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EXHIBIT 4.11.2
EXECUTION COPY
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE (the "Supplemental
Indenture") dated as of June 15, 2000 among Concentric Network Corporation, a
Delaware corporation ("the Company"), and Chase Manhattan Bank and Trust
Company, National Association, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, there has previously been executed and delivered to
the Trustee an Indenture (the "Indenture") dated as of December 18, 1997 between
the Company and the Trustee, providing for the issuance of $150,000,000 in
principal amount of the Company's 12 3/4% Senior Notes due 2007 (the
"Securities");
WHEREAS, the Company has entered into an Amended and Restated
Agreement and Plan of Merger and Share Exchange Agreement, dated as of May 10,
2000, with NEXTLINK Communications, Inc., a Delaware corporation ("NEXTLINK"),
Eagle River Investments, L.L.C., a Washington limited liability company, Craig
O. McCaw and NM Acquisition Corp., a Delaware corporation, pursuant to which the
Company and NEXTLINK will each merge with and into NM Acquisition Corp. and NM
Acquisition Corp. will be renamed "NEXTLINK Communications, Inc." (the
"Merger");
WHEREAS, in order to effect the Merger, the Company and
NEXTLINK have completed a solicitation of consents from the registered holders
(the "Holders") of the Securities to certain amendments to the Indenture, the
particulars of which are more fully set forth herein (the "Amendments"), and the
Holders of a majority in aggregate principal amount of the outstanding
Securities have consented to the Amendments in accordance with the provisions of
Section 902 of the Indenture;
WHEREAS, NM Acquisition Corp., as the surviving corporation in
the Merger will, upon effectiveness of the Merger, become the issuer of the
Securities and the "Company" for all purposes under the Indenture; and
WHEREAS, this Supplemental Indenture will become effective at
the effective time of the Merger, and will not become effective if the Merger is
not consummated.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual premises and covenants contained herein and for other good and valuable
consideration, the parties hereto agree, for the equal and proportionate benefit
of the respective Holders from time to time of the Securities, as follows:
ARTICLE ONE
AMENDMENT OF THE INDENTURE
SECTION 1.1 Amendment of Section 101.
(a) Section 101 of the Indenture is hereby amended by:
(i) deleting the definition of "Acquired Indebtedness"
and inserting the following in lieu thereof:
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""Acquired Debt" means, with respect to any specified
Person, (i) Debt of any other Person existing at the time such Person
merges with or into or consolidates with or becomes a Restricted
Subsidiary of such specified Person and (ii) Debt secured by a Lien
encumbering any asset acquired by such specified Person, which Debt was
not Incurred in anticipation of, and was outstanding prior to, such
merger, consolidation or acquisition."
(ii) deleting the definition of "Affiliate" and inserting
the following in lieu thereof:
""Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing."
(iii) deleting the definition of "Board of Directors" and
inserting the following in lieu thereof:
""Board of Directors" means either the board of
directors of the Company or a Relevant Entity any duly authorized
committee of that Board."
(iv) deleting the definition of "Board Resolution" and
inserting the following in lieu thereof:
""Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company or
a Relevant Entity to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification,
and delivered to the Trustee."
(v) deleting the definition of "Capital Lease Obligation"
and inserting the following in lieu thereof:
""Capital Lease Obligation" of any Person means the
obligation to pay rent or other payment amounts under a lease of (or
other Debt arrangements conveying the right to use) real or personal
property of such Person which is required to be classified and
accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted
accounting principles (a "Capital Lease"). The stated maturity of such
obligation shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty. The
principal amount of such obligation shall be the capitalized amount
thereof that would appear on the face of a balance sheet of such Person
in accordance with generally accepted accounting principles."
(vi) deleting the definition of "Common Stock" and
inserting the following in lieu thereof:
""Common Stock" means the Class A Common Stock, par
value $0.02 per share, of NM Acquisition Corp., into which the common
stock, par value $0.001 per share, of the Company will be converted
pursuant to the Merger."
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(vii) deleting the definition of "Company" and inserting
the following in lieu thereof:
""Company" means NM Acquisition Corp., as successor
by merger to Concentric and NEXTLINK until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture and thereafter "Company" shall mean such successor Person"
(viii) deleting the definition of "Consolidated Income Tax
Expense" and inserting the following in lieu thereof:
""Consolidated Income Tax Expense" for any period
means the consolidated provision for income taxes of the Relevant
Entity and its Restricted Subsidiaries for such period calculated on a
consolidated basis in accordance with generally accepted accounting
principles."
(ix) deleting the definition of "Consolidated Interest
Expense" and inserting the following in lieu thereof:
""Consolidated Interest Expense" means for any period
the consolidated interest expense included in a consolidated income
statement (excluding interest income) of the Relevant Entity and its
Restricted Subsidiaries for such period calculated on a consolidated
basis in accordance with generally accepted accounting principles,
including without limitation or duplication (or, to the extent not so
included, with the addition of), (i) the amortization of Debt
discounts; (ii) any payments or fees with respect to letters of credit,
bankers' acceptances or similar facilities; (iii) fees with respect to
interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements; (iv) Preferred Dividends of the Company
and its Restricted Subsidiaries (other than dividends paid in shares of
Preferred Stock that is not Disqualified Stock) declared and paid or
payable; (v) accrued Disqualified Stock dividends of the Company and
its Restricted Subsidiaries, whether or not declared or paid; (vi)
interest on Debt guaranteed by the Relevant Entity and its Restricted
Subsidiaries; and (vii) the portion of any Capital Lease Obligation
paid or accrued during such period that is allocable to interest
expense."
(x) deleting the definition of "Consolidated Net Income"
and inserting the following in lieu thereof:
""Consolidated Net Income" for any period means the
consolidated net income (or loss) of the Relevant Entity and its
Restricted Subsidiaries for such period determined on a consolidated
basis in accordance with generally accepted accounting principles;
PROVIDED that there shall be excluded therefrom (a) the net income (or
loss) of any Person acquired by the Relevant Entity or a Restricted
Subsidiary of the Relevant Entity in a pooling-of-interests transaction
for any period prior to the date of such transaction, (b) the net
income (or loss) of any Person that is not a Restricted Subsidiary of
the Relevant Entity except to the extent of the amount of dividends or
other distributions actually paid to the Relevant Entity or a
Restricted Subsidiary of the Relevant Entity by such Person during such
period, (c) gains or losses on Asset Dispositions by the Relevant
Entity or its Restricted Subsidiaries, (d) all extraordinary gains and
extraordinary losses, (e) the cumulative effect of changes in
accounting principles, (f) non-cash gains or losses resulting from
fluctuations in currency exchange rates, (g) any non-cash gain or loss
realized on the termination of any employee pension benefit plan and
(h) the tax effect of any of the items described in clauses (a) through
(g) above; PROVIDED, FURTHER, that for purposes of any determination
pursuant to the provisions of Section 1009 there shall further be
excluded therefrom the net income (but not net loss) of any Restricted
Subsidiary of the Relevant Entity that is subject to a restriction
which prevents the payment of dividends or the making of
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distributions to the Relevant Entity or another Restricted Subsidiary
of the Relevant Entity to the extent of such restriction."
(xi) deleting the definition of "Consolidated Operating
Cash Flow" and inserting the following in lieu thereof in appropriate
alphabetical order:
""Consolidated Cash Flow Available for Fixed Charges"
for any period means the Consolidated Net Income of the Relevant Entity
and its Restricted Subsidiaries for such period increased by the sum of
(i) Consolidated Interest Expense of the Relevant Entity and its
Restricted Subsidiaries for such period, plus (ii) Consolidated Income
Tax Expense of the Relevant Entity and its Restricted Subsidiaries for
such period, plus (iii) the consolidated depreciation and amortization
expense included in the income statement of the Relevant Entity and its
Restricted Subsidiaries for such period, plus (iv) any noncash expense
for such period (excluding any noncash charge to the extent that it
requires an accrual of or a reserve for cash disbursements in any
future period), plus (v) any charge related to any premium or penalty
paid in connection with redeeming or retiring any Debt prior to its
stated maturity; PROVIDED, HOWEVER, that there shall be excluded
therefrom the Consolidated Cash Flow Available for Fixed Charges (if
positive) of any Restricted Subsidiary of the Relevant Entity
(calculated separately for such Restricted Subsidiary in the same
manner as provided above for the Relevant Entity) that is subject to a
restriction which prevents the payment of dividends or the making of
distributions to the Relevant Entity or another Restricted Subsidiary
of the Company to the extent of such restriction."
