most recent
available quarterly or annual balance sheet; and
(viii) Permitted Liens.
SECTION 1012. LIMITATION ON SALE AND LEASEBACK
TRANSACTIONS.
The Company may not, and may not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless
(i) the Company or such Restricted Subsidiary would be
entitled to Incur a Lien to secure Debt by reason of the provisions of
Section 1011, equal in amount to the Attributable Value of the Sale and
Leaseback Transaction without equally and ratably securing the
Securities; or
(ii) the Sale and Leaseback Transaction is treated as an Asset
Disposition and all of the conditions of Section 1013 (including the
provisions concerning the application of Net Available Proceeds) are
satisfied with respect to such Sale and Leaseback Transaction, treating
all of the consideration received in such Sale and Leaseback
Transaction in the same manner as consideration in respect of an Asset
Disposition for purposes of such covenant.
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SECTION 1013. LIMITATION ON ASSET DISPOSITIONS.
(a) The Company may not, and may not permit any Restricted
Subsidiary to, make any Asset Disposition in one or more related transactions
occurring within any 12-month period unless:
(i) the Company or the Restricted Subsidiary, as the
case may be, receives consideration for such disposition at least equal
to the fair market value for the assets sold or disposed of as
determined by the Board of Directors in good faith and evidenced by a
Board Resolution filed with the Trustee, which determination shall be
conclusive;
(ii) at least 75% of the consideration for such
disposition consists of:
(1) cash or readily marketable cash equivalents or
the assumption of Debt or other obligations of the Company (other than
Debt that is subordinated to the Securities) or of the Restricted
Subsidiary and release from all liability on the Debt or other
obligations assumed;
(2) Telecommunications Assets; or
(3) shares of publicly-traded Voting Stock of any
Person engaged in the Telecommunications Business in the United States;
and (iii) all Net Available Proceeds, less any amounts invested in
Telecommunications Assets (within 180 days prior to and 360 days
following such disposition), are applied within 360 days of such
disposition
(1) first, to the permanent repayment or reduction of
Debt then outstanding under any Bank Credit Agreement or
Vendor Financing Facility, to the extent such agreements would
require such application or prohibit payments pursuant to
clause (2) following,
(2) second, to the extent of remaining Net Available
Proceeds, to make an Offer to Purchase outstanding Securities
at 100% of their Accreted Value (if such Offer to Purchase is
made on or before December 1, 2004) or 100% of their principal
amount plus accrued interest to the date of purchase (if such
Offer to Purchase is made thereafter)
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and, to the extent required by the terms thereof, any other
Debt of the Company that is PARI PASSU with the Securities at
a price no greater than 100% of the principal amount thereof
plus accrued interest to the date of purchase (or 100% of the
accreted value in the case of original issue discount Debt)
and
(3) third, to the extent of any remaining Net
Available Proceeds following the completion of the Offer to
Purchase, to the repayment of other Debt of the Company or
Debt of a Restricted Subsidiary of the Company, to the extent
permitted under the terms thereof. To the extent any Net
Available Proceeds remain after such uses, the Company and its
Restricted Subsidiaries may use such amounts for any purposes
not prohibited by this Indenture.
(b) The Company will mail the Offer for an Offer to Purchase
required pursuant to Section 1013(a) not more than 360 days after consummation
of the disposition referred to in Section 1013(a). The aggregate principal
amount of the Securities to be offered to be purchased pursuant to the Offer to
Purchase shall equal the Net Available Proceeds available therefor pursuant to
Clause (iii)(2) of Section 1013(a) (rounded down to the next lowest integral
multiple of $1,000). Each Holder shall be entitled to tender all or any portion
of the Securities owned by such Holder pursuant to the Offer to Purchase,
subject to the requirement that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount.
The Company shall not be entitled to any credit against its
obligations under this Section 1013 for the principal amount of any Securities
acquired or redeemed by the Company otherwise than pursuant to the Offer to
Purchase pursuant to this Section 1013.
(c) Not later than the date of the Offer with respect to an
Offer to Purchase pursuant to this Section 1013, the Company shall deliver to
the Trustee an Officers' Certificate as to
(i) the Purchase Amount,
(ii) the allocation of the Net Available Proceeds from
the Asset Disposition pursuant to which such Offer is being made,
including, if amounts are invested in Telecommunication Assets, the
amount of the assets acquired and
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(iii) the compliance of such allocation with the
provisions of Section 1013(a).
The Company and the Trustee shall perform their respective
obligations specified in the Offer for the Offer to Purchase. On or prior to the
Purchase Date, the Company shall
(i) accept for payment (on a pro rata basis, if
necessary) Securities or portions thereof tendered pursuant to the
Offer,
(ii) deposit with the Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the purchase price of
all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof accepted for payment by the Company.
The Paying Agent (or the Company, if so acting) shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal
to the purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security of like tenor equal in
principal amount to any unpurchased portion of the Security
surrendered. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof.
(d) Notwithstanding the foregoing, this Section 1013 shall not
apply to any Asset Disposition which constitutes a transfer, conveyance, sale,
lease or other disposition of all or substantially all of the Company's
properties or assets within the meaning of Section 801 hereof.
SECTION 1014. LIMITATION ON ISSUANCES AND SALES OF
CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, issue, transfer, convey, sell or otherwise dispose
of any shares of Capital Stock of a Restricted Subsidiary of the Company or
securities convertible or exchangeable into, or options, warrants, rights or any
other interest with respect to, Capital Stock of a Restricted Subsidiary of the
Company to any person other than the Company or a Wholly-Owned Restricted
Subsidiary of the Company except
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(i) in a transaction that complies with the
provisions of Section 1013;
(ii) if required, the issuance, transfer, conveyance,
sale or other disposition of directors' qualifying shares;
(iii) in a transaction in which, or in connection with
which, the Company or a Restricted Subsidiary acquires at the same time
sufficient Capital Stock of such Restricted Subsidiary to at least
maintain the same percentage ownership interest it had prior to such
transaction;
(iv) constituting the issuance of Preferred Stock
permitted by the provisions of Section 1008; and
(v) Disqualified Stock issued in exchange for, or upon
conversion of, or the proceeds of the issuance of which are used to
redeem, refinance, replace or refund shares of Disqualified Stock of
such Restricted Subsidiary, provided that the amounts of the redemption
obligations of such Disqualified Stock shall not exceed the amounts of
the redemption obligations of, and such Disqualified Stock shall have
redemption obligations no earlier than those required by, the
Disqualified Stock being exchanged, converted, redeemed, refinanced,
replaced or refunded.
SECTION 1015. TRANSACTIONS WITH AFFILIATES
AND RELATED PERSONS.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, enter into any transaction (or series of related
transactions) with an Affiliate or Related Person of the Company (other than the
Company or a Wholly-Owned Restricted Subsidiary of the Company), including any
Investment, but excluding transactions pursuant to employee compensation
arrangements approved by the Board of Directors, either directly or indirectly,
unless such transaction is on terms no less favorable to the Company or such
Restricted Subsidiary than those that could reasonably be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate or
Related Person and is in the best interests of such Company or such Restricted
Subsidiary. For any transaction that involves in excess of $1 million but less
than or equal to $15 million, the Chief Executive Officer of the Company shall
determine that the transaction satisfies the above criteria and shall evidence
such a determination by an Officer's Certificate filed with the Trustee. For any
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transaction that involves in excess of $15 million, the Company shall also
either
(x) obtain the approval of the transaction from the Board of
Directors including a majority of the disinterested members of the
Board of Directors or
(y) obtain an opinion from a nationally recognized investment
bank or other expert with experience in appraising the terms and
conditions, taken as a whole, of the type of transaction (or series of
related transactions) for which the opinion is required stating that
such transaction (or series of related transactions) is on terms and
conditions, taken as a whole, no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or
Related Person of the Company, which opinion shall be filed with the
Trustee. This covenant shall not apply to Investments by an Affiliate
or a Related Person of the Company in the Capital Stock (other than
Disqualified Stock) of the Company or any Restricted Subsidiary of the
Company.
SECTION 1016. CHANGE OF CONTROL.
(a) Within 30 days of the occurrence of a Change of Control,
the Company will be required to make an Offer to Purchase all Outstanding
Securities at a purchase price equal to 101% of their Accreted Value (if such
Offer to Purchase is made on or prior to December 1, 2004) or 101% of their
principal amount plus accrued and unpaid interest to the date of purchase (if
such Offer to Purchase is consummated thereafter).
(b) The Company and Trustee shall perform their respective
obligations specified in the Offer for the Offer to Purchase. On or prior to the
Purchase Date, the Company shall
(i) accept for payment Securities or portions
thereof tendered pursuant to the Offer,
(ii) deposit with the Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the purchase price of
all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an
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Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security or
Securities equal in principal amount to any unpurchased portion of the
Security surrendered as requested by the Holder. Any Security not
accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof.
(c) A "Change of Control" will be deemed to have occurred at
such time as either
(a) any Person or any Persons acting together that would
constitute a "group" (a "Group") for purposes of Section 13(d) of the
Exchange Act, or any successor provision thereto (other than Eagle
River, Mr. Craig O. McCaw and their respective Affiliates or an
underwriter engaged in a firm commitment underwriting on behalf of the
Company), shall beneficially own (within the meaning of Rule 13d-3
under the Exchange Act, or any successor provision thereto) more than
50% of the aggregate voting power of all classes of Voting Stock
of the Company; or
(b) neither Mr. Craig O. McCaw nor any person designated by
him to the Company as acting on his behalf shall be a director of the
Company; or
(c) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by the Board of
Directors or whose nomination for election by the shareholders of the
Company was proposed by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office.
(d) In the event that the Company makes an Offer to Purchase
the Securities, the Company intends to comply with any applicable securities
laws and regulations, including any applicable requirements of Section 14(e) of,
and Rule 14e-1 under, the Exchange Act.
(e) Unless the Company defaults in the payment of the Purchase
Price, any Security accepted for payment
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pursuant to an Offer to Purchase shall cease to accrue interest after the
Purchase Date.
SECTION 1017. PROVISION OF FINANCIAL INFORMATION.
The Company has agreed to file with the Trustee, within 15
days after it files them with the Commission, copies of the SEC Reports. In the
event the Company shall cease to be required to file SEC Reports pursuant to the
Exchange Act, the Company will nevertheless continue to file such reports with
the Commission (unless the Commission will not accept such a filing) and the
Trustee. The Company will furnish copies of the SEC Reports to the Holders of
Securities at the time the Company is required to file the same with the Trustee
and will make such information available to investors who request it in writing.
SECTION 1018. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, within 90 days
after the end of each quarter of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
and if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as
possible and in any event within 10 days after the Company becomes aware of the
occurrence of a Default or an Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default and the action which the
Company proposes to take with respect thereto.
SECTION 1019. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1004 to 1017, inclusive, if
before or after the time for such compliance the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become
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effective, the obligations of the Company and the duties of the Trustee in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 1020. LIMITATION ON USE OF PROCEEDS.
The Company will apply the net proceeds received from the
issuance and sale of the Securities (the "Securities Net Proceeds") toward the
construction, improvement, and acquisition by the Company or one or more
Restricted Subsidiaries of the Company or Joint Ventures of Telecommunications
Assets of the Company, such Restricted Subsidiaries or Joint Ventures (or will
advance such net proceeds to such Restricted Subsidiaries of the Company or
Joint Ventures for such purpose); provided, however, pending such application,
the Securities Net Proceeds may be invested in Marketable Securities.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Securities may be redeemed prior to December 1, 2004
only in the event that on or before December 1, 2002 the Company receives net
proceeds from a sale of its Common Equity, in which case the Company may, at its
option, use all or a portion of any such net proceeds to redeem Securities in a
principal amount of up to an aggregate amount equal to 33 1/3% of the Accreted
Value of the Securities at a Redemption Price of 112.125% of the Accreted Value
of the Securities, to but excluding the Redemption Date; PROVIDED, HOWEVER, that
Securities in an amount equal to at least 66 2/3% of the Accreted Value of the
Notes remain outstanding after such redemption and such redemption occurs on a
Redemption Date within 90 days of any such sale of the Company's Common Equity
and upon not less than 30 nor more than 60 days' notice by mail to each Holder
of Securities to be redeemed at such Holder's address appearing in the Security
Register. The Company may only redeem Securities in amounts of $1,000 or an
integral multiple of $1,000.
(b) The Securities further may be redeemed, as a whole or in
part, at the election of the Company, at any time on or after December 1, 2004
and prior to maturity, upon not less than 30 nor more than 60 days' notice by
mail to each Holder of Securities to be redeemed at such Holder's address
appearing in the Security Register, in amounts of
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$1,000 or an integral multiple of $1,000, at the Redemption Prices specified in
the form of Security hereinbefore set forth, together with accrued and unpaid
interest to, but excluding, the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant
to Section 1101 shall be evidenced by Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1104. SECURITIES TO BE REDEEMED PRO RATA.
If less than all the Securities are to be redeemed in any
redemption, the Securities to be redeemed shall be selected by the Trustee by
prorating, as nearly as may be practicable, the principal amount of Securities
to be redeemed. In any proration pursuant to this Section, the Trustee shall
make such adjustments, reallocations and eliminations as it shall deem proper
(and in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed) to the end that the
principal amount of Securities so prorated shall be $1,000 or a multiple
thereof, by increasing or decreasing or eliminating the amount which would be
allocable to any Holder on the basis of exact proportion by an amount not
exceeding $1,000. The Trustee in its discretion may determine the particular
Securities (if there are more
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than one) registered in the name of any Holder which are to be redeemed, in
whole or in part.
The Trustee shall promptly notify the Company and each
Security Registrar (other than the Trustee) in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at such Holder's
address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) whether the redemption is being made pursuant to Section
1101(a) or (b) and, if being made pursuant to Section 1101(a), a brief
statement setting forth the Company's right to effect such redemption
and the Company's basis therefor,
(4) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(5) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
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(7) that in the case that a Security is only redeemed in part,
the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities in an aggregate amount equal to the unredeemed
portion of the Security,
(8) the aggregate principal amount of Securities being
redeemed, and
(9) the CUSIP number or numbers of the Securities being
redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, if request is made to
the Trustee no less than 35 days prior to the Redemption Date, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued and unpaid interest
on, all the Securities which are to be redeemed on that date.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued and unpaid interest to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
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If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate provided
by the Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security
so surrendered. If a Global Security is so surrendered, such new Security shall
also be a Global Security.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution at any time
(subject to 10-day prior written notification to the Trustee), elect to have
either Section 1202 or Section 1203 applied to the Outstanding Securities upon
compliance with the conditions set forth below in this Article Twelve.
SECTION 1202. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the option provided in Section
1201 applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such
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Securities are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder:
(A) the rights of Holders of Outstanding Securities to
receive, solely from the trust fund described in Section 1204 and as
more fully set forth in such Section, payments in respect of the
principal of (and premium, if any) and interest on such Securities when
such payments are due,
(B) the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1003,
(C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and
(D) this Article Twelve. Subject to compliance with this
Article Twelve, the Company may exercise its option under this Section
1202 notwithstanding the prior exercise of its option under Section
1203.
SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided
in Section 1201 applicable to this Section
(i) the Company shall be released from its obligations
under Sections 1005 through 1017, inclusive, and Clauses (3) and (4) of
Section 801,
(ii) the occurrence of an event specified in Sections
501(3), 501(4) (with respect to Clauses (3) and (4) of Section 801),
and 501 (5) (with respect to Sections 1005 through 1017, inclusive)
shall not be deemed to be an Event of Default, on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"). For this purpose, such covenant defeasance means that the
Company may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein
or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
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<PAGE>
SECTION 1204. CONDITIONS TO DEFEASANCE OR
COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or
(B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an
amount, or
(C) a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent certified
public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee to pay and discharge,
the principal of, premium, if any, and each installment of
interest on the Securities on the Stated Maturity of such
principal or installment of interest on the day on which such
payments are due and payable in accordance with the terms of
this Indenture and of such Securities. For this purpose, "U.S.
Government Obligations" means securities that are
(x) direct obligations of the United States
of America for the payment of which its full faith
and credit is pledged or
(y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit
obligation by 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 depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S.
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<PAGE>
Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depositary
receipt, PROVIDED that (except as required by law) such
custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of
or interest on the U.S. Government Obligation evidenced by
such depositary receipt.
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections
501(8) and (9) are concerned, at any time during the period ending on
the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of
such period).
(3) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 608 and
for purposes of the Trust Indenture Act with respect to any securities
of the Company.
(4) Such defeasance or 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 the Company is a party or
by which it is bound.
(5) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1202 or the covenant defeasance under Section 1203 (as
the case may be) have been complied with.
(6) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or
(y) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion shall
confirm that, the
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<PAGE>
Holders of the Outstanding Securities 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.
(7) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities 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 covenant
defeasance had not occurred.
(8) The Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that such deposit and defeasance or covenant
defeasance shall not result in the trust arising from such deposit
constituting an investment company as defined in the Investment Company
Act of 1940, as amended, or such trust shall be qualified under such
act or exempt from regulation thereunder.
SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee--collectively, for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant
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<PAGE>
to Section 1204 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1204 which, in the opinion of a nationally recognized
accounting firm expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
SECTION 1206. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 1202 or 1203 by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Twelve until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1202 and 1203; PROVIDED, HOWEVER, that if the Company makes any payment
of principal of (and premium, if any) any Security following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.
