<PAGE>
As filed with the Securities and Exchange Commission on March 28, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PEGASUS COMMUNICATIONS CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 51-0374669
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
c/o Pegasus Communications Management Company
225 City Line Avenue, Suite 200
Bala Cynwyd, Pennsylvania 19004
(888) 438-7488
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(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Ted S. Lodge, Esq.
c/o Pegasus Communications Management Company
225 City Line Avenue, Suite 200
Bala Cynwyd, Pennsylvania 19004
(888) 438-7488
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(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
Copies to:
Scott A. Blank, Esq. Michael B. Jordan, Esq.
Pegasus Communications Corporation Diana E. McCarthy, Esq.
c/o Pegasus Communications Management Company Drinker Biddle & Reath LLP
225 City Line Avenue One Logan Square
Suite 200 18th & Cherry Streets
Bala Cynwyd, PA 19004 Philadelphia, PA 19103-6996
(888) 438-7488 (215) 988-2700
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement, depending on
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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. |_| ___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================================
Title of Each Class of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be To be Offering Price Aggregate Registration
Registered Registered(1) Per Unit (1),(2) Offering Price (1),(2) Fee (1),(3)
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<S> <C> <C>
Class A Common Stock par
value, $.01 per share
Non-Voting Common Stock
par value, $.01 per share
Preferred Securities (4)
Warrants
Units
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Senior Debt Securities
Senior Subordinated Debt
Securities
Subordinated Debt Securities
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Total $750,000,000 100% $750,000,000 $198,000
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</TABLE>
(1) Includes such indeterminate number of preferred securities and such
indeterminate principal amount of preferred stock, warrants, non-voting
common stock, units, senior debt securities, senior subordinated debt
securities and subordinated debt securities as may be periodically
issued at indeterminate prices. This Registration Statement also covers
delayed delivery contracts that may be issued by the Registrant under
which the party purchasing such contracts may be required to purchase
senior debt securities, senior subordinated debt securities,
subordinated debt securities or preferred securities.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and exclusive of accrued interest and
distributions, if any. The aggregate public offering price of the
preferred securities and the senior debt securities, senior
subordinated debt securities or subordinated debt securities registered
will not exceed $750,000,000.
(3) The registration fee has been calculated pursuant to Rule 457(o) and
reflects the offering price rather than the principal amount of any
debt securities offered at a discount.
(4) Also includes or represents, as applicable, such indeterminate number
of Depositary Shares to be evidenced by Depositary Receipts as may be
issued pursuant to a Deposit Agreement. In the event the Company elects
to offer to the public fractional interests in shares of the Preferred
Stock registered hereunder, Depositary Receipts will be distributed to
those persons purchasing such fractional interests and shares of
Preferred Stock will be issued to the Depositary under the Deposit
Agreement. No separate consideration will be received for the
Depositary Shares.
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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
The information in this prospectus is incomplete and may be changed. We may not
sell 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 is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 28, 2000
PROSPECTUS
____________, 2000
$750,000,000
[PEGASUS LOGO]
PEGASUS COMMUNICATIONS CORPORATION
Class A Common Stock, Non-Voting Common Stock, Warrants, Units,
Preferred Securities, Senior Debt Securities,
Senior Subordinated Debt Securities and Subordinated Debt Securities
-------------
We may periodically sell the following securities to the public:
o our Class A common stock;
o our non-voting common stock;
o our warrants;
o units consisting of two or more classes of our securities;
o our preferred securities, which may be represented
by depositary shares;
o our debt securities, including senior debt securities, senior
subordinated debt securities and subordinated debt securities; or
o any combination of these.
Specific terms of the Class A common stock, non-voting common stock,
warrants, units, preferred securities and debt securities will be set forth in a
prospectus supplement with respect to the specific type or types of securities
then being offered.
Our Class A common stock is listed on the Nasdaq Stock Market under the
symbol "PGTV."
The securities described in this prospectus may be offered in amounts,
at prices and on terms to be determined at the time of the offering. However,
the aggregate public offering price of all such securities will not exceed
$750,000,000.
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See Risk Factors beginning on Page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or the accompanying prospectus supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
<PAGE>
We urge you to carefully read this prospectus and the accompanying
prospectus supplement, which will describe the specific terms of the Class A
common stock, non-voting common stock, warrants, units, preferred securities and
the debt securities being offered, before you make your investment decision.
This prospectus may not be used to sell securities unless it is
accompanied by a prospectus supplement.
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
prospectus or the accompanying prospectus supplement and, if given or made, such
information or representation must not be relied upon as having been authorized.
<PAGE>
About This Prospectus
This prospectus is part of a registration statement that we filed with
the SEC using a "shelf" registration process. Under this shelf registration
process, we may sell any combination of the securities described in this
prospectus in one of more offerings up to an aggregate total public offering
price of $750,000,000. This prospectus provides you with a general description
of the securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described in
Where You Can Find More Information.
The information in this prospectus assumes the completion of the
acquisition of Golden Sky Holdings, Inc and other pending acquisitions described
in our annual report on Form 10-K.
Pegasus
Pegasus Communications Corporation is:
o The largest independent distributor of DIRECTV(R) with 1.1
million subscribers at February 29, 2000. We have the
exclusive right to distribute DIRECTV digital broadcast
satellite services to approximately 7.2 million rural
households in 41 states. We distribute DIRECTV through the
Pegasus retail network, a network in excess of 2,500
independent retailers.
o The owner or programmer of ten TV stations affiliated with
either Fox, UPN or the WB.
o One of the fastest growing media companies in the United
States. We have increased our revenues at a compound growth
rate of 89% per annum since our inception in 1991.
We were incorporated in Delaware in May 1996. Our principal executive
office is c/o Pegasus Communications Management Company, 225 City Line Avenue,
Suite 200, Bala Cynwyd, PA 19004. Our telephone number is (888) 438-7488.
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Where You Can Find More Information
We are a public company and file annual, quarterly and special reports,
as well as proxy statements and other information with the SEC. You may read and
copy any of the documents we file with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, NW, Washington DC 20549 or at its Regional Offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. You may obtain further information about the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. These SEC filings are also
available to the public over the Internet at the SEC's web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants like us that file electronically with the SEC.
Our Class A common stock is quoted on the Nasdaq National Market and reports and
other information about us may be inspected at the Nasdaq National Market at
1735 K Street, NW, Washington, DC 20007-1500.
This prospectus is only part of a registration statement on Form S-3
that we have filed with the SEC under the Securities Act of 1933 and therefore
omits certain information contained in the registration statement. We have also
filed exhibits and schedules with the registration statement that are excluded
from this prospectus. You should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. You may inspect a copy of the registration statement, including the
exhibits and schedules, without charge, at the public reference room or obtain a
copy from the SEC upon payment of the fees prescribed by the SEC.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and information we file later with the
SEC will automatically update and supersede this information. We are
incorporating by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until we terminate this offering.
We are incorporating by reference the following document:
o Pegasus' Annual Report on Form 10-K filed with the SEC on March 10,
2000 for the fiscal year ended December 31, 1999;
o Pegasus' Current Reports on Form 8-K filed with the SEC on January
12, 2000 dated January 12, 2000 and on January 12, 2000 dated
November 19, 1999 (as amended by Form 8-K/A filed on February 2, 2000
and as further amended by Form 8-K/A filed on February 16, 2000);
o The sections entitled "Golden Sky Holdings, Inc." and "Pegasus
Communications Corporation Pro Forma Consolidated Financial
Information (unaudited)" beginning at pages F-25 and F-59,
respectively, of the proxy statement/prospectus contained in Pegasus'
Registration Statement on Form S-4 (File No. 333-31080); and
o The description of Class A common stock contained in our Registration
Statement on Form 8-A (File No. 000-21389) filed with the SEC on
September 18, 1996, including any amendments or reports filed for the
purpose of updating such description.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address and number:
Pegasus Communications Corporation
c/o Pegasus Communications Management Company
225 City Line Avenue, Suite 200
Bala Cynwyd, Pennsylvania 19004
Attention: Vice President of Corporate Communications
(888) 438-7488
You should rely only on the information we include or incorporate by
reference in this prospectus and any applicable prospectus supplement. We have
not authorized anyone to provide you with different or additional information.
The information contained in this prospectus or the applicable prospectus
supplement is accurate only as of
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the date on the front of those documents, regardless of the time of delivery of
this prospectus or the applicable prospectus supplement or of any sale of our
securities, and you should not assume that the information in this prospectus or
the applicable prospectus supplement is accurate as of any other date.
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Risk Factors
In addition to the other information in this prospectus and any
applicable prospectus supplement, the following factors and the factors set
forth in the applicable prospectus supplement should be considered carefully in
evaluating an investment in our securities. To the extent that any risk factor
contained in any prospectus supplement conflicts with or supersedes any risk
factor contained in this prospectus, the risk factor in such prospectus
supplement shall control.
Risks of Investing in the Securities
Our Substantial Indebtedness Could Adversely Affect Any Investment in
Securities Outstanding From Time to Time
We have now and expect to have a significant amount of indebtedness.
Our substantial indebtedness could have important consequences. For example, it
could:
o make it more difficult for us to pay our obligations under securities
outstanding from time to time;
o increase our vulnerability to general adverse economic and industry
conditions;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, acquisitions and other activities;
o limit our flexibility in planning for, or reacting to, changes in our
business and the industries in which we operate; and
o place us at a competitive disadvantage compared to our competitors
that have less debt.
We May Not Be Able To Generate Enough Cash To Service Our Debt
Our ability to make payments on and to refinance our indebtedness,
including securities outstanding from time to time, and to fund planned capital
expenditures and other activities will depend on our ability to generate cash in
the future. This, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control. Accordingly, we cannot assure you that our business will
generate sufficient cash flow to service our debt.
Based on our current level of operations and anticipated cost savings
and operating improvements, we believe our cash flow from operations, available
cash and available borrowings under our credit facilities, will be adequate to
meet our future liquidity needs for at least the next few years.
We cannot assure you that:
o our business will generate sufficient cash flow from operations;
o currently anticipated cost savings and operating improvements will be
realized on schedule; or
o future borrowings will be available to us under our credit facilities
in amounts sufficient to enable us to pay our indebtedness, or to
fund our other liquidity needs.
We may need to refinance all or a portion our indebtedness on or before
maturity. We cannot assure you that we will be able to refinance any of our
indebtedness, including our credit facilities, on commercially reasonable terms
or at all.
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If a Change of Control Occurs, We May Be Unable To Refinance Our
Publicly Held Debt, Bank Debt and Preferred Stock
If a change of control of Pegasus occurs, we will be required to offer
to repurchase all outstanding notes. We must offer to redeem other publicly held
debt securities and preferred stock for approximately $914.8 million including
Golden Sky's publicly held debt securities. In addition, our bank debt,
including Golden Sky's bank debt, of approximately $256.2 million at December
31, 1999, would also come due on a change of control. If a change of control
occurs, and we are unable to finance it, we would be in default.
We May Have Difficulty in Obtaining Cash from Our Subsidiaries to Meet
Our Obligations Which Could Adversely Affect Your Investment
We will have to rely upon dividends and other payments from our
subsidiaries to generate the funds necessary to repurchase or pay any securities
offered from time to time. Our subsidiaries, however, are legally distinct from
us and have no obligation, contingent or otherwise, to pay amounts due under any
securities offered from time to time. The ability of our subsidiaries to make
dividend and other payments to us is subject to, among other things, the
availability of funds, the terms of our subsidiaries' indebtedness and
applicable state laws. There are significant restrictions on the payment of
dividends to us contained in the instruments governing the obligations of our
subsidiaries.
Our Stock Price Has Been Volatile
There may be significant volatility in the market price of our Class A
common stock due to factors that may or may not relate to Pegasus' performance.
The market price of the Class A common stock may be significantly affected by
various factors such as economic forecasts, financial market conditions,
acquisitions and quarterly variations in Pegasus' results of operations.
Risks of Our Direct Broadcast Satellite Business
Satellite and Direct Broadcast Satellite Technology Could Fail or
Be Impaired
If any of the DIRECTV satellites are damaged or stop working partially
or completely for any of a number of reasons, DIRECTV customers would lose
programming. We would in turn likely lose customers, which could materially and
adversely affect our operations, financial performance and the trading price of
our Class A common stock.
Direct broadcast satellite technology is highly complex and is still
evolving. As with any high-tech product or system, it might not function as
expected. In particular, the satellites at the 101(0) W orbital location may not
last for their expected lives. In July 1998, DIRECTV reported that the primary
spacecraft control processor failed on DBS-1. As it was designed to do, the
satellite automatically switched to its on-board spare processor with no
interruption of service to DIRECTV subscribers. A more substantial failure of
our DIRECTV direct broadcast satellite system could occur in the future. See -
We May Lose Our DIRECTV Rights After the Initial Term of Our Agreements With the
National Rural Telecommunications Cooperative.
Events at DIRECTV Could Adversely Affect Us
Because we are an intermediary for DIRECTV, events at DIRECTV that we
do not control can adversely affect us. One of the most important of these is
DIRECTV's ability to provide programming that appeals to mass audiences. DIRECTV
generally does not produce its own programming; it purchases it from third
parties. DIRECTV's success -- and therefore ours -- depends in large part on
DIRECTV's ability to make good judgments about programming sources and obtain
programming on favorable terms. We have no control or influence over this.
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Programming Costs May Increase, Which Could Adversely Affect Our
Direct Broadcast Satellite Business
Programmers could increase the rates that DIRECTV pays for programming.
As a result, our costs would increase. This could cause us to increase our rates
and lose either customers or revenues.
The law requires programming suppliers that are affiliated with cable
companies to provide programming to all multi-channel distributors -- including
DIRECTV -- on nondiscriminatory terms. The rules implementing this law are
scheduled to expire in 2002. If they are not extended, these programmers could
increase DIRECTV's rates, and therefore ours. If we increase our rates, we may
lose customers. If we do not increase our rates, our revenues and financial
performance could be adversely affected.
We May Lose Our DIRECTV Rights After the Initial Term of Our
Agreements With the National Rural Telecommunications Cooperative
We may or may not be able to continue in the DIRECTV business after the
current DIRECTV satellites are replaced. If we can continue, we cannot predict
what it will cost us to do so.
As part of a counterclaim in the litigation between the National Rural
Telecommunications Cooperative and DIRECTV, DIRECTV is seeking a declaratory
judgement that the term of the National Rural Telecommunications Cooperative's
agreement with DIRECTV is measured only by the orbital life of DBS-1, the first
DIRECTV satellite launched, and not the orbital lives of the other DIRECTV
satellites at the 101(degree) W orbital location. According to DIRECTV, DBS-1
suffered a failure of its primary control processor in July 1998 and since that
time has been operating normally using a spare control processor. If DIRECTV
were to prevail on its counterclaim, any failure of DBS-1 could have a material
adverse effect on our DIRECTV rights. While the National Rural
Telecommunications Cooperative has a right of first refusal to receive certain
services from any successor DIRECTV satellite, the scope and terms of this right
of first refusal are also being disputed in the litigation. This right is not
expressly provided for in our agreements with the National Rural
Telecommunications Cooperative.
On January 10, 2000, Pegasus and Golden Sky Holdings, Inc. filed a
class action lawsuit in federal court in Los Angeles against DIRECTV as
representatives of a proposed class that would include all members and
affiliates of the National Rural Telecommunications Cooperative that are
distributors of DIRECTV. The complaint contains causes of action for various
torts, common counts and declaratory relief based on DIRECTV's failure to
provide the National Rural Telecommunications Cooperative with from providing
this programming to the class members and affiliates. The claims are also based
on DIRECTV's position with respect to launch fees and other benefits, term and
rights of first refusal. The complaint seeks monetary damages and a court order
regarding the rights of the National Rural Telecommunications Cooperative and
its members and affiliates.
On February 10, 2000, Pegasus and Golden Sky filed an amended
complaint, which added new tort claims against DIRECTV for interference with
plaintiffs' relationships with manufacturers, distributors and dealers of direct
broadcast satellite equipment. Pegasus and Golden Sky also withdrew the class
action allegations to allow a new class action to be filed on behalf of the
members and affiliates of the National Rural Telecommunications Cooperative. The
outcome of this litigation and the litigation filed by the National Rural
Telecommunications Cooperative could have a material adverse effect on the scope
and duration of Pegasus' right to provide DIRECTV programming in its rural
markets, its capital requirements and its costs of operations.
Our revenues and financial performance would be adversely affected if
we are not able to continue in the DIRECTV business for the reasons described
above.
The Effect of New Federal Satellite Television Legislation on Our
Business Is Unclear
On November 29, 1999, the President signed The Satellite Home Viewer
Improvement Act of 1999. The Act contains provisions that will be phased in over
time. In addition, the FCC and other federal agencies will undertake rulemaking
and studies in connection with this legislation. Therefore, we cannot predict
the effect of this new law on our business at this time.
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The Act resolves many of the issues involved in years of litigation
between the networks and the direct broadcast satellite industry regarding
retransmission of network programming to direct broadcast satellite subscribers.
Generally, it also preserves the industry's right to retransmit distant network
programming to subscribers in "unserved" areas. It also extends through December
31, 2004 the statutory right, for a copyright royalty fee, of the industry to
retransmit independent programming - so-called superstations - to subscribers as
"distant" signals. Further, satellite carriers will be required to deliver
signals only to households that cannot clearly receive over-the-air network
signals with a rooftop antenna.
Before this legislation was enacted, we had cut-off network programming
to approximately 159,000 of our subscribers, in connection with settlement of
the litigation referred to above. We are unsure at this time how many of these
subscribers will be eligible and will want to receive network programming
services under this legislation.
Among other things, the Act directs the FCC to take actions to
prescribe the picture quality standard that the FCC uses to predict what
households do not receive a strong enough network broadcast signal over-the-air
and therefore are eligible to receive distant network signals. The effect on our
business of these FCC actions and other studies and rulemakings that the FCC
will undertake cannot be predicted at this time.
We Could Lose Money Because of Signal Theft
If signal theft becomes widespread, our revenues would suffer. Signal
theft has long been a problem in the cable and direct broadcast satellite
industries. DIRECTV uses encryption technology to prevent people from receiving
programming without paying for it. The technology is not foolproof and there
have been published reports that it has been compromised.
We Could Lose Revenues if We Have Out-of-Territory Subscribers
Just as we have exclusive DIRECTV distribution rights in our
territories, we are not allowed to have customers outside our territories. The
problem is that customers are not always truthful about where they live. If it
turns out that large numbers of our subscribers are not in our territories, we
would lose substantial revenues when we disconnect them. We could also face
legal consequences for having subscribers in Canada, where DIRECTV reception is
illegal.
Direct Broadcast Satellite Services Face Competition from
Cable Operators
One of the competitive advantages of direct broadcast satellite systems
is their ability to provide customers with more channels and a better-quality
digital signal than traditional analog cable television systems. Many cable
television operators are making significant investments to upgrade their systems
from analog to digital. This upgrade will significantly increase the number of
channels that cable television operators can provide to their customers and the
quality of the transmission. In addition, many cable television operators are
upgrading their systems to provide their customers with high-speed Internet
access. These upgrades could make cable television a more attractive alternative
for consumers, which could have an adverse effect on our direct broadcast
satellite business.
Direct Broadcast Satellite Equipment Shortages Could Adversely Affect
Our Direct Broadcast Business
There have been periodic shortages of direct broadcast satellite
equipment and there may be such shortages in the future. During such periods, we
may be unable to accept new subscribers and, as a result, potential revenue
could be lost. If we are unable to obtain direct broadcast satellite equipment
in the future, or if we cannot obtain such equipment on favorable terms, our
subscriber base and revenues could be adversely affected.
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<PAGE>
Risks of Our Broadcast Television Business
Our Broadcast Operations Could Be Adversely Affected if We Fail To
Negotiate Successfully Our Network Affiliation Agreements
Our network affiliation agreements with Fox formally expired on January
30, 1999 (other than the affiliation agreement for television station WTLH,
which is scheduled to expire on December 31, 2000). Except in the case of WTLH,
we currently broadcast Fox programming under arrangements between Pegasus and
Fox which have generally conformed in practice to such affiliation agreements,
and we are in the process of negotiating new affiliation agreements. If we are
not successful in these negotiations, our broadcast operations could suffer
materially.
Fox Could Cancel Our Affiliation Agreements if It Acquires a
Significant Ownership Interest in One of Our Markets
In addition, if Fox acquires a significant ownership interest in
another station in one of our markets, it can cancel our affiliation agreement
or arrangement for that market without penalty. Fox has done this in the past to
other broadcasters.
Our Broadcast Operations Could Be Adversely Affected if the FCC
Prevents Our Local Marketing Agreement Strategy
One of our important strategies in broadcast television is to achieve
economies of scale by programming two stations in each of our markets. Because
the FCC did not allow a broadcaster to own more than one television station in
the same market, we implemented our strategy -- like other broadcasters --
through arrangements known as local marketing agreements. Under these
arrangements, we contracted to provide programming and other services to the
licensee of a separate television station in the market. We currently have local
marketing agreements for second stations in three of our markets and our only
station in another market is programmed through a local marketing agreement. We
expect to program a second station under such an agreement in one more market by
2000.
In August 1999, the FCC revised its television ownership rules to
permit, in certain circumstances, the common ownership of two stations in a
television market. The FCC also decided to treat most television local marketing
agreements as if the station providing programming owned the programmed station.
These decisions could prohibit us from programming or acquiring additional
in-market stations and could also require us to terminate some of our existing
local marketing agreements by August 2001. We will vigorously seek to obtain
favorable rulings from the FCC and to preserve and expand our broadcast
television strategy through the grandfathering of our existing arrangements or
outright common ownership. Unfavorable implementation decisions by the FCC,
however, could cost us significant revenues and could affect our broadcast
operations materially and adversely.
Antitrust Laws Could Limit Our Local Marketing Agreement Strategy
Apart from the FCC, federal agencies that administer the antitrust laws
have said they intend to review market concentrations in television, including
through local marketing agreements that the FCC permits. If so, these agencies
could limit partially or altogether our ability to program stations through
local marketing agreements. We cannot predict how this will affect us.
Our Inability To Control Licensees Under Our Local Marketing
Agreements Could Adversely Affect Our Broadcast Operations
Even if we can keep and expand our local marketing agreements, their
use carries the inherent risk that we do not control the other parties that
actually own the stations and hold the stations' FCC licenses. It is conceivable
that the licensee could pre-empt our programming. In an extreme case, the
licensee could cease to meet FCC qualifications and put its license in jeopardy,
in which case, we could lose the ability to program the station.
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The Planned Industry Conversion to Digital Television Could Adversely
Affect Our Broadcast Business
All commercial television stations in the United States must start
broadcasting in digital format by May 2002 and must abandon the present analog
format by 2006, though the FCC may extend these dates.
o It will be expensive to convert from the current analog format to
digital format. We cannot now determine what that cost will be.
o The digital technology will allow us to broadcast multiple channels,
compared to only one today. We cannot predict whether or at what cost
we will be able to obtain programming for the additional channels.
Increased revenues from the additional channels may not make up for
the conversion cost and additional programming expenses. Also,
multiple channels programmed by other stations could increase
competition in our markets.
o The FCC has generally made available much higher power allocations to
digital stations that will replace stations on existing channels 2
through 13 than digital stations that will replace existing channels
14 through 69. All of our existing stations are on channels 14
through 69. This power disparity could put us at a disadvantage to
our competitors that now operate on channels 2 through 13.
o In some cases, when we convert a station to digital television, the
signal may not be received in as large a coverage area, or it may
suffer from additional interference. Also, because of the technical
standards adopted by the FCC, the digital signal may be subject to
interference to a greater degree than current analog transmissions.
As a result, viewers using antennas located inside their homes, as
opposed to outdoor, roof-top antennas, may not receive a reliable
signal. If viewers do not receive a high-quality, reliable signal
from our stations, they may be encouraged to seek service from our
competitors.
o The FCC is considering whether to require cable companies to carry
both the analog and the digital signals of their local broadcasters
when television stations will be broadcasting both, during the
transition period between 2002, at the latest, and 2006. If the FCC
does not require this, cable customers in our broadcast markets may
not receive our digital signal, which could affect us unfavorably.
The New Federal Satellite Television Legislation Could Adversely
Affect Our Broadcast Business
The Satellite Home Viewer Improvement Act of 1999 could have an adverse
effect on our broadcast stations' audience share and advertising revenues.
This legislation may allow satellite carriers to provide the signal of
distant stations with the same network affiliation as our stations to more
television viewers in our markets than would have been permitted under previous
law. In addition, the legislation allows satellite carriers to provide local
television signals by satellite within a station market, but does not require
satellite carriers to carry all local stations in a market until 2002. Satellite
carriers could decide to carry other stations in our markets, but not our
stations, which could adversely affect our stations' audience share and
revenues.
Risks of Our Cable Business
We Could Lose Revenues Because of Our Geographic Concentration in
Puerto Rico
All of our cable operations are in Puerto Rico. This geographic
concentration carries risks:
o Puerto Rico gets more hurricanes and other severe weather than many other
places. Because of Hurricane Georges, which struck Puerto Rico in September
1998, we lost $1.4 million of revenue in the fourth quarter of
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1998 alone, and we spent about $300,000 to repair the damage. Future
hurricanes can be expected and could be even worse for us.
o A local downturn in the Puerto Rico economy could cause us to lose revenues
from subscribers and advertisers. This would affect our cable business more
seriously than if we were more geographically diversified.
o A material adverse change in our Puerto Rico cable operations could affect
our ability to sell our cable systems at all or for the consideration
agreed upon in the letter of intent relating to the sale of the business.
The FCC's Digital Television Requirements May Prevent Us from
Expanding Our Cable Programming
The FCC's digital television rules may cause us to lose customers and
revenues. We mentioned above that the FCC is considering whether to require
cable companies to carry both the analog and digital signals of local television
stations during the transition to digital broadcasting. See Risks of Our
Broadcast Television Business -- The Planned Industry Conversion to Digital
Television Could Adversely Affect Our Broadcast Business. Because we have only a
finite amount of channel capacity in our cable system, this requirement could
hurt our ability to expand our programming offerings. If we cannot expand
programming offerings, we may lose customers and revenues.
We Could Become Subject to Rate Regulation Which Could Reduce Our
Cable Revenues
We may lose revenues if we become subject to rate regulation. The
government can regulate the rates cable companies charge for the lowest level of
their service. The government does not now regulate our rates since the FCC has
found that our cable systems are subject to effective competition. This means
that less than 30% of the people that could subscribe to the systems do
subscribe. But if we are successful in significantly increasing the percentage
of people that subscribe to our service, the lowest level of cable service we
offer could become subject to rate regulation. If so, we might have to reduce
our cable rates, resulting in decreased revenues. If our cable systems become
subject to rate regulation, we may not be able to sell our cable systems at all
or for the consideration agreed upon in the letter of intent relating to the
sale of our cable business.