(xii) deleting the definition of "Disqualified Stock" and
inserting the following in lieu thereof:
""Disqualified Stock" of any Person means any Capital
Stock of such Person (other than Capital Stock outstanding on the
Merger Effective Date) which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part, on
or prior to the final Maturity of the Securities (or, if earlier, the
date as of which the Securities have been paid in full); PROVIDED,
HOWEVER, that any Preferred Stock which would not constitute
Disqualified Stock but for provisions thereof giving holders thereof
the right to require the Company to repurchase or redeem such Preferred
Stock upon the occurrence of an asset sale or a change of control
occurring prior to the final Maturity of the Securities shall not
constitute Disqualified Stock if the asset sale or change of control
provisions applicable to such Preferred Stock are no more favorable to
the holders of such Preferred Stock than the provisions applicable to
the Securities contained in Section 1012 or Section 1014 and such
Preferred Stock specifically provides that the Company will not
repurchase or redeem any such stock pursuant to such provisions prior
to the Company's repurchase of such Securities as are required to be
repurchased pursuant to Section 1012 or Section 1014."
(xiii) adding the phrase ", and the rules and regulations
thereunder" after the word "Statute" in the definition of "Exchange Act."
(xiv) deleting the definition of "Guarantee" and inserting
the following in lieu thereof:
""Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person guaranteeing, or having the
economic effect of guaranteeing, any Debt of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including,
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without limitation, any obligation of such Person, (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Debt or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Debt, (ii) to purchase property,
securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing); PROVIDED, HOWEVER, that the
Guarantee by any Person shall not include endorsements by such Person
for collection or deposit, in either case, in the ordinary course of
business; and PROVIDED, FURTHER, that the incurrence by a Restricted
Subsidiary of the Company of a lien permitted under clause (iv) of the
second paragraph of Section 1011 shall not be deemed to constitute a
Guarantee by such Restricted Subsidiary of any Purchase Money Debt of
the Company secured thereby."
(xv) deleting the definition of "Incur" and inserting the
following in lieu thereof:
""Incur" means, with respect to any Debt or other
obligation of any Person, to create, issue, incur (by conversion,
exchange or otherwise), assume, Guarantee or otherwise become liable in
respect of such Debt or other obligation including by acquisition of
Subsidiaries or the recording, as required pursuant to generally
accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and "Incurrence",
"Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that a change in
generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall not be
deemed an Incurrence of such Debt and that neither the accrual of
interest nor the accretion of original issue discount shall be deemed
an Incurrence of Debt; PROVIDED, FURTHER, HOWEVER, that the Company may
elect to treat all or any portion of revolving credit debt of the
Company or a Subsidiary as being incurred from and after any date
beginning the date the revolving credit commitment is extended to the
Company or a Subsidiary, by furnishing notice thereof to the Trustee,
and any borrowings or reborrowings by the Company or a Subsidiary under
such commitment up to the amount of such commitment designated by the
Company as Incurred shall not be deemed to be new Incurrences of Debt
by the Company or such Subsidiary."
(xvi) deleting the definition of "Interest Rate Agreements"
and inserting the following in lieu thereof:
""Interest Rate or Currency Protection Agreement" of
any Person means any forward contract, futures contract, swap, option
or other financial agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreements) relating to,
or the value of which is dependent upon, interest rates or currency
exchange rates or indices."
(xvii) deleting the definition of "Investment" and inserting
the following in lieu thereof:
""Investment" by any Person means any direct or
indirect loan, advance or other extension of credit or capital
contribution (by means of transfers of cash or other property to others
or payments for property or services for the account or use of others,
or otherwise) to, or purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities or evidence of Debt issued by,
any other Person, including any payment on a Guarantee of any
obligation of such other Person, but excluding any loan, advance or
extension of credit to an employee of the Company or any of its
Restricted Subsidiaries in the ordinary course of business, accounts
receivable and other commercially reasonable extensions of trade
credit."
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(xviii) deleting the definition of "Lien" and inserting the
following in lieu thereof:
""Lien" means, with respect to any property or
assets, any mortgage or deed of trust, pledge, hypothecation,
assignment, Receivables Sale, deposit arrangement, security interest,
lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever on or with respect to such property or assets
(including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as
any of the foregoing)."
(xix) deleting the definition of "Permitted Investment" and
inserting the following in lieu thereof:
""Permitted Investment" means (i) any Investment in a
Joint Venture (including the purchase or acquisition of any Capital
Stock of a Joint Venture), provided the aggregate amount of all
outstanding Investments pursuant to this clause (i) in Joint Ventures
in which the Company owns, directly or indirectly, a less than 50%
interest shall not exceed $25 million, (ii) any Investment in any
Person as a result of which such Person becomes a Restricted
Subsidiary, or, subject to the proviso to clause (i) of this
definition, becomes a Joint Venture of the Company, (iii) any
Investment in Marketable Securities, (iv) Investments in Permitted
Interest Rate or Currency Protection Agreements, (v) Investments made
as a result of the receipt of noncash consideration from an Asset
Disposition that was made pursuant to and in compliance with Section
1012 of this Indenture and (vi) other Investments in an aggregate
amount not to exceed the aggregate net proceeds received by the Company
or any Restricted Subsidiary after the Merger Effective Date from the
sale or liquidation of any Unrestricted Subsidiary or any interest
therein (except to the extent that any such amount is included in the
calculation of Consolidated Net Income)."
(xx) deleting the definition of "Permitted Lien" and
inserting the following in lieu thereof:
""Permitted Liens" means (a) Liens for taxes,
assessments, governmental charges or claims which are not yet
delinquent or which are being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with generally accepted accounting
principles shall have been made therefor; (b) other Liens incidental to
the conduct of the Company's and its Restricted Subsidiaries' business
or the ownership of its property and assets not securing any Debt, and
which do not in the aggregate materially detract from the value of the
Company's and its Restricted Subsidiaries' property or assets when
taken as a whole, or materially impair the use thereof in the operation
of its business; (c) Liens with respect to assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company to
secure Debt owing to the Company; (d) pledges and deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of statutory obligations
(including to secure government contracts); (e) deposits made to secure
the performance of tenders, bids, leases, and other obligations of like
nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (f) zoning
restrictions, servitudes, easements, rights-of-way, restrictions and
other similar charges or encumbrances incurred in the ordinary course
of business which, in the aggregate, do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Company or its Restricted Subsidiaries;
(g) Liens arising out of judgments or awards against the Company or any
Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is prosecuting an appeal or
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proceeding for review and the Company or such Restricted Subsidiary is
maintaining adequate reserves in accordance with generally accepted
accounting principles; (h) any interest or title of a lessor in the
property subject to any lease other than a Capital Lease; and (i) any
statutory warehousemen's, materialmen's or other similar Liens for sums
not then due and payable (or which, if due and payable, are being
contested in good faith and with respect to which adequate reserves are
being maintained to the extent required by generally accepted
accounting principles)."
(xxi) inserting the words "or any other entity" after the
word "thereby" in the definition of "Person".
(xxii) deleting the definition of "Preferred Stock" and
inserting the following in lieu thereof:
""Preferred Stock" of any Person means Capital Stock
of such Person of any class or classes (however designated) that ranks
prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock of any other
class of such Person."
(xxiii) deleting the definition of "Purchase Money
Obligation" and inserting the following in lieu thereof:
""Purchase Money Debt" means (i) Acquired Debt
Incurred in connection with the acquisition of Telecommunications
Assets and (ii) Debt of the Relevant Entity or of any Restricted
Subsidiary of the Relevant Entity (including, without limitation, Debt
represented by Bank Credit Agreements, Capital Lease Obligations,
Vendor Financing Facilities, mortgage financings and purchase money
obligations) Incurred for the purpose of financing all or any part of
the cost of construction, acquisition or improvement by the Relevant
Entity or any Restricted Subsidiary of the Relevant Entity or any Joint
Venture of any Telecommunications Assets of the Relevant Entity, any
Restricted Subsidiary of the Relevant Entity or any Joint Venture, and
including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified or restated from time to
time."
(xxiv) deleting the definition of "Sale and Leaseback
Transaction" and inserting the following in lieu thereof:
""Sale and Leaseback Transaction" of any Person means
an arrangement with any lender or investor or to which such lender or
investor is a party providing for the leasing by such Person of any
property or asset of such Person which has been or is being sold or
transferred by such Person more than 365 days after the acquisition
thereof or the completion of construction or commencement of operation
thereof to such lender or investor or to any person to whom funds have
been or are to be advanced by such lender or investor on the security
of such property or asset. The stated maturity of such arrangement
shall be the date of the last payment of rent or any other amount due
under such arrangement prior to the first date on which such
arrangement may be terminated by the lessee without payment of a
penalty."
