AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 13, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MASTEC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 1623 59-1259279
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
---------------
<TABLE>
<S> <C>
JOSE M. SARIEGO, ESQ.
SENIOR VICE PRESIDENT--GENERAL COUNSEL
MASTEC, INC.
3155 N.W. 77TH AVENUE 3155 N.W. 77TH AVENUE
MIAMI, FLORIDA 33122-1205 MIAMI, FLORIDA 33122-1205
(305) 599-1800 (305) 599-2314
ADDRESS, INCLUDING ZIP CODE, (NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE, AND TELEPHONE NUMBER, INCLUDING
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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COPIES TO:
STEVEN D. RUBIN, ESQ.
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
150 WEST FLAGLER STREET, SUITE 2200
MIAMI, FLORIDA 33130
(305) 789-3517
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED TO BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
7-3/4% Series B Senior Subordinated
Notes Due 2008 .................. $200,000,000 100% $200,000,000 $59,000
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(1).
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED FEBRUARY 13, 1998
OFFER TO EXCHANGE
7-3/4% SERIES B SENIOR SUBORDINATED NOTES DUE 2008
FOR ANY AND ALL
OUTSTANDING 7-3/4% SENIOR SUBORDINATED NOTES DUE 2008
OF
MASTEC, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
MasTec, Inc. ("MasTec" or the "Company") hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange $1,000 principal amount of 7-3/4% Series B Senior Subordinated Notes
due 2008 of the Company (the "New Notes") for each $1,000 principal amount of
the issued and outstanding 7-3/4% Senior Subordinated Notes due 2008 (the "Old
Notes," and collectively with the New Notes, the "Notes"). Interest on the
Notes is payable semi-annually commencing August 1, 1998 with a final maturity
date of February 1, 2008. As of the date of this Prospectus, $200.0 million
aggregate principal amount of the Old Notes is outstanding. The terms of the
New Notes and the Old Notes are substantially identical in all material
respects, except for certain transfer restrictions and registration rights; and
except that holders of Old Notes are entitled to receive Liquidated Damages (as
defined) if (a) the Company fails to file any of the registration statements
required by the Registration Rights Agreement (as defined) on or before the
date specified for such filing, (b) any of such registration statements is not
declared effective by the Securities and Exchange Commission (the "Commission")
on or prior to the date specified for such effectiveness (the "Effectiveness
Target Date"), (c) the Company fails to consummate the Exchange Offer within 30
business days of the Effectiveness Target Date with respect to the registration
statement of which this Prospectus forms a part (the "Exchange Offer
Registration Statement"), or (d) a shelf registration statement or the Exchange
Offer Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities (as defined) during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (a) through (d) above is a
"Registration Default"). In the event of a Registration Default, the Company is
required to pay Liquidated Damages to each holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $.05 per week
per $1,000 principal amount of Old Notes held by such holder. The amount of the
Liquidated Damages will increase by an additional $.05 per week per $1,000
principal amount of Old Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages of $.20 per week per $1,000 principal amount of Old Notes.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease. See "Description of Notes--Registration Rights; Liquidated
Damages."
(Continued on following page)
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998
<PAGE>
The Exchange Offer is being made to satisfy certain obligations of the
Company under the Registration Rights Agreement, dated as of February 4, 1998,
among the Company and the Initial Purchasers (the "Registration Rights
Agreement"). Upon consummation of the Exchange Offer, holders of Old Notes that
were not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes and, accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon.
Based on interpretations by the staff of the Commission with respect to
similar transactions, including no-action letters, the Company believes that
the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes
may be offered for resale, resold and otherwise transferred by any holder of
such New Notes (other than any such holder which is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act of 1933, as
amended (the "Securities Act")) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business, such
holder has no arrangement or understanding with any person to participate in
the distribution of such New Notes and neither the holder nor any other person
is engaging in or intends to engage in a distribution of the New Notes. Each
broker-dealer that receives New Notes for its own account in exchange for Old
Notes must acknowledge that it will deliver a prospectus in connection with any
resale of its New Notes. A broker-dealer who acquired Old Notes directly from
the Company can not exchange such Old Notes in the Exchange Offer. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of the New Notes received in exchange for the Old Notes acquired
by the broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that they will make this Prospectus
available to any broker-dealer for use in connection with any such resale for a
period of 180 days after the Exchange Date (as defined) or, if earlier, until
all participating broker-dealers have so resold. See "Plan of Distribution."
The New Notes will evidence the same debt as the Old Notes and will be
entitled to the benefits of the Indenture (as defined). For a more complete
description of the terms of the new Notes, see "Description of Notes." There
will be no cash proceeds to the Company from the Exchange Offer. The New Notes
will be subordinated in right of payment to all current and future Senior Debt
(as defined) of the Company. The New Notes will also be effectively
subordinated to all indebtedness and other liabilities and commitments
(including trade payables and lease obligations) of the Company's subsidiaries.
As of September 30, 1997, after giving pro forma effect to the Offering and the
application of the net proceeds therefrom, the New Notes would have been
subordinated to approximately $72.2 million of Senior Debt of the Company and
indebtedness and other obligations of the Company's subsidiaries. In addition,
the Company would have had $121.5 million of borrowings available under the
Credit Facility (as defined). The Indenture will permit the Company and its
subsidiaries to incur additional indebtedness, including additional Senior
Debt, in the future.
The Old Notes were originally issued and sold on February 4, 1998 in an
offering of $200.0 million aggregate principal amount (the "Offering," as
defined). The Offering was exempt from registration under the Securities Act in
reliance upon the exemptions provided by Rule 144A and Section 4(2) of the
Securities Act. Accordingly, the Old Notes may not be reoffered, resold or
otherwise pledged, hypothecated or transferred in the United States unless so
registered or unless an exemption from the registration requirements of the
Securities Act and applicable state securities laws is available.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in its ordinary
i
<PAGE>
course of business and has no arrangement or understanding with any person to
participate in the distribution of the New Notes to be received in the Exchange
Offer. Any person participating in the Exchange Offer who does not acquire the
Exchange Notes in the ordinary course of business: (i) cannot rely on the above
referenced no-action letters; (ii) cannot tender its Old Notes in the Exchange
Offer; and (iii) must comply with the registration and prospectus delivery
requirements of the Securities Act.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange. However, the Exchange Offer is
subject to certain customary conditions which may be waived by the Company. The
Exchange Offer will expire at 5:00 p.m., New York City time, on , 1998,
unless extended (as it may be so extended, the "Expiration Date"), provided
that the Exchange Offer shall not be extended beyond 30 business days from the
date of this Prospectus. The date of acceptance for exchange of the Old Note
for the New Notes (the "Exchange Date") will be the first business day
following the Expiration Date or as soon as practicable thereafter. Old Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
the Expiration Date; otherwise such tenders are irrevocable.
There has not previously been any public market for the Notes. If a market
for the New Notes should develop, the New Notes could trade at a discount from
their initial offering price. The Company does not intend to apply for listing
of the New Notes on any securities exchange or in any automated quotation
system. There can be no assurance that an active trading market for the New
Notes will develop.
AVAILABLE INFORMATION
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-4 under the Securities Act with respect to the
Exchange Offer. This Prospectus, which is part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto. For further information with respect to
the Company and the Exchange Offer, reference is made to such Registration
Statement and the exhibits and schedules filed as part thereof. The
Registration Statement and the exhibits and schedules thereto filed with the
Commission may be inspected without charge at the Public Reference Section of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and will also be available for inspection and copying
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048, and the Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of all or any portion of
the Registration Statement may be obtained from the Public Reference Section of
the Commission upon payment of certain prescribed fees. Electronic registration
statements made through the Electronic Data Gathering, Analysis, and Retrieval
system are publicly available through the Commission's web site
(http://www.sec.gov.), which is maintained by the Commission and which contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE SECURITIES LAWS OF SUCH JURISDICTION.
ii
<PAGE>
INCORPORATION BY REFERENCE
The following documents, filed with the Commission by the Company pursuant
to the Exchange Act, are incorporated herein by reference and made a part of
this Prospectus:
1. the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended on Form 10-K/A filed February 6, 1998 (the
"1996 10-K");
2. the portions of the Company's definitive Proxy Statement for its 1997
Annual Meeting of Stockholders dated April 14, 1997 that have been
incorporated by reference into the 1996 10-K;
3. the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and
4. the Company's Current Reports on Form 8-K dated January 20, 1998 and
January 26, 1998.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the respective date of filing of each such document.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM NANCY J. DAMON, CORPORATE SECRETARY, MASTEC, INC., 3155 N.W. 77TH
AVENUE, SUITE 135, MIAMI, FLORIDA 33122-1205, TELEPHONE NUMBER 305-599-1800. IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NO
LATER THAN 5 BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER.
iii
<PAGE>
SUMMARY
THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE HEREIN. UNLESS OTHERWISE SPECIFIED, ALL
REFERENCES TO "MASTEC" OR THE "COMPANY" INCLUDE MASTEC, INC., ITS CONSOLIDATED
SUBSIDIARIES AND ITS 50%-OWNED AFFILIATES IN ARGENTINA, CHILE AND PERU.
THE COMPANY
MasTec is one of the world's largest contractors specializing in the
design, installation and maintenance of infrastructure for the rapidly growing
telecommunications industry. The Company focuses on the installation of aerial
and underground copper, coaxial and fiber optic cable networks as well as
wireless antenna networks ("outside plant services"). The Company believes it
is the largest independent contractor for these systems in the United States
and Spain, and one of the largest in Argentina, Brazil, Chile and Peru. The
Company also installs central office switching equipment, and designs, installs
and maintains integrated voice, data and video local and wide area networks
inside buildings ("inside wiring"). Clients for the Company's services include
major domestic and international telecommunications service providers such as
the regional bell operating companies ("RBOCs"), other local exchange carriers,
competitive access providers, cable television operators, long-distance
operators and wireless phone companies. MasTec believes it is well positioned
to benefit from the significant growth taking place in the global
telecommunications market.
MasTec has experienced significant and consistent growth as a result of
its ability to identify and integrate strategic acquisitions, its competitive
position as one of the largest providers of infrastructure services and
favorable trends in the telecommunications industry. The Company's revenue has
increased from $142.6 million in 1994 to $534.1 million in 1996 and from $355.8
million for the first nine months of 1996 to $500.1 million for the same period
in 1997. EBITDA (as defined) has also increased from $18.2 million in 1994 to
$71.2 million in 1996 and from $46.1 million in the first nine months of 1996
to $74.0 million in the same period in 1997. The Company expects to continue to
grow through additional strategic acquisitions as well as through internal
expansion. Since January 1996, the Company has completed 13 domestic and two
foreign acquisitions and actively continues to pursue complimentary
acquisitions in the highly fragmented telecommunications infrastructure
industry. Internal growth is expected to be driven by the expansion of the
global telecommunications industry resulting from (i) continued global
deregulation, which is allowing numerous new service providers to enter the
marketplace and is increasing the competitive pressure on existing participants
to upgrade and expand their networks; (ii) increasing consumer demand for
advanced communications services which require the upgrading of existing
infrastructure to handle increased bandwidth needs; and (iii) increasing
reliance on outsourcing of infrastructure needs to full service contractors by
service providers in an effort to reduce costs and focus on their core
competencies.
COMPETITIVE STRENGTHS
The Company seeks to differentiate itself from its competitors through the
following characteristics:
STRONG CUSTOMER RELATIONSHIPS. Founded in 1929, the Company has developed
strong relationships with numerous telecommunications service providers by
providing high quality services in a cost and time efficient manner. The
Company has been providing services to Telefonica de Espana, S.A.
("Telefonica") and BellSouth Telecommunications, Inc. ("BellSouth"), its two
largest customers, since 1950 and 1969, respectively, and maintains similar
long-term relationships with many of its other customers. MasTec currently has
23 multi-year service contracts with Telefonica, the RBOCs and other
1
<PAGE>
telecommunications service providers for certain of their outside plant
requirements up to a specific dollar amount per job and within certain
geographic areas.
DIVERSE CUSTOMER BASE. MasTec provides a full range of infrastructure
services to a diverse customer base. Domestically, the Company provides outside
plant services to local exchange customers such as BellSouth, US West
Communications, Inc., SBC Communications, Inc., United Telephone Company of
Florida, Inc. (a subsidiary of Sprint Corporation ("Sprint")) and GTE
Corporation. The Company also provides outside plant services to competitive
local exchange carriers such as MFS Communications Company, Inc., Sprint
Metropolitan Networks, Inc. and MCI Metro, Inc. (the local telephone
subsidiaries of Sprint and MCI Communications Corporation ("MCI"),
respectively), cable television operators such as Time Warner Inc., Cox
Communications, Inc. and Marcus Cable Company, long distance carriers such as
MCI and Sprint, and wireless communications providers such as PrimeCo Personal
Communications LP and Sprint Spectrum, L.P. Internationally, the Company
provides outside plant services, turn-key switching systems installation and
inside wiring services primarily to Telefonica, the principal telephone company
in Spain, and Telefonica's affiliates in Argentina, Chile and Peru. In July
1997, the Company also began servicing the local telephone subsidiaries of
Telecomunicacoes Brasileiras S.A., the Brazilian government-owned
telecommunications system ("Telebras"), in Sao Paulo, Rio de Janeiro, Parana
and other states in the more populous and developed Southern region of Brazil,
as well as Companhia Riograndense de Telecommunicacoes, S.A. ("CRT"), the local
telephone company in Rio Grande do Sul which is partly owned by Telefonica.
The Company renders inside wiring services nationwide to large corporate
customers with multiple locations such as First Union National Bank,
International Business Machines Corporation ("IBM") and Dean Witter Reynolds
Inc., and to universities and health care providers.
TURN-KEY CAPABILITIES. The Company believes it is one of the few
contractors capable of providing all of the design, installation and
maintenance services necessary for a cable or wireless network starting from a
transmission point, such as a central office or headend, and running
continuously through aerial and underground cables to the ultimate end users'
voice and data ports, cable outlets or cellular stations. The Company can also
install the switching devices at a central office or set up local and wide area
voice, data and video networks to expand a business's telecommunications
infrastructure both inside a specific structure or between multiple structures.
The Company believes that its customers increasingly are seeking
comprehensive solutions to their infrastructure needs by turning to fewer
qualified contractors who have the size, financial capability and technical
expertise to provide a full range of infrastructure services. The Company
believes that this trend will accelerate as industry consolidations increase
and as these consolidated entities begin to provide bundled services to end
users. The Company believes it has positioned itself, through acquisitions and
internal growth, as a full service provider of outside plant and inside wiring
infrastructure services to take advantage of this trend.
BROAD GEOGRAPHIC PRESENCE. The Company has significantly broadened its
geographic presence in recent years through strategic acquisitions.
Domestically, MasTec has expanded beyond its historical base in the
Southeastern United States and currently has operations in over 30 states in
the Southeast, Southwest, West and upper Midwest regions of the country. The
Company also substantially increased its international operations through the
acquisition, in April 1996, of Sistemas e Instalaciones de Telecomunicacion,
S.A. ("Sintel"), the largest telecommunications infrastructure contractor in
Spain, and through the acquisition, in July 1997, of a majority interest in
MasTec Inepar S.A. Sistemas de Telecomunicacoes ("MasTec Inepar"), a leading
telecommunications construction company in Brazil. Due to its broad geographic
presence, the Company believes that it is well suited to service customers with
operations across the United States as well as companies who are active in
multiple areas of the world such as multinational corporations and
telecommunications service providers that are expanding into international
markets. In addition, by developing business in many geographic regions, the
Company believes it is less susceptible to changes in the market dynamics in
any one region.
2
<PAGE>
GROWTH STRATEGY
The Company is pursuing a disciplined strategy of growth and
diversification in its core business through strategic acquisitions and
internal expansion as follows:
STRATEGIC ACQUISITIONS. The Company plans to continue to pursue strategic
acquisitions in the fragmented telecommunications and utility infrastructure
industry that either expand its geographic coverage and customer base or
broaden the range of services it can offer to clients. The Company focuses its
acquisition efforts primarily on companies with successful track records and
strong management. The Company has acquired 15 companies since January 1996 and
has significant experience in identifying, purchasing and integrating
telecommunications infrastructure businesses both domestically and
internationally. Management believes that MasTec is able to improve the
acquired companies' operating performance by providing strategic guidance,
administrative support, greater access to capital and savings in purchasing and
insurance costs.
INTERNAL EXPANSION. The Company believes it is poised to capitalize on the
anticipated growth in its industry due to its status as one of the world's
largest telecommunications infrastructure contractors and its strong customer
relationships. The International Telecommunications Union estimates that
between 1996 and 2000 telecommunications infrastructure investment will exceed
$50 billion in the United States and $600 billion worldwide. In addition, the
Company believes that the RBOCs and other utilities in the United States, which
still conduct a significant portion of their construction work in-house, will
out-source more infrastructure construction in the future in response to
competitive pressures to cut costs, streamline their operations and focus on
their core competencies. The Company believes that its reputation for quality
and reliability, operating efficiency, financial strength, technical expertise,
presence in key geographic areas and ability to offer a full range of
construction services make it well positioned to compete for this business,
particularly the larger, more technically complex infrastructure projects.
The Company also anticipates that its Brazilian operations will become a
more significant part of its operations. MasTec Inepar, in its first two months
of operations ended September 30, 1997, generated revenue and EBITDA (net of
minority interest) of $35.0 million and $2.7 million, respectively, and at
September 30, 1997 had a backlog of approximately $245.0 million. The Brazilian
government has estimated that approximately $75 billion will need to be
invested over a seven year period in order to modernize and expand Brazil's
telecommunications infrastructure. To accomplish this objective, the government
has stated its intention of deregulating and privatizing Brazil's
telecommunications system. The Company believes that, through MasTec Inepar, it
is well positioned to participate in this anticipated expansion.
In addition to focusing on its core telecommunications customers, the
Company plans to achieve incremental growth by continuing to develop
complementary lines of businesses. These businesses include the provision of
premise wiring services to corporations and infrastructure construction
services to the electric power industry and other public utilities.
----------------
The Company's principal executive offices are located at 3155 N.W. 77th
Avenue, Suite 135, Miami, Florida 33122-1205. The telephone number at that
location is (305) 599-1800.
3
<PAGE>
THE INITIAL OFFERING
Pursuant to a Purchase Agreement dated as of January 30, 1998 (the
"Purchase Agreement"), the Company sold Old Notes in an aggregate principal
amount of $200.0 million to the Initial Purchasers on February 4, 1998. The
Initial Purchasers subsequently resold the Old Notes purchased from the Company
to qualified institutional buyers pursuant to Rule 144A under the Securities
Act and to certain institutional accredited investors (as defined in Rule
501(A)(1), (2), (3) or (7) under the Securities Act). A portion of the net
proceeds from the Initial Offering, estimated to have been approximately $194.2
million after deducting discounts to the Initial Purchasers and estimated
Offering expenses, were used to repay approximately $82.4 million of
outstanding indebtedness under the Credit Facility (as defined), under which
borrowings bore interest at LIBOR (London Interbank Offered Rate) plus the
applicable LIBOR margin, currently 1.00%. The remaining net proceeds from the
Offering will be used by the Company for general corporate purposes, including
acquisitions, working capital needs and capital expenditures.
THE EXCHANGE OFFER
Securities Offered......... Up to $200.0 million aggregate principal amount
of 7-3/4% Series B Senior Notes due 2008 of the
Company (the "New Notes," and collectively with
the Old Notes, the "Notes"). The terms of the New
Notes and the Old Notes are substantially
identical in all material respects, except for
certain transfer restrictions, registration rights
and liquidated damages ("Liquidated Damages") for
Registration Defaults relating to the Old Notes
which will not apply to the New Notes. See
"Description of Notes."
The Exchange Offer......... The Company is offering to exchange $1,000
principal amount of New Notes for each $1,000
principal amount of Old Notes. See "The Exchange
Offer" for a description of the procedures for
tendering Old Notes. The Exchange Offer satisfies
the registration obligations of the Company under
the Registration Rights Agreement. Upon
consummation of the Exchange Offer, holders of Old
Notes that were not prohibited from participating
in the Exchange Offer and did not tender their Old
Notes will not have any registration rights under
the Registration Rights Agreement with respect to
such nontendered Old Notes and, accordingly, such
Old Notes will continue to be subject to the
restrictions on transfer contained in the legend
thereon.
Tenders, Expiration Date;
Withdrawal; Exchange Date... The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1998, or such later
date and time to which it is extended (as it may
be so extended, the "Expiration Date"), provided
that the Exchange Offer shall not be extended
beyond 30 business days from the date of this
Prospectus. Tender of Old Notes pursuant to the
Exchange Offer may be withdrawn and retendered at
any time prior to the Expiration Date. Any Old
Notes not accepted for exchange for any reason
will be returned without expense to the tendering
holder as
4
<PAGE>
promptly as practicable after the expiration or
termination of the Exchange Offer. The date of
acceptance for exchange of all Old Notes properly
tendered and not withdrawn for New Notes (the
"Exchange Date") will be the first business day
following the Expiration Date or as soon as
practicable thereafter.
Accrued Interest on the
New Notes.................. Each New Note will bear interest from the most
recent date to which interest has been paid on the
Old Note or, if no such payment has been made,
from February 4, 1998.
Federal Income
Tax Considerations......... The Exchange Offer will not result in any income,
gain or loss to the holders of Notes or the
Company for federal income tax purposes. See
"Certain Federal Income Tax Considerations."
Use of Proceeds............ There will be no proceeds to the Company from
the exchange of New Notes for the Old Notes
pursuant to the Exchange Offer.
Exchange Agent............. First Trust National Association, the Trustee
under the Indenture, is serving as exchange agent
(the "Exchange Agent") in connection with the
Exchange Offer.
CONSEQUENCES OF EXCHANGING OR FAILURE TO
EXCHANGE OLD NOTES PURSUANT TO THE EXCHANGE OFFER
Generally, holders of Old Notes (other than any holder who is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) who exchange their Old Notes for New Notes pursuant to the Exchange Offer
may offer their New Notes for resale, resell their New Notes, and otherwise
transfer their New Notes without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided such New Notes
are acquired in the ordinary course of the holder's business, such holders have
no arrangement with any person to participate in a distribution of such New
Notes and neither the holder nor any other person is engaging in or intends to
engage in a distribution of the New Notes. A broker-dealer who acquired Old
Notes directly from the Company can not exchange such Old Notes in the Exchange
Offer. Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes must acknowledge that it will deliver a prospectus in
connection with any resale of its New Notes. See "Plan of Distribution." To
comply with the securities laws of certain jurisdictions, it may be necessary
to qualify for sale or register the New Notes prior to offering or selling such
New Notes. The Company is required, under the Registration Rights Agreement, to
register the New Notes in any jurisdiction requested by the holders, subject to
certain limitations. Upon consummation of the Exchange Offer, holders that were
not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes, and accordingly,
such old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. See "The Exchange Offer--Consequences of
Failure to Exchange."
5
<PAGE>
SUMMARY DESCRIPTION OF THE NOTES
Issuer..................... MasTec, Inc.
Securities Offered......... $200.0 million aggregate principal amount of
7-3/4% Series B Senior Subordinated Notes due 2008
(the "New Notes," and collectively with the Old
Notes, the "Notes"). The terms of the New Notes
and the Old Notes are substantially identical in
all material respects, except for certain transfer
restrictions, registration rights and Liquidated
Damages for Registration Defaults relating to the
Old Notes which will not apply to the New Notes.
See "Description of Notes."
Maturity Date.............. February 1, 2008.
Interest Rate and
Payment Dates.............. The Notes bear interest at a rate of 7-3/4% per
annum, payable semi-annually in arrears on
February 1 and August 1 of each year, commencing
August 1, 1998.
Ranking.................... The Notes are subordinated in right of payment
to all existing and future Senior Debt of the
Company. In addition, the Notes are effectively
subordinated to all indebtedness and other
liabilities and commitments (including trade
payables and lease obligations) of the Company's
subsidiaries. As of September 30, 1997, after
giving pro forma effect to the Offering and the
application of the net proceeds therefrom, the
Notes would have been subordinated to
approximately $72.2 million of Senior Debt of the
Company and indebtedness and other obligations of
the Company's subsidiaries. In addition, the
Company would have had $121.5 million of
borrowings available under the Credit Facility.
Optional Redemption........ The Notes will be redeemable, at the option of
the Company, in whole or in part, at any time
after February 1, 2003, at the redemption prices
set forth herein, plus accrued and unpaid
interest, if any, to the redemption date. In
addition, on or prior to February 1, 2001, the
Company may redeem up to one-third of the
aggregate principal amount of the Notes at a
redemption price of 107.750% of the principal
amount thereof, plus accrued and unpaid interest,
if any, thereon to the redemption date with the
net cash proceeds of an offering of Equity
Interests (other than Disqualified Stock) of the
Company; PROVIDED, that at least $133.3 million in
principal amount of the Notes remain outstanding
immediately after the occurrence of such
redemption.
Change of Control.......... In the event of a Change of Control, the Company
will be required to make an offer to each holder
of Notes to repurchase such holder's Notes at a
repurchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest,
if any, thereon to the repurchase date.
6
<PAGE>
Certain Covenants.......... The indenture pursuant to which the Notes were
or will be issued (the "Indenture") contains
certain covenants that, among other things, limit
the ability of the Company and its Restricted
Subsidiaries (as defined) to incur additional
Indebtedness (as defined) and issue preferred
stock, pay dividends or make other distributions,
repurchase Equity Interests or make other
Restricted Payments (as defined), create certain
Liens (as defined), enter into certain
transactions with Affiliates (as defined), sell
assets or enter into certain mergers and
consolidations.
Exchange Offer;
Registration Rights........ Pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement") between the
Company and the Initial Purchasers, the Company
agreed (i) to file a registration statement,
within 60 days after the consummation of the
Offering (the "Exchange Offer Registration
Statement"), with respect to an offer to exchange
the Old Notes for a new issue of debt securities
of the Company (the "Exchange Notes") registered
under the Securities Act with terms substantially
identical to those of the Old Notes (the "Exchange
Offer") and (ii) to use its best efforts to cause
such registration statement to be declared
effective by the Commission within 120 days after
the consummation of the Offering. In addition,
under certain circumstances, the Company may be
required to file a shelf registration statement
(the "Shelf Registration Statement") to cover
resales of the Notes by the holders thereof. If
the Company fails to satisfy these registration
obligations, it will be required to pay liquidated
damages ("Liquidated Damages") to the holders of
Notes under certain circumstances. See
"Description of Notes--Registration Rights;
Liquidated Damages."
RISK FACTORS
Prospective participants in the Exchange Offer should take into account
the specific considerations set forth under "Risk Factors" as well as the other
information set forth in this Prospectus. See "Risk Factors."
7
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary financial information for each of the years in the
three year period ended December 31, 1996 has been derived from the Company's
consolidated financial statements, which have been audited by Coopers &
Lybrand, L.L.P., independent auditors, whose report thereon is included
elsewhere in this Prospectus. The summary financial information for the nine
month periods ended September 30, 1996 and September 30, 1997 has been derived
from the Company's unaudited condensed consolidated financial statements which,
in the opinion of management, contain all adjustments (consisting only of
normal and recurring adjustments) necessary for a fair presentation of the
Company's financial position and results of operations at such dates and for
such periods. The information presented below should be read in conjunction
with, and is qualified in its entirety by reference to, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's consolidated financial statements and the notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31,(1) ENDED SEPTEMBER 30,(1)
----------------------------------- -------------------------
1994(2) 1995 1996(3) 1996(3) 1997
----------- ----------- ----------- ----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenue ........................................ $142,583 $218,859 $534,068 $355,842 $ 500,133
Operating income ............................... 10,992 23,165 53,493 33,279 57,841
Income from continuing operations(4) ........... 8,233 1,500 36,054 20,966 36,219
OTHER DATA:
EBITDA(5) ...................................... $ 18,162 $ 33,999 $ 71,190 $ 46,106 $ 74,019
Depreciation and amortization .................. 5,545 8,178 13,686 10,261 15,038
Capital expenditures ........................... 6,028 17,202 8,386 7,359 17,171
EBITDA to pro forma interest expense(5)(6) ..... -- -- -- -- 4.6x
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1997
--------------------------
ACTUAL AS ADJUSTED(7)
---------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .......... $ 2,588 $114,387
Total assets ....................... 539,301 656,600
Total debt ......................... 154,618 271,917
Total stockholders' equity ......... 174,177 174,177
</TABLE>
- ---------------
(1) Amounts have been restated to reflect the 1997 acquisitions of Wilde
Construction, Inc. and two related companies, and AIDCO, Inc. and one
related company, which were accounted for as poolings of interest. See
Note 2 of Notes to Consolidated Financial Statements.
(2) Includes the results of Burnup & Sims Inc. from March 11, 1994.
(3) Includes the results of Sintel from May 1, 1996.
(4) Income from continuing operations excludes a pro forma adjustment for
income taxes related to companies which were S corporations and therefore
not subject to corporate federal income taxes.
(5) EBITDA represents income from continuing operations plus provision for
income taxes (less the tax effect attributable to minority interests),
non-recurring or unusual charges, interest expense (net of interest
income) and depreciation and amortization, less equity in earnings of
unconsolidated companies (except to the extent of cash dividends
received). EBITDA is used by management and certain investors as an
indicator of a company's historical ability to service debt. Management
believes that an increase in EBITDA is an indicator of the Company's
improved ability to service existing debt, to sustain potential future
increases in debt and to satisfy capital requirements. However, EBITDA is
not intended to represent cash flows for the period, nor has it been
presented as an alternative to either (i) operating income (as determined
by generally accepted accounting principles) as an indicator of operating
performance or (ii) cash flows from operating, investing and financing
activities (as determined by generally accepted accounting principles) and
is thus susceptible to varying calculations. EBITDA as presented may not
be comparable to other similarly titled measures of other companies.
(6) Interest expense represents total interest expense (excluding amortization
of deferred financing costs and original issue discount) less interest
income. Pro forma net interest expense gives effect to the Offering and
the application of the net proceeds therefrom, assuming such transactions
occurred on January 1, 1996.
(7) As adjusted to give effect to the Offering and the application of the net
proceeds therefrom as if they had occurred on September 30, 1997.
8
<PAGE>
RISK FACTORS
THIS PROSPECTUS AND OTHER REPORTS AND STATEMENTS FILED BY THE COMPANY FROM
TIME TO TIME WITH THE COMMISSION (COLLECTIVELY, "COMMISSION FILINGS") CONTAIN
OR MAY CONTAIN FORWARD-LOOKING STATEMENTS, SUCH AS STATEMENTS REGARDING THE
COMPANY'S GROWTH STRATEGY AND ANTICIPATED TRENDS IN THE INDUSTRIES AND
ECONOMIES IN WHICH THE COMPANY OPERATES. THESE FORWARD-LOOKING STATEMENTS ARE
BASED ON THE COMPANY'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF
RISKS, UNCERTAINTIES AND ASSUMPTIONS RELATING TO THE COMPANY'S OPERATIONS AND
RESULTS OF OPERATIONS, COMPETITIVE FACTORS, SHIFTS IN MARKET DEMAND, AND OTHER
RISKS AND UNCERTAINTIES, INCLUDING IN ADDITION TO THOSE DESCRIBED BELOW AND
ELSEWHERE IN THIS PROSPECTUS OR ANY COMMISSION FILING, UNCERTAINTIES WITH
RESPECT TO CHANGES OR DEVELOPMENTS IN SOCIAL, BUSINESS, ECONOMIC, INDUSTRY,
MARKET, LEGAL AND REGULATORY CIRCUMSTANCES AND CONDITIONS AND ACTIONS TAKEN OR
OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING THE COMPANY'S CONTRACTORS,
CUSTOMERS, SUPPLIERS, COMPETITORS, STOCKHOLDERS, LEGISLATIVE, REGULATORY AND
JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES. SHOULD ONE OR MORE OF THESE RISKS
OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE
INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM RESULTS EXPRESSED OR
IMPLIED IN ANY FORWARD-LOOKING STATEMENTS MADE BY THE COMPANY IN THIS
PROSPECTUS OR ANY COMMISSION FILING. THE COMPANY DOES NOT UNDERTAKE ANY
OBLIGATION TO REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS
OR CIRCUMSTANCES. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE PARTICIPATING IN
THE EXCHANGE OFFER.
CONSEQUENCES OF FAILURE TO EXCHANGE
Upon consummation of the Exchange Offer, holders of Old Notes that were
not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes and, accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, the Old Notes may not be offered
or sold, unless registered under the Securities Act and applicable state
securities laws, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. The
Company does not intend to register the Old Notes under the Securities Act.
Based on interpretations by the staff of the Commission with respect to similar
transactions, the Company believes that the New Notes issued pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
any holder of such New Notes (other than any such holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business, such holder has no arrangement
or understanding with any person to participate in the distribution of such New
Notes and neither the holder nor any other person is engaging in or intends to
engage in a distribution of the New Notes. A broker-dealer who acquired Old
Notes directly from the Company can not exchange such Old Notes in the Exchange
Offer. Each broker-deal that receives New Notes for its own account in exchange
for Old Notes must acknowledge that it will deliver a prospectus in connection
with any resale of its New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of the New
Notes received in exchange for the Old Notes acquired by the broker-dealer as a
result of market-making activities or other trading activities. The Company has
agreed that it will make this Prospectus available to any broker-dealer for use
in connection with any such resale for a period of 180 days after the Exchange
Date or, if earlier, until all participating broker-dealers have so resold. See
"Plan of Distribution." The New Notes may not be offered or sold unless they
have been registered or qualified for sale under applicable state securities
laws or an exemption from registration or qualification is available and is
complied with. The Company is required, under the Registration Rights
Agreement, to register the New Notes in any jurisdiction requested by the
holders, subject to certain limitations.
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<PAGE>
LEVERAGE
At September 30, 1997, after giving pro forma effect to the Offering and
the application of the net proceeds as set forth herein under "Use of
Proceeds," the Company would have had approximately $271.9 million in total
indebtedness and approximately $121.5 million of available borrowings under the
Credit Facility. In addition, subject to certain restrictions set forth in the
Indenture, the Company may incur additional indebtedness, including Senior
Debt, in the future for acquisitions, capital expenditures and other corporate
purposes. The Company's level of indebtedness will have several important
effects on its future operations, including, without limitation, (i) a portion
of the Company's cash flow from operations must be dedicated to the payment of
interest and principal on its indebtedness, (ii) the Company's leveraged
position will increase its vulnerability to adverse changes in general economic
and industry conditions, as well as to competitive pressure, and (iii) the
Company's ability to obtain additional financing for working capital, capital
expenditures, acquisitions, general corporate and other purposes may be
limited. The Company's ability to meet its debt service obligations and to
reduce its total indebtedness will be dependent upon the Company's future
performance, which will be subject to general economic conditions, industry
cycles and financial, business and other factors affecting the operations of
the Company, many of which are beyond its control. There can be no assurance
that the Company's business will continue to generate cash flow at or above
current levels. If the Company is unable to generate sufficient cash flow from
operations in the future to service its debt, it may be required, among other
things, to seek additional financing in the debt or equity markets, to
refinance or restructure all or a portion of its indebtedness, including the
Notes, to sell selected assets or to reduce or delay planned capital
expenditures or acquisitions. There can be no assurance that any such measures
would be sufficient to enable the Company to service its debt or that any such
financing, refinancing or sale of assets would be available on economically
favorable terms.
RESTRICTIONS IMPOSED BY CREDIT FACILITY AND INDENTURE
The Credit Facility and the Indenture contain a number of covenants that
restrict the ability of the Company to, among other things, dispose of assets,
merge or consolidate with another entity, incur additional indebtedness, create
liens, make capital expenditures, pay dividends or make other investments or
acquisitions. The Credit Facility also contains requirements that the Company
maintain certain financial ratios and restricts the ability of the Company to
prepay the Company's other indebtedness, including the Notes. The ability of
the Company to comply with such provisions may be affected by events that are
beyond the Company's control. The breach of any of these covenants could result
in a default under the Credit Facility and the Indenture and a subsequent
acceleration of such indebtedness. In the event of acceleration of such
indebtedness, payments to holders of the Notes could be limited by the
subordination provisions of the Indenture. See "Description of Notes--
Subordination." In addition, as a result of these covenants, the ability of the
Company to respond to changing business and economic conditions and to secure
additional financing, if needed, may be restricted significantly, and the
Company may be prevented from engaging in transactions that might otherwise be
considered beneficial to the Company. See "Description of Certain Indebtedness"
and "Description of Notes--Certain Covenants."
SUBORDINATION
The payment of principal of and interest on, and any premium or other
amounts owing in respect of, the Notes are subordinated to the prior payment in
full of all existing and future Senior Debt of the Company, including all
amounts owing under the Credit Facility. The Notes are also effectively
subordinated to all Indebtedness and other liabilities and commitments
(including trade payables and lease obligations) of the Company's subsidiaries.
As of September 30, 1997, after giving pro forma effect to the Offering and the
application of the net proceeds therefrom, the Notes would have been
subordinated to approximately $72.2 million of Senior Debt of the Company and
indebtedness and other obligations of the Company's subsidiaries. In addition,
the Company would have had approximately $121.5 million of available borrowings
under the Credit Facility. Consequently, in the event of a bankruptcy,
liquidation, dissolution, reorganization or similar proceeding with respect to
the
10
<PAGE>
Company, assets of the Company will be available to pay obligations under the
Notes only after all of its Senior Debt has been paid in full, and there can be
no assurance that there will be sufficient assets to pay amounts due on all or
any of the Notes. In addition, under certain circumstances, the Company may be
prohibited by the Indenture from paying amounts due in respect of the Notes, or
from purchasing, redeeming or otherwise acquiring the Notes, if a default
exists with respect to Senior Debt. See "Description of Notes--Subordination."
HOLDING COMPANY STRUCTURE
The Company is a holding company that conducts substantially all of its
operations through its subsidiaries and the Company's only significant asset is
the capital stock of its subsidiaries. The Notes will be obligations
exclusively of the Company and will not be guaranteed by any of the Company's
subsidiaries, except under certain limited circumstances. See "Description of
Notes--Certain Covenants--Limitations on Guarantees of Company Indebtedness by
Restricted Subsidiaries." As a result, the Company is dependent on dividends or
other intercompany transfers of funds from its subsidiaries to meet the
Company's debt service and other obligations, including its obligations under
the Notes, which may be restricted by applicable law. In addition, to the
extent that any such subsidiary incurs indebtedness and becomes insolvent or is
liquidated, creditors of such subsidiary would be entitled to payment from the
proceeds of such subsidiary's assets before the Company and its creditors would
derive any value from such subsidiary's assets.
DEPENDENCE ON KEY CUSTOMERS AND THE TELECOMMUNICATIONS INDUSTRY
The Company derives a substantial portion of its revenue from customers in
the telecommunications industry, particularly Telefonica and its affiliates and
BellSouth. For the year ended December 31, 1996 and the nine months ended
September 30, 1997, approximately 31% and 27%, respectively, of the Company's
revenue was derived from services performed for Telefonica and its affiliates
and approximately 13% of the Company's revenue was derived from services
performed for BellSouth for both periods. The Company anticipates that it will
continue to derive a significant portion of its revenue from services performed
for Telefonica and its affiliates and BellSouth. The Company also anticipates
that it will derive significant revenue in the future from the local telephone
operating companies that form the Brazilian Telebras system. The loss of any of
these customers or a significant reduction in the amount of business generated
by these customers could have a material adverse effect on the Company's
results of operations.
In addition, there are a number of factors that could adversely affect
these and the Company's other customers and their ability or willingness to
fund capital expenditures in the future, which in turn could have a material
adverse effect on the Company's results of operations. These factors include
the potential adverse nature of, or the uncertainty caused by, changes in
governmental regulation, technological changes, increased competition, adverse
financing conditions for the industry and economic conditions generally.
Further, the volume of work awarded under contracts with the Company's public
utility customers is subject to periodic appropriations during the term of the
contract, and a failure by the customer to receive sufficient appropriations
could result in a reduction in the volume of work under these contracts or a
delay in payments, which in turn could negatively affect the Company.
CANCELLATION CLAUSES IN CONTRACTS; FAILURE TO WIN PUBLIC BIDS
Many of the Company's contracts with its customers, including most of its
master contracts and contracts with its public utility customers, are subject
to cancellation by the customer without notice or on relatively short notice,
typically 90 to 180 days, even if the Company is not in default under the
contract. There can be no assurance that the Company's customers will not
terminate the Company's contracts pursuant to these termination clauses even if
the Company is in compliance with the contract. Many of the Company's
contracts, including master contracts, also are opened to public bid at the
expiration of the contract term, and there can be no assurance that the Company
will be the successful bidder on existing contracts that come up for bid.
Cancellation of a significant number of contracts by
11
<PAGE>
the Company's customers or the failure of the Company to win a significant
number of existing contracts upon re-bid could have a material adverse effect
on the Company.
RISK INHERENT IN GROWTH STRATEGY
The Company has grown rapidly through the acquisition of other companies
and its growth strategy is dependent in part on additional acquisitions. The
Company anticipates that it will make additional acquisitions and is actively
seeking and evaluating new acquisition candidates. There can be no assurance
that the Company will be able to continue to identify and acquire appropriate
businesses or obtain financing for acquisitions on satisfactory terms or that
acquired companies will perform as expected. The Company's growth strategy
presents the risks inherent in assessing the value, strengths and weaknesses of
growth opportunities, in evaluating the costs and uncertain returns of
expanding the operations of the Company and in integrating existing operations
with new acquisitions. Future competition for acquisition candidates could
raise prices for these targets and lengthen the time period required to recoup
the Company's investment. The Company's growth strategy also assumes there will
be a significant increase in demand for telecommunications and other
infrastructure services, which may not materialize. The Company's anticipated
growth may place significant demands on the Company's management and its
operational, financial and marketing resources. The Company's operating results
could be adversely affected if it is unable to integrate and manage acquired
companies successfully. Future acquisitions by the Company could also result in
the incurrence of additional debt and contingent liabilities, and amortization
expenses related to goodwill and other intangible assets, which could
materially adversely affect the Company's financial condition and results of
operations.
RISK OF FOREIGN OPERATIONS
During 1996 and the first nine months of 1997, approximately 37% of the
Company's revenue was derived from international operations. Some of the
countries in which the Company conducts business have, in the past, experienced
political, economic or social instability, including expropriations, currency
devaluations, hyper-inflation, confiscatory taxation or other adverse
regulatory or legislative developments, or have limited the repatriation of
investment income, capital and other assets. There can be no assurance that
some of these circumstances will not occur in the future or that, if they
occur, they will not have a material adverse effect on the Company's financial
condition and results of operations.
The Company conducts business in several foreign currencies that are
subject to fluctuations in the exchange rate relative to the U.S. dollar. The
Company's results of operations from foreign activities are translated into
U.S. dollars at the average prevailing rates of exchange during the period
reported, which average rates may differ from the actual rates of exchange in
effect at the time of actual conversion into U.S. dollars. The Company monitors
its currency exchange risk but currently does not hedge against this risk. At
September 30, 1997, the Company had recorded a $1.6 million cumulative negative
currency translation adjustment on its balance sheet to account for currency
fluctuations in the foreign countries in which it does business. There can be
no assurance that currency exchange fluctuations will not adversely affect the
Company's financial condition or results of operations. Additionally, although
the Company currently has no plans to repatriate significant earnings from its
international operations, there is no assurance that the Company could
repatriate such earnings without incurring significant tax liabilities.
SINTEL LABOR RELATIONS
Substantially all of Sintel's work force in Spain is unionized. On
September 3, 1997, Sintel filed a petition with the Spanish labor authorities
to approve a restructuring of Sintel's work force. Following the filing of this
labor petition, Sintel's labor unions commenced half-day work stoppages which
continued through the first week of October 1997. Sintel has entered into an
agreement with its unions to resolve the current labor dispute, subject to
ratification and final documentation. There can be no assurance that workers
will ratify the agreement or that final documentation can be completed.
12
<PAGE>
Additionally, any future work stoppages or the failure to negotiate future
labor agreements on competitive terms could have a material adverse effect on
Sintel and on the Company's results of operations.
DEPENDENCE ON LABOR FORCE
The Company's business is labor intensive with high employee turnover in
many operations. The low unemployment rate in the United States has made it
more difficult to find qualified personnel at low cost in some areas where the
Company operates. Shortages of labor or increased labor costs could have a
material adverse effect on the Company's operations. There can be no assurance
that the Company will be able to continue to hire and retain a sufficient labor
force of qualified persons.
DEPENDENCE ON SENIOR MANAGEMENT
The Company's businesses are managed by a small number of key executive
officers, including Jorge Mas, the Company's Chairman, President and Chief
Executive Officer. The loss of services of certain of these executives could
have a material adverse effect on the Company. The Company's growth strategy
also is dependent on its ability to hire and retain additional qualified
management personnel. There can be no assurance that the Company will be able
to hire and retain such personnel.
COMPETITION
The industry in which the Company competes is highly competitive and
fragmented. The Company competes with a number of contractors in the markets in
which it operates, ranging from small independent firms servicing local markets
to larger firms servicing regional markets, as well as with large national and
international equipment vendors on turn-key projects who subcontract
construction work to contractors other than the Company. These equipment
vendors typically are better capitalized and have greater resources than the
Company. There are relatively few barriers to entry into these markets and, as
a result, any business that has access to persons who possess technical
expertise and adequate financing may become a competitor of the Company.
Because of the highly competitive bidding environment in the United States for
the services provided by the Company, the price of a contractor's bid is often
the deciding factor in determining whether such contractor is awarded a
contract for a particular project. Internationally, the Company expects that
there will be increasing price competition as a result of privatization and
deregulation of previously monopolistic markets. There can be no assurance that
the Company's competitors will not develop the expertise, experience and
resources to provide services that achieve greater market acceptance or that
are superior in both price and quality to the Company's services, or that the
Company will be able to maintain and enhance its competitive position. In
addition, many turn-key infrastructure projects require vendor-financing, and
there can be no assurance that the Company will be able to provide such
financing on satisfactory terms or at all.
The Company also faces competition from the in-house service organizations
of RBOCs and other customers and potential customers, which employ personnel
who perform some of the same types of services as those provided by the
Company. The Company's growth strategy is dependent in part on increased
outsourcing by these customers of their infrastructure construction work. There
can be no assurance that existing or prospective customers of the Company will
continue to outsource telecommunication or other infrastructure services or
increase their outsourcing of these services in the future.
POSSIBLE INABILITY TO FUND A CHANGE OF CONTROL OFFER
Upon a Change of Control, the Company will be required to offer to
repurchase all outstanding Notes at 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
repurchase. However, there can be no assurance that sufficient funds will be
available at the time of any Change of Control to make any required repurchases
of Notes tendered or that restrictions in the Credit Facility or other
indebtedness of the Company will allow the Company to make such required
repurchases. Notwithstanding these provisions, the Company could enter into
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transactions, including certain recapitalizations, that would not constitute a
Change of Control but would increase the amount of debt outstanding at such
time. See "Description of Notes--Repurchase at the Option of Holders."
CONTROLLING STOCKHOLDERS
Jorge Mas, the Company's Chairman, President and Chief Executive Officer,
together with other family members beneficially own more than 50% of the
outstanding shares of Common Stock of the Company. Accordingly, they have the
power to control the affairs of the Company.
ABSENCE OF A PUBLIC MARKET FOR THE NOTES
The New Notes will constitute a new issue of securities with no
established trading market. The Company does not intend to apply for listing of
the New Notes on any securities exchange. The Initial Purchasers have informed
the Company that they currently intend to make a market in the New Notes.
However, they are not obligated to do so, and any such market making may be
discontinued at any time without notice. In addition, any such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer or the pendency of
the Shelf Registration Statement. Accordingly, no assurance can be given that
an active public or other market will develop for the New Notes or as to the
liquidity of or the trading market for the New Notes. If a trading market does
not develop or is not maintained, holders of the New Notes may experience
difficulty in reselling the New Notes or may be unable to sell them at all. If
a market for the New Notes develops, any such market may be discontinued at any
time.
If a public trading market develops for the New Notes, future trading
prices of such securities will depend on many factors including, among other
things, prevailing interest rates, the Company's results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the New Notes may trade at a discount from their
principal amount.
FRAUDULENT CONVEYANCE STATUTES
Under applicable provisions of federal bankruptcy law or comparable
provisions of state fraudulent transfer law, if, among other things, the
Company, at the time it incurred the indebtedness evidenced by the Notes (i)
(a) was or is insolvent or rendered insolvent by reason of such occurrence or
(b) was or is engaged in a business or transaction for which the assets
remaining with the Company constituted unreasonably small capital or (c)
intended or intends to incur, or believed or believes that it would incur,
debts beyond its ability to pay such debts as they mature, and (ii) the Company
received or receives less than reasonably equivalent value or fair
consideration for the incurrence of such indebtedness, then the Notes could be
voided, or claims in respect of the Notes could be subordinated to all other
debts of the Company. In addition, the payment of interest and principal by the
Company pursuant to the Notes could be voided and required to be returned to
the person making such payment, or to a fund for the benefit of the creditors
of the Company.
The measures of insolvency for purposes of the foregoing considerations
will vary depending upon the law applied in any proceeding with respect to the
foregoing. Generally, however, the Company would be considered insolvent if (i)
the sum of its debts, including contingent liabilities, were greater than the
saleable value of all of its assets at a fair valuation or if the present fair
saleable value of its assets were less than the amount that would be required
to pay its probable liability on its existing debts, including contingent
liabilities, as they become absolute and mature or (ii) it could not pay its
debts as they become due. On the basis of historical financial information,
recent operating history and other factors, the Company believes that, after
giving effect to the indebtedness incurred in connection with the Offering, it
will not be insolvent, will not have unreasonably small capital for the
business in which it is engaged and will not incur debts beyond its ability to
pay such debts as they mature. There can be no assurance, however, as to what
standard a court would apply in making such determinations or that a court
would agree with the Company's conclusions in this regard.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On February 4, 1998, the Company issued $200.0 million aggregate principal
amount of Old Notes to Jefferies & Company, Inc., BancBoston Securities Inc.,
CIBC Oppenheimer Corp. and NationsBanc Montgomery Securities LLC (collectively,
the "Initial Purchasers"). The issuance was not registered under the Securities
Act in reliance upon the exemption under Rule 144A and Section 4(2) of the
Securities Act. In connection with the issuance and sale of the Old Notes, the
Company entered into a Registration Rights Agreement with the Initial
Purchasers dated as of February 4, 1998 (the "Registration Rights Agreement"),
which requires the Company to cause the Old Notes to be registered under the
Securities Act or to file with the Commission a registration statement under
the Securities Act with respect to an issue of new notes of the Company
identical in all material respects to the Old Notes, and use its best efforts
to cause such registration statement to become effective under the Securities
Act and, upon the effectiveness of that registration statement, to offer to the
holders of the Old Notes the opportunity to exchange their Old Notes for a like
principal amount of New Notes, which will be issued without a restrictive
legend and may be reoffered and resold by the holder without restrictions or
limitations under the Securities Act. A copy of the Registration Rights
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The Exchange Offer is being made pursuant to the
Registration Rights Agreement to satisfy the Company's obligations thereunder.
Based on no-action letters issued by the staff of the Commission to third
parties, the Company believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder of such New Notes (other than any such
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business, such
holder has no arrangement or understanding with any person to participate in
the distribution of such New Notes and neither the holder nor any other person
is engaging in or intends to engage in a distribution of the New Notes. A
broker-dealer who acquired Old Notes directly from the Company can not exchange
such Old Notes in the Exchange Offer. Any holder who tenders in the Exchange
Offer for the purpose of participating in a distribution of the New Notes
cannot rely on such interpretations by the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each broker-dealer
that receives New Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. See "Plan of
Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept any and all Old Notes validly tendered
and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration
Date (as defined herein). The Company will issue a principal amount of New
Notes in exchange for an equal principal amount of outstanding Old Notes
tendered and accepted in the Exchange Offer. Holders may tender some or all of
their Old Notes pursuant to the Exchange Offer. The date of acceptance for
exchange of the Old Notes for the New Notes (the "Exchange Date") will be the
first business day following the Expiration Date or as soon as practicable
thereafter.
The terms of the New Notes and the Old Notes are substantially identical
in all material respects, except for certain transfer restrictions,
registration rights and Liquidated Damages for Registration Defaults relating
to the Old Notes which will not apply to the New Notes. See "Description of
Notes." The New Notes will evidence the same debt as the Old Notes. The New
Notes will be issued under and entitled to the benefits of the Indenture
pursuant to which the Old Notes were issued.
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<PAGE>
As of the date of this Prospectus, $200.0 million aggregate principal
amount of the Old Notes are outstanding. This Prospectus, together with the
Letter of Transmittal, is being sent to all registered holders of Old Notes.
Holders of Old Notes do not have any appraisal or dissenters' rights under
state law or the Indenture in connection with the Exchange Offer. The Company
intends to conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the Exchange
Act, and the rules and regulations of the Commission thereunder. Old Notes
which are not tendered and were not prohibited from being tendered for exchange
in the Exchange Offer will remain outstanding and continue to accrue interest
and to be subject to transfer restrictions, but will not be entitled to any
rights or benefits under the Registration Rights Agreement.
Upon satisfaction or waiver of all the conditions to the Exchange Offer,
on the Exchange Date the Company will accept all Old Notes properly tendered
and not withdrawn and will issue New Notes in exchange therefor. For purposes
of the Exchange Offer, the Company shall be deemed to have accepted properly
tendered Old Notes for exchange when, as and if the Company had given oral or
written notice thereof to the Exchange Agent. The Exchange Agent will act as
agent for the tendering holders for the purposes of receiving the New Notes
from the Company.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of such Old Notes, a properly completed and duly executed
Letter of Transmittal and all other required documents; provided, however, that
the Company reserves the absolute right to waive any defects or irregularities
in the tender or conditions of the Exchange Offer. If any tendered Old Notes
are not accepted for any reason set forth in the terms and conditions of the
Exchange Offer or if Old Notes are submitted for a greater principal amount
than the holder desires to exchange, such unaccepted or nonexchanged Old Notes
or substitute Old Notes evidencing the unaccepted portion, as appropriate, will
be returned without expense to the tendering holder thereof as promptly as
practicable after the expiration or termination of the Exchange Offer.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See "Fees and Expenses."
EXPIRATION DATE; EXTENSION; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended; provided that the Exchange Offer
shall not be extended beyond 30 business days after the date of this
Prospectus.
In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, prior to 9:00 a.m., New York City
time, on the next business day after the then Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof. If the Exchange Offer is amended in a manner determined by the Company
to constitute a material change, the Company will promptly disclose such
amendment in a manner reasonably calculated to inform the holder of Old Notes
of such amendment.
Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no
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<PAGE>
obligation to publish, advertise, or otherwise communicate any such public
announcement, other than by making a timely release to an appropriate news
agency.
INTEREST ON THE NEW NOTES
New Notes will bear interest at the rate of 7-3/4% per annum, payable
semi-annually, in cash, on February 1 and August 1 of each year, from the most
recent date to which interest has been paid on the Old Notes or, if no such
payment has been made, from February 4, 1998.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to exchange any new Notes for any Old Notes, and may terminate or
amend the Exchange Offer before the acceptance of any Old Notes for exchange,
if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer which
seeks to restrain or prohibit the Exchange Offer or, in the Company's judgment,
would materially impair the ability of the Company to proceed the Exchange
Offer; or
(b) any law, statute, rule or regulation is proposed, adopted or enacted,
or any existing law, statute, rule, order or regulation is interpreted, by any
government or governmental authority which, in the Company's judgment, would
materially impair the ability of the Company to proceed with the Exchange
Offer; or
(c) the Exchange Offer or the consummation thereof would otherwise violate
or be prohibited by applicable law.
If the Company determines in its sole discretion that any of these
conditions is not satisfied, the Company may (i) refuse to accept any Old Notes
and return all tendered Old Notes to the tendering holders, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the expiration of the
Exchange Offer, subject, however, to the rights of holders who tendered such
Old Notes to withdraw their tendered Old Notes, or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn. If such waiver constitutes a material
change to the Exchange Offer, the Company will promptly disclose such waiver by
means of a prospectus supplement that will be distributed to the registered
holders, and the Company will extend the Exchange Offer for a period of five to
ten business days, depending upon the significance of the waiver and the manner
of disclosure to the registered holders, if the Exchange Offer would otherwise
expire during such five to ten business day period.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in their sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right, and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time. Any determination by the
Company concerning the events described above shall be final and binding on all
parties.
PROCEDURES FOR TENDERING
The tender of Old Notes by a holder as set forth below (including the
tender of Old Notes by book-entry delivery pursuant to the procedures of the
Depository Trust Company ("DTC")) and the acceptance thereof by the Company
will constitute an agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth in this Prospectus and
in the Letter of Transmittal.