Other Risks of Our Business
We Face Certain Other Regulatory Risks
The direct broadcast satellite, television broadcast, and cable
industries are subject to regulation by the FCC under the Communications Act of
1934 and, to a certain extent, by state and local authorities. Proceedings to
implement the Communications Act are on-going, and we cannot predict the
outcomes of these proceedings or their effect on our business. We depend on
broadcast licenses from the FCC to operate our broadcast station, and DIRECTV
depends on FCC licenses to operate its digital broadcast satellite service. If
the FCC cancels, revokes, suspends, or fails to renew any of these licenses, it
could have a harmful effect on us.
We Have a History of Substantial Losses; We Expect Them To Continue;
Losses Could Adversely Affect Our Stock Price and Access to Capital
Markets
We have never made a profit, except in 1995, when we had a $10.2
million extraordinary gain. Because of interest expense on our substantial debt
and because of high expense in amortizing goodwill from our acquisitions, we do
not expect to have net income for the foreseeable future. To the extent
investors measure our performance by net income or loss, rather than alternative
measures based on cash flow, continuing losses could adversely affect our access
to capital markets and the trading price of our Class A common stock.
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We Face Significant Competition; the Competitive Landscape
Changes Constantly
Our direct broadcast satellite business faces competition from other
current or potential multi-channel programming distributors, including other
direct broadcast satellite operators, direct-to-home distributors, cable
operators, wireless cable operators, Internet and local and long-distance
telephone companies, which may be able to offer more competitive packages or
pricing than we or DIRECTV can provide. In addition, the direct broadcast
satellite industry is still evolving and recent or future competitive
developments could adversely affect us.
Our TV stations compete for audience share, programming and advertising
revenue with other television stations in their respective markets and with
direct broadcast satellite operators, cable operators and other advertising
media. Direct broadcast satellite and cable operators in particular are
competing more aggressively than in the past for advertising revenues in our TV
stations' markets. This competition could adversely affect our stations'
revenues and performance in the future.
Our cable systems face competition from television stations, satellite
master antennae television systems, wireless cable systems, direct-to-home
distributors, direct broadcast satellite systems and open video systems.
In addition, the markets in which we operate are in a constant state of
change due to technological, economic and regulatory developments. We are unable
to predict what forms of competition will develop in the future, the extent of
such competition or its possible effects on our businesses.
Our Acquisition Strategy May Become Too Expensive Which Could
Adversely Affect Our Financial Performance
We may not be able to keep making acquisitions on attractive terms. If
we cannot continue to make acquisitions on attractive terms, our financial
performance and stock price could suffer.
If we pay for an acquisition with our stock, the acquisition could
dilute existing stockholders, depending on its terms. If we finance an
acquisition by borrowing, this would increase our already high leverage and
interest expense.
We May Not Be Able To Get the Consents Necessary To Implement Our
Acquisition Strategy
We have been able to get the necessary consents to make acquisitions in
the past, but this could change, or become more difficult, or require us to
incur additional costs, for reasons we cannot predict. Our acquisitions normally
require third-party consents that we do not control. These include the consents
of DIRECTV and the National Rural Telecommunications Cooperative for direct
broadcast satellite acquisitions, the FCC and the television networks for
broadcast TV acquisitions, and cable franchising authorities and programmers for
cable acquisitions. Some acquisitions also require the consent of our lenders.
We May Not Be Able To Integrate Acquired Companies Successfully
Which Could Affect Our Financial Performance
We could encounter difficulties integrating any given acquired business
into our operations. These difficulties can cost money and divert management's
attention from other important matters.
Forward-Looking Statements May Prove Inaccurate
This prospectus contains or incorporates by reference certain
statements and information that are "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. We use words such as "anticipate," "believe," "estimate," "expect,"
"intend," "project," "should" and similar expressions to identify forward
looking statements. Those statements include, among other things, the
discussions of our business strategy and expectations concerning our market
position, future operations, margins, profitability, liquidity and capital
resources, as well as statements concerning the integration of our acquisitions
and related achievement of cost savings and other synergies. We caution you that
reliance on any forward-looking statement involves risks and uncertainties, and
that although we believe that the assumptions on which our forward-looking
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statements are based are reasonable, any of those assumptions could prove to be
inaccurate, and, as a result, the forward-looking statements based on those
assumptions also could be incorrect. The uncertainties in this regard include,
but are not limited to, those identified in the risk factors discussed above. In
light of these and other uncertainties, you should not conclude that we will
necessarily achieve any plans and objectives or projected financial results
referred to in any of the forward-looking statements. We do not undertake to
release the results of any revisions of these forward-looking statements to
reflect future events or circumstances.
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Use of Proceeds
We currently intend to use the net proceeds from the sale of the
securities described in this prospectus for working capital and general
corporate purposes. In addition, we may, if the opportunity arises, use an
unspecified portion of the net proceeds to fund our continued growth, including
growth through capacity expansion, acquisitions, alliances and joint ventures.
The prospectus supplement for the securities offered will describe any
particular use of proceeds other than as set forth above.
Dividend Policy
Common Stock. We have not paid any cash dividends on our Class A common
stock or non-voting common stock and do not anticipate paying cash dividends on
our common stock in the foreseeable future. Our policy is to retain cash for
operations and expansion. Payment of cash dividends on the common stock is
restricted by Pegasus' publicly held debt securities and preferred stock. Our
ability to obtain cash from our subsidiaries with which to pay cash dividends is
also restricted by the subsidiaries' publicly held debt securities and bank
agreements.
Preferred Stock. We are allowed to pay dividends on the Series C
convertible preferred stock by issuing shares of our Class A common stock
instead of paying cash, and until July 1, 2002, we are allowed to pay dividends
on our Series A preferred stock by issuing more shares of that stock instead of
paying cash. We expect to issue shares of our Class A common stock and Series A
preferred stock to pay these dividends, and in any event our publicly held debt
securities do not permit us to pay cash dividends on our Series A Preferred
Stock until July 1, 2002. We are also obligated to pay cash dividends of $1.4
million per year on our Series B, Series D, and Series E junior convertible
participating preferred stock. These payments are subject to compliance with
outstanding indentures and the certificate of designation with respect to the
Series A preferred stock.
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
Earnings were inadequate to cover combined fixed charges and preferred
stock dividends by approximately $8.1 million, $9.8 million, $29.6 million,
$94.8 million and $204.0 million for the years ended December 31, 1995, 1996,
1997, 1998 and 1999, respectively. Assuming the acquisition of Golden Sky
Holdings, Inc., the investment in Personalized Media, the pending sale of our
Puerto Rico cable system, the closing of the new Pegasus Media & Communications
credit facility and the offering of Series C convertible preferred stock had
occurred on January 1, 1999, our earnings would have been inadequate to cover
our fixed charges and preferred stock dividends by $460.9 million for the year
ended December 31, 1999. For the purposes of the calculation of the ratio of
earnings to fixed charges, fixed charges consist of interest expense,
amortization of deferred financing costs and the component of operating lease
expense which management believes represents an appropriate interest factor.
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Description of Capital Stock
Our authorized capital stock consists of:
o 250,000,000 shares of Class A common stock, par value $.01 per share;
o 30,000,000 shares of Class B common stock, par value $.01 per share;
o 200,000,000 shares of non-voting common stock, par value $.01 per
share; and
o 20,000,000 shares of preferred stock, par value $.01 per share.
As of March 23, 2000, there were 15,939,203 shares of Class A common
stock outstanding, held of record by approximately 148 shareholders, and
4,581,900 shares of Class B common stock outstanding beneficially owned entirely
by Marshall W. Pagon, our President and Chief Executive Officer. None of our
non-voting common stock is issued and outstanding.
Of the 20,000,000 shares of preferred stock that we are authorized to
issue, approximately 143,684 shares have been designated as Series A preferred
stock, 5,707 shares have been designated as Series B junior convertible
participating preferred stock, 3,000,000 shares have been designated as Series C
convertible preferred stock, 22,500 shares have been designated as Series D
junior convertible participating preferred stock and 10,000 shares have been
designated Series E junior convertible participating preferred stock.
The following summary description relating to our capital stock sets
forth the material terms of our capital stock. This summary is not intended to
be complete. It is subject to, and qualified in its entirety by reference to,
our amended and restated certificate of incorporation and the certificates of
designation for the different series of preferred stock.
Description of Common Stock
Voting, Dividend and Other Rights. The voting powers, preferences and
relative rights of the Class A common stock, Class B common stock and non-voting
common stock are identical in all respects, except for the following
differences:
o holders of Class A common stock are entitled to one vote per share;
holders of Class B common stock are entitled to ten votes per share;
and holders of non-voting common stock have no voting right except as
provided by law;
o stock dividends on Class A common stock may be paid only in shares of
Class A common stock or non-voting common stock; stock dividends on
Class B common stock may be paid only in shares of Class B common
stock or non-voting common stock; and stock dividends on non-voting
common stock may be paid only in shares of non-voting common stock;
o shares of Class B common stock can be converted into Class A common
stock and are subject to certain restrictions on ownership and
transfer.
Holders of non-voting common stock are not entitled to vote on
amendments to Pegasus' certificate of incorporation, whether such amendment
increases or decreases the number of shares of non-voting common stock, or
otherwise. Where holders of non-voting common stock are entitled to a vote by
law, they are entitled to one vote per share, and they will vote together as a
single class with the holders of the Class A common stock and Class B common
stock, unless the law requires a separate vote.
Holders of a majority of the outstanding shares of the Class A common
stock and the Class B common stock, voting as separate classes, must approve any
amendment to the amended and restated certificate of incorporation that has any
of the following effects:
o any decrease in the voting rights per share of Class A common stock
or any increase in the voting rights of Class B common stock;
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o any increase in the number of shares of Class A common stock into
which shares of Class B common stock are convertible;
o any relaxation on the restrictions on transfer of the Class B common
stock; or
o any change in the powers, preferences or special rights of the Class
A common stock or the Class B common stock adversely affecting the
holders of the Class A common stock.
Holders of a majority of the outstanding shares of the Class A common
stock and the Class B common stock, voting as separate classes, must approve the
authorization or issuance of additional shares of Class B common stock, except
when we take parallel action with respect to Class A common stock in connection
with stock dividends, stock splits, recapitalizations, and similar changes.
Except as described above or as required by law, holders of Class A common stock
and Class B common stock vote together on all matters presented to the
stockholders for their vote or approval, including the election of directors.
As of March 23, 2000, the outstanding shares of Class A common stock
equal approximately 77.7% of the total number of shares of common stock
outstanding, and the holders of Class B common stock have control of
approximately 74.2% of the combined voting power of the common stock.
Accordingly, the holder of Class B common stock currently has the power to elect
our entire board of directors. In general, Mr. Pagon, by virtue of his
beneficial ownership of all of the Class B common stock, may determine the
outcome of any matter submitted to the stockholders for approval including the
outcome of all corporate transactions. Mr. Pagon and the Class B common stock
are currently subject to the terms of a voting agreement.
Each share of common stock is entitled to receive dividends as declared
by the board of directors out of funds legally available. The Class A common
stock, Class B common stock and non-voting common stock share equally on a
share-for-share basis in cash dividends.
In the event of a merger or consolidation to which we are a party, each
share of Class A common stock, Class B common stock and non-voting common stock
will be entitled to receive the same consideration, except that, if we are not
the surviving corporation, holders of Class B common stock may receive stock
with greater voting power in lieu of stock with lesser voting power received by
holders of Class A common stock, and holders of non-voting common stock may
receive stock with no voting rights.
Our stockholders have no preemptive or other rights to subscribe for
additional shares. Subject to any rights of holders of any preferred stock, all
holders of common stock, regardless of class, are entitled to share equally on a
share-for-share basis in any assets available for distribution to stockholders
if we liquidate, dissolve or wind up. No shares of common stock are subject to
redemption or a sinking fund. All issued common stock is validly issued, fully
paid and nonassessable. In the event of any change in the number of outstanding
shares of either class of common stock from a stock split, combination,
consolidation or reclassification, we are required to take parallel action with
respect to the other class so that the number of shares of each class bears the
same relationship to each other as they did before the event. Cumulative voting
is not permitted.
Conversion Rights and Restrictions on Transfer. The Class A common
stock and non-voting common stock have no conversion rights. Each share of Class
B common stock is convertible at the option of the holder at any time and from
time to time into one share of Class A common stock. Any holder of shares of
Class B common stock desiring to transfer shares of Class B common stock must
present those shares to us for conversion into an equal number of shares of
Class A common stock. After conversion, the converted shares may be freely
transferred, subject to applicable securities laws. A holder of Class B common
stock may transfer shares of Class B common stock without conversion if the
transfer is to one of the following:
o Marshall W. Pagon or any of his immediate family members. For
purposes of this paragraph, immediate family member includes Mr.
Pagon's spouse and parents, the lineal descendents of either of his
parents, and the spouses of their lineal descendents. Adoptive and
step relationships are included for purposes of defining parentage
and descent;
o the estate of Marshall W. Pagon or any of his immediate family
members until the property of such estate is distributed in
accordance with such deceased's will or applicable law; or
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o any voting or other trust, corporation, partnership or other entity,
more than 50% of the voting equity interests of which are owned
directly or indirectly by, and which is controlled by, Marshall W.
Pagon or any of his immediate family members.
If ownership or voting rights of shares of Class B common stock are
transferred other than in accordance with the preceding paragraph, or a
transferee loses the status that allowed him or her to hold shares of Class B
common stock without conversion, such shares of Class B common stock will
automatically convert into an equal number of shares of Class A common stock.
Because of these restrictions, no trading market is expected to develop in the
Class B common stock and the Class B common stock will not be listed or traded
on any exchange or in any market.
In the event that shares of non-voting common stock are issued in the
future, Pegasus would decide at that time whether to register those shares under
the Securities Act of 1933. If they are not registered, the shares of non-voting
common stock would be subject to restrictions on transfer.
Pegasus will deliver to the holders of non-voting common stock the same
proxy statements, without proxies except as required by law, and annual reports
and other information and reports as it delivers to holders of Class A common
stock to the extent required by law or the market in which Pegasus' stock is
traded.
Effects of Disproportionate Voting Rights. The disproportionate voting
rights of the classes of common stock could have any adverse effect on the
market price of the Class A common stock. For example, we could not be acquired
in a hostile takeover without Marshall W. Pagon's approval as long as he has
voting control. Merger proposals, tender offers, or proxy contests may be
discouraged even if such actions were favored by holders of Class A common
stock. Accordingly, holders of Class A common stock may be unable to sell their
shares at a premium over prevailing market prices, since takeover bids
frequently involve purchases of stock directly from shareholders at a premium
price.
Description of Preferred Securities
Description of Preferred Stock
Our board of directors may issue 20,000,000 shares of preferred stock
par value $.01 per share without shareholder approval, and may determine their
terms, including the following:
o the designation of the series of preferred stock and the number of
shares which will constitute such series;
o the public offering price;
o any discount paid to, or received by, any underwriters;
o the voting powers, if any;
o the dividend rate of such series and any preferences in relation to
the dividends payable on any other class or series of our capital
stock and any limitations or conditions on the payment of dividends;
o the redemption price and terms of redemption, if redeemable;
o the amount payable upon our liquidation, dissolution or winding up;
o the amount of a sinking fund, if any;
o conversion rights, if any, including the conversion price or rate of
exchange and the adjustment, if any, to be made to the conversion
price or rate of exchange;
o any other designation, preferences and relative, participating,
optional or other special rights; and
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o any other qualifications, limitations or restrictions relating to the
preferred stock.
Our board of directors may delegate the power to determine the terms
listed above to a committee of our board of directors. The terms of the
preferred stock, as determined by our board of directors or committee will be
described in the applicable prospectus supplement.
In addition to the terms set by our board of directors or finance
committee, Delaware law provides that the holders of preferred stock have the
right to vote separately as a class on any proposal involving a fundamental
change in the rights of holders of such preferred stock.
As described under Description of Depositary Shares below we may, at
our option, elect to offer depositary shares evidenced by depositary receipts,
each representing an interest that will be specified in a prospectus supplement
relating to the particular series of preferred stock in a share of the
particular series of preferred stock issued and deposited with a depositary.
Description of Series A Preferred Stock
General. The following is a summary of certain terms of the Series A
preferred stock. The terms of the Series A preferred stock are set forth in the
certificate of designation. This summary is not intended to be complete and is
subject to, and qualified in its entirety by reference to, Pegasus' amended and
restated certificate of incorporation and the certificate of designation. To
obtain copies of the certificates of designation, please see Where You Can Find
More Information.
Pursuant to the certificate of designation, we have issued
approximately 143,684 shares of Series A preferred stock with a liquidation
preference of $1,000 per share. This includes shares issued to pay in-kind
dividends on the Series A preferred stock. On January 1, 2007, we must redeem,
subject to the legal availability of funds, all outstanding shares of Series A
preferred stock at a price in cash equal to the liquidation reference, plus
accrued and unpaid dividends, if any, to the date of redemption.
Dividends. The holders of the Series A preferred stock are entitled to
receive, as dividends are declared by the board of directors out of funds
legally available, cumulative preferential dividends from the issue date of the
Series A preferred stock accruing at the rate per share of 12 3/4% per annum,
payable semi-annually in arrears on January 1 and July 1 of each year.
Accumulated unpaid dividends bear interest at a per annum rate 200 basis points
in excess of the annual dividend rate on the Series A preferred stock. Dividends
are payable in cash, except that on or prior to January 1, 2002, dividends may
be paid, at our option, by the issuance of additional shares of Series A
preferred stock having an aggregate liquidation preference equal to the amount
of such dividends.
Optional Redemption. We do not have the option to redeem Series A
preferred stock until after January 1, 2002. We may redeem the Series A
preferred stock after that date, starting at 106.375% of the liquidation
preference during the 12-month period beginning January 1, 2002 and declining
annually to 100.000% of the liquidation preference on January 1, 2005 and
thereafter.
Change of Control. Upon the occurrence of a change of control of
Pegasus, each holder of shares of Series A preferred stock will have the right
to require us to repurchase all or any part of such holder's Series A preferred
stock at an offer price in cash equal to 101% of the aggregate liquidation
preference of the preferred stock the holder wishes to sell, plus accrued and
unpaid dividends, if any, to the date of purchase. Generally, a change of
control means the occurrence of any of the following:
o the sale of all or substantially all of our assets to any person
other than Marshall W. Pagon or his related parties as described in
the certificate of designation;
o the adoption of a plan relating to the liquidation or dissolution of
Pegasus;
o the consummation of any transaction in which a person becomes a
beneficial owner of more of our Class A common stock than is
beneficially owned at such time by Mr. Pagon and his related parties;
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o the consummation of any transaction in which Mr. Pagon and his
related parties cease to have at least 30% of the combined voting
power of all our voting stock or Mr. Pagon and his affiliates acquire
beneficial ownership of more than 66 2/3% of our Class A common
stock; or
o the first day on which a majority of the members of our board of
directors are not continuing directors - essentially, directors
elected or recommended by the current board of directors or their
designated replacements.
Certain Covenants. The certificate of designation contains a number of
covenants restricting our operations and those of our subsidiaries. For example,
the covenants limit Pegasus' ability to issue capital stock ranking on parity
with or senior to the Series A preferred stock, and the ability of Pegasus and
its subsidiaries to incur additional indebtedness, pay dividends or make
distributions, make certain investments, issue subsidiary stock, enter into
certain consolidations or mergers and enter into certain transactions with
affiliates.
Description of Series B, Series D and Series E Junior Convertible Participating
Preferred Stock
General. The following is a summary of certain terms of Series B,
Series D and Series E junior convertible participating preferred stock. The
terms of the Series B, Series D and Series E junior convertible participating
preferred stock are set forth in the respective certificates of designation.
This summary is not intended to be complete and is subject to, and qualified in
its entirety by reference to, Pegasus' amended and restated certificate of
incorporation and the certificates of designation. To obtain copies of the
certificates of designation, please see Where You Can Find More Information.
Under the respective certificates of designation, the following number
of shares of Series B, Series D and Series E junior convertible participating
preferred stock, each with a liquidation preference of $1,000 per share plus any
accrued but unpaid dividends, have been issued:
o 5,707 shares of Series B junior convertible participating preferred
stock;
o 22,500 shares of Series D junior convertible participating preferred
stock; and
o 10,000 shares of Series E junior convertible participating preferred
stock.
With respect to dividend distributions, the Series B, Series D and
Series E junior convertible participating preferred stock rank senior to all
classes of our common stock, junior to the Series A preferred stock and Series C
convertible preferred stock, and on a parity with each other. In the event of a
liquidation, the Series B, Series D and Series E junior convertible
participating preferred stock will rank, to the extent of their respective
liquidation preferences, junior to the Series A preferred stock and Series C
convertible preferred stock, senior to the common stock and on parity with each
other. The Series B, Series D and Series E preferred stock will also share pro
rata with the common stock, each other and all other series of participating
preferred stock after the common stock has received an amount equal to the sum
of the liquidation preferences of all outstanding series of participating
preferred stock.
Voting Rights. Holders of Series B, Series D and Series E junior
convertible participating preferred stock will have no voting rights with
respect to general corporate matters except as provided by Delaware law. They
have no right to consent or withhold consent to any of the proposals described
herein.
Dividends. The holders of shares of the Series B, Series D and Series E
junior convertible participating preferred stock are entitled to receive, when,
as and if declared by our board of directors out of funds legally available,
cumulative preferential cash dividends in the amount of $1.4 million per year in
the aggregate for all series.
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Conversion Rights. Each share of Series B, Series D and Series E junior
convertible participating preferred stock will be convertible at any time at the
option of the holder into that number of whole shares of our Class A common
stock as is equal to the stated liquidation preference of $1,000 per share,
divided by an initial conversion price, subject to adjustment upon the
occurrence of specified events. As a result, each share of Series B, and Series
D junior convertible participating preferred stock will initially be convertible
into 16.24, and 9.77 shares of Class A common stock, respectively. The
conversion ratio of the Series E junior convertible participating preferred
stock will be approximately 10.78.
Redemption. At our option, we may redeem all, but not less than all, of
the outstanding shares of Series B junior convertible participating preferred
stock at any time after January 4, 2005 at a price per share equal to $1,000
plus any accrued but unpaid dividends, if any, whether or not declared. At the
option of the holders of all of the Series B junior convertible participating
preferred stock, they may require us to redeem all, but not less than all, of
the outstanding shares of Series B junior convertible participating preferred
stock at any time after January 4, 2002. The redemption will be at a price per
share equal to $1,000 plus any accrued but unpaid dividends, if any, whether or
not declared.
At our option, we may redeem all, but not less than all, of the
outstanding shares of Series D junior convertible participating preferred stock
at any time at a price per share equal to $1,000 plus any accrued but unpaid
dividends, if any, whether or not declared. At the option of the holders of all
outstanding shares of Series D junior convertible participating preferred stock,
they may require us to redeem 10,000 of the outstanding shares at any time after
March 1, 2000, an additional 6,125 of the outstanding shares at any time after
February 1, 2002, and the remainder of the outstanding shares at any time after
February 1, 2003. The redemption will be at a price per share equal to $1,000
plus any accrued but unpaid dividends, if any, whether or not declared.
At our option, we may redeem all, but not less than all, of the
outstanding shares of Series E junior convertible participating preferred stock
at any time until February 2001 for $1,000 per share, and thereafter for $1,000
per share, in both cases plus accrued but unpaid dividends, if any, whether or
not declared. At the option of the holders all outstanding shares of Series E
junior convertible participating preferred stock, they may require us to redeem
5,000 of the outstanding shares beginning in February 2002, and the remaining
5,000 shares beginning in February 2003. The redemption price will be $1,000 per
share plus accrued but unpaid dividends, if any, whether or not declared.
However, we will not be obligated to redeem any of the Series B, Series
D and Series E junior convertible participating preferred stock unless at the
time we are able to do so in compliance with the certificates of designation for
our Series A preferred stock and Series C convertible preferred stock, our
indentures and any subsequent certificate of designation, indenture or similar
agreement which limits our ability to redeem the Series B, Series D and Series E
junior convertible participating preferred stock.
Description of Series C Convertible Preferred Stock
General. The following is a summary of certain terms of the Series C
convertible preferred stock. The terms of the Series C convertible preferred
stock are set forth in the certificate of designation. This summary is not
intended to be complete and is subject to, and qualified in its entirety by
reference to, Pegasus' amended and restated certificate of incorporation and the
certificate of designation. To obtain a copy of the certificate of designation,
see Where You Can Find More Information.
Pursuant to the certificate of designation, 3,000,000 shares of Series
C convertible preferred stock, with a liquidation preference of $100 per share
plus any accrued but unpaid dividends, have been issued. With respect to
dividend distributions and distributions upon liquidation, winding-up and
dissolution, the Series C convertible preferred stock ranks junior to our Series
A preferred stock senior to our Series B, D and E preferred stock and all
classes of our common stock.
Voting Rights. Holders of Series C convertible preferred stock will
have no voting rights with respect to general corporate matters except as
provided by Delaware law or, in limited circumstances, as provided in the
certificate of designation relating to the Series C convertible preferred stock.
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Dividends. The holders of shares of the Series C convertible preferred
stock are entitled to receive, when, as and if declared by our board of
directors out of funds legally available, cumulative preferential dividends from
the issue date of the Series C convertible preferred stock. These dividends will
accrue at an annual rate of 6 1/2% of the liquidation preference of $100 per
share, payable quarterly in arrears. Dividends are payable in cash or, at our
option, in shares of our Class A common stock or a combination thereof.
Conversion Rights. Each share of Series C convertible preferred stock
will be convertible at any time at the option of the holder into that number of
whole shares of our Class A common stock as is equal to the stated liquidation
preference of $100 per share, divided by an initial conversion price of $127.50
subject to adjustment upon the occurrence of specified events. As a result, each
share of Series C convertible preferred stock will initially be convertible into
0.7843 shares of Class A common stock.
Optional Redemption. Beginning February 1, 2003, we may redeem the
Series C convertible preferred stock at redemption premiums set forth in the
certificate of designation plus accumulated and unpaid dividends, if any.
Special Redemption. On or after August 1, 2000 but prior to February 1,
2003, we may redeem the Series C convertible preferred stock at a redemption
premium of 105.525% plus accumulated and unpaid dividends. We may only do this
if the trading price of the Series C convertible preferred stock equals or
exceeds $191.25 for a specified trading period.
Change of Control. In the event of a "change of control" of Pegasus, as
that term is defined in the certificate of designation, holders of the Series C
convertible preferred stock will, in the event that the market price per share
of our Class A common stock at such time is less than the conversion price of
the Series C convertible preferred stock, have a one-time option to convert such
holder's shares of Series C convertible preferred stock into shares of our Class
A common stock at a conversion price equal to the greater of:
o the market price per share of our Class A common stock as of the date
of the change of control; or
o $68.00 per share.
