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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO.1 TO
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
(NAME OF ISSUER)
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
(NAME OF PERSON(S) FILING STATEMENT)
3,500,000 SHARES OF COMMON STOCK, PAR VALUE $.01
(TITLE OF CLASS OF SECURITIES)
151 16N 108
(CUSIP NUMBER OF CLASS OF SECURITIES)
RICHARD J. LUBASCH, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
110 EAST 59TH STREET
NEW YORK, NY 10022
(212) 355-3466
(NAME, ADDRESS AND TELEPHONE NUMBER OF A PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPIES TO:
THOMAS H. KENNEDY, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022
(212) 735-3000
OCTOBER 15, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION(1) AMOUNT OF FILING FEE
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$28,875,000...................................... $5,775...........................................
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(1) For purposes of calculating this filing Common Stock fee in accordance with
Rule 0-11(b)(2) under the Securities Exchange Act of 1934, as amended, the
market value of the Common Stock proposed to be acquired was established by
multiplying the average of $7.50 and $9.00 (the high and low sales prices on
October 9, 1998) by 3,500,000, the number of shares of Common Stock which
the Company has offered to acquire.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identity the previous filing by registration statement number of the form
or schedule and the date of its filing.
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Amount Previously Paid:..................................... N/A
Form or Registration No.:................................... N/A
Filing Party:............................................... N/A
Date Filed:................................................. N/A
</TABLE>
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ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Statement relates is
Cellular Communications of Puerto Rico, Inc., a Delaware corporation (the
"Company"). The principal executive offices of the Company are located at 110
East 59th Street, New York, New York 10022.
(b) As of October 12, 1998, there were approximately 13,204,000 shares
(exclusive of 383,000 treasury shares) of the Company's common stock, par value
$.01 per share ("Common Stock") outstanding. Upon the terms and subject to the
conditions set forth in the Offering Circular dated October 15, 1998 (the
"Offering Circular") and the related Letter of Transmittal, copies of which are
filed herewith as Exhibits 99.(a)(i) and 99.(a)(ii), respectively, the Company
is offering to exchange (the "Exchange Offer") $15.00 principal amount of 15%
Subordinated Notes (the "Notes"), to be issued, in exchange for up to 3,500,000
shares of its Common Stock outstanding. Under the terms of the Exchange Offer,
the Company reserves the right to alter the terms thereof, including the right
to increase or decrease the number of shares of Common Stock that the Company
may accept pursuant to the Exchange Offer in accordance with applicable law,
including Rule 13e-4(f)(l)(ii) of the Securities Exchange Act of 1934, as
amended. The information under the headings "The Exchange Offer -- General" and
"-- Terms of the Exchange Offer" in the Offering Circular is incorporated herein
by reference. Shares of Common Stock held by Officers and Directors at the time
of the Exchange Offer are eligible for exchange if properly tendered pursuant to
the Exchange Offer on the same basis as all other shares of Common Stock.
(c) The information under the heading "Description of the Capital
Stock -- Market Price of Capital Stock" in the Offering Circular is incorporated
herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information on the cover page and under the heading "The Exchange
Offer" in the Offering Circular, respectively, attached hereto as Exhibit
99.(a)(i), is specifically incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE EXCHANGE OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
The information on the cover page and under the headings "Offering
Summary -- The Exchange Offer" and "The Exchange Offer -- General" in the
Offering Circular discusses the purpose of the Exchange Offer and is
incorporated herein by reference. The shares of Common Stock are to be canceled
upon consummation of the Exchange Offer.
(a) The information on the cover page and under the headings "Offering
Summary -- The Exchange Offer" and "The Exchange Offer -- General" in the
Offering Circular is incorporated herein by reference.
(b) The information contained under the heading "Business -- Recent
Developments" in the Offering Circular is incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) The information under the headings "Summarized Financial Information"
and "Capitalization" in the Offering Circular is incorporated herein by
reference.
(f) Not applicable.
(g) Not applicable.
(h) The information under the heading "Risk Factors -- Effect of Exchange
Offer on Unconverted Securities" is incorporated herein by reference.
(i) Not applicable.
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(j) Not applicable.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The following sets forth each transaction in the shares of Common Stock
effected since (and including) August 14, 1998 by the Company, by any person
referred to in Instruction C of Schedule 13E-4 (i.e., by each executive officer
and director of the Company, any person "controlling" the Company and each
director and executive officer of any "controlling" person) or by any associate
or subsidiary of such person, including any director or officer of any such
subsidiary:
None.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Neither the Company nor, to the best of the Company's knowledge, any of its
directors or executive officers, or any of the executive officers or directors
of any of its subsidiaries, is party to any contract, arrangement or
understanding relating to the Exchange Offer nor is there any relationship
relating to the Exchange Offer between any of such executive officers and
directors and any other person with respect to any securities of the Company.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
There have been no persons employed, retained or to be compensated to make
solicitations or recommendations in connection with the Exchange Offer.
ITEM 7. FINANCIAL INFORMATION.
(a)(1) Audited financial statements of the Company for the two most recent
fiscal years are included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 filed with the Securities and Exchange
Commission, constituting pages F-1 through F-22, inclusive thereof and are
incorporated herein by reference. A copy of pages F-1 through F-22, inclusive,
of the Company's Annual Report on Form 10-K is annexed hereto as Exhibit
99.(a)(vi).
(a)(2) Unaudited balance sheets and comparative year-to-date statements of
operations and cash flows and related earnings or loss per share amounts at June
30, 1998 and for the six-month period then ended are included on pages 2 through
11, inclusive, in the Company's quarterly report on Form 10-Q for the quarter
ended June 30,1998, and are incorporated herein by reference. A copy of pages 2
through 11, inclusive, of the Form 10-Q is annexed hereto as Exhibit
99.(a)(vii).
(a)(3) The information under the heading "Summarized Financial Information"
in the Offering Circular is incorporated herein by reference.
(a)(4) See the response to Item 7(a)(3) above.
(b)(1)-(3) The information under the heading "Summarized Financial
Information" in the Offering Circular is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The Notes issued upon exchange of shares of Common Stock will be issued
by the Company in reliance on the exemption from the registration requirements
of the Securities Act of 1933, as amended, provided in Section 3(a)(9) thereof.
The Company believes that the Notes issued by the Company to holders of Common
Stock not deemed affiliates (as defined under Rule 144 of the Securities Act of
1933, as amended) upon the exchange of shares of Common Stock will be freely
tradable by such holders of Common Stock because such Common Stock has been
registered pursuant to an effective registration statement under
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the Securities Act of 1933, as amended. Holders of Common Stock deemed
affiliates will be subject to the restrictions contained in Rule 144.
In connection with the proposed issuance of 15% Subordinated Notes due 2008
upon consummation of the Exchange Offer, an application has been filed with the
Securities and Exchange Commission on Form T-3 for qualification of the
Indenture under which the Notes will be issued. A copy of the form of the
Indenture has been attached hereto as Exhibit 99.(b).
(c) While the Notes will remain marginable, they will not automatically be
entitled to the 50% margin afforded to shares of Common Stock. Rather, the Notes
will be marginable in accordance with the good faith determination of the broker
or other creditor margining the securities, as provided for under Regulation T
promulgated by the Board of Governors of the Federal Reserve System.
(d) Not applicable.
(e) Additional material information is set forth in the Offering Circular
and related Letter of Transmittal, which are attached hereto as Exhibits
99.(a)(i) and 99.(a)(ii), respectively, and such material information is
incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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99.(a)(i) Form of Offering Circular dated October 15, 1998.
99.(a)(ii) Form of Letter of Transmittal along with guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
99.(a)(iii) Form of Letter from the Company to Brokers, Dealers and
Nominees.