Only a holder of Old Notes may tender such Old Notes in the Exchange
Offer. To tender in the Exchange Offer, a holder must (i) complete, sign and
date the Letter of Transmittal, or a facsimile
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<PAGE>
thereof, have the signatures thereon guaranteed if required by the Letter of
Transmittal, and mail or otherwise deliver such Letter of Transmittal or such
facsimile, together with the Old Notes (unless such tender is being effected
pursuant to the procedure for book-entry transfer described below) and any
other required documents, to the Exchange Agent prior to 5:00 p.m., New York
City time, on the Expiration Date, or (ii) comply with the guaranteed delivery
procedures described below. Delivery of all documents must be made to the
Exchange Agent at its address set forth herein.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owners' own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering of
such owner's Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such owner's name or obtain a properly completed
bond power from the registered holder. The transfer of registered ownership may
take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any Eligible Institution (as defined) unless
the Old Notes tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Payment Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantee must be by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old Notes,
with the signature thereon guaranteed by an Eligible Institution. If the Letter
of Transmittal or any Old Notes or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
Any financial institution that is a participant in the book-entry transfer
facility for the Old Notes, DTC, may make book-entry delivery of Old Notes by
causing DTC to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with DTC's procedures for such transfer,
including if applicable the procedures under the Automated Tender Offer Program
("ATOP"). Although delivery of Old Notes may be effected through book-entry
transfer into the Exchange Agent's account at DTC, an appropriate Letter of
Transmittal with any required signature guarantee and all other required
documents must in each case be, or be deemed to be, transmitted to and received
and confirmed by the Exchange Agent at its address set forth below on or prior
to the Expiration Date, or, if the guaranteed delivery procedures described
below are complied with, within the time period provided under such procedures.
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All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject
any and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of counsel of the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Old Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Old Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Old Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Old Notes received by the Exchange Agent that are not properly tendered and
as to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth below under "Conditions," to terminate the
Exchange Offer and, to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise.
The terms of any such purchases or offers could differ from the terms of the
Exchange Offer.
By tendering, each holder will also represent to the Company (i) that the
New Notes acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of the person receiving such New Notes, whether or
not such person is the holder, (ii) that neither the holder nor any such person
has an arrangement or understanding with any person to participate in the
distribution of such New Notes and (iii) that neither the holder nor any such
other person is an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company, or that if it is an "affiliate," it will comply with the
registration and prospective delivery requirements of the Securities Act to the
extent applicable.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, or (iii) who cannot complete the procedures for book-entry
transfer of Old Notes to the Exchange Agent's account with DTC prior to the
Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) On or prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the holder, the certificate number(s) of such Old
Notes (if possible) and the principal amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within five
business trading days after the Expiration Date, (i) the Letter of Transmittal
(or facsimile thereof) together with the certificate(s) representing the Old
Notes and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent, or (ii) that
book-entry transfer of such Old Notes into the Exchange Agent's account at DTC
will be effected and confirmation of such book-entry transfer will be delivered
to the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered Old
Notes in proper form for transfer and all other documents required by the
Letter of Transmittal, or confirmation of book-entry transfer of the Old Notes
into the Exchange Agent's account at DTC, are received by the Exchange Agent
within five
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business trading days after the Expiration Date. Upon request to the Exchange
Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to
tender their Old Notes according to the guaranteed delivery procedures set
forth above.
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Exchange Offer:
The holder tendering Old Notes exchanges, assigns and transfers the Old
Notes to the Company and irrevocably constitutes and appoints the Exchange
Agent as the holder's agent and attorney-in-fact to cause the Old Notes to be
assigned, transferred and exchanged. The holder represents and warrants to the
Company and the Exchange Agent that (i) its has full power and authority to
tender, exchange, assign and transfer the Old Notes and to acquire the New
Notes in exchange for the Old Notes, (ii) when the Old Notes are accepted for
exchange, the Company will acquire good and unencumbered title to the Old
Notes, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim, (iii) it will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the exchange, assignment and transfer of tendered Old
Notes and (iv) acceptance of any tendered Old Notes by the Company and the
issuance of New Notes in exchange therefor will constitute performance in full
by the Company of its obligations under the Registration Rights Agreement and
the Company will have no further obligations or liabilities thereunder to such
holders (except with respect to accrued and unpaid Liquidated Damages, if any).
All authority conferred by the holder will survive the death or incapacity of
the holder and every obligation of the holder will be binding upon the heirs,
legal representatives, successors, assigns, executors and administrators of the
holder.
Each holder will also certify that it (i) is not an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act or that, if it
is an "affiliate," it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, (ii) is acquiring
the New Notes in the ordinary course of its business and (iii) has no
arrangement with any person or intent to participate in, and is not
participating in, the distribution of the New Notes.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a telegram telex,
facsimile transmission or letter indicating notice of withdrawal must be
received by the Exchange Agent at its address set forth herein prior to 5:00
p.m., New York City time, on the Expiration Date. Any such notice of withdrawal
must (i) specify the name of the person having tendered the Old Notes to be
withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn
(including the certificate number or numbers and principal amount of such Old
Notes), (iii) be signed by the holder in the same manner as the original
signature on the Letter of Transmittal by which such Old Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee with respect to the Old Notes register
the transfer of such Old Notes into the name of the person withdrawing the
tender and (iv) specify the name in which any such Old Notes are to be
registered, if different from that of the Depositor. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn Old Notes or otherwise comply with DTC's
procedures. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no New Notes will be issued with respect thereto unless the
Old Notes so withdrawn are validly retendered. Any Old Notes which have been
tendered but which are not accepted for payment will be returned to the holder
thereof without cost to such holder as soon as practicable
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<PAGE>
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "Procedures for Tendering" at any time prior
to the Expiration Date.
UNTENDERED OLD NOTES
Holders of Old Notes whose Old Notes are not tendered or are tendered but
not accepted in the Exchange Offer will continue to hold such Old Notes and
will be entitled to all the rights and preferences and subject to the
limitations applicable thereto under the Indenture. Following consummation of
the Exchange Offer, the holders of Old Notes will continue to be subject to the
existing restrictions upon transfer thereof and the Company will have no
further obligations to such holders, other than the Initial Purchasers, to
provide for the registration under the Securities Act of the Old Notes held by
them. To the extent that Old Notes are tendered and accepted in the Exchange
Offer, the trading market for untendered and tendered but unaccepted Old Notes
could be adversely affected.
EXCHANGE AGENT
First Trust National Association, the Trustee under the Indenture, has
been appointed as Exchange Agent of the Exchange Offer. Questions and requests
for assistance, requests for additional copies of this Prospectus or of the
Letter of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail, By Facsimile:
by hand or by Overnight Courier:
First Trust National Association
First Trust National Association Attention: Corporate Trust Administration
180 East Fifth Street (612) 244-1145
St. Paul, Minnesota 55101 Confirm by Telephone:
Attention: Corporate Trust Administration (612) 244-0444
</TABLE>
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers, regular employees
or agents of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith
and will pay the reasonable fees and expenses of holders in delivering their
Old Notes to the Exchange Agent.
The cash expenses of the Company to be incurred in connection with the
Company's performance and completion of the Exchange Offer will be paid by the
Company. Such expenses include fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and printing costs, among others.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Old Notes tendered, or
if tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a
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<PAGE>
transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Upon consummation of the Exchange Offer, holders of Old Notes that were
not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes and, accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, the Old Notes may not be offered
or sold, unless registered under the Securities Act and applicable state
securities laws, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. The
Company does not intend to register the Old Notes under the Securities Act.
Based on interpretations by the staff of the Commission with respect to similar
transactions, the Company believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder of such New Notes (other than any such
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business, such
holder has no arrangement or understanding with any person to participate in
the distribution of such New Notes and neither the holder nor any other person
is engaging in or intends to engage in a distribution of the New Notes. If any
holder has any arrangement or understanding with respect to the distribution of
the New Notes to be acquired pursuant to the Exchange Offer, the holder (i)
could not rely on the applicable interpretations of the staff of the Commission
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction. Each broker-
dealer that receives New Notes for its own account in exchange for Old Notes
must acknowledge that it will deliver a prospectus in connection with any
resale of its New Notes. See "Plan of Distribution." The New Notes may not be
offered or sold unless they have been registered or qualified for sale under
applicable state securities laws or an exemption from registration or
qualification is available and is complied with. The Company is required, under
the Registration Rights Agreement, to register the New Notes in any
jurisdiction requested by the holders, subject to certain limitations.
OTHER
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decisions on what
action to take.
Upon consummation of the Exchange Offer, holders of the Old Notes that
were not prohibited from participating in the Exchange Offer and did not tender
their Old Notes will not have any registration rights under the Registration
Rights Agreement with respect to such nontendered Old Notes and, accordingly,
such Old Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. However, in the event the Company fails to
consummate the Exchange Offer or a holder of Old Notes notifies the Company in
accordance with the Registration Rights Agreement that it will be unable to
participate in the Exchange Offer due to circumstances delineated in the
Registration Rights Agreement, then the holder of the Old Notes will have
certain rights to have such Old Notes registered under the Securities Act
pursuant to the Registration Rights Agreement and subject to conditions
contained therein.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in it ordinary course of business
and has no arrangement or understanding with any person to participate in the
distribution
22
<PAGE>
of the New Notes to be received in the Exchange Offer. In this regard, the
Company will make each person participating in the Exchange Offer aware
(through this Prospectus or otherwise) that if the Exchange Offer is being
registered for the purpose of secondary resale, any holder using the Exchange
Offer to participate in a distribution of New Notes to be acquired in the
registered Exchange Offer (i) may not rely on the staff position enunciated in
Morgan Stanley and Co. Incorporated (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988) or similar letters and (ii) must
comply with registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
as reflected in the Company's accounting records on the Exchange Date.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Company. The expenses of the Exchange Offer will be expensed over the term of
the New Notes.
23
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Old Notes in the Offering were
approximately $194.2 million (after deducting discounts to the Initial
Purchasers and estimated Offering expenses). The Company will not receive any
proceeds from the Exchange Offer. Approximately $82.4 million of the net
proceeds from the sale of the Old Notes in the Offering was used to repay
outstanding indebtedness under the Credit Facility and the remainder will be
used by the Company for general corporate purposes, including acquisitions,
working capital needs and capital expenditures. See "Description of Certain
Indebtedness."
CAPITALIZATION
The following table sets forth the capitalization of the Company at
September 30, 1997 on an actual basis and as adjusted to give effect to the
Offering and the application of the net proceeds therefrom. The following table
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1997
-----------------------------
ACTUAL AS ADJUSTED
---------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents ................................... $ 2,588 $ 114,387
======== ==========
Total debt:
Current maturities of debt ................................ $ 33,662 $ 33,662
Credit Facility(1) ........................................ 82,425 --
7-3/4% Series B Senior Subordinated Notes due 2008 ........ -- 199,724(2)
Other long-term debt ...................................... 38,531 38,531
-------- ------------
Total debt ............................................... 154,618 271,917
-------- ------------
Total stockholders' equity .................................. 174,177 174,177
-------- ------------
Total capitalization ........................................ $328,795 $ 446,094
======== ============
</TABLE>
- ----------------
(1) The Credit Facility provides for borrowings in a principal amount at any
time outstanding of up to $125.0 million. As of September 30, 1997,
borrowings under the Credit Facility bore interest at LIBOR (London
Interbank Offered Rate) plus 1.25% (6.93% at September 30, 1997).
Borrowings under this facility have been used for working capital
purposes, for capital expenditures and to fund acquisitions. See
"Description of Certain Indebtedness" and Note 5 of Notes to Consolidated
Financial Statements.
(2) Reflects the issuance of $200.0 million of Notes, net of $276,000 of
original issue discount.
24
<PAGE>
SELECTED FINANCIAL INFORMATION
The following selected financial information for each of the years in the
three year period ended December 31, 1996 has been derived from the Company's
consolidated financial statements, which have been audited by Coopers &
Lybrand, L.L.P., independent auditors, whose report thereon is included
elsewhere in this Prospectus. The selected financial information for the nine
month periods ended September 30, 1996 and September 30, 1997 has been derived
from the Company's unaudited condensed consolidated financial statements which,
in the opinion of management, contain all adjustments (consisting only of
normal and recurring adjustments) necessary for a fair presentation of the
Company's financial position and results of operations at such dates and for
such periods. The information presented below should be read in conjunction
with, and is qualified in its entirety by reference to, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's consolidated financial statements and the notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,(1)
--------------------------------------------------------------
1992 1993 1994(2) 1995 1996(3)
----------- ------------ ------------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenue ......................................... $54,502 $ 74,728 $ 142,583 $218,859 $534,068
Cost of revenue ................................. 36,779 51,763 105,451 158,598 394,497
Depreciation and amortization ................... 1,116 1,520 5,545 8,178 13,686
General and administrative expenses ............. 7,456 15,681 20,595 28,918 72,392
------- -------- --------- -------- --------
Operating income ................................ 9,151 5,764 10,992 23,165 53,493
Interest expense ................................ 98 302 3,846 5,306 11,940
Interest and dividend income .................... 271 359 1,550 3,501 3,480
Special charges--real estate and investment
write-downs(4) ................................. -- -- -- 23,086 --
Other income, net ............................... 672 355 1,348 2,250 2,553
Equity in earnings (losses) of
unconsolidated companies and minority
interest ....................................... (416) 1,177 247 (139) 3,133
Provision (benefit) for income taxes(5) ......... 680 135 2,058 (1,115) 14,665
------- -------- --------- -------- --------
Income from continuing operations(5) ............ 8,900 7,218 8,233 1,500 36,054
Discontinued operations ......................... -- -- 825 2,531 (111)
------- -------- --------- -------- --------
Net income ...................................... $ 8,900 $ 7,218 $ 9,058 $ 4,031 $ 35,943
======= ======== ========= ======== ========
OTHER DATA:
EBITDA(6) ....................................... $10,524 $ 8,816 $ 18,162 $ 33,999 $ 71,190
Capital expenditures ............................ 2,847 3,120 6,028 17,202 8,386
Ratio of earnings to fixed charges(7) ........... 98.8x 25.3x 3.1x 1.1x 4.7x
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,(1)
---------------------------
1996(3) 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
STATEMENT OF INCOME DATA:
Revenue ......................................... $ 355,842 $ 500,133
Cost of revenue ................................. 264,699 364,153
Depreciation and amortization ................... 10,261 15,038
General and administrative expenses ............. 47,603 63,101
--------- ---------
Operating income ................................ 33,279 57,841
Interest expense ................................ 8,577 8,413
Interest and dividend income .................... 3,192 1,350
Special charges--real estate and investment
write-downs(4) ................................. -- --
Other income, net ............................... 1,640 1,685
Equity in earnings (losses) of
unconsolidated companies and minority
interest ....................................... 1,377 464
Provision (benefit) for income taxes(5) ......... 9,945 16,708
--------- ---------
Income from continuing operations(5) ............ 20,966 36,219
Discontinued operations ......................... 176 118
--------- ---------
Net income ...................................... $ 21,142 $ 36,337
========= =========
OTHER DATA:
EBITDA(6) ....................................... $ 46,106 $ 74,109
Capital expenditures ............................ 7,359 17,171
Ratio of earnings to fixed charges(7) ........... 4.0x 6.1x
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------------------------------------------------- AT SEPTEMBER 30,
1992 1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital ..................... $15,384 $12,192 $ 26,233 $ 53,028 $165,211 $133,189
Property and equipment, net ......... 6,625 8,038 44,157 50,572 67,177 79,966
Total assets ........................ 31,071 32,988 155,969 191,272 511,154 539,301
Total debt .......................... 1,565 5,545 46,977 77,668 164,934 154,618
Total stockholders' equity .......... 20,974 16,396 52,271 60,614 116,983 174,177
</TABLE>
25
<PAGE>
- ----------------
(1) Amounts have been restated to reflect the 1997 acquisitions of Wilde
Construction, Inc. and two related companies, and AIDCO, Inc. and one
related company, which were accounted for as poolings of interest. See
Note 2 of Notes to Consolidated Financial Statements.
(2) Includes the results of Burnup & Sims Inc. from March 11, 1994.
(3) Includes the results of Sintel from May 1, 1996.
(4) As a result of the disposal of non-core real estate assets and other
investments, the Company recorded $23.1 million in special charges in the
year ended December 31, 1995. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
(5) Income from continuing operations excludes a pro forma adjustment for
income taxes related to companies which were S corporations and therefore
not subject to corporate federal income taxes.
(6) EBITDA represents income from continuing operations plus provision for
income taxes (less the tax effect attributable to minority interests),
non-recurring or unusual charges, interest expense (net of interest
income) and depreciation and amortization, less equity in earnings of
unconsolidated companies (except to the extent of cash dividends
received). EBITDA is used by management and certain investors as an
indicator of a company's historical ability to service debt. Management
believes that an increase in EBITDA is an indicator of the Company's
improved ability to service existing debt, to sustain potential future
increases in debt and to satisfy capital requirements. However, EBITDA is
not intended to represent cash flows for the period, nor has it been
presented as an alternative to either (i) operating income (as determined
by generally accepted accounting principles) as an indicator of operating
performance or (ii) cash flows from operating, investing and financing
activities (as determined by generally accepted accounting principles) and
is thus susceptible to varying calculations. EBITDA as presented may not
be comparable to other similarly titled measures of other companies.
(7) For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income from continuing operations before income
taxes, plus fixed charges. Fixed charges consist of interest expense,
amortization of debt expense and the estimated interest component of
rental expense.
26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
MasTec is one of the world's largest contractors specializing in the
build-out of telecommunications and related infrastructure. The Company's
principal business consists of the design, installation and maintenance of the
outside physical plant for telephone and cable television communications
systems and of integrated voice, data and video local and wide area networks
inside buildings, and the installation of central office telecommunications
equipment. The Company also provides infrastructure construction services to
the electric power industry and other public utilities.
MasTec was formed in March 1994 through the combination of Church & Tower
Inc. and Church & Tower of Florida, Inc. (collectively, "Church & Tower") and
Burnup & Sims Inc. ("Burnup & Sims"), two established names in the U.S.
telecommunications construction services industry. In April 1996, the Company
purchased Sintel, a company engaged in telecommunications infrastructure
construction services in Spain, Argentina, Chile and Peru, from Telefonica. The
Sintel acquisition gave the Company a significant international presence and
more than doubled the size of the Company in terms of revenue and number of
employees. In Argentina, Chile and Peru, the Company operates through
unconsolidated joint ventures in which it holds a 50% interest. See Notes 2 and
9 of Notes to Consolidated Financial Statements for pro forma financial
information and geographic information, respectively.
In July and August 1997, the Company acquired Wilde Construction, Inc. and
two related companies and AIDCO, Inc. and one related company (collectively,
the "Pooled Companies") through an exchange of common stock. The acquisitions
were accounted for as poolings of interest. Accordingly, the Company's
consolidated financial statements include the results of the Pooled Companies
for all periods presented. See Note 2 of Notes to Consolidated Financial
Statements.
In July 1997, the Company acquired a 51% interest in MasTec Inepar, a
Brazilian telecommunications infrastructure construction company. At the time
of the acquisition, MasTec Inepar had a backlog of construction contracts of
approximately $280.0 million. The results of MasTec Inepar are consolidated in
the results of the Company, net of a 49% minority interest, beginning August
1997.
During the nine months ended September 30, 1997, the Company completed
eight other acquisitions which have been accounted for under the purchase
method of accounting and the results of operations of which have been included
in the Company's consolidated financial statements from the respective
acquisition dates. The Company's pro forma results of operations for 1996 and
for the nine months ended September 30, 1997, giving effect to these
acquisitions, would not differ materially from actual results. In addition,
subsequent to September 30, 1997, the Company completed the acquisition of
Weeks Construction Company.
On September 3, 1997, Sintel filed a petition with the Spanish labor
authorities to approve a restructuring of its workforce. In response to the
Company's petition, the unionized employees declared work stoppages during the
latter part of September 1997 and continued with half day strikes through the
first week in October 1997. Although only two half days of work stoppages
occurred in the quarter ended September 30, 1997, overall production for the
month of September was further impacted by labor slow downs following the
filing of the petition at the beginning of the month.
In January 1998, Sintel entered into an agreement with its unions to
resolve the labor dispute, subject to ratification and final documentation. The
agreement contemplates reductions in administrative positions, reductions in
certain non-wage compensation and increases in production benchmarks. The
agreement also contemplates an increase in base wage rates for remaining union
workers. While management anticipates a reduction in ongoing operating costs to
result from the new agreement, the Company recognizes that it services an
increasingly competitive telephony industry in
27
<PAGE>
the Spanish market and a substantial portion of any savings may be offset by
more competitive prices to Telefonica and other communication service
customers. There can be no assurance that workers will ratify the agreement or
that final documentation can be completed. As of September 30, 1997, the
Company had not reserved for possible restructuring costs associated with a
settlement of the Sintel labor situation in its consolidated financial
statements.
RESULTS OF OPERATIONS
Revenue is generated primarily from telecommunications and related
infrastructure services. Infrastructure services are provided to telephone
companies, public utilities, cable television operators, other
telecommunications providers, governmental agencies and private businesses.
Costs of revenue includes subcontractor costs and expenses, materials not
supplied by the customer, fuel, equipment rental, insurance, operations payroll
and employee benefits. General and administrative expenses include management
salaries and benefits, rent, travel, telephone and utilities, professional fees
and clerical and administrative overhead.
The following table sets forth certain historical consolidated financial
data as a percentage of revenue for the years ended December 31, 1994, 1995 and
1996 and for the nine months ended September 30, 1996 and 1997.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1994 1995 1996 1996 1997
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue .......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Costs of revenue ................................. 74.0 72.5 73.9 74.4 72.8
Depreciation and amortization .................... 3.9 3.7 2.6 2.9 3.0
General and administrative expenses .............. 14.4 13.2 13.6 13.4 12.6
----- ----- ----- ----- -----
Operating income ................................. 7.7 10.6 9.9 9.3 11.6
Interest expense ................................. 2.7 2.4 2.2 2.4 1.7
Interest and dividend income, other income, net,
equity in earnings of unconsolidated companies
and minority interest .......................... 2.2 2.6 1.7 1.8 0.7
Special charges--real estate and investment
write-downs .................................... -- 10.6 -- -- --
----- ----- ----- ----- -----
Income from continuing operations before provision
for income taxes ............................... 7.2 0.2 9.4 8.7 10.6
Provision for income taxes(1) .................... 2.5 0.1 3.2 3.1 3.9
----- ----- ----- ----- -----
Income from continuing operations ................ 4.7% 0.1% 6.2% 5.6% 6.7%
===== ===== ===== ===== =====
</TABLE>
- ----------------
(1) Provision for income taxes has been adjusted to reflect a tax provision for
companies which were S corporations and therefore not subject to corporate
federal income taxes.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1996
Revenue from domestic operations increased $61.2 million, or 24.6%, to
$309.8 million for the nine months ended September 30, 1997 as compared to
$248.6 million in the same period in 1996. Domestic growth was generated
primarily by acquisitions. Revenue generated by international operations
increased $83.0 million, or 77.4%, to $190.3 million in the nine months ended
September 30, 1997 as compared to $107.3 million in the comparable period of
1996 due primarily to the inclusion of Sintel's results for the entire period
in 1997 compared to five months in the 1996 period and the results of MasTec
Inepar for two months ended September 30, 1997.
Gross profit, excluding depreciation and amortization, increased $44.8
million, or 49.3%, to $135.9 million, or 27.2% of revenue, for the nine months
ended September 30, 1997 as compared to $91.1
28
<PAGE>
million, or 25.6% of revenue, for the same period in 1996. The increase in
gross profit as a percentage of revenue was due primarily to the performance of
certain higher margin domestic jobs during 1997 and domestic cost reductions.
Domestic gross margins (gross profit as a percentage of revenue) increased to
29.0% for the nine months ended September 30, 1997 from 24.2% in the same
period in 1996. International gross margins decreased to 24.2% for the nine
months ended September 30, 1997 as compared to 28.8% in the same period in 1996
due to overall lower margins from the Company's newly formed Brazilian
operations and lower productivity in the third quarter from the Company's
Spanish operations.
Depreciation and amortization increased $4.7 million, or 45.6%, to $15.0
million for the nine months ended September 30, 1997 from $10.3 million for the
nine months ended September 30, 1996. The increase in depreciation and
amortization was a result of increased capital expenditures in the latter part
of 1996, as well as depreciation and amortization associated with acquisitions.
As a percentage of revenue, depreciation and amortization was 3.0% and 2.9% of
revenue for 1997 and 1996, respectively.
General and administrative expenses increased $15.5 million, or 32.6%, to
$63.1 million, or 12.6% of revenue, for the nine months ended September 30,
1997 from $47.6 million, or 13.4% of revenue, for the nine months ended
September 30, 1996. Domestic general and administrative expenses were $34.2
million, or 11.0% of domestic revenue, for the nine months ended September 30,
1997, compared to $29.0 million, or 11.7% of domestic revenue, for the nine
months ended September 30, 1996. The decline as a percentage of domestic
revenue is due primarily to the higher revenue volume. The increase in dollar
amount of domestic general and administrative expenses is due primarily to
acquisitions. International general and administrative expenses increased $10.3
million, or 55.4%, to $28.9 million, or 15.2% of international revenue, for the
nine months ended September 30, 1997 from $18.6 million, or 17.3% of
international revenue, for the nine months ended September 30, 1996. The
increase in international general and administrative expenses was due to the
inclusion of Sintel's results for the entire 1997 period, compared to only five
months during the 1996 period. The decline in international general and
administrative expenses as a percentage of international revenue is due to a
lower general and administrative expense for the Brazilian operations.
Operating income increased $24.5 million, or 73.6%, to $57.8 million, or
11.6% of revenue, for the nine months ended September 30, 1997 from $33.3
million, or 9.3% of revenue, for the nine months ended September 30, 1996.
Interest expense decreased to $8.4 million for the nine months ended
September 30, 1997 from $8.6 million for the nine months ended September 30,
1996, primarily due to the lower interest rates on Spanish and domestic
borrowings and the conversion of the Company' s 12% Subordinated Convertible
Debentures into Common Stock on June 30, 1996. Offsetting the decline was the
inclusion of interest expense associated with Sintel's working capital needs
for the entire 1997 period compared to five months for the 1996 period.
Provision for income taxes on a pro forma basis was $19.3 million, or
36.8% of income from continuing operations before equity in earnings of
unconsolidated companies, taxes and minority interests for the nine months
ended September 30, 1997, compared to $11.1 million, or 37.6% of income from
continuing operations before equity in earnings of unconsolidated companies,
taxes and minority interests for the nine months ended September 30, 1996. The
reduction in the effective tax rate was primarily due to the increased
proportion of income from international operations during the nine month period
in 1997.
Income from continuing operations on a pro forma basis increased $13.8
million, or 69.7%, from $19.8 million in 1996 to $33.6 million in 1997. Income
from continuing operations on a pro forma basis as a percentage of revenue
increased to 6.7% in 1997 from 5.6% in 1996.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Revenue increased $315.2 million, or 144.0%, to $534.1 million for the
year ended December 31, 1996 from $218.9 million for the year ended December
31, 1995. Domestic revenue increased $127.0
29
<PAGE>
million, or 58.0%, to $345.9 million for 1996 from $218.9 million for 1995,
primarily due to growth in revenue generated from existing contracts and to an
acquisition completed in 1996. International revenue, comprised of revenue from
Sintel, which the Company acquired in April 1996, contributed $188.2 million of
revenue for the year ended December 31, 1996.
Gross profit, excluding depreciation and amortization, increased $79.3
million, or 131.5%, to $139.6 million, or 26.1% of revenue, for the year ended
December 31, 1996 from $60.3 million, or 27.5% of revenue, for the year ended
December 31, 1995. Domestic gross margins (gross profit as a percentage of
revenue) decreased to 25.1% for the year ended December 31, 1996 from 27.5% for
the year ended December 31, 1995. The decline in domestic gross margins was
primarily due to additional start-up and expansion costs relating to the rapid
growth in revenue. International gross margins were 28.0% for the year ended
December 31, 1996.
Depreciation and amortization increased $5.5 million, or 67.1%, to $13.7
million for the year ended December 31, 1996 from $8.2 million for the year
ended December 31, 1995. Domestic depreciation and amortization as a percentage
of domestic revenue decreased to 3.4% for 1996 from 3.7% for 1995 due to
economies of scale obtained over a larger domestic revenue base. International
depreciation and amortization was 1.1% of international revenue for the year
ended December 31, 1996, as the Company's international operations are less
capital intensive than the Company's domestic operations.
General and administrative expenses increased $43.5 million, or 150.5%, to
$72.4 million, or 13.6% of revenue, for the year ended December 31, 1996 from
$28.9 million, or 13.2% of revenue for the year ended December 31, 1995.
Domestic general and administrative expenses increased $12.5 million, or 43.3%,
to $41.4 million, or 12.0% of domestic revenue, for 1996 from $28.9 million, or
13.2% of domestic revenue in 1995. The decrease in domestic general and
administrative expenses as a percentage of domestic revenue is primarily the
result of spreading overhead expenses over a broader revenue base. Included in
domestic general and administrative expenses for 1996 and 1995 are salaries and
bonuses for employees of the Pooled Companies of approximately $6.1 million and
$3.8 million, respectively. International general and administrative expenses
were $31.0 million, or 16.5% of international revenue, for the year ended
December 31, 1996.
Operating income increased $30.3 million, or 130.6%, to $53.5 million, or
9.9% of revenue, for the year ended December 31, 1996 from $23.2 million, or
10.6% of revenue, for the year ended December 31, 1995 because of the decline
in domestic gross margins in 1996 and bonuses earned by employees of the Pooled
Companies.
Interest expense increased $6.6 million, or 124.5%, to $11.9 million for
the year ended December 31, 1996 from $5.3 million for the year ended December
31, 1995 primarily due to borrowings used for equipment purchases and to fund
investments in unconsolidated companies, offset in part by the conversion of
the Company's 12% Subordinated Convertible Debentures into Common Stock on June
30, 1996.
As a result of the disposal of non-core real estate assets and other
investments, the Company recorded $23.1 million in special charges during the
year ended December 31, 1995.
Income from continuing operations after a pro forma tax provision
increased to $33.2 million, or 6.2% of revenue, for the year ended December 31,
1996 from $0.2 million for the year ended December 31, 1995 which included a
special charge of $23.1 million.
In the third quarter of 1995, the Company adopted a plan to dispose of
certain non-core businesses acquired as a result of the acquisition of Burnup &
Sims in March 1994. See Note 13 of Notes to Consolidated Financial Statements.
These businesses included the operations of a printing company, a theater chain
and an uninterrupted power supply assembler. During 1995, the Company sold the
assets of the theater chain and the assembler. The two transactions netted a
gain of $7.4 million after tax. The remaining theater operations have been
closed and are currently being marketed for sale for the
30
<PAGE>
underlying real estate value. Based on the estimated net realizable value of
these businesses, a loss on disposition of approximately $6.4 million, net of
tax, relating to the remaining discontinued operations was recorded in 1995.
The Company sold the printing company in January 1997 for its carrying value.
Net assets of discontinued operations and other non-core assets amount to $21.4
million and $14.7 million at December 31, 1996 and September 30, 1997,
respectively, and are reflected in other current assets in the consolidated
balance sheet.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Revenue increased $76.3 million, or 53.5%, to $218.9 million for the year
ended December 31, 1995 from $142.6 million for the year ended December 31,
1994, primarily due to expansion into new contract areas and the full year's
effect in 1995 of acquisitions completed in 1994.
Gross profit, excluding depreciation and amortization, increased $23.2
million, or 62.5%, to $60.3 million, or 27.5% of revenue, for the year ended
December 31, 1995 from $37.1 million, or 26.0% of revenue, for the year ended
December 31, 1994 primarily due to improved operating efficiencies, improved
productivity due to the use of more modern equipment and the renegotiation of
an unprofitable master contract assumed in one of the Company's acquisitions.
Depreciation and amortization increased $2.7 million, or 49.1%, to $8.2
million for the year ended December 31, 1995 from $5.5 million for the year
ended December 31, 1994 due to a fleet replacement program and an increase in
capital expenditures resulting from expansion into new contract areas. As a
percentage of revenue, depreciation and amortization expense was 3.7% for 1995
and 3.9% for 1994.
General and administrative expenses increased $8.3 million, or 40.3%, to
$28.9 million, or 13.2% of revenue, for the year ended December 31, 1995 from
$20.6 million, or 14.4% of revenue, for the year ended December 31, 1994.
General and administrative expenses decreased as a percentage of revenue as a
result of spreading overhead expenses over a broader revenue base.
Operating income increased $12.2 million, or 110.9%, to $23.2 million, or
10.6% of revenue, for the year ended December 31, 1995 from $11.0 million, or
7.7% of revenue, for the year ended December 31, 1994.
Interest expense increased $1.5 million, or 39.5%, to $5.3 million for the
year ended December 31, 1995 from $3.8 million for the year ended December 31,
1994 primarily due to borrowings used for equipment purchases, to fund a loan
to the holding company of an Ecuadorian cellular phone company and to make
investments in unconsolidated companies.
As a result of the disposal of non-core real estate assets and other
investments, the Company recorded $23.1 million in special charges during the
year ended December 31, 1995.
Income from continuing operations after a pro forma tax provision was $0.2
million for the year ended December 31, 1995, compared to income from
continuing operations of $6.8 million, or 4.7% of revenue, for the year ended
December 31, 1994.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's primary liquidity needs are for working capital, to finance
acquisitions and capital expenditures and to service the Company's
indebtedness. The Company's primary sources of liquidity have been cash flow
from operations, borrowings under revolving lines of credit and the proceeds
from the sale of investments and non-core assets.
Net cash provided by operating activities for the nine months ended
September 30, 1997 was $28.5 million, compared to $45.7 million for the nine
months ended September 30, 1996. This decrease was due to an increase in net
income to $36.3 million for the nine months ended September 30, 1997 as
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compared to net income of $21.1 million in the comparative 1996 period which
was offset by fluctuations in working capital, particularly the reduction of
accounts payable balances and an increase in accounts receivable from Brazilian
operations. Net cash provided by operating activities for the years ended
December 31, 1996, 1995 and 1994 was $41.9 million, $7.9 million and $4.3
million, respectively.
Net cash provided by the sale of investments and non-core assets amounted
to $9.8 million in the nine months ended September 30, 1997. Net cash provided
by the sale of investments and non-core assets amounted to $9.4 million, $24.3
million and $0.7 million in the years ended December 31, 1996, 1995 and 1994,
respectively. The Company invested cash, net of cash acquired, in acquisitions
and investments in unconsolidated companies totaling $26.9 million during the
nine months ended September 30, 1997, $6.8 million in 1996 and $9.0 million in
1995, and in 1994 had a net inflow from acquisitions of $4.7 million. During
the nine months ended September 30, 1997, the Company made capital expenditures
of $17.2 million, primarily for machinery and equipment used in the production
of revenue. Capital expenditures were $8.4 million, $17.2 million and $6.0
million in the years ended December 31, 1996, 1995 and 1994, respectively. The
Company believes that capital expenditures in 1998, excluding capital
expenditures resulting from acquisitions, will not exceed $30.0 million.
As of September 30, 1997, working capital totaled $133.2 million, compared
to working capital of $136.2 million at December 31, 1996, excluding a note
receivable that was converted into an equity investment in June 1997. See Note
2 of Notes to Consolidated Financial Statements. Included in working capital
are net assets of discontinued operations and real estate held for sale
totaling $14.7 million.
In December 1997, the Company sold its indirect investment in Consorcio
Ecuatoriano de Telecomunicaciones, S.A. ("Conecel"), an Ecuadorian cellular
phone company, for $20.0 million in cash and the right to receive shares of
Conecel non-voting common stock upon a public offering by Conecel. The Company
will have certain registration rights with respect to the Conecel common stock
that it will receive.
The Company continues to pursue a strategy of growth through acquisitions
and internal expansion. During the quarter ended September 30, 1997, the
Company closed its acquisition of 51% of MasTec Inepar for stock and $29.4
million in cash payable over eleven months. In addition, in connection with its
acquisition of Sintel, the Company is required to make payments of 1.8 billion
pesetas (approximately $12.1 million at the exchange rate in effect at the time
of the acquisition) on each of December 31, 1997 and 1998. The Company has paid
a portion of the December 31, 1997 payment, with the remaining amounts to be
paid pending resolution of offsetting amounts between the Company and
Telefonica. See Note 2 of Notes to Consolidated Financial Statements. The
Company believes that cash generated from operations, borrowings under its
Credit Facility and proceeds from the sale of investments and non-core assets
will be sufficient to finance these payments, as well as the Company's working
capital needs, capital expenditures and debt service obligations for the
foreseeable future. Future acquisitions are expected to be financed from these
sources, as well as other external financing sources to the extent necessary,
including the issuance of equity securities and additional borrowings.
In June 1997, the Company refinanced its domestic credit facility with the
$125.0 million Credit Facility. Borrowings under this facility may be used for
domestic acquisitions, working capital, capital expenditures and general
corporate purposes. At September 30, 1997, borrowings under this facility
totaled $82.4 million and standby letters of credit issued pursuant to this
facility totaled approximately $3.5 million, and approximately $39.0 million
remained unused and available. The Company used a portion of the proceeds from
the Offering to repay all outstanding borrowings under the Credit Facility.
After giving effect to the Offering and the application of the net proceeds
therefrom, the Company had approximately $121.5 million of borrowings available
under the Credit Facility. The Credit Facility contains certain covenants
which, among other things, restrict the payment of dividends, limit the
Company's ability to incur additional debt, create liens, dispose of assets,
merge or consolidate with another entity or make other investments or
acquisitions, and provide that the Company must maintain
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minimum amounts of stockholders' equity and financial ratio coverages. See
"Description of Certain Indebtedness" and Note 5 of Notes to Consolidated
Financial Statements.
The Company conducts business in several foreign currencies that are
subject to fluctuations in the exchange rate relative to the U.S. dollar. The
Company does not enter into foreign exchange contracts. It is the Company's
intent to utilize foreign earnings in the foreign operations for an indefinite
period of time and only repatriate those earnings when it is considered cost
effective. In addition, the Company's results of operations from foreign
activities are translated into U.S. dollars at the average prevailing rates of
exchange during the period reported, which average rates may differ from the
actual rates of exchange in effect at the time of the actual conversion into
U.S. dollars. The Company currently has no plans to repatriate significant
earnings from its international operations.
The Company's current and future operations and investments in certain
foreign countries are generally subject to the risks of political, economic or
social instability, including the possibility of expropriation, confiscatory
taxation, hyper-inflation or other adverse regulatory or legislative
developments, or limitations on the repatriation of investment income, capital
and other assets. The Company cannot predict whether any of such factors will
occur in the future or the extent to which such factors would have a material
adverse effect on the Company's international operations.
SEASONALITY
The Company's domestic operations have historically been seasonally weaker
in the first and fourth quarters of the year and have produced stronger results
in the second and third quarters. Sintel has experienced seasonal weakness in
the first quarter, but has produced relatively strong results in the fourth
quarter. This seasonality is primarily the result of customer budgetary
constraints and preferences and, to a lesser extent, the effect of winter
weather on outside plant activities. Certain U.S. customers, particularly the
RBOCs, tend to complete budgeted capital expenditures before the end of the
year and defer additional expenditures until the following budget year.
Telefonica, the Company's principal international customer, has historically
rushed to complete budgeted expenditures in the last quarter. Revenue
anticipated from the Company's newly formed Brazilian operations, MasTec
Inepar, are not expected to fluctuate seasonally.
IMPACT OF INFLATION
The primary inflationary factor affecting the Company's operations is
increased labor costs. Although the Company has not experienced significant
increases in labor costs to date, the low unemployment rate in the United
States has made it more difficult to find qualified personnel at low cost in
some areas where the Company operates. Continued shortages of labor could
increase labor costs for the Company in the future.
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BUSINESS
GENERAL
MasTec is one of the world's largest contractors specializing in the
design, installation and maintenance of infrastructure for the rapidly growing
telecommunications industry. The Company focuses on the installation of aerial
and underground copper, coaxial and fiber optic cable networks as well as
wireless antenna networks ("outside plant services"). The Company believes it
is the largest independent contractor for these systems in the United States
and Spain, and one of the largest in Argentina, Brazil, Chile and Peru. The
Company also installs central office switching equipment, and designs, installs
and maintains integrated voice, data and video local and wide area networks
inside buildings ("inside wiring"). Clients for the Company's services include
major domestic and international telecommunications service providers such as
the RBOCs, other local exchange carriers, competitive access providers, cable
television operators, long-distance operators and wireless phone companies.
MasTec believes it is well positioned to benefit from the significant growth
taking place in the global telecommunications market.
MasTec has experienced significant and consistent growth as a result of
its ability to identify and integrate strategic acquisitions, its competitive
position as one of the largest providers of infrastructure services and
favorable trends in the telecommunications industry. The Company's revenue has
increased from $142.6 million in 1994 to $534.1 million in 1996 and from $355.8
million for the first nine months of 1996 to $500.1 million for the same period
in 1997. EBITDA has also increased from $18.2 million in 1994 to $71.2 million
in 1996 and from $46.1 million in the first nine months of 1996 to $74.0
million in the same period in 1997. The Company expects to continue to grow
through additional strategic acquisitions as well as through internal
expansion. Since January 1996, the Company has completed 13 domestic and two
foreign acquisitions and actively continues to pursue complimentary
acquisitions in the highly fragmented telecommunications infrastructure
industry. Internal growth is expected to be driven by the expansion of the
global telecommunications industry resulting from (i) continued global
deregulation, which is allowing numerous new service providers to enter the
marketplace and is increasing the competitive pressure on existing participants
to upgrade and expand their networks; (ii) increasing consumer demand for
advanced communications services which require the upgrading of existing
infrastructure to handle increased bandwidth needs; and (iii) increasing
reliance on outsourcing of infrastructure needs to full service contractors by
service providers in an effort to reduce costs and focus on their core
competencies.
COMPETITIVE STRENGTHS
The Company seeks to differentiate itself from its competitors through the
following characteristics:
STRONG CUSTOMER RELATIONSHIPS. Founded in 1929, the Company has developed
strong relationships with numerous telecommunications service providers by
providing high quality services in a cost and time efficient manner. The
Company has been providing services to Telefonica and BellSouth, its two
largest customers, since 1950 and 1969, respectively, and maintains similar
long-term relationships with many of its other customers. MasTec currently has
23 multi-year service contracts with Telefonica, the RBOCs and other
telecommunications service providers for certain of their outside plant
requirements up to a specific dollar amount per job and within certain
geographic areas.
DIVERSE CUSTOMER BASE. MasTec provides a full range of infrastructure
services to a diverse customer base. Domestically, the Company provides outside
plant services to local exchange customers such as BellSouth, US West
Communications, Inc., SBC Communications, Inc., United Telephone Company of
Florida, Inc. (a subsidiary of Sprint) and GTE Corporation. The Company also
provides outside plant services to competitive local exchange carriers such as
MFS Communications Company, Inc., Sprint Metropolitan Networks, Inc. and MCI
Metro, Inc. (the local telephone subsidiaries of Sprint and MCI, respectively),
cable television operators such as Time Warner Inc., Cox Communications, Inc.
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and Marcus Cable Company, long distance carriers such as MCI and Sprint, and
wireless communications providers such as PrimeCo Personal Communications LP
and Sprint Spectrum, L.P. Internationally, the Company provides outside plant
services, turn-key switching systems installation and inside wiring services
primarily to Telefonica, the principal telephone company in Spain, and
Telefonica's affiliates in Argentina, Chile and Peru. In July 1997, the Company
also began servicing the local telephone subsidiaries of Telebras, the
Brazilian government-owned telecommunications system, in Sao Paulo, Rio de
Janeiro, Parana and other states in the more populous and developed Southern
region of Brazil, as well as CRT, the local telephone company in Rio Grande do
Sul which is partly owned by Telefonica.
The Company renders inside wiring services nationwide to large corporate
customers with multiple locations such as First Union National Bank, IBM and
Dean Witter Reynolds Inc., and to universities and health care providers.
TURN-KEY CAPABILITIES. The Company believes it is one of the few
contractors capable of providing all of the design, installation and
maintenance services necessary for a cable or wireless network starting from a
transmission point, such as a central office or headend, and running
continuously through aerial and underground cables to the ultimate end users'
voice and data ports, cable outlets or cellular stations. The Company can also
install the switching devices at a central office or set up local and wide area
voice, data and video networks to expand a business's telecommunications
infrastructure both inside a specific structure or between multiple structures.
The Company believes that its customers increasingly are seeking
comprehensive solutions to their infrastructure needs by turning to fewer
qualified contractors who have the size, financial capability and technical
expertise to provide a full range of infrastructure services. The Company
believes that this trend will accelerate as industry consolidations increase
and as these consolidated entities begin to provide bundled services to end
users. The Company believes it has positioned itself through acquisitions and
internal growth as a full service provider of outside plant and inside wiring
infrastructure services to take advantage of this trend.
BROAD GEOGRAPHIC PRESENCE. The Company has significantly broadened its
geographic presence in recent years through strategic acquisitions.
Domestically, MasTec has expanded beyond its historical base in the
Southeastern United States and currently has operations in over 30 states in
the Southeast, Southwest, West and upper Midwest regions of the country. The
Company also substantially increased its international operations through the
acquisition, in April 1996, of Sintel, the largest telecommunications
infrastructure contractor in Spain, and through the acquisition, in July 1997,
of a majority interest in MasTec Inepar, a leading telecommunications
construction company in Brazil. Due to its broad geographic presence, the
Company believes that it is well suited to service customers with operations
across the United States as well as companies who are active in multiple areas
of the world such as multinational corporations and telecommunications service
providers that are expanding into international markets. In addition, by
developing business in many geographic regions, the Company believes it is less
susceptible to changes in the market dynamics in any one region.
GROWTH STRATEGY
The Company is pursuing a disciplined strategy of growth and
diversification in its core business through strategic acquisitions and
internal expansion as follows:
STRATEGIC ACQUISITIONS. The Company plans to continue to pursue strategic
acquisitions in the fragmented telecommunications and utility infrastructure
industry that either expand its geographic coverage and customer base or
broaden the range of services it can offer to clients. The Company focuses its
acquisition efforts primarily on companies with successful track records and
strong management. The Company has acquired 15 companies since January 1996 and
has significant experience in identifying, purchasing and integrating
telecommunications infrastructure businesses both domestically and
internationally. Management believes that MasTec is able to improve the
acquired
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companies' operating performance by providing strategic guidance,
administrative support, greater access to capital and savings in purchasing and
insurance costs.
INTERNAL EXPANSION. The Company believes it is poised to capitalize on the
anticipated growth in its industry due to its status as one of the world's
largest telecommunications infrastructure contractors and its strong customer
relationships. The International Telecommunications Union estimates that
between 1996 and 2000 telecommunications infrastructure investment will exceed
$50 billion in the United States and $600 billion worldwide. In addition, the
Company believes that the RBOCs and other utilities in the United States, which
still conduct a significant portion of their construction work in-house, will
out-source more infrastructure construction in the future in response to
competitive pressures to cut costs, streamline their operations and focus on
their core competencies. The Company believes that its reputation for quality
and reliability, operating efficiency, financial strength, technical expertise,
presence in key geographic areas and ability to offer a full range of
construction services make it well positioned to compete for this business,
particularly the larger, more technically complex infrastructure projects.
The Company also anticipates that its Brazilian operations will become a
more significant part of its operations. MasTec Inepar, in its first two months
of operations ended September 30, 1997, generated revenue and EBITDA (net of
minority interests) of $35.0 million and $2.7 million, respectively, and at
September 30, 1997 had a backlog of approximately $245.0 million. The Brazilian
government has estimated that approximately $75 billion will need to be
invested over a seven year period in order to modernize and expand Brazil's
telecommunications infrastructure. To accomplish this objective, the government
has stated its intention of deregulating and privatizing Brazil's
telecommunications system. The Company believes that, through MasTec Inepar, it
is well positioned to participate in this anticipated expansion.
In addition to focusing on its core telecommunications customers, the
Company plans to achieve incremental growth by continuing to develop
complementary lines of businesses. These businesses include the provision of
premise wiring services to corporations and infrastructure construction
services to the electric power industry and other public utilities.
SERVICES, MARKETS AND CUSTOMERS
TELECOMMUNICATIONS CONSTRUCTION--UNITED STATES OPERATIONS
OUTSIDE PLANT CONSTRUCTION. The Company's principal domestic business
consists of outside plant services for telecommunications providers, including
incumbent and competitive local exchange carriers, cable television operators,
long-distance carriers and wireless communications providers. Outside plant
services consist of all of the services necessary to design, install and
maintain the physical facilities used to provide telecommunications services
from the provider's central office, switching center or cable headend to the
ultimate consumer's home or business. These services include the placing and
splicing of cable, the excavation of trenches in which to place the cable, the
placing of related structures such as poles, anchors, conduits, manholes,
cabinets and closures, the placing of drop lines from the main transmission
lines to the customer's home or business, and the maintenance and removal of
these facilities. The Company has developed expertise in directional boring, a
highly specialized and increasingly common method of placing buried cable
networks in congested urban markets without digging a trench.
The Company provides a full range of outside plant services to its
telecommunications company customers, although certain of the Company's
customers, principally the RBOCs, handle certain of these services in-house.
The Company's customers generally supply materials such as cable, conduit and
telephone equipment, and the Company provides the expertise, personnel, tools
and equipment necessary to perform the required installation and maintenance
services.
The Company currently provides outside plant services primarily to
customers in Alabama, Alaska, Arizona, California, Colorado, Florida, Georgia,
Iowa, Kansas, Michigan, Minnesota, Montana,
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Nebraska, North Carolina, North Dakota, South Dakota, South Carolina,
Tennessee, Texas, Virginia and Wyoming. Principal customers for
telecommunications outside plant services include BellSouth, US West
Communications, Inc., SBC Communications, Inc., the long distance and local
exchange subsidiaries of both MCI and Sprint, GTE Corp., MFS Communications
Company, Inc., Time Warner Inc., Cox Communications, Inc. and Marcus Cable
Company.
Services rendered to the Company's incumbent local exchange customers are
performed primarily under master contracts, which typically are exclusive
service contracts to provide all of the carrier's outside plant requirements up
to a specified dollar amount per job and within certain geographic areas. These
contracts generate revenue ranging between $3.0 million and $30.0 million over
their respective terms, generally two to three years. Such contracts are
typically subject to termination at any time upon 90 to 180 days prior notice
to the Company. Each master contract contemplates hundreds of individual
construction and maintenance projects generally valued at less than $100,000
each. These contracts typically are awarded on a competitive bid basis,
although customers are sometimes willing to negotiate contract extensions
beyond their original terms without opening them up to bid. The Company
currently has 20 master contracts with telecommunications customers covering
defined regions within the United States.
In addition to services rendered pursuant to master contracts, the Company
provides outside plant services on individual projects awarded on a competitive
bid basis or through individual negotiation. While such projects generally are
substantially larger than the individual projects covered by master contracts,
they typically require the provision of services identical to those rendered
under master contracts.
The Company also provides turn-key site acquisition, design, installation
and maintenance services to the wireless communications industry, including
site acquisition and preparation, design and construction of communications
towers, placement of antennas and associated wiring, and construction of
equipment huts.
INSIDE PREMISES CONSTRUCTION. The Company provides design, installation
and maintenance of integrated voice, data and video networks inside buildings
for large companies with multiple locations such as First Union National Bank,
IBM and Dean Witter Reynolds Inc., for college campuses such as the University
of California at Riverside and the University of Miami and for health care
providers such as Carolina Medical Center and Kaiser Permanente. The Company
provides these services primarily on the east and west coasts of the United
States although the Company is capable of providing these services nationwide.
Inside wiring services consist of designing, installing and maintaining
local area networks and wide area networks linking the customers' voice
communications networks at multiple locations with their data and video
services. This type of work is similar to outside plant construction; both
involve the placing and splicing of copper, coaxial and fiber optic cables.
Inside wiring is less capital intensive than outside plant construction but
requires a more technically proficient work force.
The Company contracts with primary contractors to provide services to
First Union National Bank and IBM under subcontracts that are similar to master
contracts in the outside plant business because they grant the Company the
exclusive right to provide inside wiring to these customers within certain
geographic regions. The Company also provides inside wiring services on
individual projects that are awarded on a competitive bid basis or through
individual negotiation. The Company intends to take advantage of the
fragmentation of the inside wiring industry by marketing a full range of inside
wiring services to large corporations with multiple locations across the
country. Increasingly, these types of customers are seeking a single vendor to
provide all of their inside wiring; First Union National Bank, for example,
used more than 30 different vendors to provide the services that the Company
now provides. The Company also provides inside premises electrical wiring to
private customers, principally real estate developers.
The Company is one of two distributors in the United States, Canada and
Mexico of a fiber optic cable installation technology known as FutureFlex. This
technology allows the installation of individual
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strands of optical fiber by means of compressed gas blown through flexible
tubing without the necessity of cutting or splicing the cable except at the
terminal points. As a result, the network can be expanded, changed or moved
more easily and cost-effectively.
TELECOMMUNICATIONS CONSTRUCTION--INTERNATIONAL OPERATIONS
OVERVIEW. The Company is engaged in the telecommunications construction
business internationally primarily in Argentina, Brazil, Chile, Peru and Spain
through Sintel and its affiliates and MasTec Inepar. Sintel is a Spanish
company that has provided telecommunications construction services to
Telefonica and Telefonica's affiliates since 1950. Telefonica is the principal
provider of local and long distance telephony in Spain. Through its affiliate,
Telefonica Internacional, S.A., Telefonica owns interests in certain local
telephone companies in Argentina, Brazil, Chile and Peru. Through Sintel, the
Company is the leading provider of telecommunications infrastructure services
to Telefonica and its affiliates in Spain, and one of the leading providers of
these services to Telefonica's affiliates in Argentina, Chile and Peru.
The Company renders telecommunications construction services in Brazil
through MasTec Inepar, a Brazilian company owned 51% by the Company and 49% by
Inepar SA Industrias e Construcoes ("Inepar"), a leading telecommunications and
power company in Brazil. MasTec Inepar was formed in July 1997 to take
advantage of construction opportunities created by the privatization, de-
monopolization and deregulation of the Brazilian telecommunications market.
SPANISH OPERATIONS. In Spain, Sintel's principal business is providing
outside plant, inside wiring services and equipment installation to Telefonica
and its affiliates. These services are substantially similar to those provided
by the Company in the United States. Sintel also installs Telefonica telephone
equipment in residences and businesses. Sintel subcontracts certain outside
plant services to reduce personnel expenses and to minimize investment in
equipment. Sintel's Spanish operations are concentrated in Spain's largest
commercial centers, Madrid, Barcelona, Seville and Valencia, and surrounding
areas, although Sintel maintains a presence throughout Spain.
Sintel provides the largest percentage of Telefonica's outside plant
services requirements. Sintel provides the bulk of these services under three
separate multi-year comprehensive services contracts, which are similar to
master contracts in the United States, for distinct types of outside plant
services: (i) placement and splicing of communications lines; (ii) trenching
and placing of conduits; and (iii) placing of drop lines to residences and
businesses. These agreements set the unit prices at which Sintel will render
services to Telefonica and establish the percentage of Telefonica's
requirements in these categories that will be satisfied by Sintel in particular
geographic areas of Spain. Telefonica enters into similar agreements with
Sintel's principal competitors in Spain. The Company believes that Telefonica
considers various factors in awarding these contracts and setting their terms,
including price, quality, technical proficiency and the contractor's
relationship with Telefonica. Telefonica also awards individual projects
through a competitive bidding process or through individual negotiation.
In recent years, Telefonica has reduced the number of contractors with
which it will enter into comprehensive services agreements. Because of Sintel's
historical relationship with Telefonica, the Company believes that Sintel will
continue to be a leading provider of these services to Telefonica in Spain.
In addition to outside plant services, Sintel provides inside wiring
services to Telefonica that are substantially similar to those provided by the
Company in the United States. Sintel also installs transmission equipment,
central office switching equipment, power generating equipment and cellular
equipment for telecommunications systems for Telefonica. This equipment
includes multiplexers, carrier systems and microwave systems, and central
office equipment such as frames, protectors, connector blocks, batteries and
power systems, and cellular antennas and cell sites. The contracts for this
work are awarded on a competitive bid basis or through individual negotiation.
Telefonica is the principal provider of local and long distance telephony
in Spain. As a result of European Union initiatives, Spain must liberalize its
telecommunications industry by December 1, 1998
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to permit competitors to Telefonica. In July 1997, a second license to provide
public switched telephony was awarded to Retevision, S.A. ("Retevision"), which
is owned partly by the Spanish government, Societa Finanziaria Telefonica per
Azioni SpA ("STET"), an Italian telephone company, and Empresa Nacional de
Electricidad, S.A., a Spanish electric utility company. Retevision is expected
to begin providing local telephony in Spain in 1998, during which a third local
and long distance telephony license is expected to be awarded. By December 1,
1998, it is expected that the industry will be completely open to competition.
The Company believes that the increased competition in the Spanish telephony
market will increase demand for outside plant services in Spain as new service
providers build competing networks.
Sintel also installs and maintains cable television networks for
Telefonica and its affiliates and for Retevision. The Spanish cable television
market has been underdeveloped due to the lack of a legal structure for the
provision of cable telecommunications services in Spain. In 1997, a legal
structure for the provision of these services was completed and five new
licenses to provide cable television services have been awarded and
applications for an additional 18 licenses are pending. In addition, in 1998,
cable operators will be entitled to provide local telephony within their
service areas as well as long distance telephony. The Company anticipates that
the demand for construction services to the cable television industry will
increase significantly as new networks are constructed and existing networks
are upgraded.
