<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 11, 2000
REGISTRATION NO. 333-32910
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
CAPROCK COMMUNICATIONS CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TEXAS 1731 75-2765572
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
CAPROCK COMMUNICATIONS CORP.
15601 DALLAS PARKWAY, SUITE 700
DALLAS, TX 75001
(972) 982-9500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
MR. JERE W. THOMPSON, JR.
CHIEF EXECUTIVE OFFICER
CAPROCK COMMUNICATIONS CORP.
15601 DALLAS PARKWAY, SUITE 700
DALLAS, TX 75001
(972) 982-9500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
Copies to:
A. MICHAEL HAINSFURTHER
MARK A. KOPIDLANSKY
MUNSCH HARDT KOPF & HARR, P.C.
1445 ROSS AVENUE, 4000 FOUNTAIN PLACE
DALLAS, TEXAS 75202-2790
(214) 855-7500
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the date on which this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and we are not soliciting offers to
buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED APRIL 11, 2000
PROSPECTUS
[CAPROCK COMMUNICATIONS LOGO]
CAPROCK COMMUNICATIONS CORP.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
---------------------
We may offer from time to time any combination of these securities in one
or more offerings, and certain of our shareholders may offer from time to time
shares of common stock. We will not receive any proceeds from the sale of shares
by the selling shareholders. For information on the methods of sale, you should
refer to the section entitled "Plan of Distribution."
We will provide specific terms of these securities and their offering
prices in supplements to this prospectus.
In the case of debt securities, these terms will include, as applicable,
the specific designation, aggregate principal amount, maturity, rate or formula
of interest, premium and terms for redemption. In the case of shares of
preferred stock, these terms will include, as applicable, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights. In the case of common stock, these terms will include the
aggregate number of shares offered.
The aggregate initial offering price of all of the securities which may be
sold pursuant to this prospectus will not exceed U.S. $900,000,000, or its
equivalent based on the applicable exchange rate at the time of issue in one or
more foreign currencies or currency units as shall be designated by CapRock
Communications Corp.
Our common stock is quoted on the Nasdaq Stock Market's National Market
under the symbol CPRK. The applicable prospectus supplement will contain
information, where applicable, as to any other listing on the Nasdaq Stock
Market's National Market or any securities exchange of the securities covered by
the prospectus supplement.
---------------------
You should read this prospectus and any prospectus supplement carefully
before you invest. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALES OF
THE SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
---------------------
SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF MATTERS THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN THESE SECURITIES.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------------
The date of this prospectus is , 2000.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
The Company................................................. 2
Risk Factors................................................ 3
Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends...... 3
Use of Proceeds............................................. 3
Description of Debt Securities.............................. 3
Description of Preferred Stock.............................. 10
Description of Common Stock................................. 11
Description of Outstanding Material Indebtedness............ 11
Description of Outstanding Capital Stock.................... 12
Selling Shareholders........................................ 13
Plan of Distribution........................................ 14
Legal Matters............................................... 16
Experts..................................................... 16
</TABLE>
(ii)
<PAGE> 4
ABOUT THIS PROSPECTUS
This prospectus provides you with a general description of the securities
we and certain of our shareholders may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). Our SEC
filings are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. These
documents are also available at the public reference rooms at the SEC's regional
offices in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available at the offices of the Nasdaq Stock Market's National
Market in Washington, D.C.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. This
prospectus incorporates by reference our documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the securities:
- Annual Report on Form 10-K for the year ended December 31, 1999; and
- Registration statement on Form 8-A filed July 6, 1998.
Potential investors may obtain a copy of any of the agreements summarized
herein (subject to certain restrictions because of the confidential nature of
the subject matter) or any of our SEC filings without charge by written or oral
request directed to CapRock Communications Corp., Attention: Secretary, 15601
Dallas Parkway, Suite 700, Dallas, Texas 75001, (972) 982-9500. We maintain a
worldwide web site at www.caprock.com. The reference to our worldwide web
address does not constitute incorporation by reference of the information
contained at the site.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
1
<PAGE> 5
THE COMPANY
CapRock Communications Corp. ("CapRock") is a leading facilities-based
integrated communications service provider to small and medium-sized business
and communications carrier customers in the Southwestern United States. We offer
business customers an integrated bundle of communications products and services
including local exchange, domestic and international long distance, enhanced
voice, data, Internet and dedicated private line services. Additionally, we
offer communications-intensive business and carrier customers dark fiber, high
bandwidth dedicated fiber infrastructure, terminating access for domestic and
international long distance and ATM, frame relay and IP data transport services.
We believe that our current and planned networks will provide our customer base
the most comprehensive service alternative to the incumbent and other
competitive communications service providers in our region.
Our communications services are provided over our scalable fiber, voice and
data networks which, upon completion, will connect nearly every Tier I, Tier II
and Tier III market in the six-state region of Texas, Louisiana, Arkansas,
Oklahoma, New Mexico and Arizona. At year-end 1999, our inter-city long-haul
fiber network consisted primarily of 96 fiber strands covering approximately
3,000 route miles, which we expect to expand to approximately 7,000 route miles
by year-end 2000. Additionally, at year-end 1999, we provided switch-based
competitive local exchange services in ten markets, which we expect to expand to
48 markets by year-end 2000. We currently have 11 voice and 13 data switches
installed and operational on our network, which we expect to expand to 14 voice
and 17 data switches by year-end 2000.
Our principal executive offices are located at 15601 Dallas Parkway, Suite
700, Dallas, Texas 75001, and our telephone number is (972) 982-9500.
RECENT DEVELOPMENTS
Please see the applicable prospectus supplement and our recent public
filings for recent developments.
2
<PAGE> 6
RISK FACTORS
Before you invest in our securities, you should carefully consider the
risks involved. These risks include, but are not limited to, any risks that may
be described in other filings we make with the SEC or in the prospectus
supplements relating to specific offerings of securities.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges and earnings to combined fixed
charges and preferred stock dividends for each of the periods indicated is as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......................... 1.0 1.4 2.6 1.1 --
Ratio of earnings to combined fixed charges and preferred
stock dividends........................................... 1.0 1.4 2.6 1.1 --
</TABLE>
For this ratio, earnings consist of earnings (loss) before income taxes,
minority interest and discontinued operations plus fixed charges excluding
capitalized interest. Fixed charges consist of interest expensed and
capitalized, amortized premiums, discounts and capitalized expenses related to
indebtedness, plus the portion of rent expense under operating leases deemed by
us to be representative of the interest factor. We had deficiencies of earnings
to fixed charges of approximately $12 million for the year ended December 31,
1999.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net
proceeds from the sale of the offered securities will be used to fund the
development and growth of our communications networks and business and for
potential business acquisitions, working capital and general corporate purposes.
Until we use the net proceeds in this manner, we may temporarily use them to
make short-term investments or reduce short-term borrowings.
We will not receive any proceeds from the sale of any shares of common
stock by the selling shareholders.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities. The applicable prospectus supplement will describe the specific
terms of the debt securities offered through that prospectus supplement as well
as any general terms described in this section that will not apply to those debt
securities.
The debt securities will be our direct unsecured general obligations and
may include debentures, notes, bonds and/or other evidences of indebtedness. The
debt securities will be either senior debt securities or subordinated debt
securities. The debt securities will be issued under one or more separate
indentures between us and an institution to be named in the applicable
prospectus supplement as trustee. Senior debt securities will be issued under a
senior indenture, and subordinated debt securities will be issued under a
subordinated indenture. Together, the senior indentures and the subordinated
indentures are called indentures.
We have summarized selected provisions of the indentures below. The summary
is not complete. We have also filed the forms of the indentures as exhibits to
the registration statement. You should read the indentures for provisions that
may be important to you before you buy any debt securities.
3
<PAGE> 7
GENERAL TERMS OF DEBT SECURITIES
The debt securities issued under any indenture may be issued in one or more
series. Each indenture may provide that there may be more than one trustee under
the indenture, each with respect to one or more series of debt securities. The
indentures may provide that any trustee under any indenture may resign or be
removed with respect to one or more series of debt securities issued under that
indenture, and a successor trustee may be appointed to act with respect to that
series.
If two or more persons are acting as trustee with respect to different
series of debt securities issued under the same indenture, each of those
trustees will be a trustee of a trust under that indenture separate and apart
from the trust administered by any other trustee. In that case, except as may
otherwise be indicated in an applicable prospectus supplement, any action
described in the applicable prospectus supplement to be taken by the trustee may
be taken by each of those trustees only with respect to the one or more series
of debt securities for which it is trustee.
A prospectus supplement relating to a series of debt securities being
offered will include specific terms relating to the offering and that series.
These terms will contain some or all of the following and may include other
terms:
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the purchase price of the debt securities, expressed as a percentage of
the principal amount;
- the date or dates on which the principal of and any premium on the debt
securities will be payable or the method for determining the date or
dates;
- if the debt securities will bear interest, the interest rate or rates or
the method by which the rate or rates will be determined;
- if the debt securities will bear interest, the date or dates from which
any interest will accrue, the interest payment dates on which any
interest will be payable, the record dates for those interest payment
dates and the basis upon which interest shall be calculated if other than
that of a 360 day year of twelve 30-day months;
- the place or places where payments on the debt securities will be made
and the debt securities may be surrendered for registration of transfer
or exchange;
- if we will have the option to redeem all or any portion of the debt
securities, the terms and conditions upon which the debt securities may
be redeemed;
- the terms and conditions of any sinking fund or other similar provisions
obligating us or permitting a holder to require us to redeem or purchase
all or any portion of the debt securities prior to final maturity;
- the currency or currencies in which the debt securities are denominated
and payable if other than U.S. dollars;
- whether the amount of any payments on the debt securities may be
determined with reference to an index, formula or other method and the
manner in which such amounts are to be determined;
- any additions or changes to the events of default in the respective
indentures;
- the percentage of the principal amount of debt held by the holders
necessary to require the trustee to take action;
- any terms, conditions or restrictions upon the issuance of additional
debt;
- any terms, conditions or restrictions on dividends or distribution on any
capital stock;
- any additions or changes with respect to the other covenants in the
respective indentures;
4
<PAGE> 8
- the terms and conditions, if any, upon which the debt securities may be
convertible into common stock or preferred stock;
- whether the debt securities will be issued in certificated or book-entry
form;
- whether the debt securities will be in registered or bearer form and, if
in registered form, the denominations of the debt securities if other
than $1,000 and multiples of $1,000;
- the applicability of the defeasance and covenant defeasance provisions of
the applicable indenture;
- provisions relating to the modification of the terms of the indentures;
- any subordination provisions; and
- any other terms of the debt securities consistent with the provisions of
the applicable indenture.
Debt securities may be issued under the indentures as original issue
discount securities to be offered and sold at a substantial discount from their
stated principal amount. Special Federal income tax, accounting and other
considerations applicable to original issue discount securities will be
described in the applicable prospectus supplement.
Unless otherwise provided with respect to a series of debt securities, the
debt securities will be issued only in registered form, without coupons, in
denominations of $1,000 and multiples of $1,000.
SOME COVENANTS
Under the indentures, we will be required to:
- pay the principal, interest and any premium on the debt securities when
due;
- maintain a place of payment;
- deliver a report to the trustee at the end of each fiscal year reviewing
our obligations under the indentures; and
- deposit sufficient funds with any paying agent on or before the due date
for any payment of principal, interest or any premium.
An indenture may or may not include other covenants which will be described
in the applicable prospectus supplement.
PAYMENT AND TRANSFER
Unless we designate otherwise, we will pay principal, interest and any
premium on fully registered securities in New York, New York. We will make
interest payments by check mailed to the persons in whose names the debt
securities are registered on days specified in the indentures or any prospectus
supplement. We will make debt securities payments in other forms at a place we
designate and specify in a prospectus supplement. You may transfer or exchange
fully registered debt securities at the corporate trust office of the trustee or
at any other office or agency maintained by us for these purposes, without
having to pay any service charge except for any tax or governmental charge.
OUR SENIOR DEBT SECURITIES
Generally speaking, our senior debt securities will rank equally with all
of our other senior debt and unsubordinated debt. As of December 31, 1999, the
total amount of our debt that would rank equally with our senior debt securities
was approximately $347.5 million, net of discount and unamortized debt issuance
costs. See "Description of Outstanding Material Indebtedness." All series of
senior debt securities will rank equally in right of payment with each other.
5
<PAGE> 9
Senior debt is defined to include all notes or other unsecured evidences of
indebtedness, including our guarantees, not expressed to be subordinate or
junior in right of payment to any other indebtedness that we have.
OUR SUBORDINATED DEBT SECURITIES
Our subordinated debt securities will have a junior position to all of our
senior debt. Under the subordinated indentures, payment of the principal,
interest and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
senior debt. The subordinated indentures may provide that no payment of
principal, interest or any premium on the subordinated debt securities may be
made in the event:
- of any insolvency, bankruptcy or similar proceeding involving us or our
property until we have paid holders of our senior debt in full; or
- we fail to pay the principal, interest, any premium or any other amounts
on any senior debt when due.
Any subordinated debt securities offered pursuant to the subordinated
indentures will rank junior in right of payment to all senior debt.
The subordinated indentures may prohibit us from making for a specified
time period any payment of principal of or premium, if any, or interest on, or
sinking fund requirements for, the subordinated debt securities during the
continuance of any default in respect of some senior debt, unless and until the
default on the senior debt is cured or waived.
Upon any distribution of our assets in connection with any dissolution,
winding up, liquidation, reorganization, bankruptcy or other similar proceeding
relative to us, our creditors or our property, the holders of our senior debt
will first be entitled to receive payment in full of the principal thereof and
premium, if any, and interest due on the senior debt securities before the
holders of the subordinated debt securities are entitled to receive any payment
of the principal of and premium, if any, or interest on the subordinated debt
securities.
GLOBAL CERTIFICATES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depository
identified in a prospectus supplement.
The specific terms of the depository arrangements with respect to any debt
securities of a series will be described in a prospectus supplement.
Unless otherwise specified in a prospectus supplement, debt securities
issued in the form of a global certificate to be deposited with a depository
will be represented by a global certificate registered in the name of the
depository or its nominee. Upon the issuance of a global certificate in
registered form, the depository for the global certificate will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global certificate to the accounts of
institutions that have accounts with the depository or its nominee. The
depository or its nominee are referred to in this prospectus as participants.
The accounts to be credited shall be designated by the underwriters or agents of
the debt securities, or by us if the debt securities are offered and sold
directly by us. Ownership of beneficial interests in a global certificate will
be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in a global
certificate will be shown on, and the transfer of that ownership interest will
be effected only through, records maintained by the depository or its nominee
for the global certificate. Ownership of beneficial interests in a global
certificate by persons that hold through participants will be shown on, and the
transfer of that ownership interest within a participant will be effected only
through, records maintained by that participant. The laws of some jurisdictions
require that some purchasers of securities take physical delivery
6
<PAGE> 10
of their securities in definitive form. These limits and laws may impair your
ability to transfer beneficial interests in a global certificate.
So long as the depository for a global certificate in registered form, or
its nominee, is the registered owner of the global certificate, the depository
or its nominee, as the case may be, will be considered the sole owner or holder
of the debt securities of the series represented by the global certificate for
all purposes under the indentures. Except as set forth below, owners of
beneficial interests in a global certificate will not be entitled to have debt
securities of the series represented by the global certificate registered in
their names, will not receive or be entitled to receive physical delivery of
debt securities in definitive form, and will not be considered the owners or
holders of the global certificate under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities of a series registered in the name of or held by a depository or its
nominee will be made to the depository or its nominee, as the case may be, as
the registered owner or the holder of a global certificate representing the debt
securities. None of us, the trustee, any paying agent, or the applicable debt
security registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global certificate for debt securities or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We expect that the depository for debt securities of a series, upon receipt
of any payment of principal, premium or interest in respect of a permanent
global certificate, will credit immediately participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of the global certificate as shown on the records of the
depository. We also expect that payments by participants to owners of beneficial
interests in a global certificate held through those participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in street name, and those payments will be the responsibility of the
participants. However, we have no control over the practices of the depository
and/or the participants and there can be no assurance that these practices will
not be changed.
Unless it is exchanged in whole or in part for debt securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to particular nominees of the depository.
Unless otherwise stated in any prospectus supplement, an institution to be
named in the applicable prospectus supplement will act as depository. Beneficial
interests in global certificates will be shown on, and transfers of global
certificates will be effected only through, records maintained by the depository
and its participants.
EVENTS OF DEFAULT
Under the indentures an event of default, unless a prospectus supplement
provides otherwise, will mean any of the following:
- failure to pay the principal or any premium on any debt security when
due;
- failure to deposit any sinking fund payment when due;
- failure to pay interest on any debt security for 30 days;
- failure to perform any other covenant in the indenture that continues for
60 days after being given written notice;
- some events involving our bankruptcy, insolvency or reorganization; or
- any other event of default included in any indenture or supplemental
indenture.
An event of default for a particular series of debt securities will not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture.
7
<PAGE> 11
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% of the total principal
amount of the debt securities of the series may declare the entire principal of
that series due and payable immediately. If this happens, the holders of a
majority of the aggregate principal amount of the debt securities of that series
can waive certain past defaults and rescind and annul such acceleration, subject
to certain conditions.
The indentures will limit the right to institute legal proceedings. No
holder of any debt securities will have the right to bring a claim under an
indenture unless:
- the holder has given written notice of default to the trustee;
- the holders of not less than 25% of the aggregate principal amount of
debt securities of the series shall have made a written request to the
trustee to bring the claim and furnished the trustee reasonable
indemnification as the trustee may require;
- the trustee has not commenced an action within 60 days of receipt of the
notice and indemnification; and
- no direction inconsistent with the request has been given to the trustee
by the holders of not less than a majority of the aggregate principal
amount of the debt securities of the series then outstanding.
Subject to applicable law and any applicable subordination provisions, the
holders of debt securities may enforce payment of the principal of or premium,
if any, or interest on their debt securities.
The holders of a majority in aggregate principal amount of any series of
debt securities may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any power
conferred on the trustee, provided, however, that the trustee may decline to
follow the holders' direction if, being advised by counsel, the trustee
determines that the action is not lawful, or if the trustee in good faith
determines that the action would unduly prejudice the holders of the debt
securities not taking part in the action or would impose personal liability on
the trustee.
Each indenture will provide that, in case an event of default in respect of
a particular series of debt securities has occurred, the trustee is to use the
degree of care of a prudent person in the conduct of such person's own affairs.
Subject to these provisions, the trustee is under no obligation to exercise any
of its rights or power under the indenture at the request of any of the holders
of the debt securities of any series unless they have furnished to the trustee
reasonable security or indemnity.
We will be required to furnish to the trustee an annual statement as to our
fulfillment of all of our obligations under the relevant indenture.
DEFEASANCE
We will be discharged from our obligations on the debt securities of any
series at any time we deposit with the trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums due to
the stated maturity date or a redemption date of the debt securities of the
series. If this happens, the holders of the debt securities of the series will
not be entitled to the benefits of the indenture except for registration of
transfer and exchange of debt securities and replacement of destroyed, lost,
stolen or mutilated debt securities.
We may only effect such a defeasance if, among other things, we have
delivered to the trustee either a ruling directed to the trustee from the
Internal Revenue Service or an opinion of counsel (as specified in the
indenture) to the effect that the holders of the debt securities will not
recognize income, gain or loss for Federal income tax purposes as a result of
the deposit and discharge and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if the deposit and defeasance had not occurred.
8
<PAGE> 12
CONSOLIDATION, MERGER OR SALE
The indentures may limit or restrict our ability to consolidate or merge
with or into any other entity or sell all or substantially all of our assets.
These limitations or restrictions, if any, will be described in the applicable
prospectus supplement, and we expect that they generally will include that:
- we are the continuing corporation or, if not, that any successor or
purchaser is an entity organized under the laws of the United States of
America or any State thereof, and that such entity expressly assumes our
obligations on the debt securities under a supplemental indenture; and
- immediately before and after giving effect to the transaction, no event
of default shall exist and be continuing.
The remaining or acquiring entity will be substituted for us in the indentures
with the same effect as if it had been an original party to the indentures and
shall assume all of our responsibilities and liabilities under the indentures
including the payment of all amounts due on the debt securities and performance
of the covenants in the indentures. Thereafter, the successor entity may
exercise our rights and powers under any indenture, in our name or in its own
name. Any act or proceeding required or permitted to be done by our board of
directors or any of our officers may be done by the board or officers of the
successor entity.
MODIFICATION OF THE INDENTURES
Under each indenture, we may modify our rights and obligations and the
rights of the holders with the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of each series affected by
the modification. We cannot, however, modify the principal or interest payment
terms, or reduce the percentage required for modification, against any holder
without its consent. We may also enter into supplemental indentures with the
trustee, without obtaining the consent of the holders of any series of debt
securities, to cure any ambiguity or to correct or supplement any provision of
an indenture or any supplemental indenture which may be defective or
inconsistent with any other provision, to pledge any property to or with the
trustee or to make any other provisions with respect to matters or questions
arising under the indentures, provided that the action does not materially
adversely affect the interests of the holders of the debt securities. We may
also enter into supplemental indentures without the consent of holders of any
series of debt securities to set forth the terms of additional series of debt
securities, to evidence the succession of another person to our obligations
under the indenture or to add to our covenants.
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
Each indenture will provide that, in addition to other certificates or
opinions that may be specifically required by other provisions of an indenture,
every time we ask the trustee to take action under the indenture, we must
provide a certificate of some of our officers and an opinion of counsel (who may
be our counsel) stating that, in the opinion of the signers, all conditions
precedent to the action have been complied with.
REPORT TO HOLDERS OF DEBT SECURITIES
We will provide audited financial statements annually to holders of debt
securities. The trustee will be required to submit an annual report to the
holders of the debt securities regarding, among other things, the trustee's
eligibility to serve as trustee, the priority of the trustee's claims regarding
unpaid advances made by it, and any action taken by the trustee materially
affecting the debt securities.
THE TRUSTEE
A prospectus supplement will name the trustee under the subordinated
indentures and the senior indentures.
9
<PAGE> 13
Pursuant to applicable provisions of the indentures and the Trust Indenture
Act of 1939 governing trustee conflicts of interest, an uncured event of default
with respect to any series of debt securities may force the trustee to resign as
trustee under either the subordinated indentures or the senior indentures. Any
resignation will require the appointment of a successor trustee under the
applicable indenture in accordance with the terms and conditions of such
indenture.
The trustee may resign or be removed by us upon the occurrence of certain
events with respect to one or more series of debt securities and a successor
trustee may be appointed to act with respect to any series. The holders of a
majority in aggregate principal amount of the debt securities of any series may
remove the trustee with respect to the debt securities of that series.
GOVERNING LAW
The indenture and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
DESCRIPTION OF PREFERRED STOCK
We may issue, either separately or together with other securities, shares
of our preferred stock. See "Description of Outstanding Capital
Stock -- Preferred Stock." If we offer a series of preferred stock, we will
describe the particular terms and conditions of the series of preferred stock
offered in the prospectus supplement relating to that series of preferred stock.
The applicable prospectus supplement or prospectus supplements will describe the
following terms of each series of preferred stock being offered:
- its title;
- the number of shares offered, any liquidation preference per share and
the purchase price;
- any applicable dividend rate(s), period(s), and/or payment date(s) or
method(s) of calculation;
- if dividends apply whether they shall be cumulative or non-cumulative
and, if cumulative, the date from which dividends shall accumulate;
- any procedures for any auction and remarketing;
- any provisions for a sinking fund;
- any provisions for redemption;
- any listing of such preferred stock on any securities exchange or market;
- the terms and conditions, if applicable, upon which it will be
convertible into common stock or another series of preferred stock of
CapRock, including the conversion price (or manner of calculation
thereof) and conversion period;
- the terms and conditions, if applicable, upon which it will be
exchangeable into debt securities of CapRock, including the exchange
price (or manner of calculation thereof) and exchange period;
- any voting rights;
- a discussion of any applicable material and/or special Federal income tax
considerations;
- whether fractional interests in that series of preferred stock will be
offered by entering into a deposit agreement that will be filed with the
Securities and Exchange Commission which provides for a depositary to
issue to the public receipts of depositary shares, each of which will
represent ownership of and entitlement to all rights and preferences of a
fractional interest in a share of preferred stock of a specified series;
- its relative ranking and preferences as to any dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of CapRock;
10
<PAGE> 14
- any limitations on the future issuance of any class or series of
preferred stock ranking senior to or on a parity with the series of
preferred stock being offered as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of CapRock; and
- any other specific terms, preferences, rights, limitations or
restrictions.
DESCRIPTION OF COMMON STOCK
We may issue, either separately or together with other securities, shares
of our common stock. Under our Articles of Incorporation, we are authorized to
issue up to 200,000,000 shares of our common stock. A prospectus supplement
relating to an offering of common stock, or other securities convertible or
exchangeable for, or exercisable into, common stock, will describe the relevant
terms, including the number of shares offered, any initial offering price, and
market price and dividend information, as well as, if applicable, information on
other related securities. See "Description of Outstanding Capital Stock" below.
DESCRIPTION OF OUTSTANDING MATERIAL INDEBTEDNESS
CapRock has outstanding $150.0 million of 1998 Senior Notes due 2008
bearing interest at the rate of 12% per annum and $210.0 million of 1999 Senior
Notes due 2009 bearing interest at the rate of 11 1/2% per annum. The 1998
Senior Notes and the 1999 Senior Notes are subject to the terms and conditions
of indentures between CapRock and Chase Manhattan Trust Company, National
Association (formerly known as PNC Bank, N.A.), as Trustee. The following
summary highlights some provisions of the indentures.
The 1998 Senior Notes will mature on July 15, 2008. Interest on the 1998
Senior Notes is payable semiannually in cash on January 15 and July 15 of each
year, commencing January 15, 1999. The 1999 Senior Notes will mature on May 1,
2009. Interest on the 1999 Senior Notes is payable semiannually in cash on May 1
and November 1 of each year, commencing on November 1, 1999. The senior notes
are general senior unsecured obligations of CapRock, and as such, rank pari
passu in right of payment with all existing and future unsecured and
unsubordinated indebtedness of CapRock. The senior notes are effectively
subordinated in right of payment to all secured indebtedness of CapRock to the
extent of the value of the assets securing such indebtedness. In addition,
CapRock is a holding company, and the senior notes are effectively subordinated
to all existing and future indebtedness and other liabilities (including trade
payables) of CapRock's subsidiaries.
The indentures contain covenants that, among other things, limit or
prohibit us from engaging in certain transactions including the following:
- borrowing additional money,
- paying dividends or making other distributions to our shareholders,
- limiting the ability of subsidiaries to make payments to us,
- making certain investments,
- creating certain liens on our assets,
- selling certain assets and using the proceeds from those sales for
certain purposes,
- entering into transactions with affiliates, and
- engaging in certain mergers or consolidations.
The events of default under the senior notes include various events of
default customary for such types of agreements including, among others, the
failure to pay principal and interest when due on the
11
<PAGE> 15
senior notes, cross-defaults on other indebtedness, certain judgments, and
certain events of bankruptcy, insolvency and reorganization.
DESCRIPTION OF OUTSTANDING CAPITAL STOCK
The following summaries highlight certain provisions of our Articles of
Incorporation and By-Laws, as amended. Copies of our Articles and Bylaws are
available from us upon request. See "Where You Can Find More Information."
AUTHORIZED CAPITAL STOCK
Under our Articles, the total number of shares of all classes of stock that
we have authority to issue is 220,000,000 shares. Each share has a par value of
$.01 per share. Of the authorized amount, 200,000,000 of the shares are common
stock and 20,000,000 are shares of preferred stock. As of March 31, 2000, there
were 33,440,856 shares of common stock issued and outstanding (and 52,151 shares
were held in treasury), and no shares of preferred stock were issued or
outstanding.
COMMON STOCK
Each share of common stock has identical rights and privileges in every
respect. The holders of CapRock common stock are entitled to vote upon all
matters submitted to a vote of our shareholders and are entitled to one vote for
each share of common stock held.
Subject to the prior rights and preferences, if any, applicable to shares
of preferred stock or any series of preferred stock, or the restrictions set
forth in any applicable indentures, the holders of common stock are entitled to
receive such dividends, payable in cash, stock or otherwise, as may be declared
by the Board out of any funds legally available for the payment of dividends.
If CapRock voluntarily or involuntarily liquidates, dissolves or winds-up,
the holders of common stock will be entitled to receive after distribution in
full of the preferential amounts, if any, to be distributed to the holders of
preferred stock or any series of preferred stock, all of the remaining assets
available for distribution ratably in proportion to the number of shares of
common stock held by them.
Holders of common stock will have no preferences or any preemptive,
conversion or exchange rights.
PREFERRED STOCK
The Board is authorized to provide for the issuance of shares of CapRock
preferred stock in one or more series, and to fix for each series, voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof as are shown in a resolution
providing for the issuance of such series adopted by the Board. The Board may
authorize the issuance of shares of preferred stock with terms and conditions
which could discourage a takeover or other transaction that holders of some or a
majority of shares of CapRock common stock might believe to be in their best
interests or in which such holders might receive a premium for their shares of
stock over the then-current market price of such shares. As of the date hereof,
no shares of preferred stock are outstanding.
PREEMPTIVE RIGHTS
No holder of any shares of our stock has any preemptive or preferential
right to acquire or subscribe for any unissued shares of any class of stock or
any authorized securities convertible into or carrying any right, option or
warrant to subscribe for or acquire shares of any class of stock.
TRANSFER AGENT AND REGISTRAR
The principal transfer agent and registrar for our common stock is
ChaseMellon Shareholder Services.
12
<PAGE> 16
CERTAIN ANTI-TAKEOVER EFFECTS
As of March 31, 2000, there were 166,506,993 authorized and unissued shares
of common stock and 20,000,000 authorized and unissued shares of preferred
stock. The Board of Directors can authorize the issuance of authorized but
unissued shares of its stock to render more difficult or to discourage an
attempt to obtain control of our company by means of a merger, tender offer,
proxy solicitation or otherwise. We are also subject to prior regulatory
approval by the FCC and various state regulatory agencies for a transfer of
control or for the assignment of our (or our subsidiaries') intrastate
certification authority, its international authority and other FCC licenses and
authorizations. The 1934 Communications Act generally limits direct foreign
ownership of wireless licenses to 20%, but provides for indirect foreign
ownership holdings above 25% upon FCC approval. In its order implementing the
U.S. commitment under the WTO Agreement, the FCC established new rules that
effectively relax the foreign ownership limits for common carrier wireless
licenses. Specifically, the new rules allow for up to 100% indirect ownership of
wireless licenses by foreign interests from countries that are members of the
WTO upon FCC review and approval from countries that have participated in the
WTO Agreement. Furthermore, the indentures for our 1998 Senior Notes and 1999
Senior Notes provide for a mandatory purchase of the senior notes upon a change
of control and we expect that any credit facilities that we enter into will
provide that an event of default or redemption event thereunder will occur if
all or a controlling interest in our capital stock is sold, assigned or
otherwise transferred. Any of the foregoing factors could have the effect of
delaying, deferring or preventing a change of control of CapRock. The Articles
provide that Article 13.03 of the Texas Business Corporation Act, which includes
statutory anti-takeover measures, will not apply to us.
WARRANTS AND REGISTRATION RIGHTS
As part of its initial public offering, IWL Communications, one of our
predecessor companies, issued warrants to purchase up to 145,000 shares of IWL
Communications common stock at an exercise price of $7.20 per share to Roth
Capital Partners, Inc. (formerly known as Cruttenden Roth, Incorporated) or its
designees for nominal consideration, which, following our business combination
in August 1998, were converted on a one-to-one ratio to warrants to purchase
shares of our common stock. Roth Capital Partners exercised the warrants in
March 2000. Roth has certain demand and piggyback registration rights associated
with our common stock to be issued upon the exercise of the warrants.
SELLING SHAREHOLDERS
The selling shareholders may be directors, executive officers, holders of
shares of our company or holders that may be considered to be selling securities
on our behalf or having purchased securities from us with a view towards
distributing them to others.
The prospectus supplement relating to any shares of common stock offered by
the selling shareholders will set forth the names of the selling shareholders,
the number of shares of common stock being offered for each selling
shareholder's account as well as the number of such shares and the percentage,
if greater than one percent, to be owned by each selling shareholder after
completion of the offering.
All expenses incurred with the registration of the shares of common stock
owned by the selling shareholders will be borne by CapRock, but CapRock will not
be obligated to pay any underwriting fees, discounts or commissions in
connection with such registration.
13
<PAGE> 17
PLAN OF DISTRIBUTION
We and any selling shareholders may sell any of the securities being
offered under this prospectus in any one or more of the following ways from time
to time:
- through agents;
- to or through underwriters;
- through dealers; and
- directly by CapRock and any selling shareholders to one or more
purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Securities may also be offered or sold
through depositary receipts issued by a depositary institution.
AGENTS
Offers to purchase securities may be solicited by agents designated by us
and/or any selling shareholders from time to time. Any agent involved in the
offer or sale of the securities under this prospectus will be named, and any
commissions payable by us to these agents will be set forth, in a related
prospectus supplement. Unless otherwise indicated in a prospectus supplement,
any agent will be acting on a reasonable best efforts basis for the period of
its appointment. Any agent may be deemed to be an underwriter, as that term is
defined in the Securities Act of 1933, as amended (the "Securities Act"), of the
securities so offered and sold.
UNDERWRITERS
If securities are sold by us and/or any selling shareholders by means of an
underwritten offering, we and/or any selling shareholders, as applicable, will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in a related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters and us at
the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one
or more underwriters. If any underwriter or underwriters are used in the sale of
securities, unless otherwise indicated in a related prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to some conditions precedent and that with respect to a sale of these
securities the underwriters will be obligated to purchase all such securities if
any are purchased.
We and/or any selling shareholders may grant to the underwriters options to
purchase additional securities to cover over-allotments, if any, at the initial
public offering price, with additional underwriting commissions or discounts, as
may be set forth in a related prospectus supplement. The terms of any over-
allotment option will be set forth in the prospectus supplement for those
securities.
DEALERS
If a dealer is utilized by us and/or any selling shareholders in the sale
of the securities in respect of which this prospectus is delivered, we and/or
any selling shareholders, as applicable, will sell these securities to the
dealer as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an
14
<PAGE> 18
underwriter, as such term is defined in the Securities Act, of the securities so
offered and sold. The name of the dealer and the terms of the transaction will
be set forth in the prospectus supplement relating to those offers and sales.
DIRECT SALES
We and/or any selling shareholders may also sell offered securities
directly to institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with respect to any resale
of those securities. The terms of any sales of this type will be described in
the prospectus supplement.
Securities may also be offered and sold, if so indicated in the related
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment in connection with their terms, or
otherwise, by one or more firms "remarketing firms," acting as principals for
their own accounts or as agents for us and/or any selling shareholders. Any
remarketing firm will be identified and the terms of its agreement, if any, with
us and/or any selling shareholders and its compensation will be described in a
related prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act, in connection with
the securities remarketed by them.
DELAYED DELIVERY CONTRACTS
If so indicated in a related prospectus supplement, we and/or any selling
shareholders may authorize agents and underwriters to solicit offers by certain
institutions to purchase securities from us and/or any selling shareholders at
the public offering price set forth in a related prospectus supplement as part
of delayed delivery contracts providing for payment and delivery on the date or
dates stated in a related prospectus supplement. Such delayed delivery contracts
will be subject to only those conditions set forth in a related prospectus
supplement. A commission indicated in a related prospectus supplement will be
paid to underwriters and agents soliciting purchases of securities pursuant to
delayed delivery contracts accepted by us and/or any selling shareholders, as
applicable.
GENERAL INFORMATION
We and/or any selling shareholders may have agreements with the agents,
underwriters, dealers and remarketing firms to indemnify them against certain
civil liabilities, including liabilities under the Securities Act, or to
contribute with respect to payments that the agents, underwriters, dealers and
remarketing firms may be required to make.
Each series of securities will be a new issue (other than shares of common
stock sold by selling shareholders or treasury shares sold by us) and, other
than the common stock, which is quoted on the Nasdaq National Market, may have
no established trading market. Unless otherwise specified in a related
prospectus supplement, we will not be obligated to list any series of securities
on an exchange or otherwise. We cannot assure you that there will be any
liquidity in the trading market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, us, our subsidiaries
and/or any selling shareholders in the ordinary course of their businesses.
The place, time of delivery and other terms of the sale of the offered
securities will be described in the applicable prospectus supplement.
In order to comply with the securities laws of some states, if applicable,
the securities offered hereby will be sold in those jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states
securities may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and complied with.
15
<PAGE> 19
LEGAL MATTERS
Munsch Hardt Kopf & Harr, P.C. will issue an opinion for us and the selling
shareholders, if any, about the legality of the offered securities. As of the
date of this prospectus, certain members of Munsch Hardt Kopf & Harr, P.C.
beneficially own, in the aggregate, 1,350 shares of our Common Stock. Any
additional required information regarding ownership of our securities by lawyers
of such firm will be contained in the applicable prospectus supplement. Any
underwriters will be advised about other issues relating to any offering by
their own legal counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of CapRock Communications Corp. as of
December 31, 1998 and 1999 and for each of the years in the three year period
ended December 31, 1999, as included in our Annual Report on Form 10-K for the
year ended December 31, 1999, have been incorporated by reference herein in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated herein by reference, and upon the authority of said firm as experts
in accounting and auditing.
16
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee............................. $237,600
Blue Sky Fees and Expenses.................................. $ 15,000*
Printing and Engraving Expenses............................. $200,000*
Legal Fees and Expenses..................................... $200,000*
Fees of Rating Agencies..................................... $ 50,000*
Accounting Fees and Expenses................................ $100,000*
Fees of Indenture Trustees (including counsel fees)......... $ 20,000*
Miscellaneous............................................... $ 77,400*
--------
Total............................................. $900,000*
========
</TABLE>
- ---------------
* Estimated and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XII of the Registrant's Articles of Incorporation provides the
following:
"A director of the Corporation shall not be liable to the Corporation
or its shareholders for monetary damages for an act or omission in the
director's capacity as a director, except that this Article shall not
authorize the elimination or limitation of the liability of a director to
the extent the director is found liable for:
(1) a breach of the director's duty of loyalty to the Corporation
or its shareholders;
(2) an act or omission not in good faith that constitutes a breach
of duty of the director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
(3) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken within
the scope of the director's office;
(4) an act or omission for which the liability of a director is
expressly provided by an applicable statute."
Article XI of the Registrant's Articles of Incorporation provides the
following:
"The directors and officers of the Corporation shall be indemnified by
the Corporation in a manner and to the maximum extent permitted by
applicable state or federal law as in effect from time to time."
Section 7.06 of the Registrant's Bylaws provides the following:
"The Corporation shall have the authority to and shall indemnify and
advance expenses to the directors, officers, employees, agents of the
Corporation or any other persons serving at the request of the Corporation
in such capacities in a manner and to the maximum extent permitted by
applicable state or federal law. The Corporation may purchase and maintain
liability insurance or make other arrangements for such obligations to the
extent permitted by the Texas Business Corporation Act."
The Texas Business Corporation Act permits, and in some cases requires,
corporations to indemnify officers, directors, agents and employees who are or
have been a party to or are threatened to be made a
II-1
<PAGE> 21
party to litigation against judgments, penalties (including excise and similar
taxes), fines, settlements and reasonable expenses under certain circumstances.
We expect that any Underwriting Agreement entered into by the Registrant in
connection with any offering of debt securities will provide for indemnification
by the underwriters specified therein of the Registrant and its officers and
directors, and by the Registrant of the underwriters specified therein, for
certain liabilities arising under the Securities Act or otherwise.
We expect that any Underwriting Agreement entered into by the Registrant in
connection with any offering of common stock will provide for indemnification by
the underwriters specified therein of the Registrant and its officers and
directors, and by the Registrant of the underwriters specified therein, for
certain liabilities arising under the Securities Act or otherwise.
We expect that any Underwriting Agreement entered into by the Registrant in
connection with any offering of preferred stock will provide for indemnification
by the underwriters specified therein of the Registrant and its officers and
directors, and by the Registrant of the underwriters specified therein, for
certain liabilities arising under the Securities Act or otherwise.
The Purchase Agreement (filed as Exhibit 1.1 to the Registrant's
Registration Statement on Form S-1, as amended (File No. 333-74735)) relating to
the Registrant's May 1999 equity offering provides for indemnification by the
underwriters specified therein of the Registrant and its officers and directors,
and by the Registrant of the underwriters specified therein, for certain
liabilities arising under the Securities Act or otherwise.
The Registration Rights Agreement (Exhibit 4.7 hereto) relating to the 1998
Senior Notes provides for indemnification by each of the initial purchasers
specified therein, their successors, assigns and direct and indirect
transferees, and participating broker-dealers, in specified circumstances, of
the Registrant, the other initial purchasers, underwriters and the other selling
holders, and each of their respective directors and officers and controlling
parties, and by the Registrant of the initial purchasers specified therein,
their successors, assigns and direct and indirect transferees, and participating
broker-dealers, underwriters, and each person, if any, controlling any such
underwriter or holder, in specified circumstances, for certain liabilities
arising under the Securities Act or otherwise.