(xxv) deleting the definition of "Subordinated
Indebtedness" and inserting the following in lieu thereof:
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""Subordinated Debt" means Debt of the Company as to
which the payment of principal of (and premium, if any) and interest
and other payment obligations in respect of such Debt shall be
subordinate to the prior payment in full of the Securities to at least
the following extent: (i) no payments of principal of (or premium, if
any) or interest on or otherwise due in respect of such Debt may be
permitted for so long as any default in the payment of principal (or
premium, if any) or interest on the Securities exists; (ii) in the
event that any other default that with the passing of time or the
giving of notice, or both, would constitute an Event of Default exists
with respect to the Securities, upon notice by the Holders of 25% or
more in principal amount of the Securities to the Trustee, the Trustee
shall have the right to give notice to the Company and the holders of
such Debt (or trustees or agents therefor) of a payment blockage, and
thereafter no payments of principal of (or premium, if any) or interest
on or otherwise due in respect of such Debt may be made for a period of
179 days from the date of such notice or for the period until such
default has been cured or waived or ceased to exist and any
acceleration of the Securities has been rescinded or annulled,
whichever period is shorter (which Debt may provide that (A) no new
period of payment blockage may be commenced by a payment blockage
notice unless and until 360 days have elapsed since the effectiveness
of the immediately prior notice, (B) no nonpayment default that existed
or was continuing on the date of delivery of any payment blockage
notice to such holders (or such agents or trustees) shall be, or be
made, the basis for a subsequent payment blockage notice and (C)
failure of the Company to make payment on such Debt when due or within
any applicable grace period, whether or not on account of such payment
blockage provisions, shall constitute an event of default thereunder);
and (iii) such Debt may not (x) provide for payments of principal of
such Debt at the stated maturity thereof or by way of a sinking fund
applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each
case prior to the final Maturity of the Securities or (y) permit
redemption or other retirement (including pursuant to an offer to
purchase made by the Company) of such other Debt at the option of the
holder thereof prior to the final Maturity of the Securities, other
than a redemption or other retirement at the option of the holder of
such Debt (including pursuant to an offer to purchase made by the
Company) which is conditioned upon a change of control of the Company
pursuant to provisions substantially similar to those of Section 1014
(and which shall provide that such Debt will not be repurchased
pursuant to such provisions prior to the Company's repurchase of the
Securities required to be repurchased by the Company pursuant to the
provisions of Section 1014)."
(xxvi) deleting the definition of "Unrestricted Subsidiary"
and inserting the following in lieu thereof:
""Unrestricted Subsidiary" means (1) any subsidiary
of the Company designated as such by the Board of Directors as set
forth below where (a) neither the Company nor any of its other
subsidiaries (other than another Unrestricted Subsidiary) (i) provides
credit support for, or Guarantee of, any Debt of such subsidiary or any
subsidiary of such subsidiary (including any undertaking, agreement or
instrument evidencing such Debt) or (ii) is directly or indirectly
liable for any Debt of such subsidiary or any subsidiary of such
subsidiary, and (b) no default with respect to any Debt of such
subsidiary or any subsidiary of such subsidiary (including any right
which the holders thereof may have to take enforcement action against
such subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Debt of the Company and its Restricted Subsidiaries
to declare a default on such other Debt or cause the payment thereof to
be accelerated or payable prior to its final scheduled maturity and (2)
any subsidiary of an Unrestricted Subsidiary. The Board of Directors
may designate any subsidiary to be an Unrestricted Subsidiary unless
such subsidiary owns any Capital Stock of, or owns or holds any
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Lien on any property of, any other subsidiary of the Company which is
not a subsidiary of the subsidiary to be so designated or otherwise an
Unrestricted Subsidiary, PROVIDED that either (x) the subsidiary to be
so designated has total assets of $1,000 or less or (y) immediately
after giving effect to such designation, the Company could Incur at
least $1.00 of additional Debt pursuant to the first paragraph of
Section 1008 and PROVIDED, FURTHER, that the Company could make a
Restricted Payment in an amount equal to the greater of the fair market
value and the book value of such subsidiary pursuant to Section 1009
and such amount is thereafter treated as a Restricted Payment for the
purpose of calculating the aggregate amount available for Restricted
Payments thereunder. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary, PROVIDED that if
such Unrestricted Subsidiary has Debt outstanding at such time, either
(a) immediately after giving effect to such designation, the Company
could Incur at least $1.00 of additional Debt pursuant to the first
paragraph of Section 1008 or (b) the Company or such Restricted
Subsidiary could Incur such Debt hereunder (other than as Acquired
Debt)."
(xxvii) adding the following definitions in appropriate
alphabetical order:
""Asset Disposition" by the Company or any Restricted
Subsidiary means any transfer, conveyance, sale, lease or other
disposition (other than a creation of a Lien) by such Person (including
a consolidation or merger or other sale of any such Restricted
Subsidiary with, into or to another Person in a transaction in which
such Restricted Subsidiary ceases to be a Restricted Subsidiary of the
Company, but excluding a disposition by a Restricted Subsidiary of the
Company to the Company or a Restricted Subsidiary of the Company or by
the Company to a Restricted Subsidiary of the Company) of (i) shares of
Capital Stock or other ownership interests of a Restricted Subsidiary
of the Company (including the issuance of Capital Stock by a Restricted
Subsidiary), other than as permitted by the provisions of Section 1018
or pursuant to a transaction in compliance with Section 801, (ii)
substantially all of the assets of the Company or any of its Restricted
Subsidiaries representing a division or line of business (other than as
part of a Permitted Investment) or (iii) other assets or rights of the
Company or any of its Restricted Subsidiaries other than (A) in the
ordinary course of business or (B) that constitutes a Restricted
Payment which is permitted by the provisions of Section 1009; PROVIDED
that a transaction described in clauses (i), (ii) and (iii) shall
constitute an Asset Disposition only if the aggregate consideration for
such transfer, conveyance, sale, lease or other disposition is equal to
$5 million or more in any 12-month period."
""Attributable Value" means, as to any particular
lease under which any Person is at the time liable other than a Capital
Lease Obligation, and at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such
Person under such lease during the initial term thereof as determined
in accordance with generally accepted accounting principles, discounted
from the last date of such initial term to the date of determination at
a rate per annum equal to the discount rate which would be applicable
to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent
required to be paid under any such lease for any such period shall be
the aggregate amount of rent payable by the lessee with respect to such
period after excluding amounts required to be paid on account of
insurance, taxes, assessments, utility, operating and labor costs and
similar charges. In the case of any lease which is terminable by the
lessee upon the payment of penalty, such net amount shall also include
the lesser of the amount of such penalty (in which case no rent shall
be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated) or the rent which would
otherwise be required to be paid if such lease is not so terminated."
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""Bank Credit Agreement" means any one or more credit
agreements (which may include or consist of revolving credits) between
the Company or any Restricted Subsidiary of the Company and one or more
banks or other financial institutions providing financing for the
business of the Company and its Restricted Subsidiaries."
""Common Equity" of any Person means Capital Stock of
such Person that is not Disqualified Stock, and a "sale of Common
Equity" includes any sale of Common Equity effected by private sale or
public offering."
""Consolidated Capital Ratio" of any Person as of any
date means the ratio of (i) the aggregate consolidated principal amount
of Debt (or in the case of Debt issued at a discount the accreted
amount thereof) of such Person then outstanding (which amount of Debt
shall be reduced by any amount of cash or cash equivalent collateral
securing on a perfected basis and dedicated for disbursement
exclusively to the payment of principal of and interest on such Debt)
to (ii) the aggregate consolidated Capital Stock (other than
Disqualified Stock) and paid in capital (other than in respect of
Disqualified Stock) of such Person as of such date."
""Consolidated Net Worth" of any Person means the
consolidated stockholders' equity of such Person, determined on a
consolidated basis in accordance with generally accepted accounting
principles, less amounts attributable to Disqualified Stock of such
Person; PROVIDED that, with respect to the Company, adjustments
following the date of this Indenture to the accounting books and
records of the Company in accordance with Accounting Principles Board
Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise
resulting from the acquisition of control of the Company by another
Person shall not be given effect to."
""Consolidated Tangible Assets" of any Person means
the total amount of assets (less applicable reserves and other properly
deductible items) which under generally accepted accounting principles
would be included on a consolidated balance sheet of such Person and
its Restricted Subsidiaries after deducting therefrom all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense
and other like intangibles, which in each case under generally accepted
accounting principles would be included on such consolidated balance
sheet; PROVIDED that, with respect to the Company, adjustments
following the date of this Indenture to the accounting books and
records of the Company in accordance with Accounting Principles Board
Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise
resulting from the acquisition of control of the Company by another
Person shall not be given effect to."
""corporation" means a corporation, association,
company, limited liability company, joint-stock company or business
trust."