SECTION 1207. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Security and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such security
shall thereafter, as a creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in
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<PAGE>
the New York Times and The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
------------------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, and the Trustee has caused its seal
to be hereunto affixed and attested, all as of the day and year first above
written.
NEXTLINK Communications, Inc.
By: /s/ R. Bruce Easter, Jr.
-------------------------------
Name: R. Bruce Easter, Jr.
Title: Vice President
Attest:
/s/ Richard A. Montfort
- --------------------------
Name: Richard A. Montfort, Jr
Title: Assistant Secretary
U.S. TRUST COMPANY OF TEXAS
By__________________________
Name:
Title:
[SEAL]
Attest:
- ---------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, and the Trustee has caused its seal
to be hereunto affixed and attested, all as of the day and year first above
written.
NEXTLINK Communications, Inc.
By:
-------------------------------
Name:
Title:
Attest:
- --------------------------
Name:
Title:
U.S. TRUST COMPANY OF TEXAS
By: /s/ Gerard F. Ganey
--------------------------------
Name: Gerard F. Ganey
Title: Authorized Signatory
[SEAL]
Attest:
/s/ Patricia Gallagher
- ---------------------------
Name: Patricia Gallagher
Title: Authorized Signatory
<PAGE>
STATE OF WASHINGTON )
ss.:
COUNTY OF KING )
On this __th day of November, 1999, before me personally
appeared R. Bruce Easter, Jr., to me known, who, being duly sworn, did depose
and say that he/she is the Vice President of NEXTLINK Communications, Inc.,
one of the corporations described in and which executed the foregoing
instrument, and duly acknowledged to me that he/she executed the same by
authority of the Board of Directors of said corporation.
/s/ Kirsten P. Abboud
------------------------------
Notary Public
- -------------------
KIRSTEN P. ABBOUND
NOTARY PUBLIC
STATE OF WASHINGTON
COMMISSION EXPIRES
AUGUST 19, 2002
- -------------------
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this __th day of November, 1999, before me personally
appeared __________________, to me known, who, being duly sworn, did depose
and say that he/she is the _______________________ of U.S. Trust Company of
Texas, one of the corporations described in and which executed the foregoing
instrument, and duly acknowledged to me that he/she executed the same by
authority of the Board of Directors of said corporation.
------------------------------
Notary Public
<PAGE>
STATE OF WASHINGTON )
ss.:
COUNTY OF )
On this __th day of November, 1999, before me personally
appeared ____________, to me known, who, being duly sworn, did depose and say
that he/she is the ______________ of NEXTLINK Communications, Inc., one of the
corporations described in and which executed the foregoing instrument, and duly
acknowledged to me that he/she executed the same by authority of the Board of
Directors of said corporation.
------------------------------
Notary Public
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this 17th day of November, 1999, before me personally
appeared GERARD F. GANEY, to me known, who, being duly sworn, did depose and
say that he/she is the AUTHORIZED SIGNATORY of U.S. Trust Company of Texas,
one of the corporations described in and which executed the foregoing
instrument, and duly acknowledged to me that he/she executed the same by
authority of the Board of Directors of said corporation.
/s/ Christopher Grell
------------------------------
Notary Public
--------------------------------
CHRISTOPHER GRELL
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01GR5012466
QUALIFIED IN NEW YORK COUNTY
COMMISSION EXPIRES JUNE 15, 2001
--------------------------------
<PAGE>
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Sections 305(b)(i), (iii) and (v)
of the Indenture)
U.S. Trust Company of Texas,
as Trustee
c/o United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 12 1/8% Senior Discount Notes due 2009
of NEXTLINK Communications, Inc.
(THE "SECURITIES")
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications, Inc. (the "Company")
and U.S. Trust Company of Texas, as Trustee. Terms used herein and defined in
the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of
1933, as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Regulation S Security. In
A-1
<PAGE>
connection with such transfer, the Owner hereby certifies that, unless such
transfer is being effected pursuant to an effective registration statement under
the Securities Act, it is being effected in accordance with Rule 904 or Rule 144
under the Securities Act and with all applicable securities laws of the states
of the United States and other jurisdictions. Accordingly, the Owner hereby
further certifies as follows:
(1) RULE 904 TRANSFERS. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Company or any such distributor or a
person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof;
(E) if the Owner is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of the Specified Securities, and the transfer is to
occur during the Restricted Period, then the requirements of
Rule 904(c)(1) have been satisfied; and
A-2
<PAGE>
(F) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(2) RULE 144 TRANSFERS. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least two years has elapsed since the Specified
Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is
not, and during the preceding three months has not been, an
affiliate of the Company.
A-3
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
----------------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
----------------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
A-4
<PAGE>
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sections 305(b)(ii), (iii), (iv) and (v)
of the Indenture)
U.S. Trust Company of Texas,
as Trustee
c/o United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 12 1/8% Senior Discount Notes due 2009
of NEXTLINK Communications, Inc.
(THE "SECURITIES")
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications Inc. (the "Company") and
U.S. Trust Company of Texas, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified
Securities be transferred to a person (the "Transferee") who will
B-1
<PAGE>
take delivery in the form of a Restricted Security. In connection with such
transfer, the Owner hereby certifies that, unless such transfer is being
effected pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with Rule 144A or Rule 144 under the
Securities Act and all applicable securities laws of the states of the United
States and other jurisdictions. Accordingly, the Owner hereby further certifies
as follows:
(1) RULE 144A TRANSFERS. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) RULE 144 TRANSFERS. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Company or from an affiliate of
the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least two years has elapsed since the Specified
Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is
not, and during the preceding three months has not been, an
affiliate of the Company.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
-----------------------------------------------------
B-2
<PAGE>
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
-------------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
B-3
<PAGE>
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Sections 305(c))
U.S. Trust Company of Texas,
as Trustee
c/o United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Trustee Administration
Re: 12 1/8% Senior Discount Notes due 2009
of NEXTLINK Communications, Inc.
(THE "SECURITIES")
Reference is made to the Indenture, dated as of November 17,
1999 (the "Indenture"), between NEXTLINK Communications, Inc. (the "Company")
and U.S. Trust Company of Texas, as Trustee. Terms used herein and defined in
the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of
1933, as amended (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified
Securities be exchanged for Securities bearing no Securities Act
C-1
<PAGE>
Legend pursuant to Section 305(c) of the Indenture. In connection with such
exchange, the Owner hereby certifies that the exchange is occurring after a
holding period of at least two years (computed in accordance with paragraph (d)
of Rule 144) has elapsed since the Specified Securities were last acquired from
the Company or from an affiliate of the Company, whichever is later, and the
Owner is not, and during the preceding three months has not been, an affiliate
of the Company. The Owner also acknowledges that any future transfers of the
Specified Securities must comply with all applicable securities laws of the
states of the United States and other jurisdictions.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Purchasers.
Dated:
---------------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the second
paragraph of this certificate.)
By:
---------------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
C-2
<PAGE>
Exhibit 10.5
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of November 17,
1999 by and between NEXTLINK Communications, Inc., a Delaware corporation (the
"Company"), and Goldman, Sachs & Co., Salomon Smith Barney Inc., Credit Suisse
First Boston Corporation, TD Securities (USA) Inc., Barclays Capital Inc., Chase
Securities Inc., Banc of America Securities LLC, BancBoston Robertson Stephens
Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and PNC Capital
Markets, Inc. (the "Purchasers") of the 10 1/2% Senior Notes due 2009 (the
"Senior Notes") and the 12 1/8% Senior Discount Notes due 2009 (the "Senior
Discount Notes") of the Company.
1. CERTAIN DEFINITIONS.
For purposes of this Exchange and Registration Rights Agreement (this
"Agreement"), the following terms shall have the following respective meanings:
(a) "ADDITIONAL INTEREST" shall have the meaning assigned
thereto in Section 2(c) hereof.
(b) "CLOSING DATE" shall mean the date on which the
Securities are initially issued.
(c) "COMMISSION" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
(d) "EFFECTIVE TIME", in the case of (i) an Exchange Offer,
shall mean the date on which the Commission declares the Exchange Offer
registration statement effective or on which such registration statement
otherwise becomes effective and (ii) a Shelf Registration, shall mean the date
on which the Commission declares the Shelf Registration effective or on which
the Shelf Registration otherwise becomes effective.
(e) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, or any successor thereto, as the same shall be amended from time to time.
(f) "EXCHANGE OFFER" shall have the meaning assigned thereto
in Section 2(a).
(g) "EXCHANGE SECURITIES" shall have the meaning assigned
thereto in Section 2(a).
<PAGE>
(h) "OFFERING CIRCULAR" shall mean the offering circular
prepared by the Company in connection with the sale of the securities, dated
November 15, 1999, including any and all exhibits thereto.
(i) The term "HOLDER" shall mean each Purchaser for so long as
it owns any Registrable Securities, and such of its respective successors and
assigns who acquire Registrable Securities, directly or indirectly, from such
person or from any successor or assign of such person, in each case for so long
as such person owns any Registrable Securities.
(j) "INDENTURES" shall mean the Indenture, dated as of
November 17, 1999, between the Company and United States Trust Company of New
York, as Trustee with respect to the Senior Notes and the Indenture, dated as of
November 17, 1999, between the Company and U.S. Trust Company of Texas, as
Trustee with respect to the Senior Discount Notes.
(k) The term "PERSON" shall mean a corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or governmental agency.
(l) "PURCHASE AGREEMENT" shall mean the Purchase Agreement
dated November 12, 1999 between the Company and the Purchasers.
(m) "REGISTRABLE SECURITIES" shall mean the Securities;
PROVIDED, HOWEVER, that such Securities shall cease to be Registrable Securities
when (i) except if prior to the consummation of the Exchange Offer existing
Commission interpretations are changed such that the Exchange Securities
received by holders in the Exchange Offer for Registrable Securities are not or
would not be, upon receipt, transferable by each such holder (other than a
Restricted Holder) without restriction under the Securities Act in the
circumstances contemplated by Section 2(a), the Exchange Offer is conducted as
contemplated in Section 2(a); PROVIDED, HOWEVER, that any such Securities that,
pursuant to the last two sentences of Section 2(a), are included in a prospectus
for use in connection with resales by broker-dealers shall be deemed to be
Registrable Securities with respect to Sections 5, 6 and 9 until resale of such
Exchange Securities has been effected within the 30-day period referred to in
Section 2(a); (ii) in the circumstances contemplated by Section 2(b), a
registration statement registering such Securities under the Securities Act has
been declared or becomes effective and such Securities have been sold or
otherwise transferred by the holder thereof pursuant to such effective
registration statement; (iii) such Securities are sold pursuant to Rule 144 (or
any successor provision) promulgated under the Securities Act under
circumstances in which any legend borne by such Securities relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company
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or pursuant to the Indenture or such Securities are eligible to be sold pursuant
to paragraph (k) of Rule 144; or (iv) such Securities shall cease to be
outstanding.
(n) "REGISTRATION DEFAULT" shall have the meaning assigned
thereto in Section 2(c) hereof.
(o) "REGISTRATION EXPENSES" shall have the meaning assigned
thereto in Section 4 hereof.
(p) "RESTRICTED HOLDER" shall mean (i) a holder that is an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act, (ii) a holder who acquires Exchange Securities outside the ordinary course
of such holder's business or (iii) a holder who has arrangements or
understandings with any person to participate in the Exchange Offer for the
purpose of distributing Exchange Securities.
(q) "SECURITIES" shall mean, collectively, the Senior Notes
and the Senior Discount Notes to be issued and sold to the Purchasers, and
securities issued in exchange therefor or in lieu thereof pursuant to the
Indentures.
(r) "SECURITIES ACT" shall mean the Securities Act of 1933, or
any successor thereto, as the same shall be amended from time to time.
(s) "SHELF REGISTRATION" shall have the meaning assigned
thereto in Section 2(b) hereof.
(t) "TRUST INDENTURE ACT" shall mean the Trust Indenture Act
of 1939, or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same (including any
successor statute, rule or regulation thereto) as it may be amended from time to
time.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) Except as set forth in Section 2(b) below, the Company
agrees to use its reasonable best efforts to file under the Securities Act no
later than 90 days after the Closing Date, a registration statement relating to
an offer to exchange (the "Exchange Offer") for a like aggregate principal
amount of debt securities of the Company which are substantially
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identical to each series of the Securities (and which are entitled to the
benefits of a trust indenture which is substantially identical to the Indenture
with respect to such series or is such Indenture and which has been qualified
under the Trust Indenture Act) except that they have been registered pursuant to
an effective registration statement under the Securities Act (such new debt
securities hereinafter called "Exchange Securities") for any or all of the
Registrable Securities. The Company agrees to use its reasonable best efforts to
cause such registration statement to become effective under the Securities Act
no later than 120 days after the Closing Date. The Exchange Offer will be
registered under the Securities Act on the appropriate form and will comply with
all applicable tender offer rules and regulations under the Exchange Act. The
Company further agrees to commence and complete the Exchange Offer promptly
after such registration statement has become effective, hold the Exchange Offer
open for at least 30 days and exchange Exchange Securities for all Registrable
Securities that have been tendered and not withdrawn on or prior to the
expiration of the Exchange Offer. The Exchange Offer will be deemed to have been
completed only if the Exchange Securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are, upon
receipt, transferable by each such holder without restriction under the
Securities Act and the Exchange Act and without material restrictions under the
blue sky or securities laws of a substantial majority of the States of the
United States of America. The Exchange Offer shall be deemed to have been
completed upon the earlier to occur of (i) the Company having exchanged the
Exchange Securities for all outstanding Registrable Securities pursuant to the
Exchange Offer and (ii) the Company having exchanged, pursuant to the Exchange
Offer, Exchange Securities for all Registrable Securities that have been
tendered and not withdrawn before the expiration of the Exchange Offer, which
shall be on a date that is at least 30 days following the commencement of the
Exchange Offer. The Company agrees (i) to include in the registration statement
a prospectus for use in connection with any resales by any holder of Exchange
Securities that is a broker-dealer and (ii) to keep such registration statement
effective for a period ending on the earlier of the 30th day after the Exchange
Offer has been completed or such time as such broker-dealers no longer own any
Registrable Securities. With respect to such registration statement the Company
and any such holder shall have the benefit of, and shall each provide to the
other, the rights of indemnification and contribution set forth in Section 6
hereof.
(b) If prior to the consummation of the Exchange Offer
existing Commission interpretations are changed such that the Exchange
Securities received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are not or would not be, upon receipt,
transferable by each such holder without restriction under the Securities Act,
in lieu of conducting the Exchange Offer contemplated by Section 2(a) the
Company shall file under the Securities Act a "shelf" registration statement
providing for the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Registrable Securities, pursuant to Rule 415 under
the Securities Act and/or any similar rule that may be adopted by the Commission
(the "Shelf Registration"). The Company agrees to use its reasonable best
efforts to cause the Shelf Registration to become or be declared effective no
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later than 120 days after the Closing Date and to keep such Shelf Registration
continuously effective for a period ending on the earlier of the second
anniversary of the Closing Date or such time as there are no longer any
Registrable Securities outstanding. The Company further agrees to supplement or
make amendments to the Shelf Registration, as and when required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration or by the Securities Act or rules and
regulations thereunder for shelf registration, and the Company agrees to furnish
to the holders of the Registrable Securities copies of any such supplement or
amendment prior to its being used and/or filed with the Commission.
(c) In the event that (i) the Company has not filed the
registration statement relating to the Exchange Offer on or before the 90th day
after the Closing Date, or (ii) such registration statement or, in lieu thereof,
the Shelf Registration, has not become effective or been declared effective by
the Commission on or before the 120th day after the Closing Date, or (iii) the
Exchange Offer has not been completed within 45 days after the initial effective
date of the registration statement (if the Exchange Offer is then required to be
made) or (iv) any registration statement required by Section 2(a) or 2(b) is
filed and declared effective but shall thereafter cease to be effective (except
as specifically permitted herein) without being succeeded promptly by an
additional registration statement filed and declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default"), then
interest will accrue (in addition to the original issue discount and stated
interest, in the case of the Senior Discount Notes, and in addition to the
stated interest, in the case of the Senior Notes) at the rate of 0.5% per annum,
determined daily, on the principal amount of the Securities (or prior to
December 1, 2004, on the Accreted Value of the Senior Discount Notes),
determined daily (calculated on the same basis as interest on the Securities
shall be calculated) for the period from the occurrence of the Registration
Default until such time as no Registration Default is in effect (after which
time no such special interest will accrue). Such additional interest (the
"Additional Interest") will be payable in cash semi-annually in arrears on each
May 15 and November 15 in accordance with the Indenture. In addition, in the
event that the Exchange Offer has not been completed or, if applicable, the
Shelf Registration has not become effective or been declared effective by the
Commission on or before the 165th day after the Closing Date, then the per annum
rate of Additional Interest shall increase by an additional 0.25% for each
subsequent 90-day period (provided that such Additional Interest shall in no
event exceed 1.0% per annum in the aggregate), and Additional Interest will be
paid at such increased rate until such time as the Company completes the
Exchange Offer or, if applicable, the Shelf Registration has become or been
declared effective.