99.(a)(iv) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.
99.(a)(v) Form of Notice of Guaranteed Delivery.
99.(a)(vi) Copies of the Report to Independent Auditors and Audited
Financial Statements of the Company's 1997 Annual Report to
Stockholders (which are incorporated by reference in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997) constituting pages F-1 through
F-22, inclusive.
99.(a)(vii) Copies of unaudited balance sheets and comparative
year-to-date statements of operations and cash flows and
related earnings (loss) per share amounts constituting pages
2 through 11, inclusive, of the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998.
99.(a)(viii) Unaudited pro forma data showing the effect of the
conversion of 3,500,000 shares of Common Stock for
$52,500,000 aggregate principal amount of Notes for the year
ended December 31, 1997 and for the six months ended June
30, 1998, on the Company's balance sheet, statement of
operations, loss per share amounts, ratio of earnings to
fixed charges and book value as of its most recent fiscal
year and latest interim period (which is set forth in
Exhibit 99(a)(i) above under the heading "Summarized
Financial Information").
99.(a)(ix) Press Release, dated October 15, 1998.
99.(a)(x) Letter to holders of shares of Common Stock, dated October
15, 1998.
99.(a)(xi) Consent of Ernst & Young LLP.
99.(a)(xii) Form of Summary Advertisement
99.(b) Form of Indenture between the Company and The Chase
Manhattan Bank, as Trustee, relating to the Notes.
99.(c) None.
99.(d) None.
99.(e) Not applicable.
99.(f) None.
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SIGNATURE
After due inquiry and to the best of the Company's knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Dated: October 15, 1998
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
By: /s/ RICHARD J. LUBASCH
------------------------------------
Name: Richard J. Lubasch
Title: Senior Vice
President -- General Counsel
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EXHIBIT INDEX
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SEQUENTIAL
NAME EXHIBIT PAGE NUMBER
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99.(a)(i)* Form of Offering Circular dated October 15, 1998............
99.(a)(ii)* Form of Letter of Transmittal along with guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9.........................................
99.(a)(iii)* Form of Letter from the Company to Brokers, Dealers and
Nominees....................................................
99.(a)(iv)* Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.....................
99.(a)(v)* Form of Notice of Guaranteed Delivery.......................
99.(a)(vi)* Copies of the Report of Independent Auditors and Audited
Financial Statements of the Company's 1997 Annual Report to
Stockholders (which are incorporated by reference in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, constituting pages F1 through F22,
inclusive)..................................................
99.(a)(vii)* Copies of unaudited balance sheets and comparative
year-to-date statements of operations and cash flows and
related earnings (loss) per share amounts constituting pages
2 through 11, inclusive, of the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998............
99.(a)(viii)* Unaudited pro forma data showing the effect of the
conversion of 3,500,000 shares of Common Stock for
$52,500,000 aggregate principal amount of Notes for the year
ended December 31, 1997 and for the six months ended June
30, 1998, on operations, loss per share amounts, ratio of
earnings to fixed charges and book value as of its most
recent fiscal year and latest interim period (which is set
forth in Exhibit 99.(a)(i) above under the heading
"Summarized Financial Information").........................
99.(a)(ix)* Press Release, dated October 15, 1998.......................
99.(a)(x)* Letter to holders of shares of Common Stock, dated October
15, 1998....................................................
99.(a)(xi)* Consent of Ernst & Young LLP................................
99.(a)(xii)* Form of Summary advertisement...............................
99.(b) Form of Indenture between the Company and The Chase
Manhattan Bank, as Trustee, relating to the Notes...........
99.(c) None........................................................
99.(d) None........................................................
99.(e) Not applicable..............................................
99.(f) None........................................................
</TABLE>
* Previously Filed
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Exhibit 99.B
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
As Issuer
And
THE CHASE MANHATTAN BANK,
As Trustee
INDENTURE
Dated as of October 15, 1998
15% Subordinated Notes due November 15, 2008
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CROSS-REFERENCE TABLE
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TIA SECTION INDENTURE SECTION
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310 (a)(1)................................................................................... 7.10
(a)(2)................................................................................... 7.10
(a)(3)................................................................................... N.A.
(a)(4)................................................................................... N.A.
(a)(5)................................................................................... 7.10
(b)...................................................................................... 7.08; 7.10;
11.02
(c)...................................................................................... N.A.
311 (a)...................................................................................... 7.11
(b)...................................................................................... 7.11
(c)...................................................................................... N.A.
312 (a)...................................................................................... 2.05
(b)...................................................................................... 11.03
(c)...................................................................................... 11.03
313 (a)...................................................................................... 7.06
(b)...................................................................................... 7.06
(c)...................................................................................... 11.02; 7.06
(d)...................................................................................... 7.06
314 (a)...................................................................................... 4.05; 7.06
(b)...................................................................................... N.A.
(c)(1)................................................................................... 11.04
(c)(2)................................................................................... 11.04
(c)(3)................................................................................... N.A.
(d)...................................................................................... N.A.
(e)...................................................................................... 11.05
(f)...................................................................................... N.A.
315 (a)...................................................................................... 7.01(b)
(b)...................................................................................... 7.05; 11.02
(c)...................................................................................... 7.01(a)
(d)...................................................................................... 7.01(c)
(e)...................................................................................... 6.11
316 (a) (last sentence)...................................................................... 11.06
(a)(1)(A)................................................................................ 6.05
(a)(1)(B)................................................................................ 6.04
(a)(2)................................................................................... N.A.