""Debt" means (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of
such Person and whether or not contingent, (i) every obligation of such
Person for money borrowed, (ii) every obligation of such Person
evidenced by bonds, debentures, notes or other similar instruments,
including any such obligations Incurred in connection with the
acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services
(including securities repurchase in the ordinary course of business
which are not overdue or which are being contested in good faith), (v)
every Capital Lease Obligation of such Person, (vi) all Receivables
Sales of such Person, together with any obligation of such Person to
pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith, (vii) all
obligations to redeem Disqualified
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Stock issued by such Person, (viii) every obligation under Interest
Rate or Currency Protection Agreements of such Person and (ix) every
obligation of the type referred to in clauses (i) through (viii) of
another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed. The "amount" or
"principal amount" of Debt at any time of determination as used herein
represented by (a) any Debt issued at a price that is less than the
principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally
accepted accounting principles, (b) any Receivables Sale, shall be the
amount of the unrecovered capital or principal investment of the
purchaser (other than the Company or a Wholly-Owned Restricted
Subsidiary of the Company) thereof, excluding amounts representative of
yield or interest earned on such investment, (c) any Disqualified
Stock, shall be the maximum fixed redemption or repurchase price in
respect thereof, (d) any Capital Lease Obligation, shall be determined
in accordance with the definition thereof, or (e) any Permitted
Interest Rate or Currency Protection Agreement, shall be zero. In no
event shall Debt include any liability for taxes."
"Eligible Institution" means a commercial banking
institution that has combined capital and surplus of not less than $500
million or its equivalent in foreign currency, whose debt is rated
"A-3" or higher, "A" or higher or "A" or higher according to Moody's
Investors Service, Inc., Standard & Poor's Ratings Group or Duff &
Phelps Credit Rating Co. (or such similar equivalent rating by at least
one "nationally recognized statistical rating organization" (as defined
in Rule 436 under the Securities Act)) respectively, at the time as of
which any investment or rollover therein is made.
""Eligible Receivables" means, at any time,
Receivables of the Relevant Entity and its Restricted Subsidiaries, as
evidenced on the most recent quarterly consolidated balance sheet of
the Company as at a date at least 45 days prior to such time arising in
the ordinary course of business of the Company or any Restricted
Subsidiary of the Company."
""Government Securities" means direct obligations of,
or obligations guaranteed by, the United States of America for the
payment of which obligations or guarantee the full faith and credit of
the United States is pledged and which have a remaining weighted
average life to maturity of not more than 18 months from the date of
Investment therein."
""Joint Venture" means a corporation, partnership or
other entity engaged in one or more Telecommunications Businesses
(which shall include for purposes of this definition of "Joint Venture"
all businesses in which the Relevant Entity or any of its subsidiaries
was engaged on the Merger Effective Date; provided that, as used in
this definition of "Joint Venture," the determination of what
constitutes a "Telecommunications Business" shall be made in good faith
by the Board of directors, which determination shall be conclusive) as
to which the Company (directly or through one or more Restricted
Subsidiaries) exercises managerial control and in which the Company
owns (i) a 50% or greater interest, or (ii) a 30% or greater interest,
together with options or other contractual rights, exercisable not more
than seven years after the Company's initial Investment in such Joint
Venture, to increase its interest to not less than 50%."
""Marketable Securities" means: (i) Government
Securities; (ii) any time deposit account, money market deposit and
certificate of deposit maturing not more than 365 days after the date
of acquisition issued by, or time deposit of, an Eligible Institution;
(iii) commercial paper maturing not more than 365 days after the date
of acquisition issued by a corporation (other than an Affiliate of the
Company) with a rating, at the time as of which any investment therein
is made, of "P-1" or higher according to Moody's Investors Service,
Inc., "A-1" or higher according to Standard & Poor's Ratings Group or
"A-1" or higher according to Duff & Phelps Credit Rating
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<PAGE> 12
Co. (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436
under the Securities Act)); (iv) any banker's acceptances or money
market deposit accounts issued or offered by an Eligible Institution;
(v) repurchase obligations with a term of not more than 7 days for
Government Securities entered into with an Eligible Institution; (vi)
auction-rate preferred stocks of any corporation maturing within 90
days after the date of acquisition by the Company thereof, having a
rating of at least AA by Standard & Poor's; and (vii) any fund
investing exclusively in investments of the types described in clauses
(i) through (vi) above."
""Merger" means the merger of Concentric Network
Corporation with and into NM Acquisition Corp. and NEXTLINK pursuant to
the Agreement and Plan of Merger, dated as of January 9, 2000, by and
among the Concentric Network Corporation, NEXTLINK, Eagle River
Investments, L.L.C. and NM Acquisition Corp."
""Merger Effective Date" means the date on which the
Merger becomes effective."
""NEXTLINK" means NEXTLINK Communications, Inc. a
Delaware corporation, prior to the Merger.
""Permitted Interest Rate or Currency Protection
Agreement" of any Person means any Interest Rate or Currency Protection
Agreement entered into with one or more financial institutions in the
ordinary course of business that is designed to protect such Person
against fluctuations in interest rates or currency exchange rates with
respect to Debt Incurred and which shall have a notional amount no
greater than the payments due with respect to the Debt being hedged
thereby and not for purposes of speculation."
""Preferred Dividends" for any Person means for any
period the quotient determined by dividing the amount of dividends and
distributions paid or accrued (whether or not declared) on Preferred
Stock of such Person during such period calculated in accordance with
generally accepted accounting principles, by 1 minus the maximum
statutory income tax rate then applicable to the Company (expressed as
a decimal)."
""Receivables" means receivables, chattel paper,
instruments, documents or intangibles evidencing or relating to the
right to payment of money in respect of the sale of goods or services."
""Receivables Sale" of any Person means any sale of
Receivables of such Person (pursuant to a purchase facility or
otherwise), other than in connection with a disposition of the business
operations of such Person relating thereto or a disposition of
defaulted Receivables for purpose of collection and not as a financing
arrangement."
""Related Person" of any Person means any other
Person directly or indirectly owning (a) 10% or more of the issued and
outstanding Common Equity of such Person (or, in the case of a Person
that is not a corporation, 10% or more of the equity interest in such
Person) or (b) 10% or more of the combined voting power of the Voting
Stock of such Person."
"Relevant Entity" means NEXTLINK for periods prior to
the consummation of the Merger and the Company for periods from and
after the consummation of the Merger.
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""Restricted Subsidiary" of the Company or the
Relevant Entity, as applicable means any subsidiary, whether existing
on or after the Merger Effective Date with respect to the Company, or
prior to the Merger Effective Date with respect to the Relevant Entity,
unless such subsidiary is an Unrestricted Subsidiary.
"Significant Subsidiary" means a Restricted
Subsidiary that is a "significant subsidiary" as defined in Rule
1-02(w) of Regulation S-X under the Securities Act and the Exchange
Act."
""Telecommunications Assets" means all assets, rights
(contractual or otherwise) and properties, whether tangible or
intangible, used or intended for use in connection with a
Telecommunications Business (which shall include for purposes of this
definition of "Telecommunications Assets" all businesses in which the
Relevant Entity or any of its subsidiaries was engaged on the Merger
Effective Date; provided that, as used in this definition of
"Telecommunications Assets," the determination of what constitutes a
"Telecommunications Business" shall be made in good faith by the Board
of Directors, which determination shall be conclusive)."
""Vendor Financing Facility" means any agreements
between the Company or a Restricted Subsidiary of the Company and one
or more vendors or lessors of equipment or other capital assets to the
Company or any of its Restricted Subsidiaries (or any affiliate of any
such vendor or lessor) providing financing for the acquisition by the
Company or any such Restricted Subsidiary of equipment or other capital
assets from any such vendor or lessor."
""Wholly-Owned Restricted Subsidiary" of any Person
means a Restricted Subsidiary of such Person 99% or more of the
outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly-Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly-Owned Restricted
Subsidiaries of such Person."
(xxx) deleting the following terms and their respective
definitions:
"Acquired Person," "Acquisition," "Average Life to
Stated Maturity," "Cumulative Operating Cash Flow," "Debt to Annualized
Operating Cash Flow," "Disinterested Director," "Guaranteed Debt,"
"Guarantor," "Qualified Capital Stock," "Redeemable Capital Stock,"
"Total Consolidated Indebtedness," "Unrestricted Subsidiary
Indebtedness" and "Wholly Owned Subsidiary."
SECTION 1.2 Amendment of Section 102.
Section 102 of the Indenture is hereby amended by (a) deleting
the definitions of "Basket," "Permitted Indebtedness, "Permitted Payment,"
"Refinancing, "Restricted Payments" and "Security Amount" and (b) deleting the
cross-references to Section "1015" in the definitions of "Change of Control
Offer," "Change of Control Purchase Date," "Change of Control Purchase Notice"
and "Change of Control Purchase Price" and replacing such cross-references with
cross-references to Section "1014".
SECTION 1.3 Amendment of Section 501.