3. REGISTRATION PROCEDURES.
If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
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<PAGE>
(a) At or before the Effective Time of the Exchange Offer or
the Shelf Registration, as the case may be, the Company shall qualify the
Indentures under the Trust Indenture Act.
(b) In the event that such qualification would require the
appointment of a new trustee under either Indenture or both Indentures, the
Company shall appoint a new trustee thereunder pursuant to the applicable
provisions of the applicable Indenture or Indentures.
(c) In connection with the Company's obligations with respect
to the Shelf Registration, if applicable, the Company shall use its reasonable
best efforts to effect or cause the Shelf Registration to permit the sale of the
Registrable Securities by the holders thereof in accordance with the intended
method or methods of distribution thereof described in the Shelf Registration.
In connection therewith, the Company shall:
(i) prepare and file with the Commission a registration
statement with respect to the Shelf Registration on any form which may
be utilized by the Company and which shall permit the disposition of
the Registrable Securities in accordance with the intended method or
methods thereof, as specified in writing to the Company by the holders
of the Registrable Securities;
(ii) as soon as reasonably possible, prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such registration statement
for the period specified in Section 2(b) hereof and as may be required
by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement;
(iii) as soon as reasonably possible, comply with the
provisions of the Securities Act applicable to the Company in
connection with the disposition of all of the Registrable Securities
covered by such registration statement in accordance with the intended
methods of disposition by the holders thereof, set forth in such
registration statement;
(iv) provide (A) the holders of the Registrable Securities to
be included in such registration statement and not more than one
counsel for all the holders of such Registrable Securities, (B) the
underwriters (which term, for purposes of this Agreement, shall include
a person deemed to be an underwriter within the meaning of Section
2(11) of the Securities Act), if any, thereof, (C) the sales or
placement agent, if any, therefor, and (D) one counsel for such
underwriters or agents, if any, reasonable opportunity to participate
in the preparation of such registration statement,
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<PAGE>
each prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified in Section
2(b), make available at reasonable times at the Company's principal
place of business or such other reasonable place for inspection by the
persons referred to in Section 3(c)(iv) who shall certify to the
Company that they have a current intention to sell the Registrable
Securities pursuant to the Shelf Registration such financial and other
information and books and records of the Company, and cause the
officers, employees, counsel and independent certified public
accountants of the Company to respond to such inquiries, as shall be
reasonably necessary, in the judgment of the respective counsel
referred to in such Section, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; PROVIDED,
HOWEVER, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or
records reasonably designated by the Company as being confidential,
until such time as (A) such information becomes a matter of public
record (whether by virtue of its inclusion in such registration
statement or otherwise, except by disclosure by such party in breach of
this Agreement), or (B) such person shall be required so to disclose
such information pursuant to the subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter
(subject to, and only to the extent required by, the requirements of
such order, and only after such person shall have given the Company
prompt prior written notice of such require ment), or (C) such
information is required to be set forth in such registration statement
or the prospectus included therein or in an amendment to such
registration statement or an amendment or supplement to such prospectus
in order that such registration statement, prospectus, amendment or
supplement, as the case may be, does not contain an untrue statement of
a material fact or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(vi) promptly notify the selling holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof and confirm such
advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration statement
or the initiation or
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<PAGE>
threatening of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by Section
3(c)(xv) or Section 5 cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (F) at any time when
a prospectus is required to be delivered under the Securities Act, that
such registration statement, prospectus, prospectus amendment or
supplement or post-effective amendment, or any document incorporated by
reference in any of the foregoing, contains an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(vii) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto at the
earliest practicable date;
(viii) if requested in writing by any managing underwriter or
underwriters, any placement or sales agent or counsel for the holders
of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is required
by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such holder
specifies should be included therein relating to the terms of the sale
of such Registrable Securities, including, without limitation,
information with respect to the principal amount of Registrable
Securities being sold by any holder or agent or to any underwriters,
the name and description of such holder, agent or underwriter, the
offering price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof, the
purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable
Securities, to be sold by such holder or agent or to such underwriters;
and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to
be incorporated in such prospectus supplement or post-effective
amendment;
(ix) furnish to each holder of Registrable Securities, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(c)(iv) an
executed copy of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and such number of copies
of such registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such holder, agent or underwriter, as the case may be) and
of the prospectus included in such registration
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<PAGE>
statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act,
and such other documents, as such holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate the
offering and disposition of the Registrable Securities owned by such
holder, offered or sold by such agent or underwritten by such
underwriter and to permit such holder, agent and underwriter to satisfy
the prospectus delivery requirements of the Securities Act; and the
Company hereby consents to the use of such prospectus (including such
preliminary and summary prospectus) and any amendment or supplement
thereto by each such holder and by any such agent and underwriter, in
each case in the form most recently provided to such party by the
Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary and
summary prospectus) or any supplement or amendment thereto;
(x) use its reasonable best efforts to (A) register or qualify
the Registrable Securities to be included in such registration
statement under such securities laws or blue sky laws of such
jurisdictions as any holder of such Registrable Securities and each
placement or sales agent, if any, therefor and underwriter, if any,
thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
during the period the Shelf Registration is required to remain
effective under Section 2(b) above and for so long as may be necessary
to enable any such holder, agent or underwriter to complete its
distribution of Securities pursuant to such registration statement and
(C) take any and all other actions as may be reasonably necessary or
advisable to enable each such holder, agent, if any, and underwriter,
if any, to consummate the disposition in such jurisdictions of
Registrable Securities; PROVIDED, HOWEVER, that the Company shall not
be required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(x),
(2) consent to general service of process in any such jurisdiction, (3)
subject itself to taxation in any jurisdiction where the Company is not
already subject to taxation or (4) make any changes to the Company's
certificate of incorporation or by-laws or any agreement between the
Company and its stockholders;
(xi) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the disposition
of, their Registrable Securities;
(xii) cooperate with the holders of the Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of
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certificates representing Registrable Securities to be sold, which
certificates shall be printed, lithographed or engraved, or produced by
any combination of such methods, and which shall not bear any
restrictive legends; and, in the case of an underwritten offering,
enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at
least two business days prior to any sale of the Registrable
Securities;
(xiii) provide a CUSIP number for all Registrable Securities
of each series, not later than the effective date of the Shelf
Registration;
(xiv) enter into one or more underwriting agreements,
engagement letters, agency agreements or similar agreements, as
appropriate, including (without limitation) provisions relating to
indemnification and contribution substantially the same as those set
forth in Section 6 hereof, and take such other actions in connection
therewith as any holders of Registrable Securities aggregating at least
25% in aggregate principal amount of the Registrable Securities of
either series included in such Shelf Registration shall request in
order to expedite or facilitate the disposition of such Registrable
Securities; provided, that the Company shall not be required to enter
into any such agreement more than once with respect to all of the
Registrable Securities of either series and may delay entering into
such agreement until the consummation of any underwritten public
offering which the Company shall have then undertaken;
(xv) whether or not an agreement of the type referred to in
Section (3)(c)(xiv) hereof is entered into and whether or not any
portion of the offering contemplated by such registration statement is
an underwritten offering or is made through a placement or sales agent
or any other entity, (A) make such representations and warranties to
the holders of such Registrable Securities and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof
substantially the same as those set forth in Section 1 of the Purchase
Agreement and such other representations and warranties as are
customarily made with respect to the offering of debt securities
pursuant to a shelf registration statement on the applicable form under
the Act; (B) obtain an opinion or opinions of counsel to the Company
substantially the same as the opinions provided for in Section 7 of the
Purchase Agreement, addressed to such holder or holders and the
placement or sales agent, if any, therefor and the underwriters, if
any, thereof and dated the effective date of such registration
statement (and if such registration statement contemplates an
underwritten offering of a part or all of the Registrable Securities,
dated the date of the closing under the underwriting agreement relating
thereto) (it being agreed that the matters to be covered by such
opinion shall also include, without limitation, the due incorporation
of the Company and its subsidiaries; the qualification of the Company
and its subsidiaries to transact business as foreign corporations,
limited
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<PAGE>
liability companies or limited partnerships, as the case may be; the
due authorization, execution and delivery of the relevant agreement of
the type referred to in Section (3)(c)(xiv) hereof, the due
authorization, execution, authentication and issuance, and the validity
and enforceability, of the Securities; the absence of material legal or
governmental proceedings involving the Company; the absence of a breach
by the Company or any of its subsidiaries of, or a default under,
material agreements binding upon the Company or any subsidiary of the
Company; the absence of governmental approvals required to be obtained
in connection with the Shelf Registration, the offering and sale of the
Registrable Securities, this Agreement or any agreement of the type
referred to in Section (3)(c)(xiv) hereof, except such approvals as may
be required under state securities or blue sky laws; and the compli
ance as to form of such registration statement and any documents
incorporated by reference therein and of the Indentures with the
requirements of the Securities Act and the Trust Indenture Act,
respectively; and, such opinion shall also state that such counsel has
no reason to believe that, as of the date of the opinion and of the
registration statement or most recent post-effective amendment thereto,
as the case may be, such registration statement and the prospectus
included therein, as then amended or supplemented, and the documents
incorporated by reference therein (in each case other than the
financial statements and other financial information contained therein)
contains or contained an untrue statement of a material fact or omits
or omitted to state therein a material fact necessary to make the
statements therein not misleading (in the case of such documents, in
the light of the circumstances existing at the time that such
documents were filed with the Commission under the Exchange Act)); (C)
obtain a "cold comfort" letter or letters from the independent
certified public accountants of the Company addressed to the selling
holders of Registrable Securities, the placement or sales agent, if
any, therefor and the underwriters, if any, thereof, dated (i) the
effective date of such registration statement and (ii) the effective
date of any prospectus supplement to the prospectus included in such
registration statement or post-effective amendment to such registration
statement which includes unaudited or audited financial statements as
of a date or for a period subsequent to that of the latest such
statements included in such prospectus (and, if such registration
statement contemplates an underwritten offering pursuant to any
prospectus supplement to the prospectus included in such registration
statement or post-effective amendment to such registration statement
which includes unaudited or audited financial statements as of a date
or for a period subsequent to that of the latest such statements
included in such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or letters to be
in customary form and covering such matters of the type customarily
covered by letters of such type; (D) deliver such other documents and
certificates, including officers' certificates, as may be reasonably
requested by any holders of at least 25% in aggregate principal amount
of the Registrable Securities included in such Shelf Registration or
the placement or sales agent, if any, therefor and the managing
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underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or
those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by the Company;
and (E) undertake such obligations relating to expense reimbursement,
indemnification and contribution as are provided in Section 6 hereof;
(xvi) notify in writing each holder of Registrable Securities
of any proposal by the Company to amend or waive any provision of this
Agreement pursuant to Section 9(h) hereof and of any amendment or
waiver effected pursuant thereto, each of which notices shall contain
the text of the amendment or waiver proposed or effected, as the case
may be; and
(xvii) in the event that any broker-dealer registered under
the Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group
or "assist in the distribution" (within the meaning of the Rules of
Fair Practice and the By-Laws of the National Association of Securities
Dealers, Inc. ("NASD") or any successor thereto, as amended from time
to time) thereof, whether as a holder of such Registrable Securities or
as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying
with the requirements of such Rules and By-Laws, including, without
limitation, by (A) if such Rules or By-Laws, including Schedule E
thereto (or any successor thereto), shall so require, engaging a
"qualified independent underwriter" (as defined in such Schedule (or
any successor thereto)) to participate in the preparation of the
registration statement relating to such Registrable Securities, to
exercise usual standards of due diligence in respect thereto and, if
any portion of the offering contemplated by such registration statement
is an underwritten offering or is made through a placement or sales
agent, to recommend the yield of such Registrable Securities, (B)
indemnifying any such qualified independent underwriter to the extent
of the indemnification of underwriters provided in Section 6 hereof,
and (C) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the
requirements of the Rules of Fair Practice of the NASD.
(d) In the event that the Company would be required, pursuant
to Section 3(c)(vi)(F) above, to notify the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Company shall without delay prepare and
furnish to each such holder, to each placement or sales agent, if any, and to
each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements
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therein not misleading in light of the circumstances then existing. Each holder
of Registrable Securities agrees that upon receipt of any notice from the
Company pursuant to Section 3(c)(vi)(F) hereof, such holder shall forthwith
discontinue the disposition of Registrable Securities, pursuant to the
registration statement applicable to such Registrable Securities until such
holder shall have received copies of such amended or supplemented prospectus,
and if so directed by the Company, such holder shall deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus covering such Registrable Securities
at the time of receipt of such notice.
(e) The Company may require each holder of Registrable
Securities as to which any registration is being effected to furnish in writing
to the Company such information regarding such holder and such holder's intended
method of distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing, but only to the extent that such
information is required in order to comply with the Securities Act, and may
exclude from any such registration the Registrable Securities of any such holder
who fails to furnish such reasonably requested information within 45 days after
such request. Each such holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
such holder to the Company or of the occurrence of any event in either case as a
result of which any prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such holder or such
holder's intended method of distribution of such Registrable Securities or omits
to state any material fact regarding such holder or such holder's intended
method of distribution of such Registrable Securities required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and promptly to furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such holder or the distribution of such Registrable Securities, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. Each such holder shall comply with the
provisions of the Securities Act applicable to such holder with respect to the
disposition by such holder of Registrable Securities covered by such
registration statement in accordance with the intended methods of disposition by
such holder set forth in such registration statement.
(f) Until such time as the Exchange Offer is completed and all
Securities have been exchanged for Exchange Securities, during two years after
the Closing Date, the Company will not, and will not permit any of its
"affiliates" (as defined in Rule 144 under the Act) to, resell any of the
Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them except pursuant to an effective registration
statement under the Act or any exemption therefrom.
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4. REGISTRATION EXPENSES.
If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
The Company agrees to bear and to pay or cause to be paid all expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, (a) all Commission and any NASD registration and
filing fees and expenses, (b) all fees and expenses in connection with the
qualification of Registrable Securities for offering and sale under the State
securities and blue sky laws referred to in Section 3(c)(x) hereof, including
reasonable fees and disbursements of counsel for the placement or sales agent,
if any, or underwriters, if any, in connection with such qualifications, (c) all
expenses relating to the preparation, printing, distribution and reproduction of
each registration statement required to be filed hereunder, each prospectus
included therein or prepared for distribution pursuant hereto, each amendment
or supplement to the foregoing, and the certificates representing the
Securities, (d) messenger and delivery expenses, (e) fees and expenses of the
Trustees under the Indentures and of any escrow agent or custodian, (f) internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), (g)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
(h) fees, disbursements and expenses of any "qualified independent underwriter"
engaged pursuant to Section 3(c)(xvii) hereof, (i) fees, disbursements and
expenses of one counsel for the holders of Registrable Securities retained in
connection with a Shelf Registration, as selected by the holders of at least a
majority in aggregate principal amount of the Registrable Securities being
registered, and fees, expenses and disbursements of any other persons, including
special experts, retained by the Company in connection with such registration
(collectively, the "Registration Expenses"). To the extent that any Registration
Expenses are incurred, assumed or paid by any holder of Registrable Securities
or any placement or sales agent therefor or underwriter thereof, the Company
shall reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a written request therefor.
Notwithstanding the foregoing, the holders of the Registrable Securities being
registered shall pay all agency or brokerage fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registered Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above, transfer taxes on resale
of any of the Securities by such holders and any advertising expenses incurred
by or on behalf of such holders in connection with any offers they may make.
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<PAGE>
5. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with, the Purchasers
and each of the holders from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable
Securities and each prospectus (including any preliminary or summary prospectus)
contained therein or furnished pursuant to Section 3(c)(ix) hereof and any
further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as the
case may be, and, in the case of an underwritten offering of Registrable
Securities, at the time of the closing under the underwriting agreement relating
thereto, will conform in all material respects to the requirements of the
Securities Act and the Trust Indenture Act and any such registration statement
and any amendment thereto will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and any such prospectus or any
amendment or supplement thereto will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and at all times subsequent to the Effective Time
of any such registration statement when a prospectus would be required to be
delivered under the Securities Act, other than from (i) such time as a notice
has been given to holders of Registrable Securities pursuant to Section
3(c)(vi)(F) hereof until (ii) such time as the Company furnishes an amended or
supplemented prospectus pursuant to Section 3(d) hereof, each such registration
statement, and each prospectus (including any summary prospectus) contained
therein or furnished pursuant to Section 3(c)(ix) hereof, as then amended or
supplemented, will conform in all material respects to the requirements of the
Securities Act and the Trust Indenture Act and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof expressly for use therein.
(b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a) hereof, when they become or became effective or are
or were filed with the Commission, as the case may be, will conform or conformed
in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and none of such documents will contain or
contained an untrue statement of a material fact or will omit or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with
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<PAGE>
information furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.