(b)...................................................................................... 6.07
317 (a)(1)................................................................................... 6.08
(a)(2)................................................................................... 6.09
(b)...................................................................................... 2.04
318 (a)...................................................................................... 11.01
</TABLE>
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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Section 1.01 Definitions.....................................................................................1
Section 1.02 Incorporation by Reference of Trust Indenture Act...............................................5
Section 1.03 Rules of Construction...........................................................................5
ARTICLE II
THE SECURITIES
Section 2.01 Form and Dating.................................................................................6
Section 2.02 Execution and Authentication; Denominations.....................................................6
Section 2.03 Registrar and Paying Agent......................................................................7
Section 2.04 Paying Agent to Hold Money in Trust.............................................................7
Section 2.05 Securityholder Lists............................................................................8
Section 2.06 Transfer and Exchange...........................................................................8
Section 2.07 Replacement Securities..........................................................................8
Section 2.08 Outstanding Securities..........................................................................9
Section 2.09 Temporary Securities............................................................................9
Section 2.10 Cancellation....................................................................................9
Section 2.11 Defaulted Interest..............................................................................9
ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee.............................................................................10
Section 3.02 Selection of Securities to be Redeemed or Purchased............................................10
Section 3.03 Notice of Redemption...........................................................................10
Section 3.04 Effect of Notice of Redemption.................................................................11
Section 3.05 Deposit of Redemption Price....................................................................11
Section 3.06 Securities Redeemed in Part....................................................................12
Section 3.07 Optional Redemption Provisions.................................................................12
ARTICLE IV
COVENANTS
Section 4.01 Payment of Securities..........................................................................12
Section 4.02 Maintenance of Office or Agency................................................................13
Section 4.03 Corporate Existence............................................................................13
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Section 4.04 Compliance Certificate.........................................................................13
Section 4.05 Reports........................................................................................13
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01 When Company May Merge, Etc....................................................................14
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..............................................................................15
Section 6.02 Acceleration...................................................................................16
Section 6.03 Other Remedies.................................................................................17
Section 6.04 Waiver of Past Defaults........................................................................17
Section 6.05 Control by Majority............................................................................18
Section 6.06 Limitation on Suits............................................................................18
Section 6.07 Rights of Holders to Receive Payment...........................................................18
Section 6.08 Collection Suit by Trustee.....................................................................19
Section 6.09 Trustee May File Proofs of Claim...............................................................19
Section 6.10 Priorities.....................................................................................19
Section 6.11 Undertaking for Costs..........................................................................19
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee..............................................................................20
Section 7.02 Rights of Trustee..............................................................................21
Section 7.03 Individual Rights of Trustee...................................................................21
Section 7.04 Trustee's Disclaimer...........................................................................21
Section 7.05 Notice of Defaults.............................................................................21
Section 7.06 Reports by Trustee to Holders..................................................................22
Section 7.07 Compensation and Indemnity.....................................................................22
Section 7.08 Replacement of Trustee.........................................................................22
Section 7.09 Successor Trustee by Merger, Etc...............................................................23
Section 7.10 Eligibility; Disqualification..................................................................23
Section 7.11 Preferential Collection of Claims Against Company..............................................23
Section 7.12 Authenticating Agent...........................................................................24
</TABLE>
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ARTICLE VIII
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SATISFACTION AND DISCHARGE OF INDENTURE
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Section 8.01 Satisfaction, Discharge of the Indenture and Defeasance of the Securities......................25
Section 8.02 Termination of the Company's Obligations upon Cancellation of the Securities...................26
Section 8.03 Survival of Certain Obligations................................................................27
Section 8.04 Acknowledgment of Discharge by Trustee.........................................................27
Section 8.05 Application of Trust Assets....................................................................27
Section 8.06 Repayment to the Company.......................................................................27
Section 8.07 Reinstatement..................................................................................28
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders.....................................................................28
Section 9.02 With Consent of Holders........................................................................28
Section 9.03 Compliance with Trust Indenture Act............................................................29
Section 9.04 Revocation and Effect of Consents..............................................................30
Section 9.05 Notation on or Exchange of Securities..........................................................30
Section 9.06 Trustee to Sign Amendments, Etc................................................................30
ARTICLE X
SUBORDINATION OF SECURITIES
Section 10.01 Agreement to Subordinate.......................................................................30
Section 10.02 Default on Senior Indebtedness.................................................................31
Section 10.03 Liquidation; Dissolution; Bankruptcy...........................................................31
Section 10.04 Subrogation....................................................................................32
Section 10.05 Trustee to Effectuate Subordination............................................................33
Section 10.06 Notice by the Company..........................................................................33
Section 10.07 Rights of the Trustee; Holders of Senior Indebtedness..........................................34
Section 10.08 Subordination May Not Be Impaired..............................................................35
ARTICLE XI
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls...................................................................35
Section 11.02 Notices........................................................................................36
Section 11.03 Communication by Holders with Other Holders....................................................37
Section 11.04 Certificate and Opinion as to Conditions Precedent.............................................37
</TABLE>
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Section 11.05 Statements Required in Certificate or Opinion..................................................37
Section 11.06 When Treasury Securities Disregarded...........................................................37
Section 11.07 Rules by Trustee, Paying Agent, Registrar......................................................38
Section 11.08 Legal Holidays.................................................................................38
Section 11.09 Governing Law..................................................................................38
Section 11.10 No Adverse Interpretation of Other Agreement...................................................38
Section 11.11 No Recourse Against Others.....................................................................38
Section 11.12 Successors.....................................................................................39
Section 11.13 Duplicate Originals............................................................................39
Section 11.14 Severability...................................................................................39
Section 11.15 Table of Contents, Headings, Etc...............................................................39
</TABLE>
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INDENTURE dated as of October 15, 1998, between Cellular
Communications of Puerto Rico, Inc., a Delaware corporation ("Company"), and The
Chase Manhattan Bank, a New York corporation, as Trustee ("Trustee").
The Company has duly authorized the creation of its 15%
Subordinated Notes due November 15, 2008 (the "Securities") and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture. Each party agrees as follows for the benefit of the other party and
for the equal and proportionate benefit of the Holders of the Securities:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Affiliate" means, with respect to any specified Person, (i)
any other Person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such specified Person or (ii) any
officer, director, or controlling stockholder of such other Person. For purposes
of this definition, the term "control" means (a) the power to direct the
management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract
or otherwise, or (b) without limiting the foregoing, the beneficial ownership of
10% or more of the voting power of the voting common equity of such Person (on a
fully diluted basis) or of warrants or other rights to acquire such equity
(whether or not presently exercisable).
"Authenticating Agent" shall have the meaning provided in
Section 7.12.
"Bankruptcy Law" shall have the meaning provided in Section
6.01.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company" means the party named as such in the first paragraph
to this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and thereafter means the successor obligor under
this Indenture and on the Securities.
<PAGE> 8
"Consolidated Net Income" shall have the meaning provided in
Section 4.03.
"Custodian" shall have the meaning provided in Section 6.01.
"Default" means any event which is, or after notice or passage
of time would be, an Event of Default.
"Event of Default" shall have the meaning provided in Section
6.01.
"Exchange Offer" means the Company's offer, dated October 15,
1998, to exchange Securities for Common Stock, as such offer may be
supplemented or amended.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" of any person means (a) any indebtedness of
such person, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by the bonds, notes, debentures or
similar instruments or letters of credit, or representing the balance deferred
and unpaid of the purchase price of any property, including any such
indebtedness incurred in connection with the acquisition by such person or any
of its subsidiaries of any other business or entity, if and to the extent such
indebtedness would appear as a liability upon a balance sheet of such person
prepared in accordance with generally accepted accounting principles, including
for such purpose obligations under capitalized leases, and (b) any guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business) discount with recourse, agreement (contingent or otherwise) to
purchase, repurchase or otherwise acquire or to supply or advance funds with
respect to, or to become liable with respect to (directly or indirectly) any
indebtedness, obligation, liability or dividend of any person, but shall not
include indebtedness or amounts owed (except to banks, or other financing
institutions) for compensation to employees, for goods or materials purchased,
or services utilized, in the ordinary course of business of such person. For
purposes hereof, a "capitalized lease" shall be deemed to mean a lease of real
or personal property which, in accordance with generally accepted accounting
principles, is required to be capitalized.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Initial Aggregate Principal Amount" means an aggregate
principal amount of Securities determined in accordance with the following
formula:
C x T where C = the aggregate principal amount of Securities
exchanged by the Company for each share of Common Stock
accepted by the Company in the Exchange Offer; and T = the
number of shares of Common Stock accepted for exchange by the
Company pursuant to the Exchange Offer.
"Legal Holiday" shall have the meaning provided in Section
10.08.
"Maximum Aggregate Principal Amount" means the Initial
Aggregate Principal Amount plus the Secondary Aggregate Principal Amount.
"Net book value" shall have the meaning provided in Section
4.03.
"Net Income" shall have the meaning provided in Section 4.03.
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"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, any Vice President, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary
or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two
Officers one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the
Company. See Sections 10.04 and 10.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee. See Sections.10.04 and
10.05.
"Paying Agent" shall have the meaning provided in Section
2.03.
"person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or other agency or political subdivision thereof or other entity.
"Predecessor Securities" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"principal" of a debt security, including the Securities,
means the principal of the Security plus, when appropriate, the premium, if any,
on the security.
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture and the Securities.
"Redemption Price" when used with respect to any Security to
be redeemed means the price at which it is to be redeemed pursuant to this
Indenture and the Securities.
"Registrar" shall have the meaning provided in Section 2.03.
"SEC" means the Securities and Exchange Commission.
"Secondary Securities" shall have the meaning specified in
each Security.
"Secondary Aggregate Principal Amount" means the aggregate
principal amount of Securities determined in accordance with the following
formula:
I X 1.35, where I = Initial Aggregate Principal Amount
"Securities" means any of the Company's 15% Notes due November
15, 2008, in the form of Exhibit A hereto, including any Secondary Securities,
if any as amended or supplemented from time to time, that are authenticated and
issued under this Indenture.