The Note Purchase Agreement (filed as Exhibit 10.49 to the Registrant's
Registration Statement on Form S-4, as amended (File No. 333-57365)) relating to
the 1998 Senior Notes provides for indemnification by the initial purchasers
specified therein of the Registrant and its officers and directors, and by the
Registrant of the initial purchasers specified therein, for certain liabilities
arising under the Securities Act or otherwise.
The Registration Rights Agreement (Exhibit 4.11 hereto) relating to the
1999 Senior Notes provides for indemnification by each of the initial purchasers
specified therein, their successors, assigns and direct and indirect
transferees, and participating broker-dealers, in specified circumstances, of
the Company, the other initial purchasers, underwriters and the other selling
holders specified therein, and each of their respective directors and officers
and controlling parties, and by the Company of the initial purchasers specified
therein, their successors, assigns and direct and indirect transferees, and
participating broker-dealers, underwriters, and each person, if any controlling
any such underwriter or holder, in specified circumstances, for certain
liabilities arising under the Securities Act or otherwise.
The Note Purchase Agreement (filed as Exhibit 10.61 to the Registrant's
Registration Statement on Form S-4, as amended (File No. 333-82557)) relating to
the 1999 Senior Notes provides for indemnification by the initial purchasers,
specified therein of the Company and its officers and directors, and by the
Company of the initial purchasers specified therein, for certain liabilities
arising under the Securities Act or otherwise.
II-2
<PAGE> 22
ITEM 16. EXHIBITS
The following exhibits are filed herewith.
<TABLE>
<C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities.*
1.2 -- Form of Underwriting Agreement for Common Stock.*
1.3 -- Form of Underwriting Agreement for Preferred Stock.*
2.1 -- Agreement and Plan of Merger and Plan of Exchange, dated
as of February 16, 1998, by and among the Registrant, IWL
Communications, Incorporated ("IWL"), IWL Acquisition
Corp., CapRock Communications Corp. (n/k/a CapRock
Telecommunications Corp. ("CapRock Telecommunications")),
CapRock Acquisition Corp., and CapRock Fiber Network,
Ltd. ("CapRock Fiber" and Collectively, the "Parties").
The schedules to the Agreement and Plan of Merger and
Plan of Exchange and the appendices thereto have been
omitted. The Registrant will furnish supplementally to
the Securities and Exchange Commission any of the
schedules or appendices upon request. (Incorporated by
reference to Exhibit 2.1 to the Registration Statement on
Form S-4, as amended, of the Registrant, File No.
333-57365.)
2.2 -- First Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of April 30, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.3 -- Second Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of June 19, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.4 -- Third Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of July 8, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.1 -- Articles of Incorporation of the Registrant.
(Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.2 -- Bylaws of the Registrant. (Incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-4, as
Amended, of the Registrant, File No. 333-64699.)
4.3 -- Form of Senior Indenture.
4.4 -- Form of Subordinated Indenture.
4.5 -- Form of Certificate of Designation for the preferred
stock (together with preferred stock certificate).*
4.6 -- Indenture dated as of July 16, 1998, among the
Registrant, CapRock Telecommunications, CapRock Fiber,
IWL and PNC Bank, National Association, Trustee.
(Incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
4.7 -- Registration Rights Agreement dated July 16, 1998, among
the Registrant, CapRock Telecommunications, CapRock
Fiber, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and BancOne Capital Markets, Inc.
(Incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
</TABLE>
II-3
<PAGE> 23
<TABLE>
<C> <S>
4.8 -- Form of Warrant Agreement between IWL and Cruttenden Roth
Incorporated. (Incorporated by reference to Exhibit 1.2
to the Registration Statement on Form S-1 of IWL, as
amended, File No. 333-22801.)
4.9 -- Registration Rights Agreement dated January 22, 1998
between IWL and Nera Limited. (Incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-4,
as amended, of the Registrant, File No. 333-57365.)
4.10 -- Registration Rights Agreement dated January 22, 1998 by
And among IWL, Thomas Norman Blair and Margaret Helen
Blair. (Incorporated by reference to Exhibit 4.6 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.11 -- Registration Rights Agreement dated May 18, 1999, among
the Registrant, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities, Inc., Bear, Stearns & Co.
Inc., Donaldson, Lufkin & Jenrette Securities Corporation
and Goldman, Sachs & Co. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
4.12 -- Indenture dated as of May 18, 1999, between the
Registrant and Chase Manhattan Trust Company, National
Association, Trustee. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
5.1 -- Opinion of Munsch Hardt Kopf & Harr, P.C.
12.1 -- Statement regarding computation of ratio of earnings to
fixed charges and ratio of earnings to combined fixed
charges and preferred stock dividends.
23.1 -- Consent of KPMG LLP.
23.2 -- Consent of Munsch Hardt Kopf & Harr, P.C. (Included in
the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 -- Power of Attorney.+
25.1 -- Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1.*
</TABLE>
- ---------------
* To be filed by amendment or as an exhibit to a Current Report on Form 8-K
pursuant to Item 601 of Regulation S-K or, where applicable, incorporated
herein by reference from a subsequent filing in accordance with Section
305(b)(2) of the Trust Indenture Act of 1939.
+ Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
II-4
<PAGE> 24
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in registration statements on Form S-3, Form S-8 or
Form F-3 and the periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(d) The registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-5
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas on the 11th day of April, 2000.
CAPROCK COMMUNICATIONS CORP.
By: /s/ JERE W. THOMPSON, JR.
------------------------------------
Jere W. Thompson, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JERE W. THOMPSON Chief Executive Officer, April 11, 2000
- ----------------------------------------------------- Chairman of the Board, and
Jere W. Thompson, Jr. Director (Principal Executive
Officer)
/s/ KEVIN W. MCALEER Senior Vice President and Chief April 11, 2000
- ----------------------------------------------------- Financial Officer (Principal
Kevin W. McAleer Financial Officer)
* President, Chief Operating April 11, 2000
- ----------------------------------------------------- Officer and Director
Leo J. Cyr
* Vice Chairman of the Board and April 11, 2000
- ----------------------------------------------------- Director
Ignatius W. Leonards
* Executive Vice President and April 11, 2000
- ----------------------------------------------------- Director
Timothy W. Rogers
* Corporate Controller (Principal April 11, 2000
- ----------------------------------------------------- Accounting Officer)
Matthew M. Kingsley
* Director April 11, 2000
- -----------------------------------------------------
Mark Langdale
* Director April 11, 2000
- -----------------------------------------------------
Christopher J. Amenson
* Director April 11, 2000
- -----------------------------------------------------
John R. Harris
*By: /s/ JERE W. THOMPSON, JR.
------------------------------------------------
Jere W. Thompson, Jr.
Attorney-in-fact
</TABLE>
II-6
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities.*
1.2 -- Form of Underwriting Agreement for Common Stock.*
1.3 -- Form of Underwriting Agreement for Preferred Stock.*
2.1 -- Agreement and Plan of Merger and Plan of Exchange, dated
as of February 16, 1998, by and among the Registrant, IWL
Communications, Incorporated ("IWL"), IWL Acquisition
Corp., CapRock Communications Corp. (n/k/a CapRock
Telecommunications Corp. ("CapRock Telecommunications")),
CapRock Acquisition Corp., and CapRock Fiber Network,
Ltd. ("CapRock Fiber" and Collectively, the "Parties").
The schedules to the Agreement and Plan of Merger and
Plan of Exchange and the appendices thereto have been
omitted. The Registrant will furnish supplementally to
the Securities and Exchange Commission any of the
schedules or appendices upon request. (Incorporated by
reference to Exhibit 2.1 to the Registration Statement on
Form S-4, as amended, of the Registrant, File No.
333-57365.)
2.2 -- First Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of April 30, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.3 -- Second Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of June 19, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.4 -- Third Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of July 8, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.1 -- Articles of Incorporation of the Registrant.
(Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.2 -- Bylaws of the Registrant. (Incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-4, as
Amended, of the Registrant, File No. 333-64699.)
4.3 -- Form of Senior Indenture.
4.4 -- Form of Subordinated Indenture.
4.5 -- Form of Certificate of Designation for the preferred
stock (together with preferred stock certificate).*
4.6 -- Indenture dated as of July 16, 1998, among the
Registrant, CapRock Telecommunications, CapRock Fiber,
IWL and PNC Bank, National Association, Trustee.
(Incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.7 -- Registration Rights Agreement dated July 16, 1998, among
the Registrant, CapRock Telecommunications, CapRock
Fiber, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and BancOne Capital Markets, Inc.
(Incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
4.8 -- Form of Warrant Agreement between IWL and Cruttenden Roth
Incorporated. (Incorporated by reference to Exhibit 1.2
to the Registration Statement on Form S-1 of IWL, as
amended, File No. 333-22801.)
4.9 -- Registration Rights Agreement dated January 22, 1998
between IWL and Nera Limited. (Incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-4,
as amended, of the Registrant, File No. 333-57365.)
4.10 -- Registration Rights Agreement dated January 22, 1998 by
And among IWL, Thomas Norman Blair and Margaret Helen
Blair. (Incorporated by reference to Exhibit 4.6 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.11 -- Registration Rights Agreement dated May 18, 1999, among
the Registrant, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities, Inc., Bear, Stearns & Co.
Inc., Donaldson, Lufkin & Jenrette Securities Corporation
and Goldman, Sachs & Co. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
4.12 -- Indenture dated as of May 18, 1999, between the
Registrant and Chase Manhattan Trust Company, National
Association, Trustee. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
5.1 -- Opinion of Munsch Hardt Kopf & Harr, P.C.
12.1 -- Statement regarding computation of ratio of earnings to
fixed charges and ratio of earnings to combined fixed
charges and preferred stock dividends.
23.1 -- Consent of KPMG LLP.
23.2 -- Consent of Munsch Hardt Kopf & Harr, P.C. (Included in
the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 -- Power of Attorney.+
25.1 -- Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1.*
</TABLE>
- ---------------
* To be filed by amendment or as an exhibit to a Current Report on Form 8-K
pursuant to Item 601 of Regulation S-K or, where applicable, incorporated
herein by reference from a subsequent filing in accordance with Section
305(b)(2) of the Trust Indenture Act of 1939.
+ Previously filed.
<PAGE> 1
EXHIBIT 4.3
[PHJW DRAFT 4/11/00]
- --------------------------------------------------------------------------------
CAPROCK COMMUNICATIONS CORP., as Issuer
and
[________________], as Trustee
---------------------
Form of
Senior Debt Indenture
Dated as of ________, _____
--------------------
- --------------------------------------------------------------------------------
<PAGE> 2
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of ______.
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
Section Section
- ----------------------- -------------------------
<S> <C> <C>
Section 310 (a)(1)............................................ 6.09
(a)(2)............................................ 6.09
(a)(3)............................................ Not applicable
(a)(4)............................................ Not applicable
(b)............................................... 6.08, 6.10
Section 311 (a)............................................... 6.07
(b)............................................... 6.07
(c)............................................... Not Applicable
Section 312 (a)............................................... 3.05, 7.01
(b)............................................... 7.02
(c)............................................... 7.02
Section 313 (a)............................................... 7.03
(b)............................................... 7.03
(c)............................................... 7.03
(d)............................................... 7.03
Section 314 (a)............................................... 7.04, 10.09
(b)............................................... Not Applicable
(c)(1)............................................ 1.04, 4.02, 4.03,
11.01(c)
(c)(2)............................................ 1.04, 4.02, 4.03,
11.01(c)
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 1.04, 10.09
Section 315 (a)............................................... 6.01(a)
(b)............................................... 6.02
(c)............................................... 6.01(b)
(d)............................................... 6.01(c)
(e)............................................... 5.14
Section 316 (a) (last sentence)............................... 3.14
(a)(1)(A)......................................... 5.12
(a)(1)(B)......................................... 5.13
(a)(2)............................................ Not Applicable
(b)............................................... 5.08
(c)............................................... 9.07
Section 317 (a)(1)............................................ 5.03
(a)(2)............................................ 5.04
(b)............................................... 10.03
Section 318 (a)............................................... 1.08
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION ............................................ 1
Section 1.01. Definitions ........................................... 1
Section 1.02. Other Definitions ..................................... 28
Section 1.03. Rules of Construction ................................. 28
Section 1.04. Form of Documents Delivered to Trustee ................ 29
Section 1.05. Acts of Holders ....................................... 29
Section 1.06. Notices, etc., to the Trustee and the Issuer .......... 30
Section 1.07. Notice to Holders; Waiver ............................. 30
Section 1.08. Conflict with Trust Indenture Act ..................... 31
Section 1.09. Effect of Headings and Table of Contents .............. 31
Section 1.10. Successors and Assigns ................................ 31
Section 1.11. Separability Clause ................................... 31
Section 1.12. Benefits of Indenture.................................. 31
Section 1.13. GOVERNING LAW ......................................... 32
Section 1.14. No Recourse Against Others ............................ 32
Section 1.15. Independence of Covenants ............................. 32
Section 1.16. Exhibits .............................................. 32
Section 1.17. Counterparts........................................... 32
Section 1.18. Duplicate Originals ................................... 32
ARTICLE 2 SECURITY FORMS ................................................. 33
Section 2.01. Form and Dating ....................................... 33
ARTICLE 3 THE SECURITIES ................................................. 33
Section 3.01. Amount Unlimited; Issuable in Series .................. 33
Section 3.02. Registrar and Paying Agent ............................ 36
Section 3.03. Execution and Authentication .......................... 37
Section 3.04. Temporary Securities .................................. 39
Section 3.05. Transfer and Exchange ................................. 40
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities ...... 42
Section 3.07. Payment of Interest; Interest Rights Preserved ........ 43
Section 3.08. Persons Deemed Owners ................................. 44
Section 3.09. Cancellation .......................................... 45
Section 3.10. Computation of Interest ............................... 45
Section 3.11. Legal Holidays ........................................ 45
Section 3.12. CUSIP and CINS Numbers ................................ 46
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 3.13. Paying Agent To Hold Money in Trust ................... 46
Section 3.14. Treasury Securities ................................... 46
Section 3.15. Deposits of Monies .................................... 46
Section 3.16. Book-Entry Provisions for Securities in Global Form ... 47
ARTICLE 4 DEFEASANCE OR COVENANT DEFEASANCE .............................. 48
Section 4.01. Termination of Issuer's Obligations ................... 48
Section 4.02. Defeasance and Discharge of Indenture ................. 49
Section 4.03. Defeasance of Certain Obligations ..................... 52
Section 4.04. Application of Trust Money ............................ 54
Section 4.05. Repayment to Issuer ................................... 54
Section 4.06. Reinstatement ......................................... 54
ARTICLE 5 REMEDIES ....................................................... 54
Section 5.01. Events of Default ..................................... 54
Section 5.02. Acceleration of Maturity, Rescission and Annulment .... 57
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee .......................................... 58
Section 5.04. Trustee May File Proofs of Claims ..................... 58
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities .......................................... 59
Section 5.06. Application of Money Collected ........................ 60
Section 5.07. Limitation on Suits ................................... 60
Section 5.08. Unconditional Right of Holders To Receive Principal
Premium and Interest ................................ 61
Section 5.09. Restoration of Rights and Remedies .................... 61
Section 5.10. Rights and Remedies Cumulative ........................ 61
Section 5.11. Delay or Omission Not Waiver .......................... 62
Section 5.12. Control by Majority ................................... 62
Section 5.13. Waiver of Past Defaults ............................... 62
Section 5.14. Undertaking for Costs ................................. 63
Section 5.15. Waiver of Stay, Extension or Usury Laws ............... 63
Section 5.16. Unconditional Right of Holders To Receive Payment ..... 63
ARTICLE 6 THE TRUSTEE .................................................... 64
Section 6.01. Certain Duties and Responsibilities ................... 64
Section 6.02. Notice of Defaults .................................... 65
Section 6.03. Certain Rights of Trustee ............................. 65
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof ....... 66
Section 6.05. Trustee and Agents May Hold Securities; Collections;
Etc ................................................. 67
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 6.06. Money Held in Trust ................................... 67
Section 6.07. Compensation and Indemnification of Trustee and
Its Prior Claim ..................................... 67
Section 6.08. Conflicting Interests.................................. 68
Section 6.09. Corporate Trustee Required; Eligibility ............... 68
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.............................................. 69
Section 6.11. Acceptance of Appointment by Successor or Additional
Trustees ............................................ 70
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business .............................. 72
Section 6.13. Preferential Collection of Claims Against Issuer ...... 72
Section 6.14. Appointment of Authenticating Agent ................... 73
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER ................... 74
Section 7.01. Preservation of Information; Issuer To Furnish Trustee
Names and Addresses of Holders ...................... 74
Section 7.02. Communications of Holders ............................. 75
Section 7.03. Reports by Trustee .................................... 75
Section 7.04. Reports by Issuer ..................................... 75
ARTICLE 8 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. ........................ 76
Section 8.01. Issuer May Consolidate, etc., Only on Certain Terms ... 76
Section 8.02. Successor Substituted.................................. 77
ARTICLE 9 SUPPLEMENTAL INDENTURES AND WAIVERS ................................ 78
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders .......................... 78
Section 9.02. Supplemental Indentures, Agreements and Waivers
With Consent of Holders ............................. 79
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers.......................................... 81
Section 9.04. Effect of Supplemental Indentures ..................... 81
Section 9.05. Conformity with Trust Indenture Act ................... 82
Section 9.06. Reference in Securities to Supplemental Indentures .... 82
Section 9.07. Record Date ........................................... 82
Section 9.08. Revocation and Effect of Consents ..................... 82
ARTICLE 10 COVENANTS .......................................................... 83
Section 10.01. Payment of Principal, Premium and Interest ............ 83
Section 10.02. Maintenance of Office or Agency........................ 83
Section 10.03. Money for Security Payments To Be Held In Trust ....... 83
</TABLE>
-iii-
<PAGE> 6
<TABLE>
<S> <C> <C>
Section 10.04. Corporate Existence ................................... 85
Section 10.05. Payment of Taxes and Other Claims ..................... 85
Section 10.06. Maintenance of Properties ............................. 86
Section 10.07. Insurance ............................................. 86
Section 10.08. Books and Records ..................................... 86
Section 10.09. Compliance Certificates and Opinions .................. 86
Section 10.10. Repurchase of Securities Upon a Change of Control ..... 87
Section 10.11. Limitation on Indebtedness ............................ 87
Section 10.12. Statement by Officers as to Default ................... 88
Section 10.13. SEC Reports and Reports to Holders .................... 88
Section 10.14. Limitation on Issuances of Guarantees by Restricted
Subsidiaries ........................................ 89
ARTICLE 11 SATISFACTION AND DISCHARGE......................................... 90
Section 11.01. Satisfaction and Discharge of Indenture. .............. 90
Section 11.02. Application of Trust Money ............................ 91
ARTICLE 12 REDEMPTION......................................................... 91
Section 12.01. Right of Redemption; Mandatory Redemption ............. 91
Section 12.02. Notice to the Trustee ................................. 92
Section 12.03. Selection of Securities to be Redeemed ................ 92
Section 12.04. Notice of Redemption .................................. 93
Section 12.05. Effect of Notice of Redemption ........................ 94
Section 12.06. Deposit of Redemption Price ........................... 94
Section 12.07. Securities Redeemed in Part ........................... 95
ARTICLE 13 SINKING FUNDS...................................................... 95
Section 13.01. Applicability of Article .............................. 95
Section 13.02. Satisfaction of Sinking Fund Payments with Securities.. 95
Section 13.03. Redemption of Securities for Sinking Fund ............. 96
Exhibit A1 Form of Series A Security ............................. A1
Exhibit B Form of Legend for BookEntry Securities................ B1
Exhibit C Form of Authenticating Agent's
Certificate of Authentication ......................... C1
</TABLE>
-iv-
<PAGE> 7
SENIOR DEBT INDENTURE (the "Indenture"), dated as of ___________, ______,
between CAPROCK COMMUNICATIONS CORP., a corporation duly organized and existing
under the laws of the State of Texas (the "Issuer") and [________________] (the
"Trustee").
RECITALS
The Issuer has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its debentures, notes, bonds
and/or other evidence of indebtedness (herein called the "Securities") to be
issued in one of more series as in this Indenture provided.
All things necessary have been done to make the Securities, when executed
by the Issuer and authenticated and delivered hereunder and duly issued by the
Issuer, the valid obligations of the Issuer and to make this Indenture a valid
agreement of the Issuer and the Trustee in accordance with the terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Securities
or of any series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition by the Issuer or a Restricted Subsidiary; provided that
Indebtedness of such Person which is redeemed, defeased, retired or otherwise
repaid at the time of or immediately upon consummation of the transaction by
which such Person becomes a Restricted Subsidiary or such Asset Acquisition
shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Issuer and its Restricted Subsidiaries for such period
determined in conformity with GAAP; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
<PAGE> 8
(i) the net income (or loss) of any Person (other than a Restricted
Subsidiary) in which any Person (other than the Issuer or any of its
Restricted Subsidiaries) has a joint interest and the net income (or loss)
of any Unrestricted Subsidiary, except
(x) with respect to net income, to the extent of the amount of
dividends or other distributions actually paid in cash to the Issuer
or any of its Restricted Subsidiaries by such other Person or such
Unrestricted Subsidiary during such period and
(y) with respect to net losses, to the extent of the amount of
cash contributed by the Issuer or any Restricted Subsidiary to such
Person during such period;
(ii) the net income (or loss) of any Person acquired by the Issuer or
any of its Restricted Subsidiaries in a pooling-of-interests transaction
for any period prior to the date of the related acquisition;
(iii) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable to Asset
Sales;
(v) any net after-tax extraordinary or non-recurring gains or losses;
(vi) any gain or loss, net of taxes, realized upon the termination of
any employee benefit plan; and
(vii) any compensation or other expense paid or payable solely with
Capital Stock (other than Redeemable Stock) of the Issuer or any options,
warrants or other rights to acquire such Capital Stock.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
-2-
<PAGE> 9
"Asset Acquisition" means (i) an investment by the Issuer or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Issuer or any of its Restricted Subsidiaries; provided that such
Person's primary business is related, ancillary or complementary to the
businesses of the Issuer and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Issuer or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Issuer or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; provided that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Issuer and its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Issuer
or any of its Restricted Subsidiaries (other than to the Issuer or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets of a
division or line of business of the Issuer or any of its Restricted
Subsidiaries.
"Asset Sale" means any direct or indirect sale, transfer or lease or
other disposition (including by way of merger, consolidation or sale-leaseback
transaction) in one transaction or a series of related transactions by the
Issuer or any of its Restricted Subsidiaries to any Person other than the Issuer
or any of its Restricted Subsidiaries of:
(i) all or any of the Capital Stock of any Restricted Subsidiary,
(ii) all or substantially all of the property and assets of an
operating unit or business of the Issuer or any of its Restricted
Subsidiaries, or
(iii) any other property and assets of the Issuer or any of its
Restricted Subsidiaries outside the ordinary course of business of the
Issuer or such Restricted Subsidiary other than the Capital Stock of or
Investment in an Unrestricted Subsidiary
that, with respect to each of (i), (ii) and (iii), is not governed Article Eight
hereof; provided that "Asset Sale" shall not include:
(a) sales, transfers or other dispositions of assets, whether in
one transaction or a series of related transactions occurring within
one year, involving assets with a fair market value not in excess of
$________ in any transaction or series of related transactions,
-3-
<PAGE> 10
(b) contemporaneous exchanges by the Issuer or any Restricted
Subsidiary of Telecommunications Assets for other Telecommunications
Assets in the ordinary course of business, including fiber swaps and
partitioning of switches; provided that the applicable
Telecommunications Assets received by the Issuer or such Restricted
Subsidiary have at least substantially equal fair market value to the
Telecommunications Assets disposed of, or
(c) sales, transfers or other dispositions of assets that have
become uneconomic, obsolete or worn-out.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Code, or any similar
federal or state law relating to bankruptcy, insolvency, receivership, or relief
of debtors or the law of any other jurisdiction relating to bankruptcy,
insolvency, or relief of debtors or any amendment to, succession to or change in
any such law.
"Board of Directors" means, with respect to any Person, its Board of
Directors, general partner(s), manager(s), or similar governing body.
"Board Resolution" means a copy of a resolution delivered to the
Trustee that is certified by the Secretary or an Assistant Secretary of the
Issuer to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
New York or in Philadelphia, Pennsylvania are authorized or obligated by law,
regulation or executive order to close.
"Calculation Date" means, with respect to the Incurrence of any
Indebtedness by the Issuer or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the Issue
Date or issued thereafter, including, without limitation, all Common Stock and
Preferred Stock.
-4-
<PAGE> 11
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" shall be deemed to occur if:
(i) the sale, conveyance, transfer or lease of all or substantially
all of the assets of the Issuer to any Person or "group" (as such term is
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, including any
group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than to one or more Permitted Holders and/or one or more Restricted
Subsidiaries, shall have occurred,
(ii) any Person or "group" (as such term is used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act), other than any Permitted Holder (or
group that includes a Permitted Holder), becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total
voting power of all classes of the Voting Stock of the Issuer (including
any warrants, options or rights to acquire such Voting Stock), calculated
on a fully diluted basis,
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Issuer (together with any directors whose election or appointment by the
Board of Directors of the Issuer or whose nomination for election by the
stockholders of the Issuer was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors of the Issuer then in office or
(iv) the merger, amalgamation or consolidation of the Issuer with or
into another Person or the merger of another Person with or into the Issuer
shall have occurred, and the securities of the Issuer that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Issuer are changed into
or exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition
to any other consideration, securities of the surviving
-5-
<PAGE> 12
Person that represent, immediately after giving effect to such transaction,
at least a majority of the aggregate voting power of the Voting Stock of
the surviving Person.
"Commission" means the Securities and Exchange Commission.
"Common Depositary" has the meaning specified in Section 3.04.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Issue Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income,
(i) Consolidated Interest Expense,
(ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses
or sales of assets),
(iii) depreciation expense,
(iv) amortization expense,
(v) all other non-cash items reducing Adjusted Consolidated Net Income
(other than items that will require cash payments and for which an accrual
or reserve is, or is required by GAAP to be, made),
(vi) costs directly related to the Transaction, the offering of the
1998 Senior Notes or the offering of the 1999 Senior Notes and expensed by
the Issuer in accordance with GAAP on or prior to December 31, 1999,
less all non-cash items increasing Adjusted Consolidated Net Income, all as
determined on a consolidated basis for the Issuer and its Restricted
Subsidiaries in conformity with GAAP; provided that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the quotient of (1)
the number of shares of outstanding Common Stock of such Restricted Subsidiary
not owned on the last day of such period by the Issuer or any of its Restricted
Subsidiaries divided by
-6-
<PAGE> 13
(2) the total number of shares of outstanding Common Stock of such Restricted
Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, without
duplication, the aggregate amount of interest in respect of Indebtedness,
including, without limitation:
(i) amortization of original issue discount on any Indebtedness and
the interest portion of any deferred payment obligation, calculated in
accordance with the effective interest method of accounting;
(ii) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(iii) the net costs associated with Interest Rate Agreements;
(iv) Preferred Stock dividends of the Issuer's Restricted Subsidiaries
(other than dividends paid in shares of Preferred Stock that are not
Redeemable Stock) declared and paid or payable;
(v) accrued Redeemable Stock dividends of the Issuer and its
Restricted Subsidiaries, whether or not declared or paid; and
(vi) the interest component of rentals in respect of Capitalized Lease
Obligations paid, accrued or scheduled to be paid or to be accrued by the
Issuer and its Restricted Subsidiaries during such period;
excluding, however, (a) any amount of such interest of any Restricted Subsidiary
if the net income of such Restricted Subsidiary is excluded in the calculation
of Adjusted Consolidated Net Income pursuant to clause (iii) of the definition
thereof (but only in the same proportion as the net income of such Restricted
Subsidiary is excluded from the calculation of Adjusted Consolidated Net Income
pursuant to clause (iii) of the definition thereof) and (b) any premiums, fees
and expenses (and any amortization thereof) payable in connection with the
offering of the Securities, the 1999 Senior Notes, the 1998 Senior Notes and the
Transaction, determined on a consolidated basis (without taking into account
Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Calculation Date, the
ratio of (i) the aggregate amount of Indebtedness of the Issuer and its
Restricted Subsidiaries on a consolidated basis outstanding on such Calculation
Date to (ii) the aggregate amount of Consolidated EBITDA for the then most
recent four fiscal quarters for which financial statements of the Issuer have
been filed with the SEC or provided to the Trustee pursuant to Section 10.13
hereof (such four fiscal quarter period being the "Four Quarter Period");
-7-
<PAGE> 14
provided that, in making the foregoing calculation, (A) pro forma effect shall
be given to any Indebtedness to be Incurred or repaid on the Calculation Date;
(B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions
(including giving pro forma effect to the application of proceeds of any Asset
Disposition) that occur from the beginning of the Four Quarter Period through
the Calculation Date (the "Reference Period"), as if they had occurred and such
proceeds had been applied on the first day of such Reference Period; and (C) pro
forma effect shall be given to asset dispositions and asset acquisitions
(including giving pro forma effect to the application of proceeds of any asset
disposition) that have been made by any Person that has become a Restricted
Subsidiary or has been merged with or into the Issuer or any Restricted
Subsidiary during such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when such
Person was a Restricted Subsidiary as if such asset dispositions or asset
acquisitions had occurred on the first day of such Reference Period; provided
that to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Calculation Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at __________________________, Attention: Corporate Trust Department, or at any
other time at such other address as the Trustee may designate from time to time
by notice to the Holders.
"Credit Facilities" means any senior commercial term loan and/or
revolving credit or working capital facility or any letter of credit facility
entered into principally with commercial banks and/or other financial
institutions typically party to commercial loan agreements.
"Currency Agreement" means any spot or forward foreign exchange
contract, currency swap agreement, currency option or other similar financial
agreement or arrangement entered into by the Issuer or any of its Subsidiaries
designed solely to protect against or manage exposure to fluctuations in
currency exchange rates.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other Person with like
powers, whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
-8-
<PAGE> 15
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default. The Issuer is in "Default" during the
continuance of such an event.
"Depository" means The Depository Trust Company and its nominees and
successors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"fair market value" means the price that would be paid in an
arm's-length transaction between a willing seller under no compulsion to sell
and a willing buyer under no compulsion to buy, as determined in good faith by
the Board of Directors, whose determination shall be conclusive if evidenced by
a Board Resolution; provided that for purposes of clause (viii) of the
definition of "Permitted Indebtedness", (x) the fair market value of any
security registered under the Exchange Act shall be the average of the closing
prices, regular way, of such security for the [__] consecutive trading days
immediately preceding the capital contribution or sale of Capital Stock and (y)
in the event the aggregate fair market value of any other property (other than
cash or cash equivalents) received by the Issuer exceeds [$__] million, the fair
market value of such property shall be determined by a nationally recognized
investment banking firm (selected by the Board of Directors of the Issuer) and
set forth in their written opinion which shall be delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America in effect on the Issue Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"Global Securities" means one or more Global Securities in registered
form and representing the aggregate principal amount of Securities of any
particular series sold.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length and are entered into in
the ordinary course of business), to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the
-9-
<PAGE> 16
obligee of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guaranteed Indebtedness" has the meaning given it under Section 10.14
hereof.
"Holder" means the registered holder of any Security.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an Incurrence of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness. The terms "Incurrence" and
"Incurred" shall have corresponding meanings.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(i) all indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit,
acceptance facilities or other similar instruments (including reimbursement
obligations with respect thereto),
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
(v) all Capitalized Lease Obligations of such Person,
(vi) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B)
the amount of such Indebtedness,
-10-
<PAGE> 17
(vii) all Indebtedness of other Persons and all dividends and
distributions of another Person the payment of which, in either case, such
Person has Guaranteed or is responsible or liable for, directly or
indirectly, as obligor, guarantor or otherwise,
(viii) all Redeemable Stock of such Person valued at its maximum fixed
repurchase price plus (to the extent not otherwise included in such
repurchase price) accrued and unpaid dividends payable prior to the Stated
Maturity of the Securities in connection with a mandatory redemption or in
connection with a redemption at the option of the holder thereof unless
such Redeemable Stock has actually been called for redemption but not yet
redeemed, in which case it shall be valued at the redemption price therefor
plus such accrued and unpaid dividends unless the holder thereof can
require redemption or repurchase at any higher price, and
(ix) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation.
Notwithstanding anything herein to the contrary:
(A) the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness at the time of its issuance, as determined in conformity with
GAAP,
(B) money borrowed and set aside at the time of the Incurrence of any
Indebtedness or thereafter in order to refund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness,"
(C) Indebtedness shall not include any liability for federal, state,
local or other taxes,
(D) Indebtedness shall not include any Trade Payable or amounts due
under leases that are not Capitalized Lease Obligations,
(E) Indebtedness shall not include amounts due with respect to any
customer advance payments and customer deposits in the ordinary course of
business with the Issuer or any Restricted Subsidiary, and
-11-
<PAGE> 18
(F) Indebtedness shall not include overdrafts.
For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Redeemable Stock, such fair
market value shall be determined in good faith by the Board of Directors of the
issuer of such Redeemable Stock.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
particular series of securities established as contemplated by Section 3.01.
"Indenture Obligations" means the obligations of the Issuer, under
this Indenture or under the Securities of any particular series, to pay
principal of, premium, if any, and interest on such Securities when due and
payable, whether at maturity, by acceleration, call for redemption or repurchase
or otherwise, and to pay all other amounts due or to become due under or in
connection with this Indenture or the Securities and the performance of all
other obligations to the Trustee (including, but not limited to, payment of all
amounts due the Trustee under Section 6.07 hereof) and the Holders of the
Securities under this Indenture and the Securities, according to the terms
hereof and thereof.
"Interest," when used with respect to any Security of any series,
means the amount of all interest accruing on such Security, including all
interest accruing subsequent to the occurrence of any events specified in
Sections 5.01(g) and (h) hereof or which would have accrued but for any such
event, whether or not claims for such interest are allowable under applicable
law.
"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security, as set forth
in such Security.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan,
account receivable (other than an account receivable arising in the ordinary
course of business) or other extension of credit (including, without limitation,
by way of Guarantee or
-12-
<PAGE> 19
similar arrangement) or any capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other similar instruments issued by, such Person and
shall include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Issuer or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary at the time it so
ceases to be a Restricted Subsidiary, including, without limitation, by reason
of any transaction permitted by clause (c) of Section 10.11 hereof. For purposes
of the definition of "Unrestricted Subsidiary," (i) "Investment" shall include
the fair market value of the assets (net of liabilities (other than liabilities
to the Issuer or any of its Subsidiaries)) of any Restricted Subsidiary at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary,
(ii) the fair market value of the assets (net of liabilities (other than
liabilities to the Issuer or any of its Subsidiaries)) of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary shall be considered a reduction in outstanding Investments
and (iii) any property transferred to or from any Person shall be valued at its
fair market value at the time of such transfer.
"Issue Date" means the original date of issuance of the Securities.
"Issuer Request" or "Issuer Order" means a written request or order
delivered to the Trustee that is signed in the name of the Issuer by its
Chairman of the Board, Vice-Chairman, Chief Executive Officer, President or Vice
President, and by its Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien (statutory or other) or charge of any kind (including, without limitation,
any conditional sale or other title retention agreement or lease in the nature
thereof or any agreement to give any security interest). The term "Lien" does
not include any lease or grant of rights to use any fiber or other asset under
an arrangement that does not qualify as a conditional sale or other title
retention agreement or lease in the nature thereof or a switch partition.
"Maturity Date" means, with respect to any Security, the date
specified in such Security as the fixed date on which the principal of such
Security is due and payable.
"Merger Agreement" means that certain Agreement and Plan of Merger and
Plan of Exchange dated as of February 16, 1998 among the Issuer, CapRock
Telecommunications Corp., CapRock Fiber Network, Ltd., IWL Communications,
Incorporated and certain other parties thereto, as amended through the 1998
Senior Notes Issue Date and thereafter as amended in accordance with the terms
of the 1998 Senior Notes Indenture.
-13-
<PAGE> 20
"Moody's" means Moody's Investors Service.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Issuer or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Issuer and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Issuer or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, and (b) with respect
to any capital contribution or issuance or sale of Capital Stock, options,
warrants or other rights to acquire Capital Stock or Indebtedness, the proceeds
of such capital contribution or issuance or sale in the form of cash or cash
equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Issuer or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney's fees, accountants'
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of taxes payable as a result thereof.
"1998 Senior Notes Indenture" means the Indenture dated as of July 16,
1998, among the Issuer, CapRock Telecommunications Corp., CapRock Fiber Network,
Ltd. and IWL Communications , Incorporated and Chase Manhattan Trust Company,
National Association, as successor Trustee, providing for the issuance of the
1998 Senior Notes in the aggregate principal amount of $150,000,000 as such
instrument may be amended and supplemented from time to time.
"1998 Senior Notes" means the Issuer's 12% Senior Notes due 2008
issued pursuant to the 1998 Senior Notes Indenture, as such instrument may be
amended from time to time.
-14-
<PAGE> 21
"1998 Senior Notes Issue Date" means the date on which the 1998 Senior
Notes were originally issued under the 1998 Senior Note Indenture.
"1999 Senior Notes" mean the Issuer's 11 1/2% Senior Notes due 2009
issued pursuant to the 1999 Senior Notes Indenture, as such instrument may be
amended from time to time.
"1999 Senior Notes Indenture" means the Indenture dated as of May 18,
1999 between the Issuer and Chase Manhattan Trust Company, National Association,
as trustee, providing for the issuance of the 1999 Senior Notes in the aggregate
principal amount of $210,000,000, as such instrument may be amended and
supplemented from time to time.
"Offer to Purchase" means an offer by the Issuer to purchase
Securities from the Holders commenced by mailing a notice to the Trustee and
each Holder stating:
(i) the covenant pursuant to which the offer is being made and that
all Securities validly tendered will be accepted for payment on a pro rata
basis;
(ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed);
(iii) that any Security not tendered will continue to accrue interest
pursuant to its terms;
(iv) that, unless the Issuer defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Security purchased pursuant to the
Offer to Purchase will be required to surrender the Security, together with
the form entitled "Option of the Holder to Elect Purchase" on the reverse
side of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Securities delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities purchased; and
-15-
<PAGE> 22
(vii) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided that each Security
purchased and each new Security issued shall be in a principal amount of
$1,000 or any integral multiple thereof, the denominations in which
Securities of the series shall be issuable.
On the Payment Date, the Issuer shall (i) accept for payment on a pro
rata basis Securities or portions thereof tendered pursuant to an Offer to
Purchase; (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officer's Certificate specifying the
Securities or portions thereof accepted for payment by the Issuer. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; provided that each Security
purchased and each new Security issued shall be in a principal amount of $1,000
or any integral multiple thereof. The Issuer will publicly announce the results
of an Offer to Purchase as soon as practicable after the Payment Date. The
Trustee shall act as the Paying Agent for an Offer to Purchase. The Issuer will
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Issuer is required to repurchase Securities pursuant to an
Offer to Purchase.
"Officer" means, with respect to the Issuer, its Chairman of the
Board, Vice Chairman, President, Vice President, Secretary, Assistant Secretary,
Treasurer or Assistant Treasurer.
"Officers' Certificate" means a certificate delivered to the Trustee
that is signed by the Chairman of the Board, a Vice Chairman, the President or a
Vice President, and by the Secretary, an Assistant Secretary, the Treasurer or
an Assistant Treasurer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Issuer or the Trustee, and who shall be reasonably acceptable to
the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.02.
"Outstanding" when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
-16-
<PAGE> 23
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Issuer or any Affiliate
thereof) in trust or set aside and segregated in trust by the Issuer or any
Affiliate thereof (if the Issuer or such Affiliate shall act as Paying
Agent) for the Holders of such Securities; provided, however, that if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor reasonably
satisfactory to the Trustee has been made;
(c) Securities with respect to which the Issuer has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03 hereof; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof reasonably satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands the Securities
are valid obligations of the Issuer;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Issuer or any other obligor upon the Securities or any Affiliate of the
Issuer or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. The Issuer shall notify
the Trustee, in writing, when it repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Affiliate of the Issuer or such other obligor. If the Paying
Agent holds, in its capacity as such, on any Maturity Date or on any optional
redemption date money sufficient to pay all accrued interest and principal with
respect to such Securities payable on that date and is not prohibited from
paying such money to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Securities cease to be Outstanding
and interest on them ceases to accrue. Securities may also cease to be
Outstanding to the extent expressly provided in Article Four.
-17-
<PAGE> 24
"Payment Date" means the date on which any Security is purchased
pursuant to an Offer to Purchase.