Sintel's workers have engaged in partial work stoppages in protest of a
petition filed by Sintel for a further work force restructuring. See "Risk
Factors--Sintel Labor Relations."
LATIN AMERICAN OPERATIONS. Sintel operates in Argentina, Chile and Peru
through unconsolidated subsidiaries in which Sintel holds a 50% interest. The
other 50% interests in these subsidiaries are held by established local
infrastructure construction companies and operational control is shared by the
Company and its local partner. In Argentina and Chile, the Company's partners
are subsidiaries of Sociedad Macri, one of the largest commercial groups in
Argentina. In Peru, the Company's partner is a subsidiary of Grana y Montero,
S.A., a leading construction company in Peru. The principal shareholder of
Grana y Montero, S.A., is a shareholder and a director of Telefonica del Peru.
Sintel's Latin American affiliates primarily provide outside plant services,
cable television installation and similar services to Telefonica's local
telephone company affiliate in each of the countries in which the Sintel
affiliate is located: Telefonica de Argentina in Argentina; Compania de
Telefonos de Chile in Chile; and Telefonica del Peru in Peru. As part of the
agreement with Sociedad Macri for the acquisition of its interest in Sintel's
Argentine affiliate, Sociedad Macri has contributed to the affiliate certain of
its telecommunications construction contracts with Telecom de Argentina, S.A.,
the principal provider of local telephony in northern Argentina.
BRAZILIAN OPERATIONS. MasTec Inepar, a Brazilian company, was formed in
June 1997 by the Company and Inepar. As part of the formation, Inepar
transferred the personnel, qualifications and other assets of its
telecommunications construction division to MasTec Inepar together with
contracts for specific projects with prices totalling approximately $280
million. These contracts cover the provision of outside plant services for the
local exchange subsidiaries of Telebras, the Brazilian government-owned
telecommunications company, particularly in Sao Paulo, Rio de Janeiro, Parana
and other states in the more populous and developed southern region of Brazil.
MasTec Inepar also provides services to CRT, the local telephone company in Rio
Grande do Sul which is partly owned by Telefonica. In addition, MasTec Inepar
is seeking to provide construction services to certain of the consortia that
recently were awarded B-band cellular concessions in Brazil. BellSouth, one of
the Company's largest domestic customers, is one of the leading members of a
consortium that won the concession to provide B-band cellular services to two
of the ten regions of Brazil recently opened for public bid, including the
region comprising Sao Paulo, the world's third-largest city.
INFRASTRUCTURE CONSTRUCTION FOR PUBLIC UTILITIES
The Company provides infrastructure construction services to electric
power companies and other public utilities, including the City of Austin
Electric Department, City Public Service of San Antonio,
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<PAGE>
Duke Energy Corporation, Florida Power and Light Company, Florida Power
Corporation, Jacksonville Electric Authority, Memphis Light, Gas and Water
Division, Texas Utilities Company, Carolina Power & Light Co., and Georgia
Power Co., and a number of regional electrical cooperatives. These services,
which are substantially similar to the outside plant services provided to
telecommunications companies, include directional boring for conduit and pipes,
trenching, placing of electric cables, and restoring asphalt and concrete
surfaces. Services to many of these customers are provided under exclusive
master contracts with two to three year initial terms expiring at various
dates.
SALES AND MARKETING
Executives of the Company's outside plant subsidiaries market outside
plant services to existing and potential telecommunications and other utility
customers in order to be placed on lists of vendors invited to submit bids for
master contracts and individual construction projects. Inside premises services
are marketed both by the executives of the subsidiaries that provide these
services and through commissioned salespeople employed by the Company.
TELECOMMUNICATIONS INVESTMENTS AND OTHER ASSETS
The Company has invested in certain telecommunications businesses located
in or servicing Latin America. These include minority interests in Supercanal
Holding, S.A. ("Supercanal") and related entities, which operate a cable
television system in Argentina, and in Conecel, an Ecuadorian cellular company.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
The Company owns several assets in the United States that are unrelated to
its core construction business and that it intends to sell. Among these assets
are approximately 1,000 acres of unimproved land in Florida, four non-operating
drive-in theaters located in central and southwest Florida, and a pre-cast
concrete manufacturing facility in Charlotte, North Carolina. All of these
properties were assets of entities acquired by the Company. The Company is
actively attempting to dispose of all of these assets to concentrate its
resources on its core telecommunications and related construction businesses.
SUPPLIERS
The Company's customers supply the majority of the raw materials and
supplies necessary to carry out the Company's contracted work. The Company is
not dependent on any one supplier for any raw materials or supplies that the
Company obtains for its own account other than the FutureFlex airblown fiber
product that the Company distributes for Sumitomo Electric Lightwave Co.
COMPETITION
The industry in which the Company competes is highly competitive and
fragmented. The Company competes with a number of contractors in the markets in
which it operates, ranging from small independent firms servicing local markets
to larger firms servicing regional markets as well as with large national and
international equipment vendors on turn-key projects who subcontract
construction work to contractors other than the Company. These equipment
vendors typically are better capitalized and have greater resources than the
Company. Most companies engaged in the same or similar business tend to operate
in a specific, limited geographic area, although larger competitors may bid on
a particular project without regard to location. Although the Company believes
it is the largest provider of infrastructure services to the telecommunications
and other utilities industries in the United States and Spain and one of the
largest in Argentina, Brazil, Chile and Peru, neither the Company nor any of
its competitors can be considered dominant in the industry on a national or
international basis. The Company also faces competition from the in-house
construction and maintenance departments of RBOCs and other customers and
potential customers, which employ personnel who perform some of the same types
of services as those provided by the Company.
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<PAGE>
EMPLOYEES
As of September 30, 1997, the Company (excluding its unconsolidated
companies) had approximately 7,400 employees, 4,300 of whom are employed in
domestic operations and 3,100 of whom are employed in international operations.
Approximately 150 of the Company's domestic employees and approximately 2,300
of Sintel's employees are unionized. See "Risk Factors--Sintel Labor Relations"
for a description of the current state of labor relations at Sintel.
PROPERTIES
The Company's corporate headquarters are located in a 60,000 square foot
building owned by the Company in Miami, Florida. The Company also has regional
offices in owned facilities located in Tampa, Florida, Austin, Texas and
Charlotte, North Carolina. Sintel's principal executive offices are located in
leased premises in Madrid, Spain and MasTec Inepar's principal executive
offices are located in leased premises in Sao Paulo, Brazil.
The Company's principal operations are conducted from field offices,
equipment yards and temporary storage locations, none of which the Company
believes is material to its operations because most of the Company's services
are performed on the customers' premises or on public rights of way. In
addition, the Company believes that equally suitable alternative locations are
available in all areas where it currently does business.
LEGAL PROCEEDINGS
In December 1990, Albert H. Kahn, a stockholder of the Company, filed a
class action and derivative suit in Delaware state court against the Company,
the then-members of its Board of Directors and National Beverage Corporation
("NBC"), the Company's then-largest stockholder. The complaint alleges, among
other things, that the Company's Board of Directors and NBC breached their
respective fiduciary duties in approving certain transactions, including the
distribution in 1989 to the Company's stockholders of all of the common stock
of NBC owned by the Company and the exchange by NBC of shares of common stock
of the Company for certain indebtedness of NBC to the Company. The lawsuit
seeks to rescind these transactions and to recover damages in an unspecified
amount.
In November 1993, Mr. Kahn filed a class action and derivative complaint
against the Company, the then-members of its Board of Directors, Church &
Tower, Inc. (the Company's predecessor) and Jorge L. Mas, Jorge Mas and Juan
Carlos Mas, as the then principal shareholders of Church & Tower, Inc. The
lawsuit alleges, among other things, that the Company's Board of Directors and
NBC breached their respective fiduciary duties by approving the terms of the
acquisition of the Company by the Mas family, and that Church & Tower, Inc. and
its principal shareholders had knowledge of the fiduciary duties owed by NBC
and the Company's Board of Directors and knowingly and substantially
participated in the breach of these duties. The lawsuit also claims
derivatively that each member of the Company's Board of Directors engaged in
mismanagement, waste and breach of fiduciary duties in managing the Company's
affairs prior to the acquisition by the Mas family.
The Company believes that the allegations in each of these lawsuits are
without merit and intends to defend these lawsuits vigorously.
In November 1997, Church & Tower filed a lawsuit against Miami-Dade County
(the "County") in the Circuit Court of the Eleventh Judicial Circuit in and for
Dade County, Florida alleging breach of contract and seeking damages in
connection with the County's refusal to pay amounts due to Church & Tower under
a multi-year agreement to perform road restoration work for the Miami-Dade
Water and Sewer Department ("MWSD"), a department of the County, and the
County's wrongful termination of the agreement. The County has refused to pay
amounts due to Church & Tower under the agreement until alleged overpayments
under the agreement have been resolved. The County has also refused to award a
new road restoration agreement for MWSD to Church & Tower, which was the low
bidder for
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the new agreement. The Company believes that any amounts due to the County
under the existing agreement are not material and may be recoverable in whole
or in part from Church & Tower subcontractors who actually performed the work
and whose bills were submitted directly to the County.
The Company is a party to other pending legal proceedings arising in the
normal course of business, none of which the Company believes is material to
the Company's financial position or results of operations.
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<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below is certain information with respect to the directors and
executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- ----- ------------------------------------------------
<S> <C> <C>
Jorge Mas 34 Chairman of the Board of Directors, President
and Chief Executive Officer
Henry N. Adorno 50 Executive Vice President and Special Counsel
Ismael Perera 48 Senior Vice President--Operations
Edwin D. Johnson 41 Senior Vice President--Chief Financial Officer
Ubiratan Simoes Rezende 49 Senior Vice President--International Operations
Carlos A. Valdes 34 Senior Vice President--Corporate Development
Jose M. Sariego 43 Senior Vice President--General Counsel
Eliot C. Abbott 47 Director
Joel-Tomas Citron 35 Director
Arthur B. Laffer 56 Director
Jose S. Sorzano 56 Director
</TABLE>
JORGE MAS has been President, Chief Executive Officer and a director of
the Company since March 1994 and was elected Chairman of the Board of Directors
of the Company in January 1998. Prior to that time and during the preceding
five years, Mr. Mas served as the President and Chief Executive Officer of
Church & Tower, Inc., one of the Company's principal operating subsidiaries. In
addition, Mr. Mas is the Chairman of the Board of Directors of Neff
Corporation, Atlantic Real Estate Holding Corp., U.S. Development Corp. and
Santos Capital, Inc. (all private companies controlled by Mr. Mas) and, during
all or a portion of the past five years, has served as the President and Chief
Executive Officer of these corporations.
HENRY N. ADORNO was elected Executive Vice President and Special Counsel
of the Company in January 1998. Prior to joining the Company, Mr. Adorno was
President and Chief Executive Officer of Adorno & Zeder, P.A., a Miami law firm
that he co-founded in 1986.
ISMAEL PERERA has been Senior Vice President--Operations of the Company
since March 1994. From August 1993 until March 1994, he served as the Vice
President--Operations of Church & Tower, Inc. From 1970 until July 1993, Mr.
Perera served in various capacities in network operations for BellSouth,
including most recently as a Senior Director of Network Operations from 1985 to
1993.
EDWIN D. JOHNSON has been Senior Vice President--Chief Financial Officer
of the Company since March 1996. During the 10 years prior to joining the
Company, Mr. Johnson served in various capacities with Attwoods plc, a British
waste services company, including Chief Financial Officer and member of the
Board of Directors during the final three years of his employment with
Attwoods.
UBIRATAN SIMOES REZENDE has been Senior Vice President--International
Operations of the Company since March 1996. From August 1995 to March 1996, Mr.
Rezende was Dean of Graduate Studies and International Programs at La Roche
College. From 1991 to 1993, Mr. Rezende was visiting professor of the Paul
Nitze School of Advanced International Studies at Johns Hopkins University, and
from 1979 to 1992 he was a professor at the Center of Social and Economic
affairs at the University of Santa Catarina in Brazil. Mr. Rezende also has
served as Chief of Staff of the Organization of American States and as
Executive Vice President of the holding company for the Perdigao Group, a
leading food processing company in Brazil.
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<PAGE>
CARLOS A. VALDES has been Senior Vice President--Corporate Development of
the Company since March 1996. Prior to that time, Mr. Valdes was Senior Vice
President--Finance of the Company from March 1994 to March 1996 and Chief
Financial Officer of Church & Tower, Inc. from 1991 to 1994.
JOSE M. SARIEGO has been Senior Vice President--General Counsel of the
Company since September 1995. Prior to joining the Company, Mr. Sariego was
Senior Corporate Counsel and Secretary of Telemundo Group, Inc., a Spanish
language television network, from August 1994 to August 1995. From January 1990
to August 1994, Mr. Sariego was a partner in the Miami office of Kelley Drye &
Warren, an international law firm.
ELIOT C. ABBOTT has been a member of the Board of Directors since March
1994. From 1976 until September 1995, Mr. Abbott was a stockholder in the Miami
law firm of Carlos & Abbott. From October 1995 to January 1997, Mr. Abbott was
a member of the international law firm of Kelley Drye & Warren. Since February
1997, Mr. Abbott has been a partner in the firm of Kluger, Peretz, Kaplan,
Berlin, P.A.
JOEL-TOMAS CITRON was elected to the Board of Directors in January 1998.
Mr. Citron is the managing partner of Triscope Capital LLC, a private
investment partnership. In addition, Mr. Citron has been Chairman of the United
States subsidiary of Proventus AB, a privately held investment company based in
Stockholm since 1992.
ARTHUR B. LAFFER has been a member of the Board of Directors since March
1994. Mr. Laffer has been Chairman of the Board of Directors of Laffer &
Associates, an economic research and financial consulting firm, since 1979;
Chief Executive Officer, Laffer Advisors Inc., an investment advisor and
broker-dealer, since 1981; and Chief Executive Officer, Calport Asset
Management, a money management firm, since 1992. Mr. Laffer is a director of
U.S. Filter Corporation, Nicholas Applegate mutual funds, and Coinmach Laundry
Corporation.
JOSE S. SORZANO has been a member of the Board of Directors since October
1994. Mr. Sorzano has been Chairman of the Board of Directors of The Austin
Group, Inc., an international corporate consulting firm, since 1989. Mr.
Sorzano was also Special Assistant to the President for National Security
Affairs from 1987 to 1988; Associate Professor of Government, Georgetown
University, from 1969 to 1987; President, Cuban American National Foundation,
from 1985 to 1987; and Ambassador and U.S. Deputy to the United Nations from
1983 to 1985.
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<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a summary of certain indebtedness of the Company.
CREDIT FACILITY
The Company and its principal domestic subsidiaries maintain a $125.0
million revolving credit facility with a syndicate of banks led by BankBoston,
N.A. (the "Credit Facility"). The Company may use borrowings under the Credit
Facility for acquisitions, capital expenditures, working capital and general
corporate purposes, subject to certain restrictions. The Credit Facility
expires on June 9, 2000 unless extended until no later than June 9, 2002 as
provided in the Credit Facility. Interest on amounts outstanding under the
Credit Facility bear interest at a rate per annum equal to the prime rate, as
announced by BankBoston, N.A., or at the Company's option, LIBOR plus the
applicable LIBOR margin, currently 1.00%. The Credit Facility is secured by a
pledge of the stock of the Company's principal domestic subsidiaries as well as
a portion of the stock of Sintel. At September 30, 1997, borrowings under this
facility totaled $82.4 million. The Company used a portion of the proceeds of
the Offering to repay all outstanding borrowings under the Credit Facility, as
a result of which approximately $121.5 million of borrowings were available
under the Credit Facility.
The Credit Facility contains certain covenants which, among other things,
restrict the payment of dividends, limit the Company's ability to incur
additional debt, create liens, dispose of assets, merge or consolidate with
another entity or make other investments or acquisitions, and provide that the
Company must maintain minimum amounts of stockholders' equity and financial
ratio coverages.
SPANISH PESETA DENOMINATED DEBT
Sintel maintains a revolving credit facility denominated in pesetas with a
wholly-owned finance subsidiary of Telefonica (the "Sintel Facility"). At
September 30, 1997, borrowings under the Sintel Facility totaled approximately
2.2 billion pesetas ($14.7 million at the exchange rate on September 30, 1997).
Sintel may use borrowings under this facility for working capital and other
general corporate purposes. Amounts outstanding under the Sintel Facility bear
interest at a rate per annum equal to the Madrid Interbank Offered Rate plus
0.30%. The Sintel Facility is unsecured. Sintel also maintains other peseta
denominated credit facilities with certain other Spanish financial
institutions. At September 30, 1997, borrowings under these facilities totaled
approximately 2.5 billion pesetas ($16.9 million at the exchange rate on
September 30, 1997), and bore interest at rates ranging from 5.60% to 6.75% per
annum. These facilities are also unsecured.
OTHER INDEBTEDNESS
At September 30, 1997, the Company had notes payable totaling $14.7
million outstanding, secured by interests in certain of the Company's
equipment. Interest rates on these notes range from 7.50% to 8.50% per annum
and mature in installments through the year 2000.
In connection with the acquisition of Sintel, the Company currently is
indebted to Telefonica for 3.6 billion pesetas ($24.0 million at the exchange
rate on December 31, 1997), which indebtedness bears interest at 7.87% per
annum. A payment of 1.8 billion pesetas ($12.0 million at the exchange rate on
December 31, 1997) was due on December 31, 1997, with the balance due on
December 31, 1998. The Company has paid a portion of the December 31, 1997
payment, with the remaining amounts to be paid pending resolution of offsetting
amounts between the Company and Telefonica. The Telefonica indebtedness is
unsecured.
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<PAGE>
DESCRIPTION OF NOTES
GENERAL
The New Notes, like the Old Notes, will be issued pursuant to the
Indenture dated February 4, 1998, between the Company and First Trust National
Association, as trustee (the "TRUSTEE"). The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (the "TRUST INDENTURE ACT"). The terms of the
New Notes are substantially identical to the Old Notes in all material respects
(including interest rate and maturity), except that (i) the New Notes will not
be subject to the restrictions on transfer (other than with respect to holders
that are broker-dealers, persons who participated in the distribution of the
Old Notes or affiliates) and (ii) the Registration Rights Agreement covenants
regarding registration and the related Liquidated Damages (other than those
that have accrued and were not paid, if any) with respect to Registration
Defaults will have been deemed satisfied. The Notes are subject to all such
terms, and Holders of Notes are referred to the Indenture and the Trust
Indenture Act for a statement thereof. The following summary of the material
provisions of the Indenture does not purport to be complete and is qualified in
its entirety by reference to the Indenture, including the definitions therein
of certain terms used below. Copies of the proposed form of Indenture and
Registration Rights Agreement will be made available to prospective investors
as set forth under "--Additional Information." The definitions of certain terms
used in the following summary are set forth below under "--Certain
Definitions." For purposes of this "Description of Notes," the term "COMPANY"
refers only to MasTec, Inc. and not to any of its Subsidiaries.
The Notes will be subordinated in right of payment to all existing and
future Senior Debt of the Company. The Notes will also be effectively
subordinated to all Indebtedness and other liabilities and commitments
(including trade payables and lease obligations) of the Company's Subsidiaries.
As of September 30, 1997, after giving pro forma effect to the Offering and the
application of the net proceeds therefrom, the Notes would have been
subordinated to approximately $72.2 million of Senior Debt of the Company and
indebtedness and other obligations of the Company's subsidiaries. In addition,
the Company would have had $121.5 million of additional borrowings available
under the Credit Facility. The Indenture will permit the Company and its
Restricted Subsidiaries to incur additional indebtedness, including additional
Senior Debt, subject to certain restrictions. See "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock."
The operations of the Company are conducted through its Subsidiaries and,
therefore, the Company is dependent upon the cash flow of its Subsidiaries to
meet its obligations, including its obligations under the Notes. Any right of
the Company to receive assets of any of its Subsidiaries upon the latter's
liquidation or reorganization (and the consequent right of the Holders of the
Notes to participate in those assets) will be effectively subordinated to the
claims of that Subsidiary's creditors, except to the extent that the Company is
itself recognized as a creditor of such Subsidiary, in which case the claims of
the Company would still be subordinate to any security interest in the assets
of such Subsidiary and any indebtedness of such Subsidiary senior to that held
by the Company. See "Risk Factors--Holding Company Structure."
As of the date of the Indenture, all of the Company's Subsidiaries were
Restricted Subsidiaries. However, under certain circumstances, the Company will
be able to designate current or future Subsidiaries as Unrestricted
Subsidiaries. Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants set forth in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount to $250.0 million, of
which $200.0 million was outstanding as of the date of this Prospectus, and
will mature on February 1, 2008. Interest on the Notes will accrue at the rate
of 7-3/4% per annum and will be payable semi-annually in arrears on February 1
and August 1 of each year, commencing on August 1, 1998, to Holders of record
on the immediately
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<PAGE>
preceding January 15 and July 15. Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. Principal of and
premium, interest and Liquidated Damages, if any, on the Notes will be payable
at the office or agency of the Company maintained for such purpose or, at the
option of the Company, payment of interest and Liquidated Damages may be made
by check mailed to the Holders of the Notes at their respective addresses set
forth in the register of Holders of Notes; PROVIDED that all payments of
principal, premium, interest and Liquidated Damages with respect to Notes the
Holders of which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of
$1,000 and integral multiples thereof.
SUBORDINATION
The payment of principal of and premium, interest and Liquidated Damages,
if any, on the New Notes will be subordinated in right of payment, as set forth
in the Indenture, to the prior payment in full of all Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter
incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, the holders of Senior Debt will be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes, and until all
Obligations with respect to Senior Debt are paid in full, any distribution to
which the Holders of Notes would be entitled shall be made to the holders of
Senior Debt (except that Holders of Notes may receive Permitted Junior
Securities and payments made from the trust described under "--Legal Defeasance
and Covenant Defeasance").
The Company also may not make any payment upon or in respect of the Notes
(except in Permitted Junior Securities or from the trust described under
"--Legal Defeasance and Covenant Defeasance") if (i) a default in the payment
of the principal of or premium, or interest on any Designated Senior Debt
occurs and is continuing beyond any applicable period of grace or (ii) any
other default occurs and is continuing with respect to any Designated Senior
Debt that permits holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
such default (a "PAYMENT BLOCKAGE NOTICE") from the Company or the holders of
such Designated Senior Debt. Payments on the Notes may and shall be resumed (a)
in the case of a payment default, upon the date on which such default is cured
or waived and (b) in case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 180 days after the date on
which the applicable Payment Blockage Notice is received, unless the maturity
of any Designated Senior Debt has been accelerated. No new Payment Blockage
Notice may be delivered unless and until 360 days have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such nonpayment default shall have been cured
for a period of at least 90 days.
The Indenture further requires that the Company promptly notify holders of
Senior Debt if payment of the Notes is accelerated because of an Event of
Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders of Notes may recover less ratably than
creditors of the Company who are holders of Senior Debt.
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<PAGE>
OPTIONAL REDEMPTION
The Notes will not be redeemable at the Company's option prior to February
1, 2003. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on February 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- --------------------------------- -------------
<S> <C>
2003 ......................... 103.875%
2004 ......................... 102.583%
2005 ......................... 101.292%
2006 and thereafter .......... 100.000%
</TABLE>
Notwithstanding the foregoing, prior to February 1, 2001, the Company may
redeem up to one-third of the aggregate principal amount of Notes at a
redemption price of 107.750% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date,
with the net cash proceeds of an offering of Equity Interests (other than
Disqualified Stock) of the Company; PROVIDED that (i) at least $133.3 million
in principal amount of the Notes remain outstanding immediately after the
occurrence of such redemption and (ii) such redemption shall occur within 90
days of the date of the consummation of such offering.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
PROVIDED that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional. If any Note
is to be redeemed in part only, the notice of redemption that relates to such
Note shall state the portion of the principal amount thereof to be redeemed. A
new Note in principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Note. Notes called for redemption become due on the date fixed for redemption.
On and after the redemption date, interest ceases to accrue on Notes or
portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "--Repurchase at the Option of Holders,"
the Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL. Upon the occurrence of a Change of Control, the Company
will be obligated to make an offer (a "CHANGE OF CONTROL OFFER") to each Holder
of Notes to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 30 days following a Change of Control, the Company will mail
a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed (the "CHANGE OF CONTROL
PAYMENT DATE"), pursuant to the procedures required by the Indenture and
described in such notice. The Company will comply with the requirements of Rule
14e-1 under the
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<PAGE>
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Indenture will
provide that, prior to complying with the provisions of this covenant, but in
any event within 90 days following a Change of Control, the Company will either
repay all outstanding Senior Debt or obtain the requisite consents, if any,
under all agreements governing outstanding Senior Debt to permit the repurchase
of Notes required by this covenant.
The Change of Control provisions described above will be applicable
whether or not any other provisions of the Indenture are applicable; PROVIDED,
HOWEVER, that the Company shall not be obligated to repurchase the Notes upon a
Change of Control if the Company has irrevocably elected to redeem all of the
Notes under the provisions described under "--Optional Redemption." Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Credit Facility prohibits, and future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may
prohibit, the Company from purchasing any Notes following a Change of Control
and/or provide that certain change of control events with respect to the
Company would constitute a default thereunder. In the event a Change of Control
occurs at a time when the Company is prohibited from purchasing Notes, the
Company could seek the consent of its lenders to the purchase of Notes or could
attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing Notes. The Company's failure to purchase
tendered Notes following a Change of Control would constitute an Event of
Default under the Indenture which would, in turn, constitute a default under
the Credit Facility. In such circumstances, the subordination provisions in the
Indenture would likely restrict payments to the Holders of Notes. See
"--Subordination" and "Description of Certain Indebtedness--Credit Facility."
The Company will not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
ASSET SALES. The Indenture will provide that the Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least 75%
of the consideration therefor received by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents; PROVIDED that the amount
of (a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or such Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
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terms subordinated to the Notes or any guarantee thereof) that are assumed by
the transferee of any such assets and for which the Company or such Restricted
Subsidiary is released from further liability and (b) any securities, notes or
other obligations received by the Company or such Restricted Subsidiary from
such transferee that are promptly converted by the Company or such Restricted
Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash
Equivalents received) shall be deemed to be cash for purposes of this
provision.
Within 365 days of the receipt of any Net Proceeds from an Asset Sale, the
Company may apply such Net Proceeds, at its option, (i) to repay Senior Debt of
the Company or Indebtedness of any Restricted Subsidiary (and, in each case, to
correspondingly reduce commitments with respect thereto in the case of
revolving borrowings) or (ii) to the acquisition of a controlling interest in
another business, the making of a capital expenditure or the acquisition of
other long-term assets. Pending the final application of any such Net Proceeds,
the Company may temporarily reduce Senior Debt or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of Notes (an
"ASSET SALE OFFER") to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of an Asset Sale Offer, the amount of Excess Proceeds shall be reset
at zero.
CERTAIN COVENANTS
RESTRICTED PAYMENTS. The Indenture provides that the Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) or to any direct or indirect holders of the Company's or any of
its Restricted Subsidiaries' Equity Interests in their capacity as such (other
than dividends or distributions (a) payable in Equity Interests (other than
Disqualified Stock) of the Company, (b) to the Company or any Wholly Owned
Restricted Subsidiary of the Company, (c) paid by a Restricted Subsidiary of
the Company pro rata to the holders of its Capital Stock or (d) payable in
Equity Interests of Supercanal or Conecel); (ii) purchase, redeem or otherwise
acquire or retire for value (including without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company, any of its Subsidiaries or any direct or indirect parent of the
Company (other than any such Equity Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of the Company); (iii) make any payment on
or with respect to, or purchase, redeem, defease or otherwise acquire or retire
for value any Indebtedness of the Company or any Restricted Subsidiary that is
subordinated to the Notes, except a payment of interest, a payment of principal
at Stated Maturity or a scheduled repayment or scheduled sinking fund payment;
or (iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"RESTRICTED PAYMENTS"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable
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four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of the covenant described below under
caption "--Incurrence of Indebtedness and Issuance of Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Closing Date (excluding Restricted Payments
permitted by clauses (ii) through (vi) of the next succeeding paragraph),
is less than the sum, without duplication, of (i) 50% of the cumulative
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the Closing Date to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus (ii) 100% of
the aggregate net cash proceeds received by the Company from the issue or
sale since the Closing Date of Equity Interests of the Company (other than
Equity Interests sold to a Subsidiary of the Company and other than
Disqualified Stock), plus (iii) 50% of any dividends received by the
Company or a Wholly Owned Restricted Subsidiary after the Closing Date from
an Unrestricted Subsidiary of the Company, to the extent that such
dividends were not otherwise included in Consolidated Net Income of the
Company for such period, plus (iv) $50.0 million, plus (v) the amount by
which Indebtedness of the Company is reduced on the Company's balance sheet
upon the conversion or exchange (other than by a Restricted Subsidiary)
subsequent to the Closing Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash or other property
distributed by the Company upon such conversion or exchange), plus (vi) an
amount equal to the sum of the net reduction in Investments in Unrestricted
Subsidiaries resulting from (A) dividends, repayments of the principal of
loans or advances or other transfers of assets to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries or (B) the sale or
liquidation of any Unrestricted Subsidiaries, plus (vii) to the extent that
any Unrestricted Subsidiary of the Company is designated to be a Restricted
Subsidiary, the sum of (A) the lesser of (1) 100% of the Company's
Investment in such Subsidiary, as shown on the Company's most recent
balance sheet, and (2) the fair market value of the Company's Investment in
such Subsidiary, plus (B) 50% of the amount, if any, by which the fair
market value of the Company's Investment in such Subsidiary exceeds the
amount determined in the preceding clause (A).
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, other Equity Interests of the Company (other than any Disqualified
Stock); PROVIDED that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Restricted Subsidiary of the Company held by employees, former employees,
directors or former directors of the Company (or any of its Subsidiaries)
pursuant to any agreement or plan approved by the Company's Board of Directors;
PROVIDED that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $1.0 million in any
twelve-month period and no Default or Event of Default shall have occurred and
be continuing immediately after such transaction; (v) the purchase, repurchase
or acquisition of Capital Stock of the Company, in an amount not to exceed $5.0
million, for distribution, contribution or payment to, or for the benefit of,
any employee benefit plan of the Company or any of its Subsidiaries or any
trust established by the Company or any of its Subsidiaries for the benefit of
its employees; and (vi) any Restricted Payment utilizing cash or other
consideration received by the Company by virtue of
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its investment in Supercanal or Conecel; PROVIDED that clauses (a) and (b) of
the preceding paragraph are satisfied at the time of such payment.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined in
good faith by the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "Restricted
Payments" were computed, which calculations may be based upon the Company's
latest available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the definition of an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date
under the covenant described under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock," the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under the covenant described under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock," calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period, and (ii) no Default or
Event of Default would be in existence following such designation.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK. The Indenture
will provide that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR") any
Indebtedness (including Acquired Debt) and that the Company will not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Company and its foreign Restricted Subsidiaries may
incur Indebtedness (including Acquired Debt) and the Restricted Subsidiaries
may issue preferred stock if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such preferred stock is issued would
have been at least 2.0 to 1, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock had been issued at the
beginning of such four-quarter period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following (collectively, "PERMITTED DEBT"):
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(i) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under the Credit Facility in an aggregate amount not to exceed
$150.0 million at any one time outstanding, less the aggregate amount of all
Net Proceeds of Asset Sales applied to permanently reduce the amount of such
Indebtedness;
(ii) the incurrence by the Company of Indebtedness represented by the
Notes and any guarantee of the Notes by any Restricted Subsidiary of the
Company, in each case in an aggregate amount not to exceed $200.0 million;
(iii) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Existing Indebtedness or
Indebtedness that was permitted to be incurred by the first paragraph, or by
clause (ii) of the second paragraph of this covenant;
(iv) the incurrence of Indebtedness between or among the Company and any
of its Restricted Subsidiaries; PROVIDED, HOWEVER, that any subsequent issuance
or transfer of Equity Interests that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or a Restricted Subsidiary or a pledge or
other transfer thereof intended to create a security interest therein), and any
sale or other transfer of any such Indebtedness to a Person that is not either
the Company or a Wholly Owned Restricted Subsidiary, shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are (a) incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of the Indenture to be outstanding or (b) incurred for
the purpose of fixing or hedging currency exchange rates or prices of
commodities used in the business of the Company and its Restricted
Subsidiaries;
(vi) the guarantee by the Company or any Restricted Subsidiary of
Indebtedness that was permitted to be incurred by another provision of this
covenant, subject to the covenant described under "Limitation on Guarantees of
Company Indebtedness by Restricted Subsidiaries"; and
(vii) other Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount at any time outstanding not to exceed $25.0 million.
For purposes of determining compliance with this covenant, in the event
that (a) an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described above or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company shall, in its
sole discretion, classify such item of Indebtedness in any manner that complies
with this covenant and shall only be required to include such item of
Indebtedness in one of such clauses or pursuant to the first paragraph hereof
and (b) an item of Indebtedness may be divided and classified in more than one
of the types of Indebtedness described above. Accrual of interest, the
accretion of accredit value and the payment of interest in the form of
additional Indebtedness will not be deemed to be an incurrence of Indebtedness
for purposes of this covenant.
LIENS. The Indenture will provide that the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien securing Indebtedness or trade
payables on any asset now owned or hereafter acquired, or any income or profits
therefrom or assign or convey any right to receive income therefrom, except
Permitted Liens, unless contemporaneously therewith effective provision is made
to secure the Notes equally and ratably with such Indebtedness or trade
payables for so long as such Indebtedness or trade payables are unsecured by a
Lien.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The
Indenture will provide that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly,
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create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to
(i)(a) pay dividends or make any other distributions to the Company or any of
its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits, or (b) pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the Closing
Date, (b) the Credit Facility as in effect as of the Closing Date, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, PROVIDED that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with respect to
such dividend and other payment restrictions than those contained in the Credit
Facility as in effect on the Closing Date, (c) the Indenture and the Notes, (d)
applicable law, (e) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), (f)
by reason of customary non-assignment provisions or other restrictions in
leases, licenses and other contracts entered into in the ordinary course of
business, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (h) Permitted Refinancing
Indebtedness, PROVIDED that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced,
(i) in the case of clause (iii) above, any encumbrance or restriction (A) by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by the Indenture or (B) contained in
security agreements, mortgages or Capitalized Lease Obligations securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such security
agreements, mortgages or Capitalized Lease Obligations; (j) any restriction
with respect to a Restricted Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition; and (k)
customary net worth provisions contained in leases and other agreements entered
into by a Restricted Subsidiary in the ordinary course of business.
MERGER, CONSOLIDATION, OR SALE OF ASSETS. The Indenture will provide that
the Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
consolidated properties or assets in one or more related transactions, to
another corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company, under the Notes and the Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary, or the merger of a Wholly Owned Restricted Subsidiary
with or into the Company, the Company or the Person formed by or surviving any
such consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (a) will have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company, immediately preceding the
transaction and (b) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge
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Coverage Ratio test set forth in the first paragraph of the covenant described
above under the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock."
LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES. The Company will not permit any Restricted Subsidiary, directly
or indirectly, to guarantee any Indebtedness of the Company other than the
Notes (the "Other Company Indebtedness"), unless such Restricted Subsidiary
contemporaneously executes and delivers a supplemental indenture to the
Indenture providing for a Guarantee of payment of the Notes by such Restricted
Subsidiary to the same extent as the guarantee (the "Other Company Indebtedness
Guarantee") of the Other Company Indebtedness (including waiver of subrogation,
if any). The Guarantee of a Restricted Subsidiary will be subordinated in right
of payment to all existing and future Senior Debt of such Restricted Subsidiary
to the same extent as the Notes are subordinated to Senior Debt of the Company.
See "--Subordination."
Each Guarantee of the Notes created by a Restricted Subsidiary pursuant to
the provisions described in the foregoing paragraph shall be in form and
substance satisfactory to the Trustee and shall provide, among other things,
that it shall be automatically and unconditionally released and discharged upon
(i) any sale, exchange or transfer permitted by the Indenture of (a) all of the
Company's Capital Stock in such Restricted Subsidiary, or (b) the sale of all
or substantially all of the assets of the Restricted Subsidiary and upon the
application of the Net Proceeds from such sale in accordance with the
requirements of the "Asset Sales" provisions described herein; or (ii) the
release or discharge of the Other Company Indebtedness Guarantee that resulted
in the creation of such guarantee of the Notes, except a discharge or release
by or as a result of payment under such Other Company Indebtedness Guarantee.
TRANSACTIONS WITH AFFILIATES. The Indenture will provide that the Company
will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "AFFILIATE TRANSACTION"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or such Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$15 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal
or investment banking firm of national standing.
The foregoing provisions will not prohibit: (i) transactions between or
among the Company and/or its Restricted Subsidiaries; (ii) any Restricted
Payment that is permitted by the provisions of the Indenture described above
under the caption "--Restricted Payments"; (iii) any issuance of securities or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment arrangements, stock options and stock ownership
plans approved by the Board of Directors of the Company; (iv) any fees,
indemnities, loans or advances to employees in the ordinary course of business;
(v) any payment approved by the Board of Directors in connection with the
registration for sale or distribution by any Affiliate of the Company of any
Equity Interests of the Company, including reimbursements for offering
expenses, underwriting discounts and commissions; (vi) payments made to the
Federal Trade Commission or other foreign or domestic governmental agency on
behalf of any Affiliate by virtue of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or other similar federal, state or
foreign laws in connection with the acquisition by such Affiliate of additional
Equity Interests in the Company or the acquisition by the Company or any
Restricted Subsidiary of the Capital Stock or assets of another Person or the
merger by the Company or
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any Restricted Subsidiary with another Person; and (vii) any Affiliate
Transaction with Conecel or Supercanal not involving the payment of
consideration by the Company or any Restricted Subsidiary.
LIMITATION ON OTHER SENIOR SUBORDINATED DEBT. The Indenture will provide
that the Company will not incur any Indebtedness that is subordinate or junior
in right of payment to any Senior Debt of the Company and senior in any respect
in right of payment to the Notes.
PAYMENTS FOR CONSENT. The Indenture provides that neither the Company nor
any of its Restricted Subsidiaries will, directly or indirectly, pay or cause
to be paid any consideration, whether by way of interest, fee or otherwise, to
any Holder of any Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Notes
unless such consideration is offered to be paid or is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
REPORTS. The Indenture provides that, whether or not required by the rules
and regulations of the Commission, so long as any Notes are outstanding, the
Company will furnish to the Holders of Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results
of operations of the Company and its consolidated Subsidiaries and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. To the extent there is a material difference
between the consolidated financial condition and results of operations of (i)
the Company and (ii) the Company and its Restricted Subsidiaries separate from
the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company, the Company shall also include, either on the face
of the financial statements or in a footnote thereto, the Consolidated Cash
Flow and Fixed Charge Coverage Ratio of the Company and its Restricted
Subsidiaries. In addition, whether or not required by the rules and regulations
of the Commission, the Company will file a copy of all such information and
reports with the Commission for public availability (unless the Commission will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, the Company and
its Restricted Subsidiaries will agree that, for so long as any Notes remain
outstanding, they will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes (whether or not
prohibited by the subordination provisions of the Indenture); (ii) default in
payment when due of the principal of or premium, if any, on the Notes (whether
or not prohibited by the subordination provisions of the Indenture); (iii)
failure by the Company to comply with the provisions described under the
caption "--Merger, Consolidation or Sale of Assets;" (iv) failure by the
Company for 30 days after written notice by the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes to comply with any
of its obligations in the covenants described above under the captions
"--Change of Control," "--Asset Sales," "--Restricted Payments," or
"--Incurrence of Indebtedness and Issuance of Preferred Stock"; (v) the failure
by the Company for 60 days after written notice by the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Notes the Company
with any of its other agreements in the Indenture or the Notes; (vi) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Significant Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Significant Subsidiaries), whether
such Indebtedness or guarantee now exists or is created after the Closing Date,
which default (a) is caused by a failure to pay principal of or premium, if
any, or interest on such
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Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (b) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (vii) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $15.0 million and
either (a) any creditor commences enforcement proceedings upon any such
judgment or (b) such judgments are not paid, discharged or stayed for a period
of 60 days; (viii) except as permitted by the Indenture, any Guarantee of the
Notes by any Restricted Subsidiary which is a Significant Subsidiary shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect, or any Restricted Subsidiary
which is a Significant Subsidiary, or any Person acting on behalf of any
Restricted Subsidiary which is a Significant Subsidiary, shall deny or
disaffirm its obligations under any Guarantee of the Notes; and (ix) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Restricted Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
February 1, 2003 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to such date, then the premium
specified in the Indenture shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required within 30
days after becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATORS AND
STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
or any Restricted Subsidiary (other than the Company and its Restricted
Subsidiaries), as such, shall have any liability for any obligations of the
Company or such Restricted Subsidiary under the Notes, the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("LEGAL
DEFEASANCE") except for (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of and premium, interest and
Liquidated Damages, if any, on the Notes when such payments are due from the
trust referred to below, (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights,
powers, trusts, duties and immunities of the Trustee, and the Company's
obligations in connection therewith and (iv) the Legal Defeasance provisions of
the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("COVENANT DEFEASANCE") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of and premium, interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (a) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (b) since
the Closing Date, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; (vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and (viii) the Company shall have delivered
to the Trustee an Officers' Certificate and an opinion of counsel, each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note
selected for redemption. Also, the Company is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for Notes).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the redemption of the Notes
(other than provisions relating to the covenants described above under the
caption "--Repurchase at the Option of Holders"), (iii) reduce the rate of or
change the time for payment of interest on any Note, (iv) waive a Default or
Event of Default in the payment of principal of or premium, interest or
Liquidated Damages, if any, on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration), (v) make any Note payable in money other than that stated in the
Notes, (vi) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, interest or Liquidated Damages, if any, on the
Notes, (vii) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the caption
"--Repurchase at the Option of Holders"), or (viii) make any change in the
foregoing amendment and waiver provisions. In addition, any amendment to the
provisions of Article 10 of the Indenture (which relate to subordination) will
require the consent of all holders of Senior Debt, and the consent of the
Holders of at least 75% in aggregate principal amount of the Notes then
outstanding if such amendment would adversely affect the rights of Holders of
Notes.
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect
the legal rights under the Indenture of any such Holder, or to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
other
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transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue or resign.
The Holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of Notes, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this Offering Circular may obtain a copy of the
Indenture and Registration Rights Agreement without charge by writing to
MasTec, Inc., 3155 N.W. 77th Avenue, Miami, Florida 33122, Attention: Corporate
Secretary.
BOOK-ENTRY, DELIVERY AND FORM
The Notes were initially offered and sold (i) to "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) in reliance on the
exemption from the registration requirements of the Securities Act provided by
Rule 144A, (ii) to other institutional "accredited investors" (as defined in
rule 501(a)(1), (2), (3) or (7) under the Securities Act) that executed and
delivered a letter containing certain representations and agreements and (iii)
outside the United States in reliance on Regulation S under the Securities Act.
Except as set forth below, the New Notes will initially be issued in the form
of one or more registered Notes in global form without interest coupons (each a
"Global Note"). Each Global Note will be deposited with, or on behalf of, the
Depositary and will be registered in the name of Cede & Co., as nominee of the
Depositary (such nominee being referred to herein as the "GLOBAL NOTE HOLDER"),
in each case for credit to an account of a direct or indirect participant as
described below.
New Notes that are issued as described below under "--Certificated
Securities" will be issued in the form of registered definitive certificates
(the "CERTIFICATED SECURITIES"). Such Certificated Securities may, unless the
Global Notes have previously been exchanged for Certificated Securities, be
exchanged for an interest in a Global Note representing the principal amount of
Notes being transferred.
The Depositary has advised the Company that it is a limited-purpose trust
company that was created to hold securities for its participating organizations
(collectively, the "PARTICIPANTS" or the "DEPOSITARY'S PARTICIPANTS") and to
facilitate the clearance and settlement of transactions in such securities
between Participants through electronic book-entry changes in accounts of its
Participants. The Depositary's Participants include securities brokers and
dealers (including the Initial Purchasers), banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to other entities such as banks, brokers, dealers and trust
companies (collectively, the "INDIRECT PARTICIPANTS" or the "DEPOSITARY'S
INDIRECT PARTICIPANTS") that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly. Persons who are not
Participants may beneficially own securities held by or on behalf of the
Depositary only thorough the Depositary's Participants or the Depositary's
Indirect Participants.
The Company expects that, pursuant to procedures established by the
Depositary, (i) upon deposit of the Global Notes, the Depositary will credit
the accounts of Participants designated by the Exchange Agent with portions of
the principal amount of the Global Notes and (ii) ownership of the Notes
evidenced by the Global Notes will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by the Depositary
(with respect to the interests of the Depositary's Participants), the
Depositary's Participants and the Depositary's Indirect Participants.
Prospective
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purchasers are advised that the laws of some states require that certain
persons take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer Notes evidenced by the Global Notes will
be limited to such extent. For certain other restrictions on the
transferability of the Notes, see "Notice to Investors."
Beneficial interests in the one Global Note may be transferred to a person
who takes delivery in the form of a beneficial interest in another Global Note
only upon receipt by the Trustee of a written certification (in the form
provided in the Indenture) to the effect that such transfer is being made in
accordance with the Indenture and with the Securities Act and any applicable
securities laws of any state of the United States or any other jurisdiction.
Any beneficial interest in one of the Global Notes that is transferred to a
person who takes delivery in the form of a beneficial interest in another
Global Note will, upon transfer, cease to be a beneficial interest in such
Global Note and become a beneficial interest in the other Global Note and
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Note for as long as it remains such a beneficial interest.
So long as the Global Note Holder is the registered owner of any Notes,
the Global Note Holder will be considered the sole Holder under the Indenture
of any Notes evidenced by the Global Notes. Beneficial owners of Notes
evidenced by the Global Notes will not be considered the owners or Holders
thereof under the Indenture for any purpose, including with respect to the
giving of any directions, instructions or approvals to the Trustee thereunder.
Neither the Company nor the Trustee will have any responsibility or liability
for any aspect of the records of the Depositary or for maintaining, supervising
or reviewing any records of the Depositary relating to the Notes.
Payments in respect of the principal of and premium, interest and
Liquidated Damages, if any, on any Notes registered in the name of the Global
Note Holder on the applicable record date will be payable by the Trustee to or
at the direction of the Global Note Holder in its capacity as the registered
Holder under the Indenture. Under the terms of the Indenture, the Company and
the Trustee may treat the persons in whose names Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving such
payments. Consequently, neither the Company nor the Trustee has or will have
any responsibility or liability for the payment of such amounts to beneficial
owners of Notes. The Company believes, however, that it is currently the policy
of the Depositary to immediately credit the accounts of the relevant
Participants with such payments, in amounts proportionate to their respective
holdings of beneficial interests in the relevant security as shown on the
records of the Depositary. Payments by the Depositary's Participants and the
Depositary's Indirect Participants to the beneficial owners of Notes will be
governed by standing instructions and customary practice and will be the
responsibility of the Depositary's Participants or the Depositary's Indirect
Participants.
CERTIFICATED SECURITIES. Subject to certain conditions, any person having
a beneficial interest in a Global Note may, upon request to the Trustee,
exchange such beneficial interest for Notes in the form of Certificated
Securities. Upon any such issuance, the Trustee is required to register such
Certificated Securities in the name of, and cause the same to be delivered to,
such person or persons (or the nominee of any thereof). All such certificated
Notes will bear any applicable restrictive legends. In addition, if (i) the
Company notifies the Trustee in writing that the Depositary is no longer
willing or able to act as a depositary and the Company is unable to locate a
qualified successor within 90 days or (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of Notes in the
form of Certificated Securities under the Indenture, then, upon surrender by
the Global Note Holder of the Global Notes, Notes in such form will be issued
to each person that the Global Note Holder and the Depositary identify as being
the beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
SAME-DAY SETTLEMENT AND PAYMENT. The Indenture will require that payments
in respect of the Notes represented by the Global Notes (including principal,
premium, interest and Liquidated
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Damages, if any) be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Certificated
Securities, the Company will make all payments of principal, premium, interest
and Liquidated Damages, if any, by wire transfer of immediately available funds
to the accounts specified by the Holders thereof or, if no such account is
specified, by mailing a check to each such Holder's registered address.
The Notes represented by the Global Notes are expected to trade in the
Depositary's Same-Day Funds Settlement System, and any permitted secondary
market trading activity in such Notes will, therefore, be required by the
Depositary to be settled in immediately available funds. The Company expects
that secondary trading in the Certificated Securities will also be settled in
immediately available funds.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback), excluding sales and dispositions of services and ancillary products
in the ordinary course of business (PROVIDED that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole will be governed by the
provisions of the Indenture described above under the caption "--Change of
Control" and/or the provisions described above under the caption "--Merger,
Consolidation or Sale of Assets" and not by the provisions of the Asset Sale
covenant), and (ii) the issue or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries, in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $5.0 million or (b)
for net proceeds in excess of $5.0 million. Notwithstanding the foregoing, the
following will be deemed not to be Asset Sales: (i) a transfer of assets by the
Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary; (ii) an issuance of Equity Interests by a
Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary; (iii) a Restricted Payment that is permitted by the
covenant described above under the caption "--Restricted Payments;" (iv) the
disposition of obsolete, worn out or excess equipment; and (v) the sale or
other disposition of the Company's Equity Interests in Supercanal or Conecel.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents
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(however designated) of corporate stock, (iii) in the case of a partnership or
limited liability company, partnership or membership interests (whether general
or limited) and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means (i) any evidence of Indebtedness issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities of not more than one year
from the date of acquisition, (ii) certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $250.0 million and a Thompson Bank Watch Rating of "B" or
better, or whose short-term debt has the highest rating obtainable from Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P"),
(iii) any money market deposit account issued or offered by a domestic
commercial bank having capital and surplus in excess of $250.0 million and a
Thompson Bank Watch Rating of "B" or better, or whose short-term debt has the
highest rating obtainable from Moody's or S&P, (iv) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (i) and (ii) above entered into with any financial
institution meeting the qualifications specified in clause (ii) above, and (v)
commercial paper having the highest rating obtainable from Moody's or S&P, and
in each case maturing within one year after the date of acquisition.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principals or any Wholly Owned Restricted
Subsidiary of the Company; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the
Principals, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition), directly or
indirectly, of more than 40% of the Voting Stock of the Company (measured by
voting power rather than number of shares); or (iv) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"CLOSING DATE" means February 4, 1998.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent
deducted in computing such Consolidated Net Income, (i) an amount equal to any
extraordinary, nonrecurring or unusual loss or charge plus any net loss
realized in connection with an Asset Sale, (ii) provision for taxes based on
income or profits (less the tax effect attributable to minority interests),
(iii) consolidated interest expense (net of interest income) whether paid or
accrued and whether or not capitalized (including, without limitation,
prepayment penalties, premiums on Indebtedness, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), and (iv) depreciation and amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) in each case, on a consolidated
basis and determined in accordance with GAAP. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the depreciation
and amortization of, a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Restricted Subsidiary
was included in calculating the
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Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
such Restricted Subsidiary without prior approval (that has not been obtained)
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interest transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded, and (v) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date,
the sum of (a) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date, plus (b)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (i) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Closing Date
in the book value of any asset owned by such Person or a consolidated
Restricted Subsidiary of such Person, (ii) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Restricted Subsidiaries
and (iii) all unamortized debt discount and expense and unamortized deferred
charges as of such date, in each case determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the Closing Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"CREDIT FACILITY" means that certain credit agreement, dated as of June 9,
1997, by and among the Company, certain Subsidiaries of the Company named
therein, the lenders party thereto and BankBoston, N.A., as Agent, and all
agreements ancillary thereto, as such credit agreement and ancillary agreements
may be amended, restated, extended, modified, renewed, refunded, replaced,
substituted, restructured or refinanced in whole or in part from time to time
(including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplements or
modifications of the foregoing), whether with the present lenders or any other
lenders.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DESIGNATED SENIOR DEBT" means (i) any Indebtedness now or hereafter
outstanding under the Credit Facility and (ii) any other Senior Debt permitted
under the Indenture the principal amount of which is $10.0 million or more and
that has been designated by the Company as "Designated Senior Debt."
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"DISQUALIFIED STOCK" means any Capital Stock that, 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 redeemable
at the option of the Holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXISTING INDEBTEDNESS" means Indebtedness in existence on the Closing
Date, until such Indebtedness is repaid.
"FIXED CHARGES" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense (net of interest
income) of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such
Guarantee or Lien is called upon) and (iv) the product of (a) all dividend
payments, whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Restricted Subsidiary of the Company, other than
dividend payments on Equity Interests payable solely in Equity Interests of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person and its Restricted Subsidiaries for such
period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public
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Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.
"INDEBTEDNESS" means, with respect to any Person, (i) any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, (ii) all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and (iii) to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
Notwithstanding the foregoing, none of the following shall constitute
Indebtedness: (i) indebtedness arising from agreements providing for
non-competition payments, earn-out payments, indemnification or adjustment of
purchase price or from guarantees securing any obligations of the Company or
any of its Subsidiaries pursuant to such agreements, incurred or assumed in
connection with the acquisition or disposition of any business, assets or
Subsidiary of the Company, other than guarantees or similar credit support by
the Company or any of its Subsidiaries of indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; (ii) any trade payables and other
accrued current liabilities incurred in the ordinary course of business as the
deferred purchase price of property; (iii) obligations arising from Guarantees
to suppliers, lessors, licensees, contractors, or customers incurred in the
ordinary course of business; (iv) obligations (other than express Guarantees of
indebtedness for borrowed money) in respect of Indebtedness of other Persons
arising in connection with (A) the sale or discount of accounts receivable, (B)
trade acceptances and (C) endorsements of instruments for deposit in the
ordinary course of business; (v) obligations in respect of performance bonds
provided by the Company or its Subsidiaries in the ordinary course of business;
(vi) obligations arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, PROVIDED, HOWEVER, that such
obligation is extinguished within two business days of its incurrence; and
(vii) any obligations under workers' compensation laws and other similar
legislation.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding payroll, commission, travel and
similar advances to officers and employees made in the ordinary course of
business and excluding advances to customers or joint venture partners of the
Company or any Restricted Subsidiary in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender ),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment" shall exclude extensions of trade credit by the Company and its
Restricted Subsidiaries on commercially reasonable terms in accordance with
such Person's normal trade practices.
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If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "--Restricted Payments."
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale or (b) the disposition of
any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a
guarantor or otherwise); and (ii) no default with respect to which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness (other than the Notes being offered
hereby) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.; and (iii) as to which the
lenders will not have any recourse to the stock or assets of the Company or any
of its Restricted Subsidiaries.
"OBLIGATIONS" means all principal of and premium, interest (including
interest accruing after the filing of a petition initiating any proceeding
under any state, federal or foreign bankruptcy or insolvency laws, whether or
not allowable as a claim in such proceedings), penalties, fees,
indemnifications, reimbursements, gross-ups, damages and other liabilities
payable under the documentation governing any Indebtedness.
"PERMITTED INVESTMENTS" means (i) any Investment in the Company or in a
Restricted Subsidiary of the Company; (ii) any Investment in Cash Equivalents;
(iii) any Investment by the Company or any Restricted Subsidiary of the Company
in a Person, if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary of the Company or (b) such Person is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (iv) any Restricted Investment made as a
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result of the receipt of non-cash consideration from an Asset Sale that was
made pursuant to and in compliance with the covenant described above under the
caption "--Repurchase at the Option of Holders--Asset Sales;" (v) any
Investment acquired solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company; (vi) loans or advances to
employees made in the ordinary course of business of the Company or such
Restricted Subsidiary; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments; (viii)
Guarantees permitted to be made pursuant to the covenant "Incurrence of
Indebtedness and Issuance of Preferred Stock"; (ix) Investments in securities
of trade creditors received in settlement of obligations or pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of any creditors of customers; (x) Hedging Obligations; and (xi) any Investment
existing on the date of the Indenture.
"PERMITTED JUNIOR SECURITIES" means Equity Interests in the Company or
debt securities that are subordinated to all Senior Debt and any debt
securities issued in exchange for Senior Debt to substantially the same extent
as, or to a greater extent than, the Notes are subordinated to Senior Debt
pursuant to Article 10 of the Indenture.
"PERMITTED LIENS" means (i) Liens securing Senior Debt of the Company and
its Restricted Subsidiaries that was permitted by the terms of the Indenture to
be incurred; (ii) Liens in favor of the Company or any of its Restricted
Subsidiaries; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; PROVIDED that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, PROVIDED that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens existing on the Closing Date; (vii)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, PROVIDED that any reserve or
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefore; (viii) Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary of the Company with
respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; (ix)
statutory Liens or landlords', carriers', warehousemen's, mechanics',
suppliers' or similar Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company; (x) easements, minor title
defects, irregularities in title or other charges or encumbrances on property
not interfering in any material respect with the use of such property by the
Company or a Restricted Subsidiary of the Company; (xi) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or good
faith deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party; (xii) Liens securing industrial revenue bonds or other
tax-favored financing; (xiii) deposit arrangements entered into in connection
with acquisitions or in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
PROVIDED that: (i) the principal amount (or accredit value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accredit value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith); (ii) such
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Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity at least
equal to the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Restricted Subsidiary that is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"PRINCIPALS" means (a) the estate of Jorge L. Mas, Jorge Mas and any
spouse or lineal descendant of Jorge L. Mas or Jorge Mas or any spouse of any
such lineal descendant and (b) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of
the Persons referred to in clause (a).