In lieu of issuing the shares of our Class A common stock issuable upon
conversion in the event of a change of control, we may, at our option, make a
cash payment equal to the market value of the shares of our Class A common stock
otherwise issuable.
Description of Depositary Shares
The summary set forth below and in any prospectus supplement describing
provisions of the deposit agreement and of the depositary shares and depositary
receipts is not complete. You should carefully review the prospectus supplement
and the form of deposit agreement and form of depositary receipts relating to
each series of preferred stock.
General. We may, at our option, elect to have shares of preferred stock
be represented by depositary shares. The shares of any series of preferred stock
underlying the depositary shares will be deposited under a separate deposit
agreement that we will enter with a bank or trust company. Such bank will be
considered the depositary. The prospectus supplement relating to a series of
depositary shares will set forth the name and address of the depositary. Subject
to the terms of the deposit agreement, each owner of a depositary share will be
entitled, in proportion to the applicable interest in the number of shares of
preferred stock underlying the depositary share, to all the rights and
preferences of the preferred stock underlying such depositary share, including
dividend, voting, redemption, conversion, exchange and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to a deposit agreement, each of which will represent the applicable
interest in a number of shares of a particular series of preferred stock
described in the applicable prospectus supplement.
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Unless otherwise specified in the prospectus supplement, a holder of
depositary shares is not entitled to receive the shares of preferred stock
underlying the depositary shares.
If required by law, engraved depositary receipts will be prepared.
Pending their preparation, the depositary may, upon our written order, issue
temporary depositary receipts substantially identical to the definitive
depositary receipts. Definitive depositary receipts will thereafter be prepared
without unreasonable delay.
Dividends and Distributions. The depositary will distribute all cash
dividends or other cash distributions received for preferred stock to the record
holders of depositary shares representing such preferred stock in proportion to
the numbers of such depositary shares owned by such holders on the relevant
record date.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
entitled to such property, as nearly as practicable, in proportion to the number
of depositary shares owned by such holder. However, if the depositary determines
that it is not feasible to make such distribution, it may, with our approval,
sell the property and distribute the net proceeds from the sale to the holders.
The deposit agreement also contains provisions relating to the manner
in which any subscription or similar rights we offer to holders of preferred
stock shall be made available to holders of depositary shares.
Conversion and Exchange. If any preferred stock underlying the
depositary shares is subject to provisions relating to its conversion or
exchange as set forth in an applicable prospectus supplement, each record holder
of depositary shares will have the right or obligation to convert or exchange
their depositary shares pursuant to its terms.
Redemption of Depositary Shares. If a series of preferred stock
underlying the depositary shares is subject to redemption, the depositary shares
will be redeemed from the proceeds received by the depositary resulting from the
redemption, in whole or in part, of the series of preferred stock held by the
depositary. The redemption price per depositary share will be equal to the
aggregate redemption price payable with respect to the number of shares of
preferred stock underlying the depositary shares. Whenever we redeem preferred
stock from the depositary, the depositary will redeem as of the same redemption
date a proportionate number of depositary shares representing the shares of
preferred stock that were redeemed. If less than all the depositary shares are
to be redeemed, the depositary shares to be redeemed will be selected by lot or
pro rata as we may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price payable upon such redemption. Any funds we deposit with the
depositary for any depositary shares which the holders fail to redeem will be
returned to us after a period of two years from the date we deposit such funds.
Voting. Upon receipt of notice of any meeting or action in lieu of any
meeting at which the holders of any shares of preferred stock underlying the
depositary shares are entitled to vote, the depositary will mail the information
contained in the notice to the record holders of the depositary shares relating
to the preferred stock. Each record holder of such depositary shares on the
record date which will be the same date for the preferred stock, will be
entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the number of shares of preferred stock underlying the holder's
depositary shares. The depositary will make an effort to vote the number of
shares of preferred stock underlying such depositary shares in accordance with
the holders' instructions, and we will agree to take all action which may be
deemed necessary by the depositary in order to enable the depositary to do so.
Amendment of Deposit Agreement. The form of depositary receipt
evidencing the depositary shares and any provision of the deposit agreement may
at any time be amended by agreement between us and the depositary. However, any
amendment which materially and adversely alters the rights of existing holders
of depositary shares will not be effective unless such amendment has been
approved by at least a majority of the depositary shares then outstanding.
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Charges of Depositary. We will pay all transfer and other taxes and
governmental charges that arise solely from the existence of the depositary
arrangements. We will pay charges of the depositary in connection with the
initial deposit of preferred stock and any exchange or redemption of the
preferred stock. Holders of depositary shares will pay all other transfer and
other taxes and governmental charges, and, other charges as are expressly
provided in the deposit agreement to be for their accounts.
Miscellaneous. We, or at our option, the depositary, will forward to
the holders of depositary shares all of our reports and communications which we
are required to furnish to the holders of preferred stock. Neither we nor the
depositary will be liable if we or it is prevented or delayed by law or any
circumstances beyond our or its control in performing our or its obligations
under the deposit agreement. Our obligations and the depositary's obligations
under the deposit agreement will be limited to performance in good faith and
neither we nor the depositary will be obligated to prosecute or defend any legal
proceeding in respect of any depositary share or preferred stock unless
satisfactory indemnity has been furnished. Both we and the depositary may rely
upon written advice of counsel or accountants, or information provided by
persons presenting preferred stock for deposit, holders of depositary shares or
other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary; Termination of the Deposit
Agreement. The depositary may resign at any time by delivering notice to us of
its election to do so, and we may at any time remove the depositary. Any such
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of such appointment. We will appoint a successor
depositary within 60 days after delivery of the notice of resignation or
removal. We may terminate the deposit agreement or it may be terminated by the
depositary if a period of 90 days expires after the depositary has delivered
written notice to us of its election to resign and we have not appointed a
successor depositary. Upon termination of the deposit agreement, the depositary
will discontinue the transfer of depositary receipts, will suspend the
distribution of dividends to the holders of depositary receipts, and will not
give any further notices, other than notice of such termination, or perform any
further acts under the deposit agreement except that the depositary will
continue to deliver preferred stock certificates, together with dividends and
distributions and the net proceeds of any sales of rights, preferences,
privileges or other property in exchange for depositary receipts surrendered.
Upon our request, the depositary will deliver to us all books, records,
certificates evidencing preferred stock, depositary receipts and other documents
relating to the subject matter of the deposit agreement.
Description of Warrants
The following description of the terms of the warrants sets forth
certain general rules and provisions of the warrants to which any prospectus
supplement may relate. The prospectus supplement relating to the warrants will
describe the particular term of the warrants and the extent, if any, to which
these general provisions may apply to the warrants offered.
Pegasus may issue warrants to purchase senior debt securities, senior
subordinated debt securities, subordinated debt securities, preferred stock,
non-voting common stock, depositary shares, Class A common stock or any
combination thereof. Such warrants may be issued independently or together with
any such underlying warrant securities and may be attached or separate from the
underlying warrant securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between Pegasus and a warrant
agent. The warrant agent will act solely as an agent of Pegasus in connection
with the warrants of such series and will not assume any obligation or
relationship of agency for or with holders or beneficial owners of warrants.
The applicable prospectus supplement will describe the terms of any
warrants in respect of which this prospectus is being delivered, including the
following:
o the title of such warrants;
o the aggregate number of such warrants;
o the price or prices at which such warrants will be issued;
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o the designation and terms of the underlying warrant securities
purchasable upon exercise of such warrants and the number of such
underlying warrant securities issuable upon exercise of such
warrants;
o the date on which the right to exercise such warrants shall commence
and the date on which such right shall expire;
o whether such warrants will be issued in registered form or bearer
form;
o if applicable, the minimum or maximum amount of such warrants which
may be exercised at any one time;
o if applicable, the designation and terms of the underlying warrant
securities with which such warrants are issued and the number of such
warrants issued with each such underlying warrant security;
o if applicable, the date on and after which such warrants and the
related underlying warrant securities will be separately
transferable;
o information with respect to book-entry procedures, if any;
o if applicable, a discussion of certain United States federal income
tax considerations;
o the procedures and conditions relating to the exercise of such
warrants; and
o any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
Warrant certificates may be exchanged for new warrant certificates of
different denominations and warrants may be exercised at the corporate trust
office of the warrant agent or any other office indicated in the prospectus
supplement. Prior to the exercise of their warrants, holders of warrants
exercisable for debt securities will not have any of the rights of holders of
the debt securities purchasable upon such exercise and will not be entitled to
payments of principal, or premium, if any, or interest, if any, on the debt
securities purchasable upon such exercise. Prior to the exercise of their
warrants for shares of preferred stock, non-voting common stock, or Class A
common stock, holders of such warrants will not have any rights of holders of
the preferred stock, non-voting common stock, or Class A common stock
purchasable upon such exercise and will not be entitled to dividend payments, if
any, or voting rights of the preferred stock or Class A common stock purchasable
upon such exercise.
Description of Units
As specified in the applicable prospectus supplement, units will
consist of one or more Class A common securities, warrants, non-voting common
stock, debt securities or preferred securities or any combination thereof.
Reference is made to the applicable prospectus supplement for:
o all terms of the units and of the Class A common securities,
warrants, non-voting common stock, debt securities or preferred
securities, or any combination thereof, comprising the units,
including whether and under what circumstances the securities
comprising the units may or may not be traded separately;
o a description of the terms of any unit agreement governing the units;
and
o a description of the provisions for the payment, settlement, transfer
or exchange of the units.
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Description of Debt Securities
The following is a general description of the debt securities which may
be issued from time to time by us. The particular terms relating to each debt
security will be set forth in a prospectus supplement.
The debt securities will be our direct, unsecured obligations. The
senior debt securities will rank equally with all of our other senior and
unsubordinated debt. The senior subordinated debt securities will have a junior
position to all of our senior debt. The subordinated securities will have a
junior position to all of our senior debt and all of our other senior
subordinated debt.
Since a significant part of our operations are conducted through
subsidiaries, a significant portion of our cash flow, and consequently, our
ability to service debt, including the debt securities, is dependent upon the
earnings of our subsidiaries and the transfer of funds by those subsidiaries to
us in the form of dividends or other transfers, supplemented with borrowings.
Some of our operating subsidiaries may finance their operations by
borrowing from external creditors; lending agreements between some of the
operating subsidiaries and external creditors may restrict the amount of net
assets available for cash dividends and other payments to us.
In addition, holders of our debt securities will have a junior position
to claims of creditors of our subsidiaries, including trade creditors, debt
holders, secured creditors, taxing authorities, guarantee holders and any
preferred stockholders, except to the extent that we are recognized as a
creditor of our subsidiary. Any claims of Pegasus as the creditor of its
subsidiary would be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by us.
Each series of the debt securities will be issued under an indenture
between Pegasus and First Union National Bank, as trustee.
We have summarized below the material provisions of the indenture. The
indenture is filed as an exhibit to the registration statement and is
incorporated into this prospectus by reference. You should read the indenture
for provisions that may be important to you.
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Terms Applicable to Senior Debt Securities, Senior Subordinated Debt
Securities and Subordinated Debt Securities
No limit on debt amounts. The indenture does not limit the amount of
debt which can be issued under the indenture. That amount is set from time to
time by our board of directors.
Prospectus Supplements. The applicable prospectus supplement will
contain the specific terms for the debt securities including some or all of the
following:
o title of the securities;
o offering price;
o any limit on the amount that may be issued;
o whether or not the debt securities will be issued in global form and
who the depository will be;
o maturity date(s);
o interest rate or the method of computing the interest rate;
o dates on which interest will accrue, or how the dates will be
determined, the interest payment dates and any related record dates;
o place(s) where payments will be made;
o terms and conditions on which the debt securities may be redeemed at
our option;
o date(s), if any, on which, and the price(s) at which we are obligated
to redeem, or at the holder's option to purchase, the debt securities
and related terms and provisions;
o any provisions granting special rights to holders when a specified
event occurs;
o details of any required sinking fund payments;
o any changes to or additional events of default or covenants;
o any special tax implications of the debt securities;
o subordination terms of any senior subordinated debt securities and
subordinated debt securities;
o any events of default in lieu of or in addition to those described in
this prospectus and remedies relating to events of default;
o terms, if any, on which a series of debt securities may be
convertible into or exchangeable for our common stock, preferred
stock or other debt securities, including provisions as to whether
conversion or exchange is mandatory, at the option of the holder or
at our option; and
o any other terms that are not inconsistent with the indenture.
Unless otherwise indicated in an applicable prospectus supplement
relating to debt securities, the debt securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiple thereof. No service charge will be made for any transfer or exchange of
the debt securities, but we may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with a transfer or
exchange.
Debt securities may be issued under the indenture as original issue
discount securities (as defined below) to be offered and sold at a substantial
discount from their stated principal amount. In addition, under Treasury
regulations it is possible that the debt securities which are offered and sold
at their stated principal amount would, under certain circumstances, be treated
as issued at an original issue discount for federal income tax purposes. Federal
income tax consequences and other special considerations applicable to any such
original issue discount securities (or other debt securities treated as issued
at an original issue discount) will be described in the prospectus supplement
relating to such securities.
"Original Issue Discount Security" means any debt security that does
not provide for the payment of interest prior to maturity or which is issued at
a price lower than its principal amount and which provides that upon redemption
or acceleration of its stated maturity an amount less than its principal amount
shall become due and payable.
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Covenants. We will:
o pay the principal, interest and any premium on the debt securities
when due; and
o maintain a place of payment.
Consolidation, Merger and Sale of Assets. We will not consolidate with
or merge into any other corporation or transfer all or substantially all of our
assets unless:
o the successor is a corporation organized in the United States and
expressly assumes the due and punctual payment of the principal and
interest on all debt securities issued under the indenture and the
performance of every other covenant of the indenture; and
o immediately after we consolidate or merge, no event of default and no
event which, after notice or lapse of time, or both, would become an
event of default, shall have happened and be continuing.
Upon any such consolidation, merger or transfer, the successor
corporation shall be substituted for Pegasus under the indenture and Pegasus
shall be relieved of all obligations and covenants under the indenture and the
debt securities.
Events of default. The following are events of default:
o we fail to pay the principal, any premium or any sinking fund payment
when due;
o we fail to pay interest within 30 days of the due date;
o we fail to observe or perform any other covenant contained in the
debt security or indenture and such failure continues for 90 days
after we receive notice from the trustee or holders of at least 25%
in aggregate principal amount of the outstanding debt securities of
that series; and
o certain events of bankruptcy or insolvency, whether voluntary or not.
An event of default with respect to one series of debt securities does
not necessarily constitute an event of default with respect to any other series
of debt securities.
The trustee may withhold notice to the holders of any series of debt
securities of any default with respect to such series (except in the payment of
principal, premium or interest) if it considers such withholding to be in the
interests of such holders.
If an event of default with respect to any series of debt securities
shall have occurred and be continuing, the trustee or the holders of 25% in
aggregate principal amount of the debt securities of such series may declare the
principal of all the debt securities of such series, or in the case of
discounted debt securities, such portion of the discounted debt securities as
may be described in the prospectus supplement, to be immediately due and
payable.
The indenture contains a provision entitling the trustee to be
indemnified by the holders before proceeding to exercise any right or power at
the request of any of the holders.
The holders of a majority in principal amount of the outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or with respect to the debt
securities. The right of a holder to institute a proceeding with respect to the
indenture is subject to certain conditions, including giving notice and
indemnity to the trustee. However, the holder has an absolute right to receipt
of principal, premium, if any, and interest at the stated maturities (or, in the
case of redemption, on the redemption date) or to institute suit for the
enforcement of such payment.
The holders of a majority in principal amount of the outstanding debt
securities of any series may waive any past defaults except:
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o a default in payment of the principal or interest; and
o a default in respect of a covenant or provision of the indenture
which cannot be amended or modified without the consent of the holder
of each debt security affected. In addition, if the consent of the
holder of each outstanding senior subordinated debt security is
required, the waiver shall not be effective until each holder of the
securities shall have consented to such waiver.
We will periodically file statements with the trustees regarding our
compliance with covenants in the indenture.
Modifications and Amendments. Subject to the qualifications set forth
below, modifications and amendments to the indenture may be made by us and the
trustee without the consent of the holders of a majority in principal amount of
the outstanding debt securities. The following changes can only be made with the
consent of each affected holder:
o a change in the terms of payment of principal, premium, or interest;
and
o a reduction in the percentage of holders necessary to amend the
indenture or waive any default.
Satisfaction and Discharge. Unless otherwise specified in the
prospectus supplement, we can satisfy our obligations under outstanding debt
securities and need not comply with most of the covenants in the indenture if we
deposit with the trustee funds sufficient to pay all amounts owed in the future
and obtain an opinion of counsel that the deposit itself will not cause the
holders of debt securities to recognize gain or loss for income tax purposes.
Upon our request, the indenture will no longer be effective for almost
all purposes if either:
o all outstanding securities have been delivered to the trustee for
cancellation; or
o the only securities which are still outstanding have, or within one
year will, become due and payable or are to be called for redemption,
and we have deposited with the trustee funds which are sufficient to
make all future payments.
Concerning the Trustee. The prospectus supplement with respect to
particular debt securities will describe any relationship that we may have with
the trustee for the debt securities offered. Pegasus and certain of its
subsidiaries and affiliates may also maintain bank accounts, borrow money and
have other customary banking or investment banking relationships with the
trustee in the ordinary course of business.
Form, Exchange, Transfer. Unless otherwise specified in the prospectus
supplement, debt securities will be issued in registered form without coupons.
They may also be issued in global form with accompanying book-entry procedures
as outlined below.
A holder of debt securities of any series can exchange the debt
securities for other debt securities of the same series, in any authorized
denomination and with the same terms and aggregate principal amount. They are
transferable at the corporate trust office of the trustee or at any transfer
agent designated by us for that purpose. No charge will be made for any such
exchange or transfer except for any tax or governmental charge related to such
exchange or transfer.
Global Securities. The registered debt securities may be issued in the
form of one or more fully registered global securities that will be deposited
with and registered in the name of a depositary or with a nominee for a
depositary identified in the prospectus supplement.
The specific terms of the depositary arrangement with respect to any
debt securities to be represented by a registered global security will be
described in the prospectus supplement.
Ownership of beneficial interests in a registered global security will
be limited to persons that have accounts with the depositary for such registered
global security ("participants") or persons that may hold interests through
participants. Upon the issuance of a registered global security, the depositary
will credit, on its book-entry
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registration and transfer system, the participants' accounts with the principal
amounts of the debt securities represented by the registered global security
beneficially owned by such participants. Ownership of beneficial interests in
such registered global security will be shown on, and the transfer of such
ownership interests will be effected, only through records maintained by the
depositary for such registered global security or on the records of participants
for interests of persons holding through participants.
So long as the depositary for a registered global security, or its
nominee, is the registered owner of a registered global security, the depositary
or the nominee will be considered the sole owner or holder of the debt
securities represented by the registered global security for all purposes.
Except as set forth below, owners of beneficial interests in a registered global
security will not:
o be entitled to have the debt securities represented by such
registered global security registered in their names;
o receive or be entitled to receive physical delivery of such debt
securities in definitive forms; and
o be considered the owners or holders of the debt securities.
Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for such
registered global security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the applicable indenture. We understand
that under existing industry practices, if we request any action of holders, or
if an owner of a beneficial interest in a registered global security desires to
take any action which a holder is entitled to take under the applicable
indenture, the depositary would authorize the participants holding the relevant
beneficial interests to take such action, and such participants would authorize
beneficial owners owning through such participants to take such action.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to such depositary or its nominee, as the
case may be, as the registered owner of such registered global security. Neither
Pegasus nor the trustee will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in such registered global security.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payment of principal, premium or
interest will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such registered global
security as shown on the records of such depositary. We also expect that
payments by participants to owners of beneficial interests in such a registered
global security held by the participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name."
We may at any time determine not to have any of the debt securities of
a series represented by one or more registered global securities and, in such
event, will issue debt securities of such series in definitive form in exchange
for all of the registered global security or securities representing such debt
securities. Any debt securities issued in definitive form in exchange for a
registered global security will be registered in such name or names as the
depositary shall instruct the relevant trustee. We expect that such instructions
will be based upon directions received by the depositary from participants with
respect to ownership of beneficial interests in such registered global security.
The debt securities may also be issued in the form of one or more
bearer global securities that will be deposited with a common depositary for
Euro-clear and Cedel Bank, or with a nominee for such depositary identified in
the prospectus supplement. The specific terms and procedures, including the
specific terms of the depositary arrangement, with respect to any portion of a
series of debt securities to be represented by a bearer global security will be
described in the prospectus supplement.
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Particular Terms of the Senior Debt Securities
Ranking of Senior Debt Securities. The senior debt securities will
constitute part of our senior debt and rank equally with all our other unsecured
debt, except that it will be senior to our senior subordinated debt.
Particular Terms of the Senior Subordinated Debt Securities
Ranking of Senior Subordinated Debt Securities. The senior subordinated
debt securities will rank senior to any subordinated debt securities and will be
subordinated and junior in right of payment to any senior debt securities and
certain other indebtedness of Pegasus to the extent set forth in the applicable
prospectus supplement.
Particular Terms of the Subordinated Debt Securities
General. Subordinated debt securities are issuable in one or more
series pursuant to a resolution of our board of directors or as established in a
supplemental indenture.
Ranking of Subordinated Debt Securities. The subordinated debt
securities will be subordinated and junior in right of payment to any senior
debt securities and senior subordinated debt securities and certain other
indebtedness of Pegasus to the extent set forth in the prospectus supplement.
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Plan of Distribution
We may sell Class A common stock, non-voting common stock, warrants,
units, preferred securities or any series of debt securities in one or more of
the following ways from time to time:
o through agents;
o to or through underwriters;
o through dealers; and
o directly by us to purchasers.
If we use underwriters in the sale, the underwriters will acquire
securities for their own account and may resell them in one or more
transactions, including:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
Offers to purchase the securities may be solicited by agents designated
by us from time to time. Any agent involved in the offer or sale of the
securities under this prospectus will be named, and any commissions payable by
us to these agents will be set forth, in a related prospectus supplement. Unless
otherwise indicated in a prospectus supplement, any agent will be acting on a
reasonable best efforts basis for the period of its appointment. Any agent may
be deemed to be an underwriter, as that term is defined in the Securities Act,
of the securities so offered and sold.
If the securities are sold by means of an underwritten offering, we
will execute an underwriting agreement with an underwriter or underwriters at
the time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in a related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters and us at
the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one
or more underwriters. If any underwriter or underwriters are used in the sale of
securities, unless otherwise indicated in a related prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to some conditions precedent and that the underwriters with respect to a
sale of these securities will be obligated to purchase all such securities if
any are purchased.
We may grant to the underwriters options to purchase additional
securities, to cover over-allotments, if any, at the public offering price, with
additional underwriting commissions or discounts, as may be set forth in a
related prospectus supplement. If we grant any over-allotment option, the terms
of that over-allotment option will be set forth in the prospectus supplement for
these securities.
If a dealer is utilized in the sale of the securities in respect of
which this prospectus is delivered, we will sell these securities to the dealer
as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an underwriter, as such term is defined in the
Securities Act, of the securities so offered and sold. The name of the dealer
and the terms of the transaction will be set forth in the prospectus supplement
relating to those offers and sales.
Offers to purchase securities may be solicited directly by us and those
sales may be made by us directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
-30-
<PAGE>
respect to any resale of those securities. The terms of any sales of this type
will be described in the prospectus supplement.
If so indicated in a related prospectus supplement, we may authorize
agents and underwriters to solicit offers by certain institutions to purchase
securities from us at the public offering price set forth in a related
prospectus supplement as part of delayed delivery contracts providing for
payment and delivery on the date or dates stated in a related prospectus
supplement. Such delayed delivery contracts will be subject to only those
conditions set forth in a related prospectus supplement. A commission indicated
in a related prospectus supplement will be paid to underwriters and agents
soliciting purchases of securities pursuant to delayed delivery contracts
accepted by us.
Agents, underwriters and dealers may be entitled under relevant
agreements with us to indemnification by us against some liabilities, including
liabilities under the Securities Act, or to contributions with respect to
payments which such agents, underwriters and dealers may be required to make in
respect thereof.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, us in the ordinary course of our
business.
-31-
<PAGE>
Legal Matters
Certain legal matters in connection with the legality of any Class A
common stock, non-voting common stock, warrants, units, preferred stock, senior
debt securities, senior subordinated debt securities and subordinated debt
securities offered hereby will be passed upon for us by Drinker Biddle & Reath
LLP, Philadelphia, Pennsylvania. Michael B. Jordan, a partner of Drinker Biddle
& Reath LLP, is an Assistant Secretary of Pegasus.
Experts
The financial statements of Pegasus Communications Corporation
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 1999, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
Golden Sky Holdings, Inc.'s consolidated balance sheets as of December
31, 1998 and 1999 and the related consolidated statements of operations,
stockholder's equity and cash flows for each of the years in the three-year
period ended December 31, 1999, incorporated by reference in this prospectus
have been incorporated herein in reliance on the report of KPMG LLP, independent
accountants, given and on the authority of that firm as experts in accounting
and auditing.
-32-
<PAGE>
=====================================================
You should rely only on the information contained in
this prospectus. We have not authorized anyone to
provide you with information different from that
contained in this prospectus. The information
contained in this prospectus is accurate only as of
_____________, 2000. You should not assume that this
prospectus is accurate as of any other date.
Table of Contents
About This Prospectus...........................1
Pegasus.........................................1
Where You Can Find More
Information.....................................2
Risk Factors....................................4
Use of Proceeds................................13
Dividend Policy ...............................13
Ratio of Earnings to Fixed Charges.............13
Description of Capital Stock...................14
Description of Preferred Securities............16
Description of Warrants........................22
Description of Units...........................23
Description of Debt Securities.................24
Plan of Distribution...........................30
Legal Matters..................................32
Experts........................................32
==================================================
==================================================
[PEGASUS LOGO]
Pegasus Communications Corporation
$750,000,000
Class A Common Stock
Non-voting Common Stock
Warrants
Units
Preferred Securities
Senior Debt Securities
Senior Subordinated Debt Securities
Subordinated Debt Securities
________________________________________
PROSPECTUS
____________ , 2000
==================================================
<PAGE>
PART II. Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses payable by us in
connection with this registration statement:
Securities and Exchange Commission Registration Fee... $ 198,000
Accounting Fees and Expenses.......................... $ 20,000
Legal Fees and Expenses............................... $ 75,000
Miscellaneous Expenses................................ $ 52,000
---------
Total................................................. $ 250,000
=========
Item 15. Indemnification of Directors and Officers.
The Registrant's Amended and Restated Certificate of Incorporation
provides that a director of the Registrant shall have no personal liability to
the Registrant or to its stockholders for monetary damages for breach of
fiduciary duty as a director except to the extent that Section 102(b)(7) (or any
successor provision) of the Delaware General Corporation Law, as amended from
time to time, expressly provides that the liability of a director may not be
eliminated or limited.