(c) The compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
subsidiary of the Company is a party or by which the Company or any subsidiary
of the Company is bound or to which any of the property or assets of the Company
or any subsidiary of the Company is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation, as amended, or
the by-laws of the Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company or
any subsidiary of the Company or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement, except the
registration under the Securities Act of the Registrable Securities,
qualification of the Indentures under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under State securities or blue sky laws in connection with the offering and
distribution of the Registrable Securities.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. Upon the registration of
the Registrable Securities pursuant to Section 2 hereof, and in consideration of
the agreements of the Purchasers contained herein, and as an inducement to the
Purchasers to purchase the Securities, the Company shall, and it hereby agrees
to, (i) indemnify and hold harmless each of the holders of Registrable
Securities to be included in such registration, and each person who participates
as a placement or sales agent or as an underwriter in any offering or sale of
such Registrable Securities against any and all losses, liabilities (joint or
several) claims, damages and expenses whatsoever to which such holder, agent or
underwriter may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such holder, agent or underwriter, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and
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<PAGE>
(ii) reimburse such holder, such agent and such underwriter for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; PROVIDED,
HOWEVER, that the Company shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any such registration statement, or preliminary, final
or summary prospectus, or amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company by any holders
of Registrable Securities or any placement or sales agent thereof or underwriter
thereof expressly for use therein;
(b) INDEMNIFICATION BY THE HOLDERS AND ANY AGENTS AND
UNDERWRITERS. The Company may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to Section 2
hereof and to entering into any placement or underwriting agreement with respect
thereto, that the Company shall have received an undertaking reasonably
satisfactory to it from the holder of such Registrable Securities and from each
placement agent or underwriter named in any such placement agreement or
underwriting agreement, severally and not jointly, to (i) indemnify and hold
harmless the Company, and all other holders of Registrable Securities, against
any losses, claims, damages or liabilities to which the Company or such other
holders of Registrable Securities may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, agent or underwriter, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such holder,
agent or underwriter expressly for use therein, and (ii) reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that no such holder shall be required to undertake
liability to any person under this Section 6(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such holder from the sale of
such holder's Registrable Securities pursuant to such registration.
(c) NOTICES OF CLAIMS, ETC. Each indemnified party shall give
written notice as promptly as reasonably practicable to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) will not relieve
it from liability under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure results in
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<PAGE>
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the holders of Registrable Securities on the one hand and
any agents or underwriters on the other hand from the offering or sale of the
Registrable Securities, pursuant to this Agreement (provided that in no case
shall any agents or underwriters (except as may be provided in any agreement
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<PAGE>
among underwriters relating to the offering or sale of the Registrable
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Notes purchased by such Purchaser placed or
underwritten by it and distributed to the public) or (ii) if the allocation
provided by clause (i) is unavailable for any reason, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the holders of Registrable Securities on
the one hand and of any agents or underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by holders of Registrable Securities on
the one hand and any agents or underwriters on the other hand in connection with
the offering or sale of the Registrable Securities shall be deemed to be in the
same respective proportions as the total net proceeds from the offering or sale
thereof (before deducting expenses) received by such holders bear to the total
underwriting discounts and commissions received by any agents or underwriters
with respect to such offer or sale.
The relative fault of the holders of Registrable Securities on the one
hand and any agents or underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the holders of Registrable Securities or
by any agents or underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The holders of Registrable Securities and any agents or underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 6(d) were determined by pro rata allocation (even if the holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 6(d).
Notwithstanding the provisions of this Section 6(d), no holder shall be
required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such holder from the sale of any Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) exceeds the amount of any damages which such holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no underwriter or agent shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities placed or underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter or agent has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
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<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The holders' and
any underwriters' or agent's obligations in this Section 6(d) to contribute
shall be several in proportion to the principal amount of Registrable Securities
registered, underwritten or placed, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
partner of each holder, agent and underwriter and each person, if any, who
controls any holder, agent or underwriter within the meaning of Section 15 or
Section 20 of the Exchange Act; and the obligations of the holders and any
agents or underwriters contemplated by this Section 6 shall be in addition to
any liability which the respective holder, agent or underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his consent, is named in
any registration statement as about to become a director of the Company) and to
each person, if any, who controls the Company within the meaning of Section 15
or Section 20 of the Exchange Act.
7. UNDERWRITTEN OFFERINGS.
(a) SELECTION OF UNDERWRITERS. If any of the Registrable
Securities covered by the Shelf Registration are to be sold pursuant to an
underwritten offering, the managing underwriter or underwriters thereof shall be
designated by the holders of at least a majority in aggregate principal amount
of the Registrable Securities to be included in such offering, provided that
such designated managing underwriter or underwriters is or are reasonably
acceptable to the Company.
(b) PARTICIPATION BY HOLDERS. Each holder of Registrable
Securities hereby agrees with each other such holder that no such holder may
participate in any underwritten offering hereunder unless such holder (i) agrees
to sell such holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
(c) CONSOLIDATED EARNINGS STATEMENTS. In the event of an
underwritten offering, the Company agrees to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after the effective date of the applicable registration statement (as
defined in Rule 158(c) under the Act), a consolidated earnings statement of the
Company complying with Section 11(a) of the Act and the rules
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<PAGE>
and regulations of the Commission thereunder (including, at the option of the
Company, Rule 158 under the Act).
8. RULE 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including, but not limited to, the reports under Section
13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, and shall take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to make Rule 144 available to such holder
for the sale of Registrable Securities without registration under the Securities
Act within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar or
successor rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities in connection with that holder's
sale pursuant to Rule 144, the Company shall deliver to such holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 8 shall be deemed to require the Company
to register any of its securities under the Exchange Act.
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this
Agreement.
(b) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder and that each party may be irreparably harmed by any
such failure, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to
compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement, in any
court of the United States or any State thereof having jurisdiction.
(c) NOTICES. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: If to the
Company, to it at the address of the Company set forth in the Offering
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<PAGE>
Circular, Attention: General Counsel and if to a holder, to the address of such
holder set forth in the security register or other records of the Company, or to
such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
(d) PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto. In
the event that any transferee of any holder of Registrable Securities shall
become a holder of Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without
any further writing or action of any kind, be deemed a party hereto for all
purposes and such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such transferee shall be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement. If the Company shall so request, any such
successor, assign or transferee shall agree in writing to acquire and hold the
Registrable Securities subject to all of the terms hereof.
(e) SURVIVAL. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any holder of Registrable Securities, any director, officer or partner of such
holder, any agent or underwriter or any director, officer or partner thereof, or
any controlling person of any of the foregoing, and shall survive delivery of
and payment for the Registrable Securities pursuant to the Purchase Agreement
and the transfer and registration of Registrable Securities by such holder and
the consummation of an Exchange Offer.
(f) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS THEREOF.
(g) HEADINGS. The descriptive headings of the several Sections
and paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(h) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
writings referred to herein (including the Indenture and the form of Securities)
or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings
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<PAGE>
between the parties with respect to its subject matter. This Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a written instrument duly executed by the Company and the holders of at
least 66-2/3 percent in aggregate principal amount of each series of Registrable
Securities at the time outstanding. Each holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any amendment or waiver
effected pursuant to this Section 9(h), whether or not any notice, writing or
marking indicating such amendment or waiver appears on such Registrable
Securities or is delivered to such holder.
(i) INSPECTION. For so long as this Agreement shall be in
effect, this Agreement and a complete list of the names and addresses of all the
holders of Registrable Securities shall be made available for inspection and
copying on any business day by any holder of Registrable Securities at the
offices of the Company at the address thereof set forth in Section 9(c) above or
at the office of the Trustee under the applicable Indenture.
(j) COUNTERPARTS. This agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.
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<PAGE>
Agreed to and accepted as of the date referred to above.
NEXTLINK COMMUNICATIONS, INC.
By: /s/ R. BRUCE EASTER, JR.
-------------------------------
Name: R. Bruce Easter, Jr.
Title: Vice President
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
TD SECURITIES (USA) INC.
BARCLAYS CAPITAL INC.
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BANCBOSTON ROBERTSON STEPHENS INC.
DEUTSCHE BANK SECURITIES INC.
J.P. MORGAN SECURITIES INC.
PNC CAPITAL MARKETS INC.
By: Goldman, Sachs & Co.
/s/ GOLDMAN, SACHS & CO.
-------------------------------
(Goldman, Sachs & Co.)
<PAGE>
EXHIBIT 23.1
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-4 filed by NEXTLINK
Communications, Inc. (the "Company") of our report dated February 22, 1999,
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
February 10, 2000
<PAGE>
LETTER OF TRANSMITTAL
FOR
OFFER FOR ALL OUTSTANDING 10 1/2% SENIOR NOTES DUE 2009
IN EXCHANGE FOR UP TO $400,000,000 PRINCIPAL AMOUNT OF
10 1/2% SENIOR NOTES DUE 2009
OF
NEXTLINK COMMUNICATIONS, INC.
PURSUANT TO THE PROSPECTUS
DATED , 2000
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 2000, UNLESS EXTENDED OR TERMINATED (THE
"EXPIRATION DATE").
- --------------------------------------------------------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
UNITED STATES TRUST COMPANY
<TABLE>
<S> <C> <C>
BY HAND OR FACSIMILE TRANSMISSIONS BY REGISTERED
OVERNIGHT DELIVERY: (ELIGIBLE INSTITUTIONS ONLY) OR CERTIFIED MAIL:
United States Trust (212) 780-0592 United States Trust
Company of New York TO CONFIRM BY TELEPHONE OR FOR INFORMATION Company of New York
114 West 47th Street CALL: 114 West 47th Street
New York, New York (800) 548-6565 New York, New York
10036 10036
Attention: Patricia Attention: Patricia
Gallagher Gallagher
Reorganization Section Reorganization Section
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL (THE "LETTER OF TRANSMITTAL") TO AN
ADDRESS, OR TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID TENDER OF 10 1/2%
SENIOR NOTES DUE 2009 (THE "OLD NOTES").
The Instructions contained herein should be read carefully before this
Letter of Transmittal is completed and signed.
<PAGE>
This Letter of Transmittal is to be used by registered holders of Old Notes
("Holders") if: (i) certificates representing Old Notes are to be physically
delivered to the Exchange Agent by such Holders; (ii) tender of Old Notes is to
be made by book-entry transfer to the Exchange Agent's account at The Depositary
Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in the Prospectus, dated , 2000 (as the same may be
amended from time to time, the "Prospectus") under the caption "The Exchange
Offer--Procedures for Tendering"] by any financial institution that is a
participant in DTC and whose name appears on a security position listing as the
owner of Old Notes or (iii) delivery of Old Notes is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures," and, in each case,
instructions are not being transmitted through the DTC Automated Tender Program
("ATOP"). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
In order to properly complete this Letter of Transmittal, a Holder must
(i) complete the box entitled "Method of Delivery" by checking one of the three
boxes therein and supplying the appropriate information, (ii) complete the box
entitled "Description of Old Notes," (iii) if such Holder is a Participating
Broker Dealer (as defined below) and wishes to receive additional copies of the
Prospectus for delivery in connection with resales of New Notes, check the
applicable box, (iv) sign this Letter of Transmittal by completing the box
entitled "Please Sign Here", (v) if appropriate, check and complete the boxes
relating to the "Special Issuance Instructions" and "Special Delivery
Instructions," and (vi) complete the Substitute Form W-9. Each Holder should
carefully read the detailed Instructions below prior to completing this Letter
of Transmittal. See "The Exchange Offer--Procedures for Tendering" in the
Prospectus.
Holders of Old Notes that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through ATOP for which
the transaction will be eligible. DTC participants that are accepting the
Exchange Offer should transmit their acceptance to DTC, which will edit and
verify the acceptance and execute a book-entry delivery to the Exchange Agent's
account at DTC. DTC will then send an Agent's Message to the Exchange Agent for
its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of
the Exchange Offer as to execution and delivery of a Letter of Transmittal by
the participant identified in the Agent's Message. DTC participants may also
accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through
ATOP.
If Holders desire to tender Old Notes pursuant to the Exchange Offer and
(i) certificates representing such Old Notes are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Holder's Old Notes and all other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date, such Holders may effect a tender of such Old Notes in accordance with the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2 below.
A Holder having Old Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to accept
the Exchange Offer with respect to the Old Notes so registered.
THE EXCHANGE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OLD NOTES BE
ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING
OR ACCEPTANCE OF THE EXCHANGE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
Your bank or broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Prospectus, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be directed to the
Exchange Agent, whose address and telephone number appear on the front cover of
this Letter of Transmittal. See Instruction 11 below.
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
METHOD OF DELIVERY
------------------------------------------------------------------------------------------------
/ / CHECK HERE IF CERTIFICATES FOR TENDERED OLD NOTES ARE BEING DELIVERED HEREWITH.
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Account Number: Transaction Code Number:
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT PURSUANT TO INSTRUCTION 2 BELOW AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s):
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
If Delivered by Book-Entry Transfer (yes or no):
Account Number: Transaction Code Number:
------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately signed schedule and affix the schedule to this Letter of
Transmittal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
- ------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE AMOUNT PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBERS* REPRESENTED** TENDERED
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
TOTAL PRINCIPAL
AMOUNT OF OLD
NOTES
- ------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer (see below).
** Unless otherwise indicated in the column labeled "Principal Amount Tendered" and subject to the
terms and conditions of the Prospectus, a Holder will be deemed to have tendered the entire
aggregate principal amount represented by the Old Notes indicated in the column labeled "Aggregate
Principal Amount Represented." See Instruction 3.
- ------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
FOR PARTICIPATING BROKER-DEALERS ONLY:
/ / CHECK HERE AND PROVIDE THE INFORMATION REQUESTED BELOW IF YOU ARE A
PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND, DURING THE 30-DAY PERIOD FOLLOWING THE
CONSUMMATION OF THE EXCHANGE OFFER, 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO, AS WELL AS ANY NOTICES FROM THE COMPANY TO SUSPEND AND RESUME USE OF
THE PROSPECTUS. BY TENDERING ITS OLD NOTES AND EXECUTING THIS LETTER OF
TRANSMITTAL, EACH PARTICIPATING BROKER-DEALER AGREES TO USE ITS REASONABLE BEST
EFFORTS TO NOTIFY THE COMPANY OR THE EXCHANGE AGENT WHEN IT HAS SOLD ALL OF ITS
NEW NOTES. (IF NO PARTICIPATING BROKER-DEALERS CHECK THIS BOX, OR IF ALL
PARTICIPATING BROKER-DEALERS WHO HAVE CHECKED THIS BOX SUBSEQUENTLY NOTIFY THE
COMPANY OR THE EXCHANGE AGENT THAT ALL THEIR NEW NOTES HAVE BEEN SOLD, THE
COMPANY WILL NOT BE REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE EXCHANGE OFFER
REGISTRATION STATEMENT OR TO UPDATE THE PROSPECTUS AND WILL NOT PROVIDE ANY
NOTICES TO ANY HOLDERS TO SUSPEND OR RESUME USE OF THE PROSPECTUS.)
Provide the name of the individual who should receive, on behalf of the
Holder, additional copies of the Prospectus, and amendments and supplements
thereto, and any notices to suspend and resume use of the Prospectus:
Name: __________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone No.: _________________________________________________________________
Facsimile No.: _________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
5
<PAGE>
Ladies and Gentlemen:
By execution hereof, the undersigned acknowledges receipt of the Prospectus,
dated , 2000 (as the same may be amended from time to time, the
"Prospectus" and, together with the Letter of Transmittal, the "Exchange
Offer"), of NEXTLINK Communications, Inc., a Delaware corporation (the
"Company"), and this Letter of Transmittal and instructions hereto, which
together constitute the Company's offer to exchange $1,000 principal amount of
10 1/2% Senior Notes due 2009 (the "New Notes") of the Company, upon the terms
and subject to the conditions set forth in the Exchange Offer, for each $1,000
principal amount of outstanding 10 1/2% Senior Notes due 2009 (the "Old Notes")
of the Company.
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Old Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Old Notes tendered herewith, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Old Notes. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent also acts as the
agent of the Company) with respect to such Old Notes with full power of
substitution (such power-of-attorney being deemed to be an irrevocable power
coupled with an interest) to (i) present such Old Notes and all evidences of
transfer and authenticity to, or transfer ownership of, such Old Notes on the
account books maintained by the Book-Entry Transfer Facility to, or upon the
order of, the Company, (ii) present such Old Notes for transfer of ownership on
the books of the Company or the trustee under the indenture (the "Trustee"), and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of and conditions
of the Exchange Offer as described in the Prospectus.
The undersigned represents and warrants that it has full power and authority
to tender, exchange, assign and transfer the Old Notes tendered hereby and to
acquire New Notes issuable upon the exchange of such tendered Old Notes, and
that, when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the tendered Old Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim or
right. The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
the Old Notes tendered hereby or transfer ownership of such Old Notes on the
account books maintained by the book-entry transfer facility.
The Exchange Offer is subject to certain conditions as set forth in the
Prospectus under the caption "The Exchange Offer--Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived by the
Company, in whole or in part, in the reasonable discretion of the Company), as
more particularly set forth in the Prospectus, the Company may not be required
to exchange any of the Old Notes tendered hereby and, in such event, the Old
Notes not exchanged will be returned to the undersigned at the address shown
above.
THE EXCHANGE OFFER IS NOT BEING MADE TO ANY BROKER-DEALER WHO PURCHASED OLD
NOTES DIRECTLY FROM THE COMPANY FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT OR TO ANY PERSON THAT IS AN "AFFILIATE" OF THE COMPANY WITHIN THE
MEANING OF RULE 405 UNDER THE SECURITIES ACT. THE UNDERSIGNED UNDERSTANDS AND
AGREES THAT THE COMPANY RESERVES THE RIGHT NOT TO ACCEPT TENDERED OLD NOTES FROM
ANY TENDERING HOLDER IF THE COMPANY DETERMINE, IN ITS REASONABLE DISCRETION,
THAT SUCH ACCEPTANCE COULD RESULT IN A VIOLATION OF APPLICABLE SECURITIES LAWS.