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"SENIOR DEBT" of a Person means (i) all Indebtedness of such Person
outstanding under the Credit Facility and all Hedging Obligations with respect
thereto, whether outstanding on the date of the Indenture or thereafter
incurred, (ii) any other Indebtedness of such Person permitted to be incurred
under the terms of the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is subordinated in right of
payment to any Senior Debt of such Person and (iii) all Obligations of such
Person with respect to the foregoing. Notwithstanding anything to the contrary
in the foregoing, Senior Debt of a Person will not include (a) any liability
for federal, state, local or other taxes owed or owing by such Person, (b) any
Indebtedness of such Person to any of its Subsidiaries or other Affiliates, (c)
any trade payables or (d) any Indebtedness that is incurred in violation of the
Indenture.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: (a) is not party to
any agreement, contract, arrangement or understanding with the Company or any
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Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable, in any material
respect, to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company; (b) is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (1) to subscribe for
additional Equity Interests or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; (c) has not guaranteed or otherwise has not obligated itself
directly or indirectly to provide credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (d) has no Indebtedness
other than Non-Recourse Debt.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
Subsidiary of such Person all 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 and one or more Wholly Owned Restricted
Subsidiaries of such Person.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain United States federal income and
estate tax consequences to U.S. Holders and Non-U.S. Holders of owning and
disposing of the Notes. Hereinafter, the terms "U.S. Holder" and "Non-U.S.
Holder" refer, respectively, to holders of Notes that are or are not classified
as United States persons for United States federal income and estate tax
purposes.
This discussion does not deal with all aspects of United States federal
income and estate taxation that may be relevant to holders of Notes and does
not deal with tax consequences arising under the laws of any foreign, state or
local jurisdiction. It is, moreover, based upon the provisions of existing law
on the date hereof, including, in particular, the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations promulgated thereunder and
other administrative and judicial interpretations thereof, all of which are
subject to change at any time, with or without retroactive effect. Provisions
of existing law are also unclear in certain respects. This discussion does not
address the tax consequences to subsequent purchasers of Notes and is limited
to purchasers who hold the Notes as capital assets, within the meaning of
section 1221 of the Code. This discussion also does not address the tax
consequences to Non-U.S. Holders that are subject to United States federal
income tax on a net basis on income realized with respect to a Note because
such income is effectively connected with the conduct of a United States trade
or business. Such Non-U.S. Holders are generally taxed in a similar manner to
U.S. Holders, but certain special rules do apply. Moreover, this discussion is
for general information only and does not address all of the tax consequences
that may be relevant to particular initial purchasers in light of their
personal circumstances or to certain types of initial purchasers (such as
certain financial institutions, insurance companies, tax-exempt entities,
dealers in securities or persons who have hedged the risk of owning a Note).
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE NOTES, INCLUDING THE APPLICABILITY OF ANY FEDERAL TAX LAWS
OR ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND ANY CHANGES (OR PROPOSED CHANGES)
IN APPLICABLE TAX LAWS OR INTERPRETATIONS THEREOF.
U.S. HOLDERS
INTEREST ON NOTES. Interest on a Note will be taxable to a U.S. Holder as
ordinary interest income in accordance with the U.S Holder's method of tax
accounting at the time that such interest is accrued or (actually or
constructively) received.
DISPOSITION OF NOTES. In general, a U.S. Holder of a Note will recognize
gain or loss upon the sale, redemption, retirement or other disposition of the
Note measured by the difference between the amount of cash and fair market
value of other property received (except to the extent attributable to the
payment of accrued interest) and the U.S. Holder's adjusted tax basis in the
Note. A U.S. Holder's adjusted tax basis in a Note generally will equal the
cost of the Note to the U.S. Holder, less any principal payments received by
such U.S. Holder with respect to the Note. Any portion of the amount realized
on the sale or other disposition of a Note that represents accrued but unpaid
interest will be treated as a payment of such interest. The gain or loss on
such disposition of Notes will be a long-term capital gain or loss taxed at
lower rates than items of ordinary income if Notes have been held as capital
assets for more than one year but not more than 18 months (28%) or 18 months
(20%) at the time of such disposition and short-term capital gain or loss if
the Notes have been held for not more than 12 months.
71
<PAGE>
NON-U.S. HOLDERS
PAYMENT OF INTEREST. A Non-U.S. Holder will not be subject to United
States federal income tax by withholding or otherwise on the accrual (or
payment) of interest on a Note (provided that the beneficial owner of the Note
fulfills the statement requirements set forth in applicable Treasury
Regulations on Form W-8 or a substitute Form W-8 (or a successor form)) unless
(A) such Non-U.S. Holder actually or constructively owns 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote, or (B) such interest is effectively connected with the conduct of a trade
or business by the Non-U.S. Holder in the United States. A Non-U.S. Holder that
is not exempt from tax under such rules will be subject to United States
federal income tax withholding (provided Form 4224 is properly provided) at a
rate of 30% unless the interest is effectively connected with the conduct of a
United States trade or business.
GAIN ON DISPOSITION OF NOTES. A Non-U.S. Holder will not be subject to
United States federal income tax by withholding or otherwise on gain realized
on the disposition of a Note unless (i) in the case of a Non-U.S. Holder who is
an individual, such Non-U.S. Holder is present in the United States for a
period or periods aggregating 183 days or more during the taxable year of the
disposition (in which case such individual may be taxed as a U.S. Holder) and
certain other conditions are met, or (ii) the gain is effectively connected
with the conduct of a trade or business by the Non-U.S. Holder in the United
States.
EFFECTIVELY CONNECTED INCOME. To the extent that interest income or gain
on the disposition of Notes is effectively connected with the conduct of a
trade or business of the Non-U.S. Holder in the United States, such income will
be subject to United States federal income tax at the same rates generally
applicable to United States persons. Additionally, in the case of a non-U.S.
Holder which is a corporation, such effectively connected income may be subject
to the United States branch profits tax at the rate of 30% (or lower treaty
rates).
ESTATE TAX. Notes held at the time of death by an individual Non-U.S.
Holder will not be subject to United States federal estate tax, provided that
at such time, (i) such holder did not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the Company
entitled to vote, and (ii) the Notes were not held in connection with such
holder's trade or business in the United States.
TREATIES. Applicable treaties between the United States and a country in
which a Non-U.S. Holder is a resident may alter the tax consequences described
above.
NEW FINAL WITHHOLDING REGULATIONS. The Treasury Department recently
promulgated final regulations regarding the withholding rules described above
and backup withholding and information reporting rules described below that are
applicable to Non-U.S. Holders ("New Final Withholding Regulations"). In
general, the New Final Withholding Regulations do not significantly alter the
substantive withholding and information reporting requirements but rather unify
current certification procedures and forms and clarify reliance standards. The
New Final Withholding Regulations are generally effective for payments made
after December 31, 1998, subject to certain transition rules.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In addition to the withholding rules described above, interest and
payments of proceeds from the disposition by certain non-corporate holders of
the Notes may be subject to backup withholding at a rate of 31%. Such a U.S.
Holder generally will be subject to backup withholding at a rate of 31% unless
the recipient of such payment supplies an accurate taxpayer identification
number, as well as certain other information, or otherwise establishes, in the
manner prescribed by law, an exemption from backup withholding. Any amount
withheld under backup withholding is allowable as a credit against the U.S.
Holder's federal income tax, upon furnishing the required information.
72
<PAGE>
Generally, backup withholding of United States federal income tax at a
rate of 31% and information reporting may apply to payments of principal,
interest and premium (if any) to Non-U.S. Holders that are not "Exempt
Recipients" and that fail to provide certain information as may be required by
United States law and applicable regulations. Under currently effective United
States Treasury regulations, the payment of the proceeds of the disposition of
the Notes to or through the United States office of a broker will be subject to
information reporting and backup withholding at a rate of 31% unless the owner
certifies its status as a Non-U.S. Holder under penalties of perjury or
otherwise establishes an exemption. The proceeds of the disposition by a
Non-U.S. Holder of the Notes to or through a foreign office of a broker
generally will not be subject to backup withholding. However, if such broker is
a U.S. person, a controlled foreign corporation for United States tax purposes,
or a foreign person 50% or more of whose gross income from all sources for a
specified three-year period is from activities that are effectively connected
with a United States trade or business, information reporting will apply unless
such broker has documentary evidence (other than merely a foreign address) in
its files of the owner's status as a Non-U.S. Holder and has no actual
knowledge to the contrary. Both backup withholding and information reporting
will apply to the proceeds from such dispositions if the broker has actual
knowledge that the payee is a U.S. Holder.
Holders should consult their tax advisors regarding the application of
withholding tax, information reporting and backup withholding in their
particular situation and the availability of an exemption therefrom, and the
procedures for obtaining any such exemption including the impact of the New
Final Withholding Regulations.
LIQUIDATED DAMAGES
As more fully described under "Description of Notes--Registration Rights;
Liquidated Damages," the Company may be required to pay Liquidated Damages to
U.S. Holders of the Notes. Although the matter is not free from doubt, the
Company intends to take the position that a U.S. Holder of a Note should be
required to report any Liquidated Damages as ordinary income for United States
federal income tax purposes only at the time it accrues or is received in
accordance with such holder's method of accounting. It is possible, however,
that the Internal Revenue Service may take a different position, in which case
the timing and amount of income may be different.
EXCHANGE OFFER
The exchange of Old Notes for New Notes pursuant to the Exchange Offer
will have no United States federal income tax consequences to U.S. Holders of
Old Notes and the holding period of the New Notes will include the holding
period of the Old Notes and the basis of the New Notes will be the same as the
basis of the Old Notes immediately before the exchange.
73
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of the New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes
acquired as a result of market-making activities or other trading activities.
The Company has agreed that it will make this prospectus available to any
broker-dealer for use in connection with any such resale for a period of 180
days after the Expiration Date or until all participating broker-dealers have
so resold.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concession from any such
broker-dealer and/or the purchasers of any New Notes. Any broker-dealer that
resells New Notes that were received by it for its own account pursuant to the
Exchange Offer and any broker-dealer that participates in a distribution of New
Notes may be deemed to be an "underwriter" within the meaning of the Securities
Act, and any profit on any resale of New Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in its ordinary course of
business and has no arrangement or understanding with any person to participate
in the distribution of the New Notes to be received in the Exchange Offer.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the
Company by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami,
Florida.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and the
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1996, included and
incorporated by reference in this Prospectus, have been included and
incorporated herein in reliance on the report of Coopers & Lybrand, L.L.P.,
independent accountants, given on the authority of that Firm as experts in
accounting and auditing.
74
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
MASTEC, INC.
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants .......................................... F-2
Consolidated Statements of Income
for the years ended December 31, 1994, 1995 and 1996,
and for the nine months ended September 30, 1996 and 1997 (unaudited) ..... F-3
Consolidated Balance Sheets
as of December 1995 and 1996, and September 30, 1997 (unaudited) .......... F-4
Consolidated Statements of Stockholders' Equity
for the three years ended December 31, 1996
and the nine months ended September 30, 1997 (unaudited) .................. F-5
Consolidated Statements of Cash Flows
for the years ended December 31, 1994, 1995 and 1996,
and for the nine months ended September 30, 1996 and 1997 (unaudited) ..... F-6
Notes to Consolidated Financial Statements ................................. F-9
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of MasTec, Inc.
Miami, Florida
We have audited the accompanying consolidated balance sheets of MasTec, Inc.
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of MasTec, Inc. and
subsidiaries as of December 31, 1996 and 1995, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Miami, Florida
December 5, 1997
F-2
<PAGE>
MASTEC, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED DECEMBER 31,
----------------------------------------
1994 1995 1996
-------------- ------------ ------------
<S> <C> <C> <C>
Revenue ......................................................... $ 142,583 $ 218,859 $ 534,068
Costs of revenue ................................................ 105,451 158,598 394,497
Depreciation and amortization ................................... 5,545 8,178 13,686
General and administrative expenses ............................. 20,595 28,918 72,392
---------- --------- ---------
Operating income ............................................... 10,992 23,165 53,493
Interest expense ................................................ 3,846 5,306 11,940
Interest and dividend income .................................... 1,550 3,501 3,480
Special charges--real estate and investment write-downs ......... 0 23,086 0
Other income, net ............................................... 1,348 2,250 2,553
---------- --------- ---------
Income from continuing operations before equity in earnings
(losses) of unconsolidated companies, provision (benefit)
for income taxes and minority interest ......................... 10,044 524 47,586
Equity in earnings (losses) of unconsolidated companies ......... 247 (300) 3,040
Provision (benefit) for income taxes ............................ 2,058 (1,115) 14,665
Minority interest ............................................... 0 161 93
---------- --------- ---------
Income from continuing operations .............................. 8,233 1,500 36,054
Discontinued operations:
Income (loss) from discontinued operations, (net of applicable
income taxes) .................................................. 825 38 (177)
Net gain on disposal of discontinued operations net of a
provision of $6,405 for 1995 to write down related assets
to realizable values and including operating losses during
phase-out period, net of applicable income taxes ............... 0 2,493 66
---------- --------- ---------
Net income ...................................................... $ 9,058 $ 4,031 $ 35,943
========== ========= =========
Pro forma data(1):
Income from continuing operations before equity in earnings
(losses) of unconsolidated companies, pro forma provision
for income taxes and minority interest ......................... 10,044 524 47,586
Equity in earnings (losses) of unconsolidated companies ......... 247 (300) 3,040
Pro forma provision for income taxes(1) ......................... 3,541 148 17,492
Minority interest ............................................... 0 161 93
Discontinued operations ......................................... 825 2,531 (111)
---------- --------- ---------
Pro forma net income ............................................ $ 7,575 $ 2,768 $ 33,116
========== ========= =========
Weighted average shares outstanding(2) .......................... 25,487 25,440 26,499
========== ========= =========
Pro forma earnings per share(1)(2):
Continuing operations ........................................... $ 0.26 $ 0.01 $ 1.25
Discontinued operations ......................................... 0.03 0.10 0.00
---------- --------- ---------
$ 0.29 $ 0.11 $ 1.25
========== ========= =========
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
-------------------------
1996 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
Revenue ......................................................... $ 355,842 $ 500,133
Costs of revenue ................................................ 264,699 364,153
Depreciation and amortization ................................... 10,261 15,038
General and administrative expenses ............................. 47,603 63,101
--------- ---------
Operating income ............................................... 33,279 57,841
Interest expense ................................................ 8,577 8,413
Interest and dividend income .................................... 3,192 1,350
Special charges--real estate and investment write-downs ......... 0 0
Other income, net ............................................... 1,640 1,685
--------- ---------
Income from continuing operations before equity in earnings
(losses) of unconsolidated companies, provision (benefit)
for income taxes and minority interest ......................... 29,534 52,463
Equity in earnings (losses) of unconsolidated companies ......... 1,789 2,277
Provision (benefit) for income taxes ............................ 9,945 16,708
Minority interest ............................................... (412) (1,813)
--------- ---------
Income from continuing operations .............................. 20,966 36,219
Discontinued operations:
Income (loss) from discontinued operations, (net of applicable
income taxes) .................................................. 110 118
Net gain on disposal of discontinued operations net of a
provision of $6,405 for 1995 to write down related assets
to realizable values and including operating losses during
phase-out period, net of applicable income taxes ............... 66 0
--------- ---------
Net income ...................................................... $ 21,142 $ 36,337
========= =========
Pro forma data(1):
Income from continuing operations before equity in earnings
(losses) of unconsolidated companies, pro forma provision
for income taxes and minority interest ......................... 29,534 52,463
Equity in earnings (losses) of unconsolidated companies ......... 1,789 2,277
Pro forma provision for income taxes(1) ......................... 11,143 19,303
Minority interest ............................................... (412) (1,813)
Discontinued operations ......................................... 176 118
--------- ---------
Pro forma net income ............................................ $ 19,944 $ 33,742
========= =========
Weighted average shares outstanding(2) .......................... 26,229 27,793
========= =========
Pro forma earnings per share(1)(2):
Continuing operations ........................................... $ 0.75 $ 1.21
Discontinued operations ......................................... 0.01 0.00
--------- ---------
$ 0.76 $ 1.21
========= =========
</TABLE>
- ---------------
(1) Provision for income taxes and net income have been adjusted to reflect a
tax provision for companies which were previously S corporations.
(2) Amounts have been adjusted to reflect the three-for-two stock split
declared on February 28, 1997 and shares issued in connection with two
acquisitions accounted for under the pooling of interest method.
The accompanying notes are an integral part of these consolidated
financial statements.
F-3
<PAGE>
MASTEC, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- SEPTEMBER 30,
1995 1996 1997
------------- ------------ --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................. $ 3,084 $ 10,989 $ 2,588
Accounts receivable--net and unbilled revenue ......... 57,825 318,967 294,446
Notes receivable ...................................... 27,505 29,549 682
Inventories ........................................... 3,600 5,737 9,685
Other current assets .................................. 28,020 35,529 29,265
--------- --------- ---------
Total current assets ................................. 120,034 400,771 336,666
--------- --------- ---------
Property and equipment--at cost ........................ 68,152 95,467 119,208
Accumulated depreciation ............................... (17,580) (28,290) (39,242)
--------- --------- ---------
Property and equipment--net .......................... 50,572 67,177 79,966
Investments in unconsolidated companies ................ 14,847 30,209 63,125
Other assets ........................................... 5,819 12,997 59,544
--------- --------- ---------
TOTAL ASSETS ......................................... $ 191,272 $ 511,154 $ 539,301
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of debt ............................ $ 28,842 $ 39,916 $ 33,662
Accounts payable ...................................... 21,675 166,993 128,070
Other current liabilities ............................. 16,489 28,651 41,745
--------- --------- ---------
Total current liabilities ............................ 67,006 235,560 203,477
--------- --------- ---------
Other liabilities ...................................... 14,826 33,593 40,691
--------- --------- ---------
Long-term debt ......................................... 39,201 125,018 120,956
Convertible subordinated debentures .................... 9,625 0 0
--------- --------- ---------
Total long-term debt ................................. 48,826 125,018 120,956
--------- --------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock .......................................... 2,780 2,780 2,806
Capital surplus ....................................... 134,186 149,083 97,160
Retained earnings ..................................... 15,636 49,070 80,595
Accumulated translation adjustments ................... 1 (802) (1,553)
Treasury stock ........................................ (91,989) (83,148) (4,831)
--------- --------- ---------
Total stockholders' equity ........................... 60,614 116,983 174,177
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... $ 191,272 $ 511,154 $ 539,301
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
<PAGE>
MASTEC, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1996 AND THE NINE MONTHS ENDED SEPTEMBER
30, 1997 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK
----------------- ACCUMULATED
ISSUED CAPITAL RETAINED TRANSLATION TREASURY
SHARES AMOUNT SURPLUS EARNINGS ADJUSTMENT STOCK TOTAL
-------- -------- ----------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1993, as reported ...... 10,250 $1,025 $ 0 $ 9,918 $ 0 $ 0 $ 10,943
Acquisitions accounted for as poolings
of interest ................................ 1,371 137 5,315 5,452
------ ------ --------- --------
Balance December 31, 1993 ................... 11,621 1,162 15,233 16,395
Net income .................................. 9,058 9,058
Distributions by Pooled Companies ........... (595) (595)
Retained earnings of CT Group transferred
to capital surplus ......................... 11,165 (11,165) 0
Equity acquired in reverse acquisition ...... 16,185 1,618 122,969 (92,232) 32,355
Stock issuance costs for
reverse acquisition ........................ (18) (18)
Stock issued to employees from
treasury stock ............................. (22) 96 74
Stock issued for debentures from
treasury shares ............................ 1 1
--------- --------
Balance December 31, 1994 ................... 27,806 2,780 134,094 12,531 (92,135) 57,270
Net income .................................. 4,031 4,031
Distributions by Pooled Companies ........... (926) (926)
Stock issued to 401(k) Retirement Savings
Plan from treasury shares .................. 92 146 238
Accumulated translation adjustment .......... 1 1
-------- --------
Balance December 31, 1995 ................... 27,806 2,780 134,186 15,636 1 (91,989) 60,614
Net income .................................. 35,943 35,943
Distributions by Pooled Companies ........... (2,509) (2,509)
Cumulative effect of translation ............ (803) (803)
Stock issued from treasury stock
for options exercised ...................... 48 523 571
Tax benefit for stock option plan ........... 513 513
Stock issued from treasury stock
for an acquisition ......................... 8,844 2,201 11,045
Stock issued for Debentures from
treasury stock ............................. 5,492 6,117 11,609
--------- --------- --------
Balance December 31, 1996 ................... 27,806 2,780 149,083 49,070 (802) (83,148) 116,983
Distributions by Pooled Companies ........... (4,812) (4,812)
Net Income .................................. 36,337 36,337
Cumulative effect of translation ............ (751) (751)
Stock issued to employees from
treasury stock ............................. 92 912 1,004
Stock issued for acquisitions ............... 250 26 6,600 6,626
Stock issued for acquisitions from
treasury stock ............................. 4,479 1,603 6,082
Stock issued from treasury stock ............ 3,007 3,007
Stock issued for stock dividend from
treasury stock ............................. (75,802) 75,802 0
Tax benefit for poolings treated as asset
sales for income tax purposes .............. 9,701 9,701
--------- --------
Balance September 30, 1997 .................. 28,056 $2,806 $ 97,160 $ 80,595 $ (1,553) $ (4,831) $174,177
====== ====== ========= ========= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-5
<PAGE>
MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS FOR THE NINE MONTHS
ENDED DECEMBER 31, ENDED SEPTEMBER 30,
------------------------------------- -----------------------
1994 1995 1996 1996 1997
------------ ------------ ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income ........................................................ $ 9,058 $ 4,031 $ 35,942 $ 21,142 $
36,337
Adjustments to reconcile net income to net cash provided
by operating activities:
Minority interest ................................................. 0 (161) (93) 412
1,813
Depreciation and amortization ..................................... 5,545 8,178 13,686 10,261
15,038
Equity in (earnings) losses of unconsolidated companies ........... (247) 300 (3,040) (1,789)
(2,277)
Special charges--real estate and investments write downs .......... 0 23,086 0 0
0
Gain on sale of assets ............................................ (609) (2,823) (365) (205)
(632)
Stock issued to employees from treasury stock ..................... 74 0 0 0
0
Changes in assets and liabilities net of effect of acquisitions
and divestitures:
Accounts receivable--net and unbilled revenue .................... (10,241) (24,760) (13,057) 20,486
8,782
Inventories and other current assets ............................. 300 (2,207) (2,574) (5,742)
(924)
Other assets ..................................................... 452 (2,617) (4,657) (4,092)
(3,052)
Accounts payable ................................................. 353 10,807 26,460 3,683
(25,976)
Income and deferred taxes ........................................ 2,017 (8,338) 2,574 (1,111)
2,422
Other current liabilities ........................................ (3,161) 451 (9,151) 1,438
(884)
Net assets of discontinued operations ............................ 1,035 963 1,148 (195)
(389)
Other liabilities ................................................ (229) 1,032 (4,942) 1,405
--------- --------- --------- --------- ---
(1,783)
------
Net cash provided by operating activities ......................... 4,347 7,942 41,931 45,693
--------- --------- --------- --------- ---
28,475
------
Cash flows from investing activities:
Capital expenditures ............................................. (6,028) (17,202) (8,386) (7,359)
(17,171)
Cash acquired in acquisitions .................................... 6,585 148 1,130 999
1,702
Cash paid for acquisitions ....................................... (1,850) (1,750) (6,164) (6,164)
(24,423)
Notes to stockholders ............................................ (3,570) 0 0 0
0
Distributions from unconsolidated companies ...................... 277 245 1,365 1,338
2,130
Investments in unconsolidated companies .......................... 0 (7,408) (1,212) (1,651)
(4,165)
Investments in notes receivable .................................. 0 (25,000) 0
Repayment of notes receivable .................................... 0 443 1,273 440
1,345
Repayment of loans from stockholders ............................. 0 1,800 0 0
0
Net proceeds from sale of assets ................................. 664 24,269 9,404 9,000
--------- --------- --------- --------- ----
9,788
-----
Net cash used in investing activities ............................. (3,922) (24,455) (2,590) (3,397)
--------- --------- --------- --------- --
(30,794)
-------
Cash flows from financing activities:
Proceeds from revolving credit facilities ........................ 5,825 46,125 17,476 5,853
36,704
Other borrowings ................................................. 0 10,200 28,888 3,200
1,728
Repayment of notes to stockholders ............................... (500) (2,500) 0 0
0
Debt repayments .................................................. (8,892) (40,091) (75,280) (47,425)
(42,765)
Distribution by Pooled Companies ................................. (595) (926) (2,509) (1,821)
(4,812)
Net proceeds from common stock issued from treasury .............. 0 238 792 178
4,011
Financing costs .................................................. 0 (516) 0 0
--------- --------- --------- --------- -----
(587)
----
Net cash (used in) provided by financing activities ............... (4,162) 12,530 (30,633) (40,015)
--------- --------- --------- --------- ---
(5,721)
------
Net (decrease) increase in cash and cash equivalents .............. (3,737) (3,983) 8,708 2,281
(8,040)
Net effect of translation on cash ................................. 0 0 (803) (20)
(361)
Cash and cash equivalents--beginning of period .................... 10,804 7,067 3,084 3,084
--------- --------- --------- --------- ---
10,989
------
Cash and cash equivalents--end of period .......................... $ 7,067 $ 3,084 $ 10,989 $ 5,345 $
========= ========= ========= ========= ====
2,588
=====
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ......................................................... $ 4,241 $ 5,302 $ 10,530 $ 8,013 $
7,266
Income taxes ..................................................... $ 1,731 $ 7,527 $ 12,867 $ 8,310 $
10,437
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-6
<PAGE>
MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
(IN THOUSANDS)
Supplemental disclosure of non-cash investing and financing activities:
<TABLE>
<CAPTION>
FOR THE YEARS FOR THE NINE MONTHS
ENDED DECEMBER 31, ENDED SEPTEMBER 30,
--------------------------------- ------------------------
1994 1995 1996 1996 1997
----------- -------- ------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Acquisitions accounted for under purchase method
of accounting:
Fair value of assets acquired:
Accounts receivable .................................... $ 21,152 $ 167 $ 248,087 $ 245,940 $ 12,932
Inventories ............................................ 7,913 0 2,980 2,980 193
Other current assets ................................... 0 67 12,661 10,114 853
Property and equipment ................................. 41,955 2,688 13,148 8,750 11,999
Investments in unconsolidated companies ................ 0 0 9,373 9,373 0
Real estate and other assets ........................... 42,195 50 6,385 2,105 1,700
-------- ------ --------- --------- --------
Total non-cash assets .................................. 113,215 2,972 292,634 279,262 27,677
-------- ------ --------- --------- --------
Liabilities ............................................ 51,547 71 162,928 160,990 10,873
Long-term debt ......................................... 32,247 93 78,966 78,600 4,364
-------- ------ --------- --------- --------
Total liabilities assumed .............................. 83,794 164 241,894 239,590 15,237
-------- ------ --------- --------- --------
Net non-cash assets acquired ........................... 29,421 2,808 50,740 39,672 12,440
Cash acquired .......................................... 6,585 148 1,130 999 1,702
-------- ------ --------- --------- --------
Fair value of net assets acquired ...................... 36,006 2,956 51,870 40,671 14,142
Excess over fair value of assets acquired .............. 0 0 4,956 4,956 17,624
-------- ------ --------- --------- --------
Purchase price ......................................... $ 36,006 $2,956 $ 56,826 $ 45,627 $ 31,766
======== ====== ========= ========= ========
Note payable issued in acquisitions .................... $ 1,851 $ 800 $ 36,561 $ 36,965 $ 130
Cash paid and common stock issued for acquisitions ..... 34,155 1,750 17,340 6,169 21,562
Contingent consideration ............................... 0 406 2,250 2,250 9,895
Acquisition costs ...................................... 0 0 675 243 179
-------- ------ --------- --------- --------
Purchase price ......................................... $ 36,006 $2,956 $ 56,826 $ 45,627 $ 31,766
======== ====== ========= ========= ========
Property acquired through financing arrangements ....... $ 2,989 $9,452 $ 8,550 $ 7,596 $ 413
======== ====== ========= ========= ========
</TABLE>
<TABLE>
<S> <C>
Disposals:
Assets sold:
Accounts receivable ............. $ 2,158
Inventories ..................... 1,770
Other current assets ............ 22
Property and equipment .......... 1,832
Other assets .................... 4
--------
Total non-cash assets ............ 5,786
Liabilities ...................... 1,878
Long-term debt ................... 343
--------
Total liabilities ................ 2,221
--------
Net non-cash assets sold ......... $ 3,565
========
Sale price ....................... $ 12,350
Transaction costs ................ (521)
Note receivable .................. (450)
--------
Net cash proceeds ................ $ 11,379
========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-7
<PAGE>
MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
Supplemental disclosure of non-cash investing and financing activities:
During 1994, MasTec sold equipment in exchange for a note receivable for
$631,000.
During 1994, MasTec issued $96,000 of Common Stock from treasury stock to
its employees. Capital surplus was reduced by $22,000.
In 1995, the Company's purchase of a 33% interest in Supercanal was
financed in part by the seller for $7 million. (See Note 2.)
During 1995, MasTec issued $146,000 of Common Stock from treasury stock
for purchases made by The MasTec, Inc. 401(k) Retirement Savings Plan. Capital
surplus was increased by $92,000.
In 1996, the Company issued approximately 198,000 shares of Common Stock
for an acquisition. Common Stock was issued from treasury at a cost of $2.2
million.
In 1996, the Company converted $11.6 million of its 12% Convertible
Subordinated Debentures into Common Stock. Common Stock was issued from
treasury at a cost of $6.1 million. (See Note 6.)
In 1996, the Company's purchase of an additional 3% interest in a cable
television operator was financed in part by the sellers for $2 million. (See
Note 2.)
During 1996, MasTec issued $523,000 of Common Stock from treasury for
stock option exercises. Capital surplus was increased by $48,000.
In 1997, the Company issued approximately 173,000 shares of Common Stock
for domestic acquisitions. Common Stock was issued from treasury stock at a
cost of approximately $1.4 million. (See Note 2 for non cash transactions
related to MasTec Inepar.)
In July 1997, the Company converted a note receivable and accrued interest
thereon totaling $29 million into stock of a company. (See Note 3.)
The accompanying notes are an integral part of these consolidated financial
statements.
F-8
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
MasTec, Inc. (the "Company" or "MasTec") is one of the world's leading
contractors specializing in the build-out of telecommunications infrastructure.
The Company's principal business consists of the design, installation and
maintenance of the outside physical plant ("outside plant") for telephone and
cable television communications systems, including the installation of aerial,
underground and buried copper, coaxial and fiber optic cable networks and the
construction of wireless antenna networks for telecommunications service
companies such as local exchange carriers, competitive access providers, cable
television operators, long-distance carriers, and wireless phone companies. The
Company also installs central office equipment and designs, installs and
maintains integrated voice, data and video local and wide area networks inside
buildings ("inside wiring"). The Company believes it is the largest independent
contractor providing telecommunications infrastructure construction services in
the United States and Spain and one of the largest in Argentina, Chile and
Peru.
The Company is able to provide a full range of infrastructure services to
its telecommunications company customers. Domestically, the Company provides
outside plant services to local exchange carriers such as BellSouth
Telecommunications, Inc. ("BellSouth"), U.S. West Communications, Inc., SBC
Communications, Inc., United Telephone of Florida, Inc. (a subsidiary of Sprint
Corporation) and GTE Corp. At December 31, 1996, MasTec had 21 exclusive,
multi-year service contracts ("master contracts") with regional bell operating
companies ("RBOCs") and other local exchange carriers to provide all of their
outside plant requirements up to a specific dollar amount per job and within
certain geographic areas. Internationally, the Company provides through its
wholly owned subsidiary Sistemas e Instalaciones de Telecomunicacion, S.A.
("Sintel") outside plant services, turn-key switching system installation and
inside wiring services to Telefonica de Espana, S.A. ("Telefonica") under
multi-year contracts similar to those in the U.S.
The Company was formed through the combination of Church & Tower and
Burnup & Sims, two established names in the U.S. telecommunications
construction services industry. On March 11, 1994, the shareholders of Church &
Tower acquired 65% of the outstanding common stock of Burnup & Sims in a
reverse acquisition (the "Burnup Acquisition"). Following the change in
control, the senior management of Burnup & Sims was replaced by Church & Tower
management and the name of Burnup & Sims was changed to "MasTec, Inc." Church &
Tower is considered the predecessor company to MasTec and, accordingly, the
results of Burnup & Sims subsequent to March 11, 1994 are included in the
results of the Company.
In July and August 1997, Wilde Construction, Inc. and two related
companies ("Wilde") and AIDCO, Inc. ("Aidco") and one related company were
merged with and into the Company through an exchange of common stock. The
mergers were accounted for as poolings of interest. Accordingly, the Company's
consolidated financial statements include the results of Wilde and Aidco for
all periods presented (see Note 2).
MANAGEMENT'S ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-9
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include MasTec, Inc. and its
subsidiaries. All material intercompany accounts and transactions have been
eliminated. Certain prior year amounts have been reclassified to conform to the
current presentation.
INTERIM FINANCIAL STATEMENTS
The consolidated financial statements of MasTec as of and for the nine
months ending September 30, 1996, and 1997, presented herein, have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. As a result, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted. The
financial statements reflect all adjustments (consisting of only normal
recurring adjustments) which, in the opinion of management, are necessary to
present fairly the consolidated financial position of the Company as of
September 30, 1997 and the results of its operations and cash flows for the
nine months ended September 30, 1996 and 1997.
FOREIGN CURRENCY
The financial position and results of operations of the Company's foreign
subsidiaries are measured using local currency as the functional currency. The
Company translates foreign currency financial statements by translating balance
sheet accounts at the exchange rate on the balance sheet date and income
statement accounts at the average exchange rate for the period. Translation
gains and losses are recorded in stockholders' equity, and transaction gains
and losses are reflected in income.
REVENUE RECOGNITION
Revenue and related costs for short-term telecommunications construction
projects are recognized as the projects are completed. Revenue generated by
certain long-term construction contracts are accounted for by the
percentage-of-completion method under which income is recognized based on the
estimated stage of completion of individual contracts. Losses, if any, on such
contracts are provided for in full when they become known. Billings in excess
of costs and estimated earnings on uncompleted contracts are classified as
current liabilities. Any costs in excess of billings are classified as current
assets.
The Company also provides management, coordination, consulting and
administration services for construction projects. Compensation for such
services is recognized ratably over the term of the service agreement.
EARNINGS PER SHARE
Earnings per share is computed by dividing net income by the weighted
average number of common and common equivalent shares during the period.
Outstanding stock options are considered common stock equivalents and are
included in the calculation using the treasury stock method.
The Company's Board of Directors declared a three-for-two stock split in
the form of a stock dividend for stockholders of record on February 3, 1997
payable on February 28, 1997. All earnings per share amounts have been
calculated as if the dividend had occurred on December 31, 1993.
F-10
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
In February 1997, the Financial Accounting Standards Board (the FASB)
issued Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE
(FAS 128). FAS 128 specifies new standards designed to improve the EPS
information provided in financial statements by simplifying the existing
computational guidelines, revising the disclosure requirements, and increasing
the comparability of EPS data on an international basis. FAS 128 is effective
for financial statements issued for periods ending after December 15, 1997,
including interim periods. The Company does not believe it will have any
material effect on its EPS calculation.
CASH AND CASH EQUIVALENTS
The Company considers all short-term investments with maturities of three
months or less when purchased to be cash equivalents. The Company places its
temporary cash investments with high credit quality financial institutions. At
times, such investments may be in excess of the F.D.I.C. insurance limits. The
Company has not experienced any loss to date on these investments.
INVENTORIES
Inventories (consisting principally of material and supplies) are carried
at the lower of first-in, first-out cost or market.
PROPERTY AND EQUIPMENT, NET
Property and equipment are recorded at cost, less accumulated
depreciation. Depreciation is provided using the straight-line method over the
estimated useful life of the assets as follows: buildings and improvements--5
to 20 years, and machinery and equipment--3 to 7 years. Leasehold improvements
are amortized over the shorter of the term of the lease or the estimated useful
lives of the improvements. Expenditures for repairs and maintenance are charged
to expense as incurred. Expenditures for betterments and major improvements are
capitalized. The carrying amounts of assets sold or retired and related
accumulated depreciation are eliminated in the year of disposal and the
resulting gains and losses are included in income.
INVESTMENTS
The Company's investment in real estate located primarily in Florida,
acquired in connection with the Burnup Acquisition, is stated at its estimated
net realizable value. Investments in unconsolidated companies are accounted for
following the equity method of accounting (see Note 2).
ACCRUED INSURANCE
The Company is self-insured for certain property and casualty and worker's
compensation exposure and, accordingly, accrues the estimated losses not
otherwise covered by insurance.
INCOME TAXES
The Company records income taxes using the liability method. Under this
method, the Company records deferred taxes based on temporary taxable and
deductible differences between the tax bases of the Company's assets and
liabilities and their financial reporting bases. A valuation allowance is
established when it is more likely than not that some or all of the deferred
tax assets will not be realized.
F-11
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive
Income" which establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements. This statement requires that an
enterprise classify items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of other comprehensive
income separately from retained earnings and additional paid-in capital in the
equity section of a statement of financial position. This statement is
effective for fiscal years beginning after December 15, 1997.
In June 1997, the FASB issued SFAS No. 131 "Disclosure about Segments of
an Enterprise and Related Information" which establishes standards for public
business enterprises to report information about operating segments in annual
financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes the standards for related disclosures about
products and services, geographic areas, and major customers. This statement
requires a public business enterprise report financial and descriptive
information about its reportable operating segments. The financial information
is required to be reported on the basis that it is used internally for
evaluating segment performance and deciding how to allocate resources to
segments. Operating segments are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. This statement is effective for financial statements for
periods beginning after December 15, 1997.
Management is currently evaluating the requirements of SFAS No. 130 and
No. 131 and their applicability to the Company.
2. ACQUISITIONS AND INVESTING ACTIVITIES
INTERNATIONAL
Sistemas e Instalaciones de Telecomunicacion, S.A. ("Sintel")
On April 30, 1996, the Company purchased from Telefonica, 100% of the
capital stock of Sistemas e Instalaciones de Telecomunicacion, S.A. ("Sintel"),
a company engaged in telecommunications infrastructure construction services in
Spain, Argentina, Chile, and Peru. In Argentina, Chile and Peru, the Company
operates through unconsolidated joint ventures in which it holds interests
ranging from 38% to 50%. The purchase price for Sintel was Spanish Pesetas
("Pesetas") 4.9 billion (US$39.5 million at the then exchange rate of 124
Pesetas to one U.S. dollar). An initial payment of Pesetas 650 million ($5.1
million) was made at closing. An additional Pesetas 650 million ($4.9 million)
was paid on December 31, 1996, with the balance of the purchase price, Pesetas
3.6 billion (US$27.5 million), due in two equal installments on December 31,
1997 and 1998. Prior to April 30, 1996, as part of the terms of the purchase
and sale agreement with Telefonica, Sintel sold certain buildings to Telefonica
and Telefonica repaid certain tax credits and made a capital contribution to
Sintel collectively referred to as the "Related Transactions". The total
proceeds from the Related Transactions were approximately $41 million. The
assets and liabilities resulting from the acquisition are disclosed in the
supplemental schedule of non-cash investing and financing activities in the
Consolidated Statements of Cash Flows. The Sintel acquisition gives the Company
a significant international presence. See Note 9 regarding geographic
information.
F-12
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. ACQUISITIONS AND INVESTING ACTIVITIES--(CONTINUED)
The following information presents the unaudited pro forma condensed
results of operations for the years ended December 31, 1996 and 1995 as if the
Company's acquisition of Sintel and the Related Transactions had occurred on
January 1, 1995. The Sintel acquisition has been treated as a "purchase" as the
term is used under generally accepted accounting principles. Management's
preliminary estimate of fair value approximated that of the carrying value of
the net assets acquired after reflecting a reserve for involuntary employee
terminations of $12.4 million and deferred taxes of $4.3 million. At December
31, 1996, approximately $2.7 million remained outstanding related to the
termination reserve. The pro forma results, which include adjustments to
increase interest expense resulting from the debt incurred pursuant to the
Sintel acquisition ($700,000 and $2.4 million for 1996 and 1995, respectively),
offset by the reduction in interest and depreciation expenses resulting from
the Related Transactions ($1 million and $4.4 million for 1996 and 1995,
respectively) and a tax benefit at 35% for each period are presented for
informational purposes only and are not necessarily indicative of the future
results of operations or financial position of the Company or the results of
operations or financial position of the Company had the Sintel acquisition and
the Related Transactions occurred January 1, 1995.
<TABLE>
<CAPTION>
PRO FORMA RESULTS OF
OPERATIONS
FOR THE YEAR ENDED DECEMBER
31,
---------------------------
1995 1996
----------- -------------
(IN THOUSANDS)
<S> <C> <C>
Revenue .......................................... $ 474,361 $ 617,763
(Loss) income from continuing operations ......... (14,218) 36,423
Net (loss) income ................................ (11,687) 36,312
Earnings (loss) per share:
Continuing operations ............................ $ (0.56) $ 1.37
Discontinued operations .......................... 0.10 .00
--------- ---------
Net (loss) income ................................ $ (0.46) $ 1.37
========= =========
</TABLE>
The pro forma results for the year ended December 31, 1996 and 1995,
include special charges incurred by Sintel related to a restructuring plan of
$1.4 million and $21.1 million, net of tax, respectively.
On July 31, 1997, the Company completed its acquisition of 51% of MasTec
Inepar S/A-Sistemas de Telecomunicaoes, a newly formed Brazilian
telecommunications infrastructure contractor, for $29.4 million in cash payable
over eleven months and 250,000 shares of common stock. Goodwill related to this
acquisition amounted to $12.1 million is included in other long-term assets and
is being amortized over 15 years.
DOMESTIC
During 1996 and 1995, the Company completed certain other acquisitions
which have also been accounted for under the purchase method of accounting and
the results of operations have been included in the Company's consolidated
financial statements from the respective acquisition dates. If the acquisitions
had been made at the beginning of 1996 or 1995, pro forma results of operations
would not have differed materially from actual results. Acquisitions made in
1996 were Carolina ComTec, Inc., a privately held company engaged in installing
and maintaining voice, data and video networks and
F-13
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. ACQUISITIONS AND INVESTING ACTIVITIES--(CONTINUED)
Harrison-Wright Company Inc., one of the oldest telecommunications contractors
in the southeastern United States. In 1995, the Company acquired Utility Line
Maintenance, a privately held company engaged in the utility right of way
clearance business.
In July 1997, the Company completed the acquisition of Wilde which
provides telecommunications and cable television infrastructure services in
Minnesota, North and South Dakota, Iowa, Nebraska and other bordering states.
In August 1997, the Company completed the acquisition of Aidco, a company
engaged in the installation and maintenance of voice, data and video local-area
networks in the Western and Midwestern states. These acquisitions were
consummated through stock-for-stock exchanges in which the Company issued
approximately 1,371,000 shares of common stock. The Company has accounted for
these mergers under the pooling of interest method. Accordingly, historical
financial information has been restated to reflect the mergers as though they
occurred as of the earliest period presented. These acquisitions are
collectively referred to as the "Pooled Companies".
During the nine months ended September 30, 1997, the Company completed
other acquisitions which have been accounted for under the purchase method of
accounting and the results of operations of which have been included in the
Company's condensed consolidated financial statements from the respective
acquisition dates. If the acquisitions had been made at the beginning of 1997
or 1996, pro forma results of operations would not have differed materially
from actual results. Acquisitions made in 1997 were Kennedy Cable Construction,
Inc., GJS Construction Co. d/b/a Somerville Construction and Shanco
Corporation, three contractors servicing multiple systems operators such as
Time Warner, Marcus Cable Co. and Cox Communications in a number of states
including Alabama, Arizona, Florida, Georgia, New Jersey, New York, North
Carolina, South Carolina and Texas; and R.D. Moody and Associates, Inc., B&D
Contractors of Shelby, Inc., Tele-Communications Corporation of Virginia, E.L.
Dalton & Company, Inc., and R.D. Moody and Associates of Virginia, Inc., five
telecommunications and utility contractors with operations primarily in the
southeastern and southwestern United States.
Intangible assets of approximately $20 million resulting from domestic
business acquisitions are included in other long-term assets and principally
consist of the excess acquisition cost over the fair value of the net assets
acquired (goodwill). Goodwill associated with domestic acquisitions is being
amortized on a straight-line basis over a range of 15-20 years. The Company
periodically reviews goodwill to assess recoverability.
F-14
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. ACQUISITIONS AND INVESTING ACTIVITIES--(CONTINUED)
Separate results of the Pooled Companies for the periods prior to the
consummation of the combinations, including a pro forma adjustment for income
taxes related to the Subchapter S status of certain Pooled Companies are as
follows:
<TABLE>
<CAPTION>
POOLED
MASTEC COMPANIES COMBINED
----------- ----------- -----------
<S> <C> <C> <C>
Year ended December 31, 1994
Total revenue ..................... $111,294 $31,289 $142,583
Net income ........................ $ 6,633 $ 942 $ 7,575
Year ended December 31, 1995
Total revenue ..................... $174,583 $44,276 $218,859
Net (loss) income ................. $ (609) $ 3,377 $ 2,768
Year ended December 31, 1996
Total revenue ..................... $472,800 $61,268 $534,068
Net income ........................ $ 30,065 $ 3,051 $ 33,116
Nine months ended September 30, 1996
Total revenue ..................... $313,575 $42,267 $355,842
Net income ........................ $ 19,606 $ 338 $ 19,944
Nine months ended September 30, 1997
Total revenue ..................... $456,203 $43,930 $500,133
Net income ........................ $ 29,071 $ 4,671 $ 33,742
</TABLE>
INVESTING ACTIVITIES
In July 1996, the Company contributed its 36% ownership interest in
Supercanal, S.A., a cable television operator in Argentina, to a holding
company. Concurrently, Multicanal, S.A., one of the leading cable television
operators in Argentina, acquired a 20% interest in the holding company for
approximately $17 million in cash. The Company's interest in the holding
company was reduced to approximately 28.8% as a result of Multicanal's
investment. At December 31, 1996, the Company's investment was $16.0 million.
In July 1995, the Company made a $25 million non-recourse term loan to
Devono Company Limited, a British Virgin Islands corporation ("Devono"). The
loan was collateralized by 40% of the capital stock of a holding company that
owns 52.6% of the capital stock of Consorcio Ecuatoriano de Telecomunicaciones,
S.A. ("Conecel"), one of two cellular phone operators in the Republic of
Ecuador. In June 1997, the Company converted its loan and accrued interest into
the stock of the holding company. In December 1997, the Company sold its
investment for $20.0 million in cash and the right to receive Conecel
non-voting stock upon a public offering by Conecel.
Goodwill related to the Company's investments in unconsolidated companies
amounted to $38.3 million at September 30, 1997 and is being amortized over a
period of 17-20 years.
3. ACCOUNTS RECEIVABLE--NET
Accounts receivable are net of an allowance for doubtful accounts of
$1,404,000, $1,009,000 and $3,065,000 at December 31, 1994, 1995 and 1996,
respectively. The Company recorded a provision for doubtful accounts of
$268,000, $425,000 and $1,083,000 during 1994, 1995 and 1996, respectively. In
addition, the Company recorded write-offs of $596,000, $683,000 and $77,000
during 1994, 1995 and 1996, respectively and in 1996 transferred from other
accounts $883,000.
F-15
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
3. ACCOUNTS RECEIVABLE--NET--(CONTINUED)
Accounts receivable include retainage which has been billed but is not due
until completion of performance and acceptance by customers, and claims for
additional work performed outside original contract terms. Retainage aggregated
$2.8 million and $4.1 million at December 31, 1995 and 1996, respectively.
4. PROPERTY AND EQUIPMENT
Property and equipment is comprised of the following as of December 31,
1995 and 1996 (in thousands):
<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Land .................................... $ 7,030 $ 7,583
Buildings and improvements .............. 4,528 6,754
Machinery and equipment ................. 55,002 77,254
Office furniture and equipment .......... 1,592 3,876
--------- ---------
68,152 95,467
Less-accumulated depreciation ........... (17,580) (28,290)
--------- ---------
$ 50,572 $ 67,177
========= =========
</TABLE>
F-16
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
5. DEBT
Debt is comprised of the following (in thousands):
<TABLE>
<CAPTION>
AT DECEMBER 31, AT
--------------------------- SEPTEMBER 30,
1995 1996 1997
------------ ------------ --------------
<S> <C> <C> <C>
Revolving Credit Facility at LIBOR plus 1.25%
(6.93% at September 30, 1997) .............................. $ 0 $ 0 $ 82,425
Fleet Credit Facility at LIBOR plus 2.00%-2.25%
(7.75%-8.00% at December 31, 1995 and 7.75%-7.94%
at December 31, 1996) ...................................... 34,244 46,865 0
Revolving credit facility, at MIBOR plus 0.30%
(7.00% at December 31, 1996 and 6.01% at
September 30, 1997, due on November 1, 1998) ............... 0 43,613 14,717
Other bank facilities, denominated in Spanish pesetas, at
interest rates from 8.1% to 9.3% at December 31, 1996
and from 5.6% to 6.75% at September 30, 1997 ............... 0 11,048 16,887
Notes payable for equipment, at interest rates from 7.5%
to 8.5% due in installments through the year 2000 .......... 20,261 28,607 14,694
Notes payable for acquisitions, at interest rates from
7% to 8% due in installments through February 2000 ......... 8,382 32,253 25,895
Real estate mortgage notes, at interest rates from 8.5%
to 8.53% ................................................... 2,531 2,548 0
12% Convertible Subordinated Debentures ..................... 12,250 0 0
--------- --------- ---------
Total debt .................................................. 77,668 164,934 154,618
Less current maturities ..................................... (28,842) (39,916) (33,662)
--------- --------- ---------
Long term debt .............................................. $ 48,826 $ 125,018 $ 120,956
========= ========= =========
</TABLE>
Not included in the preceding table at December 31, 1995 and 1996 is
approximately $2.2 million and $1.9 million, respectively, in capital leases
related to discontinued operations (see Note 13).
In June 1997, the Company obtained a $125 million revolving credit
facility ("Revolving Credit Facility"), from a group of financial institutions
led by BankBoston, N.A. maturing on June 9, 2000 to replace the Fleet Credit
Facility and certain other domestic debt. As a result of the prepayment of the
Fleet Credit Facility, deferred financing costs and a termination fee totaling
$690,000 were expensed in the second quarter of 1997.
Additionally, the Company has several credit facilities denominated in
Pesetas, one of which is a revolving credit facility with a wholly-owned
finance subsidiary of Telefonica. Interest on this facility accrues at MIBOR
(Madrid interbank offering rate) plus .30%. At December 31, 1996 and September
30, 1997, the Company had $82.1 million (11.3 billion Pesetas) and $55.8
million (8.3 billion Pesetas), respectively, of debt denominated in Pesetas,
including $27.4 million and $24.2 million, respectively remaining under the
acquisition debt incurred pursuant to the Sintel acquisition (see Note 2).
F-17
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
5. DEBT--(CONTINUED)
Debt agreements contain, among other things, restrictions on the payment
of dividends and require the observance of certain financial covenants such as
minimum levels of cash flow and tangible net worth.
In May 1996, the Company called its 12% Convertible Subordinated
Debentures (the "Debentures") effective June 30, 1996. The Debentures were
converted into Common Stock increasing the number of shares outstanding by
690,456.
At December 31, 1996 debt matures as follows:
<TABLE>
<S> <C>
1997 ............... $ 39,916
1998 ............... 76,667
1999 ............... 9,717
2000 ............... 5,741
2001 ............... 4,548
after 2001 ......... 28,345
--------
Total .............. $164,934
========
</TABLE>
6. STOCK OPTION PLANS
The Company's only employee stock option plan currently in effect is the
1994 Stock Incentive Plan (the "1994 Plan"). However, options which were
outstanding under the Company's 1976 and 1978 stock option plans at the time of
the Burnup Acquisition remain outstanding in accordance with the terms of the
respective plans. Approximately 49,200 shares have been reserved for and may
still be issued in accordance with the terms of such plans. Compensation
expense of $589,000 and $51,000 was recorded in 1996 and 1995, respectively,
related to the 1976 plan. Shares underlying stock options and exercise prices
have been adjusted to reflect the three-for-two stock split declared in 1997 by
the Board of Directors.
The 1994 Plan authorizes the grant of options or awards of restricted
stock up to 1,200,000 shares of the Company's Common Stock, of which 300,000
shares may be awarded as restricted stock. As of December 31, 1996, options to
purchase 732,000 shares had been granted. Options become exercisable over a
five year period in equal increments of 20% per year beginning the year after
the date of grant and must be exercised within ten years from the date of
grant. Options are issued with an exercise price no less than the fair market
value of the Common Stock at the grant date.
The Company also adopted the 1994 Stock Option Plan for Non-Employee
Directors (the "Directors' Plan"). The Directors' Plan authorized the grant of
options to purchase up to 600,000 shares of the Company's Common Stock to the
non-employee members of the Company's Board of Directors. Options to purchase
112,500 shares have been granted to Board members through 1996. The options
granted become exercisable ratably over a three year period from the date of
grant and may be exercised for a period of up to ten years beginning the year
after the date of grant at an exercise price equal to the fair market value of
such shares on the date the option is granted.
In addition, during 1994 options to purchase 150,000 shares of Common
Stock at $3.83 per share were granted to a director outside the Directors' Plan
in lieu of the Director's Plan and annual fees paid
F-18
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
6. STOCK OPTION PLANS--(CONTINUED)
to the director. Compensation expense of $42,500 in connection with the
issuance of this option is being recognized annually over the five year vesting
period. The options are exercisable ratably over a five year period beginning
the year after the date of grant and may be exercised for a period of up to ten
years beginning the year after the date of grant.
The following is a summary of all stock option transactions:
<TABLE>
<CAPTION>
WEIGHTED
AVG. FAIR
WEIGHTED AVG. EXERCISE VALUE OF
SHARES EXERCISE PRICE PRICE OPTIONS GRANTED
----------- ---------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Outstanding December 31, 1994 ......... 407,700 $ 4.62 $ 0.10 - $ 5.29
Granted ............................... 303,000 8.48 $ 6.83 - $ 8.92 $ 4.22
Exercised ............................. (3,150) 5.29 $ 0.10 - $ 5.29
Canceled .............................. (32,250) 3.94 $ 0.10 - $ 8.92
------- ------
Outstanding December 31, 1995 ......... 675,300 6.11 $ 0.10 - $ 8.92
Granted ............................... 306,000 16.96 $ 7.42 - $28.58 $ 9.23
Exercised ............................. (81,600) 6.02 $ 0.10 - $ 8.92
Canceled .............................. (2,700) 5.29 $ 8.92 - $ 8.92
------- ------
Outstanding December 31, 1996 ......... 897,000 $ 9.81 $ 0.10 - $28.58
======= ======
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------------ --------------------------
NUMBER WTD. AVG. WTD. AVG. NUMBER WTD. AVG.
RANGE OF OUTSTANDING REMAINING EXERCISE EXERCISABLE EXERCISE
EXCERCISE PRICES AT 12/31/96 CONTRACTUAL LIFE PRICE AT 12/31/96 PRICE
- -------------------------- ------------- ------------------ ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
0.10 .................. 17,850 6.4 $ 0.10 5,400 $ 0.10
1.33 .................. 21,000 6.4 1.33 9,570 1.33
3.83 - 5.29 ........... 281,250 7.2 4.51 85,470 4.51
6.68 - 8.92 ........... 368,400 8.7 8.28 38,700 8.83
21.25 - 28.58 ......... 208,500 9.6 21.38 0 0.00
------- --- ------ ------ -------
0.10 - 28.58 .......... 897,000 8.3 $ 9.82 139,140 $ 5.32
======= === ====== ======= =======
</TABLE>
F-19
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
6. STOCK OPTION PLANS--(CONTINUED)
As of December 31, 1996, the Company adopted the disclosure provisions of
Financial Accounting Standards Board Statement No. 123, "Accounting for
Stock-Based Compensation." Accordingly, the Company is required to disclose pro
forma net income and earnings per share both for 1996 and 1995 as if
compensation expense relative to the fair value of the options granted had been
included in earnings. The fair value of each option grant was estimated using
the Black-Scholes option-pricing model with the following assumptions used for
grants in 1996 and 1995, respectively: a five year expected life for all years;
volatility factors of 51% for both years; risk-free interest rates of 6.13% and
5.94%, respectively; and no dividend payments. Had compensation cost for the
Company's options plans been determined and recorded consistent with FASB
Statement No. 123, the Company's net income and earnings per share would have
been reduced to the pro forma amounts as follows:
<TABLE>
<CAPTION>
1995 1996
----------- ------------
<S> <C> <C>
Net income (loss):
As reported, including pro forma tax adjustment ......... $ 2,671 $ 33,116
Pro forma ............................................... 2,400 32,262
Earnings per share:
As reported, including pro forma tax adjustment ......... $ 0.11 $ 1.25
Pro forma ............................................... $ 0.09 $ 1.22
</TABLE>
The 1996 and 1995 pro forma effect on net income is not necessarily
representative of the effect in future years because it does not take into
consideration pro forma compensation expense related to grants made prior to
1995 and does not reflect a tax benefit related to the compensation expense as
such benefit would be reflected directly in stockholders' equity given that the
options are considered incentive stock options.