"Permitted Holders" means Jere W. Thompson, Sr., Jere W. Thompson,
Jr., Mark Langdale, Timothy W. Rogers, Scott L. Roberts, Timothy M. Terrell and
Ignatius W. Leonards and any corporation, limited liability company,
partnership, joint venture or other entity controlled by any one or more of
them.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness of the Issuer pursuant to the Securities and this
Indenture;
(ii) Indebtedness owed (A) to the Issuer and evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiaries;
provided that such Indebtedness to any Restricted Subsidiary is
subordinated in right of payment from and after such time as the Securities
shall become due and payable (whether at Stated Maturity, by acceleration
or otherwise); provided, further, any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Issuer or
another Restricted Subsidiary) shall be deemed, in each case, to constitute
an Incurrence of such Indebtedness not permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness (other
than Indebtedness Incurred under clause (ii), (iv), (vi) or (xii) of this
definition of "Permitted Indebtedness") and any refinancings of such new
Indebtedness in an amount not to exceed the amount so refinanced or
refunded (plus premiums, accrued interest, fees and expenses); provided
that Indebtedness the proceeds of which are used to refinance or refund the
Securities or Indebtedness that is pari passu in right of payment with, or
subordinated in right of payment to, the Securities shall only be permitted
under this clause (iii) if (A) in case the Securities are refinanced in
part or the Indebtedness to be refinanced is pari passu in right of payment
with the Securities, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu in right of payment with, or
subordinate in right of payment to, the remaining Securities, (B) in case
the Indebtedness to be refinanced is subordinated in right of payment to
the Securities, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is issued
or remains outstanding, is expressly made subordinate in right of payment
to the Securities at least to the extent that the Indebtedness to be
refinanced is subordinated to the Securities and (C) such new Indebtedness,
determined as of the
-18-
<PAGE> 25
date of Incurrence of such new Indebtedness, does not mature prior to the
Stated Maturity of the Indebtedness to be refinanced or refunded, and the
Average Life of such new Indebtedness is at least equal to the remaining
Average Life of the Indebtedness to be refinanced or refunded; and provided
further that in no event may Indebtedness of the Issuer be refinanced by
means of any Indebtedness of any Restricted Subsidiary pursuant to this
clause (iii);
(iv) Indebtedness (A) to reimburse workers' compensation insurance
companies for claims paid by such companies on behalf of the Issuer or any
Restricted Subsidiary in accordance with the policies issued to the Issuer
and the Restricted Subsidiaries, (B) in respect of performance, surety or
appeal bonds or similar obligations provided in the ordinary course of
business, or (C) under Currency Agreements and Interest Rate Agreements;
provided that such agreements (1) are designed solely to protect the Issuer
or its Subsidiaries against fluctuations in foreign currency exchange rates
or interest rates and (2) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder or (D) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Issuer or any of its
Restricted Subsidiaries pursuant to such agreements, in each case Incurred
in connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a principal
amount not to exceed the gross proceeds actually received by the Issuer or
any Restricted Subsidiary in connection with such disposition;
(v) Indebtedness of the Issuer, to the extent the net proceeds thereof
are promptly used to purchase Securities tendered in an Offer to Purchase
made as a result of a Change of Control or Indebtedness of the Issuer or
any Restricted Subsidiary to the extent the net proceeds thereof are
promptly deposited to defease all of the Securities as described in Article
Four hereof;
(vi) Guarantees of the Securities and Guarantees of Indebtedness of
the Issuer by any Restricted Subsidiary; provided that the Guarantee of
such Indebtedness is permitted by and made in accordance with Section 10.14
hereof.
(vii) Acquired Indebtedness and any Indebtedness issued in exchange
for, or the net proceeds of which are used to refinance or refund, such
Acquired Indebtedness in an amount not to exceed the amount so refinanced
or refunded (plus
-19-
<PAGE> 26
premium, accrued interest, and reasonable fees and expenses) in an
aggregate amount not to exceed at any one time outstanding $__ million;
(viii) (A) Indebtedness of the Issuer not to exceed, at any one time
outstanding, two times the Net Cash Proceeds received by the Issuer after
the 1998 Senior Notes Issue Date as a capital contribution or from the
issuance and sale of its Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to acquire Capital Stock (other than
Redeemable Stock) to a Person that is not a Subsidiary of the Issuer, to
the extent such Net Cash Proceeds have not been used pursuant to Section 10
hereof to make a Restricted Payment less any Indebtedness Incurred pursuant
to clause (B), (B) Indebtedness Incurred by (x) the Issuer and/or (y) any
of the Restricted Subsidiaries in an aggregate amount not to exceed, at any
one time outstanding, the Net Cash Proceeds received by the Issuer after
the 1998 Senior Notes Issue Date as a capital contribution or from the
issuance and sale of its Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to acquire Capital Stock (other than
Redeemable Stock) to a Person that is not a Subsidiary of the Issuer, to
the extent such Net Cash Proceeds have not been used pursuant to Section 10
hereof to make a Restricted Payment; provided that the Incurrence of
Indebtedness pursuant to this clause (B) will only be permitted to the
extent that such Incurrence does not cause the amount of Indebtedness
Incurred pursuant to clause (A) to exceed the amount permitted thereunder,
and (C) Indebtedness of the Issuer not to exceed, at any one time
outstanding, 100% of the fair market value of property (other than cash and
cash equivalents) received by the Issuer after the 1998 Senior Notes Issue
Date from a contribution of capital or the proceeds from the sale of its
Capital Stock (other than Redeemable Stock) or options, warrants or other
rights to acquire Capital Stock (other than Redeemable Stock) to a Person
that is not the Issuer or a Restricted Subsidiary, to the extent such
capital contribution or sale of Capital Stock or options, warrants or
rights have not been used pursuant to Section 10 hereof to make a
Restricted Payment; provided that such Indebtedness does not mature prior
to the Stated Maturity of the Securities and has an Average Life longer
than the Securities;
(ix) Indebtedness under one or more Credit Facilities or Vendor Credit
Facilities; provided that the aggregate principal amount of any
Indebtedness incurred pursuant to this clause (ix) (including any amounts
refinanced or refunded under this clause (ix)) does not exceed at any time
outstanding the greater of (x) __% of eligible accounts receivable and __%
of eligible inventory of the Issuer and its Restricted Subsidiaries as of
the last fiscal quarter for which financial statements are prepared or (y)
$___ million less any amount of such Indebtedness permanently repaid;
(x) Indebtedness existing as of the Issue Date;
-20-
<PAGE> 27
(xi) Capitalized Lease Obligations in an aggregate principal amount
outstanding at any time not to exceed $__ million; and
(xii) Indebtedness of the Issuer (in addition to Indebtedness
permitted under clauses (i) through (xi) above) in the aggregate principal
amount outstanding at any time not to exceed $__ million, less any amount
of such Indebtedness permanently repaid.
"Permitted Investment" means any of the following:
(i) an Investment in the Issuer or a Restricted Subsidiary or a Person
which will, upon the making of such Investment, become a Restricted
Subsidiary or be merged or consolidated with or into or transfer or convey
all or substantially all its assets to, the Issuer or a Restricted
Subsidiary; provided that such Person's primary business is related,
ancillary or complementary to the businesses of the Issuer and its
Restricted Subsidiaries on the date of such Investment;
(ii) a Temporary Cash Investment;
(iii) commission, payroll, travel, relocation and similar advances to
cover matters that are expected at the time of such advances ultimately to
be treated as expenses in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction of
judgments or settlement of disputed accounts receivable that arose in the
ordinary course of business;
(v) Investments in prepaid expenses, negotiable instruments held for
collection, and lease, utility and workers' compensation, performance and
other similar deposits;
(vi) Interest Rate Agreements and Currency Agreements to the extent
permitted under clause (iv) of the definition of "Permitted Indebtedness;"
and
(vii) loans and advances to employees of the Issuer or any Subsidiary
in an aggregate amount not to exceed $________ at any time outstanding.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
-21-
<PAGE> 28
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference equity,
whether outstanding on the Issue Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"pro forma" means, with respect to the preparation of financial
statements to show the effect of any particular transaction, the preparation of
such financial statements in accordance with Article 11 of Regulation S-X.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock (other than Redeemable Stock) of the Issuer or a Restricted
Subsidiary pursuant to an effective registration statement filed under the
Securities Act (excluding registration statements on Form S-8).
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Securities, (ii) redeemable at the option of the
holder of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Securities or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Securities; provided that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Securities shall not
constitute Redeemable Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable in any
material respect to the holders of such Capital Stock than the provisions
contained in Section 10.10 hereof are to the holders of the Securities and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Issuer's
repurchase of such Securities as are required to be repurchased pursuant to
Section 10.10 hereof.
"Redemption Date" means, with respect to any Security to be redeemed,
the date fixed by the Issuer for such redemption pursuant to this Indenture and
the Securities of any series.
"Redemption Price" means, with respect to any Security to be redeemed,
the price fixed for such redemption pursuant to the terms of this Indenture and
the Securities of any series.
"Regular Record Date" means the Regular Record Date specified in the
Securities.
-22-
<PAGE> 29
"Responsible Officer" means, when used with respect to the Trustee,
any officer within the Corporate Trust Office including any Vice President,
Managing Director, Assistant Vice President, Secretary, Assistant Secretary or
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject.
"Restricted Payment" means
(i) a declaration or payment of any dividend or the making of any
distribution on or with respect to the Issuer's Capital Stock (other than
(x) dividends or distributions payable solely in shares of the Issuer's
Capital Stock (other than Redeemable Stock) or in options, warrants or
other rights to acquire shares of such Capital Stock and (y) dividends or
distributions payable to the Issuer or any Wholly Owned Restricted
Subsidiary),
(ii) a payment made by the Issuer or any Restricted Subsidiary used to
purchase, redeem, retire or otherwise acquire for value any shares of
Capital Stock of (A) of the Issuer or an Unrestricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock)
held by any Person or (B) a Restricted Subsidiary (including options,
warrants or other rights to acquire such shares of Capital Stock) held by
any Affiliate of the Issuer (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more
of any class of Capital Stock of the Issuer (including options, warrants or
other rights to acquire such shares of Capital Stock) (other than (x)
payments payable solely in shares of Capital Stock) (other than Redeemable
Stock) of the Issuer or in options, warrants or other rights to acquire
shares of such Capital Stock and (y) payments payable to the Issuer or any
Wholly-Owned Restricted Subsidiary),
(iii) any voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance, or other acquisition or
retirement for value, of Indebtedness of the Issuer that is subordinated in
right of payment to the Securities (other than, in each case, the purchase,
repurchase or acquisition of Indebtedness either in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity that in any case is due within one year after the date of such
purchase, repurchase or acquisition), or
(iv) any Investment, other than a Permitted Investment, in any Person.
"Restricted Subsidiary" means any Subsidiary of the Issuer other than
an Unrestricted Subsidiary.
-23-
<PAGE> 30
"S&P" means Standard & Poors' Rating Services, a division of McGraw
Hill, Inc.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, or if at any time after the execution of this Indenture such
Commission is not existing and performing the applicable duties now assigned to
it, then the body or bodies performing such duties at such time.
"Securities" shall have the meaning specified in the recitals of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Strategic Equity Investments" means the issuance and sale of Capital
Stock (other than Redeemable Stock) to a Person that has an equity market
capitalization, a net asset value or annual revenues of at least $1.0 billion
and owns and operates businesses primarily in a Telecommunications Business;
provided that such Telecommunications Business may be located anywhere in the
world.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning given it in Section 10.14
hereof.
"Telecommunications Assets" means, with respect to any Person, assets
(including, without limitation, rights of way, trademarks and licenses) that are
utilized by such Person, directly or indirectly, in the Telecommunications
Business and including any computer systems used in a Telecommunications
Business. Telecommunications Assets shall also include a majority of the Voting
Stock of another Person, if such Voting Stock is acquired by the Issuer or a
Restricted Subsidiary and all or substantially all the assets of such other
Person comprise Telecommunications Assets; and such other Person either is, or
-24-
<PAGE> 31
immediately following the relevant transaction shall become, a Restricted
Subsidiary of the Issuer pursuant to this Indenture. The determination of what
constitutes Telecommunications Assets shall be made by the Board of Directors of
the Issuer and evidenced by a Board Resolution delivered to the Trustee.
"Telecommunications Business" means the business of (i) transmitting
or providing services relating to the transmission of voice, video, signals,
data or Internet services; (ii) constructing, creating, developing, owning,
operating, and marketing one or more communications networks, related, ancillary
or complementary network transmission equipment, information systems, software,
and other related, ancillary or complementary assets and services; (iii)
planning, designing, and consulting with respect to the matters described in
clauses (i) and (ii); and (iv) evaluating, participating and pursuing any other
activity or opportunity that is related, ancillary, or complementary to those
identified in clauses (i), (ii) and (iii) above, as determined in good faith by
the Board of Directors of the Issuer.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United
States of America or any agency thereof with a maturity of 365 days or
less,
(ii) time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued
by a bank or trust company which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor,
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above,
(iv) commercial paper, maturing not more than one year after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Issuer) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the
-25-
<PAGE> 32
time as of which any investment therein is made of "P-1" (or higher)
according to Moody's or "A-1" (or higher) according to S&P, and
(v) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or Moody's.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction" means the transactions contemplated by the Merger
Agreement, which were consummated on August 26, 1998.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Unrestricted Subsidiary" means (a) any Subsidiary that at the time of
determination shall be an Unrestricted Subsidiary (as designated by the Board of
Directors of the Issuer, as provided below) and (b) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Issuer may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as (i) neither the Issuer nor any other
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary, (ii) no default with respect to any Indebtedness of such Subsidiary
would permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Issuer or any Restricted Subsidiary to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity, (iii) any Investment in such Subsidiary
made as a result of designating such Subsidiary an Unrestricted Subsidiary; (iv)
neither the Issuer nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary on terms more favorable to such Subsidiary than those that
might be obtained at the time from persons who are not Affiliates of the Issuer,
and (v) neither the Issuer nor any other Subsidiary has any obligation (1) to
subscribe for additional shares of Capital Stock
-26-
<PAGE> 33
or other equity interests in such Subsidiary, or (2) to maintain or preserve
such Subsidiary's financial condition or to cause such Subsidiary to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Issuer shall be evidenced to the Trustee by filing a Board
Resolution with the Trustee giving effect to such designation. The Board of
Directors of the Issuer may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after giving effect to such designation,
there would be no Default or Event of Default under this Indenture and the
Issuer could incur $1.00 of additional Indebtedness under clause (i) of Section
10.11(a) hereof.
"U.S. Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
Global Securities, the Person designated as U.S. Depositary by the Issuer
pursuant to Section 3.01, which must be a clearing agency registered under the
Exchange Act until a successor U.S. Depositary shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "U.S. Depositary"
shall mean or include each Person who is then a U.S. Depositary hereunder, and
if at any time there is more than one such Person, "U.S. Depositary" shall mean
the U.S. depositary with respect to the Securities of that series.
"U.S. Government Securities" means securities that are direct
non-callable obligations of the United States of America or securities the
timely payment of whose principal and interest is unconditionally guaranteed by
the full faith and credit of the United States of America.
"Vendor Credit Facility" means any agreement entered into with one or
more vendors, suppliers or lessors of telecommunications equipment or assets
(including any agreement entered into with any such vendor, supplier or lessor
or any financial institution acting on behalf of any such vendor, supplier or
lessor) in order to finance the acquisition or construction of
telecommunications equipment or assets, as such agreement may be amended,
modified, supplemented, refunded, refinanced, restructured, renewed or replaced
from time to time; provided that (i) any equipment or other assets acquired or
leased under or pursuant to such Vendor Credit Facility are received by the
Issuer or a Restricted Subsidiary and (ii) all obligations with respect to or
under such Vendor Credit Facility or any amendment, modification, supplement,
refunding, refinancing, restructuring, renewal or replacement thereof are owed,
whether directly or indirectly, as the case may be, to a Person who is not an
Affiliate of the Issuer or any of its Subsidiaries and no such Affiliate shall
act as a facilitator or conduit or in a similar capacity with respect thereto.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
-27-
<PAGE> 34
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals or
other shares issued to Persons as mandated by applicable law) by such Person or
one or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -----------
<S> <C>
"Act" 1.05
"Agent Member" 3.16
"Defaulted Interest" 3.07
"Event of Default" 5.01
"Paying Agent" or "Agent" 3.02
"Physical Securities" 3.03
"Registrar" 3.02
"Security Register" 3.05
------
</TABLE>
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" refer to the lawful currency of
the United States of America; and
-28-
<PAGE> 35
(f) the words "include," "included" and "including" as used herein
are deemed in each case to be followed by the phrase "without limitation."
Section 1.04. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other persons as to other matters, and any such person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Issuer stating that the information with respect to
such factual matters is in the possession of the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Section.
-29-
<PAGE> 36
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof to the same extent
as the original Holder, in respect of anything done, suffered or omitted to be
done by the Trustee, any Paying Agent or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Security.
Section 1.06. Notices, etc., to the Trustee and the Issuer.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Issuer shall be sufficient for
every purpose hereunder if made, given, furnished or filed, in writing, to or
with the Trustee at [___________________________], Attention:
[____________________], or at any other address previously furnished in writing
to the Holders and the Issuer by the Trustee; or
(b) the Issuer by the Trustee or by any Holder shall be sufficient for
every purpose (except as otherwise expressly provided herein) hereunder if in
writing and mailed, first-class postage prepaid, to the Issuer addressed to the
Issuer at 15601 Dallas Parkway, Suite 700, Dallas, Texas 75248, Attention: Jere
W. Thompson, Jr., or at any other address previously furnished in writing to the
Trustee by the Issuer.
Section 1.07.Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise expressly provided herein)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such
-30-
<PAGE> 37
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
when mailed to a Holder in the aforesaid manner shall be conclusively deemed to
have been received by such Holder whether or not actually received by such
Holder. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the foregoing
paragraph shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
Section 1.09. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities issued
pursuant hereto 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities issued pursuant hereto,
express or implied, shall give to any person (other than the parties hereto and
their successors
-31-
<PAGE> 38
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture. 1.4.
Section 1.13. 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 CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Issuer
shall not have any liability for any obligations of the Issuer under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
Section 1.16. Exhibits.
All exhibits attached hereto are by this reference made a part hereof
with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
This Indenture may be executed in any number of counterparts and by
tele copier, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 1.18. 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.
-32-
<PAGE> 39
ARTICLE 2
SECURITY FORMS
Section 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication with
respect thereto shall be in substantially the forms set forth, or referenced in
Exhibit A-1 annexed hereto, or in such other form as shall be established by or
pursuant to a Board Resolution, or in one or more indentures supplemental
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with the rules of the Depository, any clearing agency or any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof.
The definitive Securities shall be printed, typewritten, lithographed
or engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on which
the Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Each Security shall be dated the date of its issuance and shall show
the date of its authentication. The terms and provisions contained in the
Securities shall constitute, and are expressly made, a part of this Indenture.
ARTICLE 3
THE SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series to the
extent applicable:
-33-
<PAGE> 40
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Sections 3.03, 3.04, 3.05, 3.06, 9.06 or 12.07);
(c) whether any Securities of the series are to be issuable in
permanent global coupons and, if so, (i) whether beneficial owners of interests
in any such permanent Global Security may exchange such interest for Securities
of such series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 3.05, and (ii) the name of the Common Depositary (as
defined in Section 3.04) or the U.S. Depositary, as the case may be, with
respect to any Global Security;
(d) the date or dates on which the principal of the Securities of the
series is payable;
(e) the rate or rates at which the Securities of the series shall bear
interest (including reset rates, if any, and the method by which such rate will
be determined), if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable and the
Regular Record Date for the interest payable on any Interest Payment Date and,
if applicable to such series of Securities, the basis points and United States
Treasury rate(s) and any other rates or other methods to be used in calculating
the reset rate;
(f) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable and where the Issuer
will maintain an office or agency where Securities may be presented for
registration of transfer or exchange and the place or places where notices and
demands to or upon the Issuer in respect of Securities and the Indenture may be
made;
(g) the right of the Issuer, if any, to defer any payment of principal
of, premium, or interest on the Securities of the series, and the maximum length
of any such deferral period which shall not exceed the Stated Maturity for the
final installment of principal on the Securities of such series;
(h) the period or periods within which, the price or prices at which
the currency or currency units and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the option of
the Issuer, pursuant to any sinking fund or otherwise;
-34-
<PAGE> 41
(i) the obligation, if any, of the Issuer to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period of periods within which, the
price or prices at which, the currency or currency units and the terms and
conditions upon which Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation, and, where applicable, the
obligation of the Issuer to select the Securities to be redeemed;
(j) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof to Section 5.02;
(l) any additions, modifications of deletions in the Events of Default
with respect to Securities of the series, if any, other than those set forth
herein;
(m) if either or both of Section 4.02 and Section 4.03 shall be
inapplicable to the Securities of the series (provided that if no such
inapplicability shall be specified, then both Section 4.02 and Section 4.03
shall be applicable to the Securities of the series);
(n) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies in which the Securities of such series shall
be denominated and in which payments or principal of, and any premium and
interest on, such Securities shall or may by payable;
(o) additions, modifications or deletions of the Issuer's covenants
with respect to Securities of the series, if any, other than those set forth
herein;
(p) any index or indices used to determine the amount of payments of
principal of any premium, if any, on such securities and the manner in which
such amounts will be determined;
(q) if other than the Trustee, the identity of the Registrar and any
Paying Agent;
(r) the appointment of a Person as a Trustee which meets the
requirements of Section 6.09 with respect to Securities of the series;
(s) any index or indices used to determine the amounts of payments of
principal of any premium, if any, on the Securities and the manner in which such
amounts will be determined;
-35-
<PAGE> 42
(t) the terms and conditions of any obligation or right of the Issuer
or a Holder to exchange or convert Securities into other securities;
(u) any other terms of the series.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officer's Certificate or in any
such Indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Issuer and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms
the Securities of such series.
Section 3.02. Registrar and Paying Agent.
The Issuer shall maintain an office or agency (which shall be located
in the Borough of Manhattan in The City of New York, State of New York) where
Securities may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency (which shall be located in the Borough of
Manhattan in The City of New York, State of New York) where Securities may be
presented for payment (the "Paying Agent" or "Agent") and an office or agency
where notices and demands to or upon the Issuer in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Issuer may have one or more
co-registrars and one or more additional paying agents. The term "Paying Agent"
or "Agent" includes any additional paying agent. The Issuer may act as its own
Paying Agent, except for the purposes of payments on account of principal on the
Securities pursuant to Section 10.10 hereof.
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Issuer shall notify the Trustee of the
name and address of any such Agent. If the Issuer fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 6.07 hereof.
The Issuer initially appoints the Trustee as the Registrar and Paying
Agent and agent for service of notices and demands in connection with the
Securities.
-36-
<PAGE> 43
Section 3.03. Execution and Authentication.
Except as otherwise specified as contemplated by Section 3.01 for
securities of any series, the Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 hereto. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Issuer shall approve the form of the Securities and
any notation, legend or endorsement thereon. Each Security shall be dated the
date of issuance and shall show the date of its authentication.
The terms and provisions contained in the form of Security annexed
hereto as Exhibit A-1 shall constitute, and is hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities issued in exchange for interests in a Global Security
pursuant to Section 3.16 hereof may be issued in the form of permanent
certificated Securities in registered form in substantially the form set forth
in Exhibit A-1 (the "Physical Securities").
Two Officers shall sign, or one Officer shall sign, and one Officer
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Securities for the Issuer by manual or
facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office or position at the time
the Trustee authenticates the Security, the Security shall nevertheless be
valid.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Securities of any series executed by the
Issuer to the Trustee for authentication, together with a Issuer Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Issuer Order shall authenticate and make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 2.01 and 3.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through (d) of the Trust Indenture Act) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 2.01, that such form has been
established in conformity with the provisions of this Indenture;
-37-
<PAGE> 44
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.01, that such terms have
been established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Issuer in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Issuer, enforceable in accordance with their terms, except to
the extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law); and
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body having
jurisdiction over the Issuer is required for the execution and delivery of such
Securities by the Issuer, except such as have been obtained (except that no
opinion need be expressed as to state securities or Blue Sky laws).
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 3.01 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 3.01 or the Issuer Order and
Opinion of Counsel otherwise required pursuant to the immediately preceding
paragraph at or prior to the time of authentication of each security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first security of such series to be issued.
If the Issuer shall establish pursuant to Section 3.01 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section and the Issuer Order with respect to the authentication and
delivery of such series, authenticate and deliver one or more global Securities
that (i) shall be in an aggregate amount equal to the aggregate principal amount
specified in such Issuer Order, (ii) shall be registered in the name of the
Common Depositary or U.S. Depositary, as the case may be, therefor or its
nominee, and (iii) shall be made available for delivery by the Trustee to such
depositary or pursuant to such depositary's instruction.
-38-
<PAGE> 45
Each depositary designated pursuant to Section 3 must, at the time of
its designation and at all times while it serves as depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
Unless otherwise provided for in the form of security, each security
shall be dated the date of its authentication.
No security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
security shall be conclusive evidence, and the only evidence, that such security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuer and Affiliates of the Issuer.
The Securities shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 and any integral multiple thereof,
the denominations in which Securities of the series shall be issuable.
Section 3.04. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Issuer may execute, and upon Issuer Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary Securities may
be in global form, representing all or a portion of the Outstanding Securities
of such series.
-39-
<PAGE> 46
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions in Section 3.05, if temporary
Securities of any series are issued, the Issuer will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation
of definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Issuer in
a Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series, the
Issuer shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a like principal amount of definitive Securities
of the same series of authorized denominations and of like tenor. Until so
exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
If temporary Securities of any series are issued in global form, any
such temporary Global Security shall, unless otherwise provided therein, be
delivered to the office of a depositary of common depositary (the "Common
Depositary") for credit to the respective accounts of the beneficial owners of
such Securities (or to such other accounts as they may direct).
Section 3.05. Transfer and Exchange.
The Issuer shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 hereof being sometimes
referred to herein as the "Security Register") in which, subject to such
reasonable regulations as the Registrar may prescribe, the Issuer shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby initially appointed Registrar for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any security of any
series at the office or agency of the Issuer in Place of Payment for that
series, the Issuer shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
-40-
<PAGE> 47
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.01, any permanent Global Security shall be
exchangeable only as provided in paragraph. If the beneficial owners of interest
in a permanent Global Security are entitled to exchange such interests for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified and as subject to the conditions
contemplated by Section 3.01, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Issuer shall deliver to the Trustee definitive Securities of that series in
aggregate principal amount equal to the principal amount of such permanent
Global Security, executed by the Issuer. On or after the earliest date on which
such interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the Common Depositary or the U.S. Depositary,
as the case may be, and in accordance with instructions given to the Trustee and
the Common Depositary or the U.S. Depositary, as the case may be (which
instructions shall be in writing but need not comply with Section 1.03 or be
accompanied by an Opinion of Counsel), as shall be specified in the Issuer Order
with respect thereto to the Trustee, as the Issuer's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same series
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered permanent Global Security, a
like aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
Global Security to be exchanged which shall be in the form of the Securities of
such series; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series selected for redemption under
Section 12.03 and ending at the close of business on the day of such mailing.
Promptly following and such exchange in part, such permanent Global Security
shall be returned by the Trustee to the Common Depositary or the U.S.
Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary referred to above. If a Security in the form specified for such
series is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of interest or Defaulted Interest, as the case may be,
such interest or Defaulted Interest will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of such
security in the form specified for such series, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent Global
Security is payable in accordance with the provision of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligation, of the Issuer, evidencing the same
debt, and entitled
-41-
<PAGE> 48
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration or transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument or transfer in form
satisfactory to the Issuer and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 12.07 not involving any transfer.
The Issuer shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 12.03 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any security so selected for redemption in whole or in
part, except the unredeemed portion of any security being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security of any series claims that the Security has been lost, destroyed or
wrongfully taken, the Issuer shall execute and upon an Issuer Order, the Trustee
shall authenticate and deliver a replacement Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding if the
Holder of such Security furnishes to the Issuer and to the Trustee evidence
reasonably acceptable to them of the ownership and the destruction, loss or
theft of such Security and an indemnity bond shall be posted by such Holder,
sufficient in the judgment of the Issuer or the Trustee, as the case may be, to
protect the Issuer, the Trustee or any Agent from any loss that any of them may
suffer if such Security is replaced. The Issuer may charge such Holder for the
Issuer's expenses in replacing such Security (including (i) expenses of the
Trustee charged to the Issuer and (ii) any tax or other governmental charge that
may be imposed) and the Trustee may charge the Issuer for the Trustee's expenses
in replacing such Security.
Every replacement Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional
-42-
<PAGE> 49
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date and
interest on such defaulted interest at the then applicable interest rate borne
by the Securities, to the extent lawful (such defaulted interest and interest
thereon herein collectively called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the Regular Record Date; and such Defaulted
Interest may be paid by the Issuer, at its election in each case, as provided in
subsection (a) or (b) below:
(a) The Issuer may elect to make payment of any Defaulted Interest to
the persons in whose names the Securities of such series (or their respective
predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Issuer shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Issuer shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as provided in this subsection (a). Not
later than the second Business Day after the Trustee receives the notice from
the Issuer referred to in the preceding sentence, the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the Issuer
in writing of such Special Record Date. In the name and at the expense of the
Issuer, the Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
-43-
<PAGE> 50
prepaid, to each Holder at its address as it appears in the Note Register, not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the persons in whose
names the Securities of such series (or their respective predecessor Securities)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following subsection (b).
(b) The Issuer may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of any series may be listed, and upon such notice as may
be required by such exchange, if, after written notice given by the Issuer to
the Trustee of the proposed payment pursuant to this subsection (b), such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the person in whose name any Security is registered in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.07 hereof) interest on
such Security and for all other purposes whatsoever, whether or not such
Security shall be overdue, and neither the Issuer, the Trustee nor any agent of
the Issuer or the Trustee shall be affected by notice to the contrary.
None of the Issuer, the Trustee or any agent of the Issuer or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form noting herein shall
prevent the Issuer or the Trustee or any agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by any U.S. Depositary (or its nominee), as a Holder, with respect to
such Security in global form or impair, as between such U.S. Depositary or
Common Depositary and owners of beneficial interests in such Security in global
form or impair, as between such U.S. Depositary or Common Depositary and owners
of beneficial interests in such Security in global form, the operation of
customary practices governing the exercise of the right of such U.S. Depositary
or Common Depositary (or its nominee) as holder of such Security in global form.
-44-
<PAGE> 51
Section 3.09. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Issuer may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly canceled by the Trustee. The
Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer or exchange, redemption or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 3.09 hereof, except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be
destroyed and certification of their destruction delivered to the Issuer unless
by an Issuer Order the Issuer shall timely direct that the canceled Securities
be returned to it. The Trustee shall provide the Issuer a list of all Securities
that have been canceled from time to time as requested by the Issuer.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.01 for
Securities of any series, interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of principal, premium, if any,
or interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be. In such event,
no interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date, Redemption Date, date established for the
payment of Defaulted Interest or Stated Maturity, as the case may be, to the
next succeeding Business Day and, with respect to any Interest Payment Date,
interest for the period from and after such Interest Payment Date shall accrue
with respect to the next succeeding Interest Payment Date.
-45-
<PAGE> 52
Section 3.12. CUSIP and CINS Numbers.
The Issuer in issuing the Securities of any series may use "CUSIP" and
"CINS"numbers (if then generally in use), and if so, the Trustee shall use the
CUSIP or CINS numbers, as the case may be, in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP or
CINS number, as the case may be, printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Issuer shall promptly notify the Trustee in writing of any
change in the CUSIP or CINS number of any type of Securities.
Section 3.13. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all money held by the Paying Agent for the payment of principal
of, premium, if any, or interest on the Securities, and shall notify the Trustee
of any default by the Issuer in making any such payment. Money held in trust by
the Paying Agent need not be segregated except as required by law and in no
event shall the Paying Agent be liable for any interest on any money received by
it hereunder. The Issuer at any time may require the Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any Event of Default, upon an
Issuer Order to the Paying Agent, require such Paying Agent to pay forthwith all
money so held by it to the Trustee and to account for any funds disbursed. Upon
making such payment, the Paying Agent shall have no further liability for the
money delivered to the Trustee.
Section 3.14. Treasury Securities.
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver, consent or notice,
Securities owned by the Issuer or an Affiliate of the Issuer shall be considered
as though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver,
consent or notice, only Securities which a Responsible Officer of the Trustee
actually knows are so owned shall be so considered. The Issuer shall notify the
Trustee, in writing, when it or any of its Affiliates repurchases or otherwise
acquires Securities, of the aggregate principal amount of such Securities so
repurchased or otherwise acquired.
Section 3.15. Deposits of Monies.
Prior to 1:00 p.m. New York City time on each Interest Payment Date,
maturity date, the Payment Date made with respect to an Offer to Purchase made
pursuant to Section 10.10 hereof, the Issuer shall have deposited with the
Paying Agent in
-46-
<PAGE> 53
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, maturity date and Payment Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, maturity date and Payment Date, as the
case may be.
Section 3.16. Book-Entry Provisions for Securities in Global Form.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Issuer, the Trustee
and any agent of the Issuer or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or nominee of such Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 3.03 hereof. In
addition, Physical Securities shall be transferred to all beneficial owners, in
exchange for their beneficial interests in Global Securities, if (i) the
Depository notifies the Issuer that it is unwilling or unable to continue as
Depository for any Global Security, or that it will cease to be a "Clearing
Agency" under the Exchange Act, and in either case a successor Depository is not
appointed by the Issuer within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a written
request from the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Issuer shall execute, and the Trustee shall authenticate and deliver, one or
more Physical Securities of like tenor and principal amount of authorized
denominations.
-47-
<PAGE> 54
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Issuer shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of like tenor of authorized denominations.
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to this Section 3.16. The Issuer shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
prior written notice to the Registrar.
ARTICLE 4
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Termination of Issuer's Obligations.
Unless pursuant to Section 3.01 provision is made for the
inapplicability of all or part of this Article 4, and except as otherwise
provided in this Section 4.01, the Issuer may terminate its obligations under
the Securities of a particular series and this Indenture if:
(a) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities of such series
that have been replaced or Securities of such series that are paid pursuant
to Section 10.01 or Securities of such series for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Issuer, as provided in Section 4.05) have been delivered to the Trustee for
cancellation and the Issuer has paid all sums payable by it hereunder other
than those that could become payable under Sections 4.06 or 6.07; or
(b) (i) the Securities series mature within [ _____ ] or all of them
are to be called for redemption within [ _____ ] under arrangements
reasonably satisfactory to the Trustee for giving the notice of redemption,
(ii) the Issuer irrevocably deposits in trust with the Trustee during such
[ _____ ] period, under the terms of an irrevocable trust agreement in form
and substance reasonably satisfactory to the
-48-
<PAGE> 55
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Securities sufficient (in the opinion of
a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay
principal, premium, if, any, and interest on the Securities of such series
to maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder other than those that could become payable under
Sections 4.06 or 6.07, (iii) no Default or Event of Default with respect to
the Securities of such series shall have occurred and be continuing on the
date of such deposit, (iv) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer or any of its Subsidiaries is a
party or by which the Issuer or any of its Subsidiaries is bound and (v)
the Issuer has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
relating to the satisfaction and discharge of this Indenture set forth
herein have been complied with.
With respect to the foregoing clause (a), the Issuer's obligations
under Section 6.07 shall survive. With respect to the foregoing clause (b), the
Issuer's obligations under Sections 3.02, 3.03, 3.05, 3.06, 3.07, 3.13, 4.04,
4.05, 4.06, 6.10, 10.01 and 10.02 hereof shall survive until the Securities are
no longer Outstanding. Thereafter, only the provisions of Sections 4.05, 4.06
and 6.07 hereof shall survive. After any such irrevocable deposit, the Trustee
upon request shall acknowledge in writing the discharge of the Issuer's
obligations under the Securities of such series and this Indenture except for
those surviving obligations specified above.
Section 4.02. Defeasance and Discharge of Indenture.
The Issuer will be deemed to have paid and will be discharged from any
and all obligations in respect of the Securities of a particular series on the
[ ___ ] day after the date of the deposit referred to in clause (a) of this
Section 4.02, and the provisions of this Indenture will no longer be in effect
with respect to the Securities of such series, and the Trustee, except as to (i)
rights of registration of transfer and exchange, (ii) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Securities of such series, (iii)
rights of Holders to receive payments of principal thereof and interest thereon,
(iv) the Issuer's obligations under Section 10.02, (v) the rights, obligations
and immunities of the Trustee hereunder and (vi) the rights of the Holders as
beneficiaries of this Indenture with respect to the property so deposited with
the Trustee payable to all or any of them; provided that the following
conditions shall have been satisfied:
(a) with reference to this Section 4.02, the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 6.09) and conveyed
all right, title and interest
-49-
<PAGE> 56
for the benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust funds
in trust, specifically pledged to the Trustee for the benefit of the
Holders as security for payment of the principal of, premium, if any, and
interest, if any, on the Securities of such series, and dedicated solely
to, the benefit of the Holders, in and to (i) money in an amount, (ii) U.S.
Government Securities that, through the payment of interest, premium, if
any, and principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment referred
to in this clause (a), money in an amount, or (iii) a combination thereof
in an amount, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee to pay and discharge, without consideration of the
reinvestment of such interest and after payment of all federal, state and
local taxes or other charges and assessments in respect thereof payable by
the Trustee, the principal of, premium, if any, and accrued interest on the
Outstanding Securities of such series at the Stated Maturity of such
principal or interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Securities to the payment of such principal, premium, if any,
and interest with respect to the Securities of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by
which the Issuer or any of its Subsidiaries is bound;
(c) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the [ ____ ] day
after such date of deposit;
(d) the Issuer shall have delivered to the Trustee (i) either (x) a
ruling directed to the Trustee received from the Internal Revenue Service
to the effect that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of the Issuer's exercise of its
option under this Section 4.02 and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised or (y) an Opinion of
Counsel to the same effect as the ruling described in clause (x) above
accompanied by a ruling to that effect published by the Internal Revenue
Service, unless there has been a change in the applicable federal income
tax law since the date of this Indenture such that a ruling from the
Internal Revenue Service is no longer required and (ii) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and (y) after
-50-
<PAGE> 57
the passage of [ ___ ] days following the deposit (except, with respect to
any trust funds for the account of any Holder who may be deemed to be an
"insider" for purposes of the Bankruptcy Law, after one year following the
deposit), the trust funds will not be subject to the effect of Section 547
of the Bankruptcy Law or Section 15 of the New York Debtor and Creditor Law
in a case commenced by or against the Issuer under either such statute, and
either (i) the trust funds will no longer remain the property of the Issuer
(and therefore will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors,
rights generally) or (ii) if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the Issuer,
(A) assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise except for the effect of Section 552(b) of the Bankruptcy Law
on interest on the trust funds accruing after the commencement of a case
under such statute and (B) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used in such case or proceeding;
(e) if the Securities of such series are then listed on a national
securities exchange, the Issuer shall have delivered to the Trustee an
Opinion of Counsel to the effect that such deposit, defeasance and
discharge will not cause the Securities of such series to be delisted; and
(f) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 4.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the [ ___ ] day (or
one year) period referred to in clause (d)(ii)(y) of this Section 4.02 none of
the Issuer's obligations under this Indenture shall be discharged. Subsequent to
the end of such [ ___ ] (or one year) period with respect to this Section 4.02,
the Issuer's obligations under Sections 3.02, 3.03, 3.05, 3.06, 3.07, 3.13,
3.16, 4.04, 4.05, 4.06, 6.07, 6.10, 10.01 and 10.02 hereof shall survive until
the Securities of such series are no longer Outstanding. Thereafter, only the
Issuer's obligations under Sections 4.05, 4.06 and 6.07 hereof shall survive. If
and when a ruling from the Internal Revenue Service or an Opinion of Counsel
referred to in clause (d)(i) of this Section 4.02 is able to be provided
specifically without regard to, and not in reliance upon, the continuance of the
Issuer's obligations under Section 10.01, the Issuer's obligations under such
Section 10.01 shall cease upon delivery to the Trustee of such ruling or Opinion
of Counsel and compliance with the other conditions precedent provided for
herein relating to the defeasance contemplated by this Section 4.02.
-51-
<PAGE> 58
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Issuer's obligations under the
Securities of such series and this Indenture except for those surviving
obligations in the immediately preceding paragraph.
Section 4.03. Defeasance of Certain Obligations.
The Issuer may omit to comply with (i) any term, provision or
condition set forth in clauses (c) and (d) of Section 8.01 and Sections 10.10
through 10.11 and Sections 10.13 through 10.14, (ii) clause (d) of Section 5.01
with respect to defaults or breaches of Sections 10.10,10.11, 10.13 and 10.14
and (iii) clauses (c) and (d) of Section 8.01, and clauses (e) and (f) of
Section 5.01 shall be deemed not to be Events of Default, in each case with
respect to the Outstanding Securities of a particular series if:
(a) with reference to this Section 4.03, the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 6.09) and conveyed
all right, title and interest to the Trustee for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged to the Trustee for the benefit of the Holders as security for
payment of the principal of, premium, if any, and interest, if any, on the
Securities of such series, and dedicated solely to, the benefit of the
Holders, in and to (i) money in an amount, (ii) U.S. Government Securities
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one day before
the due date of any payment referred to in this clause (a), money in an
amount or (iii) a combination thereof in an amount sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee to pay
and discharge, (i) the principal of, premium, if any, and interest on the
Securities Outstanding of such series at the Stated Maturity of such
principal or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to the Outstanding Securities of such series
on the day on which such Payments are due and payable in accordance with
the terms of this Indenture and such Securities; provided that the Trustee
shall have been irrevocably instructed to apply such money or the proceeds
of such U.S. Government Securities to the payment of such principal,
premium, if any, and interest with respect to the Securities;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by
which the Issuer or any of its Subsidiaries is bound;
-52-
<PAGE> 59
(c) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the [ ___ ] day
after such date of deposit;
(d) the Issuer has delivered to the Trustee an Opinion of Counsel to
the effect that (i) the creation of the defeasance trust does not violate
the Investment Company Act of 1940, (ii) the Trustee, for the benefit of
the Holders, has a valid first priority security interest in the trust
funds, (iii) the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain covenants and Events of Default and will be subject to federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit and defeasance had not occurred
and (iv) after the passage of [ ___ ] days following the deposit (except,
with respect to any trust funds for the account of any Holder who may be
deemed to be an "insider" for purposes of the Bankruptcy Law, after one
year following the deposit), the trust funds will not be subject to the
effect of Section 547 of the Bankruptcy Law or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Issuer under
either such statute, and either (A) the trust funds will no longer remain
the property of the Issuer (and therefore will not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors, rights generally) or (B) if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Issuer, (x) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise (except for the effect of Section
552(b) of the Bankruptcy Law on interest on the trust funds accruing after
the commencement of a case under such statute) and (y) the Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used in such case or proceeding;
(e) if the Securities of such series is then listed on a national
securities exchange, the Issuer shall have delivered to the Trustee an
Opinion of Counsel to the effect that such deposit, defeasance and
discharge will not cause the Securities of such series to be delisted; and
(f) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 4.03 have been complied with.