Section 501 of the Indenture is hereby amended by:
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<PAGE> 14
(a) (i) deleting the number "30" in clause (i) in
paragraph (c) of such Section and inserting the number "60" in lieu
thereof and (ii) deleting the words "Article Eight" in clause (ii) of
such Section and inserting the words "Section 801" in lieu thereof;
(b) deleting paragraph (d) of such Section and inserting
the following in lieu thereof:
"(d) a default or defaults under any bond(s),
debenture(s), note(s) or other evidence(s) of Debt by the Company or
any Significant Subsidiary of the Company or under any mortgage(s),
indenture(s) or instrument(s) under which there may be issued or by
which there may be secured or evidenced any Debt of such type by the
Company or any such Significant Subsidiary with a principal amount then
outstanding, individually or in the aggregate, in excess of $10
million, whether such Debt now exists or shall hereafter be created,
which default or defaults shall constitute a failure to pay such Debt
when due at the final maturity thereof, or shall have resulted in such
Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable;";
(c) deleting paragraph (e) of such Section;
(d) deleting paragraph (f) of such Section and inserting
the following in lieu thereof:
"(e) a final judgment or final judgments (not subject
to appeal) for the payment of money are entered against the Company or
any Significant Subsidiary in an aggregate amount in excess of $10
million by a court or courts of competent jurisdiction, which judgments
remain undischarged or unstayed for a period (during which execution
shall not be effectively stayed) of 45 days after the right to appeal
all such judgments has expired;";
(e) deleting paragraph (g) of such Section;
(f) deleting paragraph (h) of such Section and inserting
the following in lieu thereof:
"(f) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Significant Subsidiary in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging
the Company or any Significant Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
or any Significant Subsidiary under any applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days;";
(h) deleting paragraph (i) of such Section and inserting
the following in lieu thereof:
"(g) the commencement by the Company or any
Significant Subsidiary of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or the consent by it to the entry of a decree
or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it
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<PAGE> 15
of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or any Significant Subsidiary
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action; or"; and
(i) by redesignating paragraph "(j)" of such Section as
paragraph "(h)".
SECTION 1.4 Amendment of Section 801.
Section 801 of the Indenture is hereby amended by deleting
such section and inserting the following in lieu thereof:
"Section 801. Mergers, Consolidations And Certain Sales Of
Assets.
(a) The Company may not, in a single transaction
or a series of related transactions, (i) consolidate with or merge into
any other Person or permit any other Person to consolidate with or
merge into the Company (other than a consolidation or merger of a
Wholly-Owned Restricted Subsidiary organized under the laws of a State
of the United States into the Company), or (ii) directly or indirectly,
transfer, sell, lease or otherwise dispose of all or substantially all
of its assets (determined on a consolidated basis for the Company and
its Restricted Subsidiaries taken as a whole and provided that the
creation of a Lien on or in any of its assets shall not in and of
itself constitute the transfer, sale, lease or disposition of the
assets subject to the Lien), unless: (1) in a transaction in which the
Company does not survive or in which the Company sells, leases or
otherwise disposes of all or substantially all of its assets to any
other Person, the successor entity to the Company shall be a
corporation organized under the laws of the United States of America or
any State thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture executed and delivered to the
Trustee in form satisfactory to the Trustee, all of the Company's
obligations under this Indenture; (2) immediately after giving pro
forma effect to such transaction as if such transaction had occurred at
the beginning of the last full fiscal quarter immediately prior to the
consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation
and treating any Debt which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been Incurred by
the Company or such Subsidiary at the time of the transaction, no
Default or Event of Default shall have occurred and be continuing; (3)
immediately after giving effect to such transaction, the Consolidated
Net Worth of the Company (or other successor entity to the Company) is
equal to or greater than that of the Company immediately prior to the
transaction; (4) if, as a result of any such transaction, property or
assets of the Company would become subject to a Lien prohibited by the
provisions of Section 1011, the Company or the successor entity to the
Company shall have secured the Securities as required by Section 1011;
(5) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each in form and substance satisfactory to
the Trustee stating that such consolidation, merger, conveyance,
transfer, lease or acquisition and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, complies with this Article and that all conditions precedent
herein provided for relating to transaction have been complied with,
and, with respect to such Officer's Certificate, setting forth the
manner of determination of the Consolidated Net Worth in accordance
with Clause (3) of Section 801, of the Company or, if applicable, of
the Successor Company as required pursuant to the foregoing.
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(b) In the event of any transaction (other than
a lease) described in and complying with the immediately preceding
paragraph in which the Company is not the surviving Person and the
surviving Person assumes all the obligations of the Company under the
Securities and this Indenture pursuant to a supplemental indenture,
such surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of, the Company, and the Company will be
discharged from its obligations under this Indenture and the
Securities; PROVIDED that solely for the purpose of calculating amounts
under Section 1009(iv)(3), any such surviving Person shall only be
deemed to have succeeded to and be substituted for the Company with
respect to the period subsequent to the effective time of such
transaction, and the Company (before giving effect to such transaction)
shall be deemed to be the "Company" for such purposes for all prior
periods."
SECTION 1.5 Amendment of Section 901
Section 901 of the Indenture is hereby amended by adding the following
phrase immediately after the phrase "which may be defective or inconsistent with
any other provision herein" in paragraph (c) of such Section:
"or therein or with the intent of the First Supplemental Indenture
hereto, dated June 15, 2000,"
SECTION 1.6 Amendment of Section 1008.
Section 1008 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1008. Limitation On Consolidated Debt.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, Incur any Debt unless either (a) the
ratio of: (i) the aggregate consolidated principal amount of Debt of
the Relevant Entity outstanding as of the most recent available
quarterly or annual balance sheet, after giving pro forma effect to the
Incurrence of such Debt and any other Debt Incurred since such balance
sheet date and the receipt and application of the proceeds thereof to
(ii) Consolidated Cash Flow Available for Fixed Charges for the four
full fiscal quarters next preceding the Incurrence of such Debt for
which consolidated financial statements are available, determined on a
pro forma basis as if (x) any such Debt had been Incurred and the
proceeds thereof had been applied at the beginning of such four fiscal
quarters; (y) the net income (or loss) for such period of any Person or
related to any assets disposed of by the Relevant Entity or a
Restricted Subsidiary of the Relevant Entity prior to the end of such
period had been excluded from Consolidated Net Income; and (z) the net
income (or loss) for such period of any Person or related to any assets
acquired by the Relevant Entity or any Restricted Subsidiary prior to
the end of such period had been included in Consolidated Net Income,
would be less than 5.5 to 1 for such four-quarter periods ending on or
prior to December 31, 1999 and 5.0 to 1 for such periods ending
thereafter; or (b) the Relevant Entity's Consolidated Capital Ratio as
of the most recent available quarterly or annual balance sheet, after
giving pro forma effect to the Incurrence of such Debt, any issuance of
Capital Stock (other than Disqualified Stock) since such balance sheet
date, any increase in paid in-capital (other than in respect of
Disqualified Stock) since such balance sheet date and the Incurrence of
any other Debt since such balance sheet date and the receipt and
application of the proceeds thereof, is less than 2.0 to 1.
Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur the following:
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<PAGE> 17
(i) Debt under any one or more Bank Credit Agreements or
Vendor Financing Facilities in an aggregate principal amount at any one
time not to exceed the greater of:
(x) $250 million and
(y) 85% of the Eligible Receivables, and any renewal,
extension, refinancing or refunding thereof in an amount which,
together with any principal amount remaining outstanding or available
under all Bank Credit Agreements and Vendor Financing Facilities of the
Company and its Restricted Subsidiaries, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of any Bank Credit Agreement so refinanced plus the amount of
expenses incurred in connection with such refinancing, does not exceed
the aggregate principal amount outstanding or available under all such
Bank Credit Agreements and Vendor Financing Facilities of the Company
and its Restricted Subsidiaries immediately prior to such renewal,
extension, refinancing or refunding;
(ii) Purchase Money Debt Incurred to finance the
construction, acquisition or improvement of Telecommunications Assets,
PROVIDED that the net proceeds of such Purchase Money Debt do not
exceed 100% of the cost of construction, acquisition or improvement
price of the applicable Telecommunications Assets;
(iii) Debt owed by the Company to any Restricted Subsidiary
of the Company or Debt owed by a Restricted Subsidiary of the Company
to the Company or a Restricted Subsidiary of the Company; PROVIDED,
HOWEVER, that upon either (x) the transfer or other disposition by such
Restricted Subsidiary or the Company of any Debt so permitted to a
Person other than the Company or another Restricted Subsidiary of the
Company or (y) the issuance (other than directors' qualifying shares),
sale, lease, transfer or other disposition of shares of Capital Stock
(including by consolidation or merger) of such Restricted Subsidiary as
a result of which the obligor of such Debt ceases to be a Restricted
Subsidiary, the provisions of this clause (iii) shall no longer be
applicable to such Debt and such Debt shall be deemed to have been
Incurred at the time of such transfer or other disposition;
(iv) Debt Incurred to renew, extend, refinance or refund
(each, a "refinancing") Debt of the Relevant Entity and any of its
Restricted Subsidiaries outstanding at the Merger Effective Date (after
giving effect to the Merger) or Incurred by the Relevant Entity
pursuant to the preceding paragraph or clause (ii) of this paragraph or
the Securities in an aggregate principal amount not to exceed the
aggregate principal amount of and accrued interest on the Debt so
refinanced plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt so
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the amount of
expenses of the Company incurred in connection with such refinancing;
PROVIDED, HOWEVER, that Debt the proceeds of which are used to
refinance the Securities or Debt which is PARI PASSU to the Securities
or debt which is subordinate in right of payment to the Securities
shall only be permitted if:
(A) in the case of any refinancing of the Securities or
Debt which is PARI PASSU to the Securities, the refinancing Debt is
made PARI PASSU to the Securities or subordinated to the Securities,
and, in the case of any refinancing of Debt which is subordinated to
the Securities, the refinancing Debt constitutes Subordinated Debt and
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<PAGE> 18
(B) in either case, the refinancing Debt by its terms, or
by the terms of any agreement or instrument pursuant to which such Debt
is issued, (x) does not provide for payments of principal of such Debt
at the stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance, retirement
or repurchase thereof by the Company (including any redemption,
retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon any event of default thereunder), in
each case prior to the time the same are required by the terms of the
Debt being refinanced and (y) does not permit redemption or other
retirement (including pursuant to an offer to purchase made by the
Company) of such Debt at the option of the holder thereof prior to the
final stated maturity of the Debt being refinanced, other than a
redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Company) which
is conditioned upon a change substantially similar to the provisions of
Section 1014 or which is pursuant to provisions substantially similar
to the provisions of Section 1012;
(v) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vi) Debt outstanding under the Securities;
(vii) Subordinated Debt invested by: (a) a group of
employees of the Relevant Entity, which includes the Chief Executive
Officer of the Relevant Entity, who own, directly or indirectly,
through an employee stock ownership plan or arrangement, shares of the
Relevant Entity's Capital Stock or (b) any other Person that controls
the Relevant Entity (i) on the Merger Effective Date or (ii) after a
Change of Control, PROVIDED that the Company is not in default with
respect to its obligations under Section 1016;
(viii) Debt consisting of performance and other similar
bonds and reimbursement obligations Incurred in the ordinary course of
business securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance; and
(ix) Debt not otherwise permitted to be Incurred pursuant
to clauses (i) through (viii) above, which, together with any other
outstanding Debt Incurred pursuant to this clause (ix), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
For purposes of determining compliance with this Section 1008,
in the event that an item of Debt meets the criteria of more than one
of the types of Debt the Company is permitted to incur pursuant to the
foregoing clauses (i) through (ix) or the first paragraph of this
Section 1008, the Company shall have the right, in its sole discretion,
to classify such item of Debt and shall only be required to include the
amount and type of such Debt under the clause or paragraph permitting
the Debt as so classified. The determination of any particular amount
of Debt under such covenant shall be made without duplication for
Guarantees or Liens supporting Debt otherwise included in the
determination of a particular amount."
SECTION 1.7 Amendment of Section 1009.
Section 1009 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
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"Section 1009. Limitation On Restricted Payments.
The Company:
(i) may not, directly or indirectly, declare or pay any
dividend, or make any distribution, in respect of its Capital Stock or
to the holders thereof (in their capacity as such), excluding any
dividends or distributions payable solely in shares of its Capital
Stock (other than Disqualified Stock) or in options, warrants or other
rights to acquire its Capital Stock (other than Disqualified Stock);
(ii) may not, and may not permit any Restricted Subsidiary
to, purchase, redeem, or otherwise retire or acquire for value:
(a) any Capital Stock of the Company or any Related
Person of the Company; or
(b) any options, warrants or rights to purchase or
acquire shares of Capital Stock of the Company or any Related Person of
the Company or any securities convertible or exchangeable into shares
of Capital Stock of the Company or any Related Person of the Company;
(iii) may not make, or permit any Restricted Subsidiary to
make, any Investment in, or payment on a Guarantee of any obligation
of, any Person, other than the Company or a Restricted Subsidiary of
the Company, except for Permitted Investments; and
(iv) may not, and may not permit any Restricted Subsidiary
to, redeem, defease, repurchase, retire or otherwise acquire or retire
for value, prior to any scheduled maturity, repayment or sinking fund
payment, Debt of the Company which is subordinate in right of payment
to the Securities (each of clauses (i) through (iv) being a "Restricted
Payment") if:
(1) a Default or an Event of Default shall have occurred
and is continuing; or
(2) upon giving effect to such Restricted Payment, the
Company could not Incur at least $1.00 of additional Debt pursuant to
the provisions of the first paragraph of Section 1008; or
(3) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments made by the Relevant Entity from
April 25, 1996 exceeds the sum of: (a) 50% of cumulative Consolidated
Net Income (or, in the case Consolidated Net Income shall be negative,
less 100% of such deficit) since the end of the last full fiscal
quarter prior to April 25, 1996 through the last day of the last full
fiscal quarter ending immediately preceding the date of such Restricted
Payment; plus (b) $5 million; plus (c) 100% of the net reduction in
Investments of the Relevant Entity in any Unrestricted Subsidiary since
the end of the last full fiscal quarter prior to April 25, 1996
resulting from payments of interest on Debt, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the
Relevant Entity or any Restricted Subsidiary of the Relevant Entity
from such Unrestricted Subsidiary (except to the extent that any such
payment is included in the calculation of Consolidated Net Income) or
from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries; PROVIDED that the amount included in this clause (c)
shall not exceed the amount of Investments previously made by the
Relevant Entity and its Restricted Subsidiaries in such Unrestricted
Subsidiary; PROVIDED, FURTHER, that the Company or a Restricted
Subsidiary of the Company may make any Restricted Payment with the
aggregate net proceeds received by the Relevant Entity after April 25,
1996, including the fair value of property other than cash (determined
in good faith by the Board of Directors, as
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conclusively evidenced by a Board Resolution (which, with respect to
such Board Resolutions after the Merger Effective Date, shall be filed
with the Trustee)), as capital contributions to the Relevant Entity or
from the issuance by the Relevant Entity (other than to a Restricted
Subsidiary) of Capital Stock (other than Disqualified Stock) of the
Relevant Entity and warrants, rights or options on Capital Stock (other
than Disqualified Stock) of the Relevant Entity and the principal
amount of Debt of the Relevant Entity that has been converted into
Capital Stock (other than Disqualified Stock and other than by a
Restricted Subsidiary) of the Relevant Entity after April 25, 1996.
Notwithstanding the foregoing, (i) the Company may pay any
dividend on Capital Stock of any class within 60 days after the
declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions; (ii) the Company may repurchase any shares of its Common
Equity or options to acquire its Common Equity from Persons who were
formerly officers or employees of the Relevant Entity, PROVIDED that
the aggregate amount of all such repurchases made pursuant to this
clause (ii) shall not exceed $2 million, plus the aggregate cash
proceeds received by the Relevant Entity since April 25, 1996 from
issuances of its Common Equity or options to acquire its Common Equity
to members, officers, managers, directors and employees of the Relevant
Entity or any of its Subsidiaries; (iii) the Company and its Restricted
Subsidiaries may refinance any Debt otherwise permitted by clause (iv)
of the second paragraph of Section 1008; and (iv) the Company and its
Restricted Subsidiaries may retire or repurchase any Capital Stock or
Subordinated Debt of the Company in exchange for, or out of the
proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of, Capital Stock (other than
Disqualified Stock) of the Company. If the Company makes a Restricted
Payment which, at the time of the making of such Restricted Payment,
would in the good faith determination of the Company be permitted under
this Indenture, such Restricted Payment shall be deemed to have been
made in compliance with this Indenture notwithstanding any subsequent
adjustments made in good faith to the Company financial statements
affecting Consolidated Net Income for any period.
In determining the aggregate amount expended or available for
Restricted Payments in accordance with clause (3) of the first
paragraph above, (1) no amounts expended under clauses (iii) or (iv) of
the immediately preceding paragraph shall be included, (2) 100% of the
amounts expended under clauses (i) and (ii) of the immediately
preceding paragraph shall be included, and (3) no amount shall be
credited in respect of issuances of Capital Stock in transactions under
clause (iv) of the immediately preceding paragraph."
SECTION 1.8 Amendment of Section 1010.
Section 1010 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1010. Transactions With Affiliates And Related
Persons.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, enter into any transaction (or series of
related transactions) with an Affiliate or Related Person of the
Company (other than the Company or a Wholly-Owned Restricted Subsidiary
of the Company), including any Investment, but excluding transactions
pursuant to employee compensation arrangements approved by the Board of
Directors, either directly or indirectly, unless such transaction is on
terms no less favorable to the Company or such Restricted Subsidiary
than those that could reasonably be obtained in a comparable
arm's-length transaction
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<PAGE> 21
with an entity that is not an Affiliate or Related Person and is in the
best interests of such Company or such Restricted Subsidiary. For any
transaction that involves in excess of $1 million but less than or
equal to $15 million, the Chief Executive Officer of the Company shall
determine that the transaction satisfies the above criteria and shall
evidence such a determination by an Officer's Certificate filed with
the Trustee. For any transaction that involves in excess of $15
million, the Company shall also either (x) obtain the approval of the
transaction from the Board of Directors including a majority of the
disinterested members of the Board of Directors or (y) obtain an
opinion from a nationally recognized investment bank or other expert
with experience in appraising the terms and conditions, taken as a
whole, of the type of transaction (or series of related transactions)
for which the opinion is required stating that such transaction (or
series of related transactions) is on terms and conditions, taken as a
whole, no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained in a comparable arm's-length
transaction with an entity that is not an Affiliate or Related Person
of the Company, which opinion shall be filed with the Trustee. This
covenant shall not apply to Investments by an Affiliate or a Related
Person of the Company in the Capital Stock (other than Disqualified
Stock) of the Company or any Restricted Subsidiary of the Company."