The undersigned, if the undersigned is a beneficial holder, represents, or,
if the undersigned is a broker, dealer, commercial bank, trust company or other
nominee, represents that it has received representations from the beneficial
owners of the Old Notes (in either case, the "Beneficial Owner")
6
<PAGE>
stating that (i) the New Notes to be acquired in connection with the Exchange
Offer by the Holder and each Beneficial Owner of the Old Notes are being
acquired by the Holder and each such Beneficial Owner in the ordinary course of
business of the Holder and each such Beneficial Owner, (ii) the Holder and each
such Beneficial Owner are not engaged in, do not intend to engage in, and have
no arrangement or understanding with any person to participate in, a
distribution of the New Notes, (iii) the Holder and each Beneficial Owner
acknowledge and agree that any person participating in the Exchange Offer for
the purpose of distributing the New Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes acquired by such person and cannot
rely on the position of the staff of the Commission set forth in the no-action
letters that are discussed in the Prospectus under the caption "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and may only sell the New Notes
acquired by such person pursuant to a registration statement containing the
selling security holder information required by Item 507 of Regulation S-K under
the Securities Act, (iv) if the Holder is a broker-dealer that acquired Old
Notes as a result of market-making or other trading activities, it will deliver
a prospectus in connection with any resale of New Notes acquired in the Exchange
Offer (but by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act) and (v) neither the Holder nor any such Beneficial Owner is
an "affiliate," as defined under Rule 405 of the Securities Act, of the Company
or is a broker-dealer who purchased Old Notes directly from the Company for
resale pursuant to Rule 144A under the Securities Act.
In addition, if the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of New Notes. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
EACH BROKER-DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS LETTER OF
TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO A STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
EXCHANGE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL
SUSPEND THE SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS
AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION
AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE
PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE
NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE.
EACH PARTICIPATING BROKER-DEALER SHOULD CHECK THE BOX HEREIN UNDER THE
CAPTION "FOR PARTICIPATING BROKER-DEALERS ONLY" IN ORDER TO RECEIVE ADDITIONAL
COPIES OF THE PROSPECTUS, AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, FOR USE IN
CONNECTION WITH RESALES OF THE NEW NOTES, AS WELL AS ANY NOTICES FROM THE
COMPANY TO SUSPEND AND RESUME USE OF THE
7
<PAGE>
PROSPECTUS. BY TENDERING ITS OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL,
EACH PARTICIPATING BROKER-DEALER AGREES TO USE ITS REASONABLE BEST EFFORTS TO
NOTIFY THE COMPANY OR THE EXCHANGE AGENT WHEN IT HAS SOLD ALL OF ITS NEW NOTES.
IF NO PARTICIPATING BROKER-DEALERS CHECK SUCH BOX, OR IF ALL PARTICIPATING
BROKER-DEALERS WHO HAVE CHECKED SUCH BOX SUBSEQUENTLY NOTIFY THE COMPANY OR THE
EXCHANGE AGENT THAT ALL THEIR NEW NOTES HAVE BEEN SOLD, THE COMPANY WILL NOT BE
REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE EXCHANGE OFFER REGISTRATION
STATEMENT OR TO UPDATE THE PROSPECTUS AND WILL NOT PROVIDE ANY HOLDERS WITH ANY
NOTICES TO SUSPEND OR RESUME USE OF THE PROSPECTUS.
The undersigned understands that tenders of the Old Notes pursuant to any
one of the procedures described under "The Exchange Offer--Resale of the New
Notes" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company in accordance with the
terms and subject to the conditions of the Exchange Offer. All authority herein
conferred or agreed to be conferred by this Letter of Transmittal and every
obligation of the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors and assigns, executors, administrators and trustees
in bankruptcy of the undersigned and shall survive the death or incapacity of
the undersigned. Tendered Old Notes may be withdrawn at any time prior to the
Expiration Date in accordance with the terms of the Exchange Offer.
The undersigned also understands and acknowledges that the Company reserves
the right in its sole discretion to purchase or make offers for any Old Notes
that remain outstanding subsequent to the Expiration Date in the open market, in
privately negotiated transactions, through subsequent exchange offers or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
The undersigned understands that the delivery and surrender of the Old Notes
is not effective, and the risk of loss of the Old Notes does not pass to the
Exchange Agent, until receipt by the Exchange Agent of this Letter of
Transmittal, or a manually signed facsimile hereof, properly completed and duly
executed, with any required signature guarantees, together with all accompanying
evidences of authority and any other required documents in form satisfactory to
the Company. All questions as to form of all documents and the validity
(including time of receipt) and acceptance of tenders and withdrawals of Old
Notes will be determined by the Company, in its sole discretion, which
determination shall be final and binding.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions," the undersigned hereby requests that any Old Notes representing
principal amounts not tendered or not accepted for exchange be issued in the
name(s) of the undersigned and that New Notes be issued in the name(s) of the
undersigned (or, in the case of Old Notes delivered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility). Similarly, unless
otherwise indicated herein in the box entitled "Special Delivery Instructions,"
the undersigned hereby requests that any Old Notes representing principal
amounts not tendered or not accepted for exchange and certificates for New Notes
be delivered to the undersigned at the address(es) shown above. In the event
that the "Special Issuance Instructions" box or the "Special Delivery
Instructions" box is, or both are, completed, the undersigned hereby requests
that any Old Notes representing principal amounts not tendered or not accepted
for exchange be issued in the name(s) of, certificates for such Old Notes be
delivered to, and certificates for New Notes be issued in the name(s) of, and be
delivered to, the person(s) at the address(es) so indicated, as applicable. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" box or "Special Delivery Instructions" box to
transfer any Old Notes from the name of the registered Holder(s) thereof if the
Company does not accept for exchange any of the principal amount of such Old
Notes so tendered.
8
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL HOLDERS OF OLD NOTES
REGARDLESS OF WHETHER OLD NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Notes
exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if
delivered by a participant in the Book-Entry Transfer Facility, exactly as
such participant's name appears on a security position listing as the owner
of Old Notes, or by person(s) authorized to become Holder(s) by endorsements
and documents transmitted with this Letter of Transmittal. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer
or other person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below under "Capacity" and
submit evidence satisfactory to the Company of such person's authority to so
act. See Instruction 4 below.
If the signature appearing below is not of the record holder(s) of the
Old Notes, then the record holder(s) must sign a valid bond power.
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY
Date: ________________________________________________________________, 2000
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Telephone No.: _______________________________________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND
COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: _________________________________________________________________
Address: ______________________________________________________________
MEDALLION SIGNATURE GUARANTEE (SEE INSTRUCTION 4 BELOW)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
____________________________________________________________________________
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
__________________________________________________________________________
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE)
OF FIRM)
__________________________________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
(PRINTED NAME)
__________________________________________________________________________
(TITLE)
DATED: _____________________________________________________________, 2000
- --------------------------------------------------------------------------------
9
<PAGE>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3, 4, 5 AND 7)
To be completed ONLY if certificates for Old Notes in a principal amount
not tendered or not accepted for exchange are to be issued in the name of,
or certificates for New Notes are to be issued to the order of, someone
other than the person or persons whose signature(s) appear(s) within this
Letter of Transmittal.
<TABLE>
<S> <C> <C>
Issue: / / Old Notes
/ / New Notes
(check as applicable)
</TABLE>
Name: ______________________________________________________________________
(Please Print)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
____________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
Credit Old Notes not exchanged and delivered by book-entry transfer to
the Book-Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
Credit New Notes to the Book-Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if certificates for Old Notes in a principal amount
not accepted for exchange or certificates for New Notes are to be sent to
someone other than the person or persons whose signature(s) appear(s) within
this Letter of Transmittal or to an address different from that shown in the
box entitled "Description of Old Notes" within the Letter of Transmittal.
<TABLE>
<S> <C> <C>
Deliver: / / Old Notes
/ / New Notes
(check as applicable)
</TABLE>
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
- -----------------------------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES OR
BOOK-ENTRY CONFIRMATIONS; WITHDRAWAL OF TENDERS.
To tender Old Notes in the Exchange Offer, physical delivery of certificates
for Old Notes or confirmation of a book-entry transfer into the Exchange Agent's
account with a Book-Entry Transfer Facility of Old Notes tendered
electronically, as well as a properly completed and duly executed copy or
manually signed facsimile of this Letter of Transmittal, or in the case of a
book-entry transfer, an Agent's Message, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date. Tenders of Old Notes in
the Exchange Offer may be made prior to the Expiration Date in the manner
described in the preceding sentence and otherwise in compliance with this Letter
of Transmittal. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL,
CERTIFICATES FOR OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE
AGENT, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE
TRANSMITTED THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE HOLDER TENDERING
OLD NOTES. IF SUCH DELIVERY IS MADE BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO ALTERNATIVE,
CONDITIONAL OR CONTINGENT TENDERS OF OLD NOTES WILL BE ACCEPTED. Except as
otherwise provided below, the delivery will be made when actually received by
the Exchange Agent. THIS LETTER OF TRANSMITTAL, CERTIFICATES FOR THE OLD NOTES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT
TO THE COMPANY, THE TRUSTEE OR DTC.
Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date. In order to be valid, notice of withdrawal of
tendered Old Notes must comply with the requirements set forth in the Prospectus
under the caption "The Exchange Offer--Withdrawal of Tenders."
2. GUARANTEED DELIVERY PROCEDURES.
If Holders desire to tender Old Notes pursuant to the Exchange Offer and
(i) certificates representing such Old Notes are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Holder's Old Notes and all other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date, such Holders may effect a tender of Old Notes in accordance with the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures."
Pursuant to the guaranteed delivery procedures:
(i) such tender must be made by or through an Eligible Institution;
(ii) prior to the Expiration Date, the Exchange Agent must have received
from such Eligible Institution, at one of the addresses set forth on the
cover of this Letter of Transmittal, a properly completed and validly
executed Notice of Guaranteed Delivery (by manually signed facsimile
transmission, mail or hand delivery) in substantially the form provided with
the Prospectus, setting forth the name(s) and address(es) of the registered
Holder(s) and the principal amount of Old Notes being tendered and stating
that the tender is being made thereby and guaranteeing that, within three
Nasdaq National Market ("NNM") trading days from the date of the Notice of
Guaranteed Delivery,
11
<PAGE>
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, or, in the case of a book-entry transfer, an
Agent's Message, together with certificates representing the Old Notes (or
confirmation of book-entry transfer of such Old Notes into the Exchange
Agent's account at a Book-Entry Transfer Facility), and any other documents
required by this Letter of Transmittal and the instructions thereto, will be
deposited by such Eligible Institution with the Exchange Agent; and
(iii) the Exchange Agent must have received this Letter of Transmittal
(or a manually signed facsimile thereof), properly completed and validly
executed with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, together with certificates for all
Old Notes in proper form for transfer (or a Book-Entry Confirmation with
respect to all tendered Old Notes), and any other required documents within
three NNM trading days after the date of such Notice of Guaranteed Delivery.
3. PARTIAL TENDERS.
If less than the entire principal amount of any Old Notes evidenced by a
submitted certificate is tendered, the tendering Holder must fill in the
principal amount tendered in the last column of the box entitled "Description of
Old Notes" herein. The entire principal amount represented by the certificates
for all Old Notes delivered to the Exchange Agent will be deemed to have been
tendered, unless otherwise indicated. The entire principal amount of all Old
Notes not tendered or not accepted for exchange will be sent (or, if tendered by
book-entry transfer, returned by credit to the account at the Book-Entry
Transfer Facility designated herein) to the Holder unless otherwise provided in
the "Special Issuance Instructions" or "Special Delivery Instructions" boxes of
this Letter of Transmittal.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the Holder(s) of the Old Notes
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever. If this Letter of Transmittal is signed by a participant in one of
the Book-Entry Transfer Facilities whose name is shown as the owner of the Old
Notes tendered hereby, the signature must correspond with the name shown on the
security position listing as the owner of the Old Notes.
If any of the Old Notes tendered hereby are registered in the name of two or
more Holders, all such Holders must sign this Letter of Transmittal. If any
tendered Old Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal and any necessary accompanying documents as there are
different names in which certificates are held.
If this Letter of Transmittal or any certificates for Old Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company of their authority so to act must be
submitted with this Letter of Transmittal.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A PERSON OR ENTITY WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID BOND POWER,
WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED MEDALLION SIGNATURE PROGRAM (A "MEDALLION SIGNATURE GUARANTOR").
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered Holder(s) of the Old Notes tendered herewith (or by a
participant in one of the Book-Entry Transfer
12
<PAGE>
Facilities whose name appears on a security position listing as the owner of Old
Notes) and certificates for New Notes or for any Old Notes for principal amounts
not tendered or not accepted for exchange are to be issued, directly to such
Holder(s) or, if tendered by a participant in one of the Book-Entry Transfer
Facilities, any Old Notes for principal amounts not tendered or not accepted for
exchange are to be credited to such participant's account at such Book-Entry
Transfer Facility and neither the "Special Issuance Instructions" box nor the
"Special Delivery Instructions" box of this Letter of Transmittal has been
completed or (ii) such Old Notes are tendered for the account of an Eligible
Institution. IN ALL OTHER CASES, ALL SIGNATURES ON LETTERS OF TRANSMITTAL
ACCOMPANYING OLD NOTES MUST BE GUARANTEED BY A MEDALLION SIGNATURE GUARANTOR. In
all such other cases (including if this Letter of Transmittal is not signed by
the Holder), the Holder must either properly endorse the certificates for Old
Notes tendered or transmit a separate properly completed bond power with this
Letter of Transmittal (in either case, executed exactly as the name(s) of the
registered Holder(s) appear(s) on such Old Notes, and, with respect to a
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Old Notes, exactly as the name(s) of the
participant(s) appear(s) on such security position listing), with the signature
on the endorsement or bond power guaranteed by a Medallion Signature Guarantor,
unless such certificates or bond powers are executed by an Eligible Institution.
Endorsements on certificates for Old Notes and signatures on bond powers
provided in accordance with this Instruction 4 by registered Holders not
executing this Letter of Transmittal must be guaranteed by a Medallion Signature
Guarantor.
5. SPECIAL ISSUANCE AND SPECIAL DELIVERY INSTRUCTIONS.
Tendering Holders should indicate in the applicable box or boxes the name
and address to which Old Notes for principal amounts not tendered or not
accepted for exchange or certificates for New Notes, if applicable, are to be
sent or issued, if different from the name and address of the Holder signing
this Letter of Transmittal. In the case of payment to a different name, the
taxpayer identification or social security number of the person named must also
be indicated. If no instructions are given, Old Notes not tendered or not
accepted for exchange will be returned, and certificates for New Notes will be
sent, to the Holder of the Old Notes tendered.
6. TAXPAYER IDENTIFICATION NUMBER.
Each tendering Holder is required to provide the Exchange Agent with the
Holder's social security or Federal employer identification number, on
Substitute Form W-9, which is provided under "Important Tax Information" below,
or alternatively, to establish another basis for exemption from backup
withholding. A Holder must cross out item (2) in the Certification box in
Part III on Substitute Form W-9 if such Holder is subject to backup withholding.
Failure to provide the information on the form may subject such Holder to 31%
Federal backup withholding tax on any payment made to the Holder with respect to
the Exchange Offer. The box in Part I of the form should be checked if the
tendering or consenting Holder has not been issued a Taxpayer Identification
Number ("TIN") and has either applied for a TIN or intends to apply for a TIN in
the near future. If the box in Part I is checked the Holder should also sign the
attached Certification of Awaiting Taxpayer Identification Number. If the
Exchange Agent is not provided with a TIN within 60 days thereafter, the
Exchange Agent will withhold 31% on all such payments of the New Notes until a
TIN is provided to the Exchange Agent.
7. TRANSFER TAXES.
The Company will pay all transfer taxes applicable to the exchange and
transfer of Old Notes pursuant to the Exchange Offer, except if (i) deliveries
of certificates for Old Notes for principal amounts not tendered or not accepted
for exchange are registered or issued in the name of any person other than the
Holder of Old Notes tendered thereby, (ii) tendered certificates are registered
in the name of any person
13
<PAGE>
other than the person signing this Letter of Transmittal or (iii) a transfer tax
is imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering Holder.
8. IRREGULARITIES.
All questions as to the form of all documents and the validity (including
time of receipt) and acceptance of all tenders and withdrawals of Old Notes will
be determined by the Company, in its sole discretion, which determination shall
be final and binding. ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF OLD
NOTES WILL NOT BE CONSIDERED VALID. The Company reserves the absolute right to
reject any and all tenders of Old Notes that are not in proper form or the
acceptance of which, in the Company's opinion, would be unlawful. The Company
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular Old Notes. The Company's interpretations of the terms
and conditions of the Exchange Offer (including the instructions in this Letter
of Transmittal) will be final and binding. Any defect or irregularity in
connection with tenders of Old Notes must be cured within such time as the
Company determines, unless waived by the Company. Tenders of Old Notes shall not
be deemed to have been made until all defects or irregularities have been waived
by the Company or cured. A defective tender (which defect is not waived by the
Company or cured by the Holder) will not constitute a valid tender of Old Notes
and will not entitle the Holder to New Notes. None of the Company, the Trustee,
the Exchange Agent or any other person will be under any duty to give notice of
any defect or irregularity in any tender or withdrawal of any Old Notes, or
incur any liability to Holders for failure to give any such notice.
9. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable discretion, to amend or
waive any of the conditions to the Exchange Offer.
10. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR OLD NOTES.
Any Holder whose certificates for Old Notes have been mutilated, lost,
stolen or destroyed should write to or telephone the Trustee at the address or
telephone number set forth on the cover of this Letter of Transmittal for the
Exchange Agent.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering Old Notes and requests for
assistance or additional copies of the Prospectus, this Letter of Transmittal,
the Notice of Guaranteed Delivery or other documents may be directed to the
Exchange Agent, whose address and telephone number appear above.
14
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder who tenders Old Notes prior to
receipt of the New Notes is required to provide the Exchange Agent with such
Holder's correct TIN on the Substitute Form W-9 below or otherwise establish a
basis for exemption from backup withholding. If such Holder is an individual,
the TIN is his or her social security number. If the Exchange Agent is not
provided with the correct TIN, a $50 penalty may be imposed by the Internal
Revenue Service ("IRS") and payments, including any New Notes, made to such
Holder with respect to Old Notes exchanged pursuant to the Exchange Offer may be
subject to backup withholding.
Certain Holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on the
Substitute Form W-9. A foreign person may qualify as an exempt recipient by
submitting to the Exchange Agent a properly completed IRS Form W-8, signed under
penalties of perjury, attesting to that Holder's exempt status. A Form W-8 can
be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions. Holders are urged to consult their own tax advisors to
determine whether they are exempt.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any payments made to the Holder or other payee. Backup withholding is not
an additional Federal income tax. Rather, the Federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments, including any New Notes, made
with respect to Old Notes exchanged pursuant to the Exchange Offer, the Holder
is required to provide the Exchange Agent with (i) the Holder's correct TIN by
completing the form below, certifying that the TIN provided on the Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) such
Holder is exempt from backup withholding, (B) the Holder has not been notified
by the IRS that the Holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the IRS has notified the
Holder that the Holder is no longer subject to backup withholding and (ii) if
applicable, an adequate basis for exemption.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder. If
the Old Notes are held in more than one name or are held not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
15
<PAGE>
SUBSTITUTE FORM W-9
REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION
PAYOR'S NAME: NEXTLINK COMMUNICATIONS, INC.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
PAYEE INFORMATION
(Please print or type)
Individual or business name (if joint account, list first and circle the name of person or entity whose
number you furnish in Part I below):
- -------------------------------------------------------------------------------------------------------
Check appropriate box: / / Individual/Sole proprietor / / Corporation / / Partnership / / Other
- -------------------------------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.):
- -------------------------------------------------------------------------------------------------------
City, state, and ZIP code:
- -------------------------------------------------------------------------------------------------------
PART I TAXPAYER IDENTIFICATION NUMBER ("TIN") PART II PAYEES EXEMPT FROM
Enter your TIN below. For individuals, this is your social security BACKUP WITHHOLDING
number. For other entities, it is your employer identification number. Check box (See page 2 of the
Refer to the chart on page 1 of the Guidelines for Certification of Guidelines for further
Taxpayer Identification Number on Substitute Form W-9 (the clarification. Even if you are
"Guidelines") for further clarification. If you do not have a TIN, see exempt from backup withholding,
instructions on how to obtain a TIN on page 2 of the Guidelines, check you should still complete and
the appropriate box below indicating that you have applied for a TIN sign the certification below):
and, in addition to the Part III Certification, sign the attached
Certification of Awaiting Taxpayer Identification Number.
Social security number: / / EXEMPT
/ / / / / / - / / / / - / / / / / / / /
/ / Applied For
Employer identification number:
/ / / / - / / / / / / / / / / / / / /
- -------------------------------
PART III CERTIFICATION
Certification Instructions: You must cross out item 2 below if you have been notified by the Internal
Revenue Service (the "IRS") that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return (See page 2 of the Guidelines for further
clarification).
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have
not been notified by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
SIGNATURE ---------------------------------------- DATE ------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU CHECKED THE BOX "APPLIED
FOR" IN PART I OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a TIN has not been issued to
me, and either (a) I have mailed or delivered an application to receive a TIN
to the appropriate IRS Service Center or Social Security Administration
Office, or (b) I intend to mail or deliver an application in the near future.
I understand that I must provide a TIN to the payor within 60 days of
submitting this Substitute Form W-9 and that if I do not provide a TIN to the
payor within 60 days, the payor is required to withhold 31% of all reportable
payments thereafter to me until I furnish the payor with a TIN.
-------------------------------------------------------------
SIGNATURE
-----------------------------------------------------------------
DATE
- --------------------------------------------------------------------------------
16
<PAGE>
LETTER OF TRANSMITTAL
FOR
OFFER FOR ALL OUTSTANDING 12 1/8% SENIOR DISCOUNT NOTES DUE 2009
IN EXCHANGE FOR UP TO $455,000,000 PRINCIPAL AMOUNT OF
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
OF
NEXTLINK COMMUNICATIONS, INC.
PURSUANT TO THE PROSPECTUS
DATED , 2000
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 2000, UNLESS EXTENDED OR TERMINATED (THE
"EXPIRATION DATE").
- --------------------------------------------------------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
UNITED STATES TRUST COMPANY OF TEXAS
<TABLE>
<S> <C> <C>
BY HAND OR FACSIMILE TRANSMISSIONS BY REGISTERED
OVERNIGHT DELIVERY: (ELIGIBLE INSTITUTIONS ONLY) OR CERTIFIED MAIL:
United States Trust (212) 780-0592 United States Trust
Company of Texas TO CONFIRM BY TELEPHONE OR FOR INFORMATION Company of Texas
c/o United States Trust CALL: c/o United States Trust
Company of New York (800) 548-6565 Company of New York
114 West 47th Street 114 West 47th Street
New York, New York New York, New York
10036 10036
Attention: Patricia Attention: Patricia
Gallagher Gallagher
Reorganization Section Reorganization Section
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL (THE "LETTER OF TRANSMITTAL") TO AN
ADDRESS, OR TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID TENDER OF 12 1/8%
SENIOR DISCOUNT NOTES DUE 2009 (THE "OLD NOTES").
The Instructions contained herein should be read carefully before this
Letter of Transmittal is completed and signed.
<PAGE>
This Letter of Transmittal is to be used by registered holders of Old Notes
("Holders") if: (i) certificates representing Old Notes are to be physically
delivered to the Exchange Agent by such Holders; (ii) tender of Old Notes is to
be made by book-entry transfer to the Exchange Agent's account at The Depositary
Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in the Prospectus, dated , 2000 (as the same may be
amended from time to time, the "Prospectus") under the caption "The Exchange
Offer--Procedures for Tendering"] by any financial institution that is a
participant in DTC and whose name appears on a security position listing as the
owner of Old Notes or (iii) delivery of Old Notes is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures," and, in each case,
instructions are not being transmitted through the DTC Automated Tender Program
("ATOP"). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
In order to properly complete this Letter of Transmittal, a Holder must
(i) complete the box entitled "Method of Delivery" by checking one of the three
boxes therein and supplying the appropriate information, (ii) complete the box
entitled "Description of Old Notes," (iii) if such Holder is a Participating
Broker Dealer (as defined below) and wishes to receive additional copies of the
Prospectus for delivery in connection with resales of New Notes, check the
applicable box, (iv) sign this Letter of Transmittal by completing the box
entitled "Please Sign Here", (v) if appropriate, check and complete the boxes
relating to the "Special Issuance Instructions" and "Special Delivery
Instructions," and (vi) complete the Substitute Form W-9. Each Holder should
carefully read the detailed Instructions below prior to completing this Letter
of Transmittal. See "The Exchange Offer--Procedures for Tendering" in the
Prospectus.
Holders of Old Notes that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through ATOP for which
the transaction will be eligible. DTC participants that are accepting the
Exchange Offer should transmit their acceptance to DTC, which will edit and
verify the acceptance and execute a book-entry delivery to the Exchange Agent's
account at DTC. DTC will then send an Agent's Message to the Exchange Agent for
its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of
the Exchange Offer as to execution and delivery of a Letter of Transmittal by
the participant identified in the Agent's Message. DTC participants may also
accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through
ATOP.
If Holders desire to tender Old Notes pursuant to the Exchange Offer and
(i) certificates representing such Old Notes are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Holder's Old Notes and all other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date, such Holders may effect a tender of such Old Notes in accordance with the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2 below.
A Holder having Old Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to accept
the Exchange Offer with respect to the Old Notes so registered.
THE EXCHANGE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OLD NOTES BE
ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING
OR ACCEPTANCE OF THE EXCHANGE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
Your bank or broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Prospectus, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be directed to the
Exchange Agent, whose address and telephone number appear on the front cover of
this Letter of Transmittal. See Instruction 11 below.
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
METHOD OF DELIVERY
------------------------------------------------------------------------------------------------
/ / CHECK HERE IF CERTIFICATES FOR TENDERED OLD NOTES ARE BEING DELIVERED HEREWITH.
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Account Number: Transaction Code Number:
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT PURSUANT TO INSTRUCTION 2 BELOW AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s):
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
If Delivered by Book-Entry Transfer (yes or no):
Account Number: Transaction Code Number:
------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately signed schedule and affix the schedule to this Letter of
Transmittal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
- ------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE AMOUNT PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBERS* REPRESENTED** TENDERED
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
TOTAL PRINCIPAL
AMOUNT OF OLD
NOTES
- ------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer (see below).
** Unless otherwise indicated in the column labeled "Principal Amount Tendered" and subject to the
terms and conditions of the Prospectus, a Holder will be deemed to have tendered the entire
aggregate principal amount represented by the Old Notes indicated in the column labeled "Aggregate
Principal Amount Represented." See Instruction 3.
--------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
FOR PARTICIPATING BROKER-DEALERS ONLY:
/ / CHECK HERE AND PROVIDE THE INFORMATION REQUESTED BELOW IF YOU ARE A
PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND, DURING THE 30-DAY PERIOD FOLLOWING THE
CONSUMMATION OF THE EXCHANGE OFFER, 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO, AS WELL AS ANY NOTICES FROM THE COMPANY TO SUSPEND AND RESUME USE OF
THE PROSPECTUS. BY TENDERING ITS OLD NOTES AND EXECUTING THIS LETTER OF
TRANSMITTAL, EACH PARTICIPATING BROKER-DEALER AGREES TO USE ITS REASONABLE BEST
EFFORTS TO NOTIFY THE COMPANY OR THE EXCHANGE AGENT WHEN IT HAS SOLD ALL OF ITS
NEW NOTES. (IF NO PARTICIPATING BROKER-DEALERS CHECK THIS BOX, OR IF ALL
PARTICIPATING BROKER-DEALERS WHO HAVE CHECKED THIS BOX SUBSEQUENTLY NOTIFY THE
COMPANY OR THE EXCHANGE AGENT THAT ALL THEIR NEW NOTES HAVE BEEN SOLD, THE
COMPANY WILL NOT BE REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE EXCHANGE OFFER
REGISTRATION STATEMENT OR TO UPDATE THE PROSPECTUS AND WILL NOT PROVIDE ANY
NOTICES TO ANY HOLDERS TO SUSPEND OR RESUME USE OF THE PROSPECTUS.)
Provide the name of the individual who should receive, on behalf of the
Holder, additional copies of the Prospectus, and amendments and supplements
thereto, and any notices to suspend and resume use of the Prospectus:
Name: __________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone No.: _________________________________________________________________
Facsimile No.: _________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
5
<PAGE>
Ladies and Gentlemen:
By execution hereof, the undersigned acknowledges receipt of the Prospectus,
dated , 2000 (as the same may be amended from time to time, the
"Prospectus" and, together with the Letter of Transmittal, the "Exchange
Offer"), of NEXTLINK Communications, Inc., a Delaware corporation (the
"Company"), and this Letter of Transmittal and instructions hereto, which
together constitute the Company's offer to exchange $1,000 principal amount of
12 1/8% Senior Discount Notes due 2009 (the "New Notes") of the Company, upon
the terms and subject to the conditions set forth in the Exchange Offer, for
each $1,000 principal amount of outstanding 12 1/8% Senior Discount Notes due
2009 (the "Old Notes") of the Company.
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Old Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Old Notes tendered herewith, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Old Notes. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent also acts as the
agent of the Company) with respect to such Old Notes with full power of
substitution (such power-of-attorney being deemed to be an irrevocable power
coupled with an interest) to (i) present such Old Notes and all evidences of
transfer and authenticity to, or transfer ownership of, such Old Notes on the
account books maintained by the Book-Entry Transfer Facility to, or upon the
order of, the Company, (ii) present such Old Notes for transfer of ownership on
the books of the Company or the trustee under the indenture (the "Trustee"), and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of and conditions
of the Exchange Offer as described in the Prospectus.
The undersigned represents and warrants that it has full power and authority
to tender, exchange, assign and transfer the Old Notes tendered hereby and to
acquire New Notes issuable upon the exchange of such tendered Old Notes, and
that, when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the tendered Old Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim or
right. The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
the Old Notes tendered hereby or transfer ownership of such Old Notes on the
account books maintained by the book-entry transfer facility.
The Exchange Offer is subject to certain conditions as set forth in the
Prospectus under the caption "The Exchange Offer--Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived by the
Company, in whole or in part, in the reasonable discretion of the Company), as
more particularly set forth in the Prospectus, the Company may not be required
to exchange any of the Old Notes tendered hereby and, in such event, the Old
Notes not exchanged will be returned to the undersigned at the address shown
above.
THE EXCHANGE OFFER IS NOT BEING MADE TO ANY BROKER-DEALER WHO PURCHASED OLD
NOTES DIRECTLY FROM THE COMPANY FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT OR TO ANY PERSON THAT IS AN "AFFILIATE" OF THE COMPANY WITHIN THE
MEANING OF RULE 405 UNDER THE SECURITIES ACT. THE UNDERSIGNED UNDERSTANDS AND
AGREES THAT THE COMPANY RESERVES THE RIGHT NOT TO ACCEPT TENDERED OLD NOTES FROM
ANY TENDERING HOLDER IF THE COMPANY DETERMINE, IN ITS REASONABLE DISCRETION,
THAT SUCH ACCEPTANCE COULD RESULT IN A VIOLATION OF APPLICABLE SECURITIES LAWS.
The undersigned, if the undersigned is a beneficial holder, represents, or,
if the undersigned is a broker, dealer, commercial bank, trust company or other
nominee, represents that it has received
6
<PAGE>
representations from the beneficial owners of the Old Notes (in either case, the
"Beneficial Owner") stating that (i) the New Notes to be acquired in connection
with the Exchange Offer by the Holder and each Beneficial Owner of the Old Notes
are being acquired by the Holder and each such Beneficial Owner in the ordinary
course of business of the Holder and each such Beneficial Owner, (ii) the Holder
and each such Beneficial Owner are not engaged in, do not intend to engage in,
and have no arrangement or understanding with any person to participate in, a
distribution of the New Notes, (iii) the Holder and each Beneficial Owner
acknowledge and agree that any person participating in the Exchange Offer for
the purpose of distributing the New Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes acquired by such person and cannot
rely on the position of the staff of the Commission set forth in the no-action
letters that are discussed in the Prospectus under the caption "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and may only sell the New Notes
acquired by such person pursuant to a registration statement containing the
selling security holder information required by Item 507 of Regulation S-K under
the Securities Act, (iv) if the Holder is a broker-dealer that acquired Old
Notes as a result of market-making or other trading activities, it will deliver
a prospectus in connection with any resale of New Notes acquired in the Exchange
Offer (but by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act) and (v) neither the Holder nor any such Beneficial Owner is
an "affiliate," as defined under Rule 405 of the Securities Act, of the Company
or is a broker-dealer who purchased Old Notes directly from the Company for
resale pursuant to Rule 144A under the Securities Act.
In addition, if the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of New Notes. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
EACH BROKER-DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS LETTER OF
TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO A STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
EXCHANGE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL
SUSPEND THE SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS
AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION
AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE
PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE
NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE.
EACH PARTICIPATING BROKER-DEALER SHOULD CHECK THE BOX HEREIN UNDER THE
CAPTION "FOR PARTICIPATING BROKER-DEALERS ONLY" IN ORDER TO RECEIVE ADDITIONAL
COPIES OF THE PROSPECTUS, AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, FOR USE IN
CONNECTION WITH RESALES OF THE NEW NOTES, AS WELL AS
7
<PAGE>
ANY NOTICES FROM THE COMPANY TO SUSPEND AND RESUME USE OF THE PROSPECTUS. BY
TENDERING ITS OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, EACH
PARTICIPATING BROKER-DEALER AGREES TO USE ITS REASONABLE BEST EFFORTS TO NOTIFY
THE COMPANY OR THE EXCHANGE AGENT WHEN IT HAS SOLD ALL OF ITS NEW NOTES. IF NO
PARTICIPATING BROKER-DEALERS CHECK SUCH BOX, OR IF ALL PARTICIPATING
BROKER-DEALERS WHO HAVE CHECKED SUCH BOX SUBSEQUENTLY NOTIFY THE COMPANY OR THE
EXCHANGE AGENT THAT ALL THEIR NEW NOTES HAVE BEEN SOLD, THE COMPANY WILL NOT BE
REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE EXCHANGE OFFER REGISTRATION
STATEMENT OR TO UPDATE THE PROSPECTUS AND WILL NOT PROVIDE ANY HOLDERS WITH ANY
NOTICES TO SUSPEND OR RESUME USE OF THE PROSPECTUS.