-53-
<PAGE> 60
Section 4.04. Application of Trust Money. Subject to Section 4.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Securities
deposited with it pursuant to Section 4.01, 4.02 or 4.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Securities in accordance with the Securities of a particular series and this
Indenture to the payment of principal of, premium, if any, and interest on the
Securities of such series; but such money need not be segregated from other
funds except to the extent required by law.
Section 4.05. Repayment to Issuer. Subject to Sections 4.01, 4.02,
4.03 and 6.07, the Trustee and the Paying Agent shall promptly pay to the Issuer
upon request set forth in an Officers' Certificate any excess money held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Issuer upon
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years. After payment to the Issuer,
Holders entitled to such money must look to the Issuer for payment as general
creditors, unless an applicable law designates another Person, and all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
Section 4.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Securities in accordance with Section
4.01, 4.02 or 4.03, as the case may be, by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuer's
obligations under this Indenture and the Securities of a particular series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
4.01, 4.02 or 4.03, as the case my be, until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Securities in
accordance with Section 4.01, 4.02 or 4.03, as the case may be; provided that,
if the Issuer has made any payment of principal of, premium, if any, or interest
on any Securities of such series because of the reinstatement of its
obligations, the Issuer shall be surrogated to the rights of the Holders of such
Securities of such series to receive such payment from the money or U.S.
Government Securities held by the Trustee or Paying Agent.
-54-
<PAGE> 61
ARTICLE 5
REMEDIES
Section 5.01. Events of Default.
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of the principal of, or premium, if any, on
any Security of that series when the same becomes due and payable at maturity,
upon acceleration, redemption or otherwise; provided, however, that if the
Issuer is permitted by the terms of the Securities of the applicable series to
defer the payment in question, the date on which such payment is due and payable
shall be the date on which such Issuer is required to make payment following
such deferral, by such deferral has been elected pursuant to the terms of the
Securities; or
(b) default in the payment of interest or any sinking fund payment on
any Security of that series when the same becomes due and payable, which default
continues for a period of [ ___ ] days; provided, however, that if the Issuer is
permitted by the terms of the Securities of the applicable series to defer the
payment in question, the date on which such payment is due and payable shall be
the date on which such Issuer is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(c) default in the performance or breach of the provisions of Article
Eight or the failure to make or consummate an Offer to Purchase in accordance
with Section 10.10; provided, however, that if the Issuer is permitted by the
terms of the Securities of the applicable series to defer the payment in
question, the date on which such payment is due and payable shall be the date on
which such Issuer is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities; or
(d) defaults in the performance or breach of any covenant or agreement
of the Issuer in this Indenture or under the Securities of that series (other
than defaults specified in clause (a), (b) or (c) above), which default or
breach continues (i) for a period of 30 consecutive days or (ii) in the event
such default or breach cannot be cured in such 30-day period and the Issuer is
diligently and in good faith attempting to cure such default or breach, for a
period of 60 consecutive days in the case of both clauses (i) and (ii), after
written notice by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Securities of that series then Outstanding; provided,
however, that if the Issuer is permitted by the terms of the Securities of the
applicable series to defer the payment in question, the date on which such
payment is due and payable shall be the date on which such Issuer is required to
make payment following such deferral, if such deferral has been elected pursuant
to the terms of the Securities; or
-55-
<PAGE> 62
(e) there occurs with respect to any issue or issues of Indebtedness
of the Issuer or any Restricted Subsidiary having an outstanding principal
amount of $___ million or more in the aggregate for such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created (i)
an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (ii) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; provided, however, that if the Issuer is
permitted by the terms of the Securities of the applicable series to defer the
payment in question, the date on which such payment is due and payable shall be
the date on which such Issuer is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $[ ___ ] million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Issuer or any Restricted Subsidiary and shall not be paid or discharged, and
there shall be any period of [ ___ ] consecutive days following entry of the
final judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all such
Persons to exceed $___ million during which a stay or enforcement of such final
judgement or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that if the Issuer is permitted by the terms of the
Securities of the applicable series to defer the payment in question, the date
on which such payment is due and payable shall be the date on which such Issuer
is required to make payment following such deferral, if such deferral has been
elected pursuant to the terms of the Securities; or
(g) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of the Issuer or any Restricted Subsidiary in an
involuntary case under any applicable Bankruptcy Law, (ii) appointment of a
Custodian of the Issuer or any Restricted Subsidiary or for all or substantially
all of the property and assets of the Issuer or any Restricted Subsidiary or (C)
the winding up or liquidation of the affairs of the Issuer or any Restricted
Subsidiary and, in each case, such decree or order shall remain unstayed and in
effect for a period of [ ___ ] consecutive days; provided, however, that if the
Issuer is permitted by the terms of the Securities of the applicable series to
defer the payment in question, the date on which such payment is due and payable
shall be the date on which such Issuer is required to make payment following
such deferral, if such deferral has been elected pursuant to the terms of the
Securities;
-56-
<PAGE> 63
(h) the Issuer or any Restricted Subsidiary (i) commences a voluntary
case under any applicable Bankruptcy Law, or consents to the entry of an order
for relief in an involuntary case under any Bankruptcy Law, (ii) consents to the
appointment of or taking possession by a Custodian of the Issuer or any
Restricted Subsidiary or for all or substantially all of the property and assets
of the Issuer or any Restricted Subsidiary or (iii) effects any general
assignment for the benefit of creditors; provided, however, that if the Issuer
is permitted by the terms of the Securities of the applicable series to defer
the payment in question, the date on which such payment is due and payable shall
be the date on which such Issuer is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(i) any other Event of Default provided with respect to Securities of
that series.
Section 5.02. Acceleration of Maturity, Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 5.01 hereof with respect to the Issuer) occurs and
is continuing, then the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of any series may, by written
notice to the Issuer (and to the Trustee, if such notice is given by the
Holders) may, and the Trustee upon the request of the Holders of not less than
25% in aggregate principal amount of the Outstanding Securities of that series
shall, declare the principal of, premium, if any, and accrued interest on all
Outstanding Securities of that series to be immediately due and payable and upon
any such declaration such amounts shall become immediately due and payable. If
an Event of Default specified in clause (g) or (h) of Section 5.01 hereof with
respect to the Issuer occurs and is continuing, then the principal of, premium,
if any, and accrued interest on all Outstanding Securities of that series shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder. In the event of a
declaration of acceleration because an Event of Default set forth in clause (e)
of Section 5.01 hereof has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (e) shall be
remedied or cured by the Issuer or the relevant Restricted Subsidiary or waived
by the holders of the relevant Indebtedness within 60 days after the declaration
of acceleration with respect thereto.
After an acceleration, the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of that series may, by written
notice to the Issuer and the Trustee, waive all past defaults and rescind and
annul such acceleration and its consequences if all existing Events of Default,
other than nonpayment of the principal of and accrued and unpaid interest on,
the Securities of that series that has become due solely as a result of such
acceleration, have been cured or waived and if the rescission of acceleration
would not conflict with any judgment or decree of a court of competent
jurisdiction.
-57-
<PAGE> 64
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Issuer covenants that if an Event of Default specified in Section
5.01(a), 5.01(b) or 5.01(c) (to the extent relating to a payment required by
Section 10.10) shall have occurred and be continuing, the Issuer will,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders
of Securities of any series tendered for payment pursuant to such provisions of
this Indenture, the whole amount then due and payable on Securities of that
series tendered for payment pursuant to such provisions of this Indenture for
principal, premium, if any, and interest, with interest upon the overdue
principal, premium, if any, and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest, at the rate
then borne by such Securities; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Issuer fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may, but is not
obligated under this paragraph to, institute a judicial proceeding for the
collection of the sums so due and unpaid and may, but is not obligated under
this paragraph to, prosecute such proceeding to judgment or final decree, and
may, but is not obligated under this paragraph to, enforce the same against the
Issuer or any other obligor upon such Securities and collect the moneys adjudged
or decreed to be payable in the manner provided by law out of the property of
the Issuer or any other obligor upon such Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion, but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture by such appropriate private or judicial proceedings as the Trustee
shall deem most effectual to protect and enforce such rights, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted herein, or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Issuer shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Issuer or any other obligor upon the
Securities or the property of the Issuer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
-58-
<PAGE> 65
on the Issuer for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, fees, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any Custodian, in
any such judicial proceeding, is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee as
administrative expenses associated with any such proceeding, and in the event
that the Trustee shall consent to the making of such payments directly to
Holders, any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, fees, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
-59-
<PAGE> 66
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in respect
of the Securities of any series shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid: 1.12.
(a) first, to the Trustee for amounts due under Section 6.07
applicable to such series;
(b) second, to Holders for interest accrued on the Securities of such
series, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for interest;
(c) third, to Holders for principal and premium, if any, owing under
such Securities, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities for
principal and premium, if any; and
(d) fourth, the balance, if any, to the Issuer.
The Trustee, upon prior written notice to the Issuer, may fix a Record
date and payment date for any payment to Holders pursuant to this Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b)the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of that series shall have made written request to the
Trustee to pursue the remedy;
-60-
<PAGE> 67
(c) Holders described in (b) above have offered to the Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee does not comply with the request within 60 days after
its receipt of the request and offer of indemnity; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Security to affect, disturb or prejudice the rights of any
other Holder, or to obtain or to seek to obtain priority or preference over any
other Holder or to enforce any right under this Indenture or any Security,
except in the manner provided in this Indenture and for the equal and ratable
benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive
Principal,Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive cash payment of the principal of, premium, if any, and (subject to
Section 3.07 hereof) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
respective Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Security and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Issuer, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or
-61-
<PAGE> 68
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Majority.
The Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee;
provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Security of that series or expose the Trustee to
personal liability or be determined by the Trustee in good faith as unduly
prejudicial to the rights of any Holder of Securities of such series not joining
in the giving of such direction; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past Default hereunder and its
consequences, except a Default
(a) in the payment of the principal of, or interest on any Outstanding
Security of such series or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected thereby.
-62-
<PAGE> 69
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of, premium, if any, or interest on
any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the respective Redemption
Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws .
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Issuer from paying all or any portion of the principal
of, premium, if any, or interest on the Securities of any particular series
contemplated herein or in the Securities of such series or which may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section Unconditional Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture and any other
provision of any Security of any series, the right of any Holder of any Security
of any series to receive payment of the principal of, premium, if any, and
interest on such Security on or after the respective Stated Maturities (or the
respective Redemption Dates, in the case of redemption)
-63-
<PAGE> 70
expressed in such Security, or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) During the existence of an Event of Default, the Trustee is
required to exercise such rights and powers vested in it under this Indenture
using the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.01.
-64-
<PAGE> 71
Section 6.02. Notice of Defaults.
Within [ ___ ] days after the occurrence of any Default actually known
to a Responsible Officer of the Trustee, the Trustee shall transmit by mail to
all Holders of Securities of such series in the manner and to the extent
provided in TIA Section 313(c), as their names and addresses appear in the
Security Register, notice of such Default hereunder unless such Default shall
have been cured or waived; provided, however, that, except in the case of a
Default in the payment of the principal of, premium, if any, or interest on any
Security of such series or in the case of any Default arising from the
occurrence of a Change of Control, the Trustee shall be protected in withholding
such notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution
thereof;
(c) the Trustee may consult with counsel and any advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers
-65-
<PAGE> 72
conferred upon it by this Indenture other than any liabilities arising out of
its own negligence, bad faith or willful misconduct;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, note, other evidence of indebtedness
or other paper or document unless requested in writing so to do by the Holders
of not less than a majority in aggregate principal amount of the Securities of
any series then Outstanding; provided, however, that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require indemnity satisfactory to
it against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the Issuer or,
if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer
upon demand; provided, further, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may deem
appropriate, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodian or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(h) except with respect to Section 10.01, the Trustee shall have no
duty to inquire as to the performance of the Issuer's covenants in Article Ten.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
5.01(a), 5.01(b) and 10.01 or (ii) any Default or Event of Default of which the
Trustee shall have received written notification from the Issuer or the Holders
of at least 10% in aggregate principal amount of the Securities of any series or
a Responsible Officer shall have obtained actual knowledge; and
(i) if the Trustee is acting in the capacity of Registrar and/or
Paying Agent, then the rights afforded to the Trustee under this Section 6.03
shall also be afforded to such Registrar and/or Paying Agent.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Issuer, and the Trustee
-66-
<PAGE> 73
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the Securities and perform its
obligations hereunder and that the statements made by it in a Statement of
Eligibility and Qualification on Form T-1, if any, to be supplied to the Issuer
are true and accurate subject to the qualifications set forth therein. The
Trustee shall not be accountable for the use or application by the Issuer of
Securities or the proceeds thereof.
Section 6.05. Trustee and Agents May Hold Securities; Collections;
Etc.
The Trustee, any Paying Agent, Registrar or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Securities, with the same rights it would have if it were not the Trustee,
Paying Agent, Registrar or such other agent and, subject to Section 6.08 hereof
and Sections 310 and 311 of the Trust Indenture Act, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee, Paying Agent,
Registrar or such other agent.
Section 6.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.
The Issuer covenants and agrees: (a) to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust); (b) to
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, fees, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation, fees, and the expenses and disbursements
of its counsel and of all agents and other persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct; and (c) to indemnify the Trustee
and any of its officers, directors, employees and agents and each predecessor
Trustee for, and to hold it harmless against any loss, liability or expense
(including attorneys' fees and expenses incurred in defending themselves)
incurred without negligence, bad faith or willful misconduct on its part,
arising
-67-
<PAGE> 74
out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and its duties hereunder, including enforcement of this
Section 6.07.
To secure the Issuer's payment obligations in this Section 6.07, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee in such capacity, except that held in trust to pay
principal and interest on particular Securities. Such Lien shall survive the
satisfaction and discharge of this Indenture.
The obligations of the Issuer under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture or the rejection or termination of
this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are hereby subordinated
to such senior claim. If the Trustee renders services and incurs expenses
following an Event of Default under Section 5.01(g) or (h) hereof, the parties
hereto and the Holders by their acceptance of the Securities hereby agree that
such expenses are intended to constitute expenses of administration under any
bankruptcy law.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation eligible to act as Trustee under Trust Indenture Act Sections
310(a)(1) and (2) and which shall have a combined capital and surplus of at
least [$ _________ ]. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
-68-
<PAGE> 75
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may at any time resign with respect to the Securities
of one or more series by giving written notice thereof to the Issuer at least 20
Business Days prior to the date of such proposed resignation. Upon receiving
such notice of resignation, the Issuer shall, after all monies due and owing
have been paid to the Trustee, promptly appoint a successor trustee by written
instrument executed by authority of the Board of Directors, a copy of which
shall be delivered to the resigning Trustee and a copy to the successor Trustee.
If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 20 Business Days after the giving of such notice
of resignation, the resigning Trustee may, or any Holder who has been a bona
fide Holder of a Security for at least six consecutive months immediately prior
to such date may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by an Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Issuer.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act in accordance with Section 6.08
hereof after written request therefor by the Issuer or by any Holder who
has been a bona fide Holder of a Security for at least six consecutive
months immediately prior to such date, or
(ii) the Trustee shall cease to be eligible under Section 6.09
hereof and shall fail to resign after written request therefor by the
Issuer or by any Holder who has been a bona fide Holder of a Security for
at least six consecutive months immediately prior to such date, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
-69-
<PAGE> 76
then, in any case, (x) the Issuer by a Board Resolution may remove the Trustee
with respect to all Securities, or (y) subject to Section 5.14, any Holder of
any Security who has been a bona fide Holder of a Security for at least six
consecutive months immediately prior to such date may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become disqualified
from or incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to the Securities of one or more series, the
Issuer, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any successor Trustee may be appointed with respect to the
Securities of one or all of such series and at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Issuer and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Issuer. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Issuer or the
Holders and accepted appointment in the manner hereinafter provided, the Holder
who has been a bona fide Holder of a Security of such series for at least six
consecutive months immediately prior to such date may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities of such series as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor or Additional
Trustees.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Issuer and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall
-70-
<PAGE> 77
become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Issuer or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a Trustee or a successor
with respect to the Securities of one or more (but not all) series, the Issuer,
any retiring Trustee and each Trustee or a successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each Trustee or a successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each Trustee
or a successor Trustee all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such Trustee or a successor Trustee relates, (2) if any retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of any retiring Trustee with respect tot he
Securities of that or those series as to which any retiring Trustee is not
retiring shall continue to be vested in any retiring Trustee, and (3) shall add
to or change any of the provision of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental Indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such Trustee or a successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of any retiring Trustee with respect to the Securities
of that or those series to which the appointment of such Trustee or a successor
Trustee relates; but, on request of the Issuer or any Trustee or a successor
Trustee, any such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of any such Trustee or successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Issuer shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
-71-
<PAGE> 78
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders, by
mailing a notice to such Holders at their addresses as they shall appear on the
Security Register. If the acceptance of appointment is substantially
contemporaneous with the resignation, removal, disqualification or incapacity to
act, then the notice called for by the preceding sentence may be combined with
the notice called for by Section 6.10 hereof. If the Issuer fails to give such
notice within 10 days after acceptance of appointment by the successor Trustee,
the successor Trustee shall cause such notice to be given at the expense of the
Issuer.
Section 6.12. Merger, Conversion, Amalgamation, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided such corporation shall be
eligible under this Article Six to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture, any of the
Securities shall have been authenticated but not delivered by the Trustee then
in office, any such successor to the Trustee may adopt such authentication of
any predecessor Trustee and deliver such Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee under this Section 6.12 may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee. In all such cases, such certificate of authentication
shall be of full force and effect and shall be deemed to have been duly
authenticated in accordance with this Indenture.
Section 6.13. Preferential Collection of Claims Against Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
-72-
<PAGE> 79
Section 6.14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of, and subject to the
direction of, the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.03, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Issuer and shall at all times be a corporation organized and
doing business under the laws of the United States of America, and State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than [$ _______ ] and
subject to supervision or examination by federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Issuer. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Issuer. Upon receiving such a notice or
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Issuer and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the
-73-
<PAGE> 80
security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Issuer agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
lieu of the Trustee's certificate of authentication, an alternate certificate of
authentication in form of Exhibit C attached hereto.
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
Section 7.01. Preservation of Information; Issuer To Furnish Trustee
Names and Addresses of Holders.
(a) The Trustee shall preserve the names and addresses of the Holders
and otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Issuer shall furnish or cause the Registrar to furnish to the
Trustee before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders.
Neither the Issuer nor the Trustee shall be under any responsibility with regard
to the accuracy of such list.
(b) The Issuer will furnish or cause to be furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Issuer of any such request,
a list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Subsection 7.01(b).
-74-
<PAGE> 81
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Securities pursuant to Section 312(b)
of the Trust Indenture Act. The Issuer and the Trustee and any and all other
persons intended to be beneficiaries of this Indenture shall have the protection
afforded by Section 312(c) of the Trust Indenture Act.
Section 7.03. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May
15 following the date of this Indenture, the Trustee shall mail to all Holders,
as their names and addresses appear in the Security Register, a brief report
dated as of such May 15, in accordance with, and to the extent required under
Section 313 of the Trust Indenture Act. At the time of its mailing to Holders, a
copy of each such report shall be filed by the Trustee with the Issuer, the SEC
and with each stock exchange on which any Securities are listed. The Issuer
shall notify the Trustee when the Securities are listed on any stock exchange.
Section 7.04. Reports by Issuer.
The Issuer shall:
(a) file with the Trustee, within 15 days after the Issuer is required
to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not
required to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the SEC, in accordance with
rules and regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Issuer with
the conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations;
(c) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Issuer
-75-
<PAGE> 82
pursuant to subsections (a) and (b) of this Section as may be required by rules
and regulations prescribed from time to time by the SEC; and
(d) furnish to the Trustee, on or before May 1 of each year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For purposes
of this paragraph, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture. Such
certificate need not comply with Section 1.04.
Notwithstanding anything to the contrary herein, the Trustee shall
have no duty to review information provided pursuant to subsection (a) of this
Section 7.04 for purposes of determining compliance with any provisions of this
Indenture.
ARTICLE 8
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Issuer May Consolidate, etc., Only on Certain Terms.
The Issuer will not consolidate with, or merge with or into or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to any Person or permit any
Person to merge with or into the Issuer, unless:
(a) the Issuer shall be the continuing Person, or the Person (if other
than the Issuer) formed by such consolidation or into which the Issuer is merged
or that acquired or leased such property and assets of the Issuer shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof, and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Issuer the Securities and this Indenture;
(b) immediately after giving effect to such transaction or series of
related transaction, no Default or Event of Default shall have occurred and be
continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Issuer, or any Person becoming the successor obligor of the
Securities, as the case may be, could Incur at least $1.00 of Indebtedness under
clause (i) of Section 10.11(a) hereof; provided, however, that this clause (c)
shall not apply to a consolidation or merger with or into a Wholly Owned
Restricted Subsidiary with a positive net worth, provided that in connection
with any such merger or consolidation, no consideration (except Capital Stock
-76-
<PAGE> 83
(other than Redeemable Stock) in the surviving Person or the Issuer (or a Person
that owns directly or indirectly all of the Capital Stock of the surviving
Person or the Issuer immediately following such transaction) or cash paid to
satisfy dissenter or appraisal rights; provided that such rights are exercised
with respect to no more than 5% of the outstanding Capital Stock of the Issuer
or other Person) shall be issued or distributed to the stockholders of the
Issuer; and
(d) the Issuer delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with clause (c)
above) and an Opinion of Counsel, in each case stating that such consolidation,
merger or transfer and such supplemental indenture comply with this provision
and that all conditions precedent provided for herein relating to such
transaction have been complied with; provided, however, that clauses (b) and (c)
above do not apply if, in the good faith determination of the Board of Directors
of the Issuer, whose determination shall be evidenced by a Board Resolution, the
principal purpose of such transaction is to change the state of incorporation of
the Issuer; and provided further that any such transaction shall not have as one
of its purposes the evasion of the foregoing limitations.
Section 8.02. Successor Substituted.
Upon any consolidation or merger or any sale, conveyance, lease,
transfer or other disposition of all or substantially all of the assets of the
Issuer in accordance with the foregoing in which the Issuer is not the
continuing corporation, the successor corporation formed by such a consolidation
or into which the Issuer is merged or to which such transfer is made will
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture and the Securities with the same effect as if
such successor corporation had been named as the Issuer herein and therein; and
thereafter, except in the case of (i) any consolidation or merger with, or (ii)
any sale, conveyance, transfer, lease or other disposition to a Restricted
Subsidiary, the Issuer shall be discharged from all obligations and covenants
under this Indenture and the Securities.
For all purposes of this Indenture and the Securities (including the
provision of this Article Eight and Section 10.11), Subsidiaries of any
successor entity will, upon such transaction or series of related transactions,
become Restricted Subsidiaries unless designated an Unrestricted Subsidiary in
accordance with the provisions of this Indenture and all Indebtedness, and all
Liens on property or assets, of the Issuer and the Restricted Subsidiaries in
existence immediately prior to such transaction or series of related
transactions will be deemed to have been Incurred upon such transaction or
series of related transactions.
-77-
<PAGE> 84
ARTICLE 9
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers Without
Consent of Holders.
Without notice to or the consent of any Holders of a series of
Securities, the Issuer, when authorized by a Resolution of the Board of
Directors, and the Trustee, at any time and from time to time, may amend, waive,
modify or supplement this Indenture or the Securities of any particular series
for the following specified purposes:
(a) to evidence the succession of another person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer herein and
in the Securities; or
(b) to add to the covenants of the Issuer for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of the series), or to
surrender any right or power herein conferred upon the Issuer;
(c) to add any additional Events of Default with respect to all or any
series of Securities; or
(d) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons; or
(e) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental Indenture which is entitled to the benefit of such provision;
or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 3.01; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a Trustee or a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide
-78-
<PAGE> 85
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11; or
(i) to cure any ambiguity, to correct or supplement any provision
herein, in the Securities which may be defective or inconsistent with any other
provision herein or to make any other provisions with respect to matters or
questions arising under this Indenture or the Securities; provided, however,
that, in each case, such provisions shall not materially adversely affect the
legal rights of the Holders;
(j) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act, as
contemplated by Section 9.05 hereof or otherwise;
(k) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the Holders as
security for the payment and performance of the Indenture Obligations;
(l) to make any other change that does not materially adversely affect
the legal rights of any Holder; or
(m) to add Guarantors with respect to the Securities;
provided, however, that the Issuer has delivered to the Trustee an Opinion of
Counsel stating that such amendment, waiver, modification or supplement does not
materially adversely affect the legal rights of any Holder.
Upon request of the Issuer, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in (and subject to the last sentence
of) Section 9.03, the Trustee shall join with the Issuer in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
Section 9.02. Supplemental Indentures, Agreements and Waivers
With Consent of Holders.
With the written consent of the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities of each series
affected by such supplemental indenture, agreement or waiver delivered to the
Issuer and the Trustee, the Issuer when authorized by a Board Resolution,
together with the Trustee, may amend, waive, modify or supplement any other
provision of this Indenture or the Securities of such series; provided, however,
that no such amendment, waiver, modification or supplement may, without the
written consent of the Holder of each Outstanding Security affected thereby:
-79-
<PAGE> 86
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security,
(b) reduce the principal of, or premium, if any, or interest on, any
Security including an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.02,
(c) change the place, time or currency of payment of principal of, or
premium, if any, or interest on, any Security,
(d) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption, on or
after the Redemption Date) of any Security,
(e) reduce the above-stated percentage of Outstanding Securities of
any series the consent of whose Holders is necessary to modify or amend this
Indenture,
(f) waive a default in the payment of principal of, premium, if any,
or interest on the Securities, or
(g) reduce the percentage or aggregate principal amount of Outstanding
Securities of any series the consent of whose Holders is necessary for waiver of
compliance with certain provisions of this Indenture or for waiver of certain
defaults.
(h) change the redemption provisions (including Article Eleven) hereof
in a manner adverse to such Holder; or
(i) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section, or the deletion of this proviso, in accordance with the
requirements of Sections 6.11(b) and 9.01.
Upon the written request of the Issuer accompanied by a copy of a
Board Resolution of the Board of Directors authorizing the execution of any such
supplemental indenture or other instrument effecting an amendment, waiver,
modification or supplement authorized by this Section 9.02, and an Officers'
Certificate and an Opinion of Counsel upon which the Trustee shall be fully
protected in relying as conclusive evidence that such amendment, waiver,
modification or supplement is permitted by this Indenture and upon the filing
with the
-80-
<PAGE> 87
Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall
join with the Issuer in the execution of such supplemental indenture or other
instrument.
A supplemental indenture which changes or eliminates any covenant or
other provisions of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or other
instrument or amendment, modification, waiver or supplement, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements and
Waivers.
In executing, or accepting the additional trusts created by, any
supplemental indenture, instrument or amendment, modification, waiver or
supplement permitted by this Article Nine or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate from each obligor under the Securities of any series entering into
such supplemental indenture, instrument or amendment, modification, waiver or
supplement, each stating that the execution of such supplemental indenture,
instrument or amendment, modification, waiver or supplement (a) is authorized or
permitted by this Indenture and (b) does not violate the provisions of any
agreement or instrument evidencing any other Indebtedness of the Issuer or any
other Subsidiary of the Issuer. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture, instrument or amendment
modification, waiver or supplement which affects the Trustee's own rights,
duties or immunities under this Indenture, the Securities or otherwise.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture, instrument or
amendment, modification, waiver or supplement under this Article Nine, this
Indenture or the Securities of any series shall be modified in accordance
therewith, and such supplemental indenture, instrument, amendment, waiver or
supplement shall form a part of this Indenture or the Securities of such series,
as the case may be, for all purposes; and every Holder of Securities of such
series theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby and in the event of any conflicts between such supplemental
indenture and this Indenture, the supplemental indenture will control.
-81-
<PAGE> 88
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall con-form to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture, instrument, amendment, modification,
waiver or supplement pursuant to this Article may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, instrument, amendment,
modification, waiver or supplement. If the Issuer shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture,
instrument, amendment, modification, waiver or supplement may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee upon an
Issuer Order in exchange for Outstanding Securities of such series.
Section 9.07. Record Date.
The Issuer may, but shall not be obligated to, fix, a Record date for
the purpose of determining the Holders entitled to consent to any supplemental
indenture, instrument, amendment, modification, waiver or supplement, and shall
promptly notify the Trustee of any such Record date. If a Record date is fixed
those Persons who were Holders at such Record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
supplemental indenture, instrument, amendment, modification, waiver or
supplement or to revoke any consent previously given, whether or not such
persons continue to be Holders after such Record date. No such consent shall be
valid or effective for more than 90 days after such Record date.
Section 9.08 Revocation and Effect of Consents.
Until a supplemental indenture , instrument, amendment, modification,
waiver or supplement becomes effective, a consent to it by a Holder of a
Security is a continuing consent by 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 a 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 if the Trustee receives the notice
of revocation before the date a supplement indenture becomes effective. A
supplemental Indenture, instrument, amendment, modification, waiver or
supplement shall become effective in accordance with its terms and thereafter
bind every Holder.
-82-
<PAGE> 89
ARTICLE 10
COVENANTS
Section 10.01 Payment of Principal, Premium and Interest.
The Issuer shall duly and punctually pay the principal of, premium, if
any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 10.02 Maintenance of Office or Agency.
The Issuer shall maintain in the Borough of Manhattan in The City of
New York, State 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 Issuer in respect of the Securities and this Indenture may be served. [
___________ ], will be such office or agency of the Issuer, unless the Issuer
shall designate and maintain some other office or agency for one or more of such
purposes. The Issuer will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Issuer hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designation; provided, however,
that no such designation or rescission shall in any manner relieve the Issuer of
its obligation to maintain an office or agency in The City of New York, State of
New York for such purposes. The Issuer will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
Section 10.03. Money for Security Payments To Be Held In Trust.
If the Issuer shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of any series of Securities, segregate and hold in trust for the benefit of
the Trustee or the Holders entitled thereto a sum sufficient to pay the
principal, premium, if any, or interest so becoming due until such sums shall be
paid to such persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act and of any
Default by the
-83-
<PAGE> 90
Issuer (or any other obligor upon the Securities of that series) in the making
of any payment of principal, premium, if any, or interest on the Securities of
that series.
Whenever the Issuer shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal of,
premium, if any, or interest on, any Securities of that series, deposit with a
Paying Agent a sum in same day funds sufficient to pay the principal, premium,
if any, or interest so becoming due, such sum to be held in trust for the
benefit of the Holders entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Issuer will promptly notify the
Trustee of such action or any failure so to act.
The Issuer will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent will agree with the Trustee, subject to the provisions
of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities of that series in trust for the
benefit of the Holders entitled thereto until such sums shall be paid to such
Holders or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Issuer (or any other
obligor upon the Securities of that series) in the making of any payment of
principal of, premium, if any, or interest on the Securities of that series;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities of
such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Issuer or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Issuer or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of, premium, if any, or
interest on any
-84-
<PAGE> 91
Security of any series and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Issuer upon receipt of an Issuer Request therefor or (if then held by the
Issuer) will be discharged from such trust; and the Holder of such Security of
any series will thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Issuer as
trustee thereof, will thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, at the option of the Issuer in
The New York Times or The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Issuer.
Section 10.04. Corporate Existence.
Subject to Article Eight, the Issuer shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate or
partnership existence, rights (charter and statutory), licenses and franchises
of the Issuer and each of the Restricted Subsidiaries; provided, however, that
the Issuer will not be required to preserve any such right, license or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuer and the Restricted
Subsidiaries as a whole and that the loss thereof is not adverse in any material
respect to the Holders; provided, further, that the foregoing will not prohibit
a sale, transfer or conveyance of a Subsidiary of the Issuer or any of its
assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Issuer shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Issuer or any of its
Restricted Subsidiaries or (ii) upon the income, profits or property of the
Issuer or any of the Restricted Subsidiaries and (b) all material lawful claims
for labor, materials and supplies, which, if unpaid, could reasonably be
expected to become a Lien upon the property of the Issuer or any of the
Restricted Subsidiaries; provided, however, that the Issuer will not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim (x) whose amount, applicability or validity is being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted or (y) if the failure to so pay, discharge or cause to be paid or
discharged could not reasonably be expected to have a Material Adverse Effect
(as defined in the Purchase Agreement).
-85-
<PAGE> 92
Section 10.06. Maintenance of Properties.
The Issuer shall cause all material properties owned by the Issuer or
any of the Restricted Subsidiaries or used or held for use in the conduct of
their respective businesses to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 10.06
will prevent the Issuer from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the Issuer, desirable
in the conduct of its business or the business of any of the Restricted
Subsidiaries and is not disadvantageous in any material respect to the Holders.
Section 10.07. Insurance.
The Issuer shall at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Issuer in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually and customarily so insured by corporations and partnerships similarly
situated and owning like properties.
Section 10.08. Books and Records.
The Issuer shall keep proper books of Record and account, in which
full and correct entries will be made of all financial transactions and the
assets and business of the Issuer and each Restricted Subsidiary (including
Acquired Indebtedness) in material compliance with GAAP.
Section 10.09. Compliance Certificates and Opinions.
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture, the Issuer will furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenants compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents, certificates and/or opinions is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished. On at least an annual
basis, the Issuer will furnish to the Trustee an Officer's Certificate pursuant
to Section 314(a)(4) of the TIA.
-86-
<PAGE> 93
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.10. Repurchase of Securities Upon a Change of Control.
The Issuer shall commence, within 30 days after the occurrence of a
Change of Control, an Offer to Purchase for all Securities then Outstanding in
whole or in part in integral multiples of $1,000, at a purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest to the
Payment Date.
Section 10.11. Limitation on Indebtedness.
(a) The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) other
than Permitted Indebtedness; provided that the Issuer may Incur Indebtedness, in
addition to Permitted Indebtedness, if, after giving effect to the Incurrence of
such Indebtedness and the receipt and application of the proceeds thereof, (i)
the Consolidated Leverage Ratio would be less than or equal to ___ to 1, for
Indebtedness Incurred on or prior to ___________, or less than or equal to ___
to 1, for Indebtedness Incurred thereafter and (ii) no Default or Event of
Default shall have occurred and be continuing or occur as a consequence of the
actions set forth in this Section 10.11.
(b) Notwithstanding any other provision of this Section 10.11, the
maximum amount of Indebtedness that the Issuer or a Restricted Subsidiary may
Incur pursuant to this Section 10.11 shall not be deemed to be exceeded due
solely to the result of fluctuations in the exchange rates of currencies.
-87-
<PAGE> 94
(c) For purposes of determining any particular amount of Indebtedness
under this Section 10.11, Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of
determining compliance with this Section 10.11, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the definition of "Indebtedness," the Issuer, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
Section 10.12 Statement by Officers as to Default.
The Issuer will deliver to the Trustee, within 90 days after the end
of each fiscal year of the Issuer ending after the date hereof, a written
statement signed by the chairman or a chief executive officer, the principal
financial officer or principal accounting officer of the Issuer (or its general
partner), stating (i) that a review of the activities of the Issuer and its
Restricted Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing officers with a view to determining whether the
Issuer has kept, observed, performed and fulfilled its obligations under this
Indenture, and (ii) that, to the knowledge of each officer signing such
certificate, the Issuer has kept, observed, performed and fulfilled each and
every covenant and condition contained in this Indenture and is not in Default
in the performance or observance of any of the terms, provisions, conditions and
covenants hereof (or, if a Default shall have occurred, describing all such
Defaults of which such officers may have knowledge, their status and what action
the Issuer is taking or proposes to take with respect thereto). When any Default
under this Indenture has occurred and is continuing, or if the Trustee or any
Holder or the trustee for or the holder of any other evidence of Indebtedness of
the Issuer or any Restricted Subsidiary gives any notice or takes any other
action with respect to a claimed Default (other than with respect to
Indebtedness (other than Indebtedness evidenced by the Securities) in the
principal amount of less than [$____________], the Issuer will promptly notify
the Trustee of such Default, notice or action and will deliver to the Trustee by
registered or certified mail or by telegram, or facsimile transmission followed
by hard copy by registered or certified mail an Officers' Certificate specifying
such event, notice or other action within five Business Days after the Issuer
becomes aware of such occurrence and what action the Issuer is taking or
proposes to take with respect thereto.
Section 10.13. SEC Reports and Reports to Holders.
(a) So long as the Securities remain outstanding, the Issuer shall
cause its annual report to shareholders and any other financial reports
furnished by it to shareholders generally, to be mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Security
Registrar in each case at the time of such mailing or furnishing
-88-
<PAGE> 95
to shareholders. If the Issuer is not required to furnish annual reports to its
shareholders pursuant to the Exchange Act, the Issuer shall cause its financial
statements, including any notes thereto and, with respect to annual reports, an
auditors' report by an accounting firm of established national reputation and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," to be so filed with the Trustee and mailed to the Holders within 90
days after the end of each of the Issuer's fiscal years and within 45 days after
the end of each of the first three quarters of each fiscal year.
(b) The Issuer shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Issuer may be
required to deliver to the Holders under this Section 10.13.
Section 10.14. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.
The Issuer will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Issuer which is pari passu in
right of payment with, or subordinate in right of payment to, the Securities of
any particular series ("Guaranteed Indebtedness"), unless:
(i) such Restricted Subsidiary simultaneously executes and delivers
a supplemental indenture to this Indenture providing for a Guarantee (a
"Subsidiary Guarantee") of payment of the Securities of such series by such
Restricted Subsidiary and
(ii) such Restricted Subsidiary waives, and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Issuer or any other Restricted Subsidiary as a result of any payment by
such Restricted Subsidiary under its Subsidiary Guarantee;
provided that this paragraph shall not be applicable to (x) any Guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or (y) any Guarantee of any Restricted
Subsidiary of Indebtedness Incurred under Credit Facilities or Vender Credit
Facilities pursuant to clause (ix) of the definition of "Permitted
Indebtedness." If the Guaranteed Indebtedness is (A) pari passu in right of
payment with the Securities of such series, then the Guarantee of such
Guaranteed Indebtedness shall be pari passu in right of payment with, or
subordinated in right of payment to, the Subsidiary Guarantee or (B)
subordinated in right of payment to the Securities of such series, then the
Guarantee of such Guaranteed Indebtedness shall be
-89-
<PAGE> 96
subordinated in right of payment to the Subsidiary Guarantee at least to the
extent that the Guaranteed Indebtedness is subordinated in right of payment to
the Securities of such series.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Issuer, of all of the Issuer's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights or registration of transfer or exchange of Securities of any
particular series herein expressly provided for) and the Trustee, on written
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either (i) all Securities of any particular series theretofore
authenticated and delivered (other than (x) Securities of any particular series
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 3.06 hereof and (y) Securities of any particular series
for whose payment money has theretofore been irrevocably deposited or caused to
be deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancellation; or (ii) all
such Securities of any particular series not theretofore delivered to the
Trustee for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be deposited with the Trustee in trust an
amount of money in dollars sufficient to pay and discharge the entire
Indebtedness on such issue of Securities of any particular series not
theretofore delivered to the Trustee for cancellation, for the principal of,
premium, if any, and interest to the date of such deposit or maturity date of
redemption; and
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer (other than amounts that could become payable under
Section 4.06 or 6.07); and
-90-
<PAGE> 97
(c) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with; provided, that such Opinion of Counsel may rely, as to
matters of fact, upon an Officers' Certificate.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Sections 4.06 and 6.07 and, if
money shall have been deposited with the Trustee pursuant to subclause (a)(ii)
of this Section 11.01, the obligations of the Trustee under Section 11.02 and
the last paragraph of Section 10.03 shall survive.
Section 11.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such money has been
deposited with the Trustee.