7. INCOME TAXES
On March 11, 1994, the Company became a taxable corporation and the effect
of recognizing the change in tax status of approximately $435,000 is included
in the provision for income taxes for the year ended December 31, 1994.
The provision (benefit) for income taxes consists of the following (in
thousands):
<TABLE>
<CAPTION>
1994 1995 1996
--------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal ..................................... $2,177 $ 5,541 $ 9,896
Foreign ..................................... 5,347
State and local ............................. 375 (284) 1,536
------ -------- --------
Total current ................................ 2,552 5,257 16,779
------ -------- --------
Deferred:
Federal ..................................... (422) (5,879) (1,895)
State and local ............................. (72) (493) (218)
------ -------- --------
Total deferred ............................... (494) (6,372) (2,113)
------ -------- --------
Provision (benefit) for income taxes ......... 2,058 (1,115) 14,666
Discontinued operations ...................... 552 135 (70)
------ -------- --------
Total ...................................... $2,610 $ (980) $ 14,596
====== ======== ========
</TABLE>
F-20
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. INCOME TAXES--(CONTINUED)
The tax effects of significant items comprising the Company's net deferred
tax liability as of December 31, 1995 and 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Deferred tax assets:
Accrued self insurance .................................. $ 2,773 $ 3,050
Operating loss and tax credit carry forward ............. 543 525
Accrual for disposal of discontinued operations ......... 1,503 1,147
All other ............................................... 2,708 4,774
------- -------
Total deferred tax assets ............................... 7,527 9,496
------- -------
Deferred tax liabilities:
Property and equipment .................................. 5,873 5,817
Asset revaluations ...................................... 2,604 5,462
All other ............................................... 2,820 1,718
------- -------
Total deferred tax liabilities .......................... 11,297 12,997
Valuation allowance ..................................... 400 500
------- -------
Net deferred tax liabilities ............................ $ 4,170 $ 4,001
======= =======
</TABLE>
The net change in the valuation allowance for deferred tax assets in 1996
was an increase of $100,000. The change relates primarily to state capital
losses generated in the current year which management believes will more likely
than not be realized.
Deferred tax assets of $2,096,000 and $1,068,000 for 1996 and 1995,
respectively, have been recorded in current assets in the accompanying
consolidated financial statements.
A reconciliation of U.S. statutory federal income tax expense on the
earnings from continuing operations is as follows:
<TABLE>
<CAPTION>
1994 1995 1996
--------- ----------- ---------
<S> <C> <C> <C>
U.S. statutory federal rate applied to pretax income .......... 34 % 35 % 35 %
State and local income taxes .................................. 4 0 2
Effect of dividend exclusion .................................. (2) (49) 0
Change in tax status .......................................... (8) 0 0
Foreign loss producing no tax benefit ......................... 0 62 0
Adjustment of prior years' taxes .............................. 0 (46) 0
Change in federal statutory tax rate .......................... 0 82 0
Change in state tax filing status ............................. 0 (77) 0
Income from S corporations accounted for as poolings .......... (7) (240) (5)
Other ......................................................... (1) 20 (1)
------ -------- ----
Provision (benefit) for income taxes .......................... 20 % (213)% 31 %
===== ======== =====
</TABLE>
No provision was made in 1996 for U.S. income taxes on the undistributed
earnings of the foreign subsidiaries as it is the Company's intention to
utilize those earnings in the foreign operations for an indefinite period of
time or repatriate such earnings only when tax effective to do so. At December
31, 1996, undistributed earnings of the foreign subsidiaries amounted to $12.5
million. If the earnings of such foreign subsidiaries were not indefinitely
reinvested, a deferred tax liability of $1.3 million would have been required.
F-21
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. INCOME TAXES--(CONTINUED)
The Internal Revenue Service (the "IRS") is currently examining the tax
returns of Burnup & Sims for the fiscal years ended April 30, 1989 through
April 30, 1993. The Company has filed a protest with the appellate level of the
IRS regarding assessments made for the years 1989 through 1991. Adjustments, if
any, as a result of this audit will be recorded as an adjustment to purchase
accounting.
8. CAPITAL STOCK
The Company has authorized 50,000,000 shares of Common Stock. At December
31, 1996 and 1995, 27,805,849 shares of Common Stock were issued, 26,992,169
and 25,453,619 shares were outstanding (adjusted for the stock split and
pooling transactions) (see Note 2), respectively, and 813,680 and 2,352,230
were held in treasury, at cost (after giving effect to the stock split paid in
the form of a dividend from treasury stock), respectively.
At the date of the Burnup Acquisition, the Company transferred Church &
Tower's previously reported undistributed earnings and profits of approximately
$11,165,000 to capital surplus.
At December 31, 1996 and 1995, the Company had 5,000,000 shares of
authorized but unissued preferred stock.
9. OPERATIONS BY GEOGRAPHIC AREAS
The Company's principal source of revenue is derived from
telecommunications infrastructure construction services in the United States
and Spain. The Company did not have significant international operations in
1995 or 1994, accordingly, geographic information for 1996 and subsequent is
presented below:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
-------------------- --------------------------
1996 1996 1997
-------------------- ------------ -----------
<S> <C> <C> <C>
Revenue
Domestic .............. $ 345,913 $ 248,553 $309,787
International ......... 188,155 107,289 190,346
--------- --------- --------
Total .................. $ 534,068 $ 355,842 $500,133
========= ========= ========
Operating income
Domestic .............. $ 33,760 $ 22,757 $ 42,760
International ......... 19,733 10,522 15,081
--------- --------- --------
Total .................. $ 53,493 $ 33,279 $ 57,841
========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, AT SEPTEMBER 30,
1996 1997
----------------- -----------------
<S> <C> <C>
Identifiable assets
Domestic .............. $ 147,065 $ 209,186
International ......... 258,071 173,290
Corporate ............. 106,018 156,825
--------- ---------
Total .................. $ 511,154 $ 539,301
========= =========
</TABLE>
F-22
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. OPERATIONS BY GEOGRAPHIC AREAS--(CONTINUED)
There are no transfers between geographic areas. Operating income consists
of revenue less operating expenses, and does not include interest expense,
interest and other income, equity in earnings of unconsolidated companies,
minority interest and income taxes. Domestic operating income is net of
corporate general and administrative expenses. Identifiable assets of
geographic areas are those assets used in the Company's operations in each
area. Corporate assets include cash and cash equivalents, investments in
unconsolidated companies, net assets of discontinued operations, real estate
held for sale and notes receivable.
10. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK
The Company derives a substantial portion of its revenue from providing
telecommunications infrastructure services to Telefonica and to BellSouth.
During 1994 and 1995, the Company derived revenue from BellSouth of
approximately $48.3 million and $73.1 million, respectively. For the year ended
December 31, 1996, approximately 31% and 13% of the Company's revenue was
derived from services performed for Telefonica and BellSouth, respectively.
Revenue generated by Sintel from Telefonica is included from May 1, 1996 (see
Note 2). For the nine months ended September 30, 1996, the Company derived
approximately 28% and 15% of its revenue from services performed for Telefonica
and BellSouth, respectively. For the nine months ended September 30, 1997,
approximately 27% and 13% of the Company's revenue was derived from services
performed for Telefonica and BellSouth, respectively. Accounts receivable from
the Company's two largest customers at December 31, 1995 and 1996 were $19.3
million and $194.2 million, respectively. Although the Company's strategic plan
envisions diversification of its customer base, the Company anticipates that it
will continue to be dependent on Telefonica and its affiliates and BellSouth
for a significant portion of its revenue in the future.
11. COMMITMENTS AND CONTINGENCIES
In December 1990, Albert H. Kahn, a stockholder of the Company, filed a
purported class action and derivative suit in Delaware state court against the
Company, the then-members of its Board of Directors, and National Beverage
Corporation ("NBC"), the Company's then-largest stockholder. The complaint
alleges, among other things, that the Company's Board of Directors and NBC
breached their respective fiduciary duties in approving certain transactions,
including the distribution in 1989 to the Company's stockholders of all of the
common stock of NBC owned by the Company and the exchange by NBC of shares of
common stock of the Company for certain indebtedness of NBC to the Company. The
lawsuit seeks to rescind these transactions and to recover damages in an
unspecified amount.
In November 1993, Mr. Kahn filed a class action and derivative complaint
against the Company, the then-members of its Board of Directors, Church &
Tower, Inc. and Jorge L. Mas, Jorge Mas and Juan Carlos Mas, the principal
shareholders of Church & Tower, Inc. The 1993 lawsuit alleges, among other
things, that the Company's Board of Directors and NBC breached their respective
fiduciary duties by approving the terms of the acquisition of the Company by
the Mas family, and that Church & Tower, Inc. and its principal shareholders
had knowledge of the fiduciary duties owed by NBC and the Company's Board of
Directors and knowingly and substantially participated in the breach of these
duties. The lawsuit also claims derivatively that each member of the Company's
Board of Directors engaged in mismanagement, waste and breach of fiduciary
duties in managing the Company's affairs prior to the acquisition by the Mas
Family.
F-23
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
11. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
The Company believes that the allegations in each of the lawsuits are
without merit and intends to defend these lawsuits vigorously.
In August 1997, the Company settled its lawsuit with BellSouth arising
from certain work performed by a subcontractor of the Company from 1991 to 1993
for nominal consideration.
In November 1997, Church & Tower filed a lawsuit against Miami-Dade County
(the "County") in the Circuit Court of the Eleventh Judicial Circuit in and for
Dade County, Florida alleging breach of contract and seeking damages in
connection with the County's refusal to pay amounts due to Church & Tower under
a multi-year agreement to perform road restoration work for the Miami-Dade
Water and Sewer Department ("MWSD"), a department of the County, and the
County's wrongful termination of the agreement. The County has refused to pay
amounts due to Church & Tower under the agreement until alleged overpayments
under the agreement have been resolved. The County has also refused to award a
new road restoration agreement for MWSD to Church & Tower, which was the low
bidder for the new agreement. The Company believes that any amounts due to the
County under the existing agreement are not material and may be recoverable in
whole or in part from Church & Tower subcontractors who actually performed the
work and whose bills were submitted directly to the County.
The Company is a party to other pending legal proceedings arising in the
normal course of business, none of which the Company believes is material to
the Company's financial position or results of operations.
In 1990, Trilogy Communications, Inc. filed suit against Excom Realty,
Inc., a wholly owned subsidiary of the Company, for damages and declaratory
relief. The Company counterclaimed for damages. On May 1, 1995, the Company
settled its counterclaim for $1.3 million, which is recorded as other income in
the accompanying consolidated financial statements.
In connection with certain contracts, the Company has signed certain
agreements of indemnity in the aggregate amount of approximately $100.2
million, of which approximately $62.3 million relate to the uncompleted portion
of contracts in process. These agreements are to secure the fulfillment of
obligations and performance of the related contracts.
Federal, state and local laws and regulations govern the Company's
operation of underground fuel storage tanks. The Company is in the process of
removing, restoring and upgrading these tanks, as required by applicable laws,
and has identified certain tanks and surrounding soil which will require
remedial cleanups.
12. FAIR VALUE
For certain of the Company's financial instruments, including cash and
cash equivalents, accounts and notes receivable, accounts payable and other
liabilities, the carrying amounts approximate fair value due to their short
maturities. Long-term floating rate notes are carried at amounts that
approximate fair value.
The Company uses letters of credit to back certain insurance policies. The
letters of credit reflect fair value as a condition of their underlying purpose
and are subject to fees competitively determined in the market place.
F-24
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
12. FAIR VALUE--(CONTINUED)
The estimated fair values may not be representative of actual values of
the financial instruments that could have been realized as of year end or that
will be realized in the future.
13. DISCONTINUED OPERATIONS AND REAL ESTATE HELD FOR SALE
In the third quarter of 1995, the Company determined to concentrate its
resources and better position itself to achieve its strategic growth objectives
by disposing of all of the general products segment that the Company acquired
as part of the Burnup Acquisition. These operations and assets include
Southeastern Printing Company, Inc. ("Southeastern"), Lectro Products, Inc.
("Lectro") and Floyd Theatres, Inc. ("Floyd Theatres").
In March 1995, the Company sold the indoor theater assets of Floyd
Theatres for approximately $11.5 million. A gain of $1.5 million, net of tax,
resulted from this transaction in the first quarter of 1995. In August 1995,
the Company sold the stock of Lectro for $11.9 million in cash and a note
receivable of $450,000. A gain of $5.9 million, net of tax, was recorded in the
third quarter of 1995 related to the sale of Lectro. In January 1997, the
Company sold the assets of Southeastern at its carrying value for approximately
$2.1 million in cash and a note for $500,000.
As part of the acquisition of Harrison-Wright (see Note 2), the Company
purchased the assets of Utility Pre-cast, Inc. The Company intends to sell the
pre-cast business and accordingly has reflected the net assets of approximately
$4.2 million as a discontinued operation.
Included in other current assets in the accompanying balance sheet is
approximately $15.7 million and $17.7 million of real estate held for sale at
December 31, 1996 and 1995, respectively.
Discontinued operations include management's best estimates of the amounts
expected to be realized on the sale of these assets. While the estimates are
based on current negotiations, the amounts the Company will ultimately realize
could differ materially in the near term from the amounts assumed in arriving
at the loss on disposal of the discontinued operations.
Summary operating results of discontinued operations, excluding net gains
on disposal and estimated loss during the phase-out period, are as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1995 1996
---------- ----------- ----------
<S> <C> <C> <C>
Revenue ................................................. $29,902 $ 21,952 $12,665
======= ======== =======
Earnings (loss) before income taxes ..................... $ 1,377 $ 58 $ (288)
Provision (benefit) for income taxes .................... 552 20 (111)
------- -------- -------
Net income (loss) from discontinued operations .......... $ 825 $ 38 $ (177)
======= ======== =======
</TABLE>
F-25
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
14. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER(2) QUARTER(3) QUARTER(4) TOTAL
------------ ------------ ------------ ------------ -------------
(DOLLARS IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<S> <C> <C> <C> <C> <C>
1995:
Revenue ........................................... $ 40,422 $ 48,375 $ 60,092 $ 69,970 $ 218,859
======== ======== ======== ======== =========
Operating income .................................. $ 6,232 $ 4,814 $ 6,161 $ 5,958 $ 23,165
======== ======== ======== ======== =========
Income (loss) from continuing operations .......... $ 3,460 $ 3,789 $ (5,892) $ (1,120) $ 237
Income (loss) from discontinued operations
including gain (loss) on disposal, net of
taxes ............................................ 1,709 205 1,551 (934) 2,531
-------- -------- -------- -------- ---------
Net income (loss) ................................. $ 5,169 $ 3,994 $ (4,341) $ (2,054) $ 2,768
======== ======== ======== ======== =========
Earnings per share(1)(5):
Income (loss) from continuing operations ......... $ 0.13 $ 0.15 $ (0.23) $ (0.05) $ 0.01
Income (loss) from discontinued operations 0.07 0.00 0.06 ( 0.03) 0.10
-------- -------- -------- --------- ---------
$ 0.20 $ 0.15 $ (0.17) $ (0.08) $ 0.11
======== ======== ======== ========= =========
1996:
Revenue ........................................... $ 70,670 $122,964 $162,208 $ 178,226 $ 534,068
======== ======== ======== ========= =========
Operating income .................................. $ 5,954 $ 10,194 $ 17,131 $ 20,214 $ 53,493
======== ======== ======== ========= =========
Income from continuing operations ................. $ 3,371 $ 5,645 $ 10,752 $ 13,459 $ 33,227
(Loss) income from discontinued operations
including gain (loss) on disposal, net of
taxes .......................................... (14) 27 163 (287) (111)
-------- -------- -------- --------- ---------
Net income ........................................ $ 3,357 $ 5,672 $ 10,915 $ 13,172 $ 33,116
======== ======== ======== ========= =========
Earnings per share(1)(5):
Income from continuing operations ................ $ 0.13 $ 0.22 $ 0.40 $ 0.49 $ 1.25
Income from discontinued operations .............. 0.00 0.00 0.00 ( 0.01) 0.00
-------- -------- -------- --------- ---------
$ 0.13 $ 0.22 $ 0.40 $ 0.48 $ 1.25
======== ======== ======== ========= =========
1997:
Revenue ........................................... $138,290 $160,726 $201,117
======== ======== ========
Operating income .................................. $ 15,704 $ 19,818 $ 22,319
======== ======== ========
Income from continuing operations ................. $ 9,478 $ 12,001 $ 12,145
(Loss) income from discontinued operations
including gain (loss) on disposal, net of
taxes .......................................... (51) 123 46
-------- -------- --------
Net income ........................................ $ 9,427 $ 12,124 $ 12,191
======== ======== ========
Earnings per share(1)(5)(6):
Income from continuing operations ................ $ 0.35 $ 0.43 $ 0.43
Income from discontinued operations .............. 0.00 0.00 0.00
-------- -------- --------
$ 0.35 $ 0.43 $ 0.43
======== ======== ========
</TABLE>
F-26
<PAGE>
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
14. QUARTERLY FINANCIAL DATA (UNAUDITED)--(CONTINUED)
- ----------------
(1) Earnings per share amounts have been adjusted to reflect the three-for-two
stock split declared by the Company's Board of Directors on February 28,
1997 and shares issued in connection with two acquisitions accounted for
under the pooling of interest method.
(2) The Company acquired Sintel (see Note 2) on April 30, 1996.
(3) In the third quarter of 1995, the Company recorded a special charge of
$15.4 million to write-down its real estate held for sale.
(4) In the fourth quarter of 1995, the Company recorded an additional charge of
$7.7 million to write-down real estate held for sale and its investment in
preferred stock.
(5) Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly per share data does not
equal the total computed for the year due to changes in the weighted
average number of shares outstanding.
(6) Amounts and earnings per share have been adjusted to reflect a pro forma
tax provision for two acquisitions accounted for under the pooling of interest
method which were previously S corporations.
F-27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS PROSPECTUS NOR THE
ACCOMPANYING LETTER OF TRANSMITTAL CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL NOR ANY SALE MADE HEREIN SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
-------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information ........................
Incorporation of Certain Documents
by Reference ..............................
Summary ......................................
Risk Factors .................................
The Exchange Offer ...........................
Use of Proceeds ..............................
Capitalization ...............................
Selected Financial Information ...............
Management's Discussion and Analysis
of Financial Condition and Results
of Operations .............................
Business .....................................
Management ...................................
Description of Certain Indebtedness ..........
Description of Notes .........................
Certain Federal Income Tax
Considerations ............................
Plan of Distribution .........................
Legal Matters ................................
Experts ......................................
Index to Financial Statements ................ F-1
</TABLE>
$200,000,000
[GRAPHIC OMITTED]
7-3/4% SERIES B SENIOR
SUBORDINATED NOTES
DUE 2008
PROSPECTUS
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that the Company shall indemnify to the fullest extent
authorized by the Delaware General Corporation Law (the "DGCL"), each person
who is involved in any litigation or other proceeding because such person is or
was a director or officer of the Company, against all expense, loss or
liability reasonably incurred or suffered in connection therewith. The
Company's By-laws provide that a director or officer may be paid expenses
incurred in defending any proceeding in advance of its final disposition upon
receipt by the Company of an undertaking, by or on behalf of the director or
officer, to repay all amounts so advanced if it is ultimately determined that
such director or officer is not entitled to indemnification.
Section 145 of the DGCL permits a corporation to indemnify any director or
officer of the corporation against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding brought by reason of
the fact that such person is or was a director or officer of the corporation,
if such person acted in good faith and in a manner that he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if he had no reason to believe
his conduct was unlawful. In a derivative action, (I.E., one brought by or on
behalf of the corporation), indemnification may be made only for expenses,
actually and reasonably incurred by any director or officer in connection with
the defense or settlement of such an action or suit, if such person acted in
good faith and in a manner that he reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action
or suit was brought shall determine that the defendant is fairly and reasonably
entitled to indemnity for such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7) of the DGCL, the Company's Certificate
eliminates the liability of a director to the corporation or its stockholders
for monetary damages for such breach of fiduciary duty as a director, except
for liabilities arising (i) from any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) from acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL, or (iv) from any transaction from which
the director derived an improper personal benefit.
The Company has obtained primary and excess insurance policies insuring
the directors and officers of the Company and its subsidiaries against certain
liabilities they may incur in their capacity as directors and officers. Under
such policies, the insurer, on behalf of the Company, may also pay amounts for
which the Company has granted indemnification to the directors or officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as exhibits to this Registration
Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------
<S> <C>
4.1 Purchase Agreement, dated as of January 30, 1998, by and among MasTec, Inc., Jefferies &
Company, Inc., BancBoston Securities Inc., CIBC Oppenheimer Corp. and NationsBanc
Montgomery Securities LLC.
4.2 Indenture, dated as of February 4, 1998, between MasTec, Inc. and First Trust National
Association, as trustee.
II-1
<PAGE>
4.3 Registration Rights Agreement, dated as of February 4, 1998, by and among MasTec, Inc.,
Jefferies & Company, Inc., BancBoston Securities Inc., CIBC Oppenheimer Corp. and
NationsBanc Montgomery Securities LLC .
5.1 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. (included in Exhibit 5.1
above).
24.1 Power of Attorney (included on Signature Page of this Registration Statement)
25.1 Form T-1 Statement of Eligibility of Trustee.
99.1 Form of Letter of Transmittal and Notice of Guaranteed Delivery of Notes.
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
II-2
<PAGE>
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
reports pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(1) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(2) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Miami, State of Florida,
on February 13, 1998.
MASTEC, INC.
/s/ Edwin D. Johnson
Edwin D. Johnson
Senior Vice President--Chief Financial
Officer
(Principal Financial and Accounting
Officer)
POWER OF ATTORNEY
The undersigned directors and officers of MasTec, Inc. hereby constitute
and appoint Edwin D. Johnson and Jose M. Sariego and each of them with full
power to act without the other and with full power of substitution and
resubstitution, our true and lawful attorneys-in-fact with full power to
execute in our name and behalf in the capacities indicated below this
Registration Statement on Form S-4 and any and all amendments thereto and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and hereby ratify and
confirm all that such attorneys-in-fact, or any of them, or their substitutes
shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------------------- ------------------
<S> <C> <C>
/s/ Jorge Mas Chairman of the Board of Directors, February 13, 1998
Jorge Mas President and Chief Executive
Officer (Principal Executive Officer)
/s/ Eliot C. Abbott Director February 13, 1998
Eliot C. Abbott
/s/ Joel-Tomas Citron Director February 13, 1998
Joel-Tomas Citron
/s/ Arthur B. Laffer Director February 13, 1998
Arthur B. Laffer
/s/ Jose S. Sorzano Director February 13, 1998
Jose S. Sorzano
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
- --------- ---------------------------------------------------------------------------------- -----------
<S> <C> <C>
4.1 Purchase Agreement, dated as of January 30, 1998, by and among MasTec, Inc.,
Jefferies & Company, Inc., BancBoston Securities Inc., CIBC Oppenheimer
Corp. and NationsBanc Montgomery Securities LLC.
4.2 Indenture, dated as of February 4, 1998, between MasTec, Inc. and First Trust
National Association, as trustee.
4.3 Registration Rights Agreement, dated as of February 4, 1998, by and among
MasTec, Inc., Jefferies & Company, Inc., BancBoston Securities Inc., CIBC
Oppenheimer Corp. and NationsBanc Montgomery Securities LLC .
5.1 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. (included in
Exhibit 5.1 above).
24.1 Power of Attorney (included on Signature Page of this Registration Statement)
25.1 Form T-1 Statement of Eligibility of Trustee.
99.1 Form of Letter of Transmittal and Notice of Guaranteed Delivery of Notes.
</TABLE>
EXHIBIT 4.1
MASTEC, INC.
$200,000,000
7-3/4% Senior Subordinated Notes due 2008
Purchase Agreement
January 30, 1998
JEFFERIES & COMPANY, INC.
BANCBOSTON SECURITIES INC.
CIBC OPPENHEIMER CORP.
NATIONSBANC MONTGOMERY SECURITIES LLC
<PAGE>
$200,000,000
MASTEC, INC.
7-3/4% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
January 30, 1998
Jefferies & Company, Inc.
BancBoston Securities Inc.
CIBC Oppenheimer Corp.
NationsBanc Montgomery Securities LLC
c/o Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Ladies and Gentlemen:
MasTec, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to Jefferies & Company, Inc., BancBoston Securities Inc., CIBC
Oppenheimer Corp. and NationsBanc Montgomery Securities LLC (each, an "INITIAL
PURCHASER" and, collectively, the "INITIAL PURCHASERS") an aggregate of
$200,000,000 in principal amount of its 7-3/4% Senior Subordinated Notes due
2008 (the "SERIES A NOTES"), subject to the terms and conditions set forth
herein. The Series A Notes are to be issued pursuant to the provisions of an
indenture (the "INDENTURE"), to be dated as of the Closing Date (as defined
below), among the Company and First Trust National Association, as trustee (the
"TRUSTEE"). The Series A Notes and the Series B Notes (as defined below)
issuable in exchange therefor are collectively referred to herein as the
"NOTES." Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture.
1. OFFERING CIRCULAR.
The Series A Notes will be offered and sold to the Initial Purchasers
pursuant to one or more exemptions from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Company has prepared a
preliminary offering circular, dated January 19, 1998 (the "PRELIMINARY OFFERING
CIRCULAR"), and a final offering circular, dated January 30, 1997 (the "OFFERING
CIRCULAR"), relating to the Series A Notes.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
1
<PAGE>
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
(A "QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2)
AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE.
On the basis of the representations, warranties and covenants contained in
this Agreement, and subject to the terms and conditions contained herein, the
Company agrees to issue and sell to the Initial Purchasers, and the Initial
Purchasers agree, severally and not jointly, to
2
<PAGE>
purchase from the Company, the principal amount of Series A Notes set forth
opposite the name of such Initial Purchaser on Schedule B hereto at a purchase
price equal to 97.336% of the principal amount thereof (the "PURCHASE PRICE").
3. TERMS OF OFFERING.
The Initial Purchasers have advised the Company that the Initial Purchasers
will make offers (the "EXEMPT RESALES") of the Series A Notes purchased
hereunder on the terms set forth in the Offering Circular, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), (ii) to a limited number of other institutional "accredited
investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that
make certain representations and agreements to the Company (each, an "ACCREDITED
INSTITUTION"), and (iii) to persons permitted to purchase the Series A Notes in
offshore transactions in reliance upon Regulation S under the Act (each, a
"REGULATION S PURCHASER") (such persons specified in clauses (i), (ii) and (iii)
being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial Purchasers
will offer the Series A Notes to Eligible Purchasers initially at a price equal
to 100% of the principal amount thereof. Such price may be changed at any time
without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "COMMISSION")
under the circumstances set forth therein, (i) a registration statement under
the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's
7-3/4% Series B Senior Subordinated Notes due 2008 (the "SERIES B NOTES"), to be
offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "EXCHANGE OFFER") and (ii) under certain circumstances, a
shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. This Agreement, the Indenture, the Notes and the Registration
Rights Agreement are hereinafter sometimes referred to collectively as the
"OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
a. Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Latham & Watkins, 885 Third Avenue New
York, New York or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m., New York City time, on February
4, 1998, or at such other time as shall be agreed upon by the Initial Purchasers
and the Company. The time and date of such delivery and the payment are herein
called the "CLOSING DATE."
b. One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"),
3
<PAGE>
having an aggregate principal amount corresponding to the aggregate principal
amount of the Series A Notes (collectively, the "GLOBAL NOTE"), shall be
delivered by the Company to the Initial Purchasers (or as the Initial Purchasers
direct) in each case with any transfer taxes thereon duly paid by the Company
against payment by the Initial Purchasers of the Purchase Price thereof by wire
transfer in same day funds to the order of the Company. The Global Note shall be
made available to the Initial Purchasers for inspection not later than 9:30
a.m., New York City time, on the business day immediately preceding the Closing
Date.
5. AGREEMENTS OF THE COMPANY.
The Company hereby agrees with the Initial Purchasers as follows:
a. To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Series A Notes for offering or sale in
any jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Circular or the Offering Circular untrue or that requires any additions to or
changes in the Preliminary Offering Circular or the Offering Circular in order
to make the statements therein not misleading in light of the circumstances
under which such statements were made. The Company shall use its reasonable best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Series A Notes under any state securities or
Blue Sky laws and, if at any time any state securities commission or other
federal or state regulatory authority shall issue an order suspending the
qualification or exemption of any Series A Notes under any state securities or
Blue Sky laws, the Company shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
b. To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company as many copies of the Preliminary Offering
Circular and the Offering Circular, and any amendments or supplements thereto,
as the Initial Purchasers may reasonably request for the time period specified
in Section 5(c). Subject to the Initial Purchasers compliance with their
representations and warranties and agreements set forth in Section 7 hereof, the
Company consents to the use of the Preliminary Offering Circular and the
Offering Circular, and any amendments and supplements thereto required pursuant
hereto, by the Initial Purchasers in connection with Exempt Resales.
c. During such period as in the opinion of counsel for the Initial
Purchasers an Offering Circular is required by law to be delivered in connection
with Exempt Resales by the Initial Purchasers, (i) not to make any amendment or
supplement to the Offering Circular of which the Initial Purchasers shall not
previously have been advised or to which the Initial Purchasers shall reasonably
object after being so advised and (ii) to prepare promptly upon the Initial
Purchasers reasonable request, any amendment or supplement to the Offering
Circular which may be necessary or advisable in connection with such Exempt
Resales or such market-making activities.
4
<PAGE>
d. If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Circular in order to make the statements therein, in the
light of the circumstances when such Offering Circular is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering Circular
to comply with any applicable law, forthwith to prepare an appropriate amendment
or supplement to such Offering Circular so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Circular will comply with
applicable law, and to furnish to the Initial Purchasers and such other persons
as the Initial Purchasers may designate such number of copies thereof as the
Initial Purchasers may reasonably request.
e. Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; PROVIDED,
HOWEVER, that the Company shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
relating to the Preliminary Offering Circular, the Offering Circular or Exempt
Resales, in any jurisdiction in which it is not now so subject.
f. So long as the Notes are outstanding, to furnish to the Initial
Purchasers, upon request and as soon as practical after they become available,
copies of all reports or other communications furnished by the Company to its
security holders generally or publicly available information filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed and such other publicly available information
concerning the Company and/or its subsidiaries as the Initial Purchasers may
reasonably request.
g. So long as any of the Series A Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder, the
information ("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the Act.
h. Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company under
this Agreement, including: (i) the fees, disbursements and expenses of counsel
to the Company and accountants of the Company in connection with the sale and
delivery of the Series A Notes to the Initial Purchasers and pursuant to Exempt
Resales, and all other fees and expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Circular, the
Offering Circular and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and
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delivering of copies thereof to the Initial Purchasers and persons designated by
them in the quantities specified herein, (ii) all costs and expenses related to
the original issuance and delivery of the Series A Notes to the Initial
Purchasers and pursuant to Exempt Resales, including any transfer or other taxes
payable thereon, (iii) all expenses in connection with the registration or
qualification of the Series A Notes for offer and sale pursuant to Exempt
Resales under the securities or Blue Sky laws of the several states and all
costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers in connection with such
registration or qualification and memoranda relating thereto), (iv) the cost of
printing certificates representing the Series A Notes, (v) all expenses and
listing fees in connection with the application for quotation of the Series A
Notes in the National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (vi) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture and the Notes, (vii)
the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (viii) any fees charged by rating agencies for the rating of
the Notes and (ix) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement.
Except as otherwise provided in this Section 5(h) or Section 11 hereof, the
Company shall have no liability to the Initial Purchasers for their costs and
expenses, including the fees and expenses of their counsel.
i. To use its reasonable best efforts to permit the Series A Notes
to be designated as PORTAL market securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL market and to
maintain the listing of the Series A Notes on PORTAL for so long as the Series A
Notes are outstanding.
j. To use its reasonable best efforts to obtain the approval of DTC
for "book-entry" transfer of the Notes, and to comply with all of its agreements
set forth in the representation letters of the Company to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
k. Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
l. Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
m. To comply with all of its agreements set forth in the
Registration Rights Agreement.
n. To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Series A Notes.
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6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As of the
date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchasers that:
a. The Preliminary Offering Circular and the Offering Circular do
not and will not, as of their respective dates and, in the case of the Offering
Circular, as of the Closing Date, and any supplement or amendment to them will
not, as of their respective dates and as of the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Circular or the
Offering Circular (or any supplement or amendment thereto) based upon
information relating to an Initial Purchaser furnished to the Company in writing
by or on behalf of such Initial Purchaser expressly for use therein. No stop
order preventing the use of the Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
b. Each of the Company and its subsidiaries (as defined in Section
6(d) below) has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Preliminary Offering Circular and the Offering Circular and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
c. All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.All outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or similar rights.
d. The entities listed on Schedule A hereto are the only
"significant subsidiaries", direct or indirect, of the Company, as defined in
Rule 1-02 of the Commission's Regulation S-X (the "subsidiaries"). All of the
outstanding shares of capital stock of each of the Company's subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable,
and, except as disclosed in the Offering Circular [or on Schedule A hereto], are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien or encumbrance (each, a
"LIEN").
e. This Agreement has been duly authorized, executed and delivered
by the Company.This Agreement has been duly authorized, executed and delivered
by the Company.
f. The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Indenture has been duly executed and delivered by the Company, the Indenture
will be a valid and binding
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agreement of the Company, enforceable against the Company in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
g. The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting creditors'
rights generally and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability. On the Closing Date, the
Series A Notes will conform as to legal matters to the description thereof
contained in the Offering Circular.
h. On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
i. The Registration Rights Agreement has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Registration Rights Agreement
will conform as to legal matters to the description thereof in the Offering
Circular.
j. No action has been taken and no law, statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency or body
which prevents the execution, delivery and performance of any of the Operative
Documents, the issuance of the Series A Notes, or suspends the sale of the
Series A Notes in any jurisdiction referred to in Section 5(e); and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Series A Notes in any
jurisdiction referred to in Section 5(e).
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k. Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, except for such defaults
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
l. Assuming the accuracy of the Initial Purchasers' representations,
warranties and agreements set forth in Section 7 hereof, the execution, delivery
and performance of this Agreement and the other Operative Documents by the
Company, compliance by the Company with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby will not
(i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws of the various states and
except for the filing of the Registration Statements by the Company with the
Commission pursuant to the Registration Rights Agreement), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound, (iii) violate
or conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, or (v) result in the termination, suspension
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization except, in each case, for such conflicts, breaches,
defaults, violations, Liens, terminations, suspensions, revocations or
impairments (other than conflicts with or breaches of the terms and provisions
of, or a default under, the charter or by-laws of the Company or any of its
subsidiaries) which would not reasonably be expected to have a Material Adverse
Effect.
m. Except as disclosed in the Offering Circular, there are no legal
or governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject, which
would be reasonably expected to result, singly or in the aggregate, in a
Material Adverse Effect.
n. Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
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o. There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
p. The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("intellectual property") currently
employed by them in connection with the business now operated by them except
where the failure to own or possess or otherwise be able to acquire such
intellectual property would not, singly or in the aggregate, be reasonably be
expected to have a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
q. The Company and each of its subsidiaries carry insurance
(including self-insurance) against such losses and risks and in such amounts as,
in their reasonable determination, are adequate for the conduct of the
businesses in which they are engaged.
r. Except as disclosed or incorporated by reference in the Offering
Circular, no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which would be required by the Act to be described in the
Offering Circular if the Offering Circular were a prospectus included in a
registration statement on Form S-1 filed with the Commission.
s. Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, be reasonably expected to have a Material Adverse
Effect. Each such Authorization is valid and in full force and effect and each
of the Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to the
Company or any of its subsidiaries; except, in each such case, where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such
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<PAGE>
restriction would not, singly or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
t. None of the Company or any of its subsidiaries or any of their
respective officers, directors, partners, employees, agents or affiliates or any
other person acting on behalf of the Company or any of its subsidiaries, as the
case may be, has, directly or indirectly, given or agreed to give any money,
gift or similar benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or agent of a
customer or supplier, official or employee of any governmental agency (domestic
or foreign) or any political party or candidate for office (domestic or foreign)
or other person who was, is or may be in a position to help or hinder the
business of the Company or any of its subsidiaries (or assist the Company or any
of its subsidiaries in connection with any actual or proposed transaction) which
(i) would be reasonably expected to subject the Company or any of its
subsidiaries or any other individual or entity to any damage or penalty in any
civil, criminal or governmental litigation or proceeding (domestic or foreign)
which would have a Material Adverse Effect, (ii) if not given in the past, could
reasonably be expected to have had a Material Adverse Effect on the assets,
business or operations of the Company or any of its subsidiaries or (iii) if not
continued in the future, could reasonably be expected to have a Material Adverse
Effect.
u. Except as disclosed in the Offering Circular, there is no (i)
significant unfair labor practice complaint, grievance or arbitration proceeding
pending or threatened against the Company or any of its subsidiaries before the
National Labor Relations Board or any state or local labor relations board, (ii)
strike, labor dispute, slowdown or stoppage pending or threatened against the
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, would not have a Material Adverse Effect.
v. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
w. All tax returns required to be filed by the Company and each of
its subsidiaries in any jurisdiction have been filed, other than those filings
being contested in good faith, and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good faith and
for which adequate reserves have been provided, except where the failure to file
such tax returns or pay such taxes, penalties, fees and other charges would not
reasonably be expected to have a Material Adverse Effect.
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x. All indebtedness of the Company that will be repaid with the
proceeds of the issuance and sale of the Series A Notes was incurred, and the
indebtedness represented by the Series A Notes is being incurred, for proper
purposes and in good faith and the Company was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance and sale
of the Series A Notes, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Series A Notes)
solvent, and had at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Series A Notes and will
have on the Closing Date (after giving effect to the application of the proceeds
from the issuance of the Series A Notes) sufficient capital for carrying on its
business and was, at the time of the incurrence of such indebtedness that will
be repaid with the proceeds of the issuance and sale of the Series A Notes, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) able to pay its debts as they
mature.
y. The accountants, Coopers & Lybrand, L.L.P., that have certified
the financial statements included in the Preliminary Offering Circular and the
Offering Circular are independent public accountants with respect to the
Company, as required by the Act and the Exchange Act. The historical financial
statements, together with related notes, set forth and incorporated by reference
in the Preliminary Offering Circular and the Offering Circular comply as to form
in all material respects with the requirements applicable to registration
statements on Form S-1 under the Act.
z. The historical financial statements, together with related notes
forming part of the Offering Circular (and any amendment or supplement thereto),
present fairly, in all material respects, the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Circular at the respective
dates or for the respective periods to which they apply; such statements and
related notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical information
and data of the Company set forth or incorporated by reference in the Offering
Circular (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
aa. The PRO FORMA financial information included in the Preliminary
Offering Circular and the Offering Circular have been prepared on a basis
consistent with the historical financial information of the Company and its
subsidiaries and gives effect to assumptions used in the preparation thereof on
a reasonable basis and in good faith and present fairly, in all material
respects, the historical and proposed transactions contemplated by the
Preliminary Offering Circular and the Offering Circular. The other PRO FORMA
financial and statistical information and data included in the Offering Circular
are, in all material respects, accurately presented and prepared on a basis
consistent with the PRO FORMA financial statements.
bb. The Company is not and, after giving effect to the offering and
sale of the Series A Notes and the application of the net proceeds thereof as
described in the Offering Circular, will not be, an "investment company," as
such term is defined in the Investment Company Act of 1940, as amended.
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cc. There are no contracts, agreements or understandings between the
Company and any person granting such person the right, by reason of the
execution by the Company of this Agreement or any other Operative Document or
the consummation of the transactions contemplated hereby or thereby, to require
the Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such securities
with the Notes registered pursuant to any Registration Statement.
dd. Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Series A
Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
ee. No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company that it is considering imposing) any
condition (financial or otherwise) on the Company's retaining any rating
assigned to the Company, any securities of the or (ii) has indicated to the
Company that it is considering (a) the downgrading, suspension, or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (b) any change in the outlook
for any rating of the Company or any securities of the Company.
ff. Since the respective dates as of which information is given in
the Offering Circular other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole and (ii) neither the Company
nor any of its subsidiaries has incurred any liability or obligation, direct or
contingent that is material to the Company and its subsidiaries, taken as a
whole.
gg. Each of the Preliminary Offering Circular and the Offering
Circular, as of its date, contains all the information specified in, and meeting
the requirements of, Rule 144A(d)(4) under the Act.
hh. When the Series A Notes are issued and delivered pursuant to
this Agreement, the Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Company that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
ii. No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company or any of its
representatives (other than the Initial Purchasers or their representatives, as
to whom the Company makes no representation) in connection with the offer and
sale of the Series A Notes contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees
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have been invited by any general solicitation or general advertising. No
securities of the same class as the Series A Notes have been issued and sold by
the Company within the six-month period immediately prior to the date hereof.
jj. Assuming the accuracy of the Initial Purchasers'
representations, warranties and agreements set forth in Section 7 hereof, prior
to the effectiveness of any Registration Statement, the Indenture is not
required to be qualified under the TIA.
kk. None of the Company nor any of its respective affiliates or any
person acting on its or their behalf (other than the Initial Purchasers or their
representatives, as to whom the Company makes no representation) has engaged or
will engage in any directed selling efforts within the meaning of Regulation S
under the Act ("REGULATION S") with respect to the Series A Notes.
ll. The Series A Notes offered and sold in reliance on Regulation S
have been and will be offered and sold only in offshore transactions.
mm. The sale of the Series A Notes pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the Act.
nn. The Company and its respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers or their representatives, as
to whom the Company makes no representation) have complied with and will comply
with the offering restriction requirements of Regulation S in connection with
the offering of the Series A Notes outside the United States and, in connection
therewith, the Offering Circular will contain the disclosure required by Rule
902(h).
oo. The Company is a "reporting issuer" as defined in Rule 902 under
the Act.
pp. No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchasers as contemplated
hereby or for the Exempt Resales assuming the accuracy of the Initial
Purchasers' representations and warranties and agreements set forth in Section 7
hereof.
qq. Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Company to the Initial
Purchasers as to the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
Initial Purchasers, severally and not jointly, represent and warrant to, and
agree with, the Company as follows:
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a. Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
b. Such Initial Purchaser (i) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (ii) will be reoffering and reselling the
Series A Notes only to (A) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, (B) Accredited
Institutions that execute and deliver a letter containing certain
representations and agreements in the form attached as ANNEX A to the Offering
Circular and (C) in offshore transactions in reliance upon Regulation S under
the Act.
c. Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
d. Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Series A Notes only to, and will solicit offers to buy the Series A Notes only
from (i) Eligible Purchasers that such Initial Purchaser reasonably believes are
QIBs, (ii) Accredited Institutions who make the representations contained in,
and execute and return to such Initial Purchaser, a certificate in the form of
ANNEX A attached to the Offering Circular and (iii) Regulation S Purchasers, in
each case, that agree that (A) the Series A Notes purchased by them may be
resold, pledged or otherwise transferred within the time period referred to
under Rule 144(k) (taking into account the provisions of Rule 144(d) under the
Act, if applicable) under the Act, as in effect on the date of the transfer of
such Series A Notes, only (I) to the Company or any of its subsidiaries, (II) to
a person whom the seller reasonably believes is a QIB purchasing for its own
account or for the account of a QIB in a transaction meeting the requirements of
Rule 144A under the Act, (III) in an offshore transaction (as defined in Rule
902 under the Act) meeting the requirements of Rule 904 of the Act, (IV) in a
transaction meeting the requirements of Rule 144 under the Act, (V) to an
Accredited Institution that, prior to such transfer, furnishes the Trustee a
signed letter containing certain representations and agreements relating to the
registration of transfer of such Series A Note (the form of which is
substantially the same as ANNEX A to the Offering Circular) and, if such
transfer is in respect of an aggregate principal amount of Series A Notes less
than $250,000, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Act, (VI) in accordance with another
exemption from the registration requirements of the Act (and based upon an
opinion of counsel acceptable to the Company) or (VII) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any state of the United States or any other applicable
jurisdiction and (B) they will deliver to each
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person to whom such Series A Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
e. None of such Initial Purchaser or any of its affiliates or any
person acting on its or their behalf has engaged or will engage in any directed
selling efforts within the meaning of Regulation S with respect to the Series A
Notes.
f. The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.
g. The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
h. Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes in the United States or to, or for the
benefit or account of, a U.S. person (other than a distributor), in each case,
as defined in Rule 902 under the Act (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering of the Series A Notes pursuant hereto and the Closing Date, other than
in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act.
i. Such Initial Purchaser agrees that, at or prior to confirmation
of a sale of Series A Notes by it to any distributor, dealer or person receiving
a selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903(c)(2) under the Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Series A Notes covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered and sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as part of your
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the Offering and the Closing Date,
except in either case in accordance with Regulation S under the
Securities At (or Rule 144A or to Accredited Institutions in
transactions that are exempt from the registration requirements of
the Securities Act), and in connection with any subsequent sale by
you of the Series A Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or
person receiving a selling concession, fee or other remuneration,
you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation
S."
j. Such Initial Purchaser further represents and agrees that (i) it
has not offered or sold and will not offer or sell any Series A Notes to persons
in the United Kingdom prior to the expiration of the period of six months from
the issue date of the Series A Notes, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances
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<PAGE>
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities Regulations
1995, (ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Series A Notes in, from or otherwise involving the United Kingdom and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of the
Series A Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom the document may otherwise lawfully be issued or
passed on.
k. Such Initial Purchaser agrees that it will not offer, sell or
deliver any of the Series A Notes in any jurisdiction outside the United States
except under circumstances that will result in compliance with the applicable
laws thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Series A Notes in such
jurisdictions. Such Initial Purchaser understands that no action has been taken
to permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose.
The Initial Purchasers acknowledge that the Company and, for purposes of
the opinions to be delivered to each Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchasers hereby consent to such reliance.
8. INDEMNIFICATION.
a. The Company agrees to indemnify and hold harmless each of the
Initial Purchasers, their directors, officers and each person, if any, who
controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses reasonably incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Offering Circular
(or any amendment or supplement thereto) or the Preliminary Offering Circular or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to an Initial Purchaser furnished in writing to
the Company by or on behalf of such Initial Purchaser expressly for use in the
Preliminary Offering Circular or the Offering Circular; PROVIDED, HOWEVER, that
the indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Circular shall not inure to the benefit of any Initial
Purchaser (or to the benefit of any person controlling such Initial Purchaser)
on account of any such loss, claim, damage, liability or judgment arising from
the sale of the Notes by such Initial Purchaser to any person if the untrue
statement or alleged untrue statement or omission or alleged omission of
material fact contained in the Preliminary Offering Circular was corrected in
the Offering Circular and the Initial Purchaser sold Notes to that person
without sending or giving at or prior to the written confirmation of such sale,
a copy of the Offering Circular (as then amended or
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<PAGE>
supplemented) if the Company has previously furnished sufficient copies thereof
to the Initial Purchaser on a timely basis to permit such sending or giving.
b. Each of the Initial Purchasers severally and not jointly, agrees
to indemnify and hold harmless the Company, and its respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company, to the same extent as
the foregoing indemnity from the Company to the Initial Purchasers but only with
respect to information relating to such Initial Purchaser furnished in writing
to the Company by or on behalf of such Initial Purchaser expressly for use in
the Preliminary Offering Circular or the Offering Circular.
c. In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred. Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses reasonably available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Jefferies & Company, Inc., in the case of the parties indemnified pursuant to
Section 8(a), and by the Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if (a) the
settlement is entered into more than thirty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party), (b) such indemnifying party shall
have received notice of the terms of such settlement at least twenty business
days prior to such settlement being entered into and (c) prior to the date of
such settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
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indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
d. To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers on the other hand from the
offering of the Series A Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand and the Initial Purchasers, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Series A Notes (before deducting expenses)
received by the Company, and the total discounts and commissions received by the
Initial Purchasers bear to the total price to investors of the Series A Notes,
in each case as set forth in the table on the cover page of the Offering
Circular. The relative fault of the Company, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Initial Purchasers, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchasers
exceeds the amount of any damages which the Initial Purchasers has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective
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<PAGE>
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and not joint.
e. The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of
the Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
a. All the representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
b. On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change in, any rating of
the Company or any securities of the Company (including, without limitation, the
placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred
any change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any securities of the
Company by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning) a
lower rating to the Notes than that on which the Notes were marketed.
c. Since the respective dates as of which information is given in
the Offering Circular other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole and (ii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in your judgment, is material and adverse and,
in your judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Circular.
d. The Initial Purchasers shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company, confirming the matters set forth in Sections
9(a), 9(b) and 9(c) and stating that the Company has complied in all material
respects with all the agreements and satisfied in all material respects all of
the conditions herein contained and required to be complied with or satisfied on
or prior to the Closing Date.
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e. The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,
special counsel for the Company, to the effect that:
(i). each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described
in the Offering Circular and to own, lease and operate its
properties;
(ii). the Series A Senior Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with
their terms except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of
general applicability;
(iii). the Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(iv). this Agreement has been duly authorized, executed and
delivered by the Company;
(v). The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as (A) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi). the Series B Senior Notes have been duly authorized by
the Company;
(vii). the statements under the captions "Certain Federal
Income Tax Considerations" and "Description of Notes" in the
Offering Circular, insofar as such statements constitute a summary
of the legal matters,
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<PAGE>
documents or proceedings referred to therein, fairly present in all
material respects such legal matters, documents and proceedings;
(viii). assuming the accuracy and fulfillment of the
representations, warranties and agreements of the Company and the
Initial Purchasers in this Agreement, the execution, delivery and
performance of this Agreement and the other Operative Documents by
the Company, the compliance by the Company with all provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except (a) such as may be
required under the securities or Blue Sky laws and regulations of
the various states or such as may be required by NASD, as to which
such counsel need not express any opinion or (b) in the case of the
Registration Rights Agreement, those that will be required under the
Act, the TIA, state securities or Blue Sky laws and regulations or
such as may be required by NASD) or (ii) conflict with or constitute
a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries;
(ix). the Company is not and, after giving effect to the
offering and sale of the Series A Notes and the application of the
net proceeds thereof as described in the Offering Circular, will not
be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(x). assuming the accuracy and fulfillment of the
representations, warranties and agreements of the Company and the
Initial Purchasers in this Agreement, the Indenture complies as to
form in all material respects with the requirements of the TIA, and
the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder; it is not necessary in
connection with the offer, sale and delivery of the Series A Notes
to the Initial Purchasers in the manner contemplated by this
Agreement or in connection with the Exempt Resales to qualify the
Indenture under the TIA;
(xi). no registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming that (i) each Initial Purchasers is a QIB, an
Accredited Institution or a Regulation S Purchaser, (ii) the
accuracy of, and compliance with, the Initial Purchasers'
representations and agreements contained in Section 7 of this
Agreement, (iii) the accuracy of the representations of the Company
set forth in Sections 6(ii), (kk), (ll), (mm) and (nn) of this
Agreement and (iv) with respect to Accredited Institutions, the
accuracy of the representations made by each such Accredited
Institution as set forth in the letter of representation executed by
such Accredited Institution in the form of ANNEX A to the Offering
Circular; and
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(xii). such counsel has no reason to believe that, as of the
date of the Offering Circular or as of the Closing Date, the
Offering Circular, as amended or supplemented, if applicable (except
for the financial statements and other financial, statistical or
accounting data included therein, as to which such counsel need not
express any belief) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
The opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
described in Section 9(e) above shall be rendered to you at the request of the
Company and shall so state therein. In giving such opinion with respect to the
matters covered by Section 9(e)(xii), counsel for the Company may state that
their opinion and belief are based upon their participation in the preparation
of the Offering Circular and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification except as specified. The opinion of such counsel may be limited to
the laws of the State of Florida, the General Corporation Law of the State of
Delaware and the federal laws of the United States.
f. The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Jose M. Sariego, Esq., Senior Vice President-General Counsel
for the Company, to the effect that:
(i). all of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and, except as
disclosed on Schedule A, are owned by the Company or another
subsidiary of the Company, free and clear of any Lien (other than
Liens to secure Indebtedness disclosed in the Offering Circular);
(ii). each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect;
(iii). to such counsel's knowledge, neither the Company nor
any of its subsidiaries is in violation of its respective charter or
by-laws and, to the best of such counsel's knowledge after due
inquiry, except as disclosed in the Offering Circular, neither the
Company nor any of its subsidiaries is in default in the performance
of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their
respective property is bound;
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(iv). the execution, delivery and performance of this Agreement
and the other Operative Documents by the Company, the compliance by
the Company with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby
will not (i) violate or conflict with any applicable law, rule or
regulation of the United States of America, the State of Florida or
the General Corporation Law of the State of Delaware or, to such
counsel's knowledge, any judgment, order or decree of any federal or
state court located in the State of Florida or Delaware which is
applicable to the Company, any of its subsidiaries or their
respective property or (ii) to such counsel's knowledge, result in
the imposition or creation of (or the obligation to create or
impose) a Lien under, any material agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound.
(v). after due inquiry, other than as disclosed in the Offering
Circular, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their
respective property is or could be subject, which would reasonably
be expected to result, singly or in the aggregate, in a Material
Adverse Effect;
(vi). the statements under the caption "Description of Certain
Indebtedness" in the Offering Circular, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present in all material respects such
legal matters, documents and proceedings;
(vii). such counsel has no reason to believe that, as of the
date of the Offering Circular or as of the Closing Date, the
Offering Circular, as amended or supplemented, if applicable (except
for the financial statements and other financial, statistical or
accounting data included therein, as to which such counsel need not
express any belief) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
The opinion of Jose M. Sariego, Esq. described in Section 9(f) above shall
be rendered to you at the request of the Company and shall so state therein. In
giving such opinion with respect to the matters covered by Section 9(f)(vii),
Mr. Sariego may state that his opinion and belief are based upon his
participation in the preparation of the Offering Circular and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification except as specified. The opinion of
such counsel may be limited to the laws of the State of Florida, the General
Corporation Law of the State of Delaware and the federal laws of the United
States.
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g. The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Latham & Watkins, counsel for the Initial
Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers.
h. The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from Coopers & Lybrand, L.L.P, independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Circular.
i. The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
j. The Company shall have executed the Indenture and the Initial
Purchasers shall have received an original copy thereof, duly executed by the
Company.
k. The Company shall have executed the Registration Rights Agreement
and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company.
l. The Company shall not have failed at or prior to the Closing Date
to perform or comply in all material respects with any of the agreements herein
contained and required to be performed or complied with by the Company, at or
prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the Initial
Purchasers' judgment, is material and adverse and, in the Initial Purchasers'
judgment, makes it impracticable to market the Series A Notes on the terms and
in the manner contemplated in the Offering Circular, (ii) the suspension or
material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
or limitation on prices for securities or other instruments on any such exchange
or the Nasdaq National Market, (iii) the suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
25
<PAGE>
If on the Closing Date any one or more of the Initial Purchasers shall fail
or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchaser or Initial Purchasers, as the case may be, agreed but failed or
refused to purchase on such date; PROVIDED that in no event shall the aggregate
principal amount of the Series A Notes which any Initial Purchaser has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such principal amount of the Series A
Notes without the written consent of such Initial Purchaser. If on the Closing
Date any Initial Purchaser or Initial Purchasers shall fail or refuse to
purchase the Series A Notes and the aggregate principal amount of the Series A
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Series A Notes to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Company for purchase of such the Series A Notes are not made with 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Offering Circular
or any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Initial Purchaser from liability
in respect of any default of any such Initial Purchaser under this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to MasTec, Inc.,
3155 N.W. 77th Avenue, Suite 130, Miami Florida, 33122-1205, telephone: (305)
599-1800, Attention Jose M. Sariego, Esq. and Edwin D. Johnson and (ii) if to
the Initial Purchasers, c/o Jefferies & Company, Inc., 11100 Santa Monica
Boulevard, Los Angeles, California 90025, Attention: High Yield Capital Markets,
or in any case to such other address as the person to be notified may have
requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Series A
Notes, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchasers, the officers or
directors of the Initial Purchasers, any person controlling the Initial
Purchasers, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Series A Notes and payment for
them hereunder and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Initial Purchasers for all out-of-pocket
26
<PAGE>
expenses (including the reasonable fees and disbursements of counsel) incurred
by them. Notwithstanding any termination of this Agreement, the Company shall be
liable for all expenses which it has agreed to pay pursuant to Section 5(h)
hereof.
This Agreement has been and is made solely for the benefit of and shall be
binding upon the Company, the Initial Purchasers, the Initial Purchasers'
directors and officers, any controlling persons referred to herein, the
directors of the Company and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Series A Notes from the
Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
27
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
Very truly yours,
MASTEC, INC.
By:
Name:
Title:
JEFFERIES & COMPANY, INC.
By:
Name:
Title:
BANCBOSTON SECURITIES INC.