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"Senior Indebtedness" means, with respect to any person, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
such person for money borrowed, and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such person, (ii) all
capital lease obligations of such person, (iii) all obligations of such person
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such person and all obligations of such person under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such person for the
reimbursement on any letter of credit, banker's acceptance, Security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise and
(vi) all obligations of the type referred to in clauses (i) through (v) above
of other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or ranks pari passu with
the Securities; (2) any indebtedness of the Company that, when incurred, was
without recourse to the Company; or (3) any trade payables. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions of Article X of this Indenture
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
"Significant Subsidiary" means any Subsidiary which (i) for
the most recent fiscal year of the Company, accounted for either (x) more than
5% of Consolidated Net Income, or (y) more than 10% of the Company's
consolidated revenues or (ii) as at the end of such fiscal year, was the owner
of more than 5% of the Company's consolidated net assets, all as shown on the
Company's consolidated financial statements for such fiscal year.
"subsidiary" means, with respect to any person, (i) any
corporation of which at least a majority in interest of the outstanding stock
having by the terms thereof voting power under ordinary circumstances to elect a
majority of the directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by such person, or by one or
more other corporations a majority in interest of such stock of which is
similarly owned or controlled, or by such person and one or more other
corporations a majority in interest of such stock of which is similarly owned or
controlled and (ii) any other person (other than a corporation) in which such
person or any subsidiary directly or indirectly, has a least a 50% ownership in
interest or over which it exercises control.
"Subsidiary" means any subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 as in effect on
the date of this Indenture (except as provided in Section ).
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"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable provisions of this
Indenture and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"U.S. Government Obligations" shall have the meaning provided
in Section 8.01.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts and, except for purposes of Article Eight
hereof, includes a check of the Company or a bank check payable in U.S. Legal
Tender.
Section 1.02 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:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them.
Section 1.03 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with U.S. generally accepted
accounting principles;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in
the plural include the singular.
ARTICLE II
THE SECURITIES
Section 2.01 Form and Dating.
The Securities and the Trustee's certificate of authentication
relating thereto shall be substantially in the forms set forth in Exhibit A to
this Indenture, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange rule
or usage. The Company shall approve the forms of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
The terms and provisions in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Security conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
Section 2.02 Execution and Authentication; Denominations.
One 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 the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
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Upon a written order of the Company signed by two Officers of
the Company, the Trustee shall authenticate Securities from time to time and at
any time for original issue in the aggregate principal amount of up to the
Maximum Aggregate Principal Amount. The aggregate principal amount of Securities
issued and outstanding at any time may not exceed such amount except as provided
in Section 2.07.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $15.00 and any integral multiples
thereof, provided, that, Secondary Securities may be issued in integral
denominations of less than $15.00 (but not less than $1.00).
The Company and the Trustee by their execution and
authentication, respectively, of the Securities, expressly agree to the terms
and conditions stated therein and to be bound thereby.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain in the Borough of Manhattan, City
of New York, State of New York 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 have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent. The term Registrar includes any co-registrar. The Company may change any
Paying Agent without prior notice to any Holder. The Company or any of its
Affiliates may act as Paying Agent or Registrar.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture.
The agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall notify the Trustee of the name and address of any
such agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and
Paying Agent.
Section 2.04 Paying Agent to Hold Money in Trust.
Subject to the provisions of Section 8.06 hereof, each Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities, and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or any of its Affiliates acts as Paying
Agent, it shall, on or before each due date of principal of or interest on the
Securities, segregate the money and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon doing so the Paying Agent shall have no further liability for
the money.
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Section 2.05 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee on or before each semi-annual interest payment date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
Section 2.06 Transfer and Exchange.
Where a Security is presented to the Registrar or a
co-registrar with a request to register transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(l) of the Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), 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 tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.09, 3.06 or 9.05 hereof).
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security for a period beginning at the opening of
business 15 days before the day of any selection of Securities to be redeemed
under Section 3.02 hereof and ending at the close of business on the day of
selection, or (ii) to register the transfer, or exchange, of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
Section 2.07 Replacement Securities.
If the Holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the requirements of Section 8-405
of the Uniform Commercial Code as in effect at the date of this Indenture are
met. An indemnity bond must be sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar or
any coregistrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge for its expenses in replacing a
Security. Every replacement Security is an additional obligation of the
Company.
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Section 2.08 Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
Subject to the provisions of Section 10.06 hereof, a Security does not cease to
be outstanding because the Company or an Affiliate holds the Security.
If a Security is replaced pursuant to Section 2.07, 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 Paying Agent holds on a Redemption Date or maturity
date money sufficient to pay Securities payable on that date, then on and after
the date such Securities shall cease to be outstanding and interest on them
ceases to accrue.
Section 2.09 Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall upon a written order of the Company
signed by two Officers of the Company, authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
Section 2.10 Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, payment or cancellation. The Trustee shall dispose of
canceled Securities as the Company directs. Subject to Section 2.07, the Company
may not issue new Securities to replace Securities it has paid or delivered to
the Trustee for cancellation.
Section 2.11 Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix the
record date and payment date provided that no such record date shall be less
than 10 days before the related payment date for such defaulted interest. At
least 15 days before the record date, the Company shall mail to each
Securityholder a notice that states the record date, the payment date, and the
amount of defaulted interest to be paid. The Company may pay defaulted interest
in any other lawful manner.
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ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee.
If the Company elects to redeem Securities pursuant to
paragraph 5 of the Securities, it shall notify the Trustee of the Redemption
Date and the principal amount of Securities to be redeemed at least 50 days
(unless a shorter notice shall be satisfactory to the Trustee) before the
Redemption Date.
Section 3.02 Selection of Securities to be Redeemed or Purchased.
If less than all Securities are to be redeemed, selection of
securities for redemption or acceptance shall be made by the Trustee 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, on a pro rata basis, by lot or by such other method as the Trustee deems
fair and appropriate, provided that no securities with a principal amount of
$15.00 or less shall be redeemed or purchased in part. Securities and portions
thereof selected by the Trustee shall be in amounts of $15.00 or whole multiples
of $15.00. If any Securities are to be redeemed or purchased in part only, the
notice of redemption that relates to such Securities shall state the portion of
the principal amount thereof to be redeemed or purchased. A new Securities in
principal amount equal to the unredeemed or unaccepted portion thereof shall be
issued in the name of the Holder thereof upon cancellation of the original
Securities. On and after the redemption date, interest shall cease to accrue on
Securities or portions thereof called for redemption.
Section 3.03 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall cause to be mailed a notice of redemption by first class
mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities or portions thereof
to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) in the event that any Security is to be redeemed
in part only, the portion of the principal amount thereof to be
redeemed and that, on and after the
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Redemp tion Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued upon cancellation of the original Security;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price; and
(6) that interest on Securities called for redemption
ceases to accrue on and after the Redemption Date.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's
expense.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price, plus accrued interest to the Redemption Date provided that if
the Redemption Date is after a regular interest payment record date and on or
prior to the Interest Payment Date, the accrued interest shall be payable to the
Holder of the redeemed Securities registered on the relevant record date, and
provided, further, that if a Redemption Date is a Legal Holiday, payment shall
be made on the next succeeding Business Day and no interest shall accrue for the
period from such Redemption Date to such succeeding Business Day.