Article 6 of the Registrant's By-Laws provides that any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of the Registrant, or is or was serving while a director of office of
the Registrant at the request of the Registrant as a director, officer,
employee, agent, fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
shall be indemnified by the Registrant against expenses (including attorneys'
fees), judgments, fines, excise taxes and amounts paid in settlement actually
and reasonably against expenses (including attorneys' fees), judgments, fines,
excise taxes and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding to the full
extent permissible under Delaware law. Article 6 also provides that any person
who is claiming indemnification under the Registrant's By-Laws is entitled to
advances from the Registrant for the payment of expenses incurred by such person
in the manner and to the full extent permitted under Delaware law.
The Registrant maintains directors' and officers' liability insurance.
Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------ -----------------------
<S> <C>
1.1* Form of underwriting agreement for equity securities.
1.2* Form of underwriting agreement (debt securities, warrants and units).
1.3* Form of underwriting agreement for preferred securities.
1.4* Form of underwriting agreement for depositary shares.
3.1 Certificate of Incorporation of Pegasus, as amended (which is incorporated by reference herein
to Exhibit 3.1 to Registrant's Form 10-Q dated August 13, 1999).
3.2** Certificate of Amendment to Certificate of Incorporation of Pegasus.
3.3 Bylaws of Pegasus, as amended (which is incorporated by reference herein to Exhibit 3.1 to
Pegasus' Form 10-Q dated May 14, 1998).
3.4 Certificate of Designation, Preferences and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
12.75% Series A Cumulative Exchangeable Preferred Stock (which is incorporated by reference to
Exhibit 3.3 to Pegasus' Registration Statement on Form S-1 (File No. 333-23595).
3.5 Certificate of Designation, Preferences and Rights of Series B Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.4 to Pegasus'
Registration Statement on Form S-4 (File No. 333-31080).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------ -----------------------
<S> <C>
3.6 Certificate of Designation, Preferences and Relative, Participating, Optional and Other Special
Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of 6 1/2%
Series C Convertible Preferred Stock (which is incorporated by reference to Exhibit 3.5 to
Pegasus' Registration Statement on Form S-4 (File No. 333-31080).
3.7 Certificate of Designation, Preferences and Rights of Series D Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.6 to Pegasus'
Registration Statement on Form S-4 (File No. 333-31080).
3.8 Certificate of Designation, Preferences and Rights of Series E Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.7 to Pegasus'
Form 10-K dated March 10, 2000).
4.1** Form of senior debt securities indenture.
4.2** Form of subordinated debt securities indenture.
4.3* Form of any senior debt security.
4.4* Form of any senior subordinated debt security.
4.5* Form of any subordinated debt security.
4.6* Form of preferred security.
4.7* Form of unit agreement.
4.8* Form of debt warrant agreement for warrants sold alone.
4.9* Form of debt warrant for warrants sold alone (included in Exhibit No. 4.8).
4.10* Form of debt warrant agreement for warrants sold attached to debt securities.
4.11* Form of debt warrant for warrants sold attached to debt securities (included in Exhibit No.
4.10).
4.12* Form of equity warrant agreement for warrants sold alone.
4.13* Form of equity warrant for warrants sold alone (included in Exhibit No. 4.12).
4.14* The form of any certificate of designation with respect to any preferred securities.
5.1* Opinion of Drinker Biddle & Reath LLP.
12.1 Statement Regarding Computation of Ratios (which is incorporated by reference to Exhibit 12.1
to Pegasus' Registration Statement on Form S-3 (File No. 333-32668)).
23.1** Consent of Drinker Biddle & Reath LLP.
23.2** Consent of PricewaterhouseCoopers LLP.
23.3** Consent of KPMG LLP.
24.1** Powers of Attorney (included on Signatures and Powers of Attorney).
25.1** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank as Trustee under the Indenture with respect to the senior debt
securities.
25.2** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank, as trustee under the indenture with respect to the senior
subordinated debt securities.
25.3** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank, as trustee under the indenture with respect to the subordinated debt
securities.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* To be filed by amendment or as applicable to a particular offering of
securities, as an exhibit to a Current Report on Form 8-K, pursuant to
Regulation S-K, Item 601 (b).
** Filed herewith.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however that the undertakings set forth in
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration
statement is on Form S-3, Form S-8, or Form F-3 and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall
be deemed to be the initial bona fide offering.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered that remain unsold at
the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions permitted under
Item 15 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 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 against the Registrant by such director, officer
or controlling person in connection with the securities being registered hereby,
the Registrant will, unless in the opinion of its 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 Act and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time is was
declared effective.
(d) 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 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bala Cynwyd, Commonwealth of Pennsylvania, on March
28, 2000.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Ted S. Lodge
-------------------------
Ted S. Lodge
Senior Vice President
Date: March 28, 2000
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Marshall W. Pagon, M. Kasin Smith and Ted S. Lodge as his or her
attorneys-in-fact and agents, with full power of substitution for him or her in
any and all capacities, to sign any or all amendments or post-effective
amendments to the Registration Statement, or any Registration Statement for the
same offering that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, and to file the same, with exhibits
thereto and other documents in connection therewith or in connection with the
registration of the securities under the Securities Exchange Act of 1934, as
amended, with the Securities and Exchange Commission, granting unto each of such
attorneys-in-fact the agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection with such matters and
hereby ratifying and confirming all that each of such attorneys-in-fact and
agents or his or her substitutes may 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 below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Marshall W. Pagon President, Chief Executive Officer, March 28, 2000
- ---------------------------------------------- Chairman of the Board and Director
Marshall W. Pagon
(Principal Executive Officer)
/s/ M. Kasin Smith Vice President and Chief Financial March 28, 2000
- ---------------------------------------------- Officer
M. Kasin Smith
(Principal Financial and Accounting Officer)
/s/ Robert N. Verdecchio Director March 28, 2000
- ----------------------------------------------
Robert N. Verdecchio
/s/ James J. McEntee, III Director March 28, 2000
- ----------------------------------------------
James J. McEntee, III
/s/ Mary C. Metzger Director March 28, 2000
- ----------------------------------------------
Mary C. Metzger
/s/ Donald W. Weber Director March 28, 2000
- ----------------------------------------------
Donald W. Weber
/s/ Michael C. Brooks Director March 28, 2000
- ----------------------------------------------
Michael C. Brooks
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Harry F. Hopper, III Director March 28, 2000
- ----------------------------------------------
Harry F. Hopper, III
/s/ William P. Phoenix Director March 28, 2000
- ----------------------------------------------
William P. Phoenix
/s/ Riordon B. Smith Director March 28, 2000
- ----------------------------------------------
Riordon B. Smith
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------- -----------------------
<S> <C>
1.1* Form of underwriting agreement for equity securities.
1.2* Form of underwriting agreement (debt securities, warrants and units).
1.3* Form of underwriting agreement for preferred securities.
1.4* Form of underwriting agreement for depositary shares.
3.1 Certificate of Incorporation of Pegasus, as amended (which is incorporated by reference herein
to Exhibit 3.1 to Registrant's Form 10-Q dated August 13, 1999).
3.2** Certificate of Amendment to Certificate of Incorporation of Pegasus.
3.3 Bylaws of Pegasus, as amended (which is incorporated by reference herein to Exhibit 3.1 to
Pegasus' Form 10-Q dated May 14, 1998).
3.4 Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and Restrictions Thereof
of 12.75% Series A Cumulative Exchangeable Preferred Stock
(which is incorporated by reference to Exhibit 3.3 to Pegasus'
Registration Statement on Form S-1 (File No. 333-23595).
3.5 Certificate of Designation, Preferences and Rights of Series B Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.4 to Pegasus'
Registration Statement on Form S-4 (File No. 333-31080).
3.6 Certificate of Designation, Preferences and Relative, Participating, Optional and Other Special
Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of 61/2%
Series C Convertible Preferred Stock (which is incorporated by reference to Exhibit 3.5 to
Pegasus' Registration Statement on Form S-4 (File No. 333-31080).
3.7 Certificate of Designation, Preferences and Rights of Series D Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.6 to Pegasus'
Registration Statement on Form S-4 (File No. 333-31080).
3.8 Certificate of Designation, Preferences and Rights of Series E Junior Convertible
Participating Preferred Stock (which is incorporated by reference to Exhibit 3.7 to Pegasus'
Form 10-K dated March 10, 2000).
4.1** Form of senior debt securities indenture.
4.2** Form of subordinated debt securities indenture.
4.3* Form of any senior debt security.
4.4* Form of any senior subordinated debt security.
4.5* Form of any subordinated debt security.
4.6* Form of preferred security.
4.7* Form of unit agreement.
4.8* Form of debt warrant agreement for warrants sold alone.
4.9* Form of debt warrant for warrants sold alone (included in Exhibit No. 4.8).
4.10* Form of debt warrant agreement for warrants sold attached to debt securities.
4.11* Form of debt warrant for warrants sold attached to debt securities (included in Exhibit No.
4.10).
4.12* Form of equity warrant agreement for warrants sold alone.
4.13* Form of equity warrant for warrants sold alone (included in Exhibit No. 4.12).
4.14* The form of any certificate of designation with respect to any preferred securities.
5.1* Opinion of Drinker Biddle & Reath LLP.
12.1 Statement Regarding Computation of Ratios (which is incorporated by reference to Exhibit 12.1
to Pegasus' Registration Statement on Form S-3 (File No. 333-32668)).
23.1** Consent of Drinker Biddle & Reath LLP.
23.2** Consent of PricewaterhouseCoopers LLP.
23.3** Consent of KPMG LLP.
24.1** Powers of Attorney (included on Signatures and Powers of Attorney).
25.1** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank as Trustee under the Indenture with respect to the senior debt
securities.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------- -----------------------
<S> <C>
25.2** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank, as trustee under the indenture with respect to the senior
subordinated debt securities.
25.3** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
First Union National Bank, as trustee under the indenture with respect to the subordinated debt
securities.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* To be filed by amendment or as applicable to a particular offering of
securities, as an exhibit to a Current Report on Form 8-K, pursuant to
Regulation S-K, Item 601(b).
** Filed herewith.
II-7
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
(AS AMENDED AND RESTATED)
OF
PEGASUS COMMUNICATIONS CORPORATION
PEGASUS COMMUNICATIONS CORPORATION, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY THAT:
FIRST: That at a meeting of the Board of Directors of the Corporation,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation, as amended and restated, of the Corporation,
declaring the amendment to be advisable and in the best interests of the
Corporation and directing that the proposed amendment be submitted to the
stockholders of the Corporation for their approval at a Special Meeting of
Stockholders called for such purpose. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that the amendment of first paragraph of Article
FOURTH of the Corporation's Certificate of Incorporation, as
amended and restated, to read in its entirety as follows (the
"Amendment"), is hereby proposed and declared to be advisable
and in the best interests of the Corporation:
"FOURTH: The total number of shares of stock that the
Corporation shall have authority to issue is 500,000,000
shares, divided into 250,000,000 shares of Class A Common
Stock, par value $0.01 per share, 30,000,000 shares of Class B
Common Stock, par value $0.01 per share, 200,000,000 shares of
Non-Voting Common Stock, par value $0.01 per share, and
20,000,000 shares of Preferred Stock, par value $0.01 per
share."
SECOND: That thereafter, the Special Meeting of Stockholders of the
Corporation was duly called and held, upon notice given in accordance with
Section 222 of the General Corporation Law of the State of Delaware, at which
meeting the necessary number of shares as required by statute were voted in
favor of the amendment.
THIRD: The Amendment has been duly adopted and approved in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to Certificate of Incorporation, as amended and restated, to be
executed by a duly authorized officer of the Corporation this 22nd day of March,
2000.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Michael B. Jordan
----------------------------
Michael B. Jordan
Assistant Secretary
<PAGE>
PEGASUS COMMUNICATION CORPORATION
---------------------
SENIOR
INDENTURE
Dated as of ________________
Providing for Issuance of Senior Debt Securities in Series
---------------------
---------------------
FIRST UNION NATIONAL BANK
as Trustee
---------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
Section 1.01. Definitions.........................................................................4
Section 1.02. Other Definitions...................................................................4
Section 1.03. Incorporation by Reference of Trust Indenture Act...................................5
Section 1.04. Rules of Construction...............................................................5
ARTICLE 2. THE SECURITIES........................................................................................5
Section 2.01. Form and Dating.....................................................................5
Section 2.02. Amount Unlimited; Issuable in Series................................................6
Section 2.03. Denominations......................................................................10
Section 2.04. Execution and Authentication.......................................................10
Section 2.05. Registrar and Paying Agent.........................................................11
Section 2.06. Paying Agent to Hold Money in Trust................................................11
Section 2.07. Holder Lists.......................................................................11
Section 2.08. Transfer and Exchange..............................................................12
Section 2.09. Replacement Securities.............................................................17
Section 2.10. Outstanding Securities.............................................................17
Section 2.11. Treasury Securities................................................................18
Section 2.12. Temporary Securities...............................................................18
Section 2.13. Cancellation.......................................................................18
Section 2.14. Defaulted Interest.................................................................18
ARTICLE 3. REDEMPTION AND PREPAYMENT............................................................................19
Section 3.01. Selection of Securities to Be Redeemed.............................................19
Section 3.02. Notice of Redemption...............................................................19
Section 3.03. Effect of Notice of Redemption.....................................................20
Section 3.04. Deposit of Redemption or Purchase Price............................................20
Section 3.05. Securities Redeemed or Purchased in Part...........................................20
Section 3.06. Mandatory Redemption...............................................................20
ARTICLE 4. COVENANTS............................................................................................20
Section 4.01. Payment of Securities..............................................................20
Section 4.02. Maintenance of Office or Agency....................................................21
Section 4.03. Reports............................................................................21
Section 4.04. Compliance Certificate.............................................................22
Section 4.05. Continued Existence................................................................23
Section 4.06. Waiver of Certain Covenants........................................................23
Section 4.07. Stay, Extension and Usury Laws.....................................................23
ARTICLE 5. SUCCESSORS...........................................................................................23
Section 5.01. Merger, Consolidation, or Sale of Assets...........................................23
Section 5.02. Successor Corporation Substituted..................................................24
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ARTICLE 6. DEFAULTS AND REMEDIES................................................................................24
Section 6.01. Events of Default..................................................................24
Section 6.02. Acceleration.......................................................................26
Section 6.03. Other Remedies.....................................................................26
Section 6.04. Waiver of Past Defaults............................................................26
Section 6.05. Control by Majority................................................................27
Section 6.06. Limitation on Suits................................................................27
Section 6.07. Rights of Holders of Securities to Receive Payment.................................27
Section 6.08. Collection Suit by Trustee.........................................................27
Section 6.09. Trustee May File Proofs of Claim...................................................28
Section 6.10. Priorities.........................................................................28
Section 6.11. Undertaking for Costs..............................................................28
ARTICLE 7. TRUSTEE..............................................................................................29
Section 7.01. Duties of Trustee..................................................................29
Section 7.02. Rights of Trustee..................................................................30
Section 7.03. Individual Rights of Trustee.......................................................30
Section 7.04. Trustee's Disclaimer...............................................................30
Section 7.05. Notice of Defaults.................................................................31
Section 7.06. Reports by Trustee to Holders of the Securities....................................31
Section 7.07. Compensation and Indemnity.........................................................31
Section 7.08. Replacement of Trustee.............................................................32
Section 7.09. Successor Trustee by Merger, etc...................................................33
Section 7.10. Eligibility; Disqualification......................................................33
Section 7.11. Preferential Collection of Claims Against Company..................................33
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.............................................................33
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...........................33
Section 8.02. Legal Defeasance and Discharge.....................................................33
Section 8.03. Covenant Defeasance................................................................34
Section 8.04. Conditions to Legal or Covenant Defeasance.........................................34
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions...........................................................36
Section 8.06. Repayment to Company...............................................................36
Section 8.07. Reinstatement......................................................................36
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................................37
Section 9.01. Without Consent of Holders of Securities...........................................37
Section 9.02. With Consent of Holders of Securities..............................................37
Section 9.03. Compliance with Trust Indenture Act................................................39
Section 9.04. Revocation and Effect of Consents..................................................39
Section 9.05. Notation on or Exchange of Securities..............................................39
Section 9.06. Trustee to Sign Amendments, etc....................................................39
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ARTICLE 10. CONVERSION OR EXCHANGE OF SECURITIES................................................................40
Section 10.01. Applicability of Article...........................................................40
Section 10.02. Exercise of Conversion or Exchange Privilege.......................................40
Section 10.03. No Fractional Equity Securities....................................................41
Section 10.04. Adjustment of Conversion or Exchange Price; Consolidation or Merger................42
Section 10.05. Notice of Certain Corporate Actions................................................43
Section 10.06. Reservation of Equity Securities...................................................43
Section 10.07. Payment of Certain Taxes Upon Conversion or Exchange...............................44
Section 10.08. Duties of Trustee Regarding Conversion or Exchange.................................44
Section 10.09. Repayment of Certain Funds Upon Conversion or Exchange.............................44
ARTICLE 11. MISCELLANEOUS.......................................................................................45
Section 11.01. Trust Indenture Act Controls.......................................................45
Section 11.02. Notices............................................................................45
Section 11.03. Communication by Holders of Securities with Other Holders of Securities............46
Section 11.04. Certificate and Opinion as to Conditions Precedent.................................46
Section 11.05. Statements Required in Certificate or Opinion......................................47
Section 11.06. Rules by Trustee and Agents........................................................47
Section 11.07. No Personal Liability of Directors, Officers, Employees and Stockholders...........47
Section 11.08. Governing Law......................................................................47
Section 11.09. No Adverse Interpretation of Other Agreements......................................47
Section 11.10. Successors.........................................................................47
Section 11.11. Severability.......................................................................48
Section 11.12. Counterpart Originals..............................................................48
Section 11.13. Table of Contents, Headings, etc...................................................48
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INDENTURE dated as of __________________ between Pegasus
Communications Corporation, a Delaware corporation (the "Company"), and First
Union National Bank, a national banking association, as Trustee (the "Trustee").
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
unsubordinated debentures, securities or other evidences of indebtedness
("Securities") to be issued in one or more series as herein provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"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 purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Bearer Security" means any Security issued hereunder which is
payable to bearer.
"Board" or "Board of Directors" means the Board of Directors
of the Company or any authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution of the Board
of Directors, 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 the certificate, and delivered to the Trustee.
"Business Day" means any day other than a Legal Holiday.
"Class A Common Stock" means the Company's Class A Common
Stock, par value $.01 per share.
<PAGE>
"Closing Date" means the original date of issuance of the
Securities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Pegasus Communications Corporation, a Delaware
corporation and any and all successors thereto.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section 2.05
hereof as the Depositary with respect to the Securities, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Closing Date.
"Global Securities" means, individually and collectively, the
Securities issued in global form issued in accordance with Sections 2.01 and
2.08 hereof.
"Global Security Legend" means the legend which is required to
be placed on all Global Securities issued under this Indenture.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, co-borrowing
arrangements, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Holder" means a Person in whose name a Security is
registered.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, securities, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing any Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the guarantee by such Person of any indebtedness of any
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<PAGE>
other Person. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the full amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount and (ii) the principal
amount thereof, together with any interest thereon that is more than 30 days
past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Security through a Participant.
"Interest Payment Date" when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary, any Vice-President or
any Assistant Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is not unsatisfactory to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, a Person
who has an account with the Depositary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Registered Security" means any Security issued hereunder and
registered as to principal and interest in the Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of or within any series means the date specified
for that purpose as contemplated by Section 2.08.
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<PAGE>
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration department of the
Trustee (or any successor group of the Trustee) 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.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning assigned to it in the preamble
to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any interest or
principal on any series of Securities, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries (of such Person or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such a Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof.)
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb as amended) as in effect on the date on which this Indenture is
qualified under the TIA.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
SECTION 1.02. OTHER DEFINITIONS
Defined in
Term Section
"Authentication Order"...............................................2.04
"Common Stock".......................................................10.01
"Covenant Defeasance"................................................8.03
"custodian"..........................................................6.01
"Equity Securities"..................................................10.01
"Event of Default"...................................................6.01
"Government Obligations".............................................2.02
"incur"..............................................................4.09
"Legal Defeasance"...................................................8.02
"Notice of Default"..................................................6.01
"outstanding"........................................................8.02
"Paying Agent".......................................................2.05
"Payment Default"....................................................6.01
"Preferred Stock"....................................................10.01
"Purchase Date"......................................................3.09
"Registrar"..........................................................2.05
"trading day"........................................................10.03
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SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture security Holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
"indenture Trustee" or "institutional Trustee" means the
Trustee;
"obligor" on the Securities means the Company and any
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2.
THE SECURITIES
SECTION 2.01. FORM AND DATING.
(a) General. The Securities of each series and the interest coupons, if
any, to be attached thereto shall be in substantially such form as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate 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 applicable securities exchange, organizational document,
governing instrument or law or as may, consistently herewith, be determined by
the officers executing such Securities and interest coupons, if any, as
evidenced by their execution of the Securities and interest coupons, if any. If
temporary Securities of any series are issued as permitted by Section 2.12, the
form thereof also shall be established as provided in the preceding sentence. If
the forms of Securities and interest coupons, if any, of any series are
established by, or by action taken pursuant to, a Board Resolution, a copy of
the Board Resolution together with an appropriate record of any such action
taken pursuant thereto, including a copy of the approved form of Securities or
interest coupons, if any, shall be delivered to the Trustee at or prior to the
delivery of the Authentication Order contemplated by Section 2.04 for the
authentication and delivery of such Securities. The Trustee's certificate of
authentication shall be in substantially the following form:
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This is one of the Securities of the series described in the
within-mentioned Indenture.
______________________________________ ,
as Trustee
By:____________________________________
Authorized Signatory
(b) Global Securities. If Securities of or within a series are issuable
in whole or in part in global form, any such Security may provide that it shall
represent the aggregate or specified amount of outstanding Securities from time
to time endorsed thereon and may also provide that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased to reflect exchanges. Any endorsement of a Security in global form to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders, of outstanding Securities represented thereby, shall be made
in such manner and by such Person or Persons as shall be specified therein or
upon the written order of the Company signed by an Officer to be delivered to
the Trustee pursuant to Section 2.04 or 2.12. Subject to the provisions of
Section 2.04, Section 2.12 if applicable, and Section 2.08, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable written order of the Company signed by an Officer. Any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing.
The provisions of the last paragraph of Section 2.04 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with a written instructions with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last paragraph of Section 2.04.
Notwithstanding the provisions of this Section 2.01, unless otherwise
specified as contemplated by Section 2.02, payment of principal of, premium, if
any, and interest on any Registered Security in permanent global form shall be
made to the registered holder thereof.
SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
(b) The following matters shall be established with respect to each
series of Securities issued hereunder (i) by a Board Resolution, (ii) by action
taken pursuant to a Board Resolution and (subject to Section 2.04) set forth, or
determined in the manner provided, in an Officers' Certificate or (iii) in one
or more indentures supplemental hereto:
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(1) the title of the Securities of the series (which title
shall distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (which limit shall not pertain to Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 3.06 or
9.05 or any Securities that, pursuant to Section 2.04, are deemed never to have
been authenticated and delivered hereunder);
(3) the date or dates on which the principal of and premium,
if any, on the Securities of the series is payable or the method or methods of
determination thereof;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method or methods of calculating such rate
or rates of interest, the date or dates from which such interest shall accrue or
the method or methods by which such date or dates shall be determined, the
Interest Payment Dates on which any such interest shall be payable, the right,
if any, of the Company to defer or extend an Interest Payment Date and, with
respect to Registered Securities, the Regular Record Date, if any, for the
interest payable on any Registered Security on any Interest Payment Date, and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(5) the place or places where the principal of, premium, if
any, and interest, if any, on Securities of the series shall be payable, any
Registered Securities of the series may be surrendered for registration of
transfer, Securities of the series may be surrendered for exchange and notices
and demands to or upon the Company in respect of the Securities of the series
and this Indenture may be served and where notices to Holders pursuant to
Section 11.02 will be published;
(6) the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in which,
and the other terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other than
as provided in Section 3.02, the manner in which the particular Securities of
such series (if less than all Securities of such series are to be redeemed) are
to be selected for redemption;
(7) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in which,
and the other terms and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
- 7 -
<PAGE>
(8) if other than denominations of $1,000 and any integral
multiple thereof, if Registered Securities, and if other than denominations of
$5,000 and any integral multiple thereof, if Bearer Securities, the
denominations in which Securities of the series shall be issuable;
(9) if other than dollars, the currency or currencies
(including currency unit or units) in which the principal of, premium, if any,
and interest, if any, on the Securities of the series shall be payable, or in
which the Securities of the series shall be denominated, and the particular
provisions applicable;
(10) if the payments of principal of, premium, if any, or
interest, if any, on the Securities of the series are to be made, at the
election of the Company or a Holder, in a currency or currencies (including
currency unit or units) other than that in which such Securities are denominated
or designated to be payable, the currency or currencies (including currency unit
or units) in which such payments are to be made, the terms and conditions of
such payments and the manner in which the exchange rate with respect to such
payments shall be determined, and the particular provisions applicable thereto;
(11) if the amount of payments of principal of, premium, if
any, and interest, if any, on the Securities of the series shall be determined
with reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on a currency or currencies (including
currency unit or units) other than that in which the Securities of the series
are denominated or designated to be payable), the index, formula or other method
by which such amounts shall be determined and any special voting or defeasance
provisions in connection therewith;
(12) if other than the principal amount thereof, the portion
of the principal amount of such Securities of the series which shall be payable
upon declaration of acceleration thereof pursuant to Section 6.02 or the method
by which such portion shall be determined;
(13) the Person to whom any interest on any Registered
Security of the series shall be payable and the manner in which, or the Person
to whom, any interest on any Bearer Securities of the series shall be payable;
(14) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the
Events of Default set forth in Section 6.01 or covenants of the Company set
forth in Article 4 pertaining to the Securities of the series;
(16) under what circumstances, if any, and with what
procedures and documentation the Company will pay additional amounts on the
Securities and interest coupons, if any, of that series held by a Person who is
not a U.S. Person (including any modification of the definition of such term) in
respect of taxes, assessments or similar charges withheld or deducted and, if
so, whether the Company will have the option to redeem such Securities rather
than pay such additional amounts (and the terms of any such option);
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<PAGE>
(17) whether Securities of the series shall be issuable as
Registered Securities or Bearer Securities (with or without interest coupons),
or both, and any restrictions applicable to the offering, sale, transfer or
delivery of Bearer Securities and, if other than as provided in Section 2.08,
the terms upon which Bearer Securities of a series may be exchanged for
Registered Securities of the same series and vice versa;
(18) the date as of which any Bearer Securities of the series
and any temporary global Security representing outstanding securities of the
series shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(19) the forms of the Securities and interest coupons, if any,
of the series;
(20) the applicability, if any, to the Securities and interest
coupons, if any, of or within the series of Sections 8.02 and 8.03, or such
other means of defeasance or covenant defeasance as may be specified for the
Securities and interest coupons, if any, of such series, and whether, for the
purpose of such defeasance or covenant defeasance, the term "Government
Obligations" shall include obligations referred to in the definition of such
term which are not obligations of the United States or an agency or
instrumentality of the United States;
(21) if other than the Trustee, the identity of the Registrar
and any Paying Agent;
(22) if the Securities of the series shall be issued in whole
or in part in global form, (i) the Depositary for such Global Securities, (ii)
whether beneficial owners of interests in any Securities of the series in global
form may exchange such interests for certificated Securities of such series, to
be registered in the names of or to be held by such beneficial owners or their
nominees and to be of like tenor of any authorized form and denomination, and
(iii) if other than as provided in Section 2.08, the circumstances under which
any such exchange may occur;
(23) the designation of the Depositary;
(24) any restrictions on the registration, transfer or
exchange of the Securities;
(25) if the Securities of the series may be issued or
delivered (whether upon original issuance or upon exchange of a temporary
Security of such series or otherwise), or any installment of principal or
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those specified in
this Indenture, the form and terms of such certificates, documents or
conditions;
(26) the terms and conditions of any right to convert or
exchange Securities of the series into or for Equity Securities of the Company
or other securities or property of the Company;
(27) whether the Securities are secured or unsecured, and if
secured, the Security and related terms in connection therewith; and
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(28) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture) including any terms which
may be required by or advisable under United States laws or regulations or
advisable (as determined by the Company) in connection with the marketing of
Securities of the series.