By:_________________________________
Name:
Title:
CIBC OPPENHEIMER CORP.
By:__________________________________
Name:
Title
NATIONSBANC MONTGOMERY SECURITIES LLC
By:___________________________________
Name:
Title
28
<PAGE>
SCHEDULE A
SUBSIDIARIES
29
<PAGE>
SCHEDULE B
INITIAL PURCHASER PRINCIPAL AMOUNT OF NOTES
----------------- -------------------------
Jefferies & Company, Inc. $ 140,000,000
BancBoston Securities Inc. 20,000,000
CIBC Oppenheimer Corp. 20,000,000
NationsBanc Montgomery Securities LLC 20,000,000
TOTAL $ 150,000,000
----- =============
EXHIBIT 4.2
================================================================================
MASTEC, INC.
SERIES A AND SERIES B
7 3/4% SENIOR SUBORDINATED NOTES DUE 2008
INDENTURE
DATED AS OF FEBRUARY 4, 1998
------------------------
FIRST TRUST NATIONAL ASSOCIATION
TRUSTEE
================================================================================
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
<S> <C>
ACT SECTION INDENTURE SECTION
----------- -----------------
310 (a)(1)........................................................7.10
(a)(2) ...........................................................7.10
(a)(3)............................................................N.A.
(a)(4)............................................................N.A.
(a)(5)............................................................7.10
(i)(b)............................................................7.10
(ii)(c)...........................................................N.A.
311(a)............................................................7.11
(b)...............................................................7.11
(iii(c)...........................................................N.A.
312 (a)...........................................................2.05
(b)...............................................................11.03
(iv)(c)...........................................................11.03
313(a)............................................................7.06
(b)(1)............................................................10.03
(b)(2)............................................................7.07
(v)(c)............................................................7.06; 11.02
(vi)(d)...........................................................7.06
314(a)............................................................4.03; 11.02
(a)(b).............................................................10.02
(c)(1)............................................................11.04
(c)(2)............................................................11.04
(c)(3)............................................................N.A.
(d)...............................................................10.03, 10.04, 10.05
(vii)(e)..........................................................11.05 (f)NA
315 (a)...........................................................7.01
(b)...............................................................7.05, 11.02
(b)(c)............................................................7.01
(d)...............................................................7.01
(e)...............................................................6.11
316 (a)(LAST SENTENCE)............................................2.09
(a)(1)(A).........................................................6.05
(a)(1)(B).........................................................6.04
</TABLE>
1
<PAGE>
(a)(2)............................................................n.a.
(b)...............................................................6.07
(c)(c)............................................................2.12
317 (a)(1)........................................................6.08
(a)(2)............................................................6.09
(b)...............................................................2.04
318 (a)...........................................................11.01
(b)...............................................................N.A.
(c)...............................................................11.01
N.A. MEANS NOT APPLICABLE.
*THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
2
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.......................i
SECTION 1.01. DEFINITIONS.................................................i
SECTION 1.02. OTHER DEFINITIONS...........................................i
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...........i
SECTION 1.04. RULES OF CONSTRUCTION.......................................i
ARTICLE 2. THE NOTES........................................................i
SECTION 2.01. FORM AND DATING.............................................i
SECTION 2.02. EXECUTION AND AUTHENTICATION................................i
SECTION 2.03. REGISTRAR AND PAYING AGENT..................................i
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.........................i
SECTION 2.05. HOLDER LISTS................................................i
SECTION 2.06. TRANSFER AND EXCHANGE.......................................i
SECTION 2.07. REPLACEMENT NOTES...........................................i
SECTION 2.08. OUTSTANDING NOTES...........................................i
SECTION 2.09. TREASURY NOTES..............................................i
SECTION 2.10. TEMPORARY NOTES.............................................i
SECTION 2.11. CANCELLATION................................................i
SECTION 2.12. DEFAULTED INTEREST..........................................i
ARTICLE 3. REDEMPTION AND PREPAYMENT........................................i
SECTION 3.01. NOTICES TO TRUSTEE..........................................i
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED...........................i
i
<PAGE>
SECTION 3.03. NOTICE OF REDEMPTION.......................................ii
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.............................ii
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE................................ii
SECTION 3.06. NOTES REDEEMED IN PART.....................................ii
SECTION 3.07. OPTIONAL REDEMPTION........................................ii
SECTION 3.08. MANDATORY REDEMPTION.......................................ii
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS........ii
ARTICLE 4. COVENANTS.......................................................ii
SECTION 4.01. PAYMENT OF NOTES...........................................ii
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY............................ii
SECTION 4.03. REPORTS....................................................ii
SECTION 4.04. COMPLIANCE CERTIFICATE.....................................ii
SECTION 4.05. TAXES......................................................ii
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.............................ii
SECTION 4.07. RESTRICTED PAYMENTS........................................ii
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.................................................ii
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK........................................................ii
SECTION 4.10. ASSET SALES................................................ii
SECTION 4.11. TRANSACTIONS WITH AFFILIATES...............................ii
SECTION 4.12. LIENS......................................................ii
SECTION 4.13. CORPORATE EXISTENCE........................................ii
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.................ii
SECTION 4.15. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT...............ii
SECTION 4.16. PAYMENTS FOR CONSENT.......................................ii
SECTION 4.17. LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS
BY RESTICTED SUBSIDIARIES..............................................ii
ARTICLE 5. SUCCESSORS......................................................ii
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS...................ii
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED..........................ii
ii
<PAGE>
ARTICLE 6. DEFAULTS AND REMEDIES..........................................iii
SECTION 6.01. EVENTS OF DEFAULT.........................................iii
SECTION 6.02. ACCELERATION..............................................iii
SECTION 6.03. OTHER REMEDIES............................................iii
SECTION 6.04. WAIVER OF PAST DEFAULTS...................................iii
SECTION 6.05. CONTROL BY MAJORITY.......................................iii
SECTION 6.06. LIMITATION ON SUITS.......................................iii
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.............iii
SECTION 6.08. COLLECTION SUIT BY TRUSTEE................................iii
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM..........................iii
SECTION 6.10. PRIORITIES................................................iii
SECTION 6.11. UNDERTAKING FOR COSTS.....................................iii
ARTICLE 7. TRUSTEE........................................................iii
SECTION 7.01. DUTIES OF TRUSTEE.........................................iii
SECTION 7.02. RIGHTS OF TRUSTEE.........................................iii
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE..............................iii
SECTION 7.04. TRUSTEE'S DISCLAIMER......................................iii
SECTION 7.05. NOTICE OF DEFAULTS........................................iii
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES................iii
SECTION 7.07. COMPENSATION AND INDEMNITY................................iii
SECTION 7.08. REPLACEMENT OF TRUSTEE....................................iii
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC..........................iii
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.............................iii
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........iii
iii
<PAGE>
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................iv
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...iv
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.............................iv
SECTION 8.03. COVENANT DEFEASANCE........................................iv
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................iv
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS..........................iv
SECTION 8.06. REPAYMENT TO COMPANY.......................................iv
SECTION 8.07. REINSTATEMENT..............................................iv
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER................................iv
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES........................iv
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES...........................iv
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT........................iv
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS..........................iv
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES...........................iv
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC............................iv
ARTICLE 10. SUBORDINATION..................................................iv
SECTION 10.01. AGREEMENT TO SUBORDINATE..................................iv
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY......................iv
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.........................iv
SECTION 10.04. ACCELERATION OF SECURITIES................................iv
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.......................iv
SECTION 10.06. NOTICE BY COMPANY.........................................iv
SECTION 10.07. SUBROGATION...............................................iv
SECTION 10.08. RELATivE RIGHTS...........................................iv
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY..............iv
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATivE..................iv
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT........................iv
<PAGE>
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION......................v
SECTION 10.13. AMENDMENTS.................................................v
ARTICLE 11. MISCELLANEOUS...................................................v
SECTION 11.01. TRUST INDENTURE ACT CONTROLS...............................v
SECTION 11.02. NOTICES....................................................v
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES........................................................v
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.........v
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..............v
SECTION 11.06. RULES BY TRUSTEE AND AGENTS................................v
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS..............................................v
SECTION 11.08. GOVERNING LAW..............................................v
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..............v
SECTION 11.10. SUCCESSORS.................................................v
SECTION 11.11. SEVERABILITY...............................................v
SECTION 11.12. COUNTERPART ORIGINALS......................................v
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
v
<PAGE>
INDENTURE dated as of February 4, 1998 among MasTec, Inc., a
Delaware corporation, (the "COMPANY") AND FIRST TRUST NATIONAL ASSOCIATION, AS
TRUSTEE (THE "TRUSTEE").
THE COMPANY AND THE TRUSTEE AGREE AS FOLLOWS FOR THE BENEFIT OF EACH
OTHER AND FOR THE EQUAL AND RATABLE BENEFIT OF THE HOLDERS OF THE 7 3/4% SERIES
A SENIOR SUBORDINATED NOTES DUE 2008 (THE "SERIES A NOTES") AND THE 7 3/4%
SERIES B SENIOR SUBORDINATED NOTES DUE 2008 (THE "SERIES B NOTES" AND, TOGETHER
WITH THE SERIES A NOTES, THE "NOTES"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"144A GLOBAL NOTE" MEANS A GLOBAL NOTE IN THE FORM OF EXHIBIT A
HERETO BEARING THE GLOBAL NOTE LEGEND AND THE PRIVATE PLACEMENT LEGEND AND
DEPOSITED WITH OR ON BEHALF OF, AND REGISTERED IN THE NAME OF, THE DEPOSITARY OR
ITS NOMINEE THAT WILL BE ISSUED IN A DENOMINATION EQUAL TO THE OUTSTANDING
PRINCIPAL AMOUNT OF THE NOTES SOLD IN RELIANCE ON RULE 144A.
"ACQUIRED DEBT" MEANS, WITH RESPECT TO ANY SPECIFIED PERSON, (I)
INDEBTEDNESS OF ANY OTHER PERSON EXISTING AT THE TIME SUCH OTHER PERSON IS
MERGED WITH OR INTO OR BECAME A SUBSIDIARY OF SUCH SPECIFIED PERSON, INCLUDING,
WITHOUT LIMITATION, INDEBTEDNESS INCURRED IN CONNECTION WITH OR IN CONTEMPLATION
OF, SUCH OTHER PERSON MERGING WITH OR INTO OR BECOMING A SUBSIDIARY OF SUCH
SPECIFIED PERSON, AND (II) INDEBTEDNESS SECURED BY A LIEN ENCUMBERING ANY ASSET
ACQUIRED BY SUCH SPECIFIED PERSON.
"AFFILIATE" OF ANY SPECIFIED PERSON MEANS ANY OTHER PERSON DIRECTLY
OR INDIRECTLY CONTROLLING OR CONTROLLED BY OR UNDER DIRECT OR INDIRECT COMMON
CONTROL WITH SUCH SPECIFIED PERSON. FOR PURPOSES OF THIS DEFINITION, "CONTROL"
(INCLUDING, WITH CORRELATIVE MEANINGS, THE TERMS "CONTROLLING," "CONTROLLED BY"
AND "UNDER COMMON CONTROL WITH"), AS USED WITH RESPECT TO ANY PERSON, SHALL MEAN
THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE
DIRECTION OF THE MANAGEMENT OR POLICIES OF SUCH PERSON, WHETHER THROUGH THE
OWNERSHIP OF VOTING SECURITIES, BY AGREEMENT OR OTHERWISE; PROVIDED THAT
BENEFICIAL OWNERSHIP OF 10% OR MORE OF THE VOTING SECURITIES OF A PERSON SHALL
BE DEEMED TO BE CONTROL.
"AGENT" MEANS ANY REGISTRAR, PAYING AGENT OR CO-REGISTRAR.
"APPLICABLE PROCEDURES" MEANS, WITH RESPECT TO ANY TRANSFER OR
EXCHANGE OF OR FOR BENEFICIAL INTERESTS IN ANY GLOBAL NOTE, THE RULES AND
PROCEDURES OF THE DEPOSITARY, EUROCLEAR AND CEDEL THAT APPLY TO SUCH TRANSFER OR
EXCHANGE.
"ASSET SALE" MEANS (I) THE SALE, LEASE, CONVEYANCE OR OTHER
DISPOSITION OF ANY ASSETS OR RIGHTS (INCLUDING, WITHOUT LIMITATION, BY WAY OF A
SALE OR LEASEBACK), EXCLUDING SALES AND DISPOSITIONS OF SERVICES AND ANCILLARY
PRODUCTS IN THE ORDINARY COURSE OF BUSINESS (PROVIDED THAT THE SALE, LEASE,
CONVEYANCE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE
COMPANY AND ITS RESTRICTED SUBSIDIARIES TAKEN AS A WHOLE SHALL BE GOVERNED BY
SECTIONS 4.14 AND/OR 5.01 HEREOF AND NOT BY SECTION 4.10 HEREOF), AND (II) THE
ISSUE OR SALE BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF EQUITY INTERESTS OF
ANY OF THE COMPANY'S SUBSIDIARIES, IN THE CASE OF EITHER CLAUSE (I) OR (II),
WHETHER IN A SINGLE
1
<PAGE>
TRANSACTION OR A SERIES OF RELATED TRANSACTIONS (A) THAT HAVE A FAIR MARKET
VALUE IN EXCESS OF $5.0 MILLION OR (B) FOR NET PROCEEDS IN EXCESS OF $5.0
MILLION. NOTWITHSTANDING THE FOREGOING: (I) A TRANSFER OF ASSETS BY THE COMPANY
TO A RESTRICTED SUBSIDIARY OR BY A RESTRICTED SUBSIDIARY TO THE COMPANY OR TO
ANOTHER RESTRICTED SUBSIDIARY; (II) AN ISSUANCE OF EQUITY INTERESTS BY A WHOLLY
OWNED RESTRICTED SUBSIDIARY TO THE COMPANY OR TO ANOTHER WHOLLY OWNED RESTRICTED
SUBSIDIARY; (III) A RESTRICTED PAYMENT THAT IS PERMITTED BY SECTION 4.07 HEREOF;
(IV) THE DISPOSITION OF OBSOLETE, WORN OUT OR EXCESS EQUIPMENT; AND (V) THE SALE
OR OTHER DISPOSITION OF THE COMPANY'S EQUITY INTERESTS IN SUPERCANAL OR CONECEL
SHALL NOT BE DEEMED TO BE ASSET SALES.
"BANKRUPTCY LAW" MEANS TITLE 11, U.S. CODE OR ANY SIMILAR FEDERAL OR
STATE LAW FOR THE RELIEF OF DEBTORS.
"BOARD OF DIRECTORS" MEANS THE BOARD OF DIRECTORS OF THE COMPANY OR
ANY AUTHORIZED COMMITTEE THEREOF.
"BUSINESS DAY" MEANS ANY DAY OTHER THAN A LEGAL HOLIDAY.
"CAPITAL LEASE OBLIGATION" MEANS, AT THE TIME ANY DETERMINATION
THEREOF IS TO BE MADE, THE AMOUNT OF THE LIABILITY IN RESPECT OF A CAPITAL LEASE
THAT WOULD AT SUCH TIME BE REQUIRED TO BE CAPITALIZED ON A BALANCE SHEET IN
ACCORDANCE WITH GAAP.
"CAPITAL STOCK" MEANS (I) IN THE CASE OF A CORPORATION, CORPORATE
STOCK, (II) IN THE CASE OF AN ASSOCIATION OR BUSINESS ENTITY, ANY AND ALL
SHARES, INTERESTS, PARTICIPATIONS, RIGHTS OR OTHER EQUIVALENTS (HOWEVER
DESIGNATED) OF CORPORATE STOCK, (III) IN THE CASE OF A PARTNERSHIP OR LIMITED
LIABILITY COMPANY, PARTNERSHIP OR MEMBERSHIP INTERESTS (WHETHER GENERAL OR
LIMITED) AND (IV) ANY OTHER INTEREST OR PARTICIPATION THAT CONFERS ON A PERSON
THE RIGHT TO RECEIVE A SHARE OF THE PROFITS AND LOSSES OF, OR DISTRIBUTION OF
ASSETS OF, THE ISSUING PERSON.
"CASH EQUIVALENTS" MEANS (I) ANY EVIDENCE OF INDEBTEDNESS ISSUED OR
DIRECTLY AND FULLY GUARANTEED OR INSURED BY THE UNITED STATES GOVERNMENT OR ANY
AGENCY OR INSTRUMENTALITY THEREOF HAVING MATURITIES OF NOT MORE THAN ONE YEAR
FROM THE DATE OF ACQUISITION, (II) CERTIFICATES OF DEPOSIT AND EURODOLLAR TIME
DEPOSITS WITH MATURITIES OF ONE YEAR OR LESS FROM THE DATE OF ACQUISITION,
BANKERS' ACCEPTANCES WITH MATURITIES NOT EXCEEDING ONE YEAR AND OVERNIGHT BANK
DEPOSITS, IN EACH CASE WITH ANY DOMESTIC COMMERCIAL BANK HAVING CAPITAL AND
SURPLUS IN EXCESS OF $250.0 MILLION AND A THOMPSON BANK WATCH RATING OF "B" OR
BETTER, OR WHOSE SHORT-TERM DEBT HAS THE HIGHEST RATING OBTAINABLE FROM MOODY'S
INVESTORS SERVICE, INC. ("MOODY'S") OR STANDARD & POOR'S CORPORATION ("S&P"),
(III) ANY MONEY MARKET DEPOSIT ACCOUNT ISSUED OR OFFERED BY A DOMESTIC
COMMERCIAL BANK HAVING CAPITAL AND SURPLUS IN EXCESS OF $250.0 MILLION AND A
THOMPSON BANK WATCH RATING OF "B" OR BETTER, OR WHOSE SHORT-TERM DEBT HAS THE
HIGHEST RATING OBTAINABLE FROM MOODY'S OR S&P, (IV) REPURCHASE OBLIGATIONS WITH
A TERM OF NOT MORE THAN SEVEN DAYS FOR UNDERLYING SECURITIES OF THE TYPES
DESCRIBED IN CLAUSES (I) AND (II) ABOVE ENTERED INTO WITH ANY FINANCIAL
INSTITUTION MEETING THE QUALIFICATIONS SPECIFIED IN CLAUSE (II) ABOVE, AND (V)
COMMERCIAL PAPER HAVING THE HIGHEST RATING OBTAINABLE FROM MOODY'S OR S&P, AND
IN EACH CASE MATURING WITHIN ONE YEAR AFTER THE DATE OF ACQUISITION.
"CEDEL" MEANS CEDEL BANK, SA.
"CHANGE OF CONTROL" MEANS THE OCCURRENCE OF ANY OF THE FOLLOWING:
(I) THE SALE, LEASE, TRANSFER, CONVEYANCE OR OTHER DISPOSITION (OTHER THAN BY
WAY OF MERGER OR CONSOLIDATION), IN ONE OR A SERIES OF RELATED TRANSACTIONS, OF
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY AND ITS RESTRICTED
SUBSIDIARIES TAKEN AS A WHOLE TO ANY "PERSON" (AS SUCH TERM IS USED IN SECTION
13(D)(3) OF THE EXCHANGE ACT) OTHER THAN THE PRINCIPALS OR ANY WHOLLY OWNED
RESTRICTED SUBSIDIARY OF THE COMPANY; (II) THE
2
<PAGE>
ADOPTION OF A PLAN RELATING TO THE LIQUIDATION OR DISSOLUTION OF THE COMPANY;
(III) THE CONSUMMATION OF ANY TRANSACTION (INCLUDING, WITHOUT LIMITATION, ANY
MERGER OR CONSOLIDATION) THE RESULT OF WHICH IS THAT ANY "PERSON" (AS DEFINED
ABOVE), OTHER THAN THE PRINCIPALS, BECOMES THE "BENEFICIAL OWNER" (AS SUCH TERM
IS DEFINED IN RULE 13D-3 AND RULE 13D-5 UNDER THE EXCHANGE ACT, EXCEPT THAT A
PERSON SHALL BE DEEMED TO HAVE "BENEFICIAL OWNERSHIP" OF ALL SECURITIES THAT
SUCH PERSON HAS THE RIGHT TO ACQUIRE, WHETHER SUCH RIGHT IS CURRENTLY
EXERCISABLE OR IS EXCERCISABLE ONLY UPON THE OCCURRENCE OF A SUBSEQUENT
CONDITION), DIRECTLY OR INDIRECTLY, OF MORE THAN 40% OF THE VOTING STOCK OF THE
COMPANY (MEASURED BY VOTING POWER RATHER THAN NUMBER OF SHARES) OR; (IV) THE
FIRST DAY ON WHICH A MAJORITY OR THE MEMBERS OF THE BOARD OF DIRECTORS ARE NOT
CONTINUING DIRECTORS.
"CLOSING DATE" MEANS THE DATE OF THE CLOSING ON THE SALE OF THE
NOTES.
"COMPANY" MEANS MASTEC, INC., A DELAWARE CORPORATION, AND ANY AND
ALL SUCCESSORS THERETO.
"CONECEL" MEANS CONSORCIO ECUATORIANO DE TELECOMMUNICACIONES, S.A.
"CONSOLIDATED CASH FLOW" MEANS, WITH RESPECT TO ANY PERSON FOR ANY
PERIOD, THE CONSOLIDATED NET INCOME OF SUCH PERSON FOR SUCH PERIOD PLUS, TO THE
EXTENT DEDUCTED IN COMPUTING SUCH CONSOLIDATED NET INCOME, (I) AN AMOUNT EQUAL
TO ANY EXTRAORDINARY, NONRECURRING OR UNUSUAL LOSS OR CHARGE PLUS ANY NET LOSS
REALIZED IN CONNECTION WITH AN ASSET SALE, (II) PROVISION FOR TAXES BASED ON
INCOME OR PROFITS (LESS THE TAX EFFECT ATTRIBUTABLE TO MINORITY INTERESTS),
(III) CONSOLIDATED INTEREST EXPENSE (NET OF INTEREST INCOME) WHETHER PAID OR
ACCRUED AND WHETHER OR NOT CAPITALIZED (INCLUDING, WITHOUT LIMITATION,
PREPAYMENT PENALTIES, PREMIUMS ON INDEBTEDNESS, AMORTIZATION OF DEBT ISSUANCE
COSTS AND ORIGINAL ISSUE DISCOUNT, NON-CASH INTEREST PAYMENTS, THE INTEREST
COMPONENT OF ANY DEFERRED PAYMENT OBLIGATIONS, THE INTEREST COMPONENT OF ALL
PAYMENTS ASSOCIATED WITH CAPITAL LEASE OBLIGATIONS, COMMISSIONS, DISCOUNTS AND
OTHER FEES AND CHARGES INCURRED IN RESPECT OF LETTER OF CREDIT OR BANKERS'
ACCEPTANCE FINANCINGS, AND NET PAYMENTS (IF ANY) PURSUANT TO HEDGING
OBLIGATIONS), AND (IV) DEPRECIATION AND AMORTIZATION (INCLUDING AMORTIZATION OF
GOODWILL AND OTHER INTANGIBLES BUT EXCLUDING AMORTIZATION OF PREPAID CASH
EXPENSES THAT WERE PAID IN A PRIOR PERIOD) IN EACH CASE, ON A CONSOLIDATED BASIS
AND DETERMINED IN ACCORDANCE WITH GAAP. NOTWITHSTANDING THE FOREGOING, THE
PROVISION FOR TAXES BASED ON THE INCOME OR PROFITS OF, AND THE DEPRECIATION AND
AMORTIZATION OF, A RESTRICTED SUBSIDIARY OF A PERSON SHALL BE ADDED TO
CONSOLIDATED NET INCOME TO COMPUTE CONSOLIDATED CASH FLOW ONLY TO THE EXTENT
(AND IN THE SAME PROPORTION) THAT THE NET INCOME OF SUCH RESTRICTED SUBSIDIARY
WAS INCLUDED IN CALCULATING THE CONSOLIDATED NET INCOME OF SUCH PERSON AND ONLY
IF A CORRESPONDING AMOUNT WOULD BE PERMITTED AT THE DATE OF DETERMINATION TO BE
DIVIDENDED TO THE COMPANY BY SUCH RESTRICTED SUBSIDIARY WITHOUT PRIOR APPROVAL
(THAT HAS NOT BEEN OBTAINED) PURSUANT TO THE TERMS OF ITS CHARTER AND ALL
AGREEMENTS, INSTRUMENTS, JUDGMENTS, DECREES, ORDERS, STATUTES, RULES AND
GOVERNMENTAL REGULATIONS APPLICABLE TO SUCH RESTRICTED SUBSIDIARY OR ITS
STOCKHOLDERS.
"CONSOLIDATED NET INCOME" MEANS, WITH RESPECT TO ANY PERSON FOR ANY
PERIOD, THE AGGREGATE OF THE NET INCOME OF SUCH PERSON AND ITS RESTRICTED
SUBSIDIARIES FOR SUCH PERIOD, ON A CONSOLIDATED BASIS, DETERMINED IN ACCORDANCE
WITH GAAP; PROVIDED THAT (I) THE NET INCOME (BUT NOT LOSS) OF ANY PERSON THAT IS
NOT A RESTRICTED SUBSIDIARY OR THAT IS ACCOUNTED FOR BY THE EQUITY METHOD OF
ACCOUNTING SHALL BE INCLUDED ONLY TO THE EXTENT OF THE AMOUNT OF DIVIDENDS OR
DISTRIBUTIONS PAID IN CASH TO THE REFERENT PERSON OR A WHOLLY OWNED RESTRICTED
SUBSIDIARY THEREOF, (II) THE NET INCOME OF ANY RESTRICTED SUBSIDIARY SHALL BE
EXCLUDED TO THE EXTENT THAT THE DECLARATION OR PAYMENT OF DIVIDENDS OR SIMILAR
DISTRIBUTIONS BY THAT RESTRICTED SUBSIDIARY OF THAT NET INCOME IS NOT AT THE
DATE OF DETERMINATION
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PERMITTED WITHOUT ANY PRIOR GOVERNMENTAL APPROVAL (THAT HAS NOT BEEN OBTAINED)
OR, DIRECTLY OR INDIRECTLY, BY OPERATION OF THE TERMS OF ITS CHARTER OR ANY
AGREEMENT, INSTRUMENT, JUDGMENT, DECREE, ORDER, STATUTE, RULE OR GOVERNMENTAL
REGULATION APPLICABLE TO THAT RESTRICTED SUBSIDIARY OR ITS STOCKHOLDERS, (III)
THE NET INCOME OF ANY PERSON ACQUIRED IN A POOLING OF INTEREST TRANSACTION FOR
ANY PERIOD PRIOR TO THE DATE OF SUCH ACQUISITION SHALL BE EXCLUDED, (IV) THE
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLES SHALL BE EXCLUDED AND (V)
THE NET INCOME (BUT NOT LOSS) OF ANY UNRESTRICTED SUBSIDIARY SHALL BE EXCLUDED,
WHETHER OR NOT DISTRIBUTED TO THE COMPANY OR ONE OF ITS RESTRICTED SUBSIDIARIES.
"CONSOLIDATED NET WORTH" MEANS, WITH RESPECT TO ANY PERSON AS OF ANY
DATE, THE SUM OF (I) THE CONSOLIDATED EQUITY OF THE COMMON STOCKHOLDERS OF SUCH
PERSON AND ITS CONSOLIDATED RESTRICTED SUBSIDIARIES AS OF SUCH DATE, PLUS (II)
THE RESPECTIVE AMOUNTS REPORTED ON SUCH PERSON'S BALANCE SHEET AS OF SUCH DATE
WITH RESPECT TO ANY SERIES OF PREFERRED STOCK (OTHER THAN DISQUALIFIED STOCK)
THAT BY ITS TERMS IS NOT ENTITLED TO THE PAYMENT OF DIVIDENDS UNLESS SUCH
DIVIDENDS MAY BE DECLARED AND PAID ONLY OUT OF NET EARNINGS IN RESPECT OF THE
YEAR OF SUCH DECLARATION AND PAYMENT, BUT ONLY TO THE EXTENT OF ANY CASH
RECEIVED BY SUCH PERSON UPON ISSUANCE OF SUCH PREFERRED STOCK, LESS (A) ALL
WRITE-UPS (OTHER THAN WRITE-UPS RESULTING FROM FOREIGN CURRENCY TRANSLATIONS AND
WRITE-UPS OF TANGIBLE ASSETS OF A GOING CONCERN BUSINESS MADE WITHIN 12 MONTHS
AFTER THE ACQUISITION OF SUCH BUSINESS) SUBSEQUENT TO THE CLOSING DATE IN THE
BOOK VALUE OF ANY ASSET OWNED BY SUCH PERSON OR A CONSOLIDATED RESTRICTED
SUBSIDIARY OF SUCH PERSON, (B) ALL INVESTMENTS AS OF SUCH DATE IN UNCONSOLIDATED
SUBSIDIARIES AND IN PERSONS THAT ARE NOT RESTRICTED SUBSIDIARIES AND (C) ALL
UNAMORTIZED DEBT DISCOUNT AND EXPENSE AND UNAMORTIZED DEFERRED CHARGES AS OF
SUCH DATE, IN EACH CASE, DETERMINED IN ACCORDANCE WITH GAAP.
"CONTINUING DIRECTORS" MEANS, AS OF ANY DATE OF DETERMINATION, ANY
MEMBER OF THE BOARD OF DIRECTORS WHO (I) WAS A MEMBER OF SUCH BOARD OF DIRECTORS
ON THE CLOSING DATE OR (II) WAS NOMINATED FOR ELECTION OR ELECTED TO SUCH BOARD
OF DIRECTORS WITH THE APPROVAL OF A MAJORITY OF THE CONTINUING DIRECTORS WHO
WERE MEMBERS OF SUCH BOARD OF DIRECTORS AT THE TIME OF SUCH NOMINATION OR
ELECTION.
"CREDIT FACILITY" MEANS THAT CERTAIN CREDIT AGREEMENT, DATED AS OF
JUNE 9, 1997, BY AND AMONG THE COMPANY, CERTAIN SUBSIDIARIES OF THE COMPANY
NAMED THEREIN, THE LENDERS PARTY THERETO AND BANKBOSTON, N.A., AS AGENT, AND ALL
AGREEMENTS ANCILLARY THERETO, AS SUCH CREDIT AGREEMENT AND ANCILLARY AGREEMENTS
MAY BE AMENDED, RESTATED, EXTENDED, MODIFIED, RENEWED, REFUNDED, REPLACED,
SUBSTITUTED, RESTRUCTURED OR REFINANCED IN WHOLE OR IN PART FROM TIME TO TIME
(INCLUDING, WITHOUT LIMITATION, ANY SUCCESSIVE RENEWALS, EXTENSIONS,
SUBSTITUTIONS, REFINANCINGS, RESTRUCTURINGS, REPLACEMENTS, SUPPLEMENTS OR
MODIFICATIONS OF THE FOREGOING), WHETHER WITH THE PRESENT LENDERS OR ANY OTHER
LENDERS.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" SHALL BE AT THE ADDRESS OF
THE TRUSTEE SPECIFIED IN SECTION 11.02 HEREOF OR SUCH OTHER ADDRESS AS TO WHICH
THE TRUSTEE MAY GIVE NOTICE TO THE COMPANY.
"CUSTODIAN" MEANS THE TRUSTEE, AS CUSTODIAN WITH RESPECT TO THE
NOTES IN GLOBAL FORM, OR ANY SUCCESSOR ENTITY THERETO.
"DEFAULT" MEANS ANY EVENT THAT IS OR WITH THE PASSAGE OF TIME OR THE
GIVING OF NOTICE OR BOTH WOULD BE AN EVENT OF DEFAULT.
"DEFINITIVE NOTE" MEANS A CERTIFICATED NOTE REGISTERED IN THE NAME
OF THE HOLDER THEREOF AND ISSUED IN ACCORDANCE WITH SECTION 2.06 HEREOF, IN THE
FORM OF EXHIBIT A HERETO EXCEPT THAT SUCH NOTE SHALL NOT BEAR THE GLOBAL NOTE
LEGEND AND SHALL NOT HAVE THE "SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL
NOTE" ATTACHED THERETO.
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"DEPOSITARY" MEANS, WITH RESPECT TO THE NOTES ISSUABLE OR ISSUED IN
WHOLE OR IN PART IN GLOBAL FORM, THE PERSON SPECIFIED IN SECTION 2.03 HEREOF AS
THE DEPOSITARY WITH RESPECT TO THE NOTES, AND ANY AND ALL SUCCESSORS THERETO
APPOINTED AS DEPOSITARY HEREUNDER AND HAVING BECOME SUCH PURSUANT TO THE
APPLICABLE PROVISION OF THIS INDENTURE.
"DESIGNATED SENIOR DEBT" MEANS (I) ANY INDEBTEDNESS NOW OR HEREAFTER
OUTSTANDING UNDER THE CREDIT FACILITY AND (II) ANY OTHER SENIOR DEBT PERMITTED
UNDER THIS INDENTURE THE PRINCIPAL AMOUNT OF WHICH IS $10.0 MILLION OR MORE AND
THAT HAS BEEN DESIGNATED BY THE COMPANY AS "DESIGNATED SENIOR DEBT."
"DISQUALIFIED STOCK" MEANS ANY CAPITAL STOCK THAT, 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
DATE THAT IS 91 DAYS AFTER THE DATE ON WHICH THE NOTES MATURE.
"EQUITY INTERESTS" MEANS CAPITAL STOCK AND ALL WARRANTS, OPTIONS OR
OTHER RIGHTS TO ACQUIRE CAPITAL STOCK (BUT EXCLUDING ANY DEBT SECURITY THAT IS
CONVERTIBLE INTO, OR EXCHANGEABLE FOR, CAPITAL STOCK).
"EUROCLEAR" MEANS MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE, AS OPERATOR OF THE EUROCLEAR SYSTEM.
"EXCHANGE ACT" MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
"EXCHANGE NOTES" MEANS THE NOTES ISSUED IN THE EXCHANGE OFFER
PURSUANT TO SECTION 2.06(F) HEREOF.
"EXCHANGE OFFER" HAS THE MEANING SET FORTH IN THE REGISTRATION
RIGHTS AGREEMENT.
"EXCHANGE OFFER REGISTRATION STATEMENT" HAS THE MEANING SET FORTH IN
THE REGISTRATION RIGHTS AGREEMENT.
"EXISTING INDEBTEDNESS" MEANS INDEBTEDNESS IN EXISTENCE ON THE
CLOSING DATE, UNTIL SUCH INDEBTEDNESS IS REPAID.
"FIXED CHARGES" MEANS, WITH RESPECT TO ANY PERSON FOR ANY PERIOD,
THE SUM, WITHOUT DUPLICATION, OF (I) THE CONSOLIDATED INTEREST EXPENSE (NET OF
INTEREST INCOME) OF SUCH PERSON AND ITS RESTRICTED SUBSIDIARIES FOR SUCH PERIOD,
WHETHER PAID OR ACCRUED (INCLUDING, WITHOUT LIMITATION, AMORTIZATION OF DEBT
ISSUANCE COSTS AND ORIGINAL ISSUE DISCOUNT, NON-CASH INTEREST PAYMENTS, THE
INTEREST COMPONENT OF ANY DEFERRED PAYMENT OBLIGATIONS, THE INTEREST COMPONENT
OF ALL PAYMENTS ASSOCIATED WITH CAPITAL LEASE OBLIGATIONS, COMMISSIONS,
DISCOUNTS AND OTHER FEES AND CHARGES INCURRED IN RESPECT OF LETTER OF CREDIT OR
BANKERS' ACCEPTANCE FINANCINGS, AND NET PAYMENTS (IF ANY) PURSUANT TO HEDGING
OBLIGATIONS), (II) THE CONSOLIDATED INTEREST EXPENSE OF SUCH PERSON AND ITS
RESTRICTED SUBSIDIARIES THAT WAS CAPITALIZED DURING SUCH PERIOD, (III) ANY
INTEREST EXPENSE ON INDEBTEDNESS OF ANOTHER PERSON THAT IS GUARANTEED BY SUCH
PERSON OR ONE OF ITS RESTRICTED SUBSIDIARIES OR SECURED BY A LIEN ON ASSETS OF
SUCH PERSON OR ONE OF ITS RESTRICTED SUBSIDIARIES (WHETHER OR NOT SUCH GUARANTEE
OR LIEN IS CALLED UPON) AND (IV) THE PRODUCT OF (A) ALL DIVIDEND PAYMENTS,
WHETHER OR NOT IN CASH, ON ANY SERIES OF PREFERRED STOCK OF
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SUCH PERSON OR ANY OF ITS RESTRICTED SUBSIDIARIES HELD BY PERSONS OTHER THAN THE
COMPANY OR A WHOLLY OWNED RESTRICTED SUBSIDIARY OF THE COMPANY, OTHER THAN
DIVIDEND PAYMENTS ON EQUITY INTERESTS PAYABLE SOLELY IN EQUITY INTERESTS OF THE
COMPANY, TIMES (B) A FRACTION, THE NUMERATOR OF WHICH IS ONE AND THE DENOMINATOR
OF WHICH IS ONE MINUS THE THEN CURRENT COMBINED FEDERAL, STATE AND LOCAL
STATUTORY TAX RATE OF SUCH PERSON, EXPRESSED AS A DECIMAL, IN EACH CASE, ON A
CONSOLIDATED BASIS AND IN ACCORDANCE WITH GAAP.
"FIXED CHARGE COVERAGE RATIO" MEANS WITH RESPECT TO ANY PERSON FOR
ANY PERIOD, THE RATIO OF THE CONSOLIDATED CASH FLOW OF SUCH PERSON FOR SUCH
PERIOD TO THE FIXED CHARGES OF SUCH PERSON AND ITS RESTRICTED SUBSIDIARIES FOR
SUCH PERIOD. IN THE EVENT THAT THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES
INCURS, ASSUMES, GUARANTEES OR REDEEMS ANY INDEBTEDNESS (OTHER THAN REVOLVING
CREDIT BORROWINGS) OR ISSUES PREFERRED STOCK SUBSEQUENT TO THE COMMENCEMENT OF
THE PERIOD FOR WHICH THE FIXED CHARGE COVERAGE RATIO IS BEING CALCULATED BUT
PRIOR TO THE DATE ON WHICH THE EVENT FOR WHICH THE CALCULATION OF THE FIXED
CHARGE COVERAGE RATIO IS MADE (THE "CALCULATION DATE"), THEN THE FIXED CHARGE
COVERAGE RATIO SHALL BE CALCULATED GIVING PRO FORMA EFFECT TO SUCH INCURRENCE,
ASSUMPTION, GUARANTEE OR REDEMPTION OF INDEBTEDNESS, OR SUCH ISSUANCE OR
REDEMPTION OF PREFERRED STOCK, AS IF THE SAME HAD OCCURRED AT THE BEGINNING OF
THE APPLICABLE FOUR-QUARTER REFERENCE PERIOD. IN ADDITION, FOR PURPOSES OF
MAKING THE COMPUTATION REFERRED TO ABOVE, (I) ACQUISITIONS THAT HAVE BEEN MADE
BY THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES, INCLUDING THROUGH MERGERS
OR CONSOLIDATIONS AND INCLUDING ANY RELATED FINANCING TRANSACTIONS, DURING THE
FOUR-QUARTER REFERENCE PERIOD OR SUBSEQUENT TO SUCH REFERENCE PERIOD AND ON OR
PRIOR TO THE CALCULATION DATE SHALL BE DEEMED TO HAVE OCCURRED ON THE FIRST DAY
OF THE FOUR-QUARTER REFERENCE PERIOD AND CONSOLIDATED CASH FLOW FOR SUCH
REFERENCE PERIOD SHALL BE CALCULATED WITHOUT GIVING EFFECT TO CLAUSE (III) OF
THE PROVISO SET FORTH IN THE DEFINITION OF CONSOLIDATED NET INCOME, (II) THE
CONSOLIDATED CASH FLOW ATTRIBUTABLE TO DISCONTINUED OPERATIONS, AS DETERMINED IN
ACCORDANCE WITH GAAP, AND OPERATIONS OR BUSINESSES DISPOSED OF PRIOR TO THE
CALCULATION DATE, SHALL BE EXCLUDED AND (III) THE FIXED CHARGES ATTRIBUTABLE TO
DISCONTINUED OPERATIONS, AS DETERMINED IN ACCORDANCE WITH GAAP, AND OPERATIONS
OR BUSINESSES DISPOSED OF PRIOR TO THE CALCULATION DATE, SHALL BE EXCLUDED, BUT
ONLY TO THE EXTENT THAT THE OBLIGATIONS GIVING RISE TO SUCH FIXED CHARGES SHALL
NOT BE OBLIGATIONS OF THE REFERENT PERSON OR ANY OF ITS RESTRICTED SUBSIDIARIES
FOLLOWING THE CALCULATION DATE.
"GAAP" MEANS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES SET FORTH IN
THE OPINIONS AND PRONOUNCEMENTS OF THE ACCOUNTING PRINCIPLES BOARD OF THE
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND STATEMENTS AND
PRONOUNCEMENTS OF THE FINANCIAL ACCOUNTING STANDARDS BOARD OR IN SUCH OTHER
STATEMENTS BY SUCH OTHER ENTITY AS HAVE BEEN APPROVED BY A SIGNIFICANT SEGMENT
OF THE ACCOUNTING PROFESSION, WHICH ARE IN EFFECT FROM TIME TO TIME.
"GLOBAL NOTES" MEANS, INDIVIDUALLY AND COLLECTIVELY, EACH OF THE
RESTRICTED GLOBAL NOTES AND THE UNRESTRICTED GLOBAL NOTES, IN THE FORM OF
EXHIBIT A HERETO ISSUED IN ACCORDANCE WITH SECTION 2.01, 2.06(B)(IV),
2.06(D)(II) OR 2.06(F) HEREOF.
"GLOBAL NOTE LEGEND" MEANS THE LEGEND SET FORTH IN SECTION
2.06(G)(II), WHICH IS REQUIRED TO BE PLACED ON ALL GLOBAL NOTES ISSUED UNDER
THIS INDENTURE.
"GOVERNMENT SECURITIES" MEANS DIRECT OBLIGATIONS OF, OR OBLIGATIONS
GUARANTEED BY, THE UNITED STATES OF AMERICA, AND THE PAYMENT FOR WHICH THE
UNITED STATES PLEDGES ITS FULL FAITH AND CREDIT.
"GUARANTEE" MEANS A GUARANTEE (OTHER THAN BY ENDORSEMENT OF
NEGOTIABLE INSTRUMENTS FOR COLLECTION IN THE ORDINARY COURSE OF BUSINESS),
DIRECT OR INDIRECT, IN ANY MANNER (INCLUDING, WITHOUT LIMITATION, LETTERS OF
CREDIT AND REIMBURSEMENT AGREEMENTS IN RESPECT THEREOF), OF ALL OR ANY PART OF
ANY INDEBTEDNESS.
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"HEDGING OBLIGATIONS" MEANS, WITH RESPECT TO ANY PERSON, THE
OBLIGATIONS OF SUCH PERSON UNDER (I) INTEREST RATE SWAP AGREEMENTS, INTEREST
RATE CAP AGREEMENTS AND INTEREST RATE COLLAR AGREEMENTS AND (II) OTHER
AGREEMENTS OR ARRANGEMENTS DESIGNED TO PROTECT SUCH PERSON AGAINST FLUCTUATIONS
IN INTEREST RATES, CURRENCY EXCHANGE RATES OR COMMODITY PRICES.
"HOLDER" MEANS A PERSON IN WHOSE NAME A NOTE IS REGISTERED.
"IAI GLOBAL NOTE" MEANS THE GLOBAL NOTE IN THE FORM OF EXHIBIT A
HERETO BEARING THE GLOBAL NOTE LEGEND AND THE PRIVATE PLACEMENT LEGEND AND
DEPOSITED WITH OR ON BEHALF OF AND REGISTERED IN THE NAME OF THE DEPOSITARY OR
ITS NOMINEE THAT WILL BE ISSUED IN A DENOMINATION EQUAL TO THE OUTSTANDING
PRINCIPAL AMOUNT OF THE NOTES SOLD TO INSTITUTIONAL ACCREDITED INVESTORS.
"INDEBTEDNESS" MEANS, WITH RESPECT TO ANY PERSON, (I) ANY
INDEBTEDNESS OF SUCH PERSON, WHETHER OR NOT CONTINGENT, IN RESPECT OF BORROWED
MONEY OR EVIDENCED BY BONDS, NOTES, DEBENTURES OR SIMILAR INSTRUMENTS OR LETTERS
OF CREDIT (OR REIMBURSEMENT AGREEMENTS IN RESPECT THEREOF) OR BANKER'S
ACCEPTANCES OR REPRESENTING CAPITAL LEASE OBLIGATIONS OR THE BALANCE DEFERRED
AND UNPAID OF THE PURCHASE PRICE OF ANY PROPERTY OR REPRESENTING ANY HEDGING
OBLIGATIONS, EXCEPT ANY SUCH BALANCE THAT CONSTITUTES AN ACCRUED EXPENSE OR
TRADE PAYABLE, IF AND TO THE EXTENT ANY OF THE FOREGOING INDEBTEDNESS (OTHER
THAN LETTERS OF CREDIT AND HEDGING OBLIGATIONS) WOULD APPEAR AS A LIABILITY UPON
A BALANCE SHEET OF SUCH PERSON PREPARED IN ACCORDANCE WITH GAAP, (II) ALL
INDEBTEDNESS OF OTHERS SECURED BY A LIEN ON ANY ASSET OF SUCH PERSON (WHETHER OR
NOT SUCH INDEBTEDNESS IS ASSUMED BY SUCH PERSON) AND (III) TO THE EXTENT NOT
OTHERWISE INCLUDED, THE GUARANTEE BY SUCH PERSON OF ANY INDEBTEDNESS OF ANY
OTHER PERSON.
NOTWITHSTANDING THE FOREGOING, NONE OF THE FOLLOWING SHALL
CONSTITUTE INDEBTEDNESS: (I) INDEBTEDNESS ARISING FROM AGREEMENTS PROVIDING FOR
NON-COMPETITION PAYMENTS, EARN-OUT PAYMENTS, INDEMNIFICATION OR ADJUSTMENT OF
PURCHASE PRICE OR FROM GUARANTEES SECURING ANY OBLIGATIONS OF THE COMPANY OR ANY
OF ITS SUBSIDIARIES PURSUANT TO SUCH AGREEMENTS, INCURRED OR ASSUMED IN
CONNECTION WITH THE ACQUISITION OR DISPOSITION OF ANY BUSINESS, ASSETS OR
SUBSIDIARY OF THE COMPANY, OTHER THAN GUARANTEES OR SIMILAR CREDIT SUPPORT BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES OF INDEBTEDNESS INCURRED BY ANY PERSON
ACQUIRING ALL OR ANY PORTION OF SUCH BUSINESS, ASSETS OR SUBSIDIARY FOR THE
PURPOSE OF FINANCING SUCH ACQUISITION; (II) ANY TRADE PAYABLES AND OTHER ACCRUED
CURRENT LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS AS THE DEFERRED
PURCHASE PRICE OF PROPERTY; (III) OBLIGATIONS ARISING FROM GUARANTEES TO
SUPPLIERS, LESSORS, LICENSEES, CONTRACTORS, OR CUSTOMERS INCURRED IN THE
ORDINARY COURSE OF BUSINESS; (IV) OBLIGATIONS (OTHER THAN EXPRESS GUARANTEES OF
INDEBTEDNESS FOR BORROWED MONEY) IN RESPECT OF INDEBTEDNESS OF OTHER PERSONS
ARISING IN CONNECTION WITH (A) THE SALE OR DISCOUNT OF ACCOUNTS RECEIVABLE, (B)
TRADE ACCEPTANCES AND (C) ENDORSEMENTS OF INSTRUMENTS FOR DEPOSIT IN THE
ORDINARY COURSE OF BUSINESS; (V) OBLIGATIONS IN RESPECT OF PERFORMANCE BONDS
PROVIDED BY THE COMPANY OR ITS SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS;
(VI) OBLIGATIONS ARISING FROM THE HONORING BY A BANK OTHER FINANCIAL INSTITUTION
OF A CHECK, DRAFT OR SIMILAR INSTRUMENT DRAWN AGAINST INSUFFICIENT FUNDS IN THE
ORDINARY COURSE OF BUSINESS, PROVIDED, HOWEVER, THAT SUCH OBLIGATION IS
EXTINGUISHED WITHIN TWO BUSINESS DAYS OF ITS INCURRENCE; AND (VII) ANY
OBLIGATIONS UNDER WORKERS' COMPENSATION LAWS AND OTHER SIMILAR LEGISLATION.
"INDENTURE" MEANS THIS INDENTURE, AS AMENDED OR SUPPLEMENTED FROM
TIME TO TIME.
"INDIRECT PARTICIPANT" MEANS A PERSON WHO HOLDS A BENEFICIAL
INTEREST IN A GLOBAL NOTE THROUGH A PARTICIPANT.
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"INITIAL PURCHASERS" MEANS JEFFERIES & COMPANY, INC., BANCBOSTON
SECURITIES INC., CIBC OPPENHEIMER CORP. AND NATIONSBANC MONTGOMERY SECURITIES
LLC.
"INSTITUTIONAL ACCREDITED INVESTOR" MEANS AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT, WHO ARE NOT ALSO QIBS.
"INVESTMENTS" MEANS, WITH RESPECT TO ANY PERSON, ALL INVESTMENTS BY
SUCH PERSON IN OTHER PERSONS (INCLUDING AFFILIATES) IN THE FORMS OF DIRECT OR
INDIRECT LOANS (INCLUDING GUARANTEES OF INDEBTEDNESS OR OTHER OBLIGATIONS),
ADVANCES OR CAPITAL CONTRIBUTIONS (EXCLUDING PAYROLL, COMMISSION, TRAVEL AND
SIMILAR ADVANCES TO OFFICERS AND EMPLOYEES MADE IN THE ORDINARY COURSE OF
BUSINESS AND EXCLUDING ADVANCES TO CUSTOMERS OR JOINT VENTURE PARTNERS OF THE
COMPANY OR ANY RESTRICTED SUBSIDIARY IN THE ORDINARY COURSE OF BUSINESS THAT ARE
RECORDED AS ACCOUNTS RECEIVABLE ON THE BALANCE SHEET OF THE LENDER), PURCHASES
OR OTHER ACQUISITIONS FOR CONSIDERATION OF INDEBTEDNESS, EQUITY INTERESTS OR
OTHER SECURITIES, TOGETHER WITH ALL ITEMS THAT ARE OR WOULD BE CLASSIFIED AS
INVESTMENTS ON A BALANCE SHEET PREPARED IN ACCORDANCE WITH GAAP. "INVESTMENT"
SHALL EXCLUDE EXTENSIONS OF TRADE CREDIT BY THE COMPANY AND ITS RESTRICTED
SUBSIDIARIES ON COMMERCIALLY REASONABLE TERMS IN ACCORDANCE WITH SUCH PERSON'S
NORMAL TRADE PRACTICES. IF THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY SELLS OR
OTHERWISE DISPOSES OF ANY EQUITY INTERESTS OF ANY DIRECT OR INDIRECT SUBSIDIARY
OF THE COMPANY SUCH THAT, AFTER GIVING EFFECT TO ANY SUCH SALE OR DISPOSITION,
SUCH PERSON IS NO LONGER A SUBSIDIARY OF THE COMPANY, THE COMPANY SHALL BE
DEEMED TO HAVE MADE AN INVESTMENT ON THE DATE OF ANY SUCH SALE OR DISPOSITION
EQUAL TO THE FAIR MARKET VALUE OF THE EQUITY INTERESTS OF SUCH SUBSIDIARY NOT
SOLD OR DISPOSED OF IN AN AMOUNT DETERMINED AS PROVIDED IN THE THIRD FULL
PARAGRAPH OF SECTION 4.07 HEREOF.
"LEGAL HOLIDAY" MEANS A SATURDAY, A SUNDAY OR A DAY ON WHICH BANKING
INSTITUTIONS IN THE CITY OF NEW YORK, NEW YORK OR AT A PLACE OF PAYMENT ARE
AUTHORIZED BY LAW, REGULATION OR EXECUTIVE ORDER TO REMAIN CLOSED. IF A PAYMENT
DATE IS A LEGAL HOLIDAY AT A PLACE OF PAYMENT, PAYMENT MAY BE MADE AT THAT PLACE
ON THE NEXT SUCCEEDING DAY THAT IS NOT A LEGAL HOLIDAY, AND NO INTEREST SHALL
ACCRUE ON SUCH PAYMENT FOR THE INTERVENING PERIOD.
"LETTER OF TRANSMITTAL" MEANS THE LETTER OF TRANSMITTAL TO BE
PREPARED BY THE COMPANY AND SENT TO ALL HOLDERS OF THE NOTES FOR USE BY SUCH
HOLDERS IN CONNECTION WITH THE EXCHANGE OFFER.
"LIEN" MEANS, WITH RESPECT TO ANY ASSET, ANY MORTGAGE, LIEN, PLEDGE,
CHARGE, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND IN RESPECT OF SUCH ASSET,
WHETHER OR NOT FILED, RECORDED OR OTHERWISE PERFECTED UNDER APPLICABLE LAW
(INCLUDING ANY CONDITIONAL SALE OR OTHER TITLE RETENTION AGREEMENT, ANY LEASE IN
THE NATURE THEREOF, ANY OPTION OR OTHER AGREEMENT TO SELL OR GIVE A SECURITY
INTEREST IN AND ANY FILING OF OR AGREEMENT TO GIVE ANY FINANCING STATEMENT UNDER
THE UNIFORM COMMERCIAL CODE (OR EQUIVALENT STATUTES) OF ANY JURISDICTION).
"LIQUIDATED DAMAGES" MEANS ALL LIQUIDATED DAMAGES THEN OWING
PURSUANT TO SECTION 5 OF THE REGISTRATION RIGHTS AGREEMENT.
"NET INCOME" MEANS, WITH RESPECT TO ANY PERSON, THE NET INCOME
(LOSS) OF SUCH PERSON, DETERMINED IN ACCORDANCE WITH GAAP AND BEFORE ANY
REDUCTION IN RESPECT OF PREFERRED STOCK DIVIDENDS, EXCLUDING, HOWEVER, (I) ANY
GAIN (BUT NOT LOSS), TOGETHER WITH ANY RELATED PROVISION FOR TAXES ON SUCH GAIN
(BUT NOT LOSS), REALIZED IN CONNECTION WITH (A) ANY ASSET SALE OR (B) THE
DISPOSITION OF ANY SECURITIES BY SUCH PERSON OR ANY OF ITS RESTRICTED
SUBSIDIARIES OR THE EXTINGUISHMENT OF ANY INDEBTEDNESS OF SUCH PERSON OR ANY OF
ITS RESTRICTED SUBSIDIARIES AND (II) ANY EXTRAORDINARY OR NONRECURRING GAIN (BUT
NOT LOSS), TOGETHER WITH ANY RELATED PROVISION FOR TAXES ON SUCH EXTRAORDINARY
OR NONRECURRING GAIN OR LOSS.
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"NET PROCEEDS" MEANS THE AGGREGATE CASH PROCEEDS RECEIVED BY THE
COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES IN RESPECT OF ANY ASSET SALE
(INCLUDING, WITHOUT LIMITATION, ANY CASH RECEIVED UPON THE SALE OR OTHER
DISPOSITION OF ANY NON-CASH CONSIDERATION RECEIVED IN ANY ASSET SALE), NET OF
THE DIRECT COSTS RELATING TO SUCH ASSET SALE (INCLUDING, WITHOUT LIMITATION,
LEGAL, ACCOUNTING AND INVESTMENT BANKING FEES, AND SALES COMMISSIONS) AND ANY
RELOCATION EXPENSES INCURRED AS A RESULT THEREOF, TAXES PAID OR PAYABLE AS A
RESULT THEREOF (AFTER TAKING INTO ACCOUNT ANY AVAILABLE TAX CREDITS OR
DEDUCTIONS AND ANY TAX SHARING ARRANGEMENTS), AMOUNTS REQUIRED TO BE APPLIED TO
THE REPAYMENT OF INDEBTEDNESS SECURED BY A LIEN ON THE ASSET OR ASSETS THAT WERE
THE SUBJECT OF SUCH ASSET SALE AND ANY RESERVE FOR ADJUSTMENT IN RESPECT OF THE
SALE PRICE OF SUCH ASSET OR ASSETS ESTABLISHED IN ACCORDANCE WITH GAAP.
"NON-RECOURSE DEBT" MEANS INDEBTEDNESS: (I) AS TO WHICH NEITHER THE
COMPANY NOR ANY OF ITS RESTRICTED SUBSIDIARIES (A) PROVIDES CREDIT SUPPORT OF
ANY KIND (INCLUDING ANY UNDERTAKING, AGREEMENT OR INSTRUMENT THAT WOULD
CONSTITUTE INDEBTEDNESS) OR (B) IS DIRECTLY OR INDIRECTLY LIABLE (AS A GUARANTOR
OR OTHERWISE; AND (II) NO DEFAULT WITH RESPECT TO WHICH (INCLUDING ANY RIGHTS
THAT THE HOLDERS THEREOF MAY HAVE TO TAKE ENFORCEMENT ACTION AGAINST AN
UNRESTRICTED SUBSIDIARY) WOULD PERMIT (UPON NOTICE, LAPSE OF TIME OR BOTH) ANY
HOLDER OF ANY OTHER INDEBTEDNESS (OTHER THAN THE NOTES ISSUED ON THE CLOSING
DATE) OF THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES TO DECLARE A DEFAULT
ON SUCH OTHER INDEBTEDNESS OR CAUSE THE PAYMENT THEREOF TO BE ACCELERATED OR
PAYABLE PRIOR TO ITS STATED MATURITY; AND (III) AS TO WHICH THE LENDERS WILL NOT
HAVE ANY RECOURSE TO THE STOCK OR ASSETS OF THE COMPANY OR ANY OF ITS RESTRICTED
SUBSIDIARIES.