Section 3.05 Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price
of and accrued interest on all Securities to be redeemed on that date other than
any Securities or portions thereof called for redemption on that date which have
been surrendered pursuant to the second sentence of paragraph 6 of the
Securities on or prior to the date of such deposit. On and after any Redemption
Date, if money sufficient to pay the redemption price of and accrued interest on
Securities called for redemption shall have been made available in accordance
with the preceding paragraph, the Securities called for redemption will cease
to accrue interest and the only right of the Holders of such Securities will be
to receive payment of the redemption price of and, subject to the first proviso
in Section 3.04, accrued and unpaid interest on such Securities to the
Redemption Date. If any Security called for redemption shall not be so paid,
interest will be paid, from the Redemption Date until such redemption payment
is made, on the unpaid principal of the Security and any interest not paid
on such unpaid principal, in each case, at the rate and in the manner
provided in the Securities.
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Section 3.06 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
Section 3.07 Optional Redemption Provisions.
The Company shall not have the right to redeem any Securities prior to
November 15, 1999. On or after November 15, 1999, the Company will have the
right to redeem all or any part of the Securities in cash at 102% of aggregate
principal amount, in each case plus accrued and unpaid interest, if any, to the
applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is
on prior to the redemption date).
ARTICLE IV
COVENANTS
Section 4.01 Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of principal of or interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date U.S. Legal Tender designated for and sufficient to pay the
installment; provided that interest which, under the Securities, may be paid
with Secondary Securities shall be considered paid on the date due if the Paying
Agent, if other than the Company or any Affiliate thereof, holds on the due date
duly authenticated Secondary Securities (along with the amount of cash, in
immediately available funds, necessary to satisfy the requirement that Secondary
Securities that would be in incremental amounts of less than $1.00 shall be
payable in cash) sufficient to pay all interest then due. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months and,
for periods not involving a full calendar month, the actual number of days
elapsed (but not to exceed 30 days).
The Company shall pay interest on overdue principal at the
rate borne by the Securities; it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
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Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the County of New York, The City
of New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.02.
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 County of New York, The City of New York for such purpose.
Section 4.03 Corporate Existence.
Subject to Article 5, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and each Significant Subsidiary; provided, however,
that the Company shall not be required to preserve, with respect to itself, any
material right, license or franchise, and with respect to its Significant
Subsidiaries, any such existence, material right, license or franchise if the
Board of Directors, or the board of directors or managing partners of the
Significant Subsidiary concerned, shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and the
Subsidiaries taken as a whole.
Section 4.04 Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year of the Company an Officers' Certificate stating
whether or not the signers know of any default by the Company in performing its
covenants in Sections 4.02 and 4.03. If they do know of such a default, the
certificate shall describe the default.
Section 4.05 Reports.
The Company shall file with the Trustee within 15 days after
it files them with the SEC copies of the quarterly and annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and
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regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Company also shall comply with the other
provisions of TIA Section 314(a).
So long as any of the Securities remain outstanding, the
Company shall cause annual and quarterly reports, containing such financial
statements and other information concerning the business and affairs of the
Company as would be required to be included in annual and quarterly reports
required to be filed with the SEC, pursuant to Section 13 or 15(d) of the
Exchange Act, by an issuer of a security registered with the SEC pursuant to
Section 12 of the Exchange Act, to be mailed to the Holders at their addresses
appearing in the register of Securities maintained by the Registrar.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01 When Company May Merge, Etc.
The Company shall not consolidate with or merge into any other
corporation or transfer its properties and assets substantially as an entirety
to any person, unless:
(1) either the Company shall be the continuing
corporation, or the corporation (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
properties and assets of the Company substantially as an entirety are
transferred shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities
and this Indenture;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both would become an Event of Default, shall have
happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
comply with this Article Five and that all conditions precedent herein
provided for relating to such transaction have been complied with.
The successor corporation formed by such consolidation or into
which the Company is merged or to which such transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same
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effect as if such successor corporation had been named as the Company herein,
and thereafter the predecessor corporation shall be relieved of all obligations
and covenants under the Indenture and the Securities, and in the event of such
conveyance or transfer any such predecessor cor poration may be dissolved and
liquidated.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
An "Event of Default" with respect to any Securities occurs
if:
(1) the Company defaults in the payment of interest
on any Security when the same becomes due and payable and the default
continues for a period of 30 days; or
(2) the Company defaults in the payment of principal
or premium, if any, of any Security when the same becomes due and
payable at maturity, upon redemp tion or otherwise; or
(3) the Company fails to comply with any of its other
agreements in the Securities or this Indenture, and the default
continues for a period of 45 days after the Company receives written
notice thereof specifying the default from the Trustee or the holders
of at least 25% in aggregate principal amount of outstanding
securities. The notice must specify the default, demand that it be
remedied and state that the notice is a "Notice of Default."
(4) an event or events of default, as defined in any
one or more mortgages, indentures or instruments under which there may
be issued, or by which there may be secured or evidenced, any
Indebtedness of the Company, whether such Indebted ness now exists or
shall hereafter be created, shall happen and shall entitle the holders
of such Indebtedness to declare an aggregate principal amount of at
least $25,000,000 of such Indebtedness due and payable prior to the
date on which it would otherwise have become due and payable and such
event of default shall not have been cured in accordance with the
provisions of such instrument, or such Indebtedness shall not have been
discharged, within a period of 30 days after there shall have been
given, by registered or certified mail, to the Company by the trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the outstanding Securities a written notice
specifying such event or events of default and requiring the Company to
cause such event of default to be cured, or such Indebtedness to be
discharged and stating that such notice is a "Notice of Default"
hereunder; provided, however, that the Company
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is not in good faith contesting in appropriate proceedings the
occurrence of such an event of default; or
(5) the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case;
(C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property;
(D) makes a general assignment for the
benefit of its creditors; or
(6) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or
any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or
any Significant Subsidiary or for all or substantially all of
its property; or
(C) orders the liquidation of the Company or
any Significant Subsidiary, and the order or decree remains
unstayed and in effect for 90 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.02 Acceleration.
If an Event of Default occurs and is continuing, the Trustee
by notice to the Company, or the Holders of at least 25% in principal amount of
the outstanding Securities by notice to the Company and the Trustee, may declare
the principal amount of all the Securities to gether with accrued interest
thereon, but in no event more than the maximum amount of principal and interest
thereon allowed by law, to be due and payable immediately. Upon any such
declaration such principal and interest shall be payable immediately.
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At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinaf ter in this Article Seven provided, the
Holders of a majority in principal amount of the outstand ing Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) the principal of any Securities that
have become due otherwise than by such declaration of
acceleration (together with interest, if any, pursuant to
Section 3.04);
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents,
attorneys and counsel; and
(2) all existing Events of Default have been cured or
waived and if the rescission would not conflict with any judgment or
decree.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or interest on the Securities or to
enforce the performance of any provisions of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04 Waiver of Past Defaults.
Subject to Section 9.02 the Holders of a majority in principal
amount of outstand ing Securities by notice to the Trustee may waive an existing
Default and its consequences. When a Default is waived, it is cured and stops
continuing. No waiver shall extend to any subsequent or other Default or Event
of Default or impair any right consequent thereto.
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Section 6.05 Control by Majority.
The Holders of a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, subject to Section 7.01, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that is
unduly prejudicial to the rights of another Securityholder, or that would
involve the Trustee, in personal liability.
Section 6.06 Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount
of the outstanding Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of indemnity;
and
(5) 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 Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
Section 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal or interest on
the Security, on or after the respective due dates expressed in the Security 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 the
Holder.
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Section 6.08 Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 6.01(l) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal, premium, if any, and interest
remaining unpaid.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Securityholders allowed in any judicial proceedings relative to
the Company, its creditors or its property.
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 for amounts due under Section 7.07;
Second: to Securityholders 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.