ARTICLE 12
REDEMPTION
Section 12.01. Right of Redemption; Mandatory Redemption. Except as
otherwise specified as contemplated by Section 3.01 for Securities of any
series, the Securities will be redeemable, at the Issuer's option, in whole or
in part, at any time or from time to time, on or after [___________] and prior
to maturity, upon not less than [__] nor more than [__] days' prior notice
mailed by first-class mail to each Holder's last address, as it appears in the
Security Register, at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of Record on the relevant Regular Record Date
that is prior to the Redemption Date to receive interest due on an Interest
Payment Date), if redeemed during the 12 month period commencing [________] of
the years set forth below:
-91-
<PAGE> 98
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
20__.................... [_______%]
20__.................... [_______%]
20__.................... [_______%]
20__ and thereafter..... [_______%]
</TABLE>
In addition, at any time or from time to time on or prior to [_____________],
the Issuer may, other than in any circumstances resulting in a Change of
Control, redeem, at its option, up to [____%] of the aggregate principal amount
of the Securities of any particular series with the proceeds of one or more
additional Public Equity Offerings or Strategic Equity Investments resulting in
aggregate gross proceeds to the Issuer of at least [_________], at any time or
from time to time in part, at a Redemption Price (expressed as a percentage of
principal amount) of [____%], plus accrued and unpaid interest to the Redemption
Date (subject to the right of Holders of Record on the relevant Record date that
is prior to the Redemption Date to receive interest due on an Interest Payment
Date); provided that at least [____%] of the aggregate principal amount of
Securities of any particular series originally issued remain outstanding after
each such redemption. Any such redemption shall be made within [____%] days
after the consummation of such Public Equity Offering or Strategic Equity
Investment upon not less than [__] nor more than [__] days' prior notice.
Section 12.02. Notice to the Trustee.
If the Issuer elects to redeem any Securities of any particular series
pursuant to [Paragraph 3], it shall notify the Trustee of the Redemption Date
and principal amount of Securities of such series to be redeemed.
The Issuer shall notify the Trustee of any redemption at least [___]
days before the Redemption Date by an Officers' Certificate, stating that such
redemption will comply with the provisions hereof and of the Securities of such
series.
Section 12.03. Selection of Securities to be Redeemed.
In the event that less than all of the Securities are to be redeemed
at any time, selection of such Securities for redemption will be made by the
Trustee in compliance with any applicable requirements of the principal national
securities exchange, if any, on which such Securities are listed or, if such
Securities are not then listed on a national securities exchange (or if such
Securities are so listed but the exchange does not impose requirements
-92-
<PAGE> 99
with respect to the selection of debt securities for redemption), on a pro rata
basis, by lot or by such method as the Trustee in its sole discretion shall deem
fair and appropriate; provided, however, that no Securities of a principal
amount of $1,000 or less shall be redeemed in part.
The Trustee shall promptly notify the Issuer and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 12.04. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than [__] nor more than [__] days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at the address of
such Holder appearing in the Security Register maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed
and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(c) that, unless the Issuer defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Securities
is to receive payment of the Redemption Price plus unpaid interest on such
Securities through the Redemption Date, upon surrender to the Paying Agent of
such Securities redeemed;
(d) if any Security is to be redeemed in part, the portion of the
principal amount at maturity (equal to $1,000 or any integral multiple thereof,
the denominations in which Securities of the series shall be issuable) of such
Security to be redeemed and that on and after the Redemption Date, upon
surrender for cancellation of such Security to the Paying Agent, a new Security
or Securities in the aggregate principal amount at maturity equal to the
unredeemed portion thereof will be issued without charge to the Holder of such
Security;
-93-
<PAGE> 100
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of the
Paying Agent; and
(f) that the redemption is for a sinking fund, if such is the case;
(g) the CUSIP or CINS number, if any, relating to such Securities.
(h) unless otherwise provided as to a particular series of Securities,
if at the time of publication or mailing of any notice of redemption the Issuer
shall not have deposited with the Trustee or Paying Agent and/or irrevocably
directed the Trustee or Paying Agent to apply, from money held by it available
to be used for the redemption of Securities, an amount in cash sufficient to
redeem all of the Securities called for redemption, including accrued interest
to the Redemption Date, such notice shall state that it is subject to the
receipt of the redemption moneys by the Trustee or Paying Agent before the
Redemption Date (unless such redemption is mandatory) and such notice shall be
of no effect unless moneys are so receive before such date.
Notice of redemption of Securities to be redeemed at the election of
the Issuer shall be given by the Issuer or, at the Issuer's written request, by
the Trustee in the name and at the expense of the Issuer.
Section 12.05. 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 called for redemption shall be
paid at the Redemption Price plus accrued interest, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such Redemption
Date will be payable on the relevant Interest Payment Dates to the Holders of
Record at the close of business on the relevant Record Dates referred to in the
Securities.
Section 12.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Issuer shall deposit with the
Paying Agent an amount of money in same day funds sufficient to pay the
Redemption Price of, and any accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Issuer to the Trustee for cancellation.
If the Issuer complies with the preceding paragraph, then, unless the
Issuer defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed
-94-
<PAGE> 101
will cease to accrue on and after the applicable Redemption Date, whether or not
such Securities are presented for payment, and the Holders of such Securities
shall have no further rights with respect to such Securities except for the
right to receive the Redemption Price plus unpaid interest on the Securities
through the Redemption Date, upon surrender of such Securities. If any Security
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, and, to the extent lawful, accrued
interest thereon shall, until paid, bear interest from the Redemption Date at
the rate provided in the Securities.
Section 12.07. Securities Redeemed in Part.
Upon surrender to the Paying Agent of a Security which is to be
redeemed in part, the Issuer shall execute and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed.
ARTICLE 13
SINKING FUNDS
Section 13.01. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 3.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "Mandatory Sinking
Fund Payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "Optional
Sinking Fund Payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to redemption as
provided in Section 13.02. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 13.02. Satisfaction of Sinking Fund Payments with
Securities.
The Issuer (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which
-95-
<PAGE> 102
have been (i) previously canceled pursuant to Section 3.09 or delivered for
cancellation or (ii) redeemed either at the election of the Issuer pursuant to
the terms of such Securities or through the application of permitted Optional
Sinking Fund Payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any Mandatory Sinking Fund Payment with
respect to the Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series; provided
that such Securities have not been previously so credited. Such Securities shall
be received and credited at the principal amount for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such Mandatory Sinking Fund
Payment shall be reduced accordingly.
Section 13.03. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Issuer will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Article Twelve and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Article Twelve and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Issuer in the manner provided in Article Twelve. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Article Twelve.
[The rest of this page intentionally left blank.]
-96-
<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first written above.
ISSUER:
CAPROCK COMMUNICATIONS CORP.
By:
--------------------------------------------
Name:
Title:
TRUSTEE:
[ ___________ ]
By:
--------------------------------------------
Name:
Title:
<PAGE> 104
EXHIBIT A-1
FORM OF SECURITY
CAPROCK COMMUNICATIONS CORP.
______ SENIOR SECURITIES DUE [______], SERIES [___]
CUSIP No.
No. [________]
CAPROCK COMMUNICATIONS CORP., a corporation incorporated under the
laws of the State of Texas ("Issuer," which term includes any successor Person
under the Indenture hereinafter referred to) for value received, hereby promises
to pay to _______________ or registered assigns, the principal sum of
_______________ Dollars on [_______], at the office or agency of the Issuer
referred to below, and to pay interest thereon on [_______], and [_______],
(each an "Interest Payment Date"), of each year, commencing on [_______],
accruing from [_______], or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of [_____%], per annum,
until the principal hereof is paid or duly provided for. Interest shall be
computed on the basis of a [_______]-day year of [_______]-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Security (or one or
more predecessor Securities) is registered at the close of business on the
[_______], and [_______], (each a "Regular Record Date"), whether or not a
Business Day, as the case may be, next preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date and may be paid to the Person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee, notice of which shall be given to Holders of Securities not less
than [__] days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency
A-1
<PAGE> 105
of the Issuer as may be maintained for such purpose, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Issuer by check mailed to the address of the
person entitled thereto as such address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
[Remainder of Page Intentionally Left Blank.]
A-2
<PAGE> 106
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed.
Dated: CAPROCK COMMUNICATIONS CORP.
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
A-3
<PAGE> 107
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the [_______%], Senior Securities due [_______], Series
[_], referred to in the within-mentioned Indenture.
[_____________________________],
[_____________________________]
By:
--------------------------
Authorized Signatory
<PAGE> 108
REVERSE OF SECURITY
1. Indenture. This Security is a duly authorized issue of Securities
of the Issuer designated as the [_____%] Senior Securities due ___, Series __
(herein called the "Securities"). The Securities are limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount to [$_______], which may be issued under an indenture (herein called the
"Indenture") dated as of ___ , by and among the Issuer and Chase Manhattan Trust
Company, National Association, as trustee (herein called the "Trustee," which
term includes any successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Issuer, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
All capitalized terms used in this Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Redemption. The Securities will be redeemable, at the option of the
Issuer, in whole or in part, on or after [_________] upon not less than [___]
nor more than [___] days' written notice at the redemption prices (expressed as
percentages of principal amount at maturity) set forth below, plus accrued and
unpaid interest thereon, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on [_________] of each of the years
indicated below:
<PAGE> 109
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
20__ ............................................. [_______%]
20__ ............................................. [_______%]
20__ ............................................. [_______%]
20__ and thereafter .............................. [_______%]
</TABLE>
In addition, at any time or from time to time on or prior to
[_______], the Issuer may, other than in any circumstances resulting in a Change
of Control, redeem, at its option, up to [__%] of the aggregate principal amount
of the Securities with the proceeds of one or more additional Public Equity
Offerings or Strategic Equity Investments resulting in aggregate gross proceeds
to the Issuer of at least [_________], at any time or from time to time in part,
at a Redemption Price (expressed as a percentage of principal amount) of [____],
plus accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of Record on the relevant Record date that is prior to the Redemption
Date to receive interest due on an Interest Payment Date); provided that at
least [____] of the aggregate principal amount of Securities originally issued
remain outstanding after each such redemption. Any such redemption shall be made
within [__] days after the consummation of such Public Equity Offering or
Strategic Equity Investment upon not less than [__] nor more than [__] days'
prior notice.
3. Offers to Purchase. Section 10.10 of the Indenture provides that
upon the occurrence of a Change of Control and following certain Asset Sales,
and subject to certain conditions and limitations contained therein, the Issuer
shall make an offer to purchase all or a portion of the Securities in accordance
with the procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
5. Defeasance. The Indenture contains provisions (which provisions
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Issuer on this Security and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Issuer with certain conditions set forth therein.
6. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and
-2-
<PAGE> 110
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of the Securities at the
time Outstanding. The Indenture also contains provisions permitting the Holders
of specified percentages of aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past Defaults under the Indenture and this Security and their consequences. Any
such consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.
7. Denominations, Transfer and Exchange. The Securities are issuable
only in registered form without coupons in denominations of $1,000 principal
amount at maturity and any integral multiple thereof, the denominations in which
Securities of the series shall be issuable. As provided in the Indenture and
subject to certain limitations therein set forth, the Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the Security
Register of the Issuer, upon surrender of this Security for registration of
transfer at the office or agency of the Issuer maintained for such purpose in
the Borough of Manhattan in The City of New York, State of New York, or at such
other office or agency of the Issuer as may be maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Issuer may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due presentment
of this Security for registration of transfer, the Issuer, the Trustee and any
agent of the Issuer or the Trustee may treat the person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this
Security shall be overdue, and neither the Issuer, the Trustee nor any agent
shall be affected by notice to the contrary.
-3-
<PAGE> 111
9. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Issuer will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
CapRock Communications Corp., 15601 Dallas Parkway, Suite 700, Dallas, Texas
75248.
-4-
<PAGE> 112
ASSIGNMENT FORM
I or we assign and transfer this Security to:
(Insert assignee's social security or tax I.D. number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Agent to transfer this Security on the books of the Issuer. The Agent may
substitute another to act for him.
<PAGE> 113
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer pursuant to
Section 10.10 of the Indenture, check the box below:
Section 10.10 [ ]
If you wish to have a portion of this Security purchased by the Issuer
pursuant to Section 10.10 of the Indenture, state the amount:
$
Date: Your signature:
(Sign exactly as your name appears
on the other side of this Security)
By:
--------------------------------------
NOTICE: To be executed by an
executive officer
<PAGE> 114
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Security in Global Form authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required in
the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THIS
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS Security IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS Security (OTHER THAN A TRANSFER OF THIS
Security AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE> 115
EXHIBIT C
Form of Authenticating Agent's
Certificate of Authentication
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
------------------
As Trustee
By:
-------------------------------
As Authenticating Agent
By:
-------------------------------
Authorized Signatory
C-1
<PAGE> 1
EXHIBIT 4.4
- --------------------------------------------------------------------------------
CAPROCK COMMUNICATIONS CORP., as Issuer
and
[________________], as Trustee
---------------------
Form of
Subordinated Debt Indenture
Dated as of ________, _____
--------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
<S> <C>
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ............................ -1-
Section 1.01. Definitions ......................................................... -1-
Section 1.02. Other Definitions ................................................... -29-
Section 1.03. Rules of Construction ............................................... -30-
Section 1.04. Form of Documents Delivered to Trustee .............................. -30-
Section 1.05. Acts of Holders ..................................................... -31-
Section 1.06. Notices, etc., to the Trustee and the Issuer ........................ -32-
Section 1.07. Notice to Holders; Waiver ........................................... -32-
Section 1.08. Conflict with Trust Indenture Act ................................... -33-
Section 1.09. Effect of Headings and Table of Contents ............................ -33-
Section 1.10. Successors and Assigns .............................................. -33-
Section 1.11. Separability Clause ................................................. -33-
Section 1.12. Benefits of Indenture ............................................... -33-
Section 1.13. GOVERNING LAW ....................................................... -33-
Section 1.14. No Recourse Against Others .......................................... -34-
Section 1.15. Independence of Covenants ........................................... -34-
Section 1.16. Exhibits ............................................................ -34-
Section 1.17. Counterparts ........................................................ -34-
Section 1.18. Duplicate Originals ................................................. -34-
ARTICLE 2
SECURITY FORMS ..................................................................... -34-
Section 2.01. Form and Dating ..................................................... -34-
ARTICLE 3
THE SECURITIES ..................................................................... -35-
Section 3.01. Amount Unlimited; Issuable in Series ................................ -35-
Section 3.02. Registrar and Paying Agent .......................................... -38-
Section 3.03. Execution and Authentication ........................................ -39-
Section 3.04. Temporary Securities ................................................ -41-
Section 3.05. Transfer and Exchange ............................................... -42-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities ........................... -44-
Section 3.07. Payment of Interest; Interest Rights Preserved ............................. -45-
Section 3.08. Persons Deemed Owners ...................................................... -46-
Section 3.09. Cancellation ............................................................... -47-
Section 3.10. Computation of Interest .................................................... -47-
Section 3.11. Legal Holidays ............................................................. -47-
Section 3.12. CUSIP and CINS Numbers ..................................................... -48-
Section 3.13. Paying Agent To Hold Money in Trust ........................................ -48-
Section 3.14. Treasury Securities ........................................................ -48-
Section 3.15. Deposits of Monies ......................................................... -48-
Section 3.16. Book-Entry Provisions for Securities in Global Form ........................ -49-
ARTICLE 4
DEFEASANCE OR COVENANT DEFEASANCE ......................................................... -50-
Section 4.01. Termination of Issuer's Obligations ........................................ -50-
Section 4.02. Defeasance and Discharge of Indenture ...................................... -51-
Section 4.03. Defeasance of Certain Obligations .......................................... -54-
Section 4.04. Application of Trust Money ................................................. -55-
Section 4.05. Repayment to Issuer ........................................................ -56-
Section 4.06. Reinstatement .............................................................. -56-
ARTICLE 5
REMEDIES .................................................................................. -56-
Section 5.01. Events of Default .......................................................... -56-
Section 5.02. Acceleration of Maturity, Rescission and Annulment ......................... -59-
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee ............ -60-
Section 5.04. Trustee May File Proofs of Claims .......................................... -60-
Section 5.05. Trustee May Enforce Claims Without Possession of Securities ................ -61-
Section 5.06. Application of Money Collected ............................................. -62-
Section 5.07. Limitation on Suits ........................................................ -62-
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest ....................................................... -63-
Section 5.09. Restoration of Rights and Remedies ......................................... -63-
Section 5.10. Rights and Remedies Cumulative ............................................. -63-
Section 5.11. Delay or Omission Not Waiver ............................................... -64-
Section 5.12. Control by Majority ........................................................ -64-
Section 5.13. Waiver of Past Defaults .................................................... -64-
Section 5.14. Undertaking for Costs ...................................................... -65-
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 5.15. Waiver of Stay, Extension or Usury Laws .................................... -65-
Section 5.16. Unconditional Right of Holders To Receive Payment .......................... -65-
ARTICLE 6
THE TRUSTEE ............................................................................... -66-
Section 6.01. Certain Duties and Responsibilities ........................................ -66-
Section 6.02. Notice of Defaults.......................................................... -67-
Section 6.03. Certain Rights of Trustee .................................................. -67-
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of Securities
or Application of Proceeds Thereof ......................................... -69-
Section 6.05. Trustee and Agents May Hold Securities; Collections; Etc.................... -69-
Section 6.06. Money Held in Trust ........................................................ -69-
Section 6.07. Compensation and Indemnification of Trustee and Its Prior Claim ............ -69-
Section 6.08. Conflicting Interests ...................................................... -70-
Section 6.09. Corporate Trustee Required; Eligibility .................................... -70-
Section 6.10. Resignation and Removal; Appointment of Successor Trustee .................. -71-
Section 6.11. Acceptance of Appointment by Successor or Additional Trustees .............. -73-
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business ..................................................... -74-
Section 6.13. Preferential Collection of Claims Against Issuer ........................... -75-
Section 6.14. Appointment of Authenticating Agent ........................................ -75-
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER .......................................... -76-
Section 7.01. Preservation of Information; Issuer To Furnish Trustee
Names and Addresses of Holders ............................................. -76-
Section 7.02. Communications of Holders .................................................. -77-
Section 7.03. Reports by Trustee ......................................................... -77-
Section 7.04. Reports by Issuer .......................................................... -77-
ARTICLE 8
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC................................................. -78-
Section 8.01. Issuer May Consolidate, etc., Only on Certain Terms ........................ -78-
Section 8.02. Successor Substituted ...................................................... -79-
ARTICLE 9
SUPPLEMENTAL INDENTURES AND WAIVERS ....................................................... -80-
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders ................................................. -80-
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
Section 9.02. Supplemental Indentures, Agreements and Waivers With
Consent of Holders ......................................................... -82-
Section 9.03. Execution of Supplemental Indentures, Agreements and Waivers ............... -83-
Section 9.04. Effect of Supplemental Indentures .......................................... -84-
Section 9.05. Conformity with Trust Indenture Act ........................................ -84-
Section 9.06. Reference in Securities to Supplemental Indentures ......................... -84-
Section 9.07. Record Date ................................................................ -84-
Section 9.08. Revocation and Effect of Consents .......................................... -85-
ARTICLE 10
COVENANTS ................................................................................. -85-
Section 10.01. Payment of Principal, Premium and Interest ................................. -85-
Section 10.02. Maintenance of Office or Agency ............................................ -85-
Section 10.03. Money for Security Payments To Be Held In Trust ............................ -86-
Section 10.04. Corporate Existence ........................................................ -87-
Section 10.05. Payment of Taxes and Other Claims .......................................... -88-
Section 10.06. Maintenance of Properties .................................................. -88-
Section 10.07. Insurance .................................................................. -88-
Section 10.08. Books and Records .......................................................... -89-
Section 10.09. Compliance Certificates and Opinions ....................................... -89-
Section 10.10. Repurchase of Securities Upon a Change of Control .......................... -90-
Section 10.11. Limitation on Indebtedness ................................................. -90-
Section 10.12. Statement by Officers as to Default ........................................ -90-
Section 10.13. SEC Reports and Reports to Holders ......................................... -91-
Section 10.14. Limitation on Issuances of Guarantees by Restricted Subsidiaries ........... -91-
ARTICLE 11
SATISFACTION AND DISCHARGE ................................................................ -93-
Section 11.01. Satisfaction and Discharge of Indenture .................................... -93-
Section 11.02. Application of Trust Money ................................................. -94-
ARTICLE 12
REDEMPTION ................................................................................ -94-
Section 12.01. Right of Redemption; Mandatory Redemption .................................. -94-
Section 12.02. Notice to the Trustee ...................................................... -95-
Section 12.03. Selection of Securities to be Redeemed ..................................... -95-
Section 12.04. Notice of Redemption ....................................................... -96-
Section 12.05. Effect of Notice of Redemption ............................................. -97-
Section 12.06. Deposit of Redemption Price ................................................ -97-
Section 12.07. Securities Redeemed in Part ................................................ -97-
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE 13
SINKING FUNDS ........................................................................... -98-
Section 13.02. Satisfaction of Sinking Fund Payments with Securities .................... -98-
Section 13.03. Redemption of Securities for Sinking Fund ................................ -99-
ARTICLE 14
SUBORDINATION ........................................................................... -99-
Section 14.1 Agreement to Subordinate ................................................. -99-
Section 14.2 Liquidation; Dissolution; Bankruptcy ..................................... -99-
Section 14.3 Default on Designated Senior Debt ........................................ -100-
Section 14.4 Default on Designated Senior Debt ........................................ -101-
Section 14.5 When Distribution Must Be Paid Over ...................................... -101-
Section 14.6 Notice by Issuer ......................................................... -101-
Section 14.7 Subordination ............................................................ -102-
Section 14.8 Relative Rights .......................................................... -102-
Section 14.9 Subordination May Not Be Impaired by Issuer .............................. -102-
Section 14.10 Distribution or Notice to Representative ................................. -102-
Section 14.11 Rights of Trustee and Paying Agent ....................................... -103-
Section 14.12 Authorization to Effect Subordination .................................... -103-
Section 14.13 Amendments ............................................................... -104-
EXHIBIT A-1
FORM OF SECURITY ........................................................................ A-1
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES ................................................ B-1
EXHIBIT C
FORM OF AUTHENTICATING AGENT'S CERTIFICATE OF AUTHENTICATION ............................ C-1
</TABLE>
<PAGE> 7
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of ______.
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
Section Section
- ------------------- ---------
<S> <C> <C>
Section 310 (a)(1) ................................ 6.09
(a)(2) ................................ 6.09
(a)(3) ................................ Not applicable
(a)(4) ................................ Not applicable
(b) ................................... 6.08, 6.10
Section 311 (a) ................................... 6.07
(b) ................................... 6.07
(c) ................................... Not Applicable
Section 312 (a) ................................... 3.05, 7.01
(b) ................................... 7.02
(c) ................................... 7.02
Section 313 (a) ................................... 7.03
(b) ................................... 7.03
(c) ................................... 7.03
(d) ................................... 7.03
Section 314 (a) ................................... 7.04, 10.09
(b) ................................... Not Applicable
(c)(1) ................................ 1.04, 4.02, 4.03,
11.01(c)
(c)(2) ................................ 1.04, 4.02, 4.03,
11.01(c)
(c)(3) ................................ Not Applicable
(d) ................................... Not Applicable
(e) ................................... 1.04, 10.09
Section 315 (a) ................................... 6.01(a)
(b) ................................... 6.02
(c) ................................... 6.01(b)
(d) ................................... 6.01(c)
(e) ................................... 5.14
Section 316 (a) (last sentence) ................... 3.14
(a)(1)(A) ............................. 5.12
(a)(1)(B) ............................. 5.13
(a)(2) ................................ Not Applicable
(b) ................................... 5.08
(c) ................................... 9.07
</TABLE>
i
<PAGE> 8
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
Section Section
- ------------------- ---------
<S> <C> <C>
Section 317 (a)(1) ................................ 5.03
(a)(2) ................................ 5.04
(b) ................................... 10.03
Section 318 (a) ................................... 1.08
</TABLE>
ii
<PAGE> 9
SUBORDINATED DEBT INDENTURE (the "Indenture"), dated as of
___________, ______, between CAPROCK COMMUNICATIONS CORP., a corporation duly
organized and existing under the laws of the State of Texas (the "Issuer") and
[________________] (the "Trustee").
RECITALS
The Issuer has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its debentures,
notes, bonds and/or other evidence of indebtedness (herein called the
"Securities") to be issued in one of more series as in this Indenture provided.
All things necessary have been done to make the Securities,
when executed by the Issuer and authenticated and delivered hereunder and duly
issued by the Issuer, the valid obligations of the Issuer and to make this
Indenture a valid agreement of the Issuer and the Trustee in accordance with the
terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as hereinafter defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities or of any series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary or assumed in
connection with an Asset Acquisition by the Issuer or a Restricted Subsidiary;
provided that Indebtedness of such Person which is redeemed, defeased, retired
or otherwise repaid at the time of or immediately upon consummation of the
transaction by which such Person becomes a Restricted Subsidiary or such Asset
Acquisition shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Issuer and its Restricted Subsidiaries for
such period determined in
<PAGE> 10
conformity with GAAP; provided that the following items shall be excluded in
computing Adjusted Consolidated Net Income (without duplication):
(i) the net income (or loss) of any Person (other than a
Restricted Subsidiary) in which any Person (other than the Issuer or
any of its Restricted Subsidiaries) has a joint interest and the net
income (or loss) of any Unrestricted Subsidiary, except
(x) with respect to net income, to the extent of the
amount of dividends or other distributions actually paid in
cash to the Issuer or any of its Restricted Subsidiaries by
such other Person or such Unrestricted Subsidiary during such
period and
(y) with respect to net losses, to the extent of the
amount of cash contributed by the Issuer or any Restricted
Subsidiary to such Person during such period;
(ii) the net income (or loss) of any Person acquired by the
Issuer or any of its Restricted Subsidiaries in a pooling-of-interests
transaction for any period prior to the date of the related
acquisition;
(iii) the net income of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income is not
at the time permitted by the operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable
to Asset Sales;
(v) any net after-tax extraordinary or non-recurring gains or
losses;
(vi) any gain or loss, net of taxes, realized upon the
termination of any employee benefit plan; and
(vii) any compensation or other expense paid or payable solely
with Capital Stock (other than Redeemable Stock) of the Issuer or any
options, warrants or other rights to acquire such Capital Stock.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such
-2-
<PAGE> 11
specified Person. For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Acquisition" means (i) an investment by the Issuer or
any of its Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Issuer or any of its Restricted Subsidiaries; provided
that such Person's primary business is related, ancillary or complementary to
the businesses of the Issuer and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Issuer or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Issuer or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; provided that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Issuer and its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the
Issuer or any of its Restricted Subsidiaries (other than to the Issuer or
another Restricted Subsidiary) of (i) all or substantially all of the Capital
Stock of any Restricted Subsidiary or (ii) all or substantially all of the
assets of a division or line of business of the Issuer or any of its Restricted
Subsidiaries.
"Asset Sale" means any direct or indirect sale, transfer or
lease or other disposition (including by way of merger, consolidation or
sale-leaseback transaction) in one transaction or a series of related
transactions by the Issuer or any of its Restricted Subsidiaries to any Person
other than the Issuer or any of its Restricted Subsidiaries of:
(i) all or any of the Capital Stock of any Restricted
Subsidiary,
(ii) all or substantially all of the property and assets of an
operating unit or business of the Issuer or any of its Restricted
Subsidiaries, or
(iii) any other property and assets of the Issuer or any of
its Restricted Subsidiaries outside the ordinary course of business of
the Issuer or such Restricted Subsidiary other than the Capital Stock
of or Investment in an Unrestricted Subsidiary
that, with respect to each of (i), (ii) and (iii), is not governed Article Eight
hereof; provided that "Asset Sale" shall not include:
-3-
<PAGE> 12
(a) sales, transfers or other dispositions of assets,
whether in one transaction or a series of related transactions
occurring within one year, involving assets with a fair market
value not in excess of $________ in any transaction or series
of related transactions,
(b) contemporaneous exchanges by the Issuer or any
Restricted Subsidiary of Telecommunications Assets for other
Telecommunications Assets in the ordinary course of business,
including fiber swaps and partitioning of switches; provided
that the applicable Telecommunications Assets received by the
Issuer or such Restricted Subsidiary have at least
substantially equal fair market value to the
Telecommunications Assets disposed of, or
(c) sales, transfers or other dispositions of assets
that have become uneconomic, obsolete or worn-out.
"Average Life" means, at any date of determination with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security and
(b) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law relating to bankruptcy, insolvency, receivership,
or relief of debtors or the law of any other jurisdiction relating to
bankruptcy, insolvency, or relief of debtors or any amendment to, succession to
or change in any such law.
"Board of Directors" means, with respect to any Person, its
Board of Directors, general partner(s), manager(s), or similar governing body.
"Board Resolution" means a copy of a resolution delivered to
the Trustee that is certified by the Secretary or an Assistant Secretary of the
Issuer to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New
York, New York or in Philadelphia, Pennsylvania are authorized or obligated by
law, regulation or executive order to close.
-4-
<PAGE> 13
"Calculation Date" means, with respect to the Incurrence of
any Indebtedness by the Issuer or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether outstanding on
the Issue Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present
value of the rental obligations under a Capitalized Lease.
"Change of Control" shall be deemed to occur if:
(i) the sale, conveyance, transfer or lease of all or
substantially all of the assets of the Issuer to any Person or "group"
(as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act, including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), other than to one or more Permitted Holders and/or
one or more Restricted Subsidiaries, shall have occurred,
(ii) any Person or "group" (as such term is used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act including any group acting
for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any
Permitted Holder (or group that includes a Permitted Holder), becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting power of all classes of the
Voting Stock of the Issuer (including any warrants, options or rights
to acquire such Voting Stock), calculated on a fully diluted basis,
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
of the Issuer (together with any directors whose election or
appointment by the Board of Directors of the Issuer or whose nomination
for election by the stockholders of the Issuer was
-5-
<PAGE> 14
approved by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of
the Issuer then in office or
(iv) the merger, amalgamation or consolidation of the Issuer
with or into another Person or the merger of another Person with or
into the Issuer shall have occurred, and the securities of the Issuer
that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Voting Stock of the
Issuer are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving Person that represent, immediately after giving effect to
such transaction, at least a majority of the aggregate voting power of
the Voting Stock of the surviving Person.
"Commission" means the Securities and Exchange Commission.
"Common Depositary" has the meaning specified in Section 3.04.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity, other than Preferred
Stock of such Person, whether outstanding on the Issue Date or issued
thereafter, including, without limitation, all series and classes of such common
stock.
"Consolidated EBITDA" means, for any period, Adjusted
Consolidated Net Income for such period plus, to the extent such amount was
deducted in calculating such Adjusted Consolidated Net Income,
(i) Consolidated Interest Expense,
(ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or
losses or sales of assets),
(iii) depreciation expense,
(iv) amortization expense,
-6-
<PAGE> 15
(v) all other non-cash items reducing Adjusted Consolidated
Net Income (other than items that will require cash payments and for
which an accrual or reserve is, or is required by GAAP to be, made),
(vi) costs directly related to the Transaction, the offering
of the 1998 Senior Notes or the offering of the 1999 Senior Notes and
expensed by the Issuer in accordance with GAAP on or prior to December
31, 1999,
less all non-cash items increasing Adjusted Consolidated Net Income, all as
determined on a consolidated basis for the Issuer and its Restricted
Subsidiaries in conformity with GAAP; provided that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the quotient of (1)
the number of shares of outstanding Common Stock of such Restricted Subsidiary
not owned on the last day of such period by the Issuer or any of its Restricted
Subsidiaries divided by (2) the total number of shares of outstanding Common
Stock of such Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, without
duplication, the aggregate amount of interest in respect of Indebtedness,
including, without limitation:
(i) amortization of original issue discount on any
Indebtedness and the interest portion of any deferred payment
obligation, calculated in accordance with the effective interest method
of accounting;
(ii) all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing;
(iii) the net costs associated with Interest Rate Agreements;
(iv) Preferred Stock dividends of the Issuer's Restricted
Subsidiaries (other than dividends paid in shares of Preferred Stock
that are not Redeemable Stock) declared and paid or payable;
(v) accrued Redeemable Stock dividends of the Issuer and its
Restricted Subsidiaries, whether or not declared or paid; and
-7-
<PAGE> 16
(vi) the interest component of rentals in respect of
Capitalized Lease Obligations paid, accrued or scheduled to be paid or
to be accrued by the Issuer and its Restricted Subsidiaries during such
period;
excluding, however, (a) any amount of such interest of any Restricted Subsidiary
if the net income of such Restricted Subsidiary is excluded in the calculation
of Adjusted Consolidated Net Income pursuant to clause (iii) of the definition
thereof (but only in the same proportion as the net income of such Restricted
Subsidiary is excluded from the calculation of Adjusted Consolidated Net Income
pursuant to clause (iii) of the definition thereof) and (b) any premiums, fees
and expenses (and any amortization thereof) payable in connection with the
offering of the Securities, the 1999 Senior Notes, the 1998 Senior Notes and the
Transaction, determined on a consolidated basis (without taking into account
Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Calculation Date,
the ratio of (i) the aggregate amount of Indebtedness of the Issuer and its
Restricted Subsidiaries on a consolidated basis outstanding on such Calculation
Date to (ii) the aggregate amount of Consolidated EBITDA for the then most
recent four fiscal quarters for which financial statements of the Issuer have
been filed with the SEC or provided to the Trustee pursuant to Section 10.13
hereof (such four fiscal quarter period being the "Four Quarter Period");
provided that, in making the foregoing calculation, (A) pro forma effect shall
be given to any Indebtedness to be Incurred or repaid on the Calculation Date;
(B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions
(including giving pro forma effect to the application of proceeds of any Asset
Disposition) that occur from the beginning of the Four Quarter Period through
the Calculation Date (the "Reference Period"), as if they had occurred and such
proceeds had been applied on the first day of such Reference Period; and (C) pro
forma effect shall be given to asset dispositions and asset acquisitions
(including giving pro forma effect to the application of proceeds of any asset
disposition) that have been made by any Person that has become a Restricted
Subsidiary or has been merged with or into the Issuer or any Restricted
Subsidiary during such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when such
Person was a Restricted Subsidiary as if such asset dispositions or asset
acquisitions had occurred on the first day of such Reference Period; provided
that to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Calculation Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which
-8-
<PAGE> 17
office at the date of execution of this Indenture is located at
__________________________, Attention: Corporate Trust Department, or at any
other time at such other address as the Trustee may designate from time to time
by notice to the Holders.
"Credit Facilities" means any senior commercial term loan
and/or revolving credit or working capital facility or any letter of credit
facility entered into principally with commercial banks and/or other financial
institutions typically party to commercial loan agreements.
"Currency Agreement" means any spot or forward foreign
exchange contract, currency swap agreement, currency option or other similar
financial agreement or arrangement entered into by the Issuer or any of its
Subsidiaries designed solely to protect against or manage exposure to
fluctuations in currency exchange rates.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other Person with like
powers, whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default. The Issuer is in "Default" during
the continuance of such an event.
"Depository" means The Depository Trust Company and its
nominees and successors.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"fair market value" means the price that would be paid in an
arm's-length transaction between a willing seller under no compulsion to sell
and a willing buyer under no compulsion to buy, as determined in good faith by
the Board of Directors, whose determination shall be conclusive if evidenced by
a Board Resolution; provided that for purposes of clause (viii) of the
definition of "Permitted Indebtedness", (x) the fair market value of any
security registered under the Exchange Act shall be the average of the closing
prices, regular way, of such security for the [__] consecutive trading days
immediately preceding the capital contribution or sale of Capital Stock and (y)
in the event the aggregate fair market value of any other property (other than
cash or cash equivalents) received by the Issuer exceeds [$__] million, the fair
market value of such property shall be determined by
-9-
<PAGE> 18
a nationally recognized investment banking firm (selected by the Board of
Directors of the Issuer) and set forth in their written opinion which shall be
delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the
United States of America in effect on the Issue Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession.
"Global Securities" means one or more Global Securities in
registered form and representing the aggregate principal amount of Securities of
any particular series sold.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
and are entered into in the ordinary course of business), to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning given it under
Section 10.14 hereof.
"Holder" means the registered holder of any Security.
"Incur" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an Incurrence of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness. The terms "Incurrence" and
"Incurred" shall have corresponding meanings.
-10-
<PAGE> 19
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication):
(i) all indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of
credit, acceptance facilities or other similar instruments (including
reimbursement obligations with respect thereto),
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is
due more than six months after the date of placing such property in
service or taking delivery and title thereto or the completion of such
services,
(v) all Capitalized Lease Obligations of such Person,
(vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed
by such Person; provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness,
(vii) all Indebtedness of other Persons and all dividends and
distributions of another Person the payment of which, in either case,
such Person has Guaranteed or is responsible or liable for, directly or
indirectly, as obligor, guarantor or otherwise,
(viii) all Redeemable Stock of such Person valued at its
maximum fixed repurchase price plus (to the extent not otherwise
included in such repurchase price) accrued and unpaid dividends payable
prior to the Stated Maturity of the Securities in connection with a
mandatory redemption or in connection with a redemption at the option
of the holder thereof unless such Redeemable Stock has actually been
called for redemption but not yet redeemed, in which case it shall be
valued at the redemption price therefor plus such accrued and unpaid
dividends unless the holder thereof can require redemption or
repurchase at any higher price, and
(ix) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements.
-11-
<PAGE> 20
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation.
Notwithstanding anything herein to the contrary:
(A) the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at the time of its issuance, as
determined in conformity with GAAP,
(B) money borrowed and set aside at the time of the Incurrence
of any Indebtedness or thereafter in order to refund the payment of the
interest on such Indebtedness shall not be deemed to be "Indebtedness,"
(C) Indebtedness shall not include any liability for federal,
state, local or other taxes,
(D) Indebtedness shall not include any Trade Payable or
amounts due under leases that are not Capitalized Lease Obligations,
(E) Indebtedness shall not include amounts due with respect to
any customer advance payments and customer deposits in the ordinary
course of business with the Issuer or any Restricted Subsidiary, and
(F) Indebtedness shall not include overdrafts.
For purposes hereof, the "maximum fixed repurchase price" of
any Redeemable Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Redeemable Stock, such fair
market value shall be determined in good faith by the Board of Directors of the
issuer of such Redeemable Stock.
"Indenture" means this instrument as originally executed
(including all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable
-12-
<PAGE> 21
provisions hereof and shall include the terms of particular series of securities
established as contemplated by Section 3.01.
"Indenture Obligations" means the obligations of the Issuer,
under this Indenture or under the Securities of any particular series, to pay
principal of, premium, if any, and interest on such Securities when due and
payable, whether at maturity, by acceleration, call for redemption or repurchase
or otherwise, and to pay all other amounts due or to become due under or in
connection with this Indenture or the Securities and the performance of all
other obligations to the Trustee (including, but not limited to, payment of all
amounts due the Trustee under Section 6.07 hereof) and the Holders of the
Securities under this Indenture and the Securities, according to the terms
hereof and thereof.
"Interest," when used with respect to any Security of any
series, means the amount of all interest accruing on such Security, including
all interest accruing subsequent to the occurrence of any events specified in
Sections 5.01(g) and (h) hereof or which would have accrued but for any such
event, whether or not claims for such interest are allowable under applicable
law.
"Interest Payment Date" means, when used with respect to any
Security, the Stated Maturity of an installment of interest on such Security, as
set forth in such Security.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect
advance, loan, account receivable (other than an account receivable arising in
the ordinary course of business) or other extension of credit (including,
without limitation, by way of Guarantee or similar arrangement) or any capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person and shall include (i) the designation
of a Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the fair
market value of the Capital Stock (or any other Investment), held by the Issuer
or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to
be a Restricted Subsidiary at the time it so ceases to be a Restricted
Subsidiary, including, without limitation, by reason of any transaction
permitted by clause (c) of Section 10.11 hereof. For purposes of the definition
of "Unrestricted Subsidiary," (i) "Investment" shall include the fair market
value of the assets (net of liabilities (other than liabilities to the Issuer or
any of its Subsidiaries)) of any Restricted
-13-
<PAGE> 22
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary, (ii) the fair market value of the assets (net of
liabilities (other than liabilities to the Issuer or any of its Subsidiaries))
of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary shall be considered a reduction in
outstanding Investments and (iii) any property transferred to or from any Person
shall be valued at its fair market value at the time of such transfer.
"Issue Date" means the original date of issuance of the
Securities.
"Issuer Request" or "Issuer Order" means a written request or
order delivered to the Trustee that is signed in the name of the Issuer by its
Chairman of the Board, Vice-Chairman, Chief Executive Officer, President or Vice
President, and by its Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien (statutory or other) or charge of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof or any agreement to give any security interest). The term
"Lien" does not include any lease or grant of rights to use any fiber or other
asset under an arrangement that does not qualify as a conditional sale or other
title retention agreement or lease in the nature thereof or a switch partition.
"Maturity Date" means, with respect to any Security, the date
specified in such Security as the fixed date on which the principal of such
Security is due and payable.
"Merger Agreement" means that certain Agreement and Plan of
Merger and Plan of Exchange dated as of February 16, 1998 among the Issuer,
CapRock Telecommunications Corp., CapRock Fiber Network, Ltd., IWL
Communications, Incorporated and certain other parties thereto, as amended
through the 1998 Senior Notes Issue Date and thereafter as amended in accordance
with the terms of the 1998 Senior Notes Indenture.
"Moody's" means Moody's Investors Service.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale,
the proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Issuer or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of (i) brokerage commissions and
other fees and expenses
-14-
<PAGE> 23
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Issuer and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Issuer or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, and (b) with respect
to any capital contribution or issuance or sale of Capital Stock, options,
warrants or other rights to acquire Capital Stock or Indebtedness, the proceeds
of such capital contribution or issuance or sale in the form of cash or cash
equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Issuer or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney's fees, accountants'
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of taxes payable as a result thereof.