SECTION 1.9 Amendment of Section 1011.
Section 1011 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1011. Limitation On Liens.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, Incur or suffer to exist any Lien on or
with respect to any property or assets now owned or hereafter acquired
to secure any Debt without making, or causing such Restricted
Subsidiary to make, effective provision for securing the Securities:
(x) equally and ratably with (or prior to) such Debt as to such
property for so long as such Debt will be so secured or (y) in the
event such Debt is Debt of the Company which is subordinate in right of
payment to the Securities, prior to such Debt as to such property for
so long as such Debt will be so secured.
The foregoing restrictions shall not apply to: (i) Liens of
the Relevant Entity existing on the Merger Effective Date (after giving
effect to the Merger) and securing Debt of the Relevant Entity
outstanding on the Merger Effective Date (after giving effect to the
Merger) or securing the Securities or Liens securing Debt of the
Relevant Entity Incurred pursuant to any Bank Credit Agreement or
Vendor Financing Facility (whether or not such Bank Credit Agreement or
Vendor Financing Facility was outstanding on the Merger Effective Date
(after giving effect to the Merger)); (ii) Liens securing Debt in an
amount which, together with the aggregate amount of Debt then
outstanding or available under the Bank Credit Agreement and Vendor
Financing Facility (or under refinancings or amendments of such
agreements), does not exceed 1.5 times the Company's Consolidated Cash
Flow Available for Fixed Charges for the four full fiscal quarters
preceding the Incurrence of such Lien for which consolidated financial
statements are available, determined on a pro forma basis as if such
Debt had been Incurred and the proceeds thereof had been applied at the
beginning of such four fiscal quarters; (iii) Liens in favor of the
Company or any Wholly-Owned Restricted Subsidiary of the Company; (iv)
Liens on real or personal property of the Company or a Restricted
Subsidiary of the Company acquired, constructed or constituting
improvements made after the Merger Effective Date to secure Purchase
Money Debt which is Incurred for the construction, acquisition and
improvement of Telecommunications Assets and is otherwise permitted
under this Indenture, PROVIDED, HOWEVER, that (a) the net proceeds of
any Debt secured by such a Lien does not exceed 100% of such purchase
price or cost of
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<PAGE> 22
construction or improvement of the property subject to such Lien, (b)
such Lien attaches to such property prior to, at the time of or within
180 days after the acquisition, completion of construction or
commencement of operation of such property and (c) such Lien does not
extend to or cover any property other than the property (or
identifiable portions thereof) acquired, constructed or constituting
the improvements made with the proceeds of such Purchase Money Debt (it
being understood and agreed that all Debt owed to any single lender or
group of lenders or outstanding under any single credit facility shall
be considered a single Purchase Money Debt, whether drawn at one time
or from time to time); (v) Liens to secure Acquired Debt, PROVIDED,
HOWEVER, that (a) such Lien attaches to the acquired asset prior to the
time of the acquisition of such asset and (b) such Lien does not extend
to or cover any other asset; (vi) Liens to secure Debt Incurred to
extend, renew, refinance or refund (or successive extensions, renewals,
refinancings or refundings), in whole or in part, Debt secured by any
Lien referred to in the foregoing clauses (i), (ii), (iv) and (v) so
long as such Lien does not extend to any other property and the
principal amount of Debt so secured is not increased except as
otherwise permitted under clause (iv) of Section 1008; (vii) Liens
securing Debt not otherwise permitted by the foregoing clauses (i)
through (vi) in an amount not to exceed 5% of the Company's
Consolidated Tangible Assets determined as of the most recent available
quarterly or annual balance sheet; and (viii) Permitted Liens.
SECTION 1.10 Amendment of Section 1013.
Section 1013 of the Indenture is hereby amended by deleting such
section in its entirety.
SECTION 1.11 Amendment of Section 1015.
Section 1015 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1015. Limitation On Sale And Leaseback Transactions.
The Company may not, and may not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless
(i) the Company or such Restricted Subsidiary would be
entitled to Incur a Lien to secure Debt by reason of the provisions
of Section 1011, equal in amount to the Attributable Value of the
Sale and Leaseback Transaction without equally and ratably securing
the Securities; or
(ii) the Sale and Leaseback Transaction is treated as an
Asset Sale and all of the conditions of Section 1012 (including the
provisions concerning the application of Net Cash Proceeds) are
satisfied with respect to such Sale and Leaseback Transaction,
treating all of the consideration received in such Sale and Leaseback
Transaction in the same manner as consideration in respect of an
Asset Sale for purposes of such covenant."
SECTION 1.12 Amendment of Section 1016.
Section 1016 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
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<PAGE> 23
"Section 1016. Limitation On Issuances And Sales Of Capital
Stock Of Restricted Subsidiaries.
The Company may not, and may not permit any Restricted
Subsidiary of the Company to, issue, transfer, convey, sell or
otherwise dispose of any shares of Capital Stock of a Restricted
Subsidiary of the Company or securities convertible or exchangeable
into, or options, warrants, rights or any other interest with respect
to, Capital Stock of a Restricted Subsidiary of the Company to any
person other than the Company or a Wholly-Owned Restricted Subsidiary
of the Company except (i) in a transaction that complies with the
provisions of Section 1012; (ii) if required, the issuance, transfer,
conveyance, sale or other disposition of directors' qualifying shares;
(iii) in a transaction in which, or in connection with which, the
Company or a Restricted Subsidiary acquires at the same time sufficient
Capital Stock of such Restricted Subsidiary to at least maintain the
same percentage ownership interest it had prior to such transaction;
(iv) constituting the issuance of Preferred Stock permitted by the
provisions of Section 1018; and (v) Disqualified Stock issued in
exchange for, or upon conversion of, or the proceeds of the issuance of
which are used to redeem, refinance, replace or refund shares of
Disqualified Stock of such Restricted Subsidiary, provided that the
amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such
Disqualified Stock shall have redemption obligations no earlier than
those required by, the Disqualified Stock being exchanged, converted,
redeemed, refinanced, replaced or refunded."
SECTION 1.13 Amendment of Section 1017.
Section 1017 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1017. Limitation On Dividend And Other Payment
Restrictions Affecting Restricted
Subsidiaries.
The Company may not, and may not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary of the Company
(i) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by the Company or
any other Restricted Subsidiary of the Company or pay any Debt or other
obligation owed to the Company or any other Restricted Subsidiary; (ii)
to make loans or advances to the Company or any other Restricted
Subsidiary; or (iii) to transfer any of its property or assets to the
Company or any other Restricted Subsidiary.
Notwithstanding the foregoing, the Company may, and may permit
any Restricted Subsidiary to, suffer to exist any such encumbrance or
restriction: (a) pursuant to any agreement of the Relevant Entity in
effect on the Merger Effective Date (after giving effect to the
Merger); (b) pursuant to an agreement relating to any Acquired Debt,
which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person so
acquired and its subsidiaries; (c) pursuant to any one or more Bank
Credit Agreements or Vendor Financing Facilities (and renewals,
extensions, refinancings or refundings thereof) which is permitted to
be outstanding under clause (i) or (ii) of the second paragraph of
Section 1008 or clause (vi) or (ix) of Section 1018, PROVIDED that such
restriction is consistent with, and not materially more restrictive (as
conclusively determined in good faith by the Chief Financial Officer of
the Company), taken as a whole, than, comparable provisions included in
similar agreements or facilities extended to comparable credits engaged
in the Telecommunications Business (which shall include for purposes of
this Section 1017 all business in which the
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<PAGE> 24
Relevant Entity or any of its subsidiaries was engaged on the Merger
Effective Date (after giving effect to the Merger); provided that, as
used in this Section 1017, the determination of what constitutes a
"Telecommunications Business" shall be made in good faith by the Board
of directors, which determination shall be conclusive) and PROVIDED
FURTHER that, in the case of any such Bank Credit Agreement or Vendor
Financing Facility entered into by a Restricted Subsidiary under clause
(ii) of Section 1008 or clause (ix) of Section 1018, such encumbrances
or restrictions do not prohibit dividends, distributions, loans or
advances by such Restricted Subsidiary to the Company or another
Restricted Subsidiary to the extent that the failure to make such
distribution, loan or advance would result in the Company defaulting in
the payment of principal or interest on its indebtedness; (d) pursuant
to an agreement effecting a renewal, refunding or extension of Debt
Incurred pursuant to an agreement referred to in clause (a) or (b)
above or (e) below, PROVIDED, HOWEVER, that the provisions contained in
such renewal, refunding or extension agreement relating to such
encumbrance or restriction are not materially more restrictive (as
conclusively determined in good faith by the Chief Financial Officer of
the Company), taken as a whole, than the provisions contained in the
agreement the subject thereof; (e) in the case of clause (c) above,
restrictions contained in any security agreement (including a Capital
Lease Obligation) securing Debt of the Company or a Restricted
Subsidiary otherwise permitted under this Indenture, but only to the
extent such restrictions restrict the transfer of the property subject
to such security agreement; (f) in the case of clause (c) above,
customary nonassignment provisions entered into in the ordinary course
of business in leases and other agreements; (g) any restriction with
respect to a Restricted Subsidiary of the Company imposed pursuant to
an agreement which has been entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary, provided that consummation of such transaction
would not result in a Default or an Event of Default, that such
restriction terminates if such transaction is not consummated and that
such consummation or abandonment of such transaction occurs within one
year of the date such agreement was entered into; (h) pursuant to
applicable law or regulations; (i) pursuant to this Indenture and the
Securities; or (j) any restriction on the sale or other disposition of
assets or property securing Debt as a result of a Permitted Lien on
such assets or property."