The Trustee may fix a record date and payment date for any
payment to Securityholders.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the outstanding Securities.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers and use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the
Trustee conclu sively may 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, which by any provision of this Indenture are specifically
required to be furnished to the Trustee, to determine whether or not
they conform to the requirements of this Indenture and confirm the
correctness of all mathematical computations.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(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.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
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(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives 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 with the Company.
Section 7.02 Rights of Trustee.
(a) The Trustee may rely on 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. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the certificate or opinion.
(c) The Trustee may act through its attorneys or agents (which
shall not include its employees) 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 which it believes to be authorized or within its
rights or powers.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar or co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, and it shall not be responsible
for any statement in the Securities other than its certificate of
authentication.
Section 7.05 Notice of Defaults.
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder notice of the Default
within 90 days after it occurs. Except in the case of a default in payment on
any Security, the Trustee may withhold the notice if and so
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long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
Section 7.06 Reports by Trustee to Holders.
Within 60 days after each [May 15] beginning with the [May 15]
following the date of this Indenture, the Trustee shall mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to
Securityholder shall be filed with the SEC and any stock exchange on which the
Securities are listed.
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses may include the reasonable compensation and expenses of the
Trustee's agents and counsel. The Company shall indemnify the Trustee against
any loss or liability incurred by it. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. 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. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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,
premium, if any, and interest on particular Securities.
Section 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the removed Trustee and may appoint a successor Trustee
with the Company's consent. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10
unless the Trustee's duty to resign is stayed by Section 3.0(b) of the
Trust Indenture Act;
(ii) the Trustee is adjudged a bankrupt or an
insolvent;
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(iii) a receiver or other public officer takes charge
of the Trustee or its property; or
(iv) 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.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Immediately
after that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, 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. A successor
Trustee shall mail notice of its succession to each Securityholder.
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 a majority in principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 7.09 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust assets to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA-Section 310(a)(1), (2) and (5). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
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Section 7.12 Authenticating Agent.
If the Company so requests, there shall be an Authenticating
Agent appointed by the Trustee with power to act on its behalf and subject to
its direction in the authentication and delivery of Securities in connection
with the exchange, transfer or redemption thereof as fully to all intents and
purposes as though the Authenticating Agent had been expressly authorized by the
relevant Sections hereof to authenticate and deliver Securities, and Securities
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as though authenticated by the Trustee
hereunder, and for all purposes of this Indenture, the authentication and
delivery of Securities by the Authenticating Agent pursuant to this Section
shall be deemed to be the authentication and delivery of such Securities "by the
Trustee." Notwithstanding anything to the contrary contained in Section 2.02, or
in any other Section hereof, all authentication in connection with exchange,
transfer or redemption thereof shall be effected either by the Trustee or an
Authenticating Agent.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authentication Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
the Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the parties hereto or the Authenticating Agent or
such successor corporation.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any Authenticating Agent shall cease to be eligible under this Section,
the Trustee shall promptly appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Company.
Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee that: it will perform and carry
out the duties of an Authenticating Agent as herein set forth, including,
without limitation, the duties to authenticate and deliver Securities when
presented to it in connection with exchanges, registrations of transfer or
redemptions thereof; it will furnish from time to time, as requested by the
Trustee, appropriate records of all transactions carried out by it as
Authenticating Agent and will furnish the Trustee such other information and
reports as the Trustee may reasonably require; and it will indemnify the Trustee
against any loss, liability or expense incurred by the Trustee and will defend
any claim asserted against the Trustee by reason of any act or failure to act of
the Authenticating Agent but it shall have no liability for any action taken by
it at the specific written direction of the Trustee.
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The Company agrees to pay to the Authenticating Agent from
time to time reasonable compensation for its services.
The provisions of Section 7.02, 7.03 and 7.04 shall bind and
inure to the benefit of any Authenticating Agent to the same extent that they
bind and inure to the benefit of the Trustee.
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Satisfaction, Discharge of the Indenture and Defeasance of the
Securities.
The Company shall be deemed to have paid and discharged the
entire Indebtedness on the Securities and the provisions of this Indenture
(subject to Section 8.03), if:
(1) The Company irrevocably deposits in trust with
the Trustee, pursuant to an irrevocable trust and security agreement in
form and substance reasonably satisfactory to the Trustee, U.S. Legal
Tender or direct non-callable obligations of, or non-callable
obligations guaranteed by, the United States of America for the payment
of which obligation or guarantee the full faith and credit of the
United States of America is pledged ("U.S. Government Obligations")
maturing as to principal and interest in such amounts and at such times
as are sufficient, without consideration of the reinvestment of such
interest and after payment of all Federal, state and local taxes or
other charges or assessments in respect thereof payable by the Trustee,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof (in form and
substance reasonably satisfactory to the Trustee) delivered to the
Trustee, to pay the principal of, premium, if any, and interest on the
outstanding Securities on the dates on which any such payments are due
and payable in accordance with the terms of the Indenture and of the
Securities;
(2) Such deposits shall not cause the Trustee to have
a conflicting interest as defined in and for purposes of the TIA;
(3) No Default or Event of Default shall have
occurred or be continuing on the date of such deposit or shall occur
on or before the 91st day after the date of such deposit;
(4) Such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any
other instrument to which the Company is a party or by which it or its
property is bound;
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(5) The deposit shall not result in the Company, the
Trustee or the trust becoming or being deemed to be an "investment
company" under the Investment Company Act of 1940;
(6) The Holders shall have a perfected security
interest under applicable law in the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01(l) above; and
(7) The Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the defeasance
contemplated by this Section 8.01 have been complied with.
In the event all or any portion of the Securities are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
Section 8.02 Termination of the Company's Obligations upon Cancellation of the
Securities.
In addition to its rights under Section 8.01, the Company may
terminate all of its obligations under this Indenture (subject to Section 8.03)
when:
(1) all Securities theretofore authenticated and
delivered (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
2.07) have been delivered to the Trustee for cancellation;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the satisfaction and
discharge of this indenture have been complied with.
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Section 8.03 Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this
indenture and of the Securities referred to in Section 8.01 or 8.02, the
respective obligations of the Company and the Trustee under Sections 2.02, 2.03,
2.04, 2.05, 2.06, 2.07, 4.01, 4.02, 6.07, 7.07, 7.08, 8.05, 8.06 and 8.07 shall
survive until the Securities are no longer outstanding, and thereafter the
obligations of the Company and the Trustee under Section 7.07, 8.05, 8.06 and
8.07 shall survive. Nothing contained in this Article VIII shall abrogate any of
the obligations or duties of the Trustee under this Indenture.
Section 8.04 Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.01 or 8.02 have been
satisfied, (ii) the Company has paid or caused to be paid all other sums payable
hereunder by the Company and (iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture except for those surviving obligations
specified in Section 8.03.
Section 8.05 Application of Trust Assets.
The Trustee shall hold any U.S. Legal Tender or U.S.
Government Obligations deposited with it in the irrevocable trust established
pursuant to Section 8.01. The Trustee shall apply the deposited U.S. Legal
Tender or U.S. Government Obligations, together with earnings thereon, through
the Paying Agent (other than the Company or any Affiliate thereof), in
accordance with this Indenture and the terms of the irrevocable trust agreement,
to the payment of principal of and interest on the Securities. The U.S. Legal
Tender or U.S. Government Obligations so held in trust and deposited with the
Trustee in compliance with Section 8.01 shall not be part of the trust estate
under this Indenture, but shall constitute a separate trust fund for the benefit
of all Holders entitled thereto.
Section 8.06 Repayment to the Company.
Upon termination of the trust established pursuant to Section
8.01, the Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess U.S. Legal Tender or U.S. Government Obligations held by
them.