(c) All Securities of any one series and interest coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided (i) by a Board Resolution, (ii) by
action taken pursuant to a Board Resolution and (subject to Section 2.04) set
forth, or determined in the manner provided, in the related Officers'
Certificate or (iii) in an indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders, for issuances of
additional Securities of such series.
(d) If any of the terms of the Securities of any series are established
by action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series, and an appropriate record of any action taken
pursuant thereto in connection with the issuance of any Securities of such
series shall be delivered to the Trustee prior to the authentication and
delivery thereof.
SECTION 2.03. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 2.02, any
Registered Securities of a series denominated in Dollars shall be issuable in
denominations of U.S. $1,000 and any integral multiple thereof and any Bearer
Securities of a series denominated in Dollars shall be issuable in the
denomination of U.S. $5,000 and any integral multiple thereof. Securities
denominated in a foreign currency shall be issuable in such denominations as are
established with respect to such Securities in or pursuant to this Indenture.
SECTION 2.04. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time a Security is authenticated, the Security shall nevertheless
be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Securities for original issue
up to the aggregate principal amount.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
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Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement stating that such
Security has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall not be entitled to the benefits of this Indenture.
SECTION 2.05. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Securities.
SECTION 2.06. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest on the Securities, and will notify the Trustee of
any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Securities.
SECTION 2.07. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss.312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Securities
and the Company shall otherwise comply with TIA ss.312(a).
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SECTION 2.08. TRANSFER AND EXCHANGE.
(a) Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to Section
4.02 in a place of payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor and
containing identical terms and provisions.
(b) Bearer Securities (except for any temporary global Bearer
Securities) or any interest coupons appertaining thereto (except for interest
coupons attached to any temporary global Bearer Security) shall be transferable
by delivery.
(c) At the option of the Holder, Registered Securities of any series
(except a Registered Security in global form) may be exchanged for other
Registered Securities of the same series, of any authorized denominations, of a
like aggregate principal amount and tenor and containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive. Unless otherwise specified as contemplated by Section 2.02,
Bearer Securities may not be issued in exchange for Registered Securities.
(d) Unless otherwise specified as contemplated by Section 2.02, at the
option of the Holder, Bearer Securities of such series may be exchanged for
Registered Securities (if the Securities of such series are issuable in
registered form) or Bearer Securities (if Bearer Securities of such series are
issuable in more than one denomination and such exchanges are permitted by such
series) of the same series, of any authorized denominations, of like aggregate
principal amount and tenor and containing identical terms and conditions, upon
surrender of the Bearer Securities to be exchanged at any such office or agency,
with all unmatured interest coupons and all matured interest coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured interest coupon or coupons or matured interest coupon or
coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing interest coupon or coupons, or
the surrender of such missing interest coupon or interest coupons may be waived
by the Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing interest coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
4.02, interest represented by interest coupons shall be payable only upon
presentation and surrender of those interest coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in case any
Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any special record date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the interest coupon relating to
such Interest Payment Date or proposed date of payment, as the case may be (or,
if such interest coupon is so surrendered with such Bearer Security, such
interest coupon shall be returned to the Person so surrendering the Bearer
Security), and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such interest coupon, when
due in accordance with the provisions of this Indenture.
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(e) Notwithstanding anything herein to the contrary, the exchange of
Bearer Securities for Registered Securities shall be subject to applicable laws
and regulations in effect at the time of exchange. Neither the Company, the
Trustee nor the Registrar shall exchange any Bearer Securities for Registered
Securities if it has received an Opinion of Counsel that as a result of such
exchange the Company would suffer adverse consequences under the United States
Federal income tax laws and regulations then in effect and the Company has
delivered to the Trustee a written order of the Company signed by an Officer
directing the Trustee not to make such exchanges thereafter, unless and until
the Trustee receives a written order of the Company signed by an Officer to the
contrary. The Company shall deliver copies of such written order of the Company
signed by an Officer to the Registrar.
(f) Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for Securities in certificated form, a
Security in global form representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
(g) If at any time the Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such series or if at any time the Depositary for the
Securities of such series shall no longer be eligible under Section 2.02, the
Company shall appoint a successor Depositary with respect to the Securities of
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company prior to the resignation of the Depositary and, in any
event, within 90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company's designation of the Depositary pursuant to
Section 2.02(b)(23) shall no longer be effective with respect to the Securities
of such series and the Company shall execute, and the Trustee, upon receipt of
an Authentication Order for the authentication and delivery of certificated
Securities of such series of like tenor, shall authenticate and deliver,
Securities of such series of like tenor in certificated form, in authorized
denominations and in an aggregate principal amount equal to the principal amount
of the Security or Securities of such series of like tenor in global form in
exchange for such Security or Securities in global form.
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(h) The Company may at any time in its sole discretion determine that
Securities issued in global form shall no longer be represented by such a
Security or Securities in global form. In such event the Company shall execute,
and the Trustee, upon receipt of an Authentication Order for the authentication
and delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
(i) If specified by the Company pursuant to Section 2.02 with respect
to a series of Securities, the Depositary for such series may surrender a
Security in global form of such series in exchange in whole or in part for
Securities of such series in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by such depositary a new certificated
Security or Securities of the same series of like tenor, of
any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Security in global form;
and
(ii) to such Depositary a new Security in global form of like tenor
in a denomination equal to the difference, if any, between the
principal amount of the surrendered Security in global form
and the aggregate principal amount of certificated Securities
delivered to Holders thereof.
(j) Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be canceled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a Security in global form pursuant to
this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or Indirect Participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such Securities to
the Persons in whose names such Securities are so registered.
(k) Whenever any Securities are 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.
(l) All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
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(m) Every Registered Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company, the Registrar
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Registrar and the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
(n) No service charge shall be made for any registration of transfer or
for any 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 or transfer or exchange of Securities, other
than exchanges pursuant to Section 2.12 or 3.06 not involving any transfer.
(o) The Company shall not be required (i) to issue, register the
transfer of, or exchange any Securities for a period beginning at the opening of
business 15 days before any selection for redemption of Securities of like tenor
and of the series of which such Security is a part and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Securities of like tenor and of such
series to be redeemed; (ii) to register the transfer of or exchange any
Registered Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part; or (iii) to exchange
any Bearer Security so selected for redemption, except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption.
(p) the foregoing provisions relating to registration, transfer and
exchange may be modified, supplemented or superseded with respect to any series
of Securities by a Board Resolution or in one or more indentures supplemental
hereto.
(q) Legends. The following legend shall appear on the face of all
Global securities and definitive (bearer) securities under this Indenture unless
specifically stated otherwise in the applicable provision of this Indenture.
(i) Global Security Legend. Each Global Security shall bear a
legend in substantially the following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.09 OF
THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.13 OF THE INDENTURE AND (IV)
THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
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(r) Cancellation and/or Adjustment of Global Securities. At such time
as all beneficial interests in a particular Global Security have been exchanged
for definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.13 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security or for definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(s) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate global
Securities upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Security or to a Holder of a Bearer
Security for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Security selected for redemption in whole
or in part, except the unredeemed portion of any Security being
redeemed in part.
(iv) All Global Securities and Bearer Securities issued upon
any registration of transfer or exchange of Global Securities or Bearer
Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture,
as the Global Securities or Bearer Securities surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Securities during a period
beginning at the opening of business 15 days before the day of any
selection of Securities for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (c) to register the transfer of or
to exchange a Security between a record date and the next succeeding
Interest Payment Date.
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(vi) Prior to due presentment for the registration of a
transfer of any Security, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Security is registered as
the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Securities and for all
other purposes, and none of the Trustee, any Agent or the Company shall
be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Securities and
Bearer Securities in accordance with the provisions of Section 2.04
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.08 to effect a registration of transfer or exchange may be
submitted by facsimile.
SECTION 2.09. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Security, the Company shall issue and the Trustee, upon receipt
of an Authentication Order, shall authenticate a replacement Security if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent
and any authenticating agent from any loss that any of them may suffer if a
Security is replaced. The Company may charge for its expenses in replacing a
Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
SECTION 2.10. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.11 hereof, a Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.09 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall be deemed to be no longer outstanding and shall cease to
accrue interest.
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SECTION 2.11. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows are so
owned shall be so disregarded.
SECTION 2.12. TEMPORARY SECURITIES.
Until certificates representing Securities are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of certificated Securities but may have variations
that the Company considers appropriate for temporary Securities and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
SECTION 2.13. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Securities (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all canceled
Securities shall be delivered to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.14. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Securities and in Section 4.01 hereof. 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. The Company shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed at any time, the
Trustee shall select the Securities to be redeemed among the Holders of the
Securities in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed or, if the
Securities are not so listed, to be redeemed among the Holders of Securities on
a pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
part. In the event of partial redemption by lot, the particular Securities to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Securities not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities and
portions of Securities selected shall be in amounts of $1,000 or whole multiples
of $1,000; except that if all of the Securities of a Holder are to be redeemed,
the entire outstanding amount of Securities held by such Holder, even if not a
multiple of $1,000, shall be redeemed. A new Security in principal amount equal
to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. Securities called for
redemption shall become due on the redemption date. On and after the redemption
date, interest ceases to accrue on Securities or portions of them called for
redemption. Except as provided in this Section 3.01, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
SECTION 3.02. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Securities are to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) that, unless the Company defaults in making such redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
redemption date;
(f) that any Security being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the redemption
date upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion shall be issued upon cancellation of the
original;
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(g) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.03. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.02
hereof, Securities called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.04. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
One Business Day prior to 10:00 a.m. Eastern Time on any redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money
in immediately available funds sufficient to pay the redemption or purchase
price of and accrued interest, if any, on all Securities to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest on, all Securities to be redeemed or purchased.
SECTION 3.05. SECURITIES REDEEMED OR PURCHASED IN PART.
Upon surrender of a Security that is redeemed or purchased in part, the
Company shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Security equal
in principal amount to the unredeemed or unpurchased portion of the Security
surrendered.
SECTION 3.06. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Securities.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Securities on the dates and in the manner provided in
the Securities. Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Company or a
Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.
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The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Securities to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-Registrar) where Securities may be surrendered
for registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Company shall 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.
The Company may also from time to time designate one or more other
offices or agencies 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 for such purposes. The Company shall
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.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.05.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Securities are outstanding, the Company shall furnish to the Holders
of Securities (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports, in each case within the time periods specified in the SEC's rules and
regulations. In addition, the Company shall file a copy of all such information
and reports with the SEC for public availability within the time periods set
forth in the SEC's rules and regulations (unless the SEC will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. In addition to the financial information
required by the Exchange Act, each such quarterly and annual report shall be
required to contain "summarized financial information" (as defined in Rule
1-02(aa)(1) of Regulation S-X under the Exchange Act) showing Adjusted Operating
Cash Flow for the Company and its Significant Subsidiaries, on a consolidated
basis, where Adjusted Operating Cash Flow for the Company is calculated in a
manner consistent with the manner described under the definition of "Adjusted
Operating Cash Flow" contained herein. The summarized financial information
required pursuant to the preceding sentence may, at the election of the Company,
be included in the footnotes to the audited consolidated financial statements or
unaudited quarterly financial statements of the Company and shall be as of the
same dates and for the same periods as the consolidated financial statements of
the Company and its Subsidiaries required pursuant to the Exchange Act.
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SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Securities is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
(c) The Company shall file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in this
Indenture, as may be required from time to time by such rules and regulations.
SECTION 4.05. CONTINUED EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Significant Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Significant Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and any of its Restrictive
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Significant Subsidiaries, 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 its Significant Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Securities.
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SECTION 4.06. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 2.02 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 2.02(15) and
9.01 for the benefit of the Holders of such series if before the time for such
compliance the Holders of at least a majority in principal amount of the
outstanding Securities of such series shall, by act of such, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision 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 term, provision or condition shall remain in
full force and effect.
SECTION 4.07. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the Obligations of the Company under the
Securities and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; and (iii) immediately after such
transaction no Default or Event of Default exists.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), 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; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Securities except in the case of a sale of all
of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company Defaults in the payment when due of interest on, with
respect to, the Securities and such Default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Securities when the same becomes due and payable at
maturity, upon redemption or otherwise;
(c) the Company fails to comply with any of the provisions of section
5.01 hereof;
(d) the Company or any Subsidiary fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture, the
Securities for 60 days after notice to comply;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (on the payment of which is
guaranteed by the Company), whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, which default (i) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (ii) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates at least the amount
specified in the applicable supplemental indenture;
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(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any Subsidiary that would be a Significant Subsidiary and such judgment or
judgments remain unpaid, undischarged, or unstayed for a period of 60 days,
provided that the aggregate of all such undischarged judgments exceeds the
amount specified in the applicable supplemental indenture;
(g) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
The term "custodian" as used in this Article VI means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
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An Event of Default shall not be deemed to have occurred under clause
(c), (e) or (f) until the Trustee shall have received at the Corporate Trust
Office of the Trustee written notice from the Company or any of the Holders or
unless a Responsible Officer shall have actual knowledge of such Event of
Default. A Default under clause (e) is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in principal amount of the
then outstanding Securities notify the Company and the Trustee, of the Default
and the Company does not cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Securities may declare all the Securities to be due and payable immediately.
Upon any such declaration, the principal of, premium, if any, and accrued and
unpaid interest on the Securities shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries, or any group that, taken as a whole, would constitute
a Significant Subsidiary, all outstanding Securities shall be due and payable
immediately without further action or notice. Holders of the Securities may not
enforce this Indenture or the Securities except as provided in this Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest ) if it determines that
withholding notice is in their interest.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Security in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Securities by notice to the Trustee may on behalf
of the Holders of all of the Securities waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium, if any, or interest on, the
Securities (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Securities may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
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.
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SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Securities or that may
involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Security may pursue a remedy with respect to this
Indenture or the Securities only if:
(a) the Holder of a Security gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Security or Holders of Securities offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Securities do not give the Trustee a direction
inconsistent with the request.
A Holder of a Security may not use this Indenture to prejudice the
rights of another Holder of a Security or to obtain a preference or priority
over another Holder of a Security.
SECTION 6.07. RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as Trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Securities
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Securities allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian 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 to 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 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained 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, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Securities for amounts due and unpaid on the
Securities for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal, premium, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Security pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Securities.
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ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proven that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
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(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. 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 from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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 unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if a
Responsible Officer of the Trustee has actual knowledge of such Default or Event
of Default, the Trustee shall mail to Holders of Securities a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, or interest on, any
Security, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Securities.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Securities remain outstanding,
the Trustee shall mail to the Holders of the Securities a brief report dated as
of such reporting date that complies with TIA ss. 313(a) (but if no event
described in TIA ss. 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA ss. 313(c). A copy of each report at the time of its mailing to
the Holders of Securities shall be mailed to the Company and filed with the SEC
and each stock exchange on which the Securities are listed in accordance with
TIA ss. 313(d). The Company shall promptly notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee have separately agreed. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
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The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee, after written request by any Holder of a Security who
has been a Holder of a Security for at least six months, fails to comply with
Section 7.10, such Holder of a Security may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Securities. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least the amount
specified in the applicable supplemental indenture.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) Section 0.01 to the extent indicated
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Securities, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all of its other Obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
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 8.04 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest,
on such Securities when such payments are due, (b) the Company's obligations
with respect to such Securities under Article 2 and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder, and the
Company's obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.
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SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 3.09 and 5.01
hereof with respect to the outstanding Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Securities shall thereafter be deemed not "outstanding" for the purposes
of any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
"outstanding" Securities, 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
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(d) through 6.01(f) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Securities, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, interest and premium,
if any, on the outstanding Securities on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Securities are being defeased to maturity or to a particular
redemption date;
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(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Sections 6.01(g) or (h) hereof are concerned, at any time in the period
ending on the 91st day after the date of deposit (or greater period of time in
which any such deposit of trust funds may remain subject to bankruptcy or
insolvency laws insofar as those apply to the deposit by the Company);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion, (i) the trust funds
will not be subject to the rights of holders of Indebtedness other than the
Securities and (ii) assuming no intervening bankruptcy of the Company between
the date of deposit and the 91st day (or greater period of time in which any
such deposit of trust funds may remain subject to bankruptcy or insolvency laws
insofar as those apply to the deposit by the Company) following the deposit and
assuming no Holder of Securities is an insider of the Company, after the 91st
day (or later date until which any such deposit of trust funds may remain
subject to bankruptcy or insolvency laws insofar as those apply to the deposit
by the Company) following the deposit, the trust funds will not be subject to
the effects of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally under any applicable United States or
state law;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Securities over the other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding creditors of
the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
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SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding
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 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, 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 cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof 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 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. 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 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 request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
a secured 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.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium or interest on 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 Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SECURITIES.
Notwithstanding Section 9.02 of this Indenture, the Company, a
Subsidiary Guarantor (with respect to a Subsidiary Guarantee or the Indenture to
which it is a party) and the Trustee may amend or supplement this Indenture, the
Securities or the Subsidiary Guarantees without the consent of any Holder of a
Security:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of Securities in the case of a merger or
consolidation pursuant to Article 5 hereof, as applicable;
(c) to make any change that would provide any additional rights or
benefits to the Holders of Securities or that does not adversely affect the
legal rights hereunder of any such Holder; or
(d) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA or to allow any
Subsidiary Guarantor to guarantee the Securities.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company or a Subsidiary Guarantor, as applicable,
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company or such Subsidiary Guarantor in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture or Subsidiary
Guarantee that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SECURITIES.
Except as provided below in this Section 9.02, the Company, a
Subsidiary Guarantor (with respect to a Subsidiary Guarantee or the Indenture to
which it is a party) and the Trustee may amend or supplement this Indenture, the
Securities or the Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium or interest on the Securities) or compliance with any
provision of this Indenture or the Securities may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Securities
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for the Securities). Any amendment to the
provisions of Article 11 hereof including the related definitions will require
the consent of the Holders of at least 75% in aggregate principal amount of the
Securities then outstanding if such amendment would adversely affect the rights
of Holders of Securities.
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Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company or a Subsidiary Guarantor, as applicable,
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Securities as aforesaid, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company or such Subsidiary Guarantor in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Securities affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities. However, without the consent
of each Holder affected, an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder):
(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the redemption of the
Securities (other than provisions relating to Section 3.09 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(d) waive a Default or Event of Default in the payment of principal of
or interest or premium on the Securities (except a rescission of acceleration of
the Securities by the Holders of a majority in aggregate principal amount of the
Securities and a waiver of the payment default that resulted from such
acceleration);
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(e) make any Security payable in money other than that stated in the
Securities;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Securities to receive
payments of principal of or interest or premium on the Securities;
(g) waive a redemption payment with respect to any Security (other than
a payment required by the provisions of Section 3.09 hereof);
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(i) except as provided in Article 8 hereof or otherwise in accordance
with the terms of this Indenture or any Subsidiary Guarantee, release a
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee or make
any change in a Subsidiary Guarantee that would adversely affect the Holders of
the Securities.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities shall
be set forth in an amended or supplemental Indenture that complies with the TIA
as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the Holder of a
Security and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Securities, even if notation
of the consent is not made on any Securities. However, any such Holder of a
Security or subsequent Holder of a Security may revoke the consent as to its
Securities if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An amendment, supplement
or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Securities thereafter authenticated. The Company in
exchange for all Securities may issue and the Trustee shall authenticate new
Securities that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or to issue new Securities
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until its Board
of Directors approves it. If it does, the Trustee may, but need not, sign it. In
signing or refusing to sign such amendment or supplemental Indenture, the
Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental Indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Company in accordance with its
terms.
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ARTICLE 10.
CONVERSION OR EXCHANGE OF SECURITIES
SECTION 10.01. APPLICABILITY OF ARTICLE.
(a) The provisions of this Article 10 shall be applicable to the
Securities of any series which are convertible or exchangeable into Equity
Securities of the Company, and to the issuance of such Equity Securities upon
the conversion or exchange of such Securities, except as otherwise specified as
contemplated by Section 2.02 for the Securities of such series.
(b) For purposes of this Article 10, the term "Equity Securities" shall
mean all or any of the following, authorized from time to time: (i) the Class A
Common Stock, (ii) the Company's Non-voting Common Stock par value $.01 per
share (together with the Class A Common Stock, the "Common Stock"), (iii) the
Company's Preferred Stock par value $.01 per share (the "Preferred Stock"), and
(iv) any other equity securities of the Company.
SECTION 10.02. EXERCISE OF CONVERSION OR EXCHANGE PRIVILEGE.
(a) In order to exercise a conversion or exchange privilege, the Holder
of a Security of a series with such privilege shall surrender such Security,
together, in the case of any Bearer Security, with all unmatured interest
coupons and any matured interest coupons in default appertaining thereto, to the
Company at the office or agency maintained for that purpose pursuant to Section
4.02, accompanied by written notice to the Company that the Holder elects to
convert or exchange such Security or a specified portion thereof. Such notice
shall also state, if different from the name and address of such Holder, the
name or names (with address) in which the certificate or certificates for Equity
Securities which shall be issuable on such conversion or exchange shall be
issued. Registered Securities surrendered for conversion or exchange shall (if
so required by the Company or the Trustee) be duly endorsed by or accompanied by
instruments of transfer in forms satisfactory to the Company and the Trustee
duly executed by the registered Holder or its attorney duly authorized in
writing.
(b) Registered Securities so surrendered for conversion or exchange
during the period from the close of business on any Regular Record Date to the
opening of business on the corresponding Interest Payment Date (excluding
Securities or portions thereof called for redemption during such period) shall
also be accompanied by payment in funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of such Security then being converted or exchanged, and such interest
shall be payable to such registered Holder on such Interest Payment Date
notwithstanding the conversion or exchange of such Security.
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(c) As promptly as practicable after the receipt of such notice and of
any payment required pursuant to a Board Resolution and, subject to Section
2.04, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto
setting forth the terms of such series of Security, and the surrender of such
Security in accordance with such reasonable regulations as the Company may
prescribe, the Company shall issue and shall deliver, at the office or agency at
which such Security is surrendered, to such Holder or on its written order, a
certificate or certificates for the number of Equity Securities issuable upon
the conversion or exchange of such Security (or specified portion thereof), in
accordance with the provisions of such Board Resolution, Officers' Certificate
or supplemental indenture, and cash as provided therein in respect of any
fractional share of such Equity Security otherwise issuable upon such conversion
or exchange.
(d) Such conversion or exchange shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice and
such payment, if required, shall have been received in proper order for
conversion or exchange by the Company and such Security shall have been
surrendered as aforesaid and at such time the rights of the Holder of such
Security as such Security Holder shall cease and the person or persons in whose
name or names any certificate or certificates for Equity Securities of the
Company shall be issuable upon such conversion or exchange shall be deemed to
have become the Holder or Holders of record of the Equity Securities represented
thereby. No payment or adjustment shall be made upon any conversion or exchange
on account of any interest accrued on the Securities surrendered for conversion
or exchange, or on account of any dividends on the Equity Securities of the
Company issued upon such conversion or exchange if the record date for the
payment of such dividends occurs prior to or on the date on which such
conversion or exchange shall be deemed to have been effected.
In the case of any Security which is converted or exchanged in part
only, upon such conversion or exchange the Company shall execute and the Trustee
shall authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to the unconverted
or unexchanged portion of such Security.
SECTION 10.03. NO FRACTIONAL EQUITY SECURITIES.
No fractional Equity Security of the Company shall be issued
upon conversions or exchanges of Securities of any series. If more than one
Security shall be surrendered for conversion or exchange at one time by the same
Holder, the number of full shares of the Equity Security which shall be issuable
upon conversion or exchange shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. If, except for the provisions of this Section
10.03, any Holder of a Security or Securities would be entitled to a fractional
share of any Equity Security of the Company upon the conversion or exchange of
such Security or Securities, or specified portions thereof, the Company shall
pay to such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Equity Security is listed or admitted to
unlisted trading privileges on a national securities exchange, on the basis of
the last reported sale price regular way on the principal exchange where such
Equity Security is listed or admitted, on the last trading day prior to the date
of conversion or exchange upon which such a sale shall have been effected, (ii)
if such Equity Security is not at the time so listed or admitted on a national
securities exchange but is quoted on the Nasdaq Stock Market, on the basis of
the average of the bid and asked prices of such Equity Security on the Nasdaq
Stock Market on the last trading day prior to the date of conversion or
exchange, (iii) if such Equity Security is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange or quoted on
the Nasdaq Stock Market, on the basis of the average of the bid and asked prices
of such Equity Security in the over-the-counter market, on the last trading day
prior to the date of conversion or exchange, as reported by the National
Quotation Bureau Incorporated or similar organization if the National Quotation
Bureau Incorporated is no longer reporting such information, or (iv) in
accordance with the terms of the supplemental indenture or Board Resolutions
setting the terms of the Securities of such series. For purposes of this
Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day on which the applicable Equity Security is not traded
or quoted on a national securities exchange, or if the applicable Equity
Security is not traded or quoted on a national securities exchange, on the
Nasdaq Stock Market or the principal exchange or market on which the applicable
Equity Security is traded or quoted.
- 41 -
<PAGE>
SECTION 10.04. ADJUSTMENT OF CONVERSION OR EXCHANGE PRICE; CONSOLIDATION OR
MERGER.