Section 1.14 Amendment to Section 1018.
Section 1018 of the Indenture is hereby amended by deleting such
section and inserting the following in lieu thereof:
"Section 1018. Limitation On Debt And Preferred Stock Of
Restricted Subsidiaries.
The Company may not permit any Restricted Subsidiary of the
Company (other than a Restricted Subsidiary that has fully and
unconditionally Guaranteed the Securities on an unsubordinated basis)
to Incur or suffer to exist any Debt or issue any Preferred Stock
except:
(i) Debt or Preferred Stock of the Relevant Entity
outstanding on the Merger Effective Date (after giving effect to the
Merger);
(ii) Debt Incurred or Preferred Stock issued to and held
by the Company or a Restricted Subsidiary of the Company (provided
that such Debt or Preferred Stock is at all times held by the Company
or a Restricted Subsidiary of the Company);
(iii) Debt Incurred or Preferred Stock issued by a Person
prior to the time:
(A) such Person became a Restricted Subsidiary of the
Company,
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<PAGE> 25
(B) such Person merges into or consolidates with a
Restricted Subsidiary of the Company, or
(C) another Restricted Subsidiary of the Company merges
into or consolidates with such Person (in a transaction in which such
Person becomes a Restricted Subsidiary of the Company), which Debt or
Preferred Stock was not Incurred or issued in anticipation of such
transaction and was outstanding prior to such transaction;
(iv) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(v) Debt or Preferred Stock of a Joint Venture;
(vi) Debt under any one or more Bank Credit Agreements or
Vendor Financing Facilities (and renewals, extensions, refinancings
or refundings thereof) which is permitted to be outstanding under
clause (i) of Section 1008;
(vii) Debt consisting of Guarantees of the Securities;
(viii) Debt or Preferred Stock which is exchanged for, or
the proceeds of which are used to refinance, refund or redeem, any
Debt or Preferred Stock permitted to be outstanding pursuant to
clauses (i), (iii) and (ix) hereof (or any extension or renewal
thereof) (for purposes hereof, a "refinancing"), in an aggregate
principal amount, in the case of Debt, or with an aggregate
liquidation preference, in the case of Preferred Stock, not to exceed
the aggregate principal amount of the Debt so refinanced or the
aggregate liquidation preference of the Preferred Stock so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt or
Preferred Stock so refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing
by means of a tender offer or privately negotiated repurchase, plus
the amount of expenses of the Company and the Restricted Subsidiary
incurred in connection therewith and provided the Debt or Preferred
Stock incurred or issued upon such refinancing by its terms, or by
the terms of any agreement or instrument pursuant to which such Debt
or Preferred Stock is Incurred or issued, (x) does not provide for
payments of principal or liquidation value at the stated maturity of
such Debt or Preferred Stock or by way of a sinking fund applicable
to such Debt or Preferred Stock or by way of any mandatory
redemption, defeasance, retirement or repurchase of such Debt or
Preferred Stock by the Company or any Restricted Subsidiary of the
Company (including any redemption, retirement or repurchase which is
contingent upon events or circumstances, but excluding any retirement
required by virtue of acceleration of such Debt upon an event of
default thereunder), in each case prior to the time the same are
required by the terms of the Debt or Preferred Stock being refinanced
and (y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company or a Restricted
Subsidiary of the Company) of such Debt or Preferred Stock at the
option of the holder thereof prior to the stated maturity of the Debt
or Preferred Stock being refinanced, other than a redemption or other
retirement at the option of the holder of such Debt or Preferred
Stock (including pursuant to an offer to purchase made by the Company
or a Restricted Subsidiary of the Company) which is conditioned upon
the change of control of the Company pursuant to provisions
substantially similar to the provisions of Section 1014 or which is
pursuant to provisions substantially similar to the provisions of
Section 1012, and PROVIDED, FURTHER, that in the case of any exchange
or redemption of Preferred Stock of a Restricted Subsidiary of the
Company, such Preferred Stock may only be exchanged for or redeemed
with Preferred Stock of such Restricted Subsidiary;
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<PAGE> 26
(ix) Purchase Money Debt Incurred to finance the
construction, acquisition or improvement of Telecommunications
Assets, PROVIDED that the net proceeds of such Purchase Money Debt do
not exceed 100% of the cost of construction, acquisition or
improvement price of the applicable Telecommunications Assets; and
(x) Debt consisting of performance and other similar
bonds and reimbursement obligations Incurred in the ordinary course
of business securing the performance of contractual, franchise or
license obligations of the Company or a Restricted Subsidiary, or in
respect of a letter of credit obtained to secure such performance;
and
(xi) Debt not otherwise permitted to be incurred pursuant
to clauses (i) through (x) above, which, together with any other
outstanding Debt incurred pursuant to this clause (xi), has an
aggregate principal amount (or, in the case of Debt issued at a
discount, an accreted amount (determined in accordance with generally
accepted accounting principles) at the time of Incurrence) not in
excess of $10 million at any time outstanding.
For purposes of determining compliance with this Section
1018, in the event that an item of Debt meets the criteria of more
than one of the types of Debt a Restricted Subsidiary of the Company
is permitted to incur pursuant to the foregoing clauses (i) through
(xi), the Company shall have the right, in its sole discretion, to
classify such item of Debt and shall be only required to include the
amount and type of such Debt under the clause permitting the Debt as
so classified. The determination of any particular amount of Debt
under such covenant shall be made without duplication for Guarantees
or Liens supporting Debt otherwise included in the determination of a
particular amount."
Section 1.15 Amendment to Section 1022.
Section 1022 of the Indenture is hereby amended by deleting
such section in its entirety.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1. Effect. The provisions set forth in this Supplemental
Indenture shall be deemed to be, and shall be construed as part of, the
Indenture to the same extent as if set forth fully therein. This Supplemental
Indenture shall become effective at the effective time of the Merger at which
time the surviving Corporation of the Merger will execute and deliver a second
supplemental indenture assuming the obligations of the Company hereunder. The
effectiveness of this Supplemental Indenture is expressly conditioned on the
consummation of the Merger, and shall be of no force or effect in the event that
the Merger is not consummated. All references to the "Indenture" in the
Indenture or in any other agreement, document or instrument delivered in
connection therewith or pursuant thereto shall be deemed to refer to the
Indenture as amended by this Supplemental Indenture. Except as amended hereby,
the Indenture shall remain in full force and effect.
SECTION 2.2. Definition of Subsidiary. Notwithstanding any provision of
this Supplemental Indenture, the Indenture is hereby further amended so that all
references to "Subsidiary" in the Indenture shall be deemed to be references to
"Restricted Subsidiary," except that the term "Subsidiary" as used in Section
1012 of the Indenture shall not be so amended but shall mean "Subsidiary" as
defined in the Indenture.
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<PAGE> 27
SECTION 2.3. Trust Indenture Act Controls. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with another provision
that is required by or deemed to be included in this Supplemental Indenture by
the Trust Indenture Act (as such term is defined in the Indenture), the required
or incorporated provision shall control.
SECTION 2.4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 2.5. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which shall be original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 2.6. Severability. In case any provision in this Supplemental
Indenture 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 2.7. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
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<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the day and year first above
written.
CONCENTRIC NETWORK CORPORATION
By /s/ Henry R. Nothhaft
--------------------------------------
Name: Henry R. Nothhaft
Title: Chairman, President and CEO
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION, as
Trustee
By /s/ Cecil D. Bobey
--------------------------------------
Name: Cecil D. Bobey
Title: AVP