"1998 Senior Notes Indenture" means the Indenture dated as of
July 16, 1998, among the Issuer, CapRock Telecommunications Corp., CapRock Fiber
Network, Ltd. and IWL Communications, Incorporated and Chase Manhattan Trust
Company, National Association, as successor Trustee, providing for the issuance
of the 1998 Senior Notes in the aggregate principal amount of $150,000,000 as
such instrument may be amended and supplemented from time to time.
"1998 Senior Notes" means the Issuer's 12% Senior Notes due
2008 issued pursuant to the 1998 Senior Notes Indenture, as such instrument may
be amended from time to time.
"1998 Senior Notes Issue Date" means the date on which the
1998 Senior Notes were originally issued under the 1998 Senior Note Indenture.
"1999 Senior Notes" mean the Issuer's 11 1/2% Senior Notes due
2009 issued pursuant to the 1999 Senior Notes Indenture, as such instrument may
be amended from time to time.
-15-
<PAGE> 24
"1999 Senior Notes Indenture" means the Indenture dated as of
May 18, 1999 between the Issuer and Chase Manhattan Trust Company, National
Association, as trustee, providing for the issuance of the 1999 Senior Notes in
the aggregate principal amount of $210,000,000, as such instrument may be
amended and supplemented from time to time.
"Offer to Purchase" means an offer by the Issuer to purchase
Securities from the Holders commenced by mailing a notice to the Trustee and
each Holder stating:
(i) the covenant pursuant to which the offer is being made and
that all Securities validly tendered will be accepted for payment on a
pro rata basis;
(ii) the purchase price and the date of purchase (which shall
be a Business Day no earlier than 30 days nor later than 60 days from
the date such notice is mailed);
(iii) that any Security not tendered will continue to accrue
interest pursuant to its terms;
(iv) that, unless the Issuer defaults in the payment of the
purchase price, any Security accepted for payment pursuant to the Offer
to Purchase shall cease to accrue interest on and after the Payment
Date;
(v) that Holders electing to have a Security purchased
pursuant to the Offer to Purchase will be required to surrender the
Security, together with the form entitled "Option of the Holder to
Elect Purchase" on the reverse side of the Security completed, to the
Paying Agent at the address specified in the notice prior to the close
of business on the Business Day immediately preceding the Payment Date;
(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the third Business Day immediately preceding the Payment Date, a
facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Securities delivered for purchase and a
statement that such Holder is withdrawing his election to have such
Securities purchased; and
(vii) that Holders whose Securities are being purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; provided that each
Security purchased and each new Security issued shall be in a principal
amount of $1,000 or any integral multiple thereof, the denominations in
which Securities of the series shall be issuable.
-16-
<PAGE> 25
On the Payment Date, the Issuer shall (i) accept for payment
on a pro rata basis Securities or portions thereof tendered pursuant to an Offer
to Purchase; (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officer's Certificate specifying the
Securities or portions thereof accepted for payment by the Issuer. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; provided that each Security
purchased and each new Security issued shall be in a principal amount of $1,000
or any integral multiple thereof. The Issuer will publicly announce the results
of an Offer to Purchase as soon as practicable after the Payment Date. The
Trustee shall act as the Paying Agent for an Offer to Purchase. The Issuer will
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Issuer is required to repurchase Securities pursuant to an
Offer to Purchase.
"Officer" means, with respect to the Issuer, its Chairman of
the Board, Vice Chairman, President, Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer.
"Officers' Certificate" means a certificate delivered to the
Trustee that is signed by the Chairman of the Board, a Vice Chairman, the
President or a Vice President, and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Issuer or the Trustee, and who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.02.
"Outstanding" when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
-17-
<PAGE> 26
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Issuer or any Affiliate thereof) in
trust or set aside and segregated in trust by the Issuer or any Affiliate
thereof (if the Issuer or such Affiliate shall act as Paying Agent) for the
Holders of such Securities; provided, however, that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has been
made;
(c) Securities with respect to which the Issuer has effected
defeasance or covenant defeasance as provided in Article Four, to the extent
provided in Sections 4.02 and 4.03 hereof; and
(d) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee proof reasonably satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands the Securities are
valid obligations of the Issuer;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Issuer or any other obligor upon the Securities or any Affiliate of the
Issuer or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. The Issuer shall notify
the Trustee, in writing, when it repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Affiliate of the Issuer or such other obligor. If the Paying
Agent holds, in its capacity as such, on any Maturity Date or on any optional
redemption date money sufficient to pay all accrued interest and principal with
respect to such Securities payable on that date and is not prohibited from
paying such money to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Securities cease to be Outstanding
and interest on them ceases to accrue. Securities may also cease to be
Outstanding to the extent expressly provided in Article Four.
"Payment Date" means the date on which any Security is
purchased pursuant to an Offer to Purchase.
-18-
<PAGE> 27
"Permitted Holders" means Jere W. Thompson, Sr., Jere W.
Thompson, Jr., Mark Langdale, Timothy W. Rogers, Scott L. Roberts, Timothy M.
Terrell and Ignatius W. Leonards and any corporation, limited liability company,
partnership, joint venture or other entity controlled by any one or more of
them.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness of the Issuer pursuant to the Securities and
this Indenture;
(ii) Indebtedness owed (A) to the Issuer and evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiaries;
provided that such Indebtedness to any Restricted Subsidiary is
subordinated in right of payment from and after such time as the
Securities shall become due and payable (whether at Stated Maturity, by
acceleration or otherwise); provided, further, any event which results
in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any subsequent transfer of such Indebtedness (other than to the
Issuer or another Restricted Subsidiary) shall be deemed, in each case,
to constitute an Incurrence of such Indebtedness not permitted by this
clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness
(other than Indebtedness Incurred under clause (ii), (iv), (vi) or
(xii) of this definition of "Permitted Indebtedness") and any
refinancings of such new Indebtedness in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees
and expenses); provided that Indebtedness the proceeds of which are
used to refinance or refund the Securities or Indebtedness that is pari
passu in right of payment with, or subordinated in right of payment to,
the Securities shall only be permitted under this clause (iii) if (A)
in case the Securities are refinanced in part or the Indebtedness to be
refinanced is pari passu in right of payment with the Securities, such
new Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding, is
expressly made pari passu in right of payment with, or subordinate in
right of payment to, the remaining Securities, (B) in case the
Indebtedness to be refinanced is subordinated in right of payment to
the Securities, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
issued or remains outstanding, is expressly made subordinate in right
of payment to the Securities at least to the extent that the
Indebtedness to be refinanced is subordinated to the Securities and (C)
such new Indebtedness, determined as of the date of Incurrence of such
new Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such
new Indebtedness is at least equal
-19-
<PAGE> 28
to the remaining Average Life of the Indebtedness to be refinanced or
refunded; and provided further that in no event may Indebtedness of the
Issuer be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii);
(iv) Indebtedness (A) to reimburse workers' compensation
insurance companies for claims paid by such companies on behalf of the
Issuer or any Restricted Subsidiary in accordance with the policies
issued to the Issuer and the Restricted Subsidiaries, (B) in respect of
performance, surety or appeal bonds or similar obligations provided in
the ordinary course of business, or (C) under Currency Agreements and
Interest Rate Agreements; provided that such agreements (1) are
designed solely to protect the Issuer or its Subsidiaries against
fluctuations in foreign currency exchange rates or interest rates and
(2) do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder or (D) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Issuer or any of its
Restricted Subsidiaries pursuant to such agreements, in each case
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary (other than Guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition),
in a principal amount not to exceed the gross proceeds actually
received by the Issuer or any Restricted Subsidiary in connection with
such disposition;
(v) Indebtedness of the Issuer, to the extent the net proceeds
thereof are promptly used to purchase Securities tendered in an Offer
to Purchase made as a result of a Change of Control or Indebtedness of
the Issuer or any Restricted Subsidiary to the extent the net proceeds
thereof are promptly deposited to defease all of the Securities as
described in Article Four hereof;
(vi) Guarantees of the Securities and Guarantees of
Indebtedness of the Issuer by any Restricted Subsidiary; provided that
the Guarantee of such Indebtedness is permitted by and made in
accordance with Section 10.14 hereof.
(vii) Acquired Indebtedness and any Indebtedness issued in
exchange for, or the net proceeds of which are used to refinance or
refund, such Acquired Indebtedness in an amount not to exceed the
amount so refinanced or refunded (plus premium, accrued interest, and
reasonable fees and expenses) in an aggregate amount not to exceed at
any one time outstanding $__ million;
-20-
<PAGE> 29
(viii) (A) Indebtedness of the Issuer not to exceed, at any
one time outstanding, two times the Net Cash Proceeds received by the
Issuer after the 1998 Senior Notes Issue Date as a capital contribution
or from the issuance and sale of its Capital Stock (other than
Redeemable Stock) or options, warrants or other rights to acquire
Capital Stock (other than Redeemable Stock) to a Person that is not a
Subsidiary of the Issuer, to the extent such Net Cash Proceeds have not
been used pursuant to Section 10 hereof to make a Restricted Payment
less any Indebtedness Incurred pursuant to clause (B), (B) Indebtedness
Incurred by (x) the Issuer and/or (y) any of the Restricted
Subsidiaries in an aggregate amount not to exceed, at any one time
outstanding, the Net Cash Proceeds received by the Issuer after the
1998 Senior Notes Issue Date as a capital contribution or from the
issuance and sale of its Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to acquire Capital Stock (other than
Redeemable Stock) to a Person that is not a Subsidiary of the Issuer,
to the extent such Net Cash Proceeds have not been used pursuant to
Section 10 hereof to make a Restricted Payment; provided that the
Incurrence of Indebtedness pursuant to this clause (B) will only be
permitted to the extent that such Incurrence does not cause the amount
of Indebtedness Incurred pursuant to clause (A) to exceed the amount
permitted thereunder, and (C) Indebtedness of the Issuer not to exceed,
at any one time outstanding, 100% of the fair market value of property
(other than cash and cash equivalents) received by the Issuer after the
1998 Senior Notes Issue Date from a contribution of capital or the
proceeds from the sale of its Capital Stock (other than Redeemable
Stock) or options, warrants or other rights to acquire Capital Stock
(other than Redeemable Stock) to a Person that is not the Issuer or a
Restricted Subsidiary, to the extent such capital contribution or sale
of Capital Stock or options, warrants or rights have not been used
pursuant to Section 10 hereof to make a Restricted Payment; provided
that such Indebtedness does not mature prior to the Stated Maturity of
the Securities and has an Average Life longer than the Securities;
(ix) Indebtedness under one or more Credit Facilities or
Vendor Credit Facilities; provided that the aggregate principal amount
of any Indebtedness incurred pursuant to this clause (ix) (including
any amounts refinanced or refunded under this clause (ix)) does not
exceed at any time outstanding the greater of (x) __% of eligible
accounts receivable and __% of eligible inventory of the Issuer and its
Restricted Subsidiaries as of the last fiscal quarter for which
financial statements are prepared or (y) $___ million less any amount
of such Indebtedness permanently repaid;
(x) Indebtedness existing as of the Issue Date;
(xi) Capitalized Lease Obligations in an aggregate principal
amount outstanding at any time not to exceed $__ million; and
-21-
<PAGE> 30
(xii) Indebtedness of the Issuer (in addition to Indebtedness
permitted under clauses (i) through (xi) above) in the aggregate
principal amount outstanding at any time not to exceed $__ million,
less any amount of such Indebtedness permanently repaid.
"Permitted Investment" means any of the following:
(i) an Investment in the Issuer or a Restricted Subsidiary or
a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to, the Issuer
or a Restricted Subsidiary; provided that such Person's primary
business is related, ancillary or complementary to the businesses of
the Issuer and its Restricted Subsidiaries on the date of such
Investment;
(ii) a Temporary Cash Investment;
(iii) commission, payroll, travel, relocation and similar
advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction
of judgments or settlement of disputed accounts receivable that arose
in the ordinary course of business;
(v) Investments in prepaid expenses, negotiable instruments
held for collection, and lease, utility and workers' compensation,
performance and other similar deposits;
(vi) Interest Rate Agreements and Currency Agreements to the
extent permitted under clause (iv) of the definition of "Permitted
Indebtedness;" and
(vii) loans and advances to employees of the Issuer or any
Subsidiary in an aggregate amount not to exceed $________ at any time
outstanding.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Permitted Junior Securities" means (a) Capital Stock and all
warrants, options or other rights to acquire Capital Stock in the Issuer or (b)
debt securities that are subordinated to all Senior Debt and any debt securities
issued in exchange for Senior Debt that are subordinated
-22-
<PAGE> 31
to substantially the same extent as, or to a greater extent than, the Securities
are subordinated to Senior Debt under this Indenture.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference equity,
whether outstanding on the Issue Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"pro forma" means, with respect to the preparation of
financial statements to show the effect of any particular transaction, the
preparation of such financial statements in accordance with Article 11 of
Regulation S-X.
"Public Equity Offering" means an underwritten primary public
offering of Common Stock (other than Redeemable Stock) of the Issuer or a
Restricted Subsidiary pursuant to an effective registration statement filed
under the Securities Act (excluding registration statements on Form S-8).
"Redeemable Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Securities, (ii) redeemable at the option of
the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Securities or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Securities; provided that
any Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Securities shall not
constitute Redeemable Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable in any
material respect to the holders of such Capital Stock than the provisions
contained in Section 10.10 hereof are to the holders of the Securities and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Issuer's
repurchase of such Securities as are required to be repurchased pursuant to
Section 10.10 hereof.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed by the Issuer for such redemption pursuant to this
Indenture and the Securities of any series.
"Redemption Price" means, with respect to any Security to be
redeemed, the price fixed for such redemption pursuant to the terms of this
Indenture and the Securities of any series.
-23-
<PAGE> 32
"Regular Record Date" means the Regular Record Date specified
in the Securities.
"Responsible Officer" means, when used with respect to the
Trustee, any officer within the Corporate Trust Office including any Vice
President, Managing Director, Assistant Vice President, Secretary, Assistant
Secretary or Assistant Treasurer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge and familiarity
with the particular subject.
"Restricted Payment" means
(i) a declaration or payment of any dividend or the making of
any distribution on or with respect to the Issuer's Capital Stock
(other than (x) dividends or distributions payable solely in shares of
the Issuer's Capital Stock (other than Redeemable Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and
(y) dividends or distributions payable to the Issuer or any Wholly
Owned Restricted Subsidiary),
(ii) a payment made by the Issuer or any Restricted Subsidiary
used to purchase, redeem, retire or otherwise acquire for value any
shares of Capital Stock of (A) of the Issuer or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire such
shares of Capital Stock) held by any Person or (B) a Restricted
Subsidiary (including options, warrants or other rights to acquire such
shares of Capital Stock) held by any Affiliate of the Issuer (other
than a Wholly Owned Restricted Subsidiary) or any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock
of the Issuer (including options, warrants or other rights to acquire
such shares of Capital Stock) (other than (x) payments payable solely
in shares of Capital Stock) (other than Redeemable Stock) of the Issuer
or in options, warrants or other rights to acquire shares of such
Capital Stock and (y) payments payable to the Issuer or any
Wholly-Owned Restricted Subsidiary),
(iii) any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Issuer that
is subordinated in right of payment to the Securities (other than, in
each case, the purchase, repurchase or acquisition of Indebtedness
either in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity that in any case is due within
one year after the date of such purchase, repurchase or acquisition),
or
(iv) any Investment, other than a Permitted Investment, in any
Person.
-24-
<PAGE> 33
"Restricted Subsidiary" means any Subsidiary of the Issuer
other than an Unrestricted Subsidiary.
"S&P" means Standard & Poors' Rating Services, a division of
McGraw Hill, Inc.
"SEC" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Securities" shall have the meaning specified in the recitals
of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Senior Debt" means (a) all Indebtedness of the Issuer
outstanding under the 12% Senior Notes due 2008 issued pursuant to the 1998
Senior Notes Indenture and the 11 1/2% Senior Notes due 2009 issued pursuant to
the 1999 Senior Notes Indenture (collectively, the "Notes"); (b) with respect to
a particular series of Securities, any other Indebtedness existing prior to the
issuance of such series of Securities which the applicable supplemental
indenture to this Indenture provides will be Senior Debt; (c) with respect to a
particular series of Securities, any Indebtedness of the Issuer permitted to be
incurred under the terms of this Indenture which is incurred after the date of
the applicable supplemental indenture for such series of Securities, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Securities; and
(d) all principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
items listed in the preceding clauses (a), (b) and (c). Notwithstanding anything
to the contrary in the preceding, Senior Debt will not include (i) any liability
for federal, state, local or other taxes owed or owing by the Issuer; (ii) any
Indebtedness of the Issuer to any of its Subsidiaries, joint ventures or other
Affiliates; (iii) any trade payables; or (iv) the portion of any Indebtedness
that is incurred in violation of this Indenture.
"Special Record Date" means, with respect to the payment of
any Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07
hereof.
"Stated Maturity" means (i) with respect to any debt security,
the date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
-25-
<PAGE> 34
"Strategic Equity Investments" means the issuance and sale of
Capital Stock (other than Redeemable Stock) to a Person that has an equity
market capitalization, a net asset value or annual revenues of at least $1.0
billion and owns and operates businesses primarily in a Telecommunications
Business; provided that such Telecommunications Business may be located anywhere
in the world.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
voting power of the outstanding Voting Stock is owned, directly or indirectly,
by such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning given it in Section
10.14 hereof.
"Telecommunications Assets" means, with respect to any Person,
assets (including, without limitation, rights of way, trademarks and licenses)
that are utilized by such Person, directly or indirectly, in the
Telecommunications Business and including any computer systems used in a
Telecommunications Business. Telecommunications Assets shall also include a
majority of the Voting Stock of another Person, if such Voting Stock is acquired
by the Issuer or a Restricted Subsidiary and all or substantially all the assets
of such other Person comprise Telecommunications Assets; and such other Person
either is, or immediately following the relevant transaction shall become, a
Restricted Subsidiary of the Issuer pursuant to this Indenture. The
determination of what constitutes Telecommunications Assets shall be made by the
Board of Directors of the Issuer and evidenced by a Board Resolution delivered
to the Trustee.
"Telecommunications Business" means the business of (i)
transmitting or providing services relating to the transmission of voice, video,
signals, data or Internet services; (ii) constructing, creating, developing,
owning, operating, and marketing one or more communications networks, related,
ancillary or complementary network transmission equipment, information systems,
software, and other related, ancillary or complementary assets and services;
(iii) planning, designing, and consulting with respect to the matters described
in clauses (i) and (ii); and (iv) evaluating, participating and pursuing any
other activity or opportunity that is related, ancillary, or complementary to
those identified in clauses (i), (ii) and (iii) above, as determined in good
faith by the Board of Directors of the Issuer.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any
agency thereof or obligations fully and unconditionally guaranteed by
the United States of America or any agency thereof with a maturity of
365 days or less,
-26-
<PAGE> 35
(ii) time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition
thereof issued by a bank or trust company which is organized under the
laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or
trust company has capital, surplus and undivided profits aggregating in
excess of $50 million (or the foreign currency equivalent thereof) and
has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act)
or any money-market fund sponsored by a registered broker dealer or
mutual fund distributor,
(iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in
clause (ii) above,
(iv) commercial paper, maturing not more than one year after
the date of acquisition, issued by a corporation (other than an
Affiliate of the Issuer) organized and in existence under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as
of which any investment therein is made of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P, and
(v) securities with maturities of six months or less from the
date of acquisition issued or fully and unconditionally guaranteed by
any state, commonwealth or territory of the United States of America,
or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or Moody's.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.
"Transaction" means the transactions contemplated by the
Merger Agreement, which were consummated on August 26, 1998.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions
-27-
<PAGE> 36
of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"Unrestricted Subsidiary" means (a) any Subsidiary that at the
time of determination shall be an Unrestricted Subsidiary (as designated by the
Board of Directors of the Issuer, as provided below) and (b) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Issuer may designate
any Subsidiary (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary so long as (i) neither the Issuer nor any other
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary, (ii) no default with respect to any Indebtedness of such Subsidiary
would permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Issuer or any Restricted Subsidiary to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity, (iii) any Investment in such Subsidiary
made as a result of designating such Subsidiary an Unrestricted Subsidiary; (iv)
neither the Issuer nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary on terms more favorable to such Subsidiary than those that
might be obtained at the time from persons who are not Affiliates of the Issuer,
and (v) neither the Issuer nor any other Subsidiary has any obligation (1) to
subscribe for additional shares of Capital Stock or other equity interests in
such Subsidiary, or (2) to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels of operating
results. Any such designation by the Board of Directors of the Issuer shall be
evidenced to the Trustee by filing a Board Resolution with the Trustee giving
effect to such designation. The Board of Directors of the Issuer may designate
any Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after
giving effect to such designation, there would be no Default or Event of Default
under this Indenture and the Issuer could incur $1.00 of additional Indebtedness
under clause (i) of Section 10.11(a) hereof.
"U.S. Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more
permanent Global Securities, the Person designated as U.S. Depositary by the
Issuer pursuant to Section 3.01, which must be a clearing agency registered
under the Exchange Act until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" shall mean the U.S. depositary with respect to the Securities of
that series.
"U.S. Government Securities" means securities that are direct
non-callable obligations of the United States of America or securities the
timely payment of whose principal
-28-
<PAGE> 37
and interest is unconditionally guaranteed by the full faith and credit of the
United States of America.
"Vendor Credit Facility" means any agreement entered into with
one or more vendors, suppliers or lessors of telecommunications equipment or
assets (including any agreement entered into with any such vendor, supplier or
lessor or any financial institution acting on behalf of any such vendor,
supplier or lessor) in order to finance the acquisition or construction of
telecommunications equipment or assets, as such agreement may be amended,
modified, supplemented, refunded, refinanced, restructured, renewed or replaced
from time to time; provided that (i) any equipment or other assets acquired or
leased under or pursuant to such Vendor Credit Facility are received by the
Issuer or a Restricted Subsidiary and (ii) all obligations with respect to or
under such Vendor Credit Facility or any amendment, modification, supplement,
refunding, refinancing, restructuring, renewal or replacement thereof are owed,
whether directly or indirectly, as the case may be, to a Person who is not an
Affiliate of the Issuer or any of its Subsidiaries and no such Affiliate shall
act as a facilitator or conduit or in a similar capacity with respect thereto.
"Voting Stock" means with respect to any Person, Capital Stock
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any
Person, the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or Investments by foreign nationals
or other shares issued to Persons as mandated by applicable law) by such Person
or one or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Act" 1.05
"Agent Member" 3.16
"Defaulted Interest" 3.07
"Event of Default" 5.01
"Paying Agent" or "Agent" 3.02
"Physical Securities" 3.03
"Registrar" 3.02
"Security Register" 3.05
----
</TABLE>
-29-
<PAGE> 38
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to "$" or "dollars" refer to the lawful
currency of the United States of America; and
(f) the words "include," "included" and "including" as used
herein are deemed in each case to be followed by the phrase "without
limitation."
Section 1.04. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other persons as to other matters, and any such person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Issuer
-30-
<PAGE> 39
stating that the information with respect to such factual matters is in the
possession of the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated,
with proper identification of each matter covered therein, and form one
instrument.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security or the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof to the same
extent as the original Holder, in respect of anything done, suffered or omitted
to be done by the Trustee, any Paying Agent or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Security.
-31-
<PAGE> 40
Section 1.06. Notices, etc., to the Trustee and the Issuer.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at [___________________________], Attention:
[____________________], or at any other address previously furnished in writing
to the Holders and the Issuer by the Trustee; or
(b) the Issuer by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, to the Issuer
addressed to the Issuer at 15601 Dallas Parkway, Suite 700, Dallas, Texas 75248,
Attention: Jere W. Thompson, Jr., or at any other address previously furnished
in writing to the Trustee by the Issuer.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise expressly
provided herein) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at the address of such Holder as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause, it shall be impracticable to mail notice of any
event as required by any provision of this Indenture, then any method of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
-32-
<PAGE> 41
Section 1.08. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
foregoing paragraph shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
Section 1.09. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer
shall bind its successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities
issued pursuant hereto 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities issued pursuant
hereto, express or implied, shall give to any person (other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders) any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.13. 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 CONFLICTS OF LAW.
-33-
<PAGE> 42
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Issuer shall not have any liability for any obligations of the Issuer under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
Section 1.16. Exhibits.
All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
This Indenture may be executed in any number of counterparts
and by tele copier, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
Section 1.18. 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.
ARTICLE 2
SECURITY FORMS
Section 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication
with respect thereto shall be in substantially the forms set forth, or
referenced in Exhibit A-1 annexed hereto, or in such other form as shall be
established by or pursuant to a Board Resolution, or in one or more indentures
supplemental hereto, with such appropriate insertions, omissions, substitutions
and
-34-
<PAGE> 43
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with the rules of the Depository, any clearing agency or any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof.
The definitive Securities shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
Each Security shall be dated the date of its issuance and
shall show the date of its authentication. The terms and provisions contained in
the Securities shall constitute, and are expressly made, a part of this
Indenture.
ARTICLE 3
THE SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more
series. There shall be established in or pursuant to a Board Resolution, and set
forth in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series to the
extent applicable:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 3.03, 3.04, 3.05, 3.06, 9.06 or 12.07);
-35-
<PAGE> 44
(c) whether any Securities of the series are to be issuable in
permanent global coupons and, if so, (i) whether beneficial owners of interests
in any such permanent Global Security may exchange such interest for Securities
of such series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 3.05, and (ii) the name of the Common Depositary (as
defined in Section 3.04) or the U.S. Depositary, as the case may be, with
respect to any Global Security;
(d) the date or dates on which the principal of the Securities
of the series is payable;
(e) the rate or rates at which the Securities of the series
shall bear interest (including reset rates, if any, and the method by which such
rate will be determined), if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest Payment
Date and, if applicable to such series of Securities, the basis points and
United States Treasury rate(s) and any other rates or other methods to be used
in calculating the reset rate;
(f) the place or places where the principal of (and premium,
if any) and interest on Securities of the series shall be payable and where the
Issuer will maintain an office or agency where Securities may be presented for
registration of transfer or exchange and the place or places where notices and
demands to or upon the Issuer in respect of Securities and the Indenture may be
made;
(g) the right of the Issuer, if any, to defer any payment of
principal of, premium, or interest on the Securities of the series, and the
maximum length of any such deferral period which shall not exceed the Stated
Maturity for the final installment of principal on the Securities of such
series;
(h) the period or periods within which, the price or prices at
which the currency or currency units and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the option of
the Issuer, pursuant to any sinking fund or otherwise;
(i) the obligation, if any, of the Issuer to redeem or
purchase Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period of periods within
which, the price or prices at which, the currency or currency units and the
terms and conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and, where
applicable, the obligation of the Issuer to select the Securities to be
redeemed;
-36-
<PAGE> 45
(j) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall be
issuable;
(k) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof to Section 5.02;
(l) any additions, modifications of deletions in the Events of
Default with respect to Securities of the series, if any, other than those set
forth herein;
(m) if either or both of Section 4.02 and Section 4.03 shall
be inapplicable to the Securities of the series (provided that if no such
inapplicability shall be specified, then both Section 4.02 and Section 4.03
shall be applicable to the Securities of the series);
(n) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies in which the Securities of such series
shall be denominated and in which payments or principal of, and any premium and
interest on, such Securities shall or may by payable;
(o) additions, modifications or deletions of the Issuer's
covenants with respect to Securities of the series, if any, other than those set
forth herein;
(p) any index or indices used to determine the amount of
payments of principal of any premium, if any, on such securities and the manner
in which such amounts will be determined;
(q) if other than the Trustee, the identity of the Registrar
and any Paying Agent;
(r) the appointment of a Person as a Trustee which meets the
requirements of Section 6.09 with respect to Securities of the series;
(s) any index or indices used to determine the amounts of
payments of principal of any premium, if any, on the Securities and the manner
in which such amounts will be determined;
(t) the terms and conditions of any obligation or right of the
Issuer or a Holder to exchange or convert Securities into other securities;
-37-
<PAGE> 46
(u) any other terms of the series.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officer's Certificate or in any
such Indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Issuer and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms
the Securities of such series.
Section 3.02. Registrar and Paying Agent.
The Issuer shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Registrar"), an office or agency (which shall be located in the Borough of
Manhattan in The City of New York, State of New York) where Securities may be
presented for payment (the "Paying Agent" or "Agent") and an office or agency
where notices and demands to or upon the Issuer in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Issuer may have one or more
co-registrars and one or more additional paying agents. The term "Paying Agent"
or "Agent" includes any additional paying agent. The Issuer may act as its own
Paying Agent, except for the purposes of payments on account of principal on the
Securities pursuant to Section 10.10 hereof.
The Issuer shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the Trust Indenture Act. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall notify
the Trustee of the name and address of any such Agent. If the Issuer fails to
maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate compensation in
accordance with Section 6.07 hereof.
The Issuer initially appoints the Trustee as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Securities.
-38-
<PAGE> 47
Section 3.03. Execution and Authentication.
Except as otherwise specified as contemplated by Section 3.01
for securities of any series, the Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 hereto. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Issuer shall approve the form of the Securities and
any notation, legend or endorsement thereon. Each Security shall be dated the
date of issuance and shall show the date of its authentication.
The terms and provisions contained in the form of Security
annexed hereto as Exhibit A-1 shall constitute, and is hereby expressly made, a
part of this Indenture and, to the extent applicable, the Issuer and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Securities issued in exchange for interests in a Global
Security pursuant to Section 3.16 hereof may be issued in the form of permanent
certificated Securities in registered form in substantially the form set forth
in Exhibit A-1 (the "Physical Securities").
Two Officers shall sign, or one Officer shall sign, and one
Officer (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Securities for the Issuer by
manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that office or position at the
time the Trustee authenticates the Security, the Security shall nevertheless be
valid.
At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver Securities of any series
executed by the Issuer to the Trustee for authentication, together with a Issuer
Order for the authentication and delivery of such Securities, and the Trustee in
accordance with the Issuer Order shall authenticate and make such Securities
available for delivery. If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.01 and 3.01, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Sections 315(a) through (d) of the Trust Indenture Act) shall be fully protected
in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.01, that such form has
been established in conformity with the provisions of this Indenture;
-39-
<PAGE> 48
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.01, that such terms
have been established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Issuer in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Issuer, enforceable in accordance with their terms, except to
the extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law); and
(d) that no consent, approval, authorization, order,
registration or qualification of or with any court or any governmental agency or
body having jurisdiction over the Issuer is required for the execution and
delivery of such Securities by the Issuer, except such as have been obtained
(except that no opinion need be expressed as to state securities or Blue Sky
laws).
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 3.01 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 3.01 or the Issuer Order and
Opinion of Counsel otherwise required pursuant to the immediately preceding
paragraph at or prior to the time of authentication of each security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first security of such series to be issued.
If the Issuer shall establish pursuant to Section 3.01 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section and the Issuer Order with respect to the authentication and
delivery of such series, authenticate and deliver one or more global Securities
that (i) shall be in an aggregate amount equal to the aggregate principal amount
specified in such Issuer Order, (ii) shall be registered in the name of the
Common Depositary or U.S. Depositary,
-40-
<PAGE> 49
as the case may be, therefor or its nominee, and (iii) shall be made available
for delivery by the Trustee to such depositary or pursuant to such depositary's
instruction.
Each depositary designated pursuant to Section 3 must, at the time of
its designation and at all times while it serves as depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
Unless otherwise provided for in the form of security, each security
shall be dated the date of its authentication.
No security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
security shall be conclusive evidence, and the only evidence, that such security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuer to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuer and Affiliates of the Issuer.
The Securities shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable.
Section 3.04. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Issuer may execute, and upon Issuer Order the Trustee shall
authenticate and make available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary
Securities may be in global form, representing all or a portion of the
Outstanding Securities of such series.
-41-
<PAGE> 50
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with the provisions in Section 3.05), if
temporary Securities of any series are issued, the Issuer will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Issuer in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series, the Issuer shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
If temporary Securities of any series are issued in global
form, any such temporary Global Security shall, unless otherwise provided
therein, be delivered to the office of a depositary of common depositary (the
"Common Depositary") for credit to the respective accounts of the beneficial
owners of such Securities (or to such other accounts as they may direct).
Section 3.05. Transfer and Exchange.
The Issuer shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 10.02 hereof being
sometimes referred to herein as the "Security Register") in which, subject to
such reasonable regulations as the Registrar may prescribe, the Issuer shall
provide for the registration of Securities and of transfers and exchanges of
Securities. The Trustee is hereby initially appointed Registrar for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any security of
any series at the office or agency of the Issuer in Place of Payment for that
series, the Issuer shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
-42-
<PAGE> 51
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.01, any permanent Global Security shall be
exchangeable only as provided in paragraph. If the beneficial owners of interest
in a permanent Global Security are entitled to exchange such interests for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified and as subject to the conditions
contemplated by Section 3.01, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Issuer shall deliver to the Trustee definitive Securities of that series in
aggregate principal amount equal to the principal amount of such permanent
Global Security, executed by the Issuer. On or after the earliest date on which
such interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the Common Depositary or the U.S. Depositary,
as the case may be, and in accordance with instructions given to the Trustee and
the Common Depositary or the U.S. Depositary, as the case may be (which
instructions shall be in writing but need not comply with Section 1.03 or be
accompanied by an Opinion of Counsel), as shall be specified in the Issuer Order
with respect thereto to the Trustee, as the Issuer's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same series
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered permanent Global Security, a
like aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
Global Security to be exchanged which shall be in the form of the Securities of
such series; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series selected for redemption under
Section 12.03 and ending at the close of business on the day of such mailing.
Promptly following and such exchange in part, such permanent Global Security
shall be returned by the Trustee to the Common Depositary or the U.S.
Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary referred to above. If a Security in the form specified for such
series is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of interest or Defaulted Interest, as the case may be,
such interest or Defaulted Interest will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of such
security in the form specified for such series, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent Global
Security is payable in accordance with the provision of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligation, of the Issuer, evidencing the same
debt, and entitled the same debt, and
-43-
<PAGE> 52
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration or transfer or
for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument or transfer in form
satisfactory to the Issuer and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 12.07 not involving any transfer.
The Issuer shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 12.03 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any security so selected for redemption in whole or in
part, except the unredeemed portion of any security being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen
Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security of any series claims that the Security has been lost,
destroyed or wrongfully taken, the Issuer shall execute and upon an Issuer
Order, the Trustee shall authenticate and deliver a replacement Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding
if the Holder of such Security furnishes to the Issuer and to the Trustee
evidence reasonably acceptable to them of the ownership and the destruction,
loss or theft of such Security and an indemnity bond shall be posted by such
Holder, sufficient in the judgment of the Issuer or the Trustee, as the case may
be, to protect the Issuer, the Trustee or any Agent from any loss that any of
them may suffer if such Security is replaced. The Issuer may charge such Holder
for the Issuer's expenses in replacing such Security (including (i) expenses of
the Trustee charged to the Issuer and (ii) any tax or other governmental charge
that may be imposed) and the Trustee may charge the Issuer for the Trustee's
expenses in replacing such Security.
Every replacement Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Issuer, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable
-44-
<PAGE> 53
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
and interest on such defaulted interest at the then applicable interest rate
borne by the Securities, to the extent lawful (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the Regular Record Date; and such
Defaulted Interest may be paid by the Issuer, at its election in each case, as
provided in subsection (a) or (b) below:
(a) The Issuer may elect to make payment of any Defaulted Interest to the
persons in whose names the Securities of such series (or their respective
predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Issuer shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Issuer shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as provided in this subsection (a). Not
later than the second Business Day after the Trustee receives the notice from
the Issuer referred to in the preceding sentence, the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the Issuer
in writing of such Special Record Date. In the name and at the expense of the
Issuer, the Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at its address as it appears in the Note Register, not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted
-45-
<PAGE> 54
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the Securities of
such series (or their respective predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
subsection (b).
(b) The Issuer may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of any series may be listed, and upon such
notice as may be required by such exchange, if, after written notice given by
the Issuer to the Trustee of the proposed payment pursuant to this subsection
(b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment for registration
of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the person in whose name any Security is registered in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.07 hereof) interest on
such Security and for all other purposes whatsoever, whether or not such
Security shall be overdue, and neither the Issuer, the Trustee nor any agent of
the Issuer or the Trustee shall be affected by notice to the contrary.
None of the Issuer, the Trustee or any agent of the Issuer or
the Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interest
of a Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form noting herein shall
prevent the Issuer or the Trustee or any agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by any U.S. Depositary (or its nominee), as a Holder, with respect to
such Security in global form or impair, as between such U.S. Depositary or
Common Depositary and owners of beneficial interests in such Security in global
form or impair, as between such U.S. Depositary or Common Depositary and owners
of beneficial interests in such Security in global form, the operation of
customary practices governing the exercise of the right of such U.S. Depositary
or Common Depositary (or its nominee) as holder of such Security in global form.
-46-
<PAGE> 55
Section 3.09. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Issuer may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer or exchange,
redemption or payment. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.09 hereof, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuer unless by an Issuer Order the Issuer shall timely direct that the
canceled Securities be returned to it. The Trustee shall provide the Issuer a
list of all Securities that have been canceled from time to time as requested by
the Issuer.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.01
for Securities of any series, interest on the Securities shall be computed on
the basis of a 360-day year of twelve 30-day months.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
date established for the payment of Defaulted Interest or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of principal, premium, if any,
or interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be. In such event,
no interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date, Redemption Date, date established for the
payment of Defaulted Interest or Stated Maturity, as the case may be, to the
next succeeding Business Day and, with respect to any Interest Payment Date,
interest for the period from and after such Interest Payment Date shall accrue
with respect to the next succeeding Interest Payment Date.
-47-
<PAGE> 56
Section 3.12. CUSIP and CINS Numbers.
The Issuer in issuing the Securities of any series may use
"CUSIP" and "CINS"numbers (if then generally in use), and if so, the Trustee
shall use the CUSIP or CINS numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP or CINS number, as the case may be, printed in the notice
or on the Securities, and that reliance may be placed only on the other
identification numbers printed on the Securities. The Issuer shall promptly
notify the Trustee in writing of any change in the CUSIP or CINS number of any
type of Securities.
Section 3.13. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on the Securities, and shall notify
the Trustee of any default by the Issuer in making any such payment. Money held
in trust by the Paying Agent need not be segregated except as required by law
and in no event shall the Paying Agent be liable for any interest on any money
received by it hereunder. The Issuer at any time may require the Paying Agent to
pay all money held by it to the Trustee and account for any funds disbursed and
the Trustee may at any time during the continuance of any Event of Default, upon
an Issuer Order to the Paying Agent, require such Paying Agent to pay forthwith
all money so held by it to the Trustee and to account for any funds disbursed.
Upon making such payment, the Paying Agent shall have no further liability for
the money delivered to the Trustee.
Section 3.14. Treasury Securities.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver, consent
or notice, Securities owned by the Issuer or an Affiliate of the Issuer shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver, consent or notice, only Securities which a Responsible
Officer of the Trustee actually knows are so owned shall be so considered. The
Issuer shall notify the Trustee, in writing, when it or any of its Affiliates
repurchases or otherwise acquires Securities, of the aggregate principal amount
of such Securities so repurchased or otherwise acquired.
Section 3.15. Deposits of Monies.
Prior to 1:00 p.m. New York City time on each Interest Payment
Date, maturity date, the Payment Date made with respect to an Offer to Purchase
made pursuant to Sections
-48-
<PAGE> 57
10.10 hereof, the Issuer shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, maturity date and Payment Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, maturity date and Payment Date, as the
case may be.
Section 3.16. Book-Entry Provisions for Securities in Global
Form.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit B.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security, and the Depository may be treated by
the Issuer, the Trustee and any agent of the Issuer or the Trustee as the
absolute owner of the Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or nominee of such Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities may
be transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 3.03 hereof. In
addition, Physical Securities shall be transferred to all beneficial owners, in
exchange for their beneficial interests in Global Securities, if (i) the
Depository notifies the Issuer that it is unwilling or unable to continue as
Depository for any Global Security, or that it will cease to be a "Clearing
Agency" under the Exchange Act, and in either case a successor Depository is not
appointed by the Issuer within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a written
request from the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in any Global Security to beneficial owners pursuant
to paragraph (b), the Registrar shall (if one or more Physical Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Issuer shall
-49-
<PAGE> 58
execute, and the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and principal amount of authorized denominations.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Issuer shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of like tenor of authorized denominations.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to this Section 3.16. The Issuer
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable prior written notice to the Registrar.
ARTICLE 4
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Termination of Issuer's Obligations .