The conversion or exchange price of Securities of any series that is
convertible or exchangeable into an Equity Security of the Company shall be
adjusted for any stock dividends, stock splits, reclassification, combinations
or similar transactions, and the securities, assets or other property into or
for which such Securities may be converted or exchanged as a result of any
consolidation, merger, combination or similar transaction shall be determined,
in accordance with the terms of the supplemental indenture or Board Resolutions
setting the terms of the Securities of such series.
Whenever the conversion or exchange price is adjusted, the Company
shall compute the adjusted conversion or exchange price in accordance with the
terms of the applicable Board Resolution or supplemental indenture and shall
prepare an Officers' Certificate setting forth the adjusted conversion or
exchange price and showing in reasonable detail the facts upon which such
adjustment is based. Whenever the securities, assets or other property into or
for which Securities of any series may be converted or exchanged are changed as
a result of any consolidation, merger or similar transaction, the Company shall
determine the nature and amount of such securities, assets or other property in
accordance with the terms of the applicable Board Resolution or supplemental
indenture and shall prepare an Officers' Certificate describing such securities,
assets or other property and stating the amount of such securities, assets or
other property into or for which such Securities have become convertible or
exchangeable. Such certificates shall forthwith be filed at each office or
agency maintained for the purpose of conversion or exchange of Securities
pursuant to Section 4.02 and, if different, with the Trustee. The Company shall
forthwith cause a notice setting forth the adjusted conversion or exchange price
or describing such securities, assets or other property, as applicable, to be
mailed, first class postage prepaid, to each Holder of Registered Securities of
such series at its address appearing on the Register and to any conversion or
exchange agent other than the Trustee.
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<PAGE>
SECTION 10.05. NOTICE OF CERTAIN CORPORATE ACTIONS.
If any series of Securities which are directly or indirectly
convertible or exchangeable for any Equity Securities are Outstanding, in case:
(a) the Company shall declare a dividend (or any other distribution) on
any class of such Equity Securities payable otherwise than in cash out of its
retained earnings (other than a dividend for which approval of any stockholder
of the Company is required); or
(b) the Company shall authorize the granting to the holders of any
class of such Equity Securities of rights, options or warrants to subscribe for
or purchase any shares of capital stock of any class or of any other rights
(other than any such grant for which approval of any stockholder of the Company
is required); or
(c) of any reclassification of any class of such Equity Securities
(other than a subdivision or combination of its outstanding Equity Securities,
or of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholder of the Company is required), or
of the sale of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; then the Company shall cause to be filed with the Trustee,
and shall cause to be mailed to all Holders at their addresses as they shall
appear in the Register, at least 15 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or, if
a record is not to be taken, the date as of which the Holders of such Equity
Securities of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of such Equity Securities of record shall be
entitled to exchange such Equity Securities for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, dissolution, liquidation or winding up. If at any time the
Trustee shall not be the conversion or exchange agent, a copy of such notice
shall also forthwith be filed by the Company with the Trustee.
SECTION 10.06. RESERVATION OF EQUITY SECURITIES.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Equity Securities, for the
purpose of effecting the conversion or exchange of Securities, the full number
of Equity Securities of the Company then issuable upon the conversion or
exchange of all outstanding securities of any series that has conversion or
exchange rights.
- 43 -
<PAGE>
SECTION 10.07. PAYMENT OF CERTAIN TAXES UPON CONVERSION OR EXCHANGE.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of its Equity Securities on conversion or exchange of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of its Equity Securities in a name other than that of the Holder of
the Security or Securities to be converted or exchanged, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
SECTION 10.08. DUTIES OF TRUSTEE REGARDING CONVERSION OR EXCHANGE.
Neither the Trustee nor any conversion or exchange agent shall at any
time be under any duty or responsibility to any Holder of Securities of any
series that is convertible or exchangeable into Equity Securities of the Company
to determine whether any facts exist which may require any adjustment of the
conversion or exchange price, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed, whether
herein or in any supplemental indenture, any resolutions of the Board of
Directors or written instrument executed by one or more officers of the Company
provided to be employed in making the same. Neither the Trustee nor any
conversion or exchange agent shall be accountable with respect to the validity
or value (or the kind or amount) of any Equity Securities of the Company, or of
any securities or property, which may at any time be issued or delivered upon
the conversion or exchange of any Securities and neither the Trustee nor any
conversion or exchange agent makes any representation with respect thereto.
Subject to the provisions of Section 7.01, neither the Trustee nor any
conversion or exchange agent shall be responsible for any failure of the Company
to issue, transfer or deliver any of its Equity Securities or stock certificates
or other securities or property upon the surrender of any Security for the
purpose of conversion or exchange or to comply with any of the covenants of the
Company contained in this Article 10 or in the applicable supplemental
indenture, resolutions of the Board of Directors or written instrument executed
by one or more duly authorized officers of the Company.
SECTION 10.09. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION OR EXCHANGE.
Any funds which at any time have been deposited by the Company or on
its behalf with the Trustee or any Paying Agent for the purpose of paying the
principal of, and premium, if any, and interest, if any, on any of the
Securities and which shall not be required for such purposes because of the
conversion or exchange of such Securities as provided in this Article 10 shall
after such conversion or exchange be repaid to the Company by the Trustee upon
the Company's written request.
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<PAGE>
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Pegasus Communications Corporation
c/o Pegasus Communications Management Company
225 City Lane Avenue, Suite 200
Bala Cynwyd, PA 19004
Telecopier No.: (610) 934-7121
Attention: Chief Financial Officer
With a copy to:
Drinker Biddle & Reath LLP
One Logan Square
Eighteenth & Cherry Streets
Philadelphia, PA 19103
Telecopier No.: (215) 988-2757
Attention: Michael B. Jordan, Esq.
If to the Trustee:
First Union National Bank
230 S. Tryon Street
Charlotte, NC 28288-1153
Telecopier No.: (704) 374-6114
Attention: Client Service Group
- 45 -
<PAGE>
With a copy to:
First Union National Bank
123 South Broad Street
PA 1249
Philadelphia, PA 19109
Telecopier No.: (215) 985-7290
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER HOLDERS OF
SECURITIES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to he Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
- 46 -
<PAGE>
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE SECURITIES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
- 47 -
<PAGE>
SECTION 11.11. SEVERABILITY.
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 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
- 48 -
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of the
date first written above.
PEGASUS COMMUNICATIONS CORPORATION
By:__________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:____________________________________
Name:
Title:
- 49 -
<PAGE>
- --------------------------------------------------------------------------------
PEGASUS COMMUNICATION CORPORATION
---------------------
SUBORDINATED
INDENTURE
Dated as of ________________
Providing for Issuance of Senior Subordinated and Subordinated Debt
Securities in Series
---------------------
---------------------
FIRST UNION NATIONAL BANK
as Trustee
---------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE..............................................1
<S> <C> <C>
Section 1.01. Definitions.........................................................................1
Section 1.02. Other Definitions...................................................................6
Section 1.03. Incorporation by Reference of Trust Indenture Act...................................6
Section 1.04. Rules of Construction...............................................................7
ARTICLE 2. THE SECURITIES..........................................................................7
Section 2.01. Form and Dating.....................................................................7
Section 2.02. Amount Unlimited; Issuable in Series................................................8
Section 2.03. Denominations......................................................................12
Section 2.04. Execution and Authentication.......................................................12
Section 2.05. Registrar and Paying Agent.........................................................13
Section 2.06. Paying Agent to Hold Money in Trust................................................13
Section 2.07. Holder Lists.......................................................................14
Section 2.08. Transfer and Exchange..............................................................14
Section 2.09. Replacement Securities.............................................................20
Section 2.10. Outstanding Securities.............................................................20
Section 2.11. Treasury Securities................................................................20
Section 2.12. Temporary Securities...............................................................21
Section 2.13. Cancellation.......................................................................21
Section 2.14. Defaulted Interest.................................................................21
Article 3. REDEMPTION AND PREPAYMENT..............................................................21
Section 3.01. Selection of Securities to Be Redeemed.............................................21
Section 3.02. Notice of Redemption...............................................................22
Section 3.03. Effect of Notice of Redemption.....................................................23
Section 3.04. Deposit of Redemption or Purchase Price............................................23
Section 3.05. Securities Redeemed or Purchased in Part...........................................23
Section 3.06. Mandatory Redemption...............................................................23
Article 4. COVENANTS..............................................................................23
Section 4.01. Payment of Securities..............................................................23
Section 4.02. Maintenance of Office or Agency....................................................24
Section 4.03. Reports............................................................................24
Section 4.04. Compliance Certificate.............................................................25
Section 4.05. Continued Existence................................................................25
Section 4.06. Waiver of Certain Covenants........................................................26
Section 4.07. Stay, Extension and Usury Laws.....................................................26
Article 5. SUCCESSORS.............................................................................26
Section 5.01. Merger, Consolidation, or Sale of Assets...........................................26
Section 5.02. Successor Corporation Substituted..................................................27
Article 6. DEFAULTS AND REMEDIES..................................................................27
Section 6.01. Events of Default..................................................................27
Section 6.02. Acceleration.......................................................................29
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 6.03. Other Remedies.....................................................................29
Section 6.04. Waiver of Past Defaults............................................................29
Section 6.05. Control by Majority................................................................30
Section 6.06. Limitation on Suits................................................................30
Section 6.07. Rights of Holders of Securities to Receive Payment.................................30
Section 6.08. Collection Suit by Trustee.........................................................31
Section 6.09. Trustee May File Proofs of Claim...................................................31
Section 6.10. Priorities.........................................................................31
Section 6.11. Undertaking for Costs..............................................................32
Article 7. TRUSTEE................................................................................32
Section 7.01. Duties of Trustee..................................................................32
Section 7.02. Rights of Trustee..................................................................33
Section 7.03. Individual Rights of Trustee.......................................................34
Section 7.04. Trustee's Disclaimer...............................................................34
Section 7.05. Notice of Defaults.................................................................34
Section 7.06. Reports by Trustee to Holders of the Securities....................................34
Section 7.07. Compensation and Indemnity.........................................................35
Section 7.08. Replacement of Trustee.............................................................36
Section 7.09. Successor Trustee by Merger, etc...................................................37
Section 7.10. Eligibility; Disqualification......................................................37
Section 7.11. Preferential Collection of Claims Against Company..................................37
Article 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE...............................................37
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...........................37
Section 8.02. Legal Defeasance and Discharge.....................................................37
Section 8.03. Covenant Defeasance................................................................38
Section 8.04. Conditions to Legal or Covenant Defeasance.........................................38
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions..............................................40
Section 8.06. Repayment to Company...............................................................40
Section 8.07. Reinstatement......................................................................41
Article 9. AMENDMENT, SUPPLEMENT AND WAIVER.......................................................41
Section 9.01. Without Consent of Holders of Securities...........................................41
Section 9.02. With Consent of Holders of Securities..............................................42
Section 9.03. Compliance with Trust Indenture Act................................................43
Section 9.04. Revocation and Effect of Consents..................................................43
Section 9.05. Notation on or Exchange of Securities..............................................44
Section 9.06. Trustee to Sign Amendments, etc....................................................44
Article 10. CONVERSION OR EXCHANGE OF SECURITIES...................................................44
Section 10.01. Applicability of Article...........................................................44
Section 10.02. Exercise of Conversion or Exchange Privilege.......................................45
Section 10.03. No Fractional Equity Securities....................................................46
Section 10.04. Adjustment of Conversion or Exchange Price; Consolidation or Merger................47
Section 10.05. Notice of Certain Corporate Actions................................................47
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 10.06. Reservation of Equity Securities...................................................48
Section 10.07. Payment of Certain Taxes Upon Conversion or Exchange...............................48
Section 10.08. Duties of Trustee Regarding Conversion or Exchange.................................48
Section 10.09. Repayment of Certain Funds Upon Conversion or Exchange.............................49
Article 11. SUBORDINATION OF SECURITIES............................................................49
Section 11.01. Agreement to Subordinate...........................................................49
Section 11.02. Certain Definitions................................................................50
Section 11.03. Liquidation; Dissolution; Bankruptcy...............................................50
Section 11.04. Default on Designated Senior Debt..................................................50
Section 11.05. Acceleration of Securities.........................................................51
Section 11.06. When Distribution Must Be Paid Over................................................51
Section 11.07. Notice By Company..................................................................52
Section 11.08. Subrogation........................................................................52
Section 11.09. Relative Rights....................................................................52
Section 11.10. Subordination May Not Be Impaired By Company.......................................53
Section 11.11. Distribution or Notice To Representative...........................................53
Section 11.12. Rights of Trustee and Paying Agent.................................................53
Section 11.13. Authorization to Effect Subordination..............................................53
Section 11.14. Amendments.........................................................................53
Article 12. MISCELLANEOUS..........................................................................54
Section 12.01. Trust Indenture Act Controls.......................................................54
Section 12.02. Notices............................................................................54
Section 12.03. Communication by Holders of Securities with Other Holders
of Securities......................................................................55
Section 12.04. Certificate and Opinion as to Conditions Precedent.................................56
Section 12.05. Statements Required in Certificate or Opinion......................................56
Section 12.06. Rules by Trustee and Agents........................................................56
Section 12.07. No Personal Liability of Directors, Officers, Employees
and Stockholders...................................................................56
Section 12.08. Governing Law......................................................................57
Section 12.09. No Adverse Interpretation of Other Agreements......................................57
Section 12.10. Successors.........................................................................57
Section 12.11. Severability.......................................................................57
Section 12.12. Counterpart Originals..............................................................57
Section 12.13. Table of Contents, Headings, etc...................................................57
</TABLE>
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<PAGE>
INDENTURE dated as of __________________ between Pegasus Communications
Corporation, a Delaware corporation (the "Company"), and First Union National
Bank, a national banking association, as Trustee (the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, securities or other evidences of indebtedness
("Securities") to be issued in one or more series as herein provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 DEFINITIONS.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Bearer Security" means any Security issued hereunder which is payable
to bearer.
"Board" or "Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution of the Board of
Directors, 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 the certificate, and delivered to the Trustee.
<PAGE>
"Business Day" means any day other than a Legal Holiday.
"Class A Common Stock" means the Company's Class A Common Stock, par
value $.01 per share.
"Closing Date" means the original date of issuance of the Securities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Pegasus Communications Corporation, a Delaware
corporation and any and all successors thereto.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means that certain amended and restated Revolving
Credit Agreement, dated as of January 14, 2000, by and among Pegasus Media &
Communications, Inc., the various lenders party thereto, Canadian Imperial Bank
of Commerce as Syndication Agent, Bankers Trust Company as Administrative Agent
and Fleet National Bank as Documentation Agent for such Lenders.
"Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.05 hereof
as the Depositary with respect to the Securities, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Closing Date.
-2-
<PAGE>
"Global Securities" means, individually and collectively, each of
Securities issued in global form in accordance with Sections 2.01 and 2.08
hereof.
"Global Security Legend" means the legend which is required to be
placed on all Global Securities issued under this Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, co-borrowing
arrangements, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, securities, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing any Capital Lease Obligations or the balance deferred and unpaid
of the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee by such Person of any indebtedness of any other Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the full amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP. The amount of any Indebtedness outstanding as of any
date shall be (i) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount and (ii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
"Indenture" means this Subordinated Indenture as amended and restated
hereby or as amended, waived or supplemented from time to time and shall include
and incorporate by reference the forms and terms of particular series of
Securities established as contemplated hereunder
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"Indirect Participant" means a Person who holds a beneficial interest
in a Global Security through a Participant.
"Interest Payment Date" when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary, any Vice-President or any Assistant Vice
President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is not
unsatisfactory to the Trustee, that meets the requirements of Section 12.05
hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, a Person who has
an account with the Depositary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Principal" means Marshall W. Pagon.
"PSTV Preferred Stock" means the Series A Preferred Stock, par value
$1.00 per share, of Pegasus Satellite Television of Virginia, Inc.
"Registered Security" means any Security issued hereunder and
registered as to principal and interest in the Register.
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"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of or within any series means the date specified for that
purpose as contemplated by Section 2.08.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration department of the Trustee (or
any successor group of the Trustee) 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.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning assigned to it in the preamble to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Bank Debt" means the Indebtedness (including letters of credit)
outstanding under the Credit Facility as such agreement may be restated, further
amended, supplemented or oterwise modified or replaced from time to time
hereafter, together with any refunding or replacement of such Indebtedness.
"Senior Debt" means any Indebtedness unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Securities. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (w) any liability
for federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Subsiodiaries of other Affiliates ,
(y) any trade payables or (z) any Indebtedness that is incurred in violation of
this Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any interest or principal on
any series of Securities, the date on which such payment of interest or
principal was scheduled to be paid in the original documentation governing such
Indebtedness, and shall not include any contingent obligations to repay, redeem
or repurchase any such interest or principal prior to the date originally
scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries (of such Person or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such a Person or a Subsidiary of such Person or (b)
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the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof.)
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb as amended) as in effect on the date on which this Indenture is
qualified under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
Section 1.02 OTHER DEFINITIONS
Defined in
Term Section
"Authentication Order"................................................2.04
"Common Stock"........................................................10.01
"Company Proceeding"..................................................11.02
"Company Securities Payment"..........................................11.02
"Covenant Defeasance"................................................8.03
"custodian"...........................................................6.01
"Equity Securities"..................................................10.01
"Event of Default"...................................................6.01
"Government Obligations"..............................................2.02
"incur"..............................................................4.09
"Legal Defeasance"...................................................8.02
"Notice of Default"...................................................6.01
"outstanding".........................................................8.02
"Paying Agent"........................................................2.05
"Payment Default".....................................................6.01
"Payment Blockage Period".............................................11.03
"Preferred Stock".....................................................10.01
"Purchase Date"......................................................3.09
"Registrar"...........................................................2.05
"Senior Nonmonetary Default"..........................................11.03
"trading day"........................................................10.03
Section 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture security Holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
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"indenture Trustee" or "institutional Trustee" means the Trustee;
"obligor" on the Securities means the Company and any successor obligor
upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE SECURITIES
Section 2.01 FORM AND DATING.
(a) General. The Securities of each series and the interest coupons, if
any, to be attached thereto shall be in substantially such form as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate 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 applicable securities exchange, organizational document,
governing instrument or law or as may, consistently herewith, be determined by
the officers executing such Securities and interest coupons, if any, as
evidenced by their execution of the Securities and interest coupons, if any. If
temporary Securities of any series are issued as permitted by Section 2.12, the
form thereof also shall be established as provided in the preceding sentence. If
the forms of Securities and interest coupons, if any, of any series are
established by, or by action taken pursuant to, a Board Resolution, a copy of
the Board Resolution together with an appropriate record of any such action
taken pursuant thereto, including a copy of the approved form of Securities or
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interest coupons, if any, shall be delivered to the Trustee at or prior to the
delivery of the Authentication Order contemplated by Section 2.04 for the
authentication and delivery of such Securities. The Trustee's certificate of
authentication shall be in substantially the following form:
This is one of the Securities of the series described in the
within-mentioned Indenture.
_______________________________________,
as Trustee
By: ____________________________________
Authorized Signatory
(b) Global Securities. If Securities of or within a series are issuable
in whole or in part in global form, any such Security may provide that it shall
represent the aggregate or specified amount of outstanding Securities from time
to time endorsed thereon and may also provide that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased to reflect exchanges. Any endorsement of a Security in global form to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders, of outstanding Securities represented thereby, shall be made
in such manner and by such Person or Persons as shall be specified therein or
upon the written order of the Company signed by an Officer to be delivered to
the Trustee pursuant to Section 2.04 or 2.12. Subject to the provisions of
Section 2.04, Section 2.12 if applicable, and Section 2.08, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable written order of the Company signed by an Officer. Any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing.
The provisions of the last paragraph of Section 2.04 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with a written instructions with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last paragraph of Section 2.04.
Notwithstanding the provisions of this Section 2.01, unless otherwise
specified as contemplated by Section 2.02, payment of principal of, premium, if
any, and interest on any Registered Security in permanent global form shall be
made to the registered holder thereof.
Section 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
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(b) The following matters shall be established with respect to each
series of Securities issued hereunder (i) by a Board Resolution, (ii) by action
taken pursuant to a Board Resolution and (subject to Section 2.04) set forth, or
determined in the manner provided, in an Officers' Certificate or (iii) in one
or more indentures supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(which limit shall not pertain to Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 2.08, 2.09, 2.12, 3.06 or 9.05 or any
Securities that, pursuant to Section 2.04, are deemed never to have been
authenticated and delivered hereunder);
(3) the date or dates on which the principal of and premium, if
any, on the Securities of the series is payable or the method or methods of
determination thereof;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method or methods of calculating such rate or
rates of interest, the date or dates from which such interest shall accrue or
the method or methods by which such date or dates shall be determined, the
Interest Payment Dates on which any such interest shall be payable, the right,
if any, of the Company to defer or extend an Interest Payment Date and, with
respect to Registered Securities, the Regular Record Date, if any, for the
interest payable on any Registered Security on any Interest Payment Date, and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(5) the place or places where the principal of, premium, if any,
and interest, if any, on Securities of the series shall be payable, any
Registered Securities of the series may be surrendered for registration of
transfer, Securities of the series may be surrendered for exchange and notices
and demands to or upon the Company in respect of the Securities of the series
and this Indenture may be served and where notices to Holders pursuant to
Section 12.02 will be published;
(6) the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in which,
and the other terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other than
as provided in Section 3.02, the manner in which the particular Securities of
such series (if less than all Securities of such series are to be redeemed) are
to be selected for redemption;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
upon the happening of a specified event or at the option of a Holder thereof and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which, and the other terms
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and conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, if Registered Securities, and if other than denominations of $5,000 and
any integral multiple thereof, if Bearer Securities, the denominations in which
Securities of the series shall be issuable;
(9) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of, premium, if any, and
interest, if any, on the Securities of the series shall be payable, or in which
the Securities of the series shall be denominated, and the particular provisions
applicable;
(10) if the payments of principal of, premium, if any, or interest,
if any, on the Securities of the series are to be made, at the election of the
Company or a Holder, in a currency or currencies (including currency unit or
units) other than that in which such Securities are denominated or designated to
be payable, the currency or currencies (including currency unit or units) in
which such payments are to be made, the terms and conditions of such payments
and the manner in which the exchange rate with respect to such payments shall be
determined, and the particular provisions applicable thereto;
(11) if the amount of payments of principal of, premium, if any,
and interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on a currency or currencies (including
currency unit or units) other than that in which the Securities of the series
are denominated or designated to be payable), the index, formula or other method
by which such amounts shall be determined and any special voting or defeasance
provisions in connection therewith;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities of the series which shall be payable upon
declaration of acceleration thereof pursuant to Section 6.02 or the method by
which such portion shall be determined;
(13) the Person to whom any interest on any Registered Security of
the series shall be payable and the manner in which, or the Person to whom, any
interest on any Bearer Securities of the series shall be payable;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be specified;
(15) any deletions from, modifications of or additions to the
Events of Default set forth in Section 6.01 or covenants of the Company set
forth in Article 4 pertaining to the Securities of the series;
(16) under what circumstances, if any, and with what procedures and
documentation the Company will pay additional amounts on the Securities and
interest coupons, if any, of that series held by a Person who is not a U.S.
Person (including any modification of the definition of such term) in respect of
taxes, assessments or similar charges withheld or deducted and, if so, whether
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the Company will have the option to redeem such Securities rather than pay such
additional amounts (and the terms of any such option);
(17) whether Securities of the series shall be issuable as
Registered Securities or Bearer Securities (with or without interest coupons),
or both, and any restrictions applicable to the offering, sale, transfer or
delivery of Bearer Securities and, if other than as provided in Section 2.08,
the terms upon which Bearer Securities of a series may be exchanged for
Registered Securities of the same series and vice versa;
(18) the date as of which any Bearer Securities of the series and
any temporary global Security representing outstanding securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(19) the forms of the Securities and interest coupons, if any, of
the series;
(20) the applicability, if any, to the Securities and interest
coupons, if any, of or within the series of Sections 8.02 and 8.03, or such
other means of defeasance or covenant defeasance as may be specified for the
Securities and interest coupons, if any, of such series, and whether, for the
purpose of such defeasance or covenant defeasance, the term "Government
Obligations" shall include obligations referred to in the definition of such
term which are not obligations of the United States or an agency or
instrumentality of the United States;
(21) if other than the Trustee, the identity of the Registrar and
any Paying Agent;
(22) if the Securities of the series shall be issued in whole or in
part in global form, (i) the Depositary for such global Securities, (ii) whether
beneficial owners of interests in any Securities of the series in global form
may exchange such interests for certificated Securities of such series, to be
registered in the names of or to be held by such beneficial owners or their
nominees and to be of like tenor of any authorized form and denomination, and
(iii) if other than as provided in Section 2.08, the circumstances under which
any such exchange may occur;
(23) the designation of the Depositary;
(24) any restrictions on the registration, transfer or exchange of
the Securities;
(25) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security of such
series or otherwise), or any installment of principal or interest is payable,
only upon receipt of certain certificates or other documents or satisfaction of
other conditions in addition to those specified in this Indenture, the form and
terms of such certificates, documents or conditions;
(26) the terms and conditions of any right to convert or exchange
Securities of the series into or for Equity Securities of the Company or other
securities or property of the Company;
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(27) whether the Securities are secured or unsecured, and if
secured, the Security and related terms in connection therewith;
(28) the relative degree, if any, to which the Securities of the
series shall be senior to or be subordinated to other series of Securities in
right of payment, whether such other series of Securities are Outstanding or
not; and
(29) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture) including any terms which
may be required by or advisable under United States laws or regulations or
advisable (as determined by the Company) in connection with the marketing of
Securities of the series.
(c) All Securities of any one series and interest coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided (i) by a Board Resolution, (ii) by
action taken pursuant to a Board Resolution and (subject to Section 2.04) set
forth, or determined in the manner provided, in the related Officers'
Certificate or (iii) in an indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders, for issuances of
additional Securities of such series.
(d) If any of the terms of the Securities of any series are established
by action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series, and an appropriate record of any action taken
pursuant thereto in connection with the issuance of any Securities of such
series shall be delivered to the Trustee prior to the authentication and
delivery thereof.
Section 2.03. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 2.02, any
Registered Securities of a series denominated in Dollars shall be issuable in
denominations of U.S. $1,000 and any integral multiple thereof and any Bearer
Securities of a series denominated in Dollars shall be issuable in the
denomination of U.S. $5,000 and any integral multiple thereof. Securities
denominated in a foreign currency shall be issuable in such denominations as are
established with respect to such Securities in or pursuant to this Indenture.
Section 2.04. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time a Security is authenticated, the Security shall nevertheless
be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
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The Trustee shall, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Securities for original issue
up to the aggregate principal amount.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement stating that such
Security has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall not be entitled to the benefits of this Indenture.
Section 2.05. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Depository Trust Company to act as
Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Securities.
Section 2.06. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest on the Securities, and will notify the Trustee of
any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
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segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Securities.