The undersigned understands that tenders of the Old Notes pursuant to any
one of the procedures described under "The Exchange Offer--Resale of the New
Notes" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company in accordance with the
terms and subject to the conditions of the Exchange Offer. All authority herein
conferred or agreed to be conferred by this Letter of Transmittal and every
obligation of the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors and assigns, executors, administrators and trustees
in bankruptcy of the undersigned and shall survive the death or incapacity of
the undersigned. Tendered Old Notes may be withdrawn at any time prior to the
Expiration Date in accordance with the terms of the Exchange Offer.
The undersigned also understands and acknowledges that the Company reserves
the right in its sole discretion to purchase or make offers for any Old Notes
that remain outstanding subsequent to the Expiration Date in the open market, in
privately negotiated transactions, through subsequent exchange offers or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
The undersigned understands that the delivery and surrender of the Old Notes
is not effective, and the risk of loss of the Old Notes does not pass to the
Exchange Agent, until receipt by the Exchange Agent of this Letter of
Transmittal, or a manually signed facsimile hereof, properly completed and duly
executed, with any required signature guarantees, together with all accompanying
evidences of authority and any other required documents in form satisfactory to
the Company. All questions as to form of all documents and the validity
(including time of receipt) and acceptance of tenders and withdrawals of Old
Notes will be determined by the Company, in its sole discretion, which
determination shall be final and binding.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions," the undersigned hereby requests that any Old Notes representing
principal amounts not tendered or not accepted for exchange be issued in the
name(s) of the undersigned and that New Notes be issued in the name(s) of the
undersigned (or, in the case of Old Notes delivered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility). Similarly, unless
otherwise indicated herein in the box entitled "Special Delivery Instructions,"
the undersigned hereby requests that any Old Notes representing principal
amounts not tendered or not accepted for exchange and certificates for New Notes
be delivered to the undersigned at the address(es) shown above. In the event
that the "Special Issuance Instructions" box or the "Special Delivery
Instructions" box is, or both are, completed, the undersigned hereby requests
that any Old Notes representing principal amounts not tendered or not accepted
for exchange be issued in the name(s) of, certificates for such Old Notes be
delivered to, and certificates for New Notes be issued in the name(s) of, and be
delivered to, the person(s) at the address(es) so indicated, as applicable. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" box or "Special Delivery Instructions" box to
transfer any Old Notes from the name of the registered Holder(s) thereof if the
Company does not accept for exchange any of the principal amount of such Old
Notes so tendered.
8
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL HOLDERS OF OLD NOTES
REGARDLESS OF WHETHER OLD NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Notes
exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if
delivered by a participant in the Book-Entry Transfer Facility, exactly as
such participant's name appears on a security position listing as the owner
of Old Notes, or by person(s) authorized to become Holder(s) by endorsements
and documents transmitted with this Letter of Transmittal. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer
or other person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below under "Capacity" and
submit evidence satisfactory to the Company of such person's authority to so
act. See Instruction 4 below.
If the signature appearing below is not of the record holder(s) of the
Old Notes, then the record holder(s) must sign a valid bond power.
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY
Date: ________________________________________________________________, 2000
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Telephone No.: ( )__________________________________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND
WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name: __________________________________________________________________
Address: _______________________________________________________________
MEDALLION SIGNATURE GUARANTEE (SEE INSTRUCTION 4 BELOW)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
____________________________________________________________________________
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
__________________________________________________________________________
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE)
OF FIRM)
__________________________________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
(PRINTED NAME)
__________________________________________________________________________
(TITLE)
DATED: _____________________________________________________________, 2000
--------------------------------------------------------------------------
9
<PAGE>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3, 4, 5 AND 7)
To be completed ONLY if certificates for Old Notes in a principal amount
not tendered or not accepted for exchange are to be issued in the name of,
or certificates for New Notes are to be issued to the order of, someone
other than the person or persons whose signature(s) appear(s) within this
Transmittal.
<TABLE>
<S> <C> <C>
Issue: / / Old Notes
/ / New Notes
(check as applicable)
</TABLE>
Name: ______________________________________________________________________
(Please Print)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
____________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
Credit Old Notes not exchanged and delivered by book-entry transfer to
the Book-Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
Credit New Notes to the Book-Entry Transfer Facility account set below:
____________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if certificates for Old Notes in a principal amount
not accepted for exchange or certificates for New Notes are to be sent to
someone other than the person or persons whose signature(s) appear(s) within
this Letter of Transmittal or to an address different from that shown in the
box entitled "Description of Old Notes" within the Letter of Transmittal.
<TABLE>
<S> <C> <C>
Deliver: / / Old Notes
/ / New Notes
(check as applicable)
</TABLE>
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
- -----------------------------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES OR
BOOK-ENTRY CONFIRMATIONS; WITHDRAWAL OF TENDERS.
To tender Old Notes in the Exchange Offer, physical delivery of certificates
for Old Notes or confirmation of a book-entry transfer into the Exchange Agent's
account with a Book-Entry Transfer Facility of Old Notes tendered
electronically, as well as a properly completed and duly executed copy or
manually signed facsimile of this Letter of Transmittal, or in the case of a
book-entry transfer, an Agent's Message, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date. Tenders of Old Notes in
the Exchange Offer may be made prior to the Expiration Date in the manner
described in the preceding sentence and otherwise in compliance with this Letter
of Transmittal. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL,
CERTIFICATES FOR OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE
AGENT, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE
TRANSMITTED THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE HOLDER TENDERING
OLD NOTES. IF SUCH DELIVERY IS MADE BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO ALTERNATIVE,
CONDITIONAL OR CONTINGENT TENDERS OF OLD NOTES WILL BE ACCEPTED. Except as
otherwise provided below, the delivery will be made when actually received by
the Exchange Agent. THIS LETTER OF TRANSMITTAL, CERTIFICATES FOR THE OLD NOTES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT
TO THE COMPANY, THE TRUSTEE OR DTC.
Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date. In order to be valid, notice of withdrawal of
tendered Old Notes must comply with the requirements set forth in the Prospectus
under the caption "The Exchange Offer--Withdrawal of Tenders."
2. GUARANTEED DELIVERY PROCEDURES.
If Holders desire to tender Old Notes pursuant to the Exchange Offer and
(i) certificates representing such Old Notes are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Holder's Old Notes and all other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date, such Holders may effect a tender of Old Notes in accordance with the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures."
Pursuant to the guaranteed delivery procedures:
(i) such tender must be made by or through an Eligible Institution;
(ii) prior to the Expiration Date, the Exchange Agent must have received
from such Eligible Institution, at one of the addresses set forth on the
cover of this Letter of Transmittal, a properly completed and validly
executed Notice of Guaranteed Delivery (by manually signed facsimile
transmission, mail or hand delivery) in substantially the form provided with
the Prospectus, setting forth the name(s) and address(es) of the registered
Holder(s) and the principal amount of Old Notes being tendered and stating
that the tender is being made thereby and guaranteeing that, within three
Nasdaq National Market ("NNM") trading days from the date of the Notice of
Guaranteed Delivery, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly
11
<PAGE>
executed, or, in the case of a book-entry transfer, an Agent's Message,
together with certificates representing the Old Notes (or confirmation of
book-entry transfer of such Old Notes into the Exchange Agent's account at a
Book-Entry Transfer Facility), and any other documents required by this
Letter of Transmittal and the instructions thereto, will be deposited by
such Eligible Institution with the Exchange Agent; and
(iii) the Exchange Agent must have received this Letter of Transmittal
(or a manually signed facsimile thereof), properly completed and validly
executed with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, together with certificates for all
Old Notes in proper form for transfer (or a Book-Entry Confirmation with
respect to all tendered Old Notes), and any other required documents within
three NNM trading days after the date of such Notice of Guaranteed Delivery.
3. PARTIAL TENDERS.
If less than the entire principal amount of any Old Notes evidenced by a
submitted certificate is tendered, the tendering Holder must fill in the
principal amount tendered in the last column of the box entitled "Description of
Old Notes" herein. The entire principal amount represented by the certificates
for all Old Notes delivered to the Exchange Agent will be deemed to have been
tendered, unless otherwise indicated. The entire principal amount of all Old
Notes not tendered or not accepted for exchange will be sent (or, if tendered by
book-entry transfer, returned by credit to the account at the Book-Entry
Transfer Facility designated herein) to the Holder unless otherwise provided in
the "Special Issuance Instructions" or "Special Delivery Instructions" boxes of
this Letter of Transmittal.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the Holder(s) of the Old Notes
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever. If this Letter of Transmittal is signed by a participant in one of
the Book-Entry Transfer Facilities whose name is shown as the owner of the Old
Notes tendered hereby, the signature must correspond with the name shown on the
security position listing as the owner of the Old Notes.
If any of the Old Notes tendered hereby are registered in the name of two or
more Holders, all such Holders must sign this Letter of Transmittal. If any
tendered Old Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal and any necessary accompanying documents as there are
different names in which certificates are held.
If this Letter of Transmittal or any certificates for Old Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company of their authority so to act must be
submitted with this Letter of Transmittal.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A PERSON OR ENTITY WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID BOND POWER,
WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED MEDALLION SIGNATURE PROGRAM (A "MEDALLION SIGNATURE GUARANTOR").
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered Holder(s) of the Old Notes tendered herewith (or by a
participant in one of the Book-Entry Transfer Facilities whose name appears on a
security position listing as the owner of Old Notes) and certificates for New
Notes or for any Old Notes for principal amounts not tendered or not accepted
for exchange are to be
12
<PAGE>
issued, directly to such Holder(s) or, if tendered by a participant in one of
the Book-Entry Transfer Facilities, any Old Notes for principal amounts not
tendered or not accepted for exchange are to be credited to such participant's
account at such Book-Entry Transfer Facility and neither the "Special Issuance
Instructions" box nor the "Special Delivery Instructions" box of this Letter of
Transmittal has been completed or (ii) such Old Notes are tendered for the
account of an Eligible Institution. IN ALL OTHER CASES, ALL SIGNATURES ON
LETTERS OF TRANSMITTAL ACCOMPANYING OLD NOTES MUST BE GUARANTEED BY A MEDALLION
SIGNATURE GUARANTOR. In all such other cases (including if this Letter of
Transmittal is not signed by the Holder), the Holder must either properly
endorse the certificates for Old Notes tendered or transmit a separate properly
completed bond power with this Letter of Transmittal (in either case, executed
exactly as the name(s) of the registered Holder(s) appear(s) on such Old Notes,
and, with respect to a participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Old Notes, exactly as the
name(s) of the participant(s) appear(s) on such security position listing), with
the signature on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor, unless such certificates or bond powers are executed by an
Eligible Institution.
Endorsements on certificates for Old Notes and signatures on bond powers
provided in accordance with this Instruction 4 by registered Holders not
executing this Letter of Transmittal must be guaranteed by a Medallion Signature
Guarantor.
5. SPECIAL ISSUANCE AND SPECIAL DELIVERY INSTRUCTIONS.
Tendering Holders should indicate in the applicable box or boxes the name
and address to which Old Notes for principal amounts not tendered or not
accepted for exchange or certificates for New Notes, if applicable, are to be
sent or issued, if different from the name and address of the Holder signing
this Letter of Transmittal. In the case of payment to a different name, the
taxpayer identification or social security number of the person named must also
be indicated. If no instructions are given, Old Notes not tendered or not
accepted for exchange will be returned, and certificates for New Notes will be
sent, to the Holder of the Old Notes tendered.
6. TAXPAYER IDENTIFICATION NUMBER.
Each tendering Holder is required to provide the Exchange Agent with the
Holder's social security or Federal employer identification number, on
Substitute Form W-9, which is provided under "Important Tax Information" below,
or alternatively, to establish another basis for exemption from backup
withholding. A Holder must cross out item (2) in the Certification box in
Part III on Substitute Form W-9 if such Holder is subject to backup withholding.
Failure to provide the information on the form may subject such Holder to 31%
Federal backup withholding tax on any payment made to the Holder with respect to
the Exchange Offer. The box in Part I of the form should be checked if the
tendering or consenting Holder has not been issued a Taxpayer Identification
Number ("TIN") and has either applied for a TIN or intends to apply for a TIN in
the near future. If the box in Part I is checked the Holder should also sign the
attached Certification of Awaiting Taxpayer Identification Number. If the
Exchange Agent is not provided with a TIN within 60 days thereafter, the
Exchange Agent will withhold 31% on all such payments of the New Notes until a
TIN is provided to the Exchange Agent.
7. TRANSFER TAXES.
The Company will pay all transfer taxes applicable to the exchange and
transfer of Old Notes pursuant to the Exchange Offer, except if (i) deliveries
of certificates for Old Notes for principal amounts not tendered or not accepted
for exchange are registered or issued in the name of any person other than the
Holder of Old Notes tendered thereby, (ii) tendered certificates are registered
in the name of any person other than the person signing this Letter of
Transmittal or (iii) a transfer tax is imposed for any reason other than the
exchange of Old Notes pursuant to the Exchange Offer. If satisfactory evidence
of payment
13
<PAGE>
of such taxes or exemption therefrom is not submitted herewith, the amount of
such transfer taxes will be billed directly to such tendering Holder.
8. IRREGULARITIES.
All questions as to the form of all documents and the validity (including
time of receipt) and acceptance of all tenders and withdrawals of Old Notes will
be determined by the Company, in its sole discretion, which determination shall
be final and binding. ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF OLD
NOTES WILL NOT BE CONSIDERED VALID. The Company reserves the absolute right to
reject any and all tenders of Old Notes that are not in proper form or the
acceptance of which, in the Company's opinion, would be unlawful. The Company
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular Old Notes. The Company's interpretations of the terms
and conditions of the Exchange Offer (including the instructions in this Letter
of Transmittal) will be final and binding. Any defect or irregularity in
connection with tenders of Old Notes must be cured within such time as the
Company determines, unless waived by the Company. Tenders of Old Notes shall not
be deemed to have been made until all defects or irregularities have been waived
by the Company or cured. A defective tender (which defect is not waived by the
Company or cured by the Holder) will not constitute a valid tender of Old Notes
and will not entitle the Holder to New Notes. None of the Company, the Trustee,
the Exchange Agent or any other person will be under any duty to give notice of
any defect or irregularity in any tender or withdrawal of any Old Notes, or
incur any liability to Holders for failure to give any such notice.
9. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable discretion, to amend or
waive any of the conditions to the Exchange Offer.
10. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR OLD NOTES.
Any Holder whose certificates for Old Notes have been mutilated, lost,
stolen or destroyed should write to or telephone the Trustee at the address or
telephone number set forth on the cover of this Letter of Transmittal for the
Exchange Agent.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering Old Notes and requests for
assistance or additional copies of the Prospectus, this Letter of Transmittal,
the Notice of Guaranteed Delivery or other documents may be directed to the
Exchange Agent, whose address and telephone number appear above.
14
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder who tenders Old Notes prior to
receipt of the New Notes is required to provide the Exchange Agent with such
Holder's correct TIN on the Substitute Form W-9 below or otherwise establish a
basis for exemption from backup withholding. If such Holder is an individual,
the TIN is his or her social security number. If the Exchange Agent is not
provided with the correct TIN, a $50 penalty may be imposed by the Internal
Revenue Service ("IRS") and payments, including any New Notes, made to such
Holder with respect to Old Notes exchanged pursuant to the Exchange Offer may be
subject to backup withholding.
Certain Holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on the
Substitute Form W-9. A foreign person may qualify as an exempt recipient by
submitting to the Exchange Agent a properly completed IRS Form W-8, signed under
penalties of perjury, attesting to that Holder's exempt status. A Form W-8 can
be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions. Holders are urged to consult their own tax advisors to
determine whether they are exempt.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any payments made to the Holder or other payee. Backup withholding is not
an additional Federal income tax. Rather, the Federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments, including any New Notes, made
with respect to Old Notes exchanged pursuant to the Exchange Offer, the Holder
is required to provide the Exchange Agent with (i) the Holder's correct TIN by
completing the form below, certifying that the TIN provided on the Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) such
Holder is exempt from backup withholding, (B) the Holder has not been notified
by the IRS that the Holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the IRS has notified the
Holder that the Holder is no longer subject to backup withholding and (ii) if
applicable, an adequate basis for exemption.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder. If
the Old Notes are held in more than one name or are held not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
15
<PAGE>
SUBSTITUTE FORM W-9
REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION
PAYOR'S NAME: NEXTLINK COMMUNICATIONS, INC.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
PAYEE INFORMATION
(Please print or type)
Individual or business name (if joint account, list first and circle the name of person or entity whose
number you furnish in Part I below):
- -------------------------------------------------------------------------------------------------------
Check appropriate box: / / Individual/Sole proprietor / / Corporation / / Partnership / / Other
- -------------------------------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.):
- -------------------------------------------------------------------------------------------------------
City, state, and ZIP code:
- -------------------------------------------------------------------------------------------------------
PART I TAXPAYER IDENTIFICATION NUMBER ("TIN") PART II PAYEES EXEMPT FROM
Enter your TIN below. For individuals, this is your social security BACKUP WITHHOLDING
number. For other entities, it is your employer identification number. Check box (See page 2 of the
Refer to the chart on page 1 of the Guidelines for Certification of Guidelines for further
Taxpayer Identification Number on Substitute Form W-9 (the clarification. Even if you are
"Guidelines") for further clarification. If you do not have a TIN, see exempt from backup withholding,
instructions on how to obtain a TIN on page 2 of the Guidelines, check you should still complete and
the appropriate box below indicating that you have applied for a TIN sign the certification below):
and, in addition to the Part III Certification, sign the attached
Certification of Awaiting Taxpayer Identification Number.