"NON-U.S. PERSON" MEANS A PERSON WHO IS NOT A U.S. PERSON.
"NOTES" HAS THE MEANING ASSIGNED TO IT IN THE PREAMBLE TO THIS
INDENTURE.
"OBLIGATIONS" MEANS ANY PRINCIPAL OF AND PREMIUM, INTEREST
(INCLUDING INTEREST ACCRUING AFTER THE FILING OF A PETITION INITIATING ANY
PROCEEDING UNDER ANY STATE, FEDERAL OR FOREIGN BANKRUPTCY OR INSOLVENCY LAWS,
WHETHER OR NOT ALLOWABLE AS A CLAIM IN SUCH PROCEEDINGS), PENALTIES, FEES,
INDEMNIFICATIONS, REIMBURSEMENTS, GROSS-UPS, DAMAGES AND OTHER LIABILITIES
PAYABLE UNDER THE DOCUMENTATION GOVERNING ANY INDEBTEDNESS.
"OFFERING CIRCULAR" MEANS THE OFFERING CIRCULAR, DATED JANUARY 30,
1998, RELATING TO THE NOTES.
"OFFICER" MEANS, WITH RESPECT TO ANY PERSON, THE CHAIRMAN OF THE
BOARD, THE CHIEF EXECUTIVE OFFICER, THE PRESIDENT, THE CHIEF OPERATING OFFICER,
THE CHIEF FINANCIAL OFFICER, THE TREASURER, ANY ASSISTANT TREASURER, THE
CONTROLLER, THE SECRETARY OR ANY VICE-PRESIDENT OF SUCH PERSON.
"OFFICERS' CERTIFICATE" MEANS A CERTIFICATE SIGNED ON BEHALF OF THE
COMPANY BY TWO OFFICERS OF THE COMPANY, ONE OF WHOM MUST BE THE PRINCIPAL
EXECUTIVE OFFICER, THE PRINCIPAL FINANCIAL OFFICER, THE TREASURER OR THE
PRINCIPAL ACCOUNTING OFFICER OF THE COMPANY, THAT MEETS THE REQUIREMENTS OF
SECTION 11.05 HEREOF.
"OPINION OF COUNSEL" MEANS AN OPINION FROM LEGAL COUNSEL WHO IS
REASONABLY ACCEPTABLE TO THE TRUSTEE, THAT MEETS THE REQUIREMENTS OF SECTION
11.05 HEREOF. THE COUNSEL MAY BE AN EMPLOYEE OF OR COUNSEL TO THE COMPANY, ANY
SUBSIDIARY OF THE COMPANY OR THE TRUSTEE.
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"PARTICIPANT" MEANS, WITH RESPECT TO THE DEPOSITARY, EUROCLEAR OR
CEDEL, A PERSON WHO HAS AN ACCOUNT WITH THE DEPOSITARY, EUROCLEAR OR CEDEL,
RESPECTIVELY (AND, WITH RESPECT TO THE DEPOSITORY TRUST COMPANY, SHALL INCLUDE
EUROCLEAR AND CEDEL).
"PARTICIPATING BROKER-DEALER" HAS THE MEANING SET FORTH IN THE
REGISTRATION RIGHTS AGREEMENT.
"PERMITTED INVESTMENTS" MEANS (I) ANY INVESTMENT IN THE COMPANY OR
IN A RESTRICTED SUBSIDIARY OF THE COMPANY; (II) ANY INVESTMENT IN CASH
EQUIVALENTS; (III) ANY INVESTMENT BY THE COMPANY OR ANY RESTRICTED SUBSIDIARY OF
THE COMPANY IN A PERSON, IF AS A RESULT OF SUCH INVESTMENT (A) SUCH PERSON
BECOMES A RESTRICTED SUBSIDIARY OF THE COMPANY OR (B) SUCH PERSON IS MERGED,
CONSOLIDATED OR AMALGAMATED WITH OR INTO, OR TRANSFERS OR CONVEYS SUBSTANTIALLY
ALL OF ITS ASSETS TO, OR IS LIQUIDATED INTO, THE COMPANY OR A RESTRICTED
SUBSIDIARY OF THE COMPANY; (IV) ANY RESTRICTED INVESTMENT MADE AS A RESULT OF
THE RECEIPT OF NON-CASH CONSIDERATION FROM AN ASSET SALE THAT WAS MADE PURSUANT
TO AND IN COMPLIANCE WITH SECTION 4.10 HEREOF; (V) ANY INVESTMENT ACQUIRED
SOLELY IN EXCHANGE FOR THE ISSUANCE OF EQUITY INTERESTS (OTHER THAN DISQUALIFIED
STOCK) OF THE COMPANY; (VI) LOANS OR ADVANCES TO EMPLOYEES MADE IN THE ORDINARY
COURSE OF BUSINESS OF THE COMPANY OR SUCH RESTRICTED SUBSIDIARY; (VII) STOCK,
OBLIGATIONS OR SECURITIES RECEIVED IN SETTLEMENT OF DEBTS CREATED IN THE
ORDINARY COURSE OF BUSINESS AND OWING TO THE COMPANY OR ANY RESTRICTED
SUBSIDIARY OR IN SATISFACTION OF JUDGMENTS; (VIII) GUARANTEES PERMITTED TO BE
MADE PURSUANT TO SECTION 4.09 HEREOF; (IX) INVESTMENTS IN SECURITIES OF TRADE
CREDITORS RECEIVED IN SETTLEMENT OF OBLIGATIONS OR PURSUANT TO ANY PLAN OF
REORGANIZATION OR SIMILAR ARRANGEMENT UPON THE BANKRUPTCY OR INSOLVENCY OF ANY
CREDITORS OF CUSTOMERS; (X) HEDGING OBLIGATIONS; AND (XI) ANY INVESTMENT
EXISTING ON THE DATE OF THIS INDENTURE.
"PERMITTED JUNIOR SECURITIES" MEANS EQUITY INTERESTS IN THE COMPANY
OR DEBT SECURITIES THAT (I) ARE SUBORDINATED TO ALL SENIOR DEBT AND ANY DEBT
SECURITIES ISSUED IN EXCHANGE FOR SENIOR DEBT TO SUBSTANTIALLY THE SAME EXTENT
AS, OR TO A GREATER EXTENT THAN, THE NOTES ARE SUBORDINATED TO SENIOR DEBT
PURSUANT TO ARTICLE 10 HEREOF.
"PERMITTED LIENS" MEANS (I) LIENS SECURING SENIOR DEBT OF THE
COMPANY AND ITS RESTRICTED SUBSIDIARIES THAT WAS PERMITTED BY THE TERMS OF THIS
INDENTURE TO BE INCURRED; (II) LIENS IN FAVOR OF THE COMPANY OR ANY OF ITS
RESTRICTED SUBSIDIARIES; (III) LIENS ON PROPERTY OF A PERSON EXISTING AT THE
TIME SUCH PERSON IS MERGED INTO OR CONSOLIDATED WITH THE COMPANY OR ANY
RESTRICTED SUBSIDIARY OF THE COMPANY; PROVIDED THAT SUCH LIENS WERE IN EXISTENCE
PRIOR TO THE CONTEMPLATION OF SUCH MERGER OR CONSOLIDATION AND DO NOT EXTEND TO
ANY ASSETS OTHER THAN THOSE OF THE PERSON MERGED INTO OR CONSOLIDATED WITH THE
COMPANY; (IV) LIENS ON PROPERTY EXISTING AT THE TIME OF ACQUISITION THEREOF BY
THE COMPANY OR ANY RESTRICTED SUBSIDIARY OF THE COMPANY, PROVIDED THAT SUCH
LIENS WERE IN EXISTENCE PRIOR TO THE CONTEMPLATION OF SUCH ACQUISITION; (V)
LIENS TO SECURE THE PERFORMANCE OF STATUTORY OBLIGATIONS, SURETY OR APPEAL
BONDS, PERFORMANCE BONDS OR OTHER OBLIGATIONS OF A LIKE NATURE INCURRED IN THE
ORDINARY COURSE OF BUSINESS; (VI) LIENS EXISTING ON THE CLOSING DATE; (VII)
LIENS FOR TAXES, ASSESSMENTS OR GOVERNMENTAL CHARGES OR CLAIMS THAT ARE NOT YET
DELINQUENT OR THAT ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
PROMPTLY INSTITUTED AND DILIGENTLY CONCLUDED, PROVIDED THAT ANY RESERVE OR OTHER
APPROPRIATE PROVISION AS SHALL BE REQUIRED IN CONFORMITY WITH GAAP SHALL HAVE
BEEN MADE THEREFOR; (VIII) LIENS INCURRED IN THE ORDINARY COURSE OF BUSINESS
WITH RESPECT TO OBLIGATIONS THAT DO NOT EXCEED $5.0 MILLION AT ANY ONE TIME
OUTSTANDING AND THAT (A) ARE NOT INCURRED IN CONNECTION WITH THE BORROWING OF
MONEY OR THE OBTAINING OF ADVANCES OR CREDIT (OTHER THAN TRADE CREDIT IN THE
ORDINARY COURSE OF BUSINESS) AND (B) DO NOT IN THE AGGREGATE MATERIALLY DETRACT
FROM THE VALUE OF THE PROPERTY OR MATERIALLY IMPAIR THE USE THEREOF IN THE
OPERATION OF BUSINESS BY THE COMPANY OR SUCH RESTRICTED SUBSIDIARY; (IX)
STATUTORY LIENS OR LANDLORDS', CARRIERS', WAREHOUSEMEN'S, MECHANICS'. SUPPLIERS'
OR SIMILAR LIENS INCURRED IN THE ORDINARY COURSE OF BUSINESS OF THE COMPANY OR
ANY RESTRICTED SUBSIDIARY OF THE COMPANY; (X) EASEMENTS, MINOR TITLE DEFECTS,
IRREGULARITIES IN TITLE OR OTHER CHARGES OR ENCUMBRANCES ON
10
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PROPERTY NOT INTERFERING IN ANY MATERIAL RESPECT WITH THE USE OF SUCH PROPERTY
BY THE COMPANY OR A RESTRICTED SUBSIDIARY OF THE COMPANY; (XI) LIENS INCURRED OR
DEPOSITS MADE IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH WORKERS'
COMPENSATION, UNEMPLOYMENT INSURANCE AND OTHER TYPES OF SOCIAL SECURITY OR GOOD
FAITH DEPOSITS IN CONNECTION WITH BIDS, TENDERS, CONTRACTS (OTHER THAN FOR THE
PAYMENT OF INDEBTEDNESS) OR LEASES TO WHICH THE COMPANY OR ANY RESTRICTED
SUBSIDIARY IS A PARTY; (XII) LIENS SECURING INDUSTRIAL REVENUE BONDS OR OTHER
TAX-FAVORED FINANCING; AND (XIII) DEPOSIT ARRANGEMENTS ENTERED INTO IN
CONNECTION WITH ACQUISITIONS OR IN THE ORDINARY COURSE OF BUSINESS
"PERMITTED REFINANCING INDEBTEDNESS" MEANS ANY INDEBTEDNESS OF THE
COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES ISSUED IN EXCHANGE FOR, OR THE NET
PROCEEDS OF WHICH ARE USED TO EXTEND, REFINANCE, RENEW, REPLACE, DEFEASE OR
REFUND OTHER INDEBTEDNESS OF THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES;
PROVIDED THAT: (I) THE PRINCIPAL AMOUNT (OR ACCRETED VALUE, IF APPLICABLE) OF
SUCH PERMITTED REFINANCING INDEBTEDNESS DOES NOT EXCEED THE PRINCIPAL AMOUNT OF
(OR ACCRETED VALUE, IF APPLICABLE), PLUS ACCRUED INTEREST ON, THE INDEBTEDNESS
SO EXTENDED, REFINANCED, RENEWED, REPLACED, DEFEASED OR REFUNDED (PLUS THE
AMOUNT OF REASONABLE EXPENSES INCURRED IN CONNECTION THEREWITH); (II) SUCH
PERMITTED REFINANCING INDEBTEDNESS HAS A FINAL MATURITY DATE LATER THAN THE
FINAL MATURITY DATE OF, AND HAS A WEIGHTED AVERAGE LIFE TO MATURITY EQUAL TO OR
GREATER THAN THE WEIGHTED AVERAGE LIFE TO MATURITY OF, THE INDEBTEDNESS BEING
EXTENDED, REFINANCED, RENEWED, REPLACED, DEFEASED OR REFUNDED; (III) IF THE
INDEBTEDNESS BEING EXTENDED, REFINANCED, RENEWED, REPLACED, DEFEASED OR REFUNDED
IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES, SUCH PERMITTED REFINANCING
INDEBTEDNESS IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES ON TERMS AT LEAST
AS FAVORABLE TO THE HOLDERS OF NOTES AS THOSE CONTAINED IN THE DOCUMENTATION
GOVERNING THE INDEBTEDNESS BEING EXTENDED, REFINANCED, RENEWED, REPLACED,
DEFEASED OR REFUNDED; AND (IV) SUCH INDEBTEDNESS IS INCURRED EITHER BY THE
COMPANY OR BY THE RESTRICTED SUBSIDIARY THAT IS AN OBLIGOR ON THE INDEBTEDNESS
BEING EXTENDED, REFINANCED, RENEWED, REPLACED, DEFEASED OR REFUNDED.
"PERSON" MEANS ANY INDIVIDUAL, CORPORATION, PARTNERSHIP, JOINT
VENTURE, ASSOCIATION, JOINT-STOCK COMPANY, TRUST, UNINCORPORATED ORGANIZATION OR
GOVERNMENT OR AGENCY OR POLITICAL SUBDIVISION THEREOF (INCLUDING ANY SUBDIVISION
OR ONGOING BUSINESS OF ANY SUCH ENTITY OR SUBSTANTIALLY ALL OF THE ASSETS OF ANY
SUCH ENTITY, SUBDIVISION OR BUSINESS).
"PRIVATE PLACEMENT LEGEND" MEANS THE LEGEND SET FORTH IN SECTION
2.06(G)(I) TO BE PLACED ON ALL NOTES ISSUED UNDER THIS INDENTURE EXCEPT WHERE
OTHERWISE PERMITTED BY THE PROVISIONS OF THIS INDENTURE.
"QIB" MEANS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A.
"REGISTRATION RIGHTS AGREEMENT" MEANS THE REGISTRATION RIGHTS
AGREEMENT, DATED AS OF FEBRUARY 4, 1998, BY AND AMONG THE COMPANY AND THE
INITIAL PURCHASERS AS SUCH AGREEMENT MAY BE AMENDED, MODIFIED OR SUPPLEMENTED
FROM TIME TO TIME.
"REGULATION S" MEANS REGULATION S PROMULGATED UNDER THE SECURITIES
ACT.
"REGULATION S GLOBAL NOTE" MEANS A GLOBAL NOTE BEARING THE PRIVATE
PLACEMENT LEGEND AND THE GLOBAL NOTE LEGEND AND DEPOSITED WITH OR ON BEHALF OF
THE DEPOSITARY AND REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEES,
ISSUED IN A DENOMINATION EQUAL TO THE OUTSTANDING PRINCIPAL AMOUNT OF THE NOTES
INITIALLY SOLD IN RELIANCE ON RULE 903 OF REGULATION S.
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"REPRESENTATIVE" MEANS THE INDENTURE TRUSTEE OR OTHER TRUSTEE, AGENT
OR REPRESENTATIVE FOR THE HOLDERS OF ANY SENIOR DEBT.
"RESPONSIBLE OFFICER," WHEN USED WITH RESPECT TO THE TRUSTEE, MEANS
ANY OFFICER WITHIN THE CORPORATE TRUST DEPARTMENT OF THE TRUSTEE (OR ANY
SUCCESSOR GROUP OF THE TRUSTEE) OR ANY OTHER OFFICER OF THE TRUSTEE CUSTOMARILY
PERFORMING FUNCTIONS SIMILAR TO THOSE PERFORMED BY ANY OF THE ABOVE DESIGNATED
OFFICERS AND ALSO MEANS, WITH RESPECT TO A PARTICULAR CORPORATE TRUST MATTER,
ANY OTHER OFFICER TO WHOM SUCH MATTER IS REFERRED BECAUSE OF HIS KNOWLEDGE OF
AND FAMILIARITY WITH THE PARTICULAR SUBJECT.
"RESTRICTED DEFINITIVE NOTE" MEANS A DEFINITIVE NOTE BEARING THE
PRIVATE PLACEMENT LEGEND.
"RESTRICTED GLOBAL NOTE" MEANS A GLOBAL NOTE BEARING THE PRIVATE
PLACEMENT LEGEND.
"RESTRICTED INVESTMENT" MEANS AN INVESTMENT OTHER THAN A PERMITTED
INVESTMENT.
"RESTRICTED PERIOD" MEANS THE 40-DAY RESTRICTED PERIOD AS DEFINED IN
REGULATION S.
"RESTRICTED SUBSIDIARY" OF A PERSON MEANS ANY SUBSIDIARY OF THE
REFERENT PERSON THAT IS NOT AN UNRESTRICTED SUBSIDIARY.
"RULE 144" MEANS RULE 144 PROMULGATED UNDER THE SECURITIES ACT.
"RULE 144A" MEANS RULE 144A PROMULGATED UNDER THE SECURITIES ACT.
"RULE 903" MEANS RULE 903 PROMULGATED UNDER THE SECURITIES ACT.
"RULE 904" MEANS RULE 904 PROMULGATED THE SECURITIES ACT.
"SEC" MEANS THE SECURITIES AND EXCHANGE COMMISSION.
"SECURITIES ACT" MEANS THE SECURITIES ACT OF 1933, AS AMENDED.
"SENIOR DEBT" OF A PERSON MEANS (I) ALL INDEBTEDNESS OF SUCH PERSON
OUTSTANDING UNDER THE CREDIT FACILITY AND ALL HEDGING OBLIGATIONS WITH RESPECT
THERETO, WHETHER OUTSTANDING ON THE DATE OF THE INDENTURE OR THEREAFTER
INCURRED, (II) ANY OTHER INDEBTEDNESS OF SUCH PERSON PERMITTED TO BE INCURRED
UNDER THE TERMS OF THIS INDENTURE, UNLESS THE INSTRUMENT UNDER WHICH SUCH
INDEBTEDNESS IS INCURRED EXPRESSLY PROVIDES THAT IT IS SUBORDINATED IN RIGHT OF
PAYMENT TO ANY SENIOR DEBT OF SUCH PERSON AND (III) ALL OBLIGATIONS OF SUCH
PERSON WITH RESPECT TO THE FOREGOING. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THE FOREGOING, SENIOR DEBT OF A PERSON SHALL NOT INCLUDE (A) ANY LIABILITY
FOR FEDERAL, STATE, LOCAL OR OTHER TAXES OWED OR OWING BY SUCH PERSON, (B) ANY
INDEBTEDNESS OF SUCH PERSON TO ANY OF ITS SUBSIDIARIES OR OTHER AFFILIATES, (C)
ANY TRADE PAYABLES OR (D) ANY INDEBTEDNESS THAT IS INCURRED IN VIOLATION OF THIS
INDENTURE.
"SHELF REGISTRATION STATEMENT" MEANS THE SHELF REGISTRATION
STATEMENT AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT.
"SIGNIFICANT SUBSIDIARY" MEANS ANY RESTRICTED SUBSIDIARY THAT WOULD
BE A "SIGNIFICANT SUBSIDIARY" AS DEFINED IN ARTICLE 1, RULE 1-02 OF REGULATION
S-X, PROMULGATED PURSUANT TO THE ACT, AS SUCH REGULATION IS IN EFFECT ON THE
DATE HEREOF.
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"STATED MATURITY" MEANS, WITH RESPECT TO ANY INSTALLMENT OF INTEREST
OR PRINCIPAL ON ANY SERIES OF INDEBTEDNESS, THE DATE ON WHICH SUCH PAYMENT OF
INTEREST OR PRINCIPAL WAS SCHEDULED TO BE REDEEMED OR PAID IN THE ORIGINAL
DOCUMENTATION GOVERNING SUCH INDEBTEDNESS, AND SHALL NOT INCLUDE ANY CONTINGENT
OBLIGATIONS TO REPAY, REDEEM OR REPURCHASE ANY SUCH INTEREST OR PRINCIPAL PRIOR
TO THE DATE ORIGINALLY SCHEDULED FOR THE PAYMENT THEREOF.
"SUBSIDIARY" MEANS, WITH RESPECT TO ANY PERSON, (I) ANY CORPORATION,
ASSOCIATION OR OTHER BUSINESS ENTITY OF WHICH MORE THAN 50% OF THE TOTAL VOTING
POWER OF SHARES OF CAPITAL STOCK ENTITLED (WITHOUT REGARD TO THE OCCURRENCE OF
ANY CONTINGENCY) TO VOTE IN THE ELECTION OF DIRECTORS, MANAGERS OR TRUSTEES
THEREOF IS AT THE TIME OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH
PERSON OR ONE OR MORE OF THE OTHER SUBSIDIARIES OF THAT PERSON (OR A COMBINATION
THEREOF) AND (II) ANY PARTNERSHIP (A) THE SOLE GENERAL PARTNER OR THE MANAGING
GENERAL PARTNER OF WHICH IS SUCH PERSON OR A SUBSIDIARY OF SUCH PERSON OR (B)
THE ONLY GENERAL PARTNERS OF WHICH ARE SUCH PERSON OR OF ONE OR MORE
SUBSIDIARIES OF SUCH PERSON (OR ANY COMBINATION THEREOF).
"SUPERCANAL" MEANS SUPERCANAL HOLDING, S.A.
"TIA" MEANS THE TRUST INDENTURE ACT OF 1939 (15 U.S.C. SS.SS.) AS IN
EFFECT ON THE DATE ON WHICH THIS INDENTURE IS QUALIFIED UNDER THE TIA.
"TRUSTEE" MEANS THE PARTY NAMED AS SUCH ABOVE UNTIL A SUCCESSOR
REPLACES IT IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THIS INDENTURE AND
THEREAFTER MEANS THE SUCCESSOR SERVING HEREUNDER.
"UNRESTRICTED DEFINITIVE NOTE" MEANS ONE OR MORE DEFINITIVE NOTES
THAT DO NOT BEAR AND ARE NOT REQUIRED TO BEAR THE PRIVATE PLACEMENT LEGEND.
"UNRESTRICTED GLOBAL NOTE" MEANS A PERMANENT GLOBAL NOTE IN THE FORM
OF EXHIBIT A ATTACHED HERETO THAT BEARS THE GLOBAL NOTE LEGEND AND THAT HAS THE
"SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE" ATTACHED THERETO, AND
THAT IS DEPOSITED WITH OR ON BEHALF OF AND REGISTERED IN THE NAME OF THE
DEPOSITARY, REPRESENTING A SERIES OF NOTES THAT DO NOT BEAR THE PRIVATE
PLACEMENT LEGEND.
"UNRESTRICTED SUBSIDIARY" MEANS (I) ANY SUBSIDIARY THAT IS
DESIGNATED BY THE BOARD OF DIRECTORS AS AN UNRESTRICTED SUBSIDIARY PURSUANT TO A
BOARD RESOLUTION, BUT ONLY TO THE EXTENT THAT SUCH SUBSIDIARY: (A) IS NOT A
PARTY TO ANY AGREEMENT, CONTRACT, ARRANGEMENT OR UNDERSTANDING WITH THE COMPANY
OR ANY RESTRICTED SUBSIDIARY OF THE COMPANY UNLESS THE TERMS OF ANY SUCH
AGREEMENT, CONTRACT, ARRANGEMENT OR UNDERSTANDING ARE NO LESS FAVORABLE, IN ANY
MATERIAL RESPECT, TO THE COMPANY OR SUCH RESTRICTED SUBSIDIARY THAN THOSE THAT
MIGHT BE OBTAINED AT THE TIME FROM PERSONS WHO ARE NOT AFFILIATES OF THE
COMPANY; (B) IS A PERSON WITH RESPECT TO WHICH NEITHER THE COMPANY NOR ANY OF
ITS RESTRICTED SUBSIDIARIES HAS ANY DIRECT OR INDIRECT OBLIGATION (1) TO
SUBSCRIBE FOR ADDITIONAL EQUITY INTERESTS OR (2) TO MAINTAIN OR PRESERVE SUCH
PERSON'S FINANCIAL CONDITION OR TO CAUSE SUCH PERSON TO ACHIEVE ANY SPECIFIED
LEVELS OF OPERATING RESULTS; (C) HAS NOT GUARANTEED OR OTHERWISE HAS NOT
OBLIGATED ITSELF DIRECTLY OR INDIRECTLY TO PROVIDE CREDIT SUPPORT FOR ANY
INDEBTEDNESS OF THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES; AND (D) HAS
NO INDEBTEDNESS OTHER THAN NON-RECOURSE DEBT.
"VOTING STOCK" OF ANY PERSON AS OF ANY DATE MEANS CAPITAL STOCK OF
SUCH PERSON THAT IS AT THE TIME ENTITLED TO VOTE IN THE ELECTION OF THE BOARD OF
DIRECTORS OF SUCH PERSON.
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"WEIGHTED AVERAGE LIFE TO MATURITY" MEANS, WHEN APPLIED TO ANY
INDEBTEDNESS AT ANY DATE, THE NUMBER OF YEARS OBTAINED BY DIVIDING (I) THE SUM
OF THE PRODUCTS OBTAINED BY MULTIPLYING (A) THE AMOUNT OF EACH THEN REMAINING
INSTALLMENT, SINKING FUND, SERIAL MATURITY OR OTHER REQUIRED PAYMENTS OF
PRINCIPAL, INCLUDING PAYMENT AT FINAL MATURITY, IN RESPECT THEREOF, BY (B) THE
NUMBER OF YEARS (CALCULATED TO THE NEAREST ONE-TWELFTH) THAT WILL ELAPSE BETWEEN
SUCH DATE AND THE MAKING OF SUCH PAYMENT, BY (II) THE THEN OUTSTANDING PRINCIPAL
AMOUNT OF SUCH INDEBTEDNESS.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" OF ANY PERSON MEANS A
RESTRICTED SUBSIDIARY OF SUCH PERSON ALL 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 AND ONE OR MORE WHOLLY OWNED RESTRICTED
SUBSIDIARIES OF SUCH PERSON.
SECTION 1.02 OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- -------
"AFFILIATE TRANSACTION"..............................4.11
"ASSET SALE OFFER"...................................4.10
"AUTHENTICATION ORDER"...............................2.02
"CHANGE OF CONTROL OFFER"............................4.14
"CHANGE OF CONTROL PAYMENT"..........................4.14
"CHANGE OF CONTROL PAYMENT DATE" ....................4.14
"COVENANT DEFEASANCE"................................8.03
"EVENT OF DEFAULT"...................................6.01
"EXCESS PROCEEDS"....................................4.10
"INCUR"..............................................4.09
"LEGAL DEFEASANCE" ..................................8.02
"OFFER AMOUNT".......................................3.09
"OFFER PERIOD".......................................3.09
"OTHER COMPANY INDEBTEDNESS".........................4.17
"OTHER COMPANY INDEBTEDNESS GUARANTEE"...............4.17
"PAYING AGENT".......................................2.03
"PAYMENT DEFAULT" ...................................6.01
"PAYMENT BLOCKAGE NOTICE" ...........................10.03
"PERMITTED DEBT".....................................4.09
"PURCHASE DATE"......................................3.09
"REGISTRAR"..........................................2.03
"RESTRICTED PAYMENTS"................................4.07
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
WHENEVER THIS INDENTURE REFERS TO A PROVISION OF THE TIA, THE
PROVISION IS INCORPORATED BY REFERENCE IN AND MADE A PART OF THIS INDENTURE.
THE FOLLOWING TIA TERMS USED IN THIS INDENTURE HAVE THE FOLLOWING
MEANINGS:
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"INDENTURE SECURITIES" MEANS THE NOTES;
"INDENTURE SECURITY HOLDER" MEANS A HOLDER OF A NOTE;
"INDENTURE TO BE QUALIFIED" MEANS THIS INDENTURE;
"INDENTURE TRUSTEE" OR "INSTITUTIONAL TRUSTEE" MEANS THE TRUSTEE;
AND
"OBLIGOR" ON THE NOTES MEANS THE COMPANY AND ANY SUCCESSOR OBLIGOR
UPON THE NOTES.
ALL OTHER TERMS USED IN THIS INDENTURE THAT ARE DEFINED BY THE TIA,
DEFINED BY TIA REFERENCE TO ANOTHER STATUTE OR DEFINED BY SEC RULE UNDER THE TIA
HAVE THE MEANINGS SO ASSIGNED TO THEM.
SECTION 1.04 RULES OF CONSTRUCTION.
UNLESS THE CONTEXT OTHERWISE REQUIRES:
(1)A TERM HAS THE MEANING ASSIGNED TO IT;
(2)AN ACCOUNTING TERM NOT OTHERWISE DEFINED HAS THE MEANING
ASSIGNED TO IT IN ACCORDANCE WITH GAAP;
(3)"OR" IS NOT EXCLUSIVE;
(4)WORDS IN THE SINGULAR INCLUDE THE PLURAL, AND IN THE PLURAL
INCLUDE THE SINGULAR;
(5)PROVISIONS APPLY TO SUCCESSIVE EVENTS AND TRANSACTIONS; AND
(6)REFERENCES TO SECTIONS OF OR RULES UNDER THE SECURITIES ACT
SHALL BE DEEMED TO INCLUDE SUBSTITUTE, REPLACEMENT OF SUCCESSOR SECTIONS OR
RULES ADOPTED BY THE SEC FROM TIME TO TIME.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a)..................................................GENERAL. THE NOTES AND
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION SHALL BE SUBSTANTIALLY IN THE FORM
OF EXHIBIT A HERETO. THE NOTES MAY HAVE NOTATIONS, LEGENDS OR ENDORSEMENTS
REQUIRED BY LAW, STOCK EXCHANGE RULE OR USAGE. EACH NOTE SHALL BE DATED THE DATE
OF ITS AUTHENTICATION. THE NOTES SHALL BE IN DENOMINATIONS OF $1,000 AND
INTEGRAL MULTIPLES THEREOF.
THE TERMS AND PROVISIONS CONTAINED IN THE NOTES SHALL CONSTITUTE,
AND ARE HEREBY EXPRESSLY MADE, A PART OF THIS INDENTURE AND THE COMPANY AND THE
TRUSTEE, BY THEIR EXECUTION AND DELIVERY OF THIS INDENTURE, EXPRESSLY AGREE TO
SUCH TERMS AND PROVISIONS AND AGREE TO BE BOUND THEREBY.
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HOWEVER, TO THE EXTENT ANY PROVISION OF ANY NOTE CONFLICTS WITH THE EXPRESS
PROVISIONS OF THIS INDENTURE, THE PROVISIONS OF THIS INDENTURE SHALL GOVERN AND
BE CONTROLLING.
(b)..................................................GLOBAL NOTES. NOTES
ISSUED IN GLOBAL FORM SHALL BE SUBSTANTIALLY IN THE FORM OF EXHIBIT A ATTACHED
HERETO (INCLUDING THE GLOBAL NOTE LEGEND THEREON AND THE "SCHEDULE OF EXCHANGES
OF INTERESTS IN THE GLOBAL NOTE" ATTACHED THERETO). NOTES ISSUED IN DEFINITIVE
FORM SHALL BE SUBSTANTIALLY IN THE FORM OF EXHIBIT A ATTACHED HERETO (BUT
WITHOUT THE GLOBAL NOTE LEGEND THEREON AND WITHOUT THE "SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL NOTE" ATTACHED THERETO). EACH GLOBAL NOTE SHALL
REPRESENT SUCH OF THE OUTSTANDING NOTES AS SHALL BE SPECIFIED THEREIN AND EACH
SHALL PROVIDE THAT IT SHALL REPRESENT THE AGGREGATE PRINCIPAL AMOUNT OF
OUTSTANDING NOTES FROM TIME TO TIME ENDORSED THEREON AND THAT THE AGGREGATE
PRINCIPAL AMOUNT OF OUTSTANDING NOTES REPRESENTED THEREBY MAY FROM TIME TO TIME
BE REDUCED OR INCREASED, AS APPROPRIATE, TO REFLECT EXCHANGES AND REDEMPTIONS.
ANY ENDORSEMENT OF A GLOBAL NOTE TO REFLECT THE AMOUNT OF ANY INCREASE OR
DECREASE IN THE AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING NOTES REPRESENTED
THEREBY SHALL BE MADE BY THE TRUSTEE OR THE CUSTODIAN, AT THE DIRECTION OF THE
TRUSTEE, IN ACCORDANCE WITH INSTRUCTIONS GIVEN BY THE HOLDER THEREOF AS REQUIRED
BY SECTION 2.06 HEREOF.
(c)..................................................EUROCLEAR AND CEDEL
PROCEDURES APPLICABLE. THE PROVISIONS OF THE "OPERATING PROCEDURES OF THE
EUROCLEAR SYSTEM" AND "TERMS AND CONDITIONS GOVERNING USE OF EUROCLEAR" OF
EUROCLEAR AND THE "GENERAL TERMS AND CONDITIONS OF CEDEL BANK" AND "CUSTOMER
HANDBOOK" OF CEDEL BANK SHALL BE APPLICABLE TO TRANSFERS OF BENEFICIAL INTERESTS
IN THE REGULATION S GLOBAL NOTE THAT ARE HELD BY PARTICIPANTS THROUGH EUROCLEAR
OR CEDEL.
SECTION 2.02 EXECUTION AND AUTHENTICATION.
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............................................................ TWO OFFICERS
SHALL SIGN THE NOTES FOR THE COMPANY BY MANUAL OR FACSIMILE SIGNATURE.
IF AN OFFICER WHOSE SIGNATURE IS ON A NOTE NO LONGER HOLDS THAT
OFFICE AT THE TIME A NOTE IS AUTHENTICATED, THE NOTE SHALL NEVERTHELESS BE
VALID.
A NOTE SHALL NOT BE VALID UNTIL AUTHENTICATED BY THE MANUAL
SIGNATURE OF THE TRUSTEE. THE SIGNATURE OF THE TRUSTEE ON A NOTE SHALL BE
CONCLUSIVE EVIDENCE THAT THE NOTE HAS BEEN AUTHENTICATED UNDER THIS INDENTURE.
THE TRUSTEE SHALL, UPON A WRITTEN ORDER OF THE COMPANY SIGNED BY TWO
OFFICERS (AN "AUTHENTICATION ORDER"), AUTHENTICATE NOTES FOR ORIGINAL ISSUE UP
TO THE AGGREGATE PRINCIPAL AMOUNT STATED IN PARAGRAPH 4 OF THE NOTES. THE
AGGREGATE PRINCIPAL AMOUNT OF NOTES OUTSTANDING AT ANY TIME MAY NOT EXCEED SUCH
AMOUNT EXCEPT AS PROVIDED IN SECTION 2.07 HEREOF.
THE TRUSTEE MAY APPOINT AN AUTHENTICATING AGENT ACCEPTABLE TO THE
COMPANY TO AUTHENTICATE NOTES. AN AUTHENTICATING AGENT MAY AUTHENTICATE NOTES
WHENEVER THE TRUSTEE MAY DO SO. EACH REFERENCE IN THIS INDENTURE TO
AUTHENTICATION BY THE TRUSTEE INCLUDES AUTHENTICATION BY SUCH AGENT. AN
AUTHENTICATING AGENT HAS THE SAME RIGHTS AS AN AGENT TO DEAL WITH HOLDERS OR AN
AFFILIATE OF THE COMPANY.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
............................................................ THE
COMPANY SHALL MAINTAIN AN OFFICE OR AGENCY WHERE NOTES MAY BE PRESENTED FOR
REGISTRATION OF TRANSFER OR FOR EXCHANGE ("REGISTRAR") AND AN OFFICE OR AGENCY
WHERE NOTES MAY BE PRESENTED FOR PAYMENT ("PAYING AGENT"). THE REGISTRAR SHALL
KEEP A REGISTER OF THE NOTES AND OF THEIR TRANSFER AND EXCHANGE. THE COMPANY MAY
APPOINT ONE OR MORE CO-REGISTRARS AND ONE OR MORE ADDITIONAL PAYING AGENTS. THE
TERM "REGISTRAR" INCLUDES ANY CO-REGISTRAR AND THE TERM "PAYING AGENT" INCLUDES
ANY ADDITIONAL PAYING AGENT. THE COMPANY MAY CHANGE ANY PAYING AGENT OR
REGISTRAR WITHOUT NOTICE TO ANY HOLDER. THE COMPANY SHALL NOTIFY THE TRUSTEE IN
WRITING OF THE NAME AND ADDRESS OF ANY AGENT NOT A PARTY TO THIS INDENTURE. IF
THE COMPANY FAILS TO APPOINT OR MAINTAIN ANOTHER ENTITY AS REGISTRAR OR PAYING
AGENT, THE TRUSTEE SHALL ACT AS SUCH. THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY
ACT AS PAYING AGENT OR REGISTRAR.
THE COMPANY INITIALLY APPOINTS THE DEPOSITORY TRUST COMPANY ("DTC")
TO ACT AS DEPOSITARY WITH RESPECT TO THE GLOBAL NOTES.
THE COMPANY INITIALLY APPOINTS THE TRUSTEE TO ACT AS THE REGISTRAR
AND PAYING AGENT AND TO ACT AS CUSTODIAN WITH RESPECT TO THE GLOBAL NOTES.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
THE COMPANY SHALL REQUIRE EACH PAYING AGENT OTHER THAN THE TRUSTEE
TO AGREE IN WRITING THAT SUCH PAYING AGENT WILL HOLD IN TRUST FOR THE BENEFIT OF
HOLDERS OR THE TRUSTEE ALL MONEY HELD BY THE PAYING AGENT FOR THE PAYMENT OF
PRINCIPAL, PREMIUM OR LIQUIDATED DAMAGES, IF ANY, OR INTEREST ON THE NOTES, AND
WILL NOTIFY THE TRUSTEE OF ANY DEFAULT BY THE COMPANY IN MAKING ANY SUCH
PAYMENT. WHILE ANY SUCH DEFAULT CONTINUES, THE TRUSTEE MAY REQUIRE A PAYING
AGENT TO PAY ALL MONEY HELD BY IT TO THE TRUSTEE. THE COMPANY AT ANY TIME MAY
REQUIRE A PAYING AGENT TO PAY ALL MONEY HELD BY IT TO THE
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TRUSTEE. UPON PAYMENT OVER TO THE TRUSTEE, THE PAYING AGENT (IF OTHER THAN THE
COMPANY OR A SUBSIDIARY) SHALL HAVE NO FURTHER LIABILITY FOR THE MONEY DELIVERED
TO THE TRUSTEE. IF THE COMPANY OR A SUBSIDIARY ACTS AS PAYING AGENT, IT SHALL
SEGREGATE AND HOLD IN A SEPARATE TRUST FUND FOR THE BENEFIT OF THE HOLDERS ALL
MONEY HELD BY IT AS PAYING AGENT. UPON ANY BANKRUPTCY OR REORGANIZATION
PROCEEDINGS RELATING TO THE COMPANY, THE TRUSTEE SHALL SERVE AS PAYING AGENT FOR
THE NOTES.
SECTION 2.05 HOLDER LISTS.
THE TRUSTEE SHALL PRESERVE IN AS CURRENT A FORM AS IS REASONABLY
PRACTICABLE THE MOST RECENT LIST AVAILABLE TO IT OF THE NAMES AND ADDRESSES OF
ALL HOLDERS AND SHALL OTHERWISE COMPLY WITH TIA SS. 312(A). IF THE TRUSTEE IS
NOT THE REGISTRAR, THE COMPANY SHALL FURNISH TO THE TRUSTEE AT LEAST SEVEN
BUSINESS DAYS BEFORE EACH INTEREST PAYMENT DATE AND AT SUCH OTHER TIMES AS THE
TRUSTEE MAY REQUEST IN WRITING, A LIST IN SUCH FORM AND AS OF SUCH DATE AS THE
TRUSTEE MAY REASONABLY REQUIRE OF THE NAMES AND ADDRESSES OF THE HOLDERS OF
NOTES AND THE COMPANY SHALL OTHERWISE COMPLY WITH TIA SS. 312(A).
SECTION 2.06 TRANSFER AND EXCHANGE.
(a)..................................................TRANSFER AND EXCHANGE
OF GLOBAL NOTES. A GLOBAL NOTE MAY NOT BE TRANSFERRED AS A WHOLE EXCEPT BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY, BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. ALL GLOBAL NOTES WILL BE EXCHANGED BY THE COMPANY FOR DEFINITIVE
NOTES IF (I) THE COMPANY DELIVERS TO THE TRUSTEE NOTICE FROM THE DEPOSITARY THAT
IT IS NO LONGER WILLING OR ABLE TO ACT AS DEPOSITARY OR THAT IT IS NO LONGER A
CLEARING AGENCY REGISTERED UNDER THE EXCHANGE ACT AND, IN EITHER CASE, A
SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS AFTER THE
DATE OF SUCH NOTICE FROM THE DEPOSITARY OR (II) THE COMPANY IN ITS SOLE
DISCRETION DETERMINES THAT THE GLOBAL NOTES (IN WHOLE BUT NOT IN PART) SHOULD BE
EXCHANGED FOR DEFINITIVE NOTES AND DELIVERS A WRITTEN NOTICE TO SUCH EFFECT TO
THE TRUSTEE.
UPON THE OCCURRENCE OF EITHER OF THE PRECEDING EVENTS IN (I) OR (II)
ABOVE, DEFINITIVE NOTES SHALL BE ISSUED IN SUCH NAMES AS THE DEPOSITARY SHALL
INSTRUCT THE TRUSTEE. GLOBAL NOTES ALSO MAY BE EXCHANGED OR REPLACED, IN WHOLE
OR IN PART, AS PROVIDED IN SECTIONS 2.07 AND 2.10 HEREOF. EVERY NOTE
AUTHENTICATED AND DELIVERED IN EXCHANGE FOR, OR IN LIEU OF, A GLOBAL NOTE OR ANY
PORTION THEREOF, PURSUANT TO THIS SECTION 2.06 OR SECTION 2.07 OR 2.10 HEREOF,
SHALL BE AUTHENTICATED AND DELIVERED IN THE FORM OF, AND SHALL BE, A GLOBAL
NOTE. A GLOBAL NOTE MAY NOT BE EXCHANGED FOR ANOTHER NOTE OTHER THAN AS PROVIDED
IN THIS SECTION 2.06(A), HOWEVER, BENEFICIAL INTERESTS IN A GLOBAL NOTE MAY BE
TRANSFERRED AND EXCHANGED AS PROVIDED IN SECTION 2.06(B),(C) OR (F) HEREOF.
(b)..................................................TRANSFER AND EXCHANGE
OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES. THE TRANSFER AND EXCHANGE OF
BENEFICIAL INTERESTS IN THE GLOBAL NOTES SHALL BE EFFECTED THROUGH THE
DEPOSITARY, IN ACCORDANCE WITH THE PROVISIONS OF THIS INDENTURE AND THE
APPLICABLE PROCEDURES. BENEFICIAL INTERESTS IN THE RESTRICTED GLOBAL NOTES SHALL
BE SUBJECT TO RESTRICTIONS ON TRANSFER COMPARABLE TO THOSE SET FORTH HEREIN TO
THE EXTENT REQUIRED BY THE SECURITIES ACT. TRANSFERS OF BENEFICIAL INTERESTS IN
THE GLOBAL NOTES ALSO SHALL REQUIRE COMPLIANCE WITH EITHER SUBPARAGRAPH (I) OR
(II) BELOW, AS APPLICABLE, AS WELL AS ONE OR MORE OF THE OTHER FOLLOWING
SUBPARAGRAPHS, AS APPLICABLE:
(i)TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE. BENEFICIAL
INTERESTS IN ANY RESTRICTED GLOBAL NOTE MAY BE TRANSFERRED TO PERSONS WHO
TAKE DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN THE SAME
RESTRICTED GLOBAL NOTE IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS SET
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FORTH IN THE PRIVATE PLACEMENT LEGEND; PROVIDED, HOWEVER, THAT PRIOR TO THE
EXPIRATION OF THE RESTRICTED PERIOD, TRANSFERS OF BENEFICIAL INTERESTS IN THE
REGULATION S GLOBAL NOTE MAY NOT BE MADE TO A U.S. PERSON OR FOR THE ACCOUNT
OR BENEFIT OF A U.S. PERSON (OTHER THAN THE INITIAL PURCHASERS) BENEFICIAL
INTERESTS IN ANY UNRESTRICTED GLOBAL NOTE MAY BE TRANSFERRED TO PERSONS WHO
TAKE DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE. NO WRITTEN ORDERS OR INSTRUCTIONS SHALL BE REQUIRED TO BE
DELIVERED TO THE REGISTRAR TO EFFECT THE TRANSFERS DESCRIBED IN THIS SECTION
2.06(B)(I).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN GLOBAL
NOTES. IN CONNECTION WITH ALL TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
THAT ARE NOT SUBJECT TO SECTION 2.06(B)(I) ABOVE, THE TRANSFEROR OF SUCH
BENEFICIAL INTEREST MUST DELIVER TO THE REGISTRAR EITHER (A) (1) A WRITTEN
ORDER FROM A PARTICIPANT OR AN INDIRECT PARTICIPANT GIVEN TO THE DEPOSITARY
IN ACCORDANCE WITH THE APPLICABLE PROCEDURES DIRECTING THE DEPOSITARY TO
CREDIT OR CAUSE TO BE CREDITED A BENEFICIAL INTEREST IN ANOTHER GLOBAL NOTE
IN AN AMOUNT EQUAL TO THE BENEFICIAL INTEREST TO BE TRANSFERRED OR EXCHANGED
AND (2) INSTRUCTIONS GIVEN IN ACCORDANCE WITH THE APPLICABLE PROCEDURES
CONTAINING INFORMATION REGARDING THE PARTICIPANT ACCOUNT TO BE CREDITED WITH
SUCH INCREASE OR (B) (1) A WRITTEN ORDER FROM A PARTICIPANT OR AN INDIRECT
PARTICIPANT GIVEN TO THE DEPOSITARY IN ACCORDANCE WITH THE APPLICABLE
PROCEDURES DIRECTING THE DEPOSITARY TO CAUSE TO BE ISSUED A DEFINITIVE NOTE
IN AN AMOUNT EQUAL TO THE BENEFICIAL INTEREST TO BE TRANSFERRED OR EXCHANGED
AND (2) INSTRUCTIONS GIVEN BY THE DEPOSITARY TO THE REGISTRAR CONTAINING
INFORMATION REGARDING THE PERSON IN WHOSE NAME SUCH DEFINITIVE NOTE SHALL BE
REGISTERED TO EFFECT THE TRANSFER OR EXCHANGE REFERRED TO IN (1) ABOVE. UPON
CONSUMMATION OF AN EXCHANGE OFFER BY THE COMPANY IN ACCORDANCE WITH SECTION
2.06(F) HEREOF, THE REQUIREMENTS OF THIS SECTION 2.06(B)(II) SHALL BE DEEMED
TO HAVE BEEN SATISFIED UPON RECEIPT BY THE REGISTRAR OF THE INSTRUCTIONS
CONTAINED IN THE LETTER OF TRANSMITTAL DELIVERED BY THE HOLDER OF SUCH
BENEFICIAL INTERESTS IN THE RESTRICTED GLOBAL NOTES. UPON SATISFACTION OF ALL
OF THE REQUIREMENTS FOR TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS IN
GLOBAL NOTES CONTAINED IN THIS INDENTURE AND THE NOTES OR OTHERWISE
APPLICABLE UNDER THE SECURITIES ACT, THE TRUSTEE SHALL ADJUST THE PRINCIPAL
AMOUNT OF THE RELEVANT GLOBAL NOTE(S) PURSUANT TO SECTION 2.06(H) HEREOF.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL NOTE. A
BENEFICIAL INTEREST IN ANY RESTRICTED GLOBAL NOTE MAY BE TRANSFERRED TO A
PERSON WHO TAKES DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN
ANOTHER RESTRICTED GLOBAL NOTE IF THE TRANSFER COMPLIES WITH THE REQUIREMENTS
OF SECTION 2.06(B)(II) ABOVE AND THE REGISTRAR RECEIVES THE FOLLOWING:
(A)IF THE TRANSFEREE WILL TAKE DELIVERY IN THE FORM OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE, THEN THE TRANSFEROR MUST DELIVER A
CERTIFICATE IN THE FORM OF EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (1) THEREOF;
(B)IF THE TRANSFEREE WILL TAKE DELIVERY IN THE FORM OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE, THEN THE TRANSFEROR MUST
DELIVER A CERTIFICATE IN THE FORM OF EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (2) THEREOF; AND
(C)IF THE TRANSFEREE WILL TAKE DELIVERY IN THE FORM OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE, THEN THE TRANSFEROR MUST DELIVER A
CERTIFICATE IN THE FORM OF EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS AND CERTIFICATES AND OPINION OF COUNSEL REQUIRED BY ITEM
(3) THEREOF, IF APPLICABLE.
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(iv)TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL
NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A BENEFICIAL
INTEREST IN ANY RESTRICTED GLOBAL NOTE MAY BE EXCHANGED BY ANY HOLDER THEREOF
FOR A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR TRANSFERRED TO A
PERSON WHO TAKES DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE IF THE EXCHANGE OR TRANSFER COMPLIES WITH THE
REQUIREMENTS OF SECTION 2.06(B)(II) ABOVE AND:
(A)SUCH EXCHANGE OR TRANSFER IS EFFECTED PURSUANT TO THE EXCHANGE
OFFER IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT AND THE
HOLDER OF THE BENEFICIAL INTEREST TO BE TRANSFERRED, IN THE CASE OF AN
EXCHANGE, OR THE TRANSFEREE, IN THE CASE OF A TRANSFER, CERTIFIES IN
THE APPLICABLE LETTER OF TRANSMITTAL THAT IT IS NOT (1) A
BROKER-DEALER, (2) A PERSON PARTICIPATING IN THE DISTRIBUTION OF THE
EXCHANGE NOTES OR (3) A PERSON WHO IS AN AFFILIATE (AS DEFINED IN RULE
144) OF THE COMPANY;
(B)SUCH TRANSFER IS EFFECTED PURSUANT TO THE SHELF REGISTRATION
STATEMENT IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT;
(C)SUCH TRANSFER IS EFFECTED BY A PARTICIPATING BROKER-DEALER
PURSUANT TO THE EXCHANGE OFFER REGISTRATION STATEMENT IN ACCORDANCE
WITH THE REGISTRATION RIGHTS AGREEMENT; OR
(D)THE REGISTRAR RECEIVES THE FOLLOWING:
(1)IF THE HOLDER OF SUCH BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PROPOSES TO EXCHANGE SUCH BENEFICIAL INTEREST FOR A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE, A CERTIFICATE FROM SUCH HOLDER IN
THE FORM OF EXHIBIT C HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (1)(A)
THEREOF; OR
(2)IF THE HOLDER OF SUCH BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PROPOSES TO TRANSFER SUCH BENEFICIAL INTEREST TO A PERSON WHO
SHALL TAKE DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE, A CERTIFICATE FROM SUCH HOLDER IN THE FORM OF
EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (4) THEREOF;
AND, IN EACH SUCH CASE SET FORTH IN THIS SUBPARAGRAPH (D), IF THE
REGISTRAR SO REQUESTS OR IF THE APPLICABLE PROCEDURES SO REQUIRE, AN
OPINION OF COUNSEL IN FORM REASONABLY ACCEPTABLE TO THE REGISTRAR TO THE
EFFECT THAT SUCH EXCHANGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND THAT THE RESTRICTIONS ON TRANSFER CONTAINED HEREIN AND IN THE
PRIVATE PLACEMENT LEGEND ARE NO LONGER REQUIRED IN ORDER TO MAINTAIN
COMPLIANCE WITH THE SECURITIES ACT.
IF ANY SUCH TRANSFER IS EFFECTED PURSUANT TO SUBPARAGRAPH (B) OR (D)
ABOVE AT A TIME WHEN AN UNRESTRICTED GLOBAL NOTE HAS NOT YET BEEN ISSUED, THE
COMPANY SHALL ISSUE AND, UPON RECEIPT OF AN AUTHENTICATION ORDER IN ACCORDANCE
WITH SECTION 2.02 HEREOF, THE TRUSTEE SHALL AUTHENTICATE ONE OR MORE
UNRESTRICTED GLOBAL NOTES IN AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE
AGGREGATE PRINCIPAL AMOUNT OF BENEFICIAL INTERESTS TRANSFERRED PURSUANT TO
SUBPARAGRAPH (B) OR (D) ABOVE.
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE CANNOT BE
EXCHANGED FOR, OR TRANSFERRED TO PERSONS WHO TAKE DELIVERY THEREOF IN THE FORM
OF, A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
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(i)BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED
DEFINITIVE NOTES. IF ANY HOLDER OF A BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PROPOSES TO EXCHANGE SUCH BENEFICIAL INTEREST FOR A RESTRICTED
DEFINITIVE NOTE OR TO TRANSFER SUCH BENEFICIAL INTEREST TO A PERSON WHO TAKES
DELIVERY THEREOF IN THE FORM OF A RESTRICTED DEFINITIVE NOTE, THEN, UPON
RECEIPT BY THE REGISTRAR OF THE FOLLOWING DOCUMENTATION:
(A)IF THE HOLDER OF SUCH BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE PROPOSES TO EXCHANGE SUCH BENEFICIAL INTEREST FOR A RESTRICTED
DEFINITIVE NOTE, A CERTIFICATE FROM SUCH HOLDER IN THE FORM OF EXHIBIT
C HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (2)(A) THEREOF;
(B)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED TO A QIB IN
ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, A CERTIFICATE TO
THE EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS
IN ITEM (1) THEREOF;
(C)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED TO A NON-U.S.
PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 UNDER THE SECURITIES ACT, A CERTIFICATE TO THE EFFECT SET FORTH IN
EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (2) THEREOF;
(D)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, A CERTIFICATE TO THE
EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN
ITEM (3)(A) THEREOF;
(E)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN RELIANCE ON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OTHER THAN THOSE LISTED
IN SUBPARAGRAPHS (B) THROUGH (D) ABOVE, A CERTIFICATE TO THE EFFECT SET
FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS, CERTIFICATES
AND OPINION OF COUNSEL REQUIRED BY ITEM (3) THEREOF, IF APPLICABLE;
(F)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED TO THE COMPANY
OR ANY OF ITS SUBSIDIARIES, A CERTIFICATE TO THE EFFECT SET FORTH IN
EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (3)(B) THEREOF;
OR
(G)IF SUCH BENEFICIAL INTEREST IS BEING TRANSFERRED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A
CERTIFICATE TO THE EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (3)(C) THEREOF,
THE TRUSTEE SHALL CAUSE THE AGGREGATE PRINCIPAL AMOUNT OF THE APPLICABLE GLOBAL
NOTE TO BE REDUCED ACCORDINGLY PURSUANT TO SECTION 2.06(H) HEREOF, AND THE
COMPANY SHALL EXECUTE AND THE TRUSTEE SHALL AUTHENTICATE AND DELIVER TO THE
PERSON DESIGNATED IN THE INSTRUCTIONS A DEFINITIVE NOTE IN THE APPROPRIATE
PRINCIPAL AMOUNT. ANY DEFINITIVE NOTE ISSUED IN EXCHANGE FOR A BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE PURSUANT TO THIS SECTION 2.06(C)(I) SHALL
BE REGISTERED IN SUCH NAME OR NAMES AND IN SUCH AUTHORIZED DENOMINATION OR
DENOMINATIONS AS THE HOLDER OF SUCH BENEFICIAL INTEREST SHALL INSTRUCT THE
REGISTRAR THROUGH INSTRUCTIONS FROM THE DEPOSITARY AND THE PARTICIPANT OR
INDIRECT PARTICIPANT. THE TRUSTEE SHALL DELIVER SUCH DEFINITIVE NOTES TO THE
PERSONS IN WHOSE NAMES SUCH NOTES ARE SO REGISTERED.
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ANY DEFINITIVE NOTE ISSUED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PURSUANT TO THIS SECTION 2.06(C)(I) SHALL BEAR THE PRIVATE PLACEMENT
LEGEND AND SHALL BE SUBJECT TO ALL RESTRICTIONS ON TRANSFER CONTAINED THEREIN.