Section 2.07. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss.312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Securities
and the Company shall otherwise comply with TIA ss.312(a).
Section 2.08. TRANSFER AND EXCHANGE.
(a) Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to Section
4.02 in a place of payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor and
containing identical terms and provisions.
(b) Bearer Securities (except for any temporary global Bearer
Securities) or any interest coupons appertaining thereto (except for interest
coupons attached to any temporary global Bearer Security) shall be transferable
by delivery.
(c) At the option of the Holder, Registered Securities of any series
(except a Registered Security in global form) may be exchanged for other
Registered Securities of the same series, of any authorized denominations, of a
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like aggregate principal amount and tenor and containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive. Unless otherwise specified as contemplated by Section 2.02,
Bearer Securities may not be issued in exchange for Registered Securities.
(d) Unless otherwise specified as contemplated by Section 2.02, at the
option of the Holder, Bearer Securities of such series may be exchanged for
Registered Securities (if the Securities of such series are issuable in
registered form) or Bearer Securities (if Bearer Securities of such series are
issuable in more than one denomination and such exchanges are permitted by such
series) of the same series, of any authorized denominations, of like aggregate
principal amount and tenor and containing identical terms and conditions, upon
surrender of the Bearer Securities to be exchanged at any such office or agency,
with all unmatured interest coupons and all matured interest coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured interest coupon or coupons or matured interest coupon or
coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing interest coupon or coupons, or
the surrender of such missing interest coupon or interest coupons may be waived
by the Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing interest coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
4.02, interest represented by interest coupons shall be payable only upon
presentation and surrender of those interest coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in case any
Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any special record date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the interest coupon relating to
such Interest Payment Date or proposed date of payment, as the case may be (or,
if such interest coupon is so surrendered with such Bearer Security, such
interest coupon shall be returned to the Person so surrendering the Bearer
Security), and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such interest coupon, when
due in accordance with the provisions of this Indenture.
(e) Notwithstanding anything herein to the contrary, the exchange of
Bearer Securities for Registered Securities shall be subject to applicable laws
and regulations in effect at the time of exchange. Neither the Company, the
Trustee nor the Registrar shall exchange any Bearer Securities for Registered
Securities if it has received an Opinion of Counsel that as a result of such
exchange the Company would suffer adverse consequences under the United States
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Federal income tax laws and regulations then in effect and the Company has
delivered to the Trustee a written order of the Company signed by an Officer
directing the Trustee not to make such exchanges thereafter, unless and until
the Trustee receives a written order of the Company signed by an Officer to the
contrary. The Company shall deliver copies of such written order of the Company
signed by an Officer to the Registrar.
(f) Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for Securities in certificated form, a
Security in global form representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
(g) If at any time the Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such series or if at any time the Depositary for the
Securities of such series shall no longer be eligible under Section 2.02, the
Company shall appoint a successor Depositary with respect to the Securities of
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company prior to the resignation of the Depositary and, in any
event, within 90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company's designation of the Depositary pursuant to
Section 2.02(b)(23) shall no longer be effective with respect to the Securities
of such series and the Company shall execute, and the Trustee, upon receipt of
an Authentication Order for the authentication and delivery of certificated
Securities of such series of like tenor, shall authenticate and deliver,
Securities of such series of like tenor in certificated form, in authorized
denominations and in an aggregate principal amount equal to the principal amount
of the Security or Securities of such series of like tenor in global form in
exchange for such Security or Securities in global form.
(h) The Company may at any time in its sole discretion determine that
Securities issued in global form shall no longer be represented by such a
Security or Securities in global form. In such event the Company shall execute,
and the Trustee, upon receipt of an Authentication Order for the authentication
and delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
(i) If specified by the Company pursuant to Section 2.02 with respect
to a series of Securities, the Depositary for such series may surrender a
Security in global form of such series in exchange in whole or in part for
Securities of such series in certificated form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by such depositary a new certificated
Security or Securities of the same series of like tenor, of any
authorized denomination as requested by such Person in aggregate
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principal amount equal to and in exchange for such Person's beneficial
interest in the Security in global form;
and
(ii) to such Depositary a new Security in global form of like tenor
in a denomination equal to the difference, if any, between the
principal amount of the surrendered Security in global form and the
aggregate principal amount of certificated Securities delivered to
Holders thereof.
(j) Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be canceled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a Security in global form pursuant to
this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or Indirect Participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such Securities to
the Persons in whose names such Securities are so registered.
(k) Whenever any Securities are 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.
(l) All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
(m) Every Registered Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company, the Registrar
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Registrar and the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
(n) No service charge shall be made for any registration of transfer or
for any 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 or transfer or exchange of Securities, other
than exchanges pursuant to Section 2.12 or 3.06 not involving any transfer.
(o) The Company shall not be required (i) to issue, register the
transfer of, or exchange any Securities for a period beginning at the opening of
business 15 days before any selection for redemption of Securities of like tenor
and of the series of which such Security is a part and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Securities of like tenor and of such
series to be redeemed; (ii) to register the transfer of or exchange any
Registered Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part; or (iii) to exchange
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any Bearer Security so selected for redemption, except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption.
(p) the foregoing provisions relating to registration, transfer and
exchange may be modified, supplemented or superseded with respect to any series
of Securities by a Board Resolution or in one or more indentures supplemental
hereto.
(q) Legends. The following legend shall appear on the face of all
Global securities and definitive (bearer) securities under this Indenture unless
specifically stated otherwise in the applicable provision of this Indenture.
(i) Global Security Legend. Each Global Security shall bear a
legend in substantially the following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.09 OF
THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.13 OF THE INDENTURE AND (IV)
THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(r) Cancellation and/or Adjustment of Global Securities. At such time
as all beneficial interests in a particular Global Security have been exchanged
for definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.13 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security or for definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
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(s) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate global
Securities upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Security or to a Holder of a Bearer
Security for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Security selected for redemption in whole
or in part, except the unredeemed portion of any Security being
redeemed in part.
(iv) All Global Securities and Bearer Securities issued upon
any registration of transfer or exchange of Global Securities or Bearer
Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture,
as the Global Securities or Bearer Securities surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Securities during a period
beginning at the opening of business 15 days before the day of any
selection of Securities for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (c) to register the transfer of or
to exchange a Security between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Security, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Security is registered as
the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Securities and for all
other purposes, and none of the Trustee, any Agent or the Company shall
be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Securities and
Bearer Securities in accordance with the provisions of Section 2.04
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.08 to effect a registration of transfer or exchange may be
submitted by facsimile.
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Section 2.09. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Security, the Company shall issue and the Trustee, upon receipt
of an Authentication Order, shall authenticate a replacement Security if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent
and any authenticating agent from any loss that any of them may suffer if a
Security is replaced. The Company may charge for its expenses in replacing a
Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
Section 2.10. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.11 hereof, a Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.09 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Section 2.11. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows are so
owned shall be so disregarded.
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Section 2.12. TEMPORARY SECURITIES.
Until certificates representing Securities are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of certificated Securities but may have variations
that the Company considers appropriate for temporary Securities and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
Section 2.13. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Securities (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all canceled
Securities shall be delivered to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.14. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Securities and in Section 4.01 hereof. 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. The Company shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed at any time, the
Trustee shall select the Securities to be redeemed among the Holders of the
Securities in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed or, if the
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Securities are not so listed, to be redeemed among the Holders of Securities on
a pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
part. In the event of partial redemption by lot, the particular Securities to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Securities not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities and
portions of Securities selected shall be in amounts of $1,000 or whole multiples
of $1,000; except that if all of the Securities of a Holder are to be redeemed,
the entire outstanding amount of Securities held by such Holder, even if not a
multiple of $1,000, shall be redeemed. A new Security in principal amount equal
to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. Securities called for
redemption shall become due on the redemption date. On and after the redemption
date, interest ceases to accrue on Securities or portions of them called for
redemption. Except as provided in this Section 3.01, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
Section 3.02. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Securities are to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(e) that, unless the Company defaults in making such redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
redemption date;
(f) that any Security being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the redemption date upon
surrender of such Security, a new Security or Securities in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original;
(g) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
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Company shall have delivered to the Trustee, at least 30 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.03. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.02
hereof, Securities called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.04. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
One Business Day prior to 10:00 a.m. Eastern Time on any redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money
in immediately available funds sufficient to pay the redemption or purchase
price of and accrued interest, if any, on all Securities to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest on, all Securities to be redeemed or purchased.
Section 3.05. SECURITIES REDEEMED OR PURCHASED IN PART.
Upon surrender of a Security that is redeemed or purchased in part, the
Company shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Security equal
in principal amount to the unredeemed or unpurchased portion of the Security
surrendered.
Section 3.06. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Securities.
ARTICLE 4.
COVENANTS
Section 4.01. PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Securities on the dates and in the manner provided in
the Securities. Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Company or a
Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Securities to
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the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-Registrar) where Securities may be surrendered
for registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Company shall 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.
The Company may also from time to time designate one or more other
offices or agencies 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 for such purposes. The Company shall
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.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.05.
Section 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Securities are outstanding, the Company shall furnish to the Holders
of Securities (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports, in each case within the time periods specified in the SEC's rules and
regulations. In addition, the Company shall file a copy of all such information
and reports with the SEC for public availability within the time periods set
forth in the SEC's rules and regulations (unless the SEC will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. In addition to the financial information
required by the Exchange Act, each such quarterly and annual report shall be
required to contain "summarized financial information" (as defined in Rule
1-02(aa)(1) of Regulation S-X under the Exchange Act) showing Adjusted Operating
Cash Flow for the Company and its Significant Subsidiaries, on a consolidated
basis, where Adjusted Operating Cash Flow for the Company is calculated in a
manner consistent with the manner described under the definition of "Adjusted
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Operating Cash Flow" contained herein. The summarized financial information
required pursuant to the preceding sentence may, at the election of the Company,
be included in the footnotes to the audited consolidated financial statements or
unaudited quarterly financial statements of the Company and shall be as of the
same dates and for the same periods as the consolidated financial statements of
the Company and its Subsidiaries required pursuant to the Exchange Act.
Section 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Securities is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon any Officer of the Company becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
(c) The Company shall file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in this
Indenture, as may be required from time to time by such rules and regulations.
Section 4.05. CONTINUED EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Significant Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Significant Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and any of its Restrictive
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Significant Subsidiaries, 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 its Significant Subsidiaries,
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taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Securities.
Section 4.06. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 2.02 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 2.02(15) and
9.01 for the benefit of the Holders of such series if before the time for such
compliance the Holders of at least a majority in principal amount of the
outstanding Securities of such series shall, by act of such, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision 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 term, provision or condition shall remain in
full force and effect.
Section 4.07. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
ARTICLE 5.
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the Obligations of the Company under the
Securities and this Indenture pursuant to a supplemental indenture in a form
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reasonably satisfactory to the Trustee; and (iii) immediately after such
transaction no Default or Event of Default exists.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), 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; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Securities except in the case of a sale of all
of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company Defaults in the payment when due of interest on, with
respect to, the Securities and such Default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Securities when the same becomes due and payable at
maturity, upon redemption or otherwise;
(c) the Company fails to comply with any of the provisions of section
5.01 hereof;
(d) the Company or any Subsidiary fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture, the
Securities for 60 days after notice to comply;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (on the payment of which is
guaranteed by the Company), whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, which default (i) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (ii) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
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maturity of which has been so accelerated, aggregates to the amount specified in
the applicable supplemental indenture more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any Subsidiary that would be a Significant Subsidiary and such judgment or
judgments remain unpaid, undischarged, or unstayed for a period of 60 days,
provided that the aggregate of all such undischarged judgments exceeds the
amount specified in the applicable supplemental indenture;
(g) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
The term "custodian" as used in this Article VI means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
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An Event of Default shall not be deemed to have occurred under
clause (c), (e) or (f) until the Trustee shall have received at the Corporate
Trust Office of the Trustee written notice from the Company or any of the
Holders or unless a Responsible Officer shall have actual knowledge of such
Event of Default. A Default under clause (e) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the then outstanding Securities notify the Company and the Trustee, of
the Default and the Company does not cure the Default within 60 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."
Section 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Securities may declare all the Securities to be due and payable immediately.
Upon any such declaration, the principal of, premium, if any, and accrued and
unpaid interest on the Securities shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiary, or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Securities shall be
due and payable immediately without further action or notice, provided that the
payment of principal and interest on such Securities shall remain subordinated
to the extent provided in Article 11. Holders of the Securities may not enforce
this Indenture or the Securities except as provided in this Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest ) if it determines that
withholding notice is in their interest.
Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Security in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Securities by notice to the Trustee may on behalf of the
Holders of all of the Securities waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
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in the payment of the principal of, premium, if any, or interest on, the
Securities (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Securities may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. 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 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Securities or that may
involve the Trustee in personal liability.
Section 6.06. LIMITATION ON SUITS.
A Holder of a Security may pursue a remedy with respect to this
Indenture or the Securities only if:
(a) the Holder of a Security gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding
Securities make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Security or Holders of Securities offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Securities do not give the Trustee a direction
inconsistent with the request.
A Holder of a Security may not use this Indenture to prejudice the
rights of another Holder of a Security or to obtain a preference or priority
over another Holder of a Security.
Section 6.07. RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal, premium, if
any, and interest on the Security, on or after the respective due dates
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expressed in the Security (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as Trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Securities
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Securities allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian 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 to 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 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained 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, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
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Second: to Holders of Securities for amounts due and unpaid on the
Securities for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal, premium, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Security pursuant to Section 6.07 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Securities.
ARTICLE 7.
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proven that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. 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 from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(f) 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 unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if a
Responsible Officer of the Trustee has actual knowledge of such Default or Event
of Default, the Trustee shall mail to Holders of Securities a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, or interest on, any
Security, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Securities.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Securities remain outstanding,
the Trustee shall mail to the Holders of the Securities a brief report dated as
of such reporting date that complies with TIA ss. 313(a) (but if no event
described in TIA ss. 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA ss. 313(c). A copy of each report at the time of its mailing to
the Holders of Securities shall be mailed to the Company and filed with the SEC
and each stock exchange on which the Securities are listed in accordance with
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TIA ss. 313(d). The Company shall promptly notify the Trustee when the
Securities are listed on any stock exchange.
Section 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee have separately agreed. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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Section 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee, after written request by any Holder of a Security who
has been a Holder of a Security for at least six months, fails to comply with
Section 7.10, such Holder of a Security may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Securities. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least the amount
specified in the applicable supplemental indenture as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) Section 0.01 to the extent indicated
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all of its
other Obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions 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 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest, on such Securities
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when such payments are due, (b) the Company's obligations with respect to such
Securities under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.
Section 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 3.09 and 5.01 hereof with
respect to the outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
"outstanding" Securities, 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
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(d) through 6.01(f) hereof shall not constitute Events of Default.
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Securities, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, interest and premium,
if any, on the outstanding Securities on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Securities are being defeased to maturity or to a particular
redemption date;
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(b) in the case of an election under Section 8.02 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) or insofar as
Sections 6.01(g) or (h) hereof are concerned, at any time in the period ending
on the 91st day after the date of deposit (or greater period of time in which
any such deposit of trust funds may remain subject to bankruptcy or insolvency
laws insofar as those apply to the deposit by the Company);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that, as of the date of such opinion, (i) the trust funds will not
be subject to the rights of holders of Indebtedness other than the Securities
and (ii) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day (or greater period of time in which any such deposit of
trust funds may remain subject to bankruptcy or insolvency laws insofar as those
apply to the deposit by the Company) following the deposit and assuming no
Holder of Securities is an insider of the Company, after the 91st day (or later
date until which any such deposit of trust funds may remain subject to
bankruptcy or insolvency laws insofar as those apply to the deposit by the
Company) following the deposit, the trust funds will not be subject to the
effects of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally under any applicable United States or
state law;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Securities over the other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding creditors of
the Company or others; and
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(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding
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 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, 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 cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof 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 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. 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 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 request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
a secured 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.
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Section 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium or interest on 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 Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF SECURITIES.
Notwithstanding Section 9.02 of this Indenture, the Company, a
Subsidiary Guarantor (with respect to a Subsidiary Guarantee or the Indenture to
which it is a party) and the Trustee may amend or supplement this Indenture, the
Securities or the Subsidiary Guarantees without the consent of any Holder of a
Security:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of Securities in the case of a merger or
consolidation pursuant to Article 5 hereof, as applicable;
(c) modify the provisions in Article 11 of this Indenture with respect to
the subordination of outstanding securities of any series in a manner not
adverse to the Holders thereof;
(d) to make any change that would provide any additional rights or benefits
to the Holders of Securities or that does not adversely affect the legal rights
hereunder of any such Holder; or
(e) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA or to allow any
Subsidiary Guarantor to guarantee the Securities.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company or a Subsidiary Guarantor, as applicable,
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company or such Subsidiary Guarantor in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
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stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture or Subsidiary
Guarantee that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. WITH CONSENT OF HOLDERS OF SECURITIES.
Except as provided below in this Section 9.02, the Company, a
Subsidiary Guarantor (with respect to a Subsidiary Guarantee or the Indenture to
which it is a party) and the Trustee may amend or supplement this Indenture, the
Securities or the Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium or interest on the Securities) or compliance with any
provision of this Indenture or the Securities may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Securities
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for the Securities). Any amendment to the
provisions of Article 12 hereof including the related definitions will require
the consent of the Holders of at least 75% in aggregate principal amount of the
Securities then outstanding if such amendment would adversely affect the rights
of Holders of Securities.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company or a Subsidiary Guarantor, as applicable,
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Securities as aforesaid, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company or such Subsidiary Guarantor in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Securities affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities. However, without the consent
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of each Holder affected, an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder):
(a) reduce the principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Security or
alter the provisions with respect to the redemption of the Securities (other
than provisions relating to Section 3.09 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(d) waive a Default or Event of Default in the payment of principal of or
interest or premium on the Securities (except a rescission of acceleration of
the Securities by the Holders of a majority in aggregate principal amount of the
Securities and a waiver of the payment default that resulted from such
acceleration);
(e) make any Security payable in money other than that stated in the
Securities;
(f) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Securities to receive payments of
principal of or interest or premium on the Securities;
(g) waive a redemption payment with respect to any Security (other than a
payment required by the provisions of Section 3.09 hereof);
(h) modify the provisions in Article 11 of this Indenture with respect to
the subordination of outstanding securities of any series in a manner adverse to
the Holders thereof;
(i) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(j) except as provided in Article 8 hereof or otherwise in accordance with
the terms of this Indenture or any Subsidiary Guarantee, release a Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee or make any change
in a Subsidiary Guarantee that would adversely affect the Holders of the
Securities.
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities shall
be set forth in an amended or supplemental Indenture that complies with the TIA
as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the Holder of a
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Security and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Securities, even if notation
of the consent is not made on any Securities. However, any such Holder of a
Security or subsequent Holder of a Security may revoke the consent as to its
Securities if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An amendment, supplement
or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
Section 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Securities thereafter authenticated. The Company in
exchange for all Securities may issue and the Trustee shall authenticate new
Securities that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or to issue new Securities
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until its Board
of Directors approves it. If it does, the Trustee may, but need not, sign it. In
signing or refusing to sign such amendment or supplemental Indenture, the
Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental Indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Company in accordance with its
terms.
ARTICLE 10.
CONVERSION OR EXCHANGE OF SECURITIES
Section 10.01. APPLICABILITY OF ARTICLE.
(a) The provisions of this Article 10 shall be applicable to the Securities
of any series which are convertible or exchangeable into Equity Securities of
the Company, and to the issuance of such Equity Securities upon the conversion
or exchange of such Securities, except as otherwise specified as contemplated by
Section 2.02 for the Securities of such series.
(b) For purposes of this Article 10, the term "Equity Securities" shall
mean all or any of the following, authorized from time to time: (i) the Class A
Common Stock, (ii) the Company's Non-voting Common Stock par value $.01 per
share (together with the Class A Common Stock, the "Common Stock"), (iii) the
Company's Preferred Stock par value $.01 per share (the "Preferred Stock"), and
(iv) any other equity securities of the Company.
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Section 10.02. EXERCISE OF CONVERSION OR EXCHANGE PRIVILEGE.
(a) In order to exercise a conversion or exchange privilege, the Holder of
a Security of a series with such privilege shall surrender such Security,
together, in the case of any Bearer Security, with all unmatured interest
coupons and any matured interest coupons in default appertaining thereto, to the
Company at the office or agency maintained for that purpose pursuant to Section
4.02, accompanied by written notice to the Company that the Holder elects to
convert or exchange such Security or a specified portion thereof. Such notice
shall also state, if different from the name and address of such Holder, the
name or names (with address) in which the certificate or certificates for Equity
Securities which shall be issuable on such conversion or exchange shall be
issued. Registered Securities surrendered for conversion or exchange shall (if
so required by the Company or the Trustee) be duly endorsed by or accompanied by
instruments of transfer in forms satisfactory to the Company and the Trustee
duly executed by the registered Holder or its attorney duly authorized in
writing.
(b) Registered Securities so surrendered for conversion or exchange during
the period from the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date (excluding Securities or
portions thereof called for redemption during such period) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Security then being converted or exchanged, and such interest shall be
payable to such registered Holder on such Interest Payment Date notwithstanding
the conversion or exchange of such Security.
(c) As promptly as practicable after the receipt of such notice and of any
payment required pursuant to a Board Resolution and, subject to Section 2.04,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of Equity Securities issuable upon the conversion
or exchange of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Equity Security otherwise issuable upon such conversion or exchange.
(d) Such conversion or exchange shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice and
such payment, if required, shall have been received in proper order for
conversion or exchange by the Company and such Security shall have been
surrendered as aforesaid and at such time the rights of the Holder of such
Security as such Security Holder shall cease and the person or persons in whose
name or names any certificate or certificates for Equity Securities of the
Company shall be issuable upon such conversion or exchange shall be deemed to
have become the Holder or Holders of record of the Equity Securities represented
thereby. No payment or adjustment shall be made upon any conversion or exchange
on account of any interest accrued on the Securities surrendered for conversion
or exchange, or on account of any dividends on the Equity Securities of the
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Company issued upon such conversion or exchange if the record date for the
payment of such dividends occurs prior to or on the date on which such
conversion or exchange shall be deemed to have been effected.
In the case of any Security which is converted or exchanged in part
only, upon such conversion or exchange the Company shall execute and the Trustee
shall authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to the unconverted
or unexchanged portion of such Security.
Section 10.03. NO FRACTIONAL EQUITY SECURITIES.
No fractional Equity Security of the Company shall be issued upon
conversions or exchanges of Securities of any series. If more than one Security
shall be surrendered for conversion or exchange at one time by the same Holder,
the number of full shares of the Equity Security which shall be issuable upon
conversion or exchange shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof to the extent permitted
hereby) so surrendered. If, except for the provisions of this Section 10.03, any
Holder of a Security or Securities would be entitled to a fractional share of
any Equity Security of the Company upon the conversion or exchange of such
Security or Securities, or specified portions thereof, the Company shall pay to
such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Equity Security is listed or admitted to
unlisted trading privileges on a national securities exchange, on the basis of
the last reported sale price regular way on the principal exchange where such
Equity Security is listed or admitted, on the last trading day prior to the date
of conversion or exchange upon which such a sale shall have been effected, (ii)
if such Equity Security is not at the time so listed or admitted on a national
securities exchange but is quoted on the Nasdaq Stock Market, on the basis of
the average of the bid and asked prices of such Equity Security on the Nasdaq
Stock Market on the last trading day prior to the date of conversion or
exchange, (iii) if such Equity Security is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange or quoted on
the Nasdaq Stock Market, on the basis of the average of the bid and asked prices
of such Equity Security in the over-the-counter market, on the last trading day
prior to the date of conversion or exchange, as reported by the National
Quotation Bureau Incorporated or similar organization if the National Quotation
Bureau Incorporated is no longer reporting such information, or (iv) in
accordance with the terms of the supplemental indenture or Board Resolutions
setting the terms of the Securities of such series. For purposes of this
Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day on which the applicable Equity Security is not traded
or quoted on a national securities exchange, or if the applicable Equity
Security is not traded or quoted on a national securities exchange, on the
Nasdaq Stock Market or the principal exchange or market on which the applicable
Equity Security is traded or quoted.
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Section 10.04. ADJUSTMENT OF CONVERSION OR EXCHANGE PRICE; CONSOLIDATION OR
MERGER.
The conversion or exchange price of Securities of any series that is
convertible or exchangeable into an Equity Security of the Company shall be
adjusted for any stock dividends, stock splits, reclassification, combinations
or similar transactions, and the securities, assets or other property into or
for which such Securities may be converted or exchanged as a result of any
consolidation, merger, combination or similar transaction shall be determined,
in accordance with the terms of the supplemental indenture or Board Resolutions
setting the terms of the Securities of such series.
Whenever the conversion or exchange price is adjusted, the Company
shall compute the adjusted conversion or exchange price in accordance with the
terms of the applicable Board Resolution or supplemental indenture and shall
prepare an Officers' Certificate setting forth the adjusted conversion or
exchange price and showing in reasonable detail the facts upon which such
adjustment is based. Whenever the securities, assets or other property into or
for which Securities of any series may be converted or exchanged are changed as
a result of any consolidation, merger or similar transaction, the Company shall
determine the nature and amount of such securities, assets or other property in
accordance with the terms of the applicable Board Resolution or supplemental
indenture and shall prepare an Officers' Certificate describing such securities,
assets or other property and stating the amount of such securities, assets or
other property into or for which such Securities have become convertible or
exchangeable. Such certificates shall forthwith be filed at each office or
agency maintained for the purpose of conversion or exchange of Securities
pursuant to Section 4.02 and, if different, with the Trustee. The Company shall
forthwith cause a notice setting forth the adjusted conversion or exchange price
or describing such securities, assets or other property, as applicable, to be
mailed, first class postage prepaid, to each Holder of Registered Securities of
such series at its address appearing on the Register and to any conversion or
exchange agent other than the Trustee.
Section 10.05. NOTICE OF CERTAIN CORPORATE ACTIONS.
If any series of Securities which are directly or indirectly
convertible or exchangeable for any Equity Securities are Outstanding, in case:
(a) the Company shall declare a dividend (or any other distribution) on any
class of such Equity Securities payable otherwise than in cash out of its
retained earnings (other than a dividend for which approval of any stockholder
of the Company is required); or
(b) the Company shall authorize the granting to the holders of any class of
such Equity Securities of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights (other
than any such grant for which approval of any stockholder of the Company is
required); or
(c) of any reclassification of any class of such Equity Securities (other
than a subdivision or combination of its outstanding Equity Securities, or of
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any consolidation, merger or share exchange to which the Company is a party and
for which approval of any stockholder of the Company is required), or of the
sale of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders at their addresses as they shall appear in the Register,
at least 15 days (or 10 days in any case specified in clause (a) or (b) above)
prior to the applicable record date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the Holders of such Equity Securities of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, or (ii) the date on which such reclassification, consolidation,
merger, share exchange, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
such Equity Securities of record shall be entitled to exchange such Equity
Securities for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up. If at any time the Trustee shall not be the
conversion or exchange agent, a copy of such notice shall also forthwith be
filed by the Company with the Trustee.