The Trustee and the Paying Agent shall pay to the Company upon
request, and, if applicable, in accordance with the irrevocable trust
established pursuant to Section 8.01 or 8.02, any U.S. Legal Tender or U.S.
Government Obligations held by them for the payment of principal of, premium, if
any, or interest on the Securities that remain unclaimed for two years after the
date on which such payment shall have become due. After payment to the Company,
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Holders entitled to such payment must look to the Company for such payment as
general creditors unless an applicable abandoned property law designates another
person.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 8.01 or
8.02 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 and 8.02 until such time as the Trustee or Paying Agent
is permitted to apply all such U.S. Legal Tender or U.S. Government Obligations
in accordance with Section 8.01 or 8.02; provided, however, that if the Company
has made any payment of principal of, premium, if any, or interest on any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the U.S. Legal Tender or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to comply with Article 5;
(iii) to provide for uncertified Securities in
addition to or in place of certified Securities; or
(iv) to make any change that does not adversely
affect the rights of any Securityholder.
Section 9.02 With Consent of Holders.
The Company may amend or supplement this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of the outstanding
Securities. The Holders of a majority in principal amount of
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the outstanding Securities may waive compliance by the Company with any
provision of this Indenture or the Securities without notice to any
Securityholder. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 7.04,
may not:
(1) reduce the amount of Securities whose Holders
must consent to any amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment
of interest on any Security;
(3) reduce the principal of or extend the fixed
maturity of any Security or alter the redemption provisions with
respect thereto;
(4) waive a default in the payment of the principal
of, premium, if any, interest on or redemption payment with respect to
any Security (except in rescission of acceleration of the Securities by
the Holders of at least a majority in aggregate principal amount of the
Securities and a waiver of the payment default that resulted from such
acceleration);
(5) make any Security payable in money other than
that stated in the Security;
(6) make any change in Section 6.04 or 6.07; or
(7) make any change in the foregoing amendment and
waiver provisions of this Article 9.
To secure a consent of the Holders under this Section 9.02, it
shall not be necessary for the Holders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to Holders a notice briefly describing
the amendment or waiver.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
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Section 9.04 Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of
a Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security. The Trustee must receive the notice of revocation
before the date the amendment, supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it
shall bind the Holder of every such Security unless it makes a change described
in clause (1), (2), (3), (4), (5), (6) or (7) of Section 9.02. In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
Section 9.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
Section 9.06 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article if the amendment, supplement or waiver does
not adversely affect the rights of the Trustee. If it does, the Trustee may but
need not sign it. The Company may not sign an amendment or supplement until the
Board of Directors approves it. The Trustee, subject to Sections 7.01 and 7.02,
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that any amendment, supplement or waiver is
authorized by this Indenture and complies with the provisions of this Article 9.
ARTICLE X
SUBORDINATION OF SECURITIES
Section 10.01 Agreement to Subordinate.
The Securities issued hereunder will be subordinate and junior
in right of payment to all Senior Indebtedness of the Company. No payment of
principal (including prepayments),
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premium, if any, or interest on the Securities (except for payment in shares of
capital stock of the Company or subordinated debt securities of the Company
(including Secondary Securities) that require no payment of principal or prior
to the stated maturity of the Securities and that are subordinated and junior in
right of payment to Senior Indebtedness at least to the same extent as the
Securities) may be made at any time when (i) any Senior Indebtedness is not paid
when due, (ii) any applicable grace period with respect to such default has
ended and such default has not been cured or waived or ceased to exist, or (iii)
the maturity of any Senior Indebtedness has been accelerated because of a
default).
No provision of this Article X shall prevent the occurrence of
any Default or Event of Default hereunder.
Section 10.02 Default on Senior Indebtedness.
In the event that, any payment shall be received by the
Trustee when such payment is prohibited by Section 10.01, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing,
within 90 days of such payment of the amounts then due and owing on such Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of such Senior Indebtedness.
Section 10.03 Liquidation; Dissolution; Bankruptcy.
Upon any distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, all Senior Indebtedness must be paid in
full before the holders of the Securities are entitled to receive or retain any
payment in respect thereof; and upon any such dissolution or winding-up or
liquidation or reorganization or assignment, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Securityholders or the Trustee would be
entitled to receive from the Company, except for the provisions of this Article
X, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the Securityholders or by the Trustee under the Indenture if received by
them or it, directly to the holders of Senior Indebtedness of the Company (pro
rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full, in money or money's
worth, after giving
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<PAGE> 38
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness, before any payment or distribution is made to the
Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness is paid in full, or provision is made
for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebted ness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article X, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article X with respect
to the Securities to the payment of Senior Indebtedness that may at the time be
out standing, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article V of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 10.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article V of this
Indenture.
Section 10.04 Subrogation.
Subject to the payment in full of all Senior Indebtedness, the
rights of the Securityholders shall be subrogated to the rights of the holders
of such Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Securities shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article X, and no payment over
pursuant to the provisions of this Article X to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between
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<PAGE> 39
the Company, its creditors other than holders of Senior Indebtedness of the
Company, and the holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that the
provisions of this Article X are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article X or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the
Securities and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or the holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under the Indenture, subject to the rights, if any, under this Article X of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Company, as the case may be, received upon the exercise of any such
remedy.
Section 10.05 Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article X and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
Section 10.06 Notice by the Company.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article X. Notwithstanding the provisions of this Article X
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 of monies to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article X, unless and until the Trustee shall have
received written notice thereof, in accordance with the provisions set forth in
Section 11.02, from the Company or a holder or holders of Senior Indebtedness
or from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Article VII of this Indenture, shall
be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 10.06 at least two Business Days prior to the date (i) upon which
by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (or premium, if any) or
interest on any Security), or (ii)
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<PAGE> 40
moneys are deposited in trust pursuant to Article VIII, then anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VII of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder), as the case may be, to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee or representative on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article X, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article X, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Upon any payment or distribution of assets of the Company
referred to in this Article X, the Trustee and the Securityholders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
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 X.
Section 10.07 Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article X in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article X, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
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 Indebtedness and,
subject to the provisions of Article VII of this Indenture, the Trustee shall
not be liable to any holder of Senior
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<PAGE> 41
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article X or otherwise.
Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
Section 10.08 Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article X or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA or the TIA as amended after the date hereof, the required
provision shall control.
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<PAGE> 42
Section 11.02 Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by registered or certified mail,
postage prepaid, return receipt requested or delivered by telecopier or
overnight air courier guaranteeing next day delivery to the other's address set
forth below:
If to the Company:
Cellular Communications of Puerto Rico, Inc.
110 East 59th Street
New York, New York 10022
Attention: Secretary
Telecopier No: (212) 906-8497
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
Attention: Thomas H. Kennedy, Esq
Telecopier No: (212) 735-2000
if to the Trustee:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed by first-class mail, postage prepaid, to such Holder at such Holder's
address as it appears on the register maintained by the Registrar and shall be
sufficiently given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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<PAGE> 43
Section 11.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
Section 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee at the request of the Trustee:
(i) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied
with; and
(ii) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent have been complied with.
Section 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that the person making such
certificate or opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such
person, such person has made such examination or investigation as is
necessary to enable such person to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not in the opinion
of such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an opinion of
counsel may rely on an Officer's Certificate.
Section 11.06 When Treasury Securities Disregarded.
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<PAGE> 44
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 an Affiliate shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded.
Section 11.07 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders. The Paying Agent or Registrar each may make
reasonable rules for its functions.
Section 11.08 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or
a day on which banking institutions in New York, New York are not required to be
open. 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 for the intervening period. If any other operative date
for purposes of this Indenture shall occur on a Legal Holiday then for all
purposes the next succeeding day that is not a Legal Holiday shall be such
operative date.