Unless pursuant to Section 3.01 provision is made for the
inapplicability of all or part of this Article 4, and except as otherwise
provided in this Section 4.01, the Issuer may terminate its obligations under
the Securities of a particular series and this Indenture if:
(a) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities of such
series that have been replaced or Securities of such series that are
paid pursuant to Section 10.01 or Securities of such series for whose
payment money or securities have theretofore been held in trust and
thereafter repaid to the Issuer, as provided in Section 4.05) have been
delivered to the Trustee for cancellation and the Issuer has paid all
sums payable by it hereunder other than those that could become payable
under Sections 4.06 or 6.07; or
(b) (i) the Securities series mature within [_____] or all
of them are to be called for redemption within [_____] under
arrangements reasonably satisfactory to the
-50-
<PAGE> 59
Trustee for giving the notice of redemption, (ii) the Issuer
irrevocably deposits in trust with the Trustee during such [_____]
period, under the terms of an irrevocable trust agreement in form and
substance reasonably satisfactory to the Trustee, as trust funds solely
for the benefit of the Holders for that purpose, money or U.S.
Government Securities sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay
principal, premium, if, any, and interest on the Securities of such
series to maturity or redemption, as the case may be, and to pay all
other sums payable by it hereunder other than those that could become
payable under Sections 4.06 or 6.07, (iii) no Default or Event of
Default with respect to the Securities of such series shall have
occurred and be continuing on the date of such deposit, (iv) such
deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to
which the Issuer or any of its Subsidiaries is a party or by which the
Issuer or any of its Subsidiaries is bound and (v) the Issuer has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent relating to
the satisfaction and discharge of this Indenture set forth herein have
been complied with.
With respect to the foregoing clause (a), the Issuer's
obligations under Section 6.07 shall survive. With respect to the foregoing
clause (b), the Issuer's obligations under Sections 3.02, 3.03, 3.05, 3.06,
3.07, 3.13, 4.04, 4.05, 4.06, 6.10, 10.01 and 10.02 hereof shall survive until
the Securities are no longer Outstanding. Thereafter, only the provisions of
Sections 4.05, 4.06 and 6.07 hereof shall survive. After any such irrevocable
deposit, the Trustee upon request shall acknowledge in writing the discharge of
the Issuer's obligations under the Securities of such series and this Indenture
except for those surviving obligations specified above.
4.02. Defeasance and Discharge of Indenture.
The Issuer will be deemed to have paid and will be discharged
from any and all obligations in respect of the Securities of a particular series
on the [___] day after the date of the deposit referred to in clause (a) of
this Section 4.02, and the provisions of this Indenture will no longer be in
effect with respect to the Securities of such series, and the Trustee, except as
to (i) rights of registration of transfer and exchange, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders to receive payments of principal thereof and
interest thereon, (iv) the Issuer's obligations under Section 10.02, (v) the
rights, obligations and immunities of the Trustee hereunder and (vi) the rights
of the Holders as beneficiaries of this Indenture with respect to the property
so deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
-51-
<PAGE> 60
(a) with reference to this Section 4.02, the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
6.09) and conveyed all right, title and interest for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal of, premium, if any, and
interest, if any, on the Securities of such series, and dedicated
solely to, the benefit of the Holders, in and to (i) money in an
amount, (ii) U.S. Government Securities that, through the payment of
interest, premium, if any, and principal in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (a),
money in an amount, or (iii) a combination thereof in an amount,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and accrued interest on the Outstanding Securities of such series
at the Stated Maturity of such principal or interest; provided that the
Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Securities to the payment of such
principal, premium, if any, and interest with respect to the Securities
of such series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or
by which the Issuer or any of its Subsidiaries is bound;
(c) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the [____] day after such date of deposit;
(d) the Issuer shall have delivered to the Trustee (i) either
(x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of the Issuer's
exercise of its option under this Section 4.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised or (y) an Opinion of Counsel to the same effect as the ruling
described in clause (x) above accompanied by a ruling to that effect
published by the Internal Revenue Service, unless there has been a
change in the applicable federal income tax law since the date of this
Indenture such that a ruling from the Internal Revenue Service is no
longer required and (ii) an Opinion of Counsel to the effect that the
creation of the defeasance trust does not violate the Investment
Company
-52-
<PAGE> 61
Act of 1940 and (y) after the passage of [___] days following the
deposit (except, with respect to any trust funds for the account of any
Holder who may be deemed to be an "insider" for purposes of the
Bankruptcy Law, after one year following the deposit), the trust funds
will not be subject to the effect of Section 547 of the Bankruptcy Law
or Section 15 of the New York Debtor and Creditor Law in a case
commenced by or against the Issuer under either such statute, and
either (i) the trust funds will no longer remain the property of the
Issuer (and therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors, rights generally) or (ii) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Issuer, (A) assuming such trust funds remained
in the possession of the Trustee prior to such court ruling to the
extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise except for the
effect of Section 552(b) of the Bankruptcy Law on interest on the trust
funds accruing after the commencement of a case under such statute and
(B) the Holders will be entitled to receive adequate protection of
their interests in such trust funds if such trust funds are used in
such case or proceeding;
(e) if the Securities of such series are then listed on a
national securities exchange, the Issuer shall have delivered to the
Trustee an Opinion of Counsel to the effect that such deposit,
defeasance and discharge will not cause the Securities of such series
to be delisted; and
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 4.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the [___]
day (or one year) period referred to in clause (d)(ii)(y) of this Section 4.02
none of the Issuer's obligations under this Indenture shall be discharged.
Subsequent to the end of such [___] (or one year) period with respect to this
Section 4.02, the Issuer's obligations under Sections 3.02, 3.03, 3.05, 3.06,
3.07, 3.13, 3.16, 4.04, 4.05, 4.06, 6.07, 6.10, 10.01 and 10.02 hereof shall
survive until the Securities of such series are no longer Outstanding.
Thereafter, only the Issuer's obligations under Sections 4.05, 4.06 and 6.07
hereof shall survive. If and when a ruling from the Internal Revenue Service or
an Opinion of Counsel referred to in clause (d)(i) of this Section 4.02 is able
to be provided specifically without regard to, and not in reliance upon, the
continuance of the Issuer's obligations under Section 10.01, the Issuer's
obligations under such Section 10.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 4.02.
-53-
<PAGE> 62
After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Issuer's obligations under the
Securities of such series and this Indenture except for those surviving
obligations in the immediately preceding paragraph.
Section 4.03. Defeasance of Certain Obligations.
The Issuer may omit to comply with (i) any term, provision or
condition set forth in clauses (c) and (d) of Section 8.01 and Sections 10.10
through 10.11 and Sections 10.13 through 10.14, (ii) clause (d) of Section 5.01
with respect to defaults or breaches of Sections 10.10,10.11, 10.13 and 10.14
and (iii) clauses (c) and (d) of Section 8.01, and clauses (e) and (f) of
Section 5.01 shall be deemed not to be Events of Default, in each case with
respect to the Outstanding Securities of a particular series if:
(a) with reference to this Section 4.03, the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 6.09) and conveyed all
right, title and interest to the Trustee for the benefit of the Holders, under
the terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee as trust funds in trust, specifically pledged to the Trustee for
the benefit of the Holders as security for payment of the principal of, premium,
if any, and interest, if any, on the Securities of such series, and dedicated
solely to, the benefit of the Holders, in and to (i) money in an amount, (ii)
U.S. Government Securities that, through the payment of interest and principal
in respect thereof in accordance with their terms, will provide, not later than
one day before the due date of any payment referred to in this clause (a), money
in an amount or (iii) a combination thereof in an amount sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee to pay and discharge, (i)
the principal of, premium, if any, and interest on the Securities Outstanding of
such series at the Stated Maturity of such principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to the
Outstanding Securities of such series on the day on which such Payments are due
and payable in accordance with the terms of this Indenture and such Securities;
provided that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Securities to the payment of such
principal, premium, if any, and interest with respect to the Securities;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by which
the Issuer or any of its Subsidiaries is bound;
-54-
<PAGE> 63
(c) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on the [___]
day after such date of deposit;
(d) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the creation of the defeasance trust does not
violate the Investment Company Act of 1940, (ii) the Trustee, for the benefit of
the Holders, has a valid first priority security interest in the trust funds,
(iii) the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance of certain covenants and
Events of Default and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (iv) after the passage of [___]
days following the deposit (except, with respect to any trust funds for the
account of any Holder who may be deemed to be an "insider" for purposes of the
Bankruptcy Law, after one year following the deposit), the trust funds will not
be subject to the effect of Section 547 of the Bankruptcy Law or Section 15 of
the New York Debtor and Creditor Law in a case commenced by or against the
Issuer under either such statute, and either (A) the trust funds will no longer
remain the property of the Issuer (and therefore will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors, rights generally) or (B) if a court were to rule under any
such law in any case or proceeding that the trust funds remained property of the
Issuer, (x) assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the Trustee
will hold, for the benefit of the Holders, a valid and perfected security
interest in such trust funds that is not avoidable in bankruptcy or otherwise
(except for the effect of Section 552(b) of the Bankruptcy Law on interest on
the trust funds accruing after the commencement of a case under such statute)
and (y) the Holders will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used in such case or
proceeding;
(e) if the Securities of such series is then listed on a
national securities exchange, the Issuer shall have delivered to the Trustee an
Opinion of Counsel to the effect that such deposit, defeasance and discharge
will not cause the Securities of such series to be delisted; and
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 4.03 have been complied with.
Section 4.04. Application of Trust Money. Subject to Section
4.06, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Securities deposited with it pursuant to Section 4.01, 4.02 or 4.03, as the case
may be, and shall apply the deposited money and the money from U.S. Government
Securities in accordance with the Securities of a particular
-55-
<PAGE> 64
series and this Indenture to the payment of principal of, premium, if any, and
interest on the Securities of such series; but such money need not be segregated
from other funds except to the extent required by law.
Section 4.05. Repayment to Issuer. Subject to Sections 4.01,
4.02, 4.03 and 6.07, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request set forth in an Officers' Certificate any excess money held
by them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the Issuer
upon request any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years. After payment to the
Issuer, Holders entitled to such money must look to the Issuer for payment as
general creditors, unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
Section 4.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Securities in accordance with
Section 4.01, 4.02 or 4.03, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuer's obligations under this Indenture and the Securities of a particular
series shall be revived and reinstated as though no deposit had occurred
pursuant to Section 4.01, 4.02 or 4.03, as the case my be, until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Securities in accordance with Section 4.01, 4.02 or 4.03, as the case
may be; provided that, if the Issuer has made any payment of principal of,
premium, if any, or interest on any Securities of such series because of the
reinstatement of its obligations, the Issuer shall be surrogated to the rights
of the Holders of such Securities of such series to receive such payment from
the money or U.S. Government Securities held by the Trustee or Paying Agent.
ARTICLE 5
REMEDIES
Section 5.01. Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
-56-
<PAGE> 65
(a) default in the payment of the principal of, or premium, if
any, on any Security of that series when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise; provided, however, that if
the Issuer is permitted by the terms of the Securities of the applicable series
to defer the payment in question, the date on which such payment is due and
payable shall be the date on which such Issuer is required to make payment
following such deferral, by such deferral has been elected pursuant to the terms
of the Securities; or
(b) default in the payment of interest or any sinking fund
payment on any Security of that series when the same becomes due and payable,
which default continues for a period of [___] days; provided, however, that if
the Issuer is permitted by the terms of the Securities of the applicable series
to defer the payment in question, the date on which such payment is due and
payable shall be the date on which such Issuer is required to make payment
following such deferral, if such deferral has been elected pursuant to the terms
of the Securities; or
(c) default in the performance or breach of the provisions of
Article Eight or the failure to make or consummate an Offer to Purchase in
accordance with Section 10.10; provided, however, that if the Issuer is
permitted by the terms of the Securities of the applicable series to defer the
payment in question, the date on which such payment is due and payable shall be
the date on which such Issuer is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(d) defaults in the performance or breach of any covenant or
agreement of the Issuer in this Indenture or under the Securities of that series
(other than defaults specified in clause (a), (b) or (c) above), which default
or breach continues (i) for a period of 30 consecutive days or (ii) in the event
such default or breach cannot be cured in such 30-day period and the Issuer is
diligently and in good faith attempting to cure such default or breach, for a
period of 60 consecutive days in the case of both clauses (i) and (ii), after
written notice by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Securities of that series then Outstanding; provided,
however, that if the Issuer is permitted by the terms of the Securities of the
applicable series to defer the payment in question, the date on which such
payment is due and payable shall be the date on which such Issuer is required to
make payment following such deferral, if such deferral has been elected pursuant
to the terms of the Securities; or
(e) there occurs with respect to any issue or issues of
Indebtedness of the Issuer or any Restricted Subsidiary having an outstanding
principal amount of $___ million or more in the aggregate for such issues of all
such Persons, whether such Indebtedness now exists or shall hereafter be created
(i) an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has
-57-
<PAGE> 66
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (ii) the failure to make a
principal payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within 30 days of
such payment default; provided, however, that if the Issuer is permitted by the
terms of the Securities of the applicable series to defer the payment in
question, the date on which such payment is due and payable shall be the date on
which such Issuer is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities; or
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $[___] million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Issuer or any Restricted Subsidiary and shall not be paid or discharged, and
there shall be any period of [___] consecutive days following entry of the
final judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all such
Persons to exceed $___ million during which a stay or enforcement of such final
judgement or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that if the Issuer is permitted by the terms of the
Securities of the applicable series to defer the payment in question, the date
on which such payment is due and payable shall be the date on which such Issuer
is required to make payment following such deferral, if such deferral has been
elected pursuant to the terms of the Securities; or
(g) a court having jurisdiction in the premises enters a
decree or order for (i) relief in respect of the Issuer or any Restricted
Subsidiary in an involuntary case under any applicable Bankruptcy Law, (ii)
appointment of a Custodian of the Issuer or any Restricted Subsidiary or for all
or substantially all of the property and assets of the Issuer or any Restricted
Subsidiary or (C) the winding up or liquidation of the affairs of the Issuer or
any Restricted Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of [___] consecutive days; provided,
however, that if the Issuer is permitted by the terms of the Securities of the
applicable series to defer the payment in question, the date on which such
payment is due and payable shall be the date on which such Issuer is required to
make payment following such deferral, if such deferral has been elected pursuant
to the terms of the Securities;
(h) the Issuer or any Restricted Subsidiary (i) commences a
voluntary case under any applicable Bankruptcy Law, or consents to the entry of
an order for relief in an involuntary case under any Bankruptcy Law, (ii)
consents to the appointment of or taking possession by a Custodian of the Issuer
or any Restricted Subsidiary or for all or substantially all of the property and
assets of the Issuer or any Restricted Subsidiary or (iii) effects any general
assignment for the benefit of creditors; provided, however, that if the Issuer
is permitted by the terms of the Securities of the applicable series to defer
the payment in question, the date on which
-58-
<PAGE> 67
such payment is due and payable shall be the date on which such Issuer is
required to make payment following such deferral, if such deferral has been
elected pursuant to the terms of the Securities; or
(i) any other Event of Default provided with respect to
Securities of that series.
Section 5.02. Acceleration of Maturity, Rescission and
Annulment.
If an Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 5.01 hereof with respect to the
Issuer) occurs and is continuing, then the Trustee or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of any series
may, by written notice to the Issuer (and to the Trustee, if such notice is
given by the Holders) may, and the Trustee upon the request of the Holders of
not less than 25% in aggregate principal amount of the Outstanding Securities of
that series shall, declare the principal of, premium, if any, and accrued
interest on all Outstanding Securities of that series to be immediately due and
payable and upon any such declaration such amounts shall become immediately due
and payable. If an Event of Default specified in clause (g) or (h) of Section
5.01 hereof with respect to the Issuer occurs and is continuing, then the
principal of, premium, if any, and accrued interest on all Outstanding
Securities of that series shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. In the event of a declaration of acceleration because an Event of
Default set forth in clause (e) of Section 5.01 hereof has occurred and is
continuing, such declaration of acceleration shall be automatically rescinded
and annulled if the event of default triggering such Event of Default pursuant
to clause (e) shall be remedied or cured by the Issuer or the relevant
Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto.
After an acceleration, the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities of that series may, by
written notice to the Issuer and the Trustee, waive all past defaults and
rescind and annul such acceleration and its consequences if all existing Events
of Default, other than nonpayment of the principal of and accrued and unpaid
interest on, the Securities of that series that has become due solely as a
result of such acceleration, have been cured or waived and if the rescission of
acceleration would not conflict with any judgment or decree of a court of
competent jurisdiction.
-59-
<PAGE> 68
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Issuer covenants that if an Event of Default specified in
Section 5.01(a), 5.01(b) or 5.01(c) (to the extent relating to a payment
required by Section 10.10) shall have occurred and be continuing, the Issuer
will, upon demand of the Trustee, pay to the Trustee, for the benefit of the
Holders of Securities of any series tendered for payment pursuant to such
provisions of this Indenture, the whole amount then due and payable on
Securities of that series tendered for payment pursuant to such provisions of
this Indenture for principal, premium, if any, and interest, with interest upon
the overdue principal, premium, if any, and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest, at
the rate then borne by such Securities; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Issuer fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may,
but is not obligated under this paragraph to, institute a judicial proceeding
for the collection of the sums so due and unpaid and may, but is not obligated
under this paragraph to, prosecute such proceeding to judgment or final decree,
and may, but is not obligated under this paragraph to, enforce the same against
the Issuer or any other obligor upon such Securities and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Issuer or any other obligor upon such Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion, but is not obligated under this paragraph to, (i) proceed
to protect and enforce its rights and the rights of the Holders under this
Indenture by such appropriate private or judicial proceedings as the Trustee
shall deem most effectual to protect and enforce such rights, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted herein, or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Issuer shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuer or any other obligor upon the
Securities or the property of the Issuer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuer for the payment of overdue
-60-
<PAGE> 69
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, fees, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
Custodian, in any such judicial proceeding, is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay the
Trustee as administrative expenses associated with any such proceeding, and in
the event that the Trustee shall consent to the making of such payments directly
to Holders, any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 6.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise.
Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, fees,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
-61-
<PAGE> 70
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in
respect of the Securities of any series shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal, premium, if any, or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
(a) first, to the Trustee for amounts due under Section 6.07
applicable to such series;
(b) second, to Holders for interest accrued on the Securities
of such series, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities for interest;
(c) third, to Holders for principal and premium, if any, owing
under such Securities, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities for
principal and premium, if any; and
(d) fourth, the balance, if any, to the Issuer.
The Trustee, upon prior written notice to the Issuer, may fix
a Record date and payment date for any payment to Holders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series shall have made written
request to the Trustee to pursue the remedy;
(c) Holders described in (b) above have offered to the Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
-62-
<PAGE> 71
(d) the Trustee does not comply with the request within 60
days after its receipt of the request and offer of indemnity; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Security to affect, disturb or prejudice the rights of any
other Holder, or to obtain or to seek to obtain priority or preference over any
other Holder or to enforce any right under this Indenture or any Security,
except in the manner provided in this Indenture and for the equal and ratable
benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive cash payment of the principal of, premium, if any, and
(subject to Section 3.07 hereof) interest on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
the respective Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Issuer, the Trustee and the Holders shall, subject to any determination
in such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity
-63-
<PAGE> 72
or otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 5.12. Control by Majority.
The Holders of at least a majority in aggregate principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture or any Security of that series or expose the Trustee
to personal liability or be determined by the Trustee in good faith as unduly
prejudicial to the rights of any Holder of Securities of such series not joining
in the giving of such direction; and (b) (c) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series may on behalf of the Holders
of all the Securities of such series waive any past Default hereunder and its
consequences, except a Default
(a) in the payment of the principal of, or interest on any
Outstanding Security of such series or
(b) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected thereby.
-64-
<PAGE> 73
(c) Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.14 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of, premium, if any, or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the respective
Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive the Issuer from paying all or any portion
of the principal of, premium, if any, or interest on the Securities of any
particular series contemplated herein or in the Securities of such series or
which may affect the covenants or the performance of this Indenture; and the
Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 5.16. Unconditional Right of Holders To Receive
Payment.
Notwithstanding any other provision in this Indenture and any
other provision of any Security of any series, the right of any Holder of any
Security of any series to receive payment of the principal of, premium, if any,
and interest on such Security on or after the respective Stated Maturities (or
the respective Redemption Dates, in the case of redemption)
-65-
<PAGE> 74
expressed in such Security, or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any
such certificates or opinions which by provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) During the existence of an Event of Default, the Trustee
is required to exercise such rights and powers vested in it under this Indenture
using the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 6.01.
-66-
<PAGE> 75
Section 6.02. Notice of Defaults.
Within [___] days after the occurrence of any Default
actually known to a Responsible Officer of the Trustee, the Trustee shall
transmit by mail to all Holders of Securities of such series in the manner and
to the extent provided in TIA Section 313(c), as their names and addresses
appear in the Security Register, notice of such Default hereunder unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a Default in the payment of the principal of, premium, if any, or
interest on any Security of such series or in the case of any Default arising
from the occurrence of a Change of Control, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section
315 of the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution thereof;
(c) the Trustee may consult with counsel and any advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
-67-
<PAGE> 76
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other than any
liabilities arising out of its own negligence, bad faith or willful misconduct;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, note, other evidence of
indebtedness or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of any series then Outstanding; provided, however, that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
indemnity satisfactory to it against such expenses or liabilities as a condition
to proceeding; the reasonable expenses of every such investigation shall be paid
by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Issuer upon demand; provided, further, the Trustee in its
discretion may make such further inquiry or investigation into such facts or
matters as it may deem appropriate, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodian or nominees and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent, attorney,
custodian or nominee appointed with due care by it hereunder;
(h) except with respect to Section 10.01, the Trustee shall
have no duty to inquire as to the performance of the Issuer's covenants in
Article Ten. In addition, the Trustee shall not be deemed to have knowledge of
any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 5.01(a), 5.01(b) and 10.01 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification from the
Issuer or the Holders of at least 10% in aggregate principal amount of the
Securities of any series or a Responsible Officer shall have obtained actual
knowledge; and
(i) if the Trustee is acting in the capacity of Registrar
and/or Paying Agent, then the rights afforded to the Trustee under this Section
6.03 shall also be afforded to such Registrar and/or Paying Agent.
-68-
<PAGE> 77
Section 6.04. Trustee Not Responsible for Recitals,
Dispositions of Securities or Application of
Proceeds Thereof.
The recitals contained herein and in the Securities, except
the Trustee's certificate of authentication, shall be taken as the statements of
the Issuer, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification on Form T-1, if any, to be
supplied to the Issuer are true and accurate subject to the qualifications set
forth therein. The Trustee shall not be accountable for the use or application
by the Issuer of Securities or the proceeds thereof.
Section 6.05 Trustee and Agents May Hold Securities;
Collections; Etc.
The Trustee, any Paying Agent, Registrar or any other agent of
the Issuer, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Registrar or such other agent and, subject to Section
6.08 hereof and Sections 310 and 311 of the Trust Indenture Act, may otherwise
deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 6.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder.
Section 6.07 Compensation and Indemnification of Trustee and
Its Prior Claim.
The Issuer covenants and agrees: (a) to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable compensation
for all services rendered by it hereunder (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); (b) to reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, fees, disbursements and advances incurred
or made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation, fees, and the expenses and
disbursements of its counsel and of all agents and other
-69-
<PAGE> 78
persons not regularly in its employ), except any such expense, disbursement or
advance as may arise from its negligence, bad faith or willful misconduct; and
(c) to indemnify the Trustee and any of its officers, directors, employees and
agents and each predecessor Trustee for, and to hold it harmless against any
loss, liability or expense (including attorneys' fees and expenses incurred in
defending themselves) incurred without negligence, bad faith or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including enforcement of this Section 6.07.
To secure the Issuer's payment obligations in this Section
6.07, the Trustee shall have a Lien prior to the Securities on all money or
property held or collected by the Trustee in such capacity, except that held in
trust to pay principal and interest on particular Securities. Such Lien shall
survive the satisfaction and discharge of this Indenture.
The obligations of the Issuer under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute an additional obligation hereunder and shall survive
the satisfaction and discharge of this Indenture or the rejection or termination
of this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are hereby subordinated
to such senior claim. If the Trustee renders services and incurs expenses
following an Event of Default under Section 5.01(g) or (h) hereof, the parties
hereto and the Holders by their acceptance of the Securities hereby agree that
such expenses are intended to constitute expenses of administration under any
bankruptcy law.
6.08.. Section Conflicting Interests.
The Trustee shall be subject to and comply with the provisions
of Section 310(b) of the Trust Indenture Act.
6.09. Section Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a corporation eligible to act as Trustee under Trust Indenture Act Sections
310(a)(1) and (2) and which shall have a combined capital and surplus of at
least [$_________]. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the
-70-
<PAGE> 79
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10 Resignation and Removal; Appointment of Successor
Trustee.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.11.
(b) The Trustee may at any time resign with respect to the
Securities of one or more series by giving written notice thereof to the Issuer
at least 20 Business Days prior to the date of such proposed resignation. Upon
receiving such notice of resignation, the Issuer shall, after all monies due and
owing have been paid to the Trustee, promptly appoint a successor trustee by
written instrument executed by authority of the Board of Directors, a copy of
which shall be delivered to the resigning Trustee and a copy to the successor
Trustee. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 20 Business Days after the giving of such
notice of resignation, the resigning Trustee may, or any Holder who has been a
bona fide Holder of a Security for at least six consecutive months immediately
prior to such date may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by an Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Issuer.
(d) If at any time:
(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act in accordance
with Section 6.08 hereof after written request therefor by the Issuer
or by any Holder who has been a bona fide Holder of a Security for at
least six consecutive months immediately prior to such date, or
(ii) the Trustee shall cease to be eligible under
Section 6.09 hereof and shall fail to resign after written request
therefor by the Issuer or by any Holder who has been a bona fide
Holder of a Security for at least six consecutive months immediately
prior to such date, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed
-71-
<PAGE> 80
or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose or rehabilitation,
conservation or liquidation,
then, in any case, (x) the Issuer by a Board Resolution may remove the Trustee
with respect to all Securities, or (y) subject to Section 5.14, any Holder of
any Security who has been a bona fide Holder of a Security for at least six
consecutive months immediately prior to such date may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become
disqualified from or incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause with respect to the Securities of one or more
series, the Issuer, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any successor Trustee may be appointed with respect to the
Securities of one or all of such series and at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Issuer and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Issuer. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Issuer or the
Holders and accepted appointment in the manner hereinafter provided, the Holder
who has been a bona fide Holder of a Security of such series for at least six
consecutive months immediately prior to such date may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Issuer shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
and the address of its Corporate Trust Office.
-72-
<PAGE> 81
Section 6.11 Acceptance of Appointment by Successor or
Additional Trustees.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Issuer and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Issuer or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a Trustee or a
successor with respect to the Securities of one or more (but not all) series,
the Issuer, any retiring Trustee and each Trustee or a successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each Trustee or a successor Trustee shall
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each Trustee
or a successor Trustee all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such Trustee or a successor Trustee relates, (2) if any retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of any retiring Trustee with respect tot he
Securities of that or those series as to which any retiring Trustee is not
retiring shall continue to be vested in any retiring Trustee, and (3) shall add
to or change any of the provision of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental Indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such Trustee or a successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of any retiring Trustee with respect to the Securities
of that or those series to which the appointment of such Trustee or a successor
Trustee relates; but, on request of the Issuer or any Trustee or a successor
Trustee, any such retiring Trustee hereunder with respect
-73-
<PAGE> 82
to the Securities of that or those series to which the appointment of any such
Trustee or successor Trustee relates.
(c) Upon request of any such successor Trustee, the Issuer
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
No successor Trustee with respect to the Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as
provided in this Section 6.11, the Issuer shall give notice thereof to the
Holders, by mailing a notice to such Holders at their addresses as they shall
appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, removal, disqualification or
incapacity to act, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 6.10 hereof. If the Issuer fails
to give such notice within 10 days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be given at
the expense of the Issuer.
Section 6.12 Merger, Conversion, Amalgamation, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or amalgamated, or any
corporation resulting from any merger, conversion, amalgamation or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided such
corporation shall be eligible under this Article Six to serve as Trustee
hereunder.
In case at the time such successor to the Trustee under this
Section 6.12 shall succeed to the trusts created by this Indenture, any of the
Securities shall have been authenticated but not delivered by the Trustee then
in office, any such successor to the Trustee may adopt such authentication of
any predecessor Trustee and deliver such Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee under this Section 6.12 may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee. In all such cases, such certificate of authentication
shall
-74-
<PAGE> 83
be of full force and effect and shall be deemed to have been duly authenticated
in accordance with this Indenture.
Section 6.13 Preferential Collection of Claims Against Issuer.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
Section 6.14 Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the
Trustee may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of, and
subject to the direction of, the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.03, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Issuer and shall at all times be a corporation organized and
doing business under the laws of the United States of America, and State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than [$_______] and
subject to supervision or examination by federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this
-75-
<PAGE> 84
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Issuer. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Issuer. Upon receiving such a notice or resignation
or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Issuer and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the security Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Issuer agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
lieu of the Trustee's certificate of authentication, an alternate certificate of
authentication in form of Exhibit C attached hereto.
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
Section 7.01. Preservation of Information; Issuer To Furnish
Trustee Names and Addresses of Holders.
(a) The Trustee shall preserve the names and addresses of the
Holders and otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Issuer shall furnish or cause the Registrar to furnish to the
Trustee before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders.
Neither the Issuer nor the Trustee shall be under any responsibility with regard
to the accuracy of such list.
(b) The Issuer will furnish or cause to be furnished to the
Trustee
-76-
<PAGE> 85
(i) semi-annually, not more than 15 days after each
Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of
such Regular Record Date; and
(i) at such other times as the Trustee may reasonably
request in writing, within 30 days after receipt by the Issuer of any
such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to
their rights under this Indenture or under the Securities pursuant to Section
312(b) of the Trust Indenture Act. The Issuer and the Trustee and any and all
other persons intended to be beneficiaries of this Indenture shall have the
protection afforded by Section 312(c) of the Trust Indenture Act.
Section 7.03 Reports by Trustee.
Within 60 days after May 15 of each year commencing with the
first May 15 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Security Register, a brief
report dated as of such May 15, in accordance with, and to the extent required
under Section 313 of the Trust Indenture Act. At the time of its mailing to
Holders, a copy of each such report shall be filed by the Trustee with the
Issuer, the SEC and with each stock exchange on which any Securities are listed.
The Issuer shall notify the Trustee when the Securities are listed on any stock
exchange.
Section 7.04 Reports by Issuer.
The Issuer shall:
(a) file with the Trustee, within 15 days after the Issuer is
required to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not
required to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the SEC, in accordance with
rules and regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may
-77-
<PAGE> 86
be required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with
rules and regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Issuer with
the conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations;
(c) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and (b)
of this Section as may be required by rules and regulations prescribed from time
to time by the SEC; and
(d) furnish to the Trustee, on or before May 1 of each year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Issuer's compliance with all conditions and covenants under this Indenture. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under this Indenture.
Such certificate need not comply with Section 1.04.
Notwithstanding anything to the contrary herein, the Trustee
shall have no duty to review information provided pursuant to subsection (a) of
this Section 7.04 for purposes of determining compliance with any provisions of
this Indenture.
ARTICLE 8
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Issuer May Consolidate, etc., Only on Certain
Terms.
The Issuer will not consolidate with, or merge with or into or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to any Person or permit any
Person to merge with or into the Issuer, unless:
(a) the Issuer shall be the continuing Person, or the Person
(if other than the Issuer) formed by such consolidation or into which the Issuer
is merged or that acquired or leased
-78-
<PAGE> 87
such property and assets of the Issuer shall be a corporation organized and
validly existing under the laws of the United States of America or any
jurisdiction thereof, and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the Issuer the
Securities and this Indenture;
(b) immediately after giving effect to such transaction or
series of related transaction, no Default or Event of Default shall have
occurred and be continuing;
(c) immediately after giving effect to such transaction on a
pro forma basis, the Issuer, or any Person becoming the successor obligor of the
Securities, as the case may be, could Incur at least $1.00 of Indebtedness under
clause (i) of Section 10.11(a) hereof; provided, however, that this clause (c)
shall not apply to a consolidation or merger with or into a Wholly Owned
Restricted Subsidiary with a positive net worth, provided that in connection
with any such merger or consolidation, no consideration (except Capital Stock
(other than Redeemable Stock) in the surviving Person or the Issuer (or a Person
that owns directly or indirectly all of the Capital Stock of the surviving
Person or the Issuer immediately following such transaction) or cash paid to
satisfy dissenter or appraisal rights; provided that such rights are exercised
with respect to no more than 5% of the outstanding Capital Stock of the Issuer
or other Person) shall be issued or distributed to the stockholders of the
Issuer; and
(d) the Issuer delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (c) above) and an Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture comply with
this provision and that all conditions precedent provided for herein relating to
such transaction have been complied with; provided, however, that clauses (b)
and (c) above do not apply if, in the good faith determination of the Board of
Directors of the Issuer, whose determination shall be evidenced by a Board
Resolution, the principal purpose of such transaction is to change the state of
incorporation of the Issuer; and provided further that any such transaction
shall not have as one of its purposes the evasion of the foregoing limitations.
Section 8.02. Successor Substituted.
Upon any consolidation or merger or any sale, conveyance,
lease, transfer or other disposition of all or substantially all of the assets
of the Issuer in accordance with the foregoing in which the Issuer is not the
continuing corporation, the successor corporation formed by such a consolidation
or into which the Issuer is merged or to which such transfer is made will
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture and the Securities with the same effect as if
such successor corporation had been named as the Issuer herein and therein; and
thereafter, except in the case of (i) any consolidation or merger with, or (ii)
any sale, conveyance, transfer, lease or other disposition to a Restricted
-79-
<PAGE> 88
Subsidiary, the Issuer shall be discharged from all obligations and covenants
under this Indenture and the Securities.
For all purposes of this Indenture and the Securities
(including the provision of this Article Eight and Section 10.11), Subsidiaries
of any successor entity will, upon such transaction or series of related
transactions, become Restricted Subsidiaries unless designated an Unrestricted
Subsidiary in accordance with the provisions of this Indenture and all
Indebtedness, and all Liens on property or assets, of the Issuer and the
Restricted Subsidiaries in existence immediately prior to such transaction or
series of related transactions will be deemed to have been Incurred upon such
transaction or series of related transactions.
ARTICLE 9
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders.
Without notice to or the consent of any Holders of a series of
Securities, the Issuer, when authorized by a Resolution of the Board of
Directors, and the Trustee, at any time and from time to time, may amend, waive,
modify or supplement this Indenture or the Securities of any particular series
for the following specified purposes:
(a) to evidence the succession of another person to the
Issuer, and the assumption by any such successor of the covenants of the Issuer
herein and in the Securities; or
(b) to add to the covenants of the Issuer for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of the series), or
to surrender any right or power herein conferred upon the Issuer;
(c) to add any additional Events of Default with respect to
all or any series of Securities; or
(d) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons; or
-80-
<PAGE> 89
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental Indenture which is entitled to the benefit of
such provision; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series
as permitted by Sections 2.01 and 3.01 including any subordination provisions;
or
(h) to evidence and provide for the acceptance of appointment
hereunder by a Trustee or a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11; or
(i) to cure any ambiguity, to correct or supplement any
provision herein, in the Securities which may be defective or inconsistent with
any other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture or the Securities; provided,
however, that, in each case, such provisions shall not materially adversely
affect the legal rights of the Holders;
(j) to comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 9.05 hereof or otherwise;
(k) to mortgage, pledge, hypothecate or grant a security
interest in any property or assets in favor of the Trustee for the benefit of
the Holders as security for the payment and performance of the Indenture
Obligations;
(l) to make any other change that does not materially
adversely affect the legal rights of any Holder; or
(m) to add Guarantors with respect to the Securities;
provided, however, that the Issuer has delivered to the Trustee an Opinion of
Counsel stating that such amendment, waiver, modification or supplement does not
materially adversely affect the legal rights of any Holder.
-81-
<PAGE> 90
Upon request of the Issuer, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in (and subject to the
last sentence of) Section 9.03, the Trustee shall join with the Issuer in the
execution of any supplemental indenture authorized or permitted by the terms of
this Indenture.
Section 9.02. Supplemental Indentures, Agreements and Waivers
With Consent of Holders.
With the written consent of the Holders of not less than a
majority of the aggregate principal amount of the Outstanding Securities of each
series affected by such supplemental indenture, agreement or waiver delivered to
the Issuer and the Trustee, the Issuer when authorized by a Board Resolution,
together with the Trustee, may amend, waive, modify or supplement any other
provision of this Indenture or the Securities of such series; provided, however,
that no such amendment, waiver, modification or supplement may, without the
written consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security,
(b) reduce the principal of, or premium, if any, or interest
on, any Security including an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.02,
(c) change the place, time or currency of payment of principal
of, or premium, if any, or interest on, any Security,
(d) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a redemption, on
or after the Redemption Date) of any Security,
(e) reduce the above-stated percentage of Outstanding
Securities of any series the consent of whose Holders is necessary to modify or
amend this Indenture,
(f) waive a default in the payment of principal of, premium,
if any, or interest on the Securities, or
(g) reduce the percentage or aggregate principal amount of
Outstanding Securities of any series the consent of whose Holders is necessary
for waiver of compliance with certain provisions of this Indenture or for waiver
of certain defaults.
-82-
<PAGE> 91
(h) change the redemption provisions (including Article
Eleven) hereof in a manner adverse to such Holder; or
(i) modify any of the provisions of this Section or Section
5.13, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section, or the deletion of this proviso, in accordance with the
requirements of Sections 6.11(b) and 9.01.
Upon the written request of the Issuer accompanied by a copy of a Board
Resolution of the Board of Directors authorizing the execution of any such
supplemental indenture or other instrument effecting an amendment, waiver,
modification or supplement authorized by this Section 9.02, and an Officers'
Certificate and an Opinion of Counsel upon which the Trustee shall be fully
protected in relying as conclusive evidence that such amendment, waiver,
modification or supplement is permitted by this Indenture and upon the filing
with the Trustee of evidence of the consent of Holders as aforesaid, the Trustee
shall join with the Issuer in the execution of such supplemental indenture or
other instrument.
A supplemental indenture which changes or eliminates any
covenant or other provisions of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture or
other instrument or amendment, modification, waiver or supplement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers.
In executing, or accepting the additional trusts created by,
any supplemental indenture, instrument or amendment, modification, waiver or
supplement permitted by this Article Nine or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate from each obligor under the Securities of any series entering into
such supplemental indenture, instrument or amendment, modification, waiver or
supplement, each stating that the execution of such supplemental indenture,
instrument or amendment,
-83-
<PAGE> 92
modification, waiver or supplement (a) is authorized or permitted by this
Indenture and (b) does not violate the provisions of any agreement or instrument
evidencing any other Indebtedness of the Issuer or any other Subsidiary of the
Issuer. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture, instrument or amendment modification, waiver or
supplement which affects the Trustee's own rights, duties or immunities under
this Indenture, the Securities or otherwise.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture, instrument
or amendment, modification, waiver or supplement under this Article Nine, this
Indenture or the Securities of any series shall be modified in accordance
therewith, and such supplemental indenture, instrument, amendment, waiver or
supplement shall form a part of this Indenture or the Securities of such series,
as the case may be, for all purposes; and every Holder of Securities of such
series theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby and in the event of any conflicts between such supplemental
indenture and this Indenture, the supplemental indenture will control.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
Nine shall con-form to the requirements of the Trust Indenture Act as then in
effect.
Section 9.06. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture, instrument, amendment, modification,
waiver or supplement pursuant to this Article may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, instrument, amendment,
modification, waiver or supplement. If the Issuer shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture,
instrument, amendment, modification, waiver or supplement may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee upon an
Issuer Order in exchange for Outstanding Securities of such series.
Section 9.07. Record Date.
The Issuer may, but shall not be obligated to, fix, a Record
date for the purpose of determining the Holders entitled to consent to any
supplemental indenture, instrument, amendment, modification, waiver or
supplement, and shall promptly notify the Trustee of any
-84-
<PAGE> 93
such Record date. If a Record date is fixed those Persons who were Holders at
such Record date (or their duly designated proxies), and only those Persons,
shall be entitled to consent to such supplemental indenture, instrument,
amendment, modification, waiver or supplement or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
Record date. No such consent shall be valid or effective for more than 90 days
after such Record date.
Section 9.08. Revocation and Effect of Consents.
Until a supplemental indenture, instrument, amendment,
modification, waiver or supplement becomes effective, a consent to it by a
Holder of a Security is a continuing consent by 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 a 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 if the Trustee receives the
notice of revocation before the date a supplement indenture becomes effective. A
supplemental Indenture, instrument, amendment, modification, waiver or
supplement shall become effective in accordance with its terms and thereafter
bind every Holder.
ARTICLE 10
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest.
The Issuer shall duly and punctually pay the principal of,
premium, if any, and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
Section 10.02. Maintenance of Office or Agency.
The Issuer shall maintain in the Borough of Manhattan in The
City of New York, State 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 Issuer in respect of the Securities and this Indenture may be served.
[___________], will be such office or agency of the Issuer, unless the Issuer
shall designate and maintain some other office or agency for one or more of such
purposes. The Issuer will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Issuer
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
-85-
<PAGE> 94
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Issuer hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Issuer may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York, State of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designation; provided, however,
that no such designation or rescission shall in any manner relieve the Issuer of
its obligation to maintain an office or agency in The City of New York, State of
New York for such purposes. The Issuer will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
Section 10.03. Money for Security Payments To Be Held In
Trust.