Section 10.06. RESERVATION OF EQUITY SECURITIES.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Equity Securities, for the
purpose of effecting the conversion or exchange of Securities, the full number
of Equity Securities of the Company then issuable upon the conversion or
exchange of all outstanding securities of any series that has conversion or
exchange rights.
Section 10.07. PAYMENT OF CERTAIN TAXES UPON CONVERSION OR EXCHANGE.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of its Equity Securities on conversion or exchange of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of its Equity Securities in a name other than that of the Holder of
the Security or Securities to be converted or exchanged, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
Section 10.08. DUTIES OF TRUSTEE REGARDING CONVERSION OR EXCHANGE.
Neither the Trustee nor any conversion or exchange agent shall at any
time be under any duty or responsibility to any Holder of Securities of any
series that is convertible or exchangeable into Equity Securities of the Company
to determine whether any facts exist which may require any adjustment of the
conversion or exchange price, or with respect to the nature or extent of any
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such adjustment when made, or with respect to the method employed, whether
herein or in any supplemental indenture, any resolutions of the Board of
Directors or written instrument executed by one or more officers of the Company
provided to be employed in making the same. Neither the Trustee nor any
conversion or exchange agent shall be accountable with respect to the validity
or value (or the kind or amount) of any Equity Securities of the Company, or of
any securities or property, which may at any time be issued or delivered upon
the conversion or exchange of any Securities and neither the Trustee nor any
conversion or exchange agent makes any representation with respect thereto.
Subject to the provisions of Section 7.01, neither the Trustee nor any
conversion or exchange agent shall be responsible for any failure of the Company
to issue, transfer or deliver any of its Equity Securities or stock certificates
or other securities or property upon the surrender of any Security for the
purpose of conversion or exchange or to comply with any of the covenants of the
Company contained in this Article 10 or in the applicable supplemental
indenture, resolutions of the Board of Directors or written instrument executed
by one or more duly authorized officers of the Company.
Section 10.09. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION OR EXCHANGE.
Any funds which at any time have been deposited by the Company or on
its behalf with the Trustee or any Paying Agent for the purpose of paying the
principal of, and premium, if any, and interest, if any, on any of the
Securities and which shall not be required for such purposes because of the
conversion or exchange of such Securities as provided in this Article 10 shall
after such conversion or exchange be repaid to the Company by the Trustee upon
the Company's written request.
ARTICLE 11.
SUBORDINATION
Section 11.01. AGREEMENT TO SUBORDINATE.
(a) The Company agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
(b) If any holder of Senior Debt is required by any court or otherwise to
return to the Company, or any Custodian, trustee, or similar official acting in
relation to the Company, any amount paid by the Company to such holder of Senior
Debt, the provisions of this Article 11, to the extent theretofore discharged,
shall be reinstated in full force and effect; provided, however, that any
amounts paid pursuant to this Indenture to Holders of Securities shall not be
subject to disgorgement pursuant to the provisions of this paragraph (b).
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<PAGE>
Section 11.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) the Senior Bank Debt and (ii) any
other Senior Debt permitted under this Indenture the principal amount of which
at least the amount specified in the applicable supplemental indenture and that
has been designated by the Company as "Designated Senior Debt."
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
A "distribution" may consist of cash, securities or other property, by
set-off or otherwise.
Section 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive payment in full
of all Obligations due in respect of such Senior Debt (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Debt) before the Holders of Securities shall be entitled
to receive any payment with respect to the Securities (except that Holders
may receive (i) securities that are subordinated to at least the same
extent as the Securities to (a) Senior Debt and (b) any securities issued
in exchange for Senior Debt and (ii) payments and other distributions made
from any defeasance trust created pursuant to Section 8.05 hereof); and
(ii) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full, any distribution to which the
Holders of Securities would be entitled but for this Article shall be made
to holders of Senior Debt (except that Holders may receive (i) securities
that are subordinated to at least the same extent as the Securities to (a)
Senior Debt and (b) any securities issued in exchange for Senior Debt and
(ii) payments and other distributions made from any defeasance trust
created pursuant to Section 8.05 hereof), as their interests may appear.
Section 11.04. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment or distribution to the Trustee or
any Holder in respect of the Securities and may not acquire from the Trustee or
any Holder any Securities for cash or property (other than (1) securities that
are subordinated to at least the same extent as the Securities to (A) Senior
Debt and (B) any securities issued in exchange for Senior Debt and (2) payments
and other distributions made from any defeasance trust created pursuant to
Section 8.05 hereof) until all principal and other Obligations with respect to
the Senior Debt have been paid in full if:
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(1) a default in the payment of the principal of, premium, if any, or
interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document governing
such Designated Senior Debt; or
(2) a default, other than a default specified in Section 11.04(a)(i),
on Designated Senior Debt occurs and is continuing with respect to Designated
Senior Debt that then permits holders of the Designated Senior Debt as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a Person who may give
it pursuant to Section 11.12 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (I) at least 360 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage Notice
and (II) all scheduled payments of principal and premium, if any, and interest
on the Securities that have come due (other than by reason of acceleration) have
been paid in full in cash. No default described in this paragraph (ii) that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
(b) The Company may and shall resume payments on and distributions in
respect of the Securities and may acquire them:
(i) in the case of a default described in Section 11.04(a)(i), upon the
date on which the default is cured or waived, and
(ii) in the case of a default referred to in Section 11.04(a)(ii)
hereof, the earlier of the date on which such default is cured or waived or
179 days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been
accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 11.05. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 11.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Securities at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 11.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may
appear or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
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<PAGE>
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 11, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 11, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 11.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior Debt
as provided in this Article.
Section 11.08. SUBROGATION.
After all Senior Debt is paid in full and until the Securities are paid
in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Securities) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior Debt
that otherwise would have been made to Holders is not, as between the Company
and Holders, a payment by the Company on the Senior Debt.
Section 11.09. RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(iii) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal or and
interest on the Securities in accordance with their terms;
(iv) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(v) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders.
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<PAGE>
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
Section 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or any Holder or by the failure of the Company or
any Holder to comply with this Indenture.
Section 11.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 11.
Section 11.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless the Trustee shall have received at
its Corporate Trust Office of the Trustee at least five Business Days prior to
the date of such payment written notice of facts that would cause the payment of
any Obligations with respect to the Securities to violate this Article. Only the
Company or a Representative may give the notice. Nothing in this Article 11
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 11.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Security by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
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<PAGE>
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the agent under the Credit Facility (or in the absence of such agent, the
lender) is hereby authorized to file an appropriate claim for and on behalf of
the Holders of the Securities.
Section 11.14. AMENDMENTS.
The provisions of this Article 11 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Pegasus Communications Corporation
c/o Pegasus Communications Management Company
225 City Lane Avenue, Suite 200
Bala Cynwyd, PA 19004
Telecopier No.: (610) 934-7121
Attention: Chief Financial Officer
With a copy to:
Drinker Biddle & Reath LLP
One Logan Square
Eighteenth & Cherry Streets
Philadelphia, PA 19103
Telecopier No.: (215) 988-2757
Attention: Michael B. Jordan, Esq.
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<PAGE>
If to the Trustee:
First Union National Bank
230 S. Tryon Street
Charlotte, NC 28288-1153
Telecopier No.: (704) 374-6114
Attention: Client Service Group
With a copy to:
First Union National Bank
123 South Broad Street
PA 1249
Philadelphia, PA 19109
Telecopier No.: (215) 985-7290
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03. COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER HOLDERS OF
SECURITIES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
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<PAGE>
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
he Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
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<PAGE>
Each Holder of Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities.
Section 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE SECURITIES.
Section 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
Section 12.11. SEVERABILITY.
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 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of the
date first written above.
PEGASUS COMMUNICATIONS CORPORATION
By: ______________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By: _______________________________
Name:
Title:
<PAGE>
CONSENT OF DRINKER BIDDLE & REATH LLP
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement. In giving
this consent, we do not admit that we come within the categories of persons
whose consent is required under Section 7 of the Securities Act.
/s/ Drinker Biddle & Reath LLP
Philadelphia, PA
March 28, 2000
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 11, 2000 relating to the
financial statements and financial statement schedules, which appears in Pegasus
Communications Corporation's Annual Report on Form 10-K for the year ended
December 31, 1999. We also consent to the references to us under the heading
"Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Philadelphia, PA
March 27, 2000
<PAGE>
Exhibit 23.3
Board of Directors
Golden Sky Holdings, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Pegasus Communications Corporation of our report dated February 14,
2000, with respect to the consolidated balance sheets of Golden Sky Holdings,
Inc. as of December 31, 1998 and 1999, and the related consolidated statements
of operations, stockholders' equity (deficit), and cash flows for each of the
years in the three-year period ended December 31, 1999, which report appears in
the Form S-4 of Pegasus Communications Corporation dated February 25, 2000.
/s/ KPMG LLP
Kansas City, Missouri
March 27, 2000
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
FIRST UNION NATIONAL BANK
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
301 SOUTH COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)
28288-0630
(Zip Code)
FIRST UNION NATIONAL BANK
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 985-6000
(Name, address and telephone number of Agent for Service)
PEGASUS COMMUNICATIONS CORPORATION
(Exact Name of Obligor as Specified in its Charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
51-0374669
(I.R.S. Employer Identification No.)
225 CITY LINE AVENUE
SUITE 200
BALA CYNWYD, PA
(Address of Principal Executive Offices)
19004
(Zip Code)
Senior Debt Securities
Application relates to all securities registered pursuant
to the delayed offering registration statement
(Title of Indenture Securities)
<PAGE>
1. General information.
Furnish the following information as to the trustee:
a) Name and address of each examining or supervisory authority to which it is
subject:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank
Richmond, Virginia 23219
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of
the trustee:
Not applicable - see answer to Item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
Not applicable - see answer to Item 13.
5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable - see answer to Item 13.
<PAGE>
6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner, and executive
officer of the obligor:
Not applicable - see answer to Item 13.
7. Voting securities of the trustee owned by underwriters or their officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter:
Not applicable - see answer to Item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable - see answer to Item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting stock of the obligor or
(2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:
Not applicable - see answer to Item 13.
11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
<PAGE>
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
Not applicable - see answer to Item 13.
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable - see answer to Item 13.
<PAGE>
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
Not applicable - trustee is a national banking association organized under
the laws of the United States.
16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. Copy of Articles of Association of the trustee as now in effect.*
- --
2. Copy of the Certificate of the Comptroller of the Currency dated March 4,
1998, evidencing the authority of the trustee to transact business.**
3. Copy of the Certification of Fiduciary Powers of the trustee by the
Office of the Comptroller of the Currency dated April 7, 1999.***
4. Copy of existing by-laws of the trustee.*
- --
5. Copy of each indenture referred to in Item 4, if the obligor is in
- -- default.
-Not Applicable.
X 6. Consent of the trustee required by Section 321(b) of the Act.
- --
X 7. Copy of report of condition of the trustee at the close of business on
- --- December 31, 1999, published pursuant to the requirements of its
supervising authority.
8. Copy of any order pursuant to which the foreign trustee is authorized to
___ act as sole trustee under indentures qualified or to be qualified under the
Act.
- Not Applicable
9. Consent to service of process required of foreign trustees pursuant to
- -- Rule 10a-4 under the Act.
- Not Applicable
- ---------------------
*Previously filed with the Securities and Exchange Commission on
March 16, 1998 as an Exhibit to Form T-1 in connection with Registration
Statement Number 333-47985, ** and filed with the Securities and Exchange
Commission on July 15, 1998 as an Exhibit to Form T-1 in connection with
Registration Statement Number 333-59145, and incorporated herein by reference,
*** and filed with the Securities and Exchange Commission on May 20, 1999 in
connection with Registration Statement Number 333-78927 and incorporated herein
by reference.
<PAGE>
NOTE
The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to rely
or will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States of America, has duly caused this
Statement of Eligibility and Qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Philadelphia and
Commonwealth of Pennsylvania, on the 27h day of March 2000.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
------------------
Alan G. Finn
Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, and in connection with the proposed issue of Pegasus Communications
Corporation, Debt Securities, First Union National Bank, hereby consents that
reports of examinations by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
------------------
Alan G. Finn
Vice President
Philadelphia, Pennsylvania
March 27, 2000
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Union National
Bank, Charlotte, North Carolina, at the close of business on December 31, 1999
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161. Charter Number 22693 Comptroller of the
Currency. Statement of Resources and Liabilities
ASSETS
Thousand of Dollars
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin........... 10,364,000
Interest-bearing balances.................................... 755,000
Securities..................................................... /////////
Held-to-maturity securities.................................. 1,635,000
Available-for-sale securities................................ 49,595,000
Federal funds sold and securities purchases to resell.......... 2,151,000
Loans and lease financing receivables:
Loan and leases, net of unearned income........................ 137,708,000
LESS: Allowance for loan and lease losses...................... 1,741,000
LESS: Allocated transfer risk reserve.......................... 0
Loans and leases, net of unearned income, allowance, and
reserve........................................................ 135,967,000
Assets held in trading accounts................................ 8,688,000
Premises and fixed assets (including capitalized leases)....... 3,184,000
Other real estate owned........................................ 99,000
Investment in unconsolidated subsidiaries and associated //////////
companies...................................................... 248,000
Customer's liability to this bank on acceptances outstanding... 995,000
Intangible assets.............................................. 5,027,000
Other assets................................................... 10,564,000
Total assets................................................... 229,272,000
LIABILITIES
Deposits:
In domestic offices....................................... 133,606,000
Noninterest-bearing..................................... 21,268,000
Interest-bearing........................................ 112,338,000
In foreign offices, Edge and Agreement subsidiaries,
and IBFs.................................................. 11,028,000
Noninterest-bearing..................................... 548,000
Interest-bearing........................................ 10,480,000
Federal funds purchased and securities sold under agreements
to repurchase ................................................. 24,013,000
Demand notes issued to the U.S. Treasury....................... 4,569,000
Trading liabilities............................................ 5,696,000
Other borrowed money:.......................................... /////////
With original maturity of one year or less................ 14,068,000
With original maturity of more than one year thru 3 yrs... 5,061,000
With a maturity of more than three years.................. 2,221,000
Not applicable ................................................ ////////
Bank's liability on acceptances executed and outstanding....... 995,000
Subordinated notes and debentures.............................. 4,269,000
Other liabilities.............................................. 6,611,000
Total liabilities.............................................. 212,137,000
Not applicable................................................. ///////////
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................ 161,000
Common Stock................................................. 455,000
Surplus...................................................... 13,306,000
Undivided profits and capital reserves....................... 4,188,000
Net unrealized holding gains (losses) on available-for-sale /////////
securities.................................................. (971,000)
Cumulative foreign currency translation adjustments.......... (4,000)
Total equity capital......................................... 17,135,000
Total liabilities and equity capital......................... 229,272,000
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) __
FIRST UNION NATIONAL BANK
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
301 SOUTH COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)
28288-0630
(Zip Code)
FIRST UNION NATIONAL BANK
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 985-6000
(Name, address and telephone number of Agent for Service)
PEGASUS COMMUNICATIONS CORPORATION
(Exact Name of Obligor as Specified in its Charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
51-0374669
(I.R.S. Employer Identification No.)
225 CITY LINE AVENUE
SUITE 200
BALA CYNWYD, PA
(Address of Principal Executive Offices)
19004
(Zip Code)
Senior Subordinated Debt Securities
Application relates to all securities registered pursuant
to the delayed offering registration statement
(Title of Indenture Securities)
<PAGE>
1. General information.
Furnish the following information as to the trustee:
a) Name and address of each examining or supervisory authority to which it is
subject:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank
Richmond, Virginia 23219
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of
the trustee:
Not applicable - see answer to Item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
Not applicable - see answer to Item 13.
5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable - see answer to Item 13.
<PAGE>
6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner, and executive
officer of the obligor:
Not applicable - see answer to Item 13.
7. Voting securities of the trustee owned by underwriters or their officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter:
Not applicable - see answer to Item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable - see answer to Item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting stock of the obligor or
(2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:
Not applicable - see answer to Item 13.
11. Ownership or holdings by the trustee of any securities of a person owning
50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
<PAGE>
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
Not applicable - see answer to Item 13.
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable - see answer to Item 13.
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
Not applicable - trustee is a national banking association organized under
the laws of the United States.
<PAGE>
16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
___ 1. Copy of Articles of Association of the trustee as now in effect.*
2. Copy of the Certificate of the Comptroller of the Currency dated March 4,
1998, evidencing the authority of the trustee to transact business.**
3. Copy of the Certification of Fiduciary Powers of the trustee by the
Office of the Comptroller of the Currency dated April 7, 1999.***
___ 4. Copy of existing by-laws of the trustee.*
___ 5. Copy of each indenture referred to in Item 4, if the obligor is in
default.
-Not Applicable.
_X_ 6. Consent of the trustee required by Section 321(b) of the Act.
_X_ 7. Copy of report of condition of the trustee at the close of business on
December 31,1999, published pursuant to the requirements of its supervising
authority.
___ 8. Copy of any order pursuant to which the foreign trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
- Not Applicable
___ 9. Consent to service of process required of foreign trustees pursuant to
Rule 10a-4 under the Act.
- Not Applicable
- ---------------------
*Previously filed with the Securities and Exchange Commission on
March 16, 1998 as an Exhibit to Form T-1 in connection with Registration
Statement Number 333-47985, ** and filed with the Securities and Exchange
Commission on July 15, 1998 as an Exhibit to Form T-1 in connection with
Registration Statement Number 333-59145, and incorporated herein by reference,
*** and filed with the Securities and Exchange Commission on May 20, 1999 in
connection with Registration Statement Number 333-78927 and incorporated herein
by reference.
<PAGE>
NOTE
The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to rely
or will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States of America, has duly caused this
Statement of Eligibility and Qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Philadelphia and
Commonwealth of Pennsylvania, on the 27h day of March 2000.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
-------------------
Alan G. Finn
Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, and in connection with the proposed issue of Pegasus Communications
Corporation, Debt Securities, First Union National Bank, hereby consents that
reports of examinations by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
Alan G. Finn
Vice President
Philadelphia, Pennsylvania
March 27, 2000
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Union National
Bank, Charlotte, North Carolina, at the close of business on December 31, 1999
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161. Charter Number 22693 Comptroller of the
Currency.
Statement of Resources and Liabilities
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin....... 10,364,000
Interest-bearing balances................................ 755,000
Securities................................................. /////////
Held-to-maturity securities.............................. 1,635,000
Available-for-sale securities............................ 49,595,000
Federal funds sold and securities purchases to resell...... 2,151,000
Loans and lease financing receivables:
Loan and leases, net of unearned income.................... 137,708,000
LESS: Allowance for loan and lease losses.................. 1,741,000
LESS: Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income, allowance, and
reserve................................................... 135,967,000
Assets held in trading accounts............................ 8,688,000
Premises and fixed assets (including capitalized leases)... 3,184,000
Other real estate owned.................................... 99,000
Investment in unconsolidated subsidiaries and associated //////////
companies................................................. 248,000
Customer's liability to this bank on acceptances
outstanding............................................... 995,000
Intangible assets.......................................... 5,027,000
Other assets............................................... 10,564,000
Total assets............................................... 229,272,000
LIABILITIES
Deposits:
In domestic offices................................... 133,606,000
Noninterest-bearing................................. 21,268,000
Interest-bearing.................................... 112,338,000
In foreign offices, Edge and Agreement subsidiaries,
and IBFs............................................. 11,028,000
Noninterest-bearing................................. 548,000
Interest-bearing.................................... 10,480,000
Federal funds purchased and securities sold under
agreements to repurchase ................................. 24,013,000
Demand notes issued to the U.S. Treasury................... 4,569,000
Trading liabilities........................................ 5,696,000
Other borrowed money:...................................... /////////
With original maturity of one year or less............ 14,068,000
With original maturity of more than one year thru
3 yrs. .............................................. 5,061,000
With a maturity of more than three years.............. 2,221,000
Not applicable ............................................ ////////
Bank's liability on acceptances executed and outstanding... 995,000
Subordinated notes and debentures.......................... 4,269,000
Other liabilities.......................................... 6,611,000
Total liabilities.......................................... 212,137,000
Not applicable............................................. ///////////
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus.............. 161,000
Common Stock............................................... 455,000
Surplus.................................................... 13,306,000
Undivided profits and capital reserves..................... 4,188,000
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................ (971,000)
Cumulative foreign currency translation adjustments........ ( 4,000)
Total equity capital....................................... 17,135,000
Total liabilities and equity capital....................... 229,272,000
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) __
FIRST UNION NATIONAL BANK
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
301 SOUTH COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)
28288-0630
(Zip Code)
FIRST UNION NATIONAL BANK
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 985-6000
(Name, address and telephone number of Agent for Service)
PEGASUS COMMUNICATIONS CORPORATION
(Exact Name of Obligor as Specified in its Charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
51-0374669
(I.R.S. Employer Identification No.)
225 CITY LINE AVENUE
SUITE 200
BALA CYNWYD, PA
(Address of Principal Executive Offices)
19004
(Zip Code)
Subordinated Debt Securities
Application relates to all securities registered pursuant
to the delayed offering registration statement
(Title of Indenture Securities)
<PAGE>
1. General information.
Furnish the following information as to the trustee:
a) Name and address of each examining or supervisory authority to which it is
subject:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank
Richmond, Virginia 23219
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of
the trustee:
Not applicable - see answer to Item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
Not applicable - see answer to Item 13.
5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable - see answer to Item 13.
<PAGE>
6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner, and executive
officer of the obligor:
Not applicable - see answer to Item 13.
7. Voting securities of the trustee owned by underwriters or their officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter:
Not applicable - see answer to Item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable - see answer to Item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting stock of the obligor or
(2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:
Not applicable - see answer to Item 13.
11. Ownership or holdings by the trustee of any securities of a person owning
50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
<PAGE>
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
Not applicable - see answer to Item 13.
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable - see answer to Item 13.
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
Not applicable - trustee is a national banking association organized under
the laws of the United States.
<PAGE>
16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
___ 1. Copy of Articles of Association of the trustee as now in effect.*
2. Copy of the Certificate of the Comptroller of the Currency dated March 4,
1998, evidencing the authority of the trustee to transact business.**
3. Copy of the Certification of Fiduciary Powers of the trustee by the
Office of the Comptroller of the Currency dated April 7, 1999.***
___ 4. Copy of existing by-laws of the trustee.*
___ 5. Copy of each indenture referred to in Item 4, if the obligor is in
default.
-Not Applicable.
_X_ 6. Consent of the trustee required by Section 321(b) of the Act.
_X_ 7. Copy of report of condition of the trustee at the close of business on
December 31, 1999, published pursuant to the requirements of its supervising
authority.
___ 8. Copy of any order pursuant to which the foreign trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
- Not Applicable
___ 9. Consent to service of process required of foreign trustees pursuant to
Rule 10a-4 under the Act.
- Not Applicable
- ---------------------
*Previously filed with the Securities and Exchange Commission on
March 16, 1998 as an Exhibit to Form T-1 in connection with Registration
Statement Number 333-47985, ** and filed with the Securities and Exchange
Commission on July 15, 1998 as an Exhibit to Form T-1 in connection with
Registration Statement Number 333-59145, and incorporated herein by reference,
*** and filed with the Securities and Exchange Commission on May 20, 1999 in
connection with Registration Statement Number 333-78927 and incorporated herein
by reference.
<PAGE>
NOTE
The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to rely
or will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, First Union National Bank, a national banking association organized and
existing under the laws of the United States of America, has duly caused this
Statement of Eligibility and Qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Philadelphia and
Commonwealth of Pennsylvania, on the 27h day of March 2000.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
----------------
Alan G. Finn
Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, and in connection with the proposed issue of Pegasus Communications
Corporation, Debt Securities, First Union National Bank, hereby consents that
reports of examinations by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
FIRST UNION NATIONAL BANK
By: s/Alan G. Finn
-------------------
Alan G. Finn
Vice President
Philadelphia, Pennsylvania
March 27, 2000
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Union National
Bank, Charlotte, North Carolina, at the close of business on December 31, 1999
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161. Charter Number 22693 Comptroller of the
Currency.
Statement of Resources and Liabilities
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 10,364,000
Interest-bearing balances.................................. 755,000
Securities................................................... /////////
Held-to-maturity securities................................ 1,635,000
Available-for-sale securities.............................. 49,595,000
Federal funds sold and securities purchases to resell........ 2,151,000
Loans and lease financing receivables:
Loan and leases, net of unearned income...................... 137,708,000
LESS: Allowance for loan and lease losses.................... 1,741,000
LESS: Allocated transfer risk reserve........................ 0
Loans and leases, net of unearned income, allowance, and
reserve..................................................... 135,967,000
Assets held in trading accounts.............................. 8,688,000
Premises and fixed assets (including capitalized leases)..... 3,184,000
Other real estate owned...................................... 99,000
Investment in unconsolidated subsidiaries and associated //////////
companies................................................... 248,000
Customer's liability to this bank on acceptances
outstanding................................................. 995,000
Intangible assets............................................ 5,027,000
Other assets................................................. 10,564,000
Total assets................................................. 229,272,000
LIABILITIES
Deposits:
In domestic offices..................................... 133,606,000
Noninterest-bearing................................... 21,268,000
Interest-bearing...................................... 112,338,000
In foreign offices, Edge and Agreement subsidiaries,
and IBFs............................................... 11,028,000
Noninterest-bearing................................... 548,000
Interest-bearing...................................... 10,480,000
Federal funds purchased and securities sold under agreements
to repurchase .............................................. 24,013,000
Demand notes issued to the U.S. Treasury..................... 4,569,000
Trading liabilities.......................................... 5,696,000
Other borrowed money:........................................ /////////
With original maturity of one year or less.............. 14,068,000
With original maturity of more than one year thru 3 yrs. 5,061,000
With a maturity of more than three years................ 2,221,000
Not applicable .............................................. ////////
Bank's liability on acceptances executed and outstanding..... 995,000
Subordinated notes and debentures............................ 4,269,000
Other liabilities............................................ 6,611,000
Total liabilities............................................ 212,137,000
Not applicable............................................... ///////////
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................ 161,000
Common Stock................................................. 455,000
Surplus...................................................... 13,306,000
Undivided profits and capital reserves....................... 4,188,000
Net unrealized holding gains (losses) on available-for-sale /////////
securities.................................................. (971,000)
Cumulative foreign currency translation adjustments.......... ( 4,000)
Total equity capital......................................... 17,135,000
Total liabilities and equity capital......................... 229,272,000