Social security number: / / EXEMPT
/ / / / / / - / / / / - / / / / / / / /
/ / Applied For
Employer identification number:
/ / / / - / / / / / / / / / / / / / /
- -------------------------------
PART III CERTIFICATION
Certification Instructions: You must cross out item 2 below if you have been notified by the Internal
Revenue Service (the "IRS") that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return (See page 2 of the Guidelines for further
clarification).
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have
not been notified by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
SIGNATURE ---------------------------------------- DATE ------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU CHECKED THE BOX "APPLIED
FOR" IN PART I OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a TIN has not been issued to
me, and either (a) I have mailed or delivered an application to receive a TIN
to the appropriate IRS Service Center or Social Security Administration
Office, or (b) I intend to mail or deliver an application in the near future.
I understand that I must provide a TIN to the payor within 60 days of
submitting this Substitute Form W-9 and that if I do not provide a TIN to the
payor within 60 days, the payor is required to withhold 31% of all reportable
payments thereafter to me until I furnish the payor with a TIN.
-------------------------------------------------------------
SIGNATURE
-----------------------------------------------------------------
DATE
- --------------------------------------------------------------------------------
16
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
10 1/2% SENIOR NOTES DUE 2009
IN EXCHANGE FOR NEW
10 1/2% SENIOR NOTES DUE 2009
OF
NEXTLINK COMMUNICATIONS, INC.
As set forth in the Prospectus dated , 2000 (as the same may be
amended from time to time, the "Prospectus") of NEXTLINK Communications, Inc.
(the "Company") under the caption "The Exchange Offer--Guaranteed Delivery
Procedures," and in the accompanying Letter of Transmittal (the "Letter of
Transmittal") and Instruction 2 thereto, this form or one substantially
equivalent, must be used to tender any of the Company's outstanding 10 1/2%
Senior Notes due 2009 (the "Old Notes") pursuant to the Exchange Offer, if
(i) certificates representing the Old Notes to be tendered for exchange are not
lost but are not immediately available, (ii) time will not permit a Holder's
Letter of Transmittal, certificates representing the Old Notes to be tendered
and all other required documents to reach United States Trust Company of New
York (the "Exchange Agent") prior to the Expiration Date with respect to the
Exchange Offer, or (iii) the procedures for book-entry transfer cannot be
completed prior to the Expiration Date. This form may be delivered by an
Eligible Institution by mail or hand delivery or transmitted, via manually
signed facsimile, to the Exchange Agent as set forth below.
Terms not otherwise defined herein shall have their respective meanings as
set forth in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
2000, UNLESS EXTENDED OR TERMINATED (THE "EXPIRATION DATE").
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
UNITED STATES TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY HAND OR OVERNIGHT FACSIMILE TRANSMISSIONS: BY REGISTERED OR
DELIVERY: (ELIGIBLE INSTITUTIONS CERTIFIED MAIL:
United States Trust Company ONLY) United States Trust Company
of New York (212) 780-0592 of New York
114 West 47th Street FACSIMILE TRANSMISSIONS: 114 West 47th Street
New York, New York 10036 (ELIGIBLE INSTITUTIONS New York, New York 10036
Attention: Patricia ONLY) Attention: Patricia
Gallagher (800) 548-6565 Gallagher
Reorganization Section Reorganization Section
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE
TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Old Notes set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender the Old Notes. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable for the perfection of the undersigned's
tender.
Tenders may be withdrawn in accordance with the procedures set forth in the
Prospectus. The undersigned authorizes the Exchange Agent to deliver this Notice
of Guaranteed Delivery to the Company and the Trustee as evidence of the
undersigned's tender of Old Notes.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
2
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------------------
Signatures of Registered Holder(s) or Date:
Authorized Signatory:
Address:
Name(s) of Registered Holder(s): Area Code and Telephone No.:
Principal Amount of Notes Tendered: If Notes will be delivered by book-entry
transfer, complete the following:
Certificate No.(s) of Notes (if available):
Depository Account No.
- --------------------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as their names
appear on certificates for Old Notes or on a security position listing as the owner of Old
Notes, or by person(s) authorized to become Holder(s) by endorsements and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Company of such person's
authority to so act.
Please print name(s) and address(es)
Name(s):
Capacity:
Address(es):
- --------------------------------------------------------------------------------------------
</TABLE>
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE EXCHANGE
AGENT, TOGETHER WITH A PROPERLY COMPLETED AND VALIDLY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER RELATED DOCUMENTS.
3
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
The undersigned, a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States, hereby guarantees that, within three
Nasdaq National Market trading days from the date of this Notice of Guaranteed Delivery, a
properly completed and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), together with certificates representing the Old Notes tendered hereby in proper
form for transfer (or confirmation of the book-entry transfer of such Old Notes into the
Exchange Agent's account at a Book-Entry Transfer Facility, pursuant to the procedure for
book-entry transfer set forth in the Prospectus under the caption "The Exchange
Offer--Book-Entry Transfer"), and any other required documents will be deposited by the
undersigned with the Exchange Agent at its address set forth above.
Name of Firm: ---------------------------- -------------------------------------------
Authorized Signature
Address: ---------------------------------
- -------------------------------------------
Area Code and Name: ------------------------------------
Telephone No.: ------------------------
Title: ------------------------------------
Date: ------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
IN EXCHANGE FOR NEW
12 1/8% SENIOR DISCOUNT NOTES DUE 2009
OF
NEXTLINK COMMUNICATIONS, INC.
As set forth in the Prospectus dated , 2000 (as the same may be
amended from time to time, the "Prospectus") of NEXTLINK Communications, Inc.
(the "Company") under the caption "The Exchange Offer--Guaranteed Delivery
Procedures," and in the accompanying Letter of Transmittal (the "Letter of
Transmittal") and Instruction 2 thereto, this form or one substantially
equivalent, must be used to tender any of the Company's outstanding 12 1/8%
Senior Notes due 2009 (the "Old Notes") pursuant to the Exchange Offer, if
(i) certificates representing the Old Notes to be tendered for exchange are not
lost but are not immediately available, (ii) time will not permit a Holder's
Letter of Transmittal, certificates representing the Old Notes to be tendered
and all other required documents to reach United States Trust Company of Texas
(the "Exchange Agent") prior to the Expiration Date with respect to the Exchange
Offer, or (iii) the procedures for book-entry transfer cannot be completed prior
to the Expiration Date. This form may be delivered by an Eligible Institution by
mail or hand delivery or transmitted, via manually signed facsimile, to the
Exchange Agent as set forth below.
Terms not otherwise defined herein shall have their respective meanings as
set forth in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
2000, UNLESS EXTENDED OR TERMINATED (THE "EXPIRATION DATE").
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
UNITED STATES TRUST COMPANY OF TEXAS
<TABLE>
<S> <C> <C>
BY HAND OR OVERNIGHT FACSIMILE TRANSMISSIONS: BY REGISTERED OR
DELIVERY: (ELIGIBLE INSTITUTIONS CERTIFIED MAIL:
United States Trust Company ONLY) United States Trust Company
of Texas (212) 780-0592 of Texas
c/o United States Trust FACSIMILE TRANSMISSIONS: c/o United States Trust
Company of New York (ELIGIBLE INSTITUTIONS Company of New York
114 West 47th Street ONLY) 114 West 47th Street
New York, New York 10036 (800) 548-6565 New York, New York 10036
Attention: Patricia Attention: Patricia
Gallagher Gallagher
Reorganization Section Reorganization Section
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE
TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Old Notes set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender the Old Notes. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable for the perfection of the undersigned's
tender.
Tenders may be withdrawn in accordance with the procedures set forth in the
Prospectus. The undersigned authorizes the Exchange Agent to deliver this Notice
of Guaranteed Delivery to the Company and the Trustee as evidence of the
undersigned's tender of Old Notes.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
2
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------------------
Signatures of Registered Holder(s) or Date:
Authorized Signatory:
Address:
Name(s) of Registered Holder(s): Area Code and Telephone No.:
Principal Amount of Notes Tendered: If Notes will be delivered by book-entry
transfer, complete the following:
Certificate No.(s) of Notes (if available):
Depository Account No.
- --------------------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as their names
appear on certificates for Old Notes or on a security position listing as the owner of Old
Notes, or by person(s) authorized to become Holder(s) by endorsements and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Company of such person's
authority to so act.
Please print name(s) and address(es)
Name(s):
Capacity:
Address(es):
- --------------------------------------------------------------------------------------------
</TABLE>
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE EXCHANGE
AGENT, TOGETHER WITH A PROPERLY COMPLETED AND VALIDLY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER RELATED DOCUMENTS.
3
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
The undersigned, a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States, hereby guarantees that, within three
Nasdaq National Market trading days from the date of this Notice of Guaranteed Delivery, a
properly completed and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), together with certificates representing the Old Notes tendered hereby in proper
form for transfer (or confirmation of the book-entry transfer of such Old Notes into the
Exchange Agent's account at a Book-Entry Transfer Facility, pursuant to the procedure for
book-entry transfer set forth in the Prospectus under the caption "The Exchange
Offer--Book-Entry Transfer"), and any other required documents will be deposited by the
undersigned with the Exchange Agent at its address set forth above.
Name of Firm: ---------------------------- -------------------------------------------
Authorized Signature
Address: ---------------------------------
- -------------------------------------------
Area Code and Name: ------------------------------------
Telephone No.: ------------------------
Title: ------------------------------------
Date: ------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
NEXTLINK COMMUNICATIONS, INC.
OFFER FOR ALL OUTSTANDING 10 1/2% SENIOR NOTES DUE 2009
AND ALL OUTSTANDING 12 1/8% SENIOR DISCOUNT NOTES DUE 2009
IN EXCHANGE FOR UP TO $400,000,000 PRINCIPAL AMOUNT OF
10 1/2% SENIOR NOTES DUE 2009 AND $455,000,000 PRINCIPAL AMOUNT
OF 12 1/8% SENIOR DISCOUNT NOTES DUE 2009, RESPECTIVELY
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY 3, 1999,
UNLESS EXTENDED OR TERMINATED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is a Prospectus dated , 2000 (as the
same may be amended or supplemented from time to time, the "Prospectus") and two
forms of Letter of Transmittal (each a "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by NEXTLINK Communications, Inc. (the "Company") to
exchange up to $400,000,000 in aggregate principal amount of its Senior Notes
due 2009 and $455,000,000 principal amount of Senior Discount Notes Due 2009
(collectively, the "New Notes") for $400,000,000 in aggregate principal amount
of its Senior Notes due 2009 and $455,000,000 principal amount of Senior
Discount Notes Due 2009 (collectively, the "Old Notes"), respectively.
The material is being forwarded to you as the beneficial owner of Old Notes
held by us for your account or benefit but not registered in your name. A tender
of the Old Notes pursuant to the Exchange Offer may be made only by us as the
registered holder of the Old Notes, and pursuant to your instructions.
Therefore, the Company urges beneficial owners of Old Notes registered in the
name of a broker, dealer, commercial bank, trust company or other nominee to
contact such holder promptly if they wish to tender Old Notes in the Exchange
Offer.
Accordingly, we request instructions as to whether you wish us to tender any
or all Old Notes held by us for your account or benefit, pursuant to the terms
and conditions set forth in the Prospectus and the appropriate Letter of
Transmittal. We urge you to read carefully the Prospectus and such Letter of
Transmittal before instructing us to tender your Old Notes pursuant to the
Exchange Offer.
Your instructions to us should be forwarded as promptly as practicable in
order to permit us to tender Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City Time, on , 2000 unless extended (the "Expiration
Date"). Old Notes tendered pursuant to the Exchange Offer may be withdrawn,
subject to the procedures described in the Prospectus, at any time prior to the
Expiration Date.
If you wish to have us tender any or all of your Old Notes held by us for
your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. The accompanying Letter
of Transmittal is furnished to you for informational purposes only and may not
be used by you to tender Old Notes held by us and registered in our name for
your account or benefit.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by NEXTLINK
Communications, Inc. with respect to their Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, upon and subject to the terms and conditions set forth in
the Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
AGGREGATE PRINCIPAL AMOUNT
OF OLD NOTES
----------------------------------------
/ / Please do not tender any Old Notes
held by you for my account
Dated: ____________, 2000
--------------------------------------
--------------------------------------
Signature(s)
--------------------------------------
--------------------------------------
Please Print Name(s) here
--------------------------------------
--------------------------------------
Address(es)
--------------------------------------
Area Code(s) and Telephone Number(s)
--------------------------------------
Tax Identification or Social Security
No(s)
None of the Old Notes held by us for your account will be tendered unless we
receive written instructions from you to do so. Unless a specific instruction is
given in the space provided, your signature(s) hereon shall constitute an
instruction to us to tender all the Old Notes held by us for your account.
2
<PAGE>
NEXTLINK COMMUNICATIONS, INC.
OFFER FOR ALL OUTSTANDING 10 1/2% SENIOR NOTES DUE 2009
AND ALL OUTSTANDING 12 1/8% SENIOR DISCOUNT NOTES DUE 2009
IN EXCHANGE FOR UP TO $400,000,000 PRINCIPAL AMOUNT OF
10 1/2% SENIOR NOTES DUE 2009 AND $455,000,000 PRINCIPAL AMOUNT
OF 12 1/8% SENIOR DISCOUNT NOTES DUE 2009, RESPECTIVELY
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
2000, UNLESS EXTENDED OR TERMINATED (THE "EXPIRATION DATE").
To Brokers, Dealers, Commercial Banks
Trust Companies and Other Nominees:
Enclosed for your consideration is a Prospectus dated , 2000 (as
the same may be amended or supplemented form time to time, the "Prospectus") and
two forms of Letter of Transmittal (each a "Letter of Transmittal" and
collectively the "Letters of Transmittal") relating to the offer (the "Exchange
Offer") by NEXTLINK Communications, Inc. (the "Company") to exchange up to
$400,000,000 in aggregate principal amount of its Senior Notes due 2009 and
$455,000,000 principal amount of Senior Discount Notes Due 2009 (collectively,
the "New Notes") for $400,000,000 in aggregate principal amount of its Senior
Notes due 2009 and $455,000,000 principal amount of Senior Discount Notes Due
2009 (collectively, the "Old Notes"), respectively.
We are asking you to contact your clients for whom you hold Old Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Old Notes registered in
their own name. The Company will not pay any fees or commissions to any broker,
dealer or other person in connection with the solicitation of tenders pursuant
to the Exchange Offer. You will, however, be reimbursed by the Company for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Company will pay all transfer taxes, if
any, applicable to the tender of Old Notes to it or its order, except as
otherwise provided in the Prospectus and the Letter of Transmittal.
Enclosed are copies of the following documents:
1. The Prospectus;
2. Two Letters of Transmittal for your use in connection with the tender
of Old Notes and for the information of your clients;
3. A form of letter that may be sent to your clients for whose accounts
you hold Old Notes registered in your name or the name of your nominee; with
space provided for obtaining the clients' instructions with regard to the
Exchange Offer;
4. Two forms of Notices of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Your prompt action is requested. The Exchange Offer will expire at
5:00 p.m., New York City Time, on , 2000, unless extended (the
"Expiration Date"). Old Notes tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus, at any time
prior to the Expiration Date.
In all cases, exchanges of Old Notes for New Notes accepted for exchange
pursuant to the Exchange Offer will be made only after timely receipt by the
Exchange Agent of (a) certificates representing such Old Notes or a confirmation
of a book-entry transfer of such Old Notes, as the case may be, (b) the
appropriate Letter of Transmittal (or a facsimile thereof) promptly completed
and duly executed with any
<PAGE>
required signature guarantees, and (c) any other documents required by the
appropriate Letter of Transmittal.
Holders who wish to tender their Old Notes and (a) whose Old Notes are not
immediately available, (b) who cannot deliver their Old Notes, the appropriate
Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date or (c) who cannot complete the procedure for
book-entry transfer on a timely basis, may tender their Old Notes by following
the guaranteed delivery procedures described in the Prospectus under "The
Exchange Offer--Guaranteed Delivery Procedures."
To tender Old Notes, certificates for Old Notes, a duly executed and
properly completed Letter of Transmittal or a facsimile thereof, together with
any other required documents, must be received by the Exchange Agent as provided
the Prospectus and the appropriate Letter of Transmittal.
Additional copies of the enclosed material may be obtained form the Exchange
Agent, United States Trust Company of New York, by calling (800) 548-6565.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO
THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS AND
THE LETTER OF TRANSMITTAL.
2