If the Issuer shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of, premium, if any, or
interest on any of any series of Securities, segregate and hold in trust for the
benefit of the Trustee or the Holders entitled thereto a sum sufficient to pay
the principal, premium, if any, or interest so becoming due until such sums
shall be paid to such persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act and of any
Default by the Issuer (or any other obligor upon the Securities of that series)
in the making of any payment of principal, premium, if any, or interest on the
Securities of that series.
Whenever the Issuer shall have one or more Paying Agents for
any series of Securities, it will, on or before each due date of the principal
of, premium, if any, or interest on, any Securities of that series, deposit with
a Paying Agent a sum in same day funds sufficient to pay the principal, premium,
if any, or interest so becoming due, such sum to be held in trust for the
benefit of the Holders entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Issuer will promptly notify the
Trustee of such action or any failure so to act.
The Issuer will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities of that series in trust for the
benefit of the Holders entitled thereto until such sums shall be paid to such
Holders or otherwise disposed of as herein provided;
-86-
<PAGE> 95
(b) give the Trustee notice of any Default by the Issuer (or
any other obligor upon the Securities of that series) in the making of any
payment of principal of, premium, if any, or interest on the Securities of that
series;
(c) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Issuer or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Issuer or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Issuer, in trust for the payment of the principal of, premium,
if any, or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium, if any, or interest has become due and
payable shall be paid to the Issuer upon receipt of an Issuer Request therefor
or (if then held by the Issuer) will be discharged from such trust; and the
Holder of such Security of any series will thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Issuer as trustee thereof, will thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published once, at the
option of the Issuer in The New York Times or The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining shall be repaid
to the Issuer.
Section 10.04. Corporate Existence.
Subject to Article Eight, the Issuer shall do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate or partnership existence, rights (charter and statutory), licenses and
franchises of the Issuer and each of the Restricted Subsidiaries; provided,
however, that the Issuer will not be required to preserve any such right,
license or franchise if the Board of Directors shall determine that the
preservation thereof is no longer
-87-
<PAGE> 96
desirable in the conduct of the business of the Issuer and the Restricted
Subsidiaries as a whole and that the loss thereof is not adverse in any material
respect to the Holders; provided, further, that the foregoing will not prohibit
a sale, transfer or conveyance of a Subsidiary of the Issuer or any of its
assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Issuer shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed (i) upon the Issuer or
any of its Restricted Subsidiaries or (ii) upon the income, profits or property
of the Issuer or any of the Restricted Subsidiaries and (b) all material lawful
claims for labor, materials and supplies, which, if unpaid, could reasonably be
expected to become a Lien upon the property of the Issuer or any of the
Restricted Subsidiaries; provided, however, that the Issuer will not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim (x) whose amount, applicability or validity is being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted or (y) if the failure to so pay, discharge or cause to be paid or
discharged could not reasonably be expected to have a Material Adverse Effect
(as defined in the Purchase Agreement).
Section 10.06. Maintenance of Properties.
The Issuer shall cause all material properties owned by the
Issuer or any of the Restricted Subsidiaries or used or held for use in the
conduct of their respective businesses to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Issuer may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 10.06 will prevent the Issuer from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Issuer, desirable in the conduct of its business or the business of any
of the Restricted Subsidiaries and is not disadvantageous in any material
respect to the Holders.
Section 10.07. Insurance.
The Issuer shall at all times keep all of its and the
Restricted Subsidiaries' properties which are of an insurable nature insured
with insurers, believed by the Issuer in good faith to be financially sound and
responsible, against loss or damage to the extent that property
-88-
<PAGE> 97
of similar character is usually and customarily so insured by corporations and
partnerships similarly situated and owning like properties.
Section 10.08. Books and Records.
The Issuer shall keep proper books of Record and account, in
which full and correct entries will be made of all financial transactions and
the assets and business of the Issuer and each Restricted Subsidiary (including
Acquired Indebtedness) in material compliance with GAAP.
Section 10.09. Compliance Certificates and Opinions.
Upon any application or request by the Issuer to the Trustee
to take any action under any provision of this Indenture, the Issuer will
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenants
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to
which the furnishing of such documents, certificates and/or opinions is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished. On at least an annual basis, the Issuer will furnish to the Trustee
an Officer's Certificate pursuant to Section 314(a)(4) of the TIA.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(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 each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been complied
with.
-89-
<PAGE> 98
Section 10.10. Repurchase of Securities Upon a Change of
Control.
The Issuer shall commence, within 30 days after the occurrence
of a Change of Control, an Offer to Purchase for all Securities then Outstanding
in whole or in part in integral multiples of $1,000, at a purchase price equal
to 101% of the principal amount thereof, plus accrued and unpaid interest to the
Payment Date.
Section 10.11. Limitation on Indebtedness.
(a) The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness (including Acquired
Indebtedness) other than Permitted Indebtedness; provided that the Issuer may
Incur Indebtedness, in addition to Permitted Indebtedness, if, after giving
effect to the Incurrence of such Indebtedness and the receipt and application of
the proceeds thereof, (i) the Consolidated Leverage Ratio would be less than or
equal to ___ to 1, for Indebtedness Incurred on or prior to ___________, or less
than or equal to ___ to 1, for Indebtedness Incurred thereafter and (ii) no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the actions set forth in this Section 10.11.
(b) Notwithstanding any other provision of this Section 10.11,
the maximum amount of Indebtedness that the Issuer or a Restricted Subsidiary
may Incur pursuant to this Section 10.11 shall not be deemed to be exceeded due
solely to the result of fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of
Indebtedness under this Section 10.11, Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of
determining compliance with this Section 10.11, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the definition of "Indebtedness," the Issuer, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
Section 10.12. Statement by Officers as to Default.
The Issuer will deliver to the Trustee, within 90 days after
the end of each fiscal year of the Issuer ending after the date hereof, a
written statement signed by the chairman or a chief executive officer, the
principal financial officer or principal accounting officer of the Issuer (or
its general partner), stating (i) that a review of the activities of the Issuer
and its Restricted Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with a view to determining whether
the Issuer has kept, observed, performed and fulfilled
-90-
<PAGE> 99
its obligations under this Indenture, and (ii) that, to the knowledge of each
officer signing such certificate, the Issuer has kept, observed, performed and
fulfilled each and every covenant and condition contained in this Indenture and
is not in Default in the performance or observance of any of the terms,
provisions, conditions and covenants hereof (or, if a Default shall have
occurred, describing all such Defaults of which such officers may have
knowledge, their status and what action the Issuer is taking or proposes to take
with respect thereto). When any Default under this Indenture has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Issuer or any Restricted Subsidiary
gives any notice or takes any other action with respect to a claimed Default
(other than with respect to Indebtedness (other than Indebtedness evidenced by
the Securities) in the principal amount of less than [$____________], the Issuer
will promptly notify the Trustee of such Default, notice or action and will
deliver to the Trustee by registered or certified mail or by telegram, or
facsimile transmission followed by hard copy by registered or certified mail an
Officers' Certificate specifying such event, notice or other action within five
Business Days after the Issuer becomes aware of such occurrence and what action
the Issuer is taking or proposes to take with respect thereto.
Section 10.13. SEC Reports and Reports to Holders.
(a) So long as the Securities remain outstanding, the Issuer
shall cause its annual report to shareholders and any other financial reports
furnished by it to shareholders generally, to be mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Security
Registrar in each case at the time of such mailing or furnishing to
shareholders. If the Issuer is not required to furnish annual reports to its
shareholders pursuant to the Exchange Act, the Issuer shall cause its financial
statements, including any notes thereto and, with respect to annual reports, an
auditors' report by an accounting firm of established national reputation and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," to be so filed with the Trustee and mailed to the Holders within 90
days after the end of each of the Issuer's fiscal years and within 45 days after
the end of each of the first three quarters of each fiscal year.
(b) The Issuer shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information that the
Issuer may be required to deliver to the Holders under this Section 10.13.
Section 10.14. Limitation on Issuances of Guarantees by
Restricted Subsidiaries.
The Issuer will not permit any Restricted Subsidiary, directly
or indirectly, to Guarantee any Indebtedness of the Issuer which is pari passu
in right of payment with, or
-91-
<PAGE> 100
subordinate in right of payment to, the Securities of any particular series
("Guaranteed Indebtedness"), unless:
(i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the
Securities of such series by such Restricted Subsidiary and
(ii) such Restricted Subsidiary waives, and will not
in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights
against the Issuer or any other Restricted Subsidiary as a result of
any payment by such Restricted Subsidiary under its Subsidiary
Guarantee;
provided that this paragraph shall not be applicable to (x) any Guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or (y) any Guarantee of any Restricted
Subsidiary of Indebtedness Incurred under Credit Facilities or Vender Credit
Facilities pursuant to clause (ix) of the definition of "Permitted
Indebtedness." If the Guaranteed Indebtedness is (A) pari passu in right of
payment with the Securities of such series, then the Guarantee of such
Guaranteed Indebtedness shall be pari passu in right of payment with, or
subordinated in right of payment to, the Subsidiary Guarantee or (B)
subordinated in right of payment to the Securities of such series, then the
Guarantee of such Guaranteed Indebtedness shall be subordinated in right of
payment to the Subsidiary Guarantee at least to the extent that the Guaranteed
Indebtedness is subordinated in right of payment to the Securities of such
series.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Issuer, of all of the Issuer's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
-92-
<PAGE> 101
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to surviving rights or registration of transfer or exchange of Securities of any
particular series herein expressly provided for) and the Trustee, on written
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either (i) all Securities of any particular series
theretofore authenticated and delivered (other than (x) Securities of any
particular series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06 hereof and (y) Securities of any
particular series for whose payment money has theretofore been irrevocably
deposited or caused to be deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee for cancellation;
or (ii) all such Securities of any particular series not theretofore delivered
to the Trustee for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be deposited with the Trustee in trust an
amount of money in dollars sufficient to pay and discharge the entire
Indebtedness on such issue of Securities of any particular series not
theretofore delivered to the Trustee for cancellation, for the principal of,
premium, if any, and interest to the date of such deposit or maturity date of
redemption; and
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer (other than amounts that could become payable
under Section 4.06 or 6.07); and
(c) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture
have been complied with; provided, that such Opinion of Counsel may rely, as to
matters of fact, upon an Officers' Certificate.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Sections 4.06 and 6.07 and, if
money shall have been deposited with the Trustee pursuant to subclause (a)(ii)
of this Section 11.01, the obligations of the Trustee under Section 11.02 and
the last paragraph of Section 10.03 shall survive.
-93-
<PAGE> 102
Section 11.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
10.03, all money deposited with the Trustee pursuant to Section 11.01 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuer acting as its own Paying Agent) as the
Trustee may determine, to the persons entitled thereto, of the principal of,
premium, if any, and interest on the Securities for whose payment such money has
been deposited with the Trustee.
ARTICLE 12
REDEMPTION
Section 12.01. Right of Redemption; Mandatory Redemption.
Except as otherwise specified as contemplated by Section 3.01 for Securities of
any series, the Securities will be redeemable, at the Issuer's option, in whole
or in part, at any time or from time to time, on or after [___________] and
prior to maturity, upon not less than [__] nor more than [__] days' prior notice
mailed by first-class mail to each Holder's last address, as it appears in the
Security Register, at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of Record on the relevant Regular Record Date
that is prior to the Redemption Date to receive interest due on an Interest
Payment Date), if redeemed during the 12 month period commencing [________] of
the years set forth below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
20__ .................. [_______%]
20__ ................... [_______%]
20__ ................... [_______%]
20__ and thereafter .... [_______%]
</TABLE>
In addition, at any time or from time to time on or prior to [_____________],
the Issuer may, other than in any circumstances resulting in a Change of
Control, redeem, at its option, up to [____%] of the aggregate principal amount
of the Securities of any particular series with the
-94-
<PAGE> 103
proceeds of one or more additional Public Equity Offerings or Strategic Equity
Investments resulting in aggregate gross proceeds to the Issuer of at least
[_________], at any time or from time to time in part, at a Redemption Price
(expressed as a percentage of principal amount) of [____%], plus accrued and
unpaid interest to the Redemption Date (subject to the right of Holders of
Record on the relevant Record date that is prior to the Redemption Date to
receive interest due on an Interest Payment Date); provided that at least
[____%] of the aggregate principal amount of Securities of any particular series
originally issued remain outstanding after each such redemption. Any such
redemption shall be made within [____%] days after the consummation of such
Public Equity Offering or Strategic Equity Investment upon not less than [__]
nor more than [__] days' prior notice.
Section 12.02. Notice to the Trustee.
If the Issuer elects to redeem any Securities of any
particular series pursuant to [Paragraph 3], it shall notify the Trustee of the
Redemption Date and principal amount of Securities of such series to be
redeemed.
The Issuer shall notify the Trustee of any redemption at least
[___] days before the Redemption Date by an Officers' Certificate, stating that
such redemption will comply with the provisions hereof and of the Securities of
such series.
Section 12.03. Selection of Securities to be Redeemed.
In the event that less than all of the Securities are to be
redeemed at any time, selection of such Securities for redemption will be made
by the Trustee in compliance with any applicable requirements of the principal
national securities exchange, if any, on which such Securities are listed or, if
such Securities are not then listed on a national securities exchange (or if
such Securities are so listed but the exchange does not impose requirements with
respect to the selection of debt securities for redemption), on a pro rata
basis, by lot or by such method as the Trustee in its sole discretion shall deem
fair and appropriate; provided, however, that no Securities of a principal
amount of $1,000 or less shall be redeemed in part.
The Trustee shall promptly notify the Issuer and the Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.
-95-
<PAGE> 104
Section 12.04. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than [__] nor more than [__] days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at the address of
such Holder appearing in the Security Register maintained by the Registrar.
All notices of redemption shall identify the Securities to be
redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(c) that, unless the Issuer defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price plus unpaid interest on
such Securities through the Redemption Date, upon surrender to the Paying Agent
of such Securities redeemed;
(d) if any Security is to be redeemed in part, the portion of
the principal amount at maturity (equal to $1,000 or any integral multiple
thereof, the denominations in which Securities of the series shall be issuable)
of such Security to be redeemed and that on and after the Redemption Date, upon
surrender for cancellation of such Security to the Paying Agent, a new Security
or Securities in the aggregate principal amount at maturity equal to the
unredeemed portion thereof will be issued without charge to the Holder of such
Security;
(e) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent; and
(f) that the redemption is for a sinking fund, if such is the
case;
(g) the CUSIP or CINS number, if any, relating to such
Securities.
(h) unless otherwise provided as to a particular series of
Securities, if at the time of publication or mailing of any notice of redemption
the Issuer shall not have deposited with the Trustee or Paying Agent and/or
irrevocably directed the Trustee or Paying Agent to apply, from money held by it
available to be used for the redemption of Securities, an amount in cash
sufficient to redeem all of the Securities called for redemption, including
accrued interest to the
-96-
<PAGE> 105
Redemption Date, such notice shall state that it is subject to the receipt of
the redemption moneys by the Trustee or Paying Agent before the Redemption Date
(unless such redemption is mandatory) and such notice shall be of no effect
unless moneys are so receive before such date.
Notice of redemption of Securities to be redeemed at the
election of the Issuer shall be given by the Issuer or, at the Issuer's written
request, by the Trustee in the name and at the expense of the Issuer.
Section 12.05. 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 called for redemption
shall be paid at the Redemption Price plus accrued interest, if any, to the
Redemption Date, but interest installments whose maturity is on or prior to such
Redemption Date will be payable on the relevant Interest Payment Dates to the
Holders of Record at the close of business on the relevant Record Dates referred
to in the Securities.
Section 12.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Issuer shall deposit
with the Paying Agent an amount of money in same day funds sufficient to pay the
Redemption Price of, and any accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Issuer to the Trustee for cancellation.
If the Issuer complies with the preceding paragraph, then,
unless the Issuer defaults in the payment of such Redemption Price, interest on
the Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to such
Securities except for the right to receive the Redemption Price plus unpaid
interest on the Securities through the Redemption Date, upon surrender of such
Securities. If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal, premium, if any, and, to the
extent lawful, accrued interest thereon shall, until paid, bear interest from
the Redemption Date at the rate provided in the Securities.
Section 12.07. Securities Redeemed in Part.
Upon surrender to the Paying Agent of a Security which is to
be redeemed in part, the Issuer shall execute and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as
-97-
<PAGE> 106
requested by such Holder in aggregate principal amount equal to, and in
exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.
ARTICLE 13
SINKING FUNDS
Section 13.01. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series, except as otherwise
specified as contemplated by Section 3.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "Mandatory
Sinking Fund Payment," and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"Optional Sinking Fund Payment." If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
redemption as provided in Section 13.02. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 13.02. Satisfaction of Sinking Fund Payments with
Securities.
The Issuer (1) may deliver Securities of a series (other than
any Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been (i) previously canceled pursuant to
Section 3.09 or delivered for cancellation or (ii) redeemed either at the
election of the Issuer pursuant to the terms of such Securities or through the
application of permitted Optional Sinking Fund Payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
Mandatory Sinking Fund Payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been previously
so credited. Such Securities shall be received and credited at the principal
amount for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such Mandatory Sinking Fund Payment shall be reduced accordingly.
-98-
<PAGE> 107
Section 13.03. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any series of Securities, the Issuer will deliver to the Trustee an
Officer's Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Article Twelve and will also deliver to the Trustee
any Securities to be so delivered. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Article Twelve
and cause notice of the redemption thereof to be given in the name of and at the
expense of the Issuer in the manner provided in Article Twelve. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Article Twelve.
ARTICLE 14
SUBORDINATION
14.1. Agreement to Subordinate.
The Issuer agrees, and each Holder by accepting a Security
agrees, that the Indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article 14,
to the prior payment in full of all Senior Debt (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
14.2. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Issuer in a
liquidation or dissolution of the Issuer or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Issuer or its
property, in an assignment for the benefit of creditors or any marshaling of the
Issuer's assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Senior Debt) before Holders of the Securities shall be entitled
to receive any payment with respect to the Securities (except that Holders may
receive (A) Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 4.01 hereof); and
-99-
<PAGE> 108
(ii) until all Obligations with respect to Senior Debt (as
provided in clause (i) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 14 shall be made to holders of
Senior Debt (except that Holders of Securities may receive (A) Permitted Junior
Securities and (B) payments and other distributions made from any defeasance
trust created pursuant to Section 4.01 hereof), as their interests may appear.
14.3. Default on Designated Senior Debt.
(a) The Issuer may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Securities
and may not acquire from the Trustee or any Holder any Securities for cash or
property (other than (A) Permitted Junior Securities and (B) payments and other
distributions made from any defeasance trust created pursuant to Section 4.01
hereof) until all principal and other Obligations with respect to the Senior
Debt have been paid in full if:
(i) a default in the payment of any principal or
other Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture or
other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on
Designated Senior Debt occurs and is continuing that then permits holders of the
Designated Senior Debt to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a Person who may give
it pursuant to Section 14.11 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 360 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage Notice
and (B) all scheduled payments of principal, premium, if any, and interest on
the Securities that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been waived for a period
of not less than 90 days.
(b) The Issuer may and shall resume payments on and
distributions in respect of the Securities and may acquire them upon the earlier
of:
(i) the date upon which the default is cured or
waived, or
(ii) in the case of a default referred to in clause
(ii) of Section 14.3(a) hereof, 179 days pass after notice is received if the
maturity of such Designated Senior Debt has not been accelerated,
-100-
<PAGE> 109
if this Article 14 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
14.4. Acceleration of Securities.
If payment of the Securities is accelerated because of an
Event of Default, the Issuer shall promptly notify holders of Senior Debt of the
acceleration.
14.5. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Securities at a time when the
Trustee or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 14.3 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 14, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Issuer or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 14 except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
14.6. Notice by Issuer.
The Issuer shall promptly notify the Trustee and the Paying
Agent of any facts known to the Issuer that would cause a payment of any
Obligations with respect to the Securities to violate this Article 14, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Debt as provided in this Article 14.
-101-
<PAGE> 110
14.7. Subrogation.
After all Senior Debt is paid in full and until the Securities
are paid in full, Holders of Securities shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Securities) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders of Securities have
been applied to the payment of Senior Debt. A distribution made under this
Article 14 to holders of Senior Debt that otherwise would have been made to
Holders of Securities is not, as between the Issuer and Holders, a payment by
the Issuer on the Securities.
14.8. Relative Rights.
This Article 14 defines the relative rights of Holders of
Securities and holders of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Issuer and Holders of Securities,
the obligation of the Issuer, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
(ii) affect the relative rights of Holders of Securities and
creditors of the Issuer other than their rights in relation to holders of Senior
Debt; or
(iii) prevent the Trustee or any Holder of Securities from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Securities.
If the Issuer fails because of this Article 14 to pay
principal of or interest on a Security on the due date, the failure is still a
Default or Event of Default.
14.9. Subordination May Not Be Impaired by Issuer.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Issuer or any Holder or by the failure of
the Issuer or any Holder to comply with this Indenture.
14.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
-102-
<PAGE> 111
Upon any payment or distribution of assets of the Issuer
referred to in this Article 14, the Trustee and the Holders of Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Issuer, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 14.
14.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 14 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless the Trustee shall have received at
its Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Securities to violate this Article 14. Only the Issuer or a
Representative may give the notice. Nothing in this Article 14 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 6.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
14.12. Authorization to Effect Subordination.
Each Holder of Securities, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 14, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the Representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.
-103-
<PAGE> 112
14.13. Amendments.
The provisions of this Article 14 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
[The rest of this page intentionally left blank.]
-104-
<PAGE> 113
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first written above.
ISSUER:
CAPROCK COMMUNICATIONS CORP.
By:
-------------------------------
Name:
Title:
TRUSTEE:
[ ___________ ]
By:
-------------------------------
Name:
Title:
<PAGE> 114
EXHIBIT A-1
FORM OF SECURITY
CAPROCK COMMUNICATIONS CORP.
______ SENIOR SECURITIES DUE [______], SERIES [___]
CUSIP No.
No. [________]
CAPROCK COMMUNICATIONS CORP., a corporation incorporated under
the laws of the State of Texas ("Issuer," which term includes any successor
Person under the Indenture hereinafter referred to) for value received, hereby
promises to pay to _______________ or registered assigns, the principal sum of
_______________ Dollars on [_______], at the office or agency of the Issuer
referred to below, and to pay interest thereon on [_______], and [_______],
(each an "Interest Payment Date"), of each year, commencing on [_______],
accruing from [_______], or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of [_____%], per annum,
until the principal hereof is paid or duly provided for. Interest shall be
computed on the basis of a [_______]-day year of [_______]-day months.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this Security (or one
or more predecessor Securities) is registered at the close of business on the
[_______], and [_______], (each a "Regular Record Date"), whether or not a
Business Day, as the case may be, next preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date and may be paid to the Person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee, notice of which shall be given to Holders of Securities not less
than [__] days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of, premium, if any, and interest on
this Security will be made at the office or agency of the Issuer maintained for
that purpose in the Borough of
<PAGE> 115
Manhattan in The City of New York, State of New York, or at such other office or
agency of the Issuer as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Issuer by check mailed to the
address of the person entitled thereto as such address shall appear on the
Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
[Remainder of Page Intentionally Left Blank.]
<PAGE> 116
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
Dated: CAPROCK COMMUNICATIONS CORP.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
<PAGE> 117
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the [_______%], Senior Securities due
[_______], Series [_], referred to in the within-mentioned Indenture.
[_____________________________],
[_____________________________]
By:
-----------------------------
Authorized Signatory
<PAGE> 118
REVERSE OF SECURITY
1. Indenture. This Security is a duly authorized issue of
Securities of the Issuer designated as the [_____%] Senior Securities due ___,
Series __ (herein called the "Securities"). The Securities are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to [$_______], which may be issued under an indenture (herein called the
"Indenture") dated as of ___ , by and among the Issuer and Chase Manhattan Trust
Company, National Association, as trustee (herein called the "Trustee," which
term includes any successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Issuer, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
All capitalized terms used in this Security which are defined
in the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbb) (the "TIA"), as in effect
on the date of the Indenture. Notwithstanding anything to the contrary herein,
the Securities are subject to all such terms, and Holders of Securities are
referred to the Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Redemption. The Securities will be redeemable, at the
option of the Issuer, in whole or in part, on or after [_________] upon not less
than [___] nor more than [___] days' written notice at the redemption prices
(expressed as percentages of principal amount at maturity) set forth below, plus
accrued and unpaid interest thereon, if any, to the applicable redemption date,
if redeemed during the twelve-month period beginning on [_________] of each of
the years indicated below:
<PAGE> 119
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
20__ ............................... [_______%]
20__ ............................... [_______%]
20__ ............................... [_______%]
20__ and thereafter ................ [_______%]
</TABLE>
In addition, at any time or from time to time on or prior to
[_______], the Issuer may, other than in any circumstances resulting in a Change
of Control, redeem, at its option, up to [__%] of the aggregate principal amount
of the Securities with the proceeds of one or more additional Public Equity
Offerings or Strategic Equity Investments resulting in aggregate gross proceeds
to the Issuer of at least [_________], at any time or from time to time in part,
at a Redemption Price (expressed as a percentage of principal amount) of [____],
plus accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of Record on the relevant Record date that is prior to the Redemption
Date to receive interest due on an Interest Payment Date); provided that at
least [____] of the aggregate principal amount of Securities originally issued
remain outstanding after each such redemption. Any such redemption shall be made
within [__] days after the consummation of such Public Equity Offering or
Strategic Equity Investment upon not less than [__] nor more than [__] days'
prior notice.
3. Offers to Purchase. Section 10.10 of the Indenture provides
that upon the occurrence of a Change of Control and following certain Asset
Sales, and subject to certain conditions and limitations contained therein, the
Issuer shall make an offer to purchase all or a portion of the Securities in
accordance with the procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
5. Defeasance. The Indenture contains provisions (which
provisions apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Issuer on this Security and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Issuer with certain conditions set forth therein.
-2-
<PAGE> 120
6. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Issuer and the rights of the Holders under the
Indenture at any time by the Issuer and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages of aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
7. Denominations, Transfer and Exchange. The Securities are
issuable only in registered form without coupons in denominations of $1,000
principal amount at maturity and any integral multiple thereof, the
denominations in which Securities of the series shall be issuable. As provided
in the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable on
the Security Register of the Issuer, upon surrender of this Security for
registration of transfer at the office or agency of the Issuer maintained for
such purpose in the Borough of Manhattan in The City of New York, State of New
York, or at such other office or agency of the Issuer as may be maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Issuer, the
Trustee and any agent of the Issuer or the Trustee may treat the person in
whosename this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Issuer, the
Trustee nor any agent shall be affected by notice to the contrary.
-3-
<PAGE> 121
9. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Issuer will furnish to any Holder of a Security upon
written request and without charge a copy of the Indenture. Requests may be made
to: CapRock Communications Corp., 15601 Dallas Parkway, Suite 700, Dallas, Texas
75248.
-4-
<PAGE> 122
ASSIGNMENT FORM
I or we assign and transfer this Security to:
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent to transfer this Security on the books of the Issuer. The Agent may
substitute another to act for him.
<PAGE> 123
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer
pursuant to Section 10.10 of the Indenture, check the box below:
Section 10.10 [ ]
If you wish to have a portion of this Security purchased by
the Issuer pursuant to Section 10.10 of the Indenture, state the amount:
$
Date: Your signature:
(Sign exactly as your name appears
on the other side of this Security)
By:
-------------------------------
NOTICE: To be executed by
an executive officer
<PAGE> 124
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Security in Global Form authenticated and delivered
hereunder shall bear a legend (which would be in addition to any other legends
required in the case of a Restricted Security) in substantially the following
form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THIS
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS Security IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS Security (OTHER THAN A TRANSFER OF THIS
Security AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 125
EXHIBIT C
Form of Authenticating Agent's
Certificate of Authentication
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
------------------
As Trustee
By:
------------------------
As Authenticating Agent
By:
------------------------
Authorized Signatory
<PAGE> 1
EXHIBIT 5.1
April 11, 2000
CapRock Communications Corp.
15601 Dallas Parkway, Suite 700
Dallas, Texas 75001
Re: CapRock Communications Corp.
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to CapRock Communications Corp. (the
"Company"), a corporation organized under the laws of the State of Texas, in
connection with the preparation of a Registration Statement on Form S-3 (File
No. 333-32910) (the "Registration Statement"), filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"). The Registration Statement relates to the
issuance and sale from time to time pursuant to Rule 415 of the General Rules
and Regulations promulgated under the Act, of the following securities with an
aggregate public offering price of up to $900,000,000 (or, if applicable, the
equivalent thereof in any other currency or currency unit): (i) senior or
subordinated debt securities, in one or more series (the "Debt Securities"),
which may be issued under the senior Indenture (the "Senior Indenture"),
proposed to be entered into between the Company and a trustee to be selected,
and the subordinated Indenture (the "Subordinated Indenture") proposed to be
entered into between the Company and a trustee to be selected, respectively,
each filed as an exhibit to the Registration Statement (collectively, the
"Indentures" and each trustee, a "Trustee"); (ii) shares of preferred stock,
$0.01 par value per share (the "Preferred Stock"), in one or more series and
(iii) shares of common stock, $0.01 par value per share (the "Common Stock")
(which may be offered by the Company and one or more selling shareholders (the
"Selling Shareholders")). The shares of Preferred Stock and Common Stock
referred to above also include such indeterminate number of shares of Preferred
Stock or Common Stock, as may be issued as a dividend or upon conversion or
exchange of any convertible or exchangeable Debt Securities or Preferred Stock,
including such shares of Preferred Stock or Common Stock as may be issued
pursuant to anti-dilution adjustments, in amounts, at prices and on terms to be
determined at the time of offering (the "Indeterminate Stock"). The Debt
Securities, the Preferred Stock, the Common Stock and the Indeterminate Stock
are collectively referred to herein as the "Offered Securities."
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement relating to the Offered Securities; (ii) the forms of the Indentures;
(iii) the Articles of Incorporation of the Company, as currently in effect (the
"Articles of Incorporation"); (iv) the By-laws of the Company, as currently in
effect (the "By-laws"); (v) a specimen certificate evidencing the Common Stock;
and (vi) certain resolutions adopted to date by the
<PAGE> 2
CapRock Communications Corp.
April 11, 2000
Page 2
Board of Directors of the Company (the "Board of Directors") relating to the
registration of the Offered Securities. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
executed documents or documents to be executed, we have assumed that the parties
thereto, other than the Company, had or will have the power, corporate or other,
to enter into and perform all obligations thereunder and have also assumed the
due authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and that such documents constitute or
will constitute valid and binding obligations of such parties. We have assumed
that the Indentures will be duly authorized, executed and delivered by the
applicable Trustees and that any Debt Securities that may be issued will be
manually signed by duly authorized officers of the Trustees. In addition, we
have assumed that the terms of the Offered Debt Securities (defined below) and
the Offered Preferred Stock (defined below) will have been established so as not
to violate any applicable law, the Articles of Incorporation or By-Laws or
result in a default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company. We have
also assumed that (i) the stock certificates evidencing the Preferred Stock to
be issued will be in a form that complies with, and the terms of such Preferred
Stock will be duly established in accordance with, the Texas Business
Corporation Act (the "TBCA"), and (ii) the stock certificate evidencing any
Offered Common Stock (defined below) issued will conform to the specimen
certificate examined by us and will be duly executed and delivered. We have also
assumed that the number of shares of Common Stock and Preferred Stock offered
pursuant to the Registration Statement does not exceed, at the time of issuance,
the authorized but unissued shares of Common Stock and Preferred Stock. As to
any facts material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of the Company and others.
In addition, this opinion letter incorporates by reference and shall be
interpreted in accordance with the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991) and the Report (the "Texas Report") of the
Legal Opinion Committee Regarding Legal Opinions in Business Transactions of the
Business Law Section of the State Bar of Texas (1992). As a consequence, in
addition to the qualifications exceptions and limitations set forth herein, this
opinion letter is also subject to the qualifications, exceptions, definitions
and limitations set forth in the Accord and the Texas Report including the
general qualifications of the Accord and the Other Common Texas Qualifications
contained in the Texas Report.
We have assumed that the execution and delivery by the Company of the
Offered Securities and the performance by the Company of its obligations
thereunder will not violate, conflict with or constitute a default under (i) any
agreement or instrument to which the Company or its properties is subject
(except that we do not make the assumption set forth in this clause (i) with
respect to the Articles of Incorporation or By-laws), (ii) any law, rule or
regulation to which the Company is subject (except that we do not make the
assumption set forth in this clause (ii) with respect to those laws, rules and
regulations of the State of Texas that, in our experience, are normally
applicable to transactions of the
<PAGE> 3
CapRock Communications Corp.
April 11, 2000
Page 3
type provided for by the Registration Statement, but without our having made any
special investigation with respect to any other laws, rules or regulations),
(iii) any judicial or regulatory order or decree of any governmental authority
or (iv) any consent, approval, license, authorization or validation of, or
filing, recording or registration with any governmental authority.
We are licensed to practice law solely in the State of Texas and we
express no opinion herein as to any other laws, statutes, ordinances, rules or
regulations of any other jurisdiction. To the extent that the laws of any other
jurisdiction govern any of the matters as which we are opining herein (including
without limitation to the extent any Debt Securities are governed by New York
law), we have assumed that such laws are identical to the state laws of the
State of Texas.
Based on and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
1. With respect to any series of Debt Securities (the "Offered Debt
Securities"), when (i) the Registration Statement, as finally amended (including
all necessary post-effective amendments), has become effective under the Act and
the applicable Indenture has been qualified under the Trust Indenture Act of
1939, as amended; (ii) an appropriate prospectus supplement or term sheet with
respect to the Offered Debt Securities has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations thereunder;
(iii) if the Offered Debt Securities are to be sold pursuant to a firm
commitment underwritten offering, an underwriting agreement with respect to the
Offered Debt Securities has been duly authorized, executed and delivered by the
Company and the other parties thereto; (iv) all necessary corporate action has
been taken in conformity with the Articles of Incorporation and the By-laws
(including by the Board of Directors, including any appropriate committee
appointed thereby, and appropriate officers of the Company) to approve the
issuance and terms of the Offered Debt Securities and related matters; and (v)
the Offered Debt Securities have been duly executed and authenticated in
accordance with the provisions of the applicable Indenture and duly delivered to
the purchasers thereof upon payment of the agreed-upon consideration therefor,
then (1) if the Offered Debt Securities are governed by the laws of the State of
Texas, the Offered Debt Securities, when issued and sold in accordance with the
applicable Indenture and the applicable underwriting agreement, if any, or any
other duly authorized, executed and delivered valid and binding purchase or
agency agreement, will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity); (2) if the Offered Debt Securities are
governed by the laws of any jurisdiction other than the State of Texas, the
Offered Debt Securities, when issued and sold in accordance with the applicable
Indenture and the applicable underwriting agreement, if any, or any other duly
authorized, executed and delivered valid and binding purchase or agency
agreement, would be valid and binding obligations of the Company if such Offered
Debt Securities were governed by the laws of the State of Texas, enforceable
against the Company in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); and (3) if the Offered Debt Securities are
convertible into Offered Common Stock, the Offered Common Stock issuable upon
conversion of the Offered Debt Securities will be duly authorized, validly
issued, fully
<PAGE> 4
CapRock Communications Corp.
April 11, 2000
Page 4
paid and nonassessable, assuming the issuance of the Offered Common Stock upon
conversion of the Offered Debt Securities has been authorized by all necessary
corporate action, that the Offered Debt Securities have been converted in
accordance with their terms and the terms of the applicable Indenture and that
the certificates evidencing such shares of Offered Common Stock are duly
executed and delivered. In rendering the opinion set forth in clause (3) of this
paragraph 1, we have assumed that, at the time of issuance of any Offered Common
Stock upon conversion of the Offered Debt Securities, the Articles of
Incorporation, the By-Laws and the TBCA shall not have been amended so as to
affect the validity of such issuance.
2. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) an appropriate prospectus supplement or term sheet
with respect to the shares of the Offered Preferred Stock has been prepared,
delivered and filed in compliance with the Act and the applicable rules and
regulations thereunder; (iii) the terms of the Offered Preferred Stock and of
their issuance and sale have been duly established by the Board of Directors,
including any appropriate committee appointed thereby, and by all other
necessary corporate action in conformity with the Articles of Incorporation,
including a Certificate of Designation relating to the Offered Preferred Stock,
and the By-Laws; (iv) the filing of a Certificate of Designation with the
Secretary of State of the State of Texas has duly occurred; (v) if the Offered
Preferred Stock is to be sold pursuant to a firm commitment underwritten
offering, an underwriting agreement with respect to the shares of the Offered
Preferred Stock has been duly authorized, executed and delivered by the Company
and the other parties thereto; and (vi) certificates representing the shares of
the Offered Preferred Stock have been duly executed and delivered by the proper
officers of the Company to the purchasers thereof against payment of the
agreed-upon consideration therefor in the manner contemplated in the
Registration Statement or any prospectus supplement or term sheet relating
thereto, (1) the shares of the Offered Preferred Stock, when issued and sold in
accordance with the applicable underwriting agreement or any other duly
authorized, executed and delivered applicable purchase agreement, will be duly
authorized, validly issued, fully paid and nonassessable, provided that the
consideration therefor is not less than the par value thereof; and (2) if the
Offered Preferred Stock is convertible into Offered Common Stock, the Offered
Common Stock issuable upon conversion of the Offered Preferred Stock will be
duly authorized, validly issued, fully paid and nonassessable, assuming the
issuance of the Offered Common Stock upon conversion of the Offered Preferred
Stock has been authorized by all necessary corporate action, that the Offered
Preferred Stock has been converted in accordance with the terms of a duly
authorized, executed and filed Certificate of Designation and that the
certificates evidencing such shares of Offered Common Stock are duly executed
and delivered. In rendering the opinion set forth in clause (2) of this
paragraph 2, we have assumed that, at the time of issuance of any Offered Common
Stock upon conversion of the Offered Preferred Stock, the Articles of
Incorporation, the By-Laws and the TBCA shall not have been amended so as to
affect the validity of such issuance.
3. With respect to the shares of Common Stock to be offered by the
Company (the "Offered Primary Shares"), when (i) the Registration Statement, as
finally amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) an appropriate prospectus supplement or term sheet
with respect to the shares of the Offered Primary Shares has been prepared,
delivered and filed in compliance with the Act and the applicable rules and
regulations thereunder; (iii) the terms of the issuance and sale of the Offered
Primary Shares have been duly established by the Board of Directors, including
any appropriate committee appointed thereby, and by all other necessary
corporate action in conformity with the Articles of Incorporation and the
By-Laws; (iv) if the Offered Primary Shares are to
<PAGE> 5
CapRock Communications Corp.
April 11, 2000
Page 5
be sold pursuant to a firm commitment underwritten offering, an underwriting
agreement with respect to the shares of the Offered Primary Shares has been duly
authorized, executed and delivered by the Company and the other parties thereto;
and (v) certificates representing the Offered Primary Shares have been duly
executed and delivered by the proper officers of the Company to the purchasers
thereof against payment of the agreed-upon consideration therefor in the manner
contemplated in the Registration Statement or any prospectus supplement or term
sheet relating thereto, the Offered Primary Shares, when issued and sold in
accordance with the applicable underwriting agreement or any other duly
authorized, executed and delivered applicable purchase agreement, will be duly
authorized, validly issued, fully paid and nonassessable, provided that the
consideration therefor is not less than the par value thereof.
4. The shares of Common Stock to be offered by the Selling
Shareholders, if any, have been duly authorized and are validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also hereby consent to the use of
our name under the heading "Legal Matters" in the prospectus and any prospectus
supplements which form a part of the Registration Statement. In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof unless otherwise expressly stated, and we disclaim any
undertaking to advise you of any subsequent changes in the facts stated or
assumed herein or of any subsequent changes in applicable law. This opinion
letter has been prepared solely for your use in connection with the filing of
the Registration Statement on the date of this opinion letter and may not be
relied upon by you for any other purpose without the prior written consent of
our firm and should not be quoted in whole or in part or otherwise referred to,
nor filed with or furnished to any governmental agency or other person or
entity, without the prior written consent of the firm (except as expressly
provided for above).
Very truly yours,
MUNSCH HARDT KOPF & HARR, P.C.
<PAGE> 1
EXHIBIT 12.1
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
CAPROCK COMMUNICATION, CORP.
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
($ in thousands, except for ratios)
<S> <C> <C> <C> <C> <C>
Interest expensed and capitalized ................ $ 536 $ 774 $ 1,735 $ 9,642 $ 34,016
Amortized discounts and capitalized expenses
related to indebtedness ........................ 7 59 311 202 1,154
Rental expense attributed to interest ............ 180 253 473 343 1,562
-------- -------- -------- -------- --------
Total fixed charges ......................... 723 1,086 2,519 10,187 36,732
Pre-tax income ................................... 23 551 4,075 1,490 (5,621)
Fixed charges .................................... 723 1,086 2,519 10,187 36,732
Amortization of capitalized interest ............. -- -- 7 16 352
Interest capitalized ............................. -- (143) -- (183) (6,724)
-------- -------- -------- -------- --------
Total earnings .............................. $ 746 $ 1,494 $ 6,601 $ 11,510 $ 24,739
Ratio of earnings to fixed charges ............... 1.0 1.4 2.6 1.1 --
Deficiency ....................................... -- -- -- -- 11,993
</TABLE>
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CapRock Communications Corp.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Dallas, Texas
April 11, 2000