Section 11.09 Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
Section 11.10 No Adverse Interpretation of Other Agreement.
This Indenture many not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement many no be used to interpret this Indenture.
Section 11.11 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
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<PAGE> 45
Section 11.12 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 11.13 Duplicate 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 11.14 Severability.
If any provision of this Indenture or in the Notes 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 11.15 Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
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<PAGE> 46
IN WITNESS WHEREOF, the Company and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized and their respective corporate seals, duly attested, to be hereunto
duly affixed, all as of the day and year first above written.
Dated: October 15, 1998
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
By: ________________________________
Richard J. Lubasch
Senior Vice President-General Counsel
Dated: THE CHASE MANHATTAN BANK,
as Trustee
By: ________________________________
40
<PAGE> 47
EXHIBIT A
FORM OF SECURITY
15% SUBORDINATED NOTE DUE 2008
CUSIP NO.
No. $____________
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC., a Delaware
corporation, for value received
promises to pay to
or registered assigns the principal sum of __________ Dollars on ____________.
Interest Payment Dates: May 15 and November 15
Record Date: May 1 and November 1
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by a duly authorized officer.
<PAGE> 48
This is one of the 15% Subordinated Notes due 2008 described in the
within-mentioned Indenture.
Authenticated: Dated:
Trustee's Certificate of Authentication
Dated: _______, 1998
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
THE CHASE MANHATTAN BANK,
as Trustee
By: ________________________________
Name:
By: ____________________________ Title:
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<PAGE> 49
(Back of Security)
1. Interest.
Cellular Communications of Puerto Rico, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
May 15 and November 15 of each year ("Interest Payment Date"), commencing May
15, 1999. For interest payments due beginning on May 15, 2000, the Company may,
at its option, make interest payments through the issuance of additional
Securities ("Secondary Securities") in an aggregate principal amount equal to
the amount of the interest that would be payable. The Company may, at its
option, pay cash in lieu of issuing any Secondary Security to the extent the
principal amount of such Secondary Security is not an integral multiple of
$1.00. Interest on the Securities will accrue from the most recent date to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case from the date of the Security, or, if no interest has
been paid, from November 15, 1998. Notwithstanding the foregoing, when there is
no existing default in the payment of interest on the s, if the date hereof is
after a Record Date, as that term is defined below, and before the next
succeeding Interest Payment Date, this Security shall bear interest from such
Interest Payment Date; provided, however, that if the Company shall default in
the payment of interest due on such Interest Payment Date, then this Security
shall bear interest from the next preceding Interest Payment Date to which
interest has been paid, or, if no interest has been paid on the s, from November
15, 1988. Interest will be computed on the basis of a 360-day year of twelve
30-day months. If the Company elects to make an interest payment on an Interest
Payment Date through the issuance of Secondary Securities as provided above, it
must provide the Trustee and the Holders with irrevocable notice of such
election at least ten (10) and not more than thirty (30) Business Days prior to
the immediately preceding Interest Payment Date. Notwithstanding the foregoing,
Secondary Securities may be used to make the interest payments due May 15, 1999
or November 15, 1999.
2. Method of Payment.
The Company will pay interest on the s (except defaulted
interest) to the persons who are registered holders of s at the close of
business on the first day of the month in which the Interest Payment Date occurs
("Record Date"). Holders must surrender s to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts (other than payment of interest through the issuance of Secondary
Securities). However, the Company may pay principal and any interest by its
check payable in such money (other than payment of interest through the issuance
of Secondary Securities). It may mail an interest check to a holder's registered
address.
A-3
<PAGE> 50
3. Paying Agent and Registrar.
Initially, the Trustee, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its Affiliates may act as Paying Agent,
Registrar or co-registrar.
4. Indenture.
The Company issued the s under an Indenture dated as of
October 15, 1998 ("Indenture") between the Company and the Trustee. The terms of
the s include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 as in effect on the date of the
Indenture. The s are subject to all such terms and Securityholders are referred
to the Indenture and such Act for a statement of them. Terms used herein which
are defined in the Indenture shall have the respective meanings assigned to them
in the Indenture.
5. Optional Redemption.
The s may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time on or after November 15, 1999,
at a Redemption Price equal to 102% of the principal amount thereof, together
with accrued interest to the Redemption Date; provided, however, that if the
Redemption Date is subsequent to a Record Date with respect to any Interest
Payment Date specified above on or prior to such Interest Payment Date, then
such accrued interest will be paid to the person in whose name this Security is
Registered at the close of business on such Record Date.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$15.00 may be redeemed in part in integral multiples of $15.00. On or after the
Redemption Date interest ceases to accrue on Securities or portions of them
called for redemption.
7. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in
denominations of $15.00 and integral multiples thereof. A holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption. Also, it need not transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
A-4
<PAGE> 51
8. Persons Deemed Owners.
The registered holder of a Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money back to
the Company at its request. After that, holders entitled to the money must look
to the Company for payment unless an abandoned property law designates another
person.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Securities to redemption or maturity and complies with the
other provisions of the Indenture relating thereto, the Company will be
discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding its obligation to pay the
principal of or interest on the Securities).
11. Amendment, Supplement, Waiver.
Subject to certain exceptions requiring the consent of the
holders of each of the affected Securities, the Indenture or the Securities may
be amended or supplemented with the consent of the holders of at least a
majority in principal amount of the Securities then outstanding, and any past
default or compliance with any provision may be waived with the consent of the
holders of a majority in principal amount of the Securities then outstanding.
Without the consent of any Securityholder, the Company may amend or supplement
the Indenture or the Securities to cure any ambiguity, defect or inconsistency
or to provide for uncertificated Securities in addition to or in place of
certificated s or to make any change that does not materially adversely affect
the rights of any Securityholder.
12. Restrictive Covenants.
The Securities are general unsecured obligations of the
Company limited to the aggregate principal amount as defined in the Indenture.
The Indenture does not limit unsecured debt other than the aggregate principal
amount of indebtedness to be issued pursuant to the Indenture.
13. Successor Corporation.
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<PAGE> 52
When a successor corporation assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor
corporation will be released from these obligations.
14. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on any of the Securities; default in payment of principal of any of the
Securities due and payable at maturity or upon redemption or otherwise; failure
by the Company for 45 days after notice to it to comply with any of its other
agreements in the Indenture or in the Securities; or the happening of an Event
of Default under other Indebtedness of the Company entitling the holders thereof
to declare at least $25,000,000 aggregate principal amount thereof due and
payable, unless cured or waived or discharged within 30 days after notice to the
Company by the Trustee or the holders of at least 25% in aggregate principal
amount of the Securities then outstanding or unless the Company by appropriate
proceedings is in good faith contesting such happening; and certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the Securities
then outstanding may declare all the Securities to be due and payable
immediately in accordance with Section 6.02 of the Indenture. Securityholders
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
holders of a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interests.
15. Trustee Dealings with Company.
The Chase Manhattan Bank, the Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its affiliates, and may otherwise deal
with the Company or its affiliates, as if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each holder of Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication.
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<PAGE> 53
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
A-7
<PAGE> 54
18. Abbreviations.
Customary abbreviations may be used in the name of a holder of
Securities of an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
[19. Original Issue Discount.
For purposes of Section 1232 of the Internal Revenue Code of
1986, as amended, dealing with "original issue discount," the "date of original
issue" of this Security is ____________, the "issue price," expressed as a
percentage of the principal amount hereof, is ____% and the effective yield to
maturity is ____%.]
The Company will furnish to any holder of Securities upon
written request and without charge a copy of the Indenture. Requests may be made
to: Cellular Communications of Puerto Rico, Inc., 110 East 59th Street, New
York, New York, 10022, Attention: Chief Financial Officer.
A-8