(II)BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A HOLDER OF A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE MAY EXCHANGE SUCH BENEFICIAL INTEREST FOR AN UNRESTRICTED DEFINITIVE
NOTE OR MAY TRANSFER SUCH BENEFICIAL INTEREST TO A PERSON WHO TAKES DELIVERY
THEREOF IN THE FORM OF AN UNRESTRICTED DEFINITIVE NOTE ONLY IF:
(A)SUCH EXCHANGE OR TRANSFER IS EFFECTED PURSUANT TO THE EXCHANGE
OFFER IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT AND THE
HOLDER OF SUCH BENEFICIAL INTEREST, IN THE CASE OF AN EXCHANGE, OR THE
TRANSFEREE, IN THE CASE OF A TRANSFER, CERTIFIES IN THE APPLICABLE
LETTER OF TRANSMITTAL THAT IT IS NOT (1) A BROKER-DEALER, (2) A PERSON
PARTICIPATING IN THE DISTRIBUTION OF THE EXCHANGE NOTES OR (3) A PERSON
WHO IS AN AFFILIATE (AS DEFINED IN RULE 144) OF THE COMPANY;
(B)SUCH TRANSFER IS EFFECTED PURSUANT TO THE SHELF REGISTRATION
STATEMENT IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT;
(C)SUCH TRANSFER IS EFFECTED BY A PARTICIPATING BROKER-DEALER
PURSUANT TO THE EXCHANGE OFFER REGISTRATION STATEMENT IN ACCORDANCE
WITH THE REGISTRATION RIGHTS AGREEMENT; OR
(D)THE REGISTRAR RECEIVES THE FOLLOWING:
(1)IF THE HOLDER OF SUCH BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PROPOSES TO EXCHANGE SUCH BENEFICIAL INTEREST FOR A DEFINITIVE
NOTE THAT DOES NOT BEAR THE PRIVATE PLACEMENT LEGEND, A CERTIFICATE FROM
SUCH HOLDER IN THE FORM OF EXHIBIT C HERETO, INCLUDING THE CERTIFICATIONS
IN ITEM (1)(B) THEREOF; OR
(2)IF THE HOLDER OF SUCH BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE PROPOSES TO TRANSFER SUCH BENEFICIAL INTEREST TO A PERSON WHO
SHALL TAKE DELIVERY THEREOF IN THE FORM OF A DEFINITIVE NOTE THAT DOES NOT
BEAR THE PRIVATE PLACEMENT LEGEND, A CERTIFICATE FROM SUCH HOLDER IN THE
FORM OF EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (4)
THEREOF;
AND, IN EACH SUCH CASE SET FORTH IN THIS SUBPARAGRAPH (D), IF THE
REGISTRAR SO REQUESTS OR IF THE APPLICABLE PROCEDURES SO REQUIRE, AN
OPINION OF COUNSEL IN FORM REASONABLY ACCEPTABLE TO THE REGISTRAR TO THE
EFFECT THAT SUCH EXCHANGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND THAT THE RESTRICTIONS ON TRANSFER CONTAINED HEREIN AND IN THE
PRIVATE PLACEMENT LEGEND ARE NO LONGER REQUIRED IN ORDER TO MAINTAIN
COMPLIANCE WITH THE SECURITIES ACT.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. IF ANY HOLDER OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE PROPOSES TO EXCHANGE SUCH BENEFICIAL INTEREST FOR A
DEFINITIVE NOTE OR TO TRANSFER SUCH BENEFICIAL INTEREST TO A PERSON WHO TAKES
DELIVERY THEREOF IN THE FORM OF A DEFINITIVE NOTE, THEN, UPON SATISFACTION OF
THE CONDITIONS SET FORTH IN SECTION 2.06(B)(II) HEREOF, THE TRUSTEE SHALL
CAUSE THE AGGREGATE PRINCIPAL AMOUNT OF THE APPLICABLE GLOBAL NOTE TO BE
REDUCED ACCORDINGLY PURSUANT TO SECTION 2.06(H) HEREOF, AND THE COMPANY SHALL
EXECUTE AND THE TRUSTEE SHALL AUTHENTICATE AND DELIVER TO THE PERSON
DESIGNATED IN THE INSTRUCTIONS A DEFINITIVE NOTE IN THE APPROPRIATE PRINCIPAL
AMOUNT. ANY DEFINITIVE NOTE ISSUED IN EXCHANGE FOR A BENEFICIAL INTEREST
PURSUANT TO THIS SECTION 2.06(C)(III) SHALL BE REGISTERED IN SUCH NAME OR
NAMES
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AND IN SUCH AUTHORIZED DENOMINATION OR DENOMINATIONS AS THE HOLDER OF SUCH
BENEFICIAL INTEREST SHALL INSTRUCT THE REGISTRAR THROUGH INSTRUCTIONS FROM
THE DEPOSITARY AND THE PARTICIPANT OR INDIRECT PARTICIPANT. THE TRUSTEE SHALL
DELIVER SUCH DEFINITIVE NOTES TO THE PERSONS IN WHOSE NAMES SUCH NOTES ARE SO
REGISTERED. ANY DEFINITIVE NOTE ISSUED IN EXCHANGE FOR A BENEFICIAL INTEREST
PURSUANT TO THIS SECTION 2.06(C)(III) SHALL NOT BEAR THE PRIVATE PLACEMENT
LEGEND.
(D) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i)RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES. IF ANY HOLDER OF A RESTRICTED DEFINITIVE NOTE PROPOSES TO
EXCHANGE SUCH NOTE FOR A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OR
TO TRANSFER SUCH RESTRICTED DEFINITIVE NOTES TO A PERSON WHO TAKES DELIVERY
THEREOF IN THE FORM OF A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE,
THEN, UPON RECEIPT BY THE REGISTRAR OF THE FOLLOWING DOCUMENTATION:
(A)IF THE HOLDER OF SUCH RESTRICTED DEFINITIVE NOTE PROPOSES TO
EXCHANGE SUCH NOTE FOR A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE, A CERTIFICATE FROM SUCH HOLDER IN THE FORM OF EXHIBIT C HERETO,
INCLUDING THE CERTIFICATIONS IN ITEM (2)(b) THEREOF;
(B)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED TO A QIB
IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, A CERTIFICATE TO
THE EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS
IN ITEM (1) THEREOF;
(C)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED TO A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903
OR RULE 904 UNDER THE SECURITIES ACT, A CERTIFICATE TO THE EFFECT SET
FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (2)
THEREOF;
(D)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, A CERTIFICATE
TO THE EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (3)(A) THEREOF;
(E)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN RELIANCE ON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OTHER THAN THOSE LISTED
IN SUBPARAGRAPHS (B) THROUGH (D) ABOVE, A CERTIFICATE TO THE EFFECT SET
FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS, CERTIFICATES
AND OPINION OF COUNSEL REQUIRED BY ITEM (3) THEREOF, IF APPLICABLE;
(F)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, A CERTIFICATE TO THE EFFECT SET
FORTH IN EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (3)(B)
THEREOF; OR
(G)IF SUCH RESTRICTED DEFINITIVE NOTE IS BEING TRANSFERRED PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A
CERTIFICATE TO THE EFFECT SET FORTH IN EXHIBIT B HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (3)(C) THEREOF,
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THE TRUSTEE SHALL CANCEL THE RESTRICTED DEFINITIVE NOTE, INCREASE OR CAUSE
TO BE INCREASED THE AGGREGATE PRINCIPAL AMOUNT OF, IN THE CASE OF CLAUSE
(A) ABOVE, THE APPROPRIATE RESTRICTED GLOBAL NOTE, IN THE CASE OF CLAUSE
(B) ABOVE, THE 144A GLOBAL NOTE, IN THE CASE OF CLAUSE (C) ABOVE, THE
REGULATION S GLOBAL NOTE, AND IN ALL OTHER CASES, THE IAI GLOBAL NOTE.
(ii)RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED
GLOBAL NOTES. A HOLDER OF A RESTRICTED DEFINITIVE NOTE MAY EXCHANGE SUCH NOTE
FOR A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR TRANSFER SUCH
RESTRICTED DEFINITIVE NOTE TO A PERSON WHO TAKES DELIVERY THEREOF IN THE FORM
OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE ONLY IF:
(A)SUCH EXCHANGE OR TRANSFER IS EFFECTED PURSUANT TO THE EXCHANGE
OFFER IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT AND THE
HOLDER, IN THE CASE OF AN EXCHANGE, OR THE TRANSFEREE, IN THE CASE OF A
TRANSFER, CERTIFIES IN THE APPLICABLE LETTER OF TRANSMITTAL THAT IT IS
NOT (1) A BROKER-DEALER, (2) A PERSON PARTICIPATING IN THE DISTRIBUTION
OF THE EXCHANGE NOTES OR (3) A PERSON WHO IS AN AFFILIATE (AS DEFINED
IN RULE 144) OF THE COMPANY;
(B)SUCH TRANSFER IS EFFECTED PURSUANT TO THE SHELF REGISTRATION
STATEMENT IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT;
(C)SUCH TRANSFER IS EFFECTED BY A PARTICIPATING BROKER-DEALER
PURSUANT TO THE EXCHANGE OFFER REGISTRATION STATEMENT IN ACCORDANCE
WITH THE REGISTRATION RIGHTS AGREEMENT; OR
(D)THE REGISTRAR RECEIVES THE FOLLOWING:
(1)IF THE HOLDER OF SUCH DEFINITIVE NOTES PROPOSES TO EXCHANGE
SUCH NOTES FOR A BENEFICIAL INTEREST IN THE UNRESTRICTED GLOBAL NOTE, A
CERTIFICATE FROM SUCH HOLDER IN THE FORM OF EXHIBIT C HERETO, INCLUDING
THE CERTIFICATIONS IN ITEM (1)(C) THEREOF; OR
(2)IF THE HOLDER OF SUCH DEFINITIVE NOTES PROPOSES TO TRANSFER
SUCH NOTES TO A PERSON WHO SHALL TAKE DELIVERY THEREOF IN THE FORM OF A
BENEFICIAL INTEREST IN THE UNRESTRICTED GLOBAL NOTE, A CERTIFICATE FROM
SUCH HOLDER IN THE FORM OF EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS
IN ITEM (4) THEREOF;
AND, IN EACH SUCH CASE SET FORTH IN THIS SUBPARAGRAPH (D), IF THE
REGISTRAR SO REQUESTS OR IF THE APPLICABLE PROCEDURES SO REQUIRE, AN
OPINION OF COUNSEL IN FORM REASONABLY ACCEPTABLE TO THE REGISTRAR TO THE
EFFECT THAT SUCH EXCHANGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND THAT THE RESTRICTIONS ON TRANSFER CONTAINED HEREIN AND IN THE
PRIVATE PLACEMENT LEGEND ARE NO LONGER REQUIRED IN ORDER TO MAINTAIN
COMPLIANCE WITH THE SECURITIES ACT.
UPON SATISFACTION OF THE CONDITIONS OF ANY OF THE SUBPARAGRAPHS IN THIS
SECTION 2.06(D)(II), THE TRUSTEE SHALL CANCEL THE DEFINITIVE NOTES AND
INCREASE OR CAUSE TO BE INCREASED THE AGGREGATE PRINCIPAL AMOUNT OF THE
UNRESTRICTED GLOBAL NOTE.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A HOLDER OF AN UNRESTRICTED DEFINITIVE NOTE MAY
EXCHANGE SUCH NOTE FOR A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE
OR TRANSFER SUCH DEFINITIVE NOTES TO A PERSON WHO TAKES DELIVERY THEREOF IN
THE FORM OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE AT ANY TIME.
UPON RECEIPT OF A REQUEST FOR SUCH AN EXCHANGE OR TRANSFER, THE TRUSTEE SHALL
CANCEL THE APPLICABLE UNRESTRICTED
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DEFINITIVE NOTE AND INCREASE OR CAUSE TO BE INCREASED THE AGGREGATE PRINCIPAL
AMOUNT OF ONE OF THE UNRESTRICTED GLOBAL NOTES.
IF ANY SUCH EXCHANGE OR TRANSFER FROM A DEFINITIVE NOTE TO A
BENEFICIAL INTEREST IS EFFECTED PURSUANT TO SUBPARAGRAPHS (ii)(B), (ii)(D) OR
(III) ABOVE AT A TIME WHEN AN UNRESTRICTED GLOBAL NOTE HAS NOT YET BEEN ISSUED,
THE COMPANY SHALL ISSUE AND, UPON RECEIPT OF AN AUTHENTICATION ORDER IN
ACCORDANCE WITH SECTION 2.02 HEREOF, THE TRUSTEE SHALL AUTHENTICATE ONE OR MORE
UNRESTRICTED GLOBAL NOTES IN AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE
PRINCIPAL AMOUNT OF DEFINITIVE NOTES SO TRANSFERRED.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
UPON REQUEST BY A HOLDER OF DEFINITIVE NOTES AND SUCH HOLDER'S COMPLIANCE WITH
THE PROVISIONS OF THIS SECTION 2.06(E), THE REGISTRAR SHALL REGISTER THE
TRANSFER OR EXCHANGE OF DEFINITIVE NOTES. PRIOR TO SUCH REGISTRATION OF TRANSFER
OR EXCHANGE, THE REQUESTING HOLDER SHALL PRESENT OR SURRENDER TO THE REGISTRAR
THE DEFINITIVE NOTES DULY ENDORSED OR ACCOMPANIED BY A WRITTEN INSTRUCTION OF
TRANSFER IN FORM SATISFACTORY TO THE REGISTRAR DULY EXECUTED BY SUCH HOLDER OR
BY HIS OR HER ATTORNEY, DULY AUTHORIZED IN WRITING. IN ADDITION, THE REQUESTING
HOLDER SHALL PROVIDE ANY ADDITIONAL CERTIFICATIONS, DOCUMENTS AND INFORMATION,
AS APPLICABLE, REQUIRED PURSUANT TO THE FOLLOWING PROVISIONS OF THIS SECTION
2.06(E).
(i)RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. ANY
RESTRICTED DEFINITIVE NOTE MAY BE TRANSFERRED TO AND REGISTERED IN THE NAME
OF PERSONS WHO TAKE DELIVERY THEREOF IN THE FORM OF A RESTRICTED DEFINITIVE
NOTE IF THE REGISTRAR RECEIVES THE FOLLOWING:
(A)IF THE TRANSFER WILL BE MADE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, THEN THE TRANSFEROR MUST DELIVER A CERTIFICATE IN THE
FORM OF EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (1)
THEREOF;
(B)IF THE TRANSFER WILL BE MADE PURSUANT TO RULE 903 OR RULE 904,
THEN THE TRANSFEROR MUST DELIVER A CERTIFICATE IN THE FORM OF EXHIBIT B
HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (2) THEREOF; AND
(C)IF THE TRANSFER WILL BE MADE PURSUANT TO ANY OTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, THEN THE
TRANSFEROR MUST DELIVER A CERTIFICATE IN THE FORM OF EXHIBIT B HERETO,
INCLUDING THE CERTIFICATIONS, CERTIFICATES AND OPINION OF COUNSEL
REQUIRED BY ITEM (3) THEREOF, IF APPLICABLE.
(ii)RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. ANY
RESTRICTED DEFINITIVE NOTE MAY BE EXCHANGED BY THE HOLDER THEREOF FOR AN
UNRESTRICTED DEFINITIVE NOTE OR TRANSFERRED TO A PERSON OR PERSONS WHO TAKE
DELIVERY THEREOF IN THE FORM OF AN UNRESTRICTED DEFINITIVE NOTE IF:
(A)SUCH EXCHANGE OR TRANSFER IS EFFECTED PURSUANT TO THE EXCHANGE
OFFER IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT AND THE
HOLDER, IN THE CASE OF AN EXCHANGE, OR THE TRANSFEREE, IN THE CASE OF A
TRANSFER, CERTIFIES IN THE APPLICABLE LETTER OF TRANSMITTAL THAT IT IS
NOT (1) A BROKER-DEALER, (2) A PERSON PARTICIPATING IN THE DISTRIBUTION
OF THE EXCHANGE NOTES OR (3) A PERSON WHO IS AN AFFILIATE (AS DEFINED
IN RULE 144) OF THE COMPANY;
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(B)ANY SUCH TRANSFER IS EFFECTED PURSUANT TO THE SHELF REGISTRATION
STATEMENT IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT;
(C)ANY SUCH TRANSFER IS EFFECTED BY A PARTICIPATING BROKER-DEALER
PURSUANT TO THE EXCHANGE OFFER REGISTRATION STATEMENT IN ACCORDANCE
WITH THE REGISTRATION RIGHTS AGREEMENT; OR
(D)THE REGISTRAR RECEIVES THE FOLLOWING:
(1)IF THE HOLDER OF SUCH RESTRICTED DEFINITIVE NOTES PROPOSES TO
EXCHANGE SUCH NOTES FOR AN UNRESTRICTED DEFINITIVE NOTE, A CERTIFICATE
FROM SUCH HOLDER IN THE FORM OF EXHIBIT C HERETO, INCLUDING THE
CERTIFICATIONS IN ITEM (1)(D) THEREOF; OR
(2)IF THE HOLDER OF SUCH RESTRICTED DEFINITIVE NOTES PROPOSES TO
TRANSFER SUCH NOTES TO A PERSON WHO SHALL TAKE DELIVERY THEREOF IN THE
FORM OF AN UNRESTRICTED DEFINITIVE NOTE, A CERTIFICATE FROM SUCH HOLDER IN
THE FORM OF EXHIBIT B HERETO, INCLUDING THE CERTIFICATIONS IN ITEM (4)
THEREOF;
AND, IN EACH SUCH CASE SET FORTH IN THIS SUBPARAGRAPH (D), IF THE
REGISTRAR SO REQUESTS, AN OPINION OF COUNSEL IN FORM REASONABLY ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT SUCH EXCHANGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND THAT THE RESTRICTIONS ON TRANSFER
CONTAINED HEREIN AND IN THE PRIVATE PLACEMENT LEGEND ARE NO LONGER
REQUIRED IN ORDER TO MAINTAIN COMPLIANCE WITH THE SECURITIES ACT.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES.
A HOLDER OF UNRESTRICTED DEFINITIVE NOTES MAY TRANSFER SUCH NOTES TO A PERSON
WHO TAKES DELIVERY THEREOF IN THE FORM OF AN UNRESTRICTED DEFINITIVE NOTE.
UPON RECEIPT OF A REQUEST TO REGISTER SUCH A TRANSFER, THE REGISTRAR SHALL
REGISTER THE UNRESTRICTED DEFINITIVE NOTES PURSUANT TO THE INSTRUCTIONS FROM
THE HOLDER THEREOF.
(F) EXCHANGE OFFER. UPON THE OCCURRENCE OF THE EXCHANGE OFFER IN
ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT, THE COMPANY SHALL ISSUE AND,
UPON RECEIPT OF AN AUTHENTICATION ORDER IN ACCORDANCE WITH SECTION 2.02, THE
TRUSTEE SHALL AUTHENTICATE (I) ONE OR MORE UNRESTRICTED GLOBAL NOTES IN AN
AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF THE BENEFICIAL
INTERESTS IN THE RESTRICTED GLOBAL NOTES TENDERED FOR ACCEPTANCE BY PERSONS THAT
CERTIFY IN THE APPLICABLE LETTERS OF TRANSMITTAL THAT (X) THEY ARE NOT
BROKER-DEALERS, (Y) THEY ARE NOT PARTICIPATING IN A DISTRIBUTION OF THE EXCHANGE
NOTES AND (Z) THEY ARE NOT AFFILIATES (AS DEFINED IN RULE 144) OF THE COMPANY,
AND ACCEPTED FOR EXCHANGE IN THE EXCHANGE OFFER AND (II) DEFINITIVE NOTES IN AN
AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF THE RESTRICTED
DEFINITIVE NOTES ACCEPTED FOR EXCHANGE IN THE EXCHANGE OFFER. CONCURRENTLY WITH
THE ISSUANCE OF SUCH NOTES, THE TRUSTEE SHALL CAUSE THE AGGREGATE PRINCIPAL
AMOUNT OF THE APPLICABLE RESTRICTED GLOBAL NOTES TO BE REDUCED ACCORDINGLY, AND
THE COMPANY SHALL EXECUTE AND THE TRUSTEE SHALL AUTHENTICATE AND DELIVER TO THE
PERSONS DESIGNATED BY THE HOLDERS OF DEFINITIVE NOTES SO ACCEPTED DEFINITIVE
NOTES IN THE APPROPRIATE PRINCIPAL AMOUNT.
(G) LEGENDS. THE FOLLOWING LEGENDS SHALL APPEAR ON THE FACE OF ALL
GLOBAL NOTES AND DEFINITIVE NOTES ISSUED UNDER THIS INDENTURE UNLESS
SPECIFICALLY STATED OTHERWISE IN THE APPLICABLE PROVISIONS OF THIS INDENTURE.
(I)PRIVATE PLACEMENT LEGEND.
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(A)EXCEPT AS PERMITTED BY SUBPARAGRAPH (B) BELOW, EACH GLOBAL NOTE
AND EACH DEFINITIVE NOTE (AND ALL NOTES ISSUED IN EXCHANGE THEREFOR OR
SUBSTITUTION THEREOF) SHALL BEAR THE LEGEND IN SUBSTANTIALLY THE
FOLLOWING FORM:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OF U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), (B) IT IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT)
(AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(B)NOTWITHSTANDING THE FOREGOING, ANY GLOBAL NOTE OR DEFINITIVE NOTE
ISSUED PURSUANT TO SUBPARAGRAPHS (B)(IV), (C)(II), (C)(III), (D)(II),
(D)(III), (E)(II), (E)(III) OR (F) TO THIS SECTION 2.06 (AND ALL NOTES
ISSUED IN EXCHANGE THEREFOR OR SUBSTITUTION THEREOF) SHALL NOT BEAR THE
PRIVATE PLACEMENT LEGEND.
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(ii) GLOBAL NOTE LEGEND. EACH GLOBAL NOTE SHALL BEAR A LEGEND IN
SUBSTANTIALLY THE FOLLOWING FORM:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.01 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(A) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. AT SUCH TIME AS
ALL BENEFICIAL INTERESTS IN A PARTICULAR GLOBAL NOTE HAVE BEEN EXCHANGED
FOR DEFINITIVE NOTES OR A PARTICULAR GLOBAL NOTE HAS BEEN REDEEMED,
REPURCHASED OR CANCELED IN WHOLE AND NOT IN PART, EACH SUCH GLOBAL NOTE
SHALL BE RETURNED TO OR RETAINED AND CANCELED BY THE TRUSTEE IN ACCORDANCE
WITH SECTION 2.11 HEREOF. AT ANY TIME PRIOR TO SUCH CANCELLATION, IF ANY
BENEFICIAL INTEREST IN A GLOBAL NOTE IS EXCHANGED FOR OR TRANSFERRED TO A
PERSON WHO WILL TAKE DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST
IN ANOTHER GLOBAL NOTE OR FOR DEFINITIVE NOTES, THE PRINCIPAL AMOUNT OF
NOTES REPRESENTED BY SUCH GLOBAL NOTE SHALL BE REDUCED ACCORDINGLY AND AN
ENDORSEMENT SHALL BE MADE ON SUCH GLOBAL NOTE BY THE TRUSTEE OR BY THE
DEPOSITARY AT THE DIRECTION OF THE TRUSTEE TO REFLECT SUCH REDUCTION; AND
IF THE BENEFICIAL INTEREST IS BEING EXCHANGED FOR OR TRANSFERRED TO A
PERSON WHO WILL TAKE DELIVERY THEREOF IN THE FORM OF A BENEFICIAL INTEREST
IN ANOTHER GLOBAL NOTE, SUCH OTHER GLOBAL NOTE SHALL BE INCREASED
ACCORDINGLY AND AN ENDORSEMENT SHALL BE MADE ON SUCH GLOBAL NOTE BY THE
TRUSTEE OR BY THE DEPOSITARY AT THE DIRECTION OF THE TRUSTEE TO REFLECT
SUCH INCREASE.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i)TO PERMIT REGISTRATIONS OF TRANSFERS AND EXCHANGES, THE COMPANY SHALL
EXECUTE AND THE TRUSTEE SHALL AUTHENTICATE GLOBAL NOTES AND DEFINITIVE NOTES
UPON THE COMPANY'S ORDER OR AT THE REGISTRAR'S REQUEST.
(ii)NO SERVICE CHARGE SHALL BE MADE TO A HOLDER OF A BENEFICIAL INTEREST
IN A GLOBAL NOTE OR TO A HOLDER OF A DEFINITIVE NOTE FOR ANY REGISTRATION OF
TRANSFER OR EXCHANGE, BUT THE COMPANY MAY REQUIRE PAYMENT OF A SUM SUFFICIENT
TO COVER ANY TRANSFER TAX OR SIMILAR GOVERNMENTAL CHARGE PAYABLE IN
CONNECTION THEREWITH (OTHER THAN ANY SUCH TRANSFER TAXES OR SIMILAR
GOVERNMENTAL CHARGE PAYABLE UPON EXCHANGE OR TRANSFER PURSUANT TO SECTIONS
2.10, 3.06, 3.09, 4.10, 4.14 AND 9.05 HEREOF).
(iii)THE REGISTRAR SHALL NOT BE REQUIRED TO REGISTER THE TRANSFER OF OR
EXCHANGE ANY NOTE SELECTED FOR REDEMPTION IN WHOLE OR IN PART, EXCEPT THE
UNREDEEMED PORTION OF ANY NOTE BEING REDEEMED IN PART.
(iv)ALL GLOBAL NOTES AND DEFINITIVE NOTES ISSUED UPON ANY REGISTRATION OF
TRANSFER OR EXCHANGE OF GLOBAL NOTES OR DEFINITIVE NOTES SHALL BE THE VALID
OBLIGATIONS OF THE COMPANY,
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EVIDENCING THE SAME DEBT, AND ENTITLED TO THE SAME BENEFITS UNDER THIS
INDENTURE, AS THE GLOBAL NOTES OR DEFINITIVE NOTES SURRENDERED UPON SUCH
REGISTRATION OF TRANSFER OR EXCHANGE.
(v)THE COMPANY SHALL NOT BE REQUIRED (A) TO ISSUE, TO REGISTER THE
TRANSFER OF OR TO EXCHANGE ANY NOTES DURING A PERIOD BEGINNING AT THE OPENING
OF BUSINESS 15 DAYS BEFORE THE DAY OF ANY SELECTION OF NOTES FOR REDEMPTION
UNDER SECTION 3.02 HEREOF AND ENDING AT THE CLOSE OF BUSINESS ON THE DAY OF
SELECTION, (B) TO REGISTER THE TRANSFER OF OR TO EXCHANGE ANY NOTE SO
SELECTED FOR REDEMPTION IN WHOLE OR IN PART, EXCEPT THE UNREDEEMED PORTION OF
ANY NOTE BEING REDEEMED IN PART OR (C) TO REGISTER THE TRANSFER OF OR TO
EXCHANGE A NOTE BETWEEN A RECORD DATE AND THE NEXT SUCCEEDING INTEREST
PAYMENT DATE.
(vi)PRIOR TO DUE PRESENTMENT FOR THE REGISTRATION OF A TRANSFER OF ANY
NOTE, THE TRUSTEE, ANY AGENT AND THE COMPANY MAY DEEM AND TREAT THE PERSON IN
WHOSE NAME ANY NOTE IS REGISTERED AS THE ABSOLUTE OWNER OF SUCH NOTE FOR THE
PURPOSE OF RECEIVING PAYMENT OF PRINCIPAL OF AND INTEREST ON SUCH NOTES AND
FOR ALL OTHER PURPOSES, AND NONE OF THE TRUSTEE, ANY AGENT OR THE COMPANY
SHALL BE AFFECTED BY NOTICE TO THE CONTRARY.
(vii)THE TRUSTEE SHALL AUTHENTICATE GLOBAL NOTES AND DEFINITIVE NOTES IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 2.02 HEREOF.
(viii)CERTIFICATIONS, CERTIFICATES AND OPINIONS OF COUNSEL REQUIRED TO BE
SUBMITTED TO THE REGISTRAR PURSUANT TO THIS SECTION 2.06 TO EFFECT A
REGISTRATION OF TRANSFER OR EXCHANGE MAY BE SUBMITTED BY FACSIMILE.
SECTION 2.07 REPLACEMENT NOTES.
IF ANY MUTILATED NOTE IS SURRENDERED TO THE TRUSTEE OR THE
COMPANY AND THE TRUSTEE RECEIVES EVIDENCE TO ITS SATISFACTION OF THE
DESTRUCTION, LOSS OR THEFT OF ANY NOTE, THE COMPANY SHALL ISSUE AND THE
TRUSTEE, UPON RECEIPT OF AN AUTHENTICATION ORDER, SHALL AUTHENTICATE A
REPLACEMENT NOTE IF THE TRUSTEE'S REQUIREMENTS ARE MET. IF REQUIRED BY THE
TRUSTEE OR THE COMPANY, AN INDEMNITY BOND MUST BE SUPPLIED BY THE HOLDER
THAT IS SUFFICIENT IN THE JUDGMENT OF THE TRUSTEE AND THE COMPANY TO
PROTECT THE COMPANY, THE TRUSTEE, ANY AGENT AND ANY AUTHENTICATING AGENT
FROM ANY LOSS THAT ANY OF THEM MAY SUFFER IF A NOTE IS REPLACED. THE
COMPANY MAY CHARGE FOR ITS EXPENSES IN REPLACING A NOTE.
EVERY REPLACEMENT NOTE IS AN ADDITIONAL OBLIGATION OF THE
COMPANY AND SHALL BE ENTITLED TO ALL OF THE BENEFITS OF THIS INDENTURE
EQUALLY AND PROPORTIONATELY WITH ALL OTHER NOTES DULY ISSUED HEREUNDER.
SECTION 2.08 OUTSTANDING NOTES.
THE NOTES OUTSTANDING AT ANY TIME ARE ALL THE NOTES
AUTHENTICATED BY THE TRUSTEE EXCEPT FOR THOSE CANCELED BY IT, THOSE
DELIVERED TO IT FOR CANCELLATION, THOSE REDUCTIONS IN THE INTEREST IN A
GLOBAL NOTE EFFECTED BY THE TRUSTEE IN ACCORDANCE WITH THE PROVISIONS
HEREOF AND THOSE DESCRIBED IN THIS SECTION 2.08 AS NOT OUTSTANDING. EXCEPT
AS SET FORTH IN SECTION 2.09 HEREOF, A NOTE DOES NOT CEASE TO BE
OUTSTANDING BECAUSE THE COMPANY OR AN AFFILIATE OF THE COMPANY HOLDS THE
NOTE.
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IF A NOTE IS REPLACED PURSUANT TO SECTION 2.07 HEREOF, IT
CEASES TO BE OUTSTANDING UNLESS THE TRUSTEE RECEIVES PROOF SATISFACTORY TO
IT THAT THE REPLACED NOTE IS HELD BY A BONA FIDE PURCHASER.
IF THE PRINCIPAL AMOUNT OF ANY NOTE IS CONSIDERED PAID UNDER
SECTION 4.01 HEREOF, IT CEASES TO BE OUTSTANDING AND INTEREST ON IT CEASES
TO ACCRUE.
IF THE PAYING AGENT (OTHER THAN THE COMPANY, A SUBSIDIARY OR
AN AFFILIATE OF ANY THEREOF) HOLDS, ON A REDEMPTION DATE OR MATURITY DATE,
MONEY SUFFICIENT TO PAY NOTES PAYABLE ON THAT DATE, THEN ON AND AFTER THAT
DATE SUCH NOTES SHALL BE DEEMED TO BE NO LONGER OUTSTANDING AND SHALL
CEASE TO ACCRUE INTEREST.
SECTION 2.09 TREASURY NOTES.
IN DETERMINING WHETHER THE HOLDERS OF THE REQUIRED PRINCIPAL
AMOUNT OF NOTES HAVE CONCURRED IN ANY DIRECTION, WAIVER OR CONSENT, NOTES
OWNED BY THE COMPANY, OR BY ANY PERSON DIRECTLY OR INDIRECTLY CONTROLLING
OR CONTROLLED BY OR UNDER DIRECT OR INDIRECT COMMON CONTROL WITH THE
COMPANY, SHALL BE CONSIDERED AS THOUGH NOT OUTSTANDING, EXCEPT THAT FOR
THE PURPOSES OF DETERMINING WHETHER THE TRUSTEE SHALL BE PROTECTED IN
RELYING ON ANY SUCH DIRECTION, WAIVER OR CONSENT, ONLY NOTES THAT THE
TRUSTEE KNOWS ARE SO OWNED SHALL BE SO DISREGARDED.
SECTION 2.10 TEMPORARY NOTES.
UNTIL CERTIFICATES REPRESENTING NOTES ARE READY FOR DELIVERY,
THE COMPANY MAY PREPARE AND THE TRUSTEE, UPON RECEIPT OF AN AUTHENTICATION
ORDER, SHALL AUTHENTICATE TEMPORARY NOTES. TEMPORARY NOTES SHALL BE
SUBSTANTIALLY IN THE FORM OF CERTIFICATED NOTES BUT MAY HAVE VARIATIONS
THAT THE COMPANY CONSIDERS APPROPRIATE FOR TEMPORARY NOTES AND AS SHALL BE
REASONABLY ACCEPTABLE TO THE TRUSTEE. WITHOUT UNREASONABLE DELAY, THE
COMPANY SHALL PREPARE AND THE TRUSTEE SHALL AUTHENTICATE DEFINITIVE NOTES
IN EXCHANGE FOR TEMPORARY NOTES.
HOLDERS OF TEMPORARY NOTES SHALL BE ENTITLED TO ALL OF THE
BENEFITS OF THIS INDENTURE.
SECTION 2.11 CANCELLATION.
THE COMPANY AT ANY TIME MAY DELIVER NOTES TO THE TRUSTEE FOR
CANCELLATION. THE REGISTRAR AND PAYING AGENT SHALL FORWARD TO THE TRUSTEE
ANY NOTES SURRENDERED TO THEM FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT. THE TRUSTEE AND NO ONE ELSE SHALL CANCEL ALL NOTES SURRENDERED
FOR REGISTRATION OF TRANSFER, EXCHANGE, PAYMENT, REPLACEMENT OR
CANCELLATION AND SHALL DESTROY CANCELED NOTES (SUBJECT TO THE RECORD
RETENTION REQUIREMENT OF THE EXCHANGE ACT). CERTIFICATION OF THE
DESTRUCTION OF ALL CANCELED NOTES SHALL BE DELIVERED TO THE COMPANY. THE
COMPANY MAY NOT ISSUE NEW NOTES TO REPLACE NOTES THAT IT HAS PAID OR THAT
HAVE BEEN DELIVERED TO THE TRUSTEE FOR CANCELLATION.
SECTION 2.12 DEFAULTED INTEREST.
IF THE COMPANY DEFAULTS IN A PAYMENT OF INTEREST ON THE NOTES,
IT SHALL PAY THE DEFAULTED INTEREST IN ANY LAWFUL MANNER PLUS, TO THE
EXTENT LAWFUL, INTEREST PAYABLE ON THE DEFAULTED INTEREST, TO THE PERSONS
WHO ARE HOLDERS ON A SUBSEQUENT SPECIAL RECORD DATE, IN EACH CASE AT THE
RATE PROVIDED IN THE NOTES AND IN SECTION 4.01 HEREOF. THE COMPANY SHALL
NOTIFY THE TRUSTEE IN WRITING OF THE AMOUNT OF DEFAULTED INTEREST PROPOSED
TO BE PAID ON EACH NOTE AND THE
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DATE OF THE PROPOSED PAYMENT. THE COMPANY SHALL FIX OR CAUSE TO BE FIXED
EACH SUCH SPECIAL RECORD DATE AND PAYMENT DATE, PROVIDED THAT NO SUCH
SPECIAL RECORD DATE SHALL BE LESS THAN 10 DAYS PRIOR TO THE RELATED
PAYMENT DATE FOR SUCH DEFAULTED INTEREST. AT LEAST 15 DAYS BEFORE THE
SPECIAL RECORD DATE, THE COMPANY (OR, UPON THE WRITTEN REQUEST OF THE
COMPANY, THE TRUSTEE IN THE NAME AND AT THE EXPENSE OF THE COMPANY) SHALL
MAIL OR CAUSE TO BE MAILED TO HOLDERS A NOTICE THAT STATES THE SPECIAL
RECORD DATE, THE RELATED PAYMENT DATE AND THE AMOUNT OF SUCH INTEREST TO
BE PAID.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01 NOTICES TO TRUSTEE.
IF THE COMPANY ELECTS TO REDEEM NOTES PURSUANT TO THE OPTIONAL
REDEMPTION PROVISIONS OF SECTION 3.07 HEREOF, IT SHALL FURNISH TO THE
TRUSTEE, AT LEAST 30 DAYS BUT NOT MORE THAN 60 DAYS BEFORE A REDEMPTION
DATE, AN OFFICERS' CERTIFICATE SETTING FORTH (I) THE CLAUSE OF THIS
INDENTURE PURSUANT TO WHICH THE REDEMPTION SHALL OCCUR, (II) THE
REDEMPTION DATE, (III) THE PRINCIPAL AMOUNT OF NOTES TO BE REDEEMED AND
(IV) THE REDEMPTION PRICE.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.
IF LESS THAN ALL OF THE NOTES ARE TO BE REDEEMED OR PURCHASED
IN AN OFFER TO PURCHASE AT ANY TIME, THE TRUSTEE SHALL SELECT THE NOTES TO
BE REDEEMED OR PURCHASED AMONG THE HOLDERS OF THE NOTES IN COMPLIANCE WITH
THE REQUIREMENTS OF THE PRINCIPAL NATIONAL SECURITIES EXCHANGE, IF ANY, ON
WHICH THE NOTES ARE LISTED OR, IF THE NOTES ARE NOT SO LISTED, ON A PRO
RATA BASIS, BY LOT OR IN ACCORDANCE WITH ANY OTHER METHOD THE TRUSTEE
CONSIDERS FAIR AND APPROPRIATE. IN THE EVENT OF PARTIAL REDEMPTION BY LOT,
THE PARTICULAR NOTES TO BE REDEEMED SHALL BE SELECTED, UNLESS OTHERWISE
PROVIDED HEREIN, NOT LESS THAN 30 NOR MORE THAN 60 DAYS PRIOR TO THE
REDEMPTION DATE BY THE TRUSTEE FROM THE OUTSTANDING NOTES NOT PREVIOUSLY
CALLED FOR REDEMPTION.
THE TRUSTEE SHALL PROMPTLY NOTIFY THE COMPANY IN WRITING OF
THE NOTES SELECTED FOR REDEMPTION AND, IN THE CASE OF ANY NOTE SELECTED
FOR PARTIAL REDEMPTION, THE PRINCIPAL AMOUNT THEREOF TO BE REDEEMED. NOTES
AND PORTIONS OF NOTES SELECTED SHALL BE IN AMOUNTS OF $1,000 OR WHOLE
MULTIPLES OF $1,000; EXCEPT THAT IF ALL OF THE NOTES OF A HOLDER ARE TO BE
REDEEMED, THE ENTIRE OUTSTANDING AMOUNT OF NOTES HELD BY SUCH HOLDER, EVEN
IF NOT A MULTIPLE OF $1,000, SHALL BE REDEEMED. EXCEPT AS PROVIDED IN THE
PRECEDING SENTENCE, PROVISIONS OF THIS INDENTURE THAT APPLY TO NOTES
CALLED FOR REDEMPTION ALSO APPLY TO PORTIONS OF NOTES CALLED FOR
REDEMPTION.
SECTION 3.03 NOTICE OF REDEMPTION.
SUBJECT TO THE PROVISIONS OF SECTION 3.09 HEREOF, AT LEAST 30
DAYS BUT NOT MORE THAN 60 DAYS BEFORE A REDEMPTION DATE, THE COMPANY SHALL
MAIL OR CAUSE TO BE MAILED, BY FIRST CLASS MAIL, A NOTICE OF REDEMPTION TO
EACH HOLDER WHOSE NOTES ARE TO BE REDEEMED AT ITS REGISTERED ADDRESS.
THE NOTICE SHALL IDENTIFY THE NOTES TO BE REDEEMED AND SHALL
STATE:
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(a) THE REDEMPTION DATE;
(b) THE REDEMPTION PRICE;
(c) IF ANY NOTE IS BEING REDEEMED IN PART, THE PORTION OF THE
PRINCIPAL AMOUNT OF SUCH NOTE TO BE REDEEMED AND THAT, AFTER THE
REDEMPTION DATE UPON SURRENDER OF SUCH NOTE, A NEW NOTE OR NOTES IN
PRINCIPAL AMOUNT EQUAL TO THE UNREDEEMED PORTION SHALL BE ISSUED UPON
CANCELLATION OF THE ORIGINAL NOTE;
(d) THE NAME AND ADDRESS OF THE PAYING AGENT;
(e) THAT NOTES CALLED FOR REDEMPTION MUST BE SURRENDERED TO THE
PAYING AGENT TO COLLECT THE REDEMPTION PRICE;
(f) THAT, UNLESS THE COMPANY DEFAULTS IN MAKING SUCH REDEMPTION
PAYMENT, INTEREST ON NOTES CALLED FOR REDEMPTION CEASES TO ACCRUE ON AND
AFTER THE REDEMPTION DATE;
(g) THE PARAGRAPH OF THE NOTES AND/OR SECTION OF THIS INDENTURE
PURSUANT TO WHICH THE NOTES CALLED FOR REDEMPTION ARE BEING REDEEMED; AND
(h) THAT NO REPRESENTATION IS MADE AS TO THE CORRECTNESS OR
ACCURACY OF THE CUSIP NUMBER, IF ANY, LISTED IN SUCH NOTICE OR PRINTED ON
THE NOTES.
AT THE COMPANY'S REQUEST, THE TRUSTEE SHALL GIVE THE NOTICE OF
REDEMPTION IN THE COMPANY'S NAME AND AT ITS EXPENSE; PROVIDED, HOWEVER,
THAT THE COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE, AT LEAST 45 DAYS
PRIOR TO THE REDEMPTION DATE, AN OFFICERS' CERTIFICATE REQUESTING THAT THE
TRUSTEE GIVE SUCH NOTICE AND SETTING FORTH THE INFORMATION TO BE STATED IN
SUCH NOTICE AS PROVIDED IN THE PRECEDING PARAGRAPH.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
ONCE NOTICE OF REDEMPTION IS MAILED IN ACCORDANCE WITH SECTION
3.03 HEREOF, NOTES CALLED FOR REDEMPTION BECOME IRREVOCABLY DUE AND
PAYABLE ON THE REDEMPTION DATE AT THE REDEMPTION PRICE. A NOTICE OF
REDEMPTION MAY NOT BE CONDITIONAL.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE
ON OR PRIOR TO THE REDEMPTION DATE, THE COMPANY SHALL DEPOSIT
WITH THE TRUSTEE OR WITH THE PAYING AGENT MONEY SUFFICIENT TO PAY THE
REDEMPTION PRICE OF AND ACCRUED INTEREST ON ALL NOTES TO BE REDEEMED ON
THAT DATE (OTHER THAN NOTES OR PORTIONS OF NOTES CALLED FOR REDEMPTION
WHICH ARE OWNED BY THE COMPANY OR A SUBSIDIARY AND HAVE BEEN DELIVERED BY
THE COMPANY OR SUCH SUBSIDIARY TO THE TRUSTEE FOR CANCELLATION). THE
TRUSTEE OR THE PAYING AGENT SHALL PROMPTLY RETURN TO THE COMPANY ANY MONEY
DEPOSITED WITH THE TRUSTEE OR THE PAYING AGENT BY THE COMPANY IN EXCESS OF
THE AMOUNTS NECESSARY TO PAY THE REDEMPTION PRICE OF, AND ACCRUED INTEREST
ON, ALL NOTES TO BE REDEEMED.
IF THE COMPANY COMPLIES WITH THE PROVISIONS OF THE PRECEDING
PARAGRAPH, ON AND AFTER THE REDEMPTION DATE, INTEREST SHALL CEASE TO
ACCRUE ON THE NOTES OR THE PORTIONS OF NOTES CALLED FOR REDEMPTION. IF A
NOTE IS REDEEMED ON OR AFTER AN INTEREST RECORD DATE BUT ON OR PRIOR TO
THE RELATED INTEREST PAYMENT DATE, THEN ANY ACCRUED AND UNPAID INTEREST
SHALL BE PAID TO THE
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PERSON IN WHOSE NAME SUCH NOTE WAS REGISTERED AT THE CLOSE OF BUSINESS ON
SUCH RECORD DATE. IF ANY NOTE CALLED FOR REDEMPTION SHALL NOT BE SO PAID
UPON SURRENDER FOR REDEMPTION BECAUSE OF THE FAILURE OF THE COMPANY TO
COMPLY WITH THE PRECEDING PARAGRAPH, INTEREST SHALL BE PAID ON THE UNPAID
PRINCIPAL, FROM THE REDEMPTION DATE UNTIL SUCH PRINCIPAL IS PAID, AND TO
THE EXTENT LAWFUL ON ANY INTEREST NOT PAID ON SUCH UNPAID PRINCIPAL, IN
EACH CASE AT THE RATE PROVIDED IN THE NOTES AND IN SECTION 4.01 HEREOF.
SECTION 3.06 NOTES REDEEMED IN PART.
UPON SURRENDER OF A NOTE THAT IS REDEEMED IN PART, THE COMPANY
SHALL ISSUE AND, UPON RECEIPT OF AN AUTHENTICATION ORDER, THE TRUSTEE
SHALL AUTHENTICATE FOR THE HOLDER, AT THE EXPENSE OF THE COMPANY, A NEW
NOTE EQUAL IN PRINCIPAL AMOUNT TO THE UNREDEEMED PORTION OF THE NOTE
SURRENDERED.
SECTION 3.07 OPTIONAL REDEMPTION.
(A) EXCEPT AS SET FORTH IN CLAUSE (B) OF THIS SECTION 3.07, THE
NOTES SHALL NOT BE REDEEMABLE AT THE COMPANY'S OPTION PRIOR TO FEBRUARY 1,
2003. THEREAFTER, THE NOTES SHALL BE SUBJECT TO REDEMPTION AT ANY TIME AT
THE OPTION OF THE COMPANY, IN WHOLE OR IN PART, UPON NOT LESS THAN 30 NOR
MORE THAN 60 DAYS' NOTICE, AT THE REDEMPTION PRICES (EXPRESSED AS
PERCENTAGES OF PRINCIPAL AMOUNT) SET FORTH BELOW, PLUS ACCRUED AND UNPAID
INTEREST AND LIQUIDATED DAMAGES, IF ANY, THEREON TO THE APPLICABLE
REDEMPTION DATE, IF REDEEMED DURING THE TWELVE-MONTH PERIOD BEGINNING ON
FEBRUARY 1 OF THE YEARS INDICATED BELOW:
YEAR PERCENTAGE
---- ----------
2003.................................103.875%
2004.................................102.583%
2005.................................101.292%
2006 AND THEREAFTER..................100.000%
(B) NOTWITHSTANDING THE PROVISIONS OF CLAUSE (A) OF THIS SECTION 3.07,
PRIOR TO FEBRUARY 1, 2001, THE COMPANY MAY REDEEM UP TO ONE-THIRD OF THE
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT REDEMPTION PRICE OF 107.750% OF THE
PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED
DAMAGES, IF ANY, THEREON TO THE REDEMPTION DATE, WITH THE NET CASH PROCEEDS OF
ONE OR MORE OFFERINGS OF EQUITY INTERESTS (OTHER THAN DISQUALIFIED STOCK) OF THE
COMPANY; PROVIDED THAT (I) AT LEAST $133.3 MILLION IN PRINCIPAL AMOUNT OF THE
NOTES REMAIN OUTSTANDING IMMEDIATELY AFTER THE OCCURRENCE OF EACH SUCH
REDEMPTION AND (II) SUCH REDEMPTION SHALL OCCUR WITHIN 90 DAYS OF THE DATE OF
THE CONSUMMATION OF SUCH OFFERING.
(C) ANY REDEMPTION PURSUANT TO THIS SECTION 3.07 SHALL BE MADE PURSUANT
TO THE PROVISIONS OF SECTION 3.01 THROUGH 3.06 HEREOF.
SECTION 3.08 MANDATORY REDEMPTION.
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EXCEPT AS SET FORTH IN SECTIONS 4.10 AND 4.14 HEREOF, THE COMPANY
SHALL NOT BE REQUIRED TO MAKE MANDATORY REDEMPTION OR SINKING FUND PAYMENTS WITH
RESPECT TO THE NOTES.
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
IN THE EVENT THAT, PURSUANT TO SECTION 4.10 HEREOF, THE COMPANY
SHALL BE REQUIRED TO COMMENCE AN ASSET SALE OFFER, IT SHALL FOLLOW THE
PROCEDURES SPECIFIED BELOW.
THE ASSET SALE OFFER SHALL REMAIN OPEN FOR A PERIOD OF 20 BUSINESS
DAYS FOLLOWING ITS COMMENCEMENT AND NO LONGER, EXCEPT TO THE EXTENT THAT A
LONGER PERIOD IS REQUIRED BY APPLICABLE LAW (THE "OFFER PERIOD"). NO LATER THAN
FIVE BUSINESS DAYS AFTER THE TERMINATION OF THE OFFER PERIOD (THE "PURCHASE
DATE"), THE COMPANY SHALL PURCHASE THE PRINCIPAL AMOUNT OF NOTES REQUIRED TO BE
PURCHASED PURSUANT TO SECTION 4.10 HEREOF (THE "OFFER AMOUNT") OR, IF LESS THAN
THE OFFER AMOUNT HAS BEEN TENDERED, ALL NOTES TENDERED IN RESPONSE TO THE ASSET
SALE OFFER. PAYMENT FOR ANY NOTES SO PURCHASED SHALL BE MADE IN THE SAME MANNER
AS INTEREST PAYMENTS ARE MADE.
IF THE PURCHASE DATE IS ON OR AFTER AN INTEREST RECORD DATE AND ON
OR BEFORE THE RELATED INTEREST PAYMENT DATE, ANY ACCRUED AND UNPAID INTEREST
SHALL BE PAID TO THE PERSON IN WHOSE NAME A NOTE IS REGISTERED AT THE CLOSE OF
BUSINESS ON SUCH RECORD DATE, AND NO ADDITIONAL INTEREST SHALL BE PAYABLE TO
HOLDERS WHO TENDER NOTES PURSUANT TO THE ASSET SALE OFFER.
UPON THE COMMENCEMENT OF AN ASSET SALE OFFER, THE COMPANY SHALL
SEND, BY FIRST CLASS MAIL, A NOTICE TO THE TRUSTEE AND EACH OF THE HOLDERS, WITH
A COPY TO THE TRUSTEE. THE NOTICE SHALL CONTAIN ALL INSTRUCTIONS AND MATERIALS
NECESSARY TO ENABLE SUCH HOLDERS TO TENDER NOTES PURSUANT TO THE ASSET SALE
OFFER. THE ASSET SALE OFFER SHALL BE MADE TO ALL HOLDERS. THE NOTICE, WHICH
SHALL GOVERN THE TERMS OF THE ASSET SALE OFFER, SHALL STATE:
(a) THAT THE ASSET SALE OFFER IS BEING MADE PURSUANT TO THIS SECTION 3.09
AND SECTION 4.10 HEREOF AND THE LENGTH OF TIME THE ASSET SALE OFFER SHALL REMAIN
OPEN;
(b) THE OFFER AMOUNT, THE PURCHASE PRICE AND THE PURCHASE DATE;
(c) THAT ANY NOTE NOT TENDERED OR ACCEPTED FOR PAYMENT SHALL CONTINUE TO
ACCRUE INTEREST;
(d) THAT, UNLESS THE COMPANY DEFAULTS IN MAKING SUCH PAYMENT, ANY NOTE
ACCEPTED FOR PAYMENT PURSUANT TO THE ASSET SALE OFFER SHALL CEASE TO ACCRUE
INTEREST AFTER THE PURCHASE DATE;
(e) THAT HOLDERS ELECTING TO HAVE A NOTE PURCHASED PURSUANT TO AN ASSET
SALE OFFER MAY ONLY ELECT TO HAVE ALL OF SUCH NOTE PURCHASED AND MAY NOT ELECT
TO HAVE ONLY A PORTION OF SUCH NOTE PURCHASED;
(f) THAT HOLDERS ELECTING TO HAVE A NOTE PURCHASED PURSUANT TO ANY ASSET
SALE OFFER SHALL BE REQUIRED TO SURRENDER THE NOTE, WITH THE FORM ENTITLED
"OPTION OF HOLDER TO ELECT PURCHASE" ON THE REVERSE OF THE NOTE COMPLETED, OR
TRANSFER BY BOOK-ENTRY TRANSFER, TO THE COMPANY, A DEPOSITARY, IF APPOINTED BY
THE COMPANY, OR A PAYING AGENT AT THE ADDRESS SPECIFIED IN THE NOTICE AT LEAST
THREE DAYS BEFORE THE PURCHASE DATE;
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(g) THAT HOLDERS SHALL BE ENTITLED TO WITHDRAW THEIR ELECTION IF THE
COMPANY, THE DEPOSITARY OR THE PAYING AGENT, AS THE CASE MAY BE, RECEIVES, NOT
LATER THAN THE EXPIRATION OF THE OFFER PERIOD, A TELEGRAM, TELEX, FACSIMILE
TRANSMISSION OR LETTER SETTING FORTH THE NAME OF THE HOLDER, THE PRINCIPAL
AMOUNT OF THE NOTE THE HOLDER DELIVERED FOR PURCHASE AND A STATEMENT THAT SUCH
HOLDER IS WITHDRAWING HIS ELECTION TO HAVE SUCH NOTE PURCHASED;
(h) THAT, IF THE AGGREGATE PRINCIPAL AMOUNT OF NOTES SURRENDERED BY
HOLDERS EXCEEDS THE OFFER AMOUNT, THE TRUSTEE SHALL SELECT THE NOTES TO BE
PURCHASED ON A PRO RATA BASIS (WITH SUCH ADJUSTMENTS AS MAY BE DEEMED
APPROPRIATE BY THE COMPANY SO THAT ONLY NOTES IN DENOMINATIONS OF $1,000, OR
INTEGRAL MULTIPLES THEREOF, SHALL BE PURCHASED); AND
(i) THAT HOLDERS WHOSE NOTES WERE PURCHASED ONLY IN PART SHALL BE ISSUED
NEW NOTES EQUAL IN PRINCIPAL AMOUNT TO THE UNPURCHASED PORTION OF THE NOTES
SURRENDERED (OR TRANSFERRED BY BOOK-ENTRY TRANSFER).
ON OR BEFORE THE PURCHASE DATE, THE COMPANY SHALL, TO THE EXTENT
LAWFUL, ACCEPT FOR PAYMENT, ON A PRO RATA BASIS TO THE EXTENT NECESSARY, THE
OFFER AMOUNT OF NOTES OR PORTIONS THEREOF TENDERED PURSUANT TO THE ASSET SALE
OFFER, OR IF LESS THAN THE OFFER AMOUNT HAS BEEN TENDERED, ALL NOTES TENDERED,
AND SHALL DELIVER TO THE TRUSTEE AN OFFICERS' CERTIFICATE STATING THAT SUCH
NOTES OR PORTIONS THEREOF WERE ACCEPTED FOR PAYMENT BY THE COMPANY IN ACCORDANCE
WITH THE TERMS OF THIS SECTION 3.09. THE COMPANY, THE DEPOSITARY OR THE PAYING
AGENT, AS THE CASE MAY BE, SHALL PROMPTLY (BUT IN ANY CASE NOT LATER THAN FIVE
DAYS AFTER THE PURCHASE DATE) MAIL OR DELIVER TO EACH TENDERING HOLDER AN AMOUNT
EQUAL TO THE PURCHASE PRICE OF THE NOTES TENDERED BY SUCH HOLDER AND ACCEPTED BY
THE COMPANY FOR PURCHASE, AND THE COMPANY SHALL PROMPTLY ISSUE A NEW NOTE, AND
THE TRUSTEE, UPON WRITTEN REQUEST FROM THE COMPANY, SHALL AUTHENTICATE AND MAIL
OR DELIVER SUCH NEW NOTE TO SUCH HOLDER, IN A PRINCIPAL AMOUNT EQUAL TO ANY
UNPURCHASED PORTION OF THE NOTE SURRENDERED. ANY NOTE NOT SO ACCEPTED SHALL BE
PROMPTLY MAILED OR DELIVERED BY THE COMPANY TO THE HOLDER THEREOF. THE COMPANY
SHALL PUBLICLY ANNOUNCE THE RESULTS OF THE ASSET SALE OFFER ON THE PURCHASE
DATE.
OTHER THAN AS SPECIFICALLY PROVIDED IN THIS SECTION 3.09, ANY
PURCHASE PURSUANT TO THIS SECTION 3.09 SHALL BE MADE PURSUANT TO THE PROVISIONS
OF SECTIONS 3.01 THROUGH 3.06 HEREOF.
ARTICLE 4.
COVENANTS
SECTION 4.01 PAYMENT OF NOTES.
THE COMPANY SHALL PAY OR CAUSE TO BE PAID THE PRINCIPAL OF, PREMIUM,
IF ANY, AND INTEREST ON THE NOTES ON THE DATES AND IN THE MANNER PROVIDED IN THE
NOTES. PRINCIPAL, PREMIUM, IF ANY, AND INTEREST SHALL BE CONSIDERED PAID ON THE
DATE DUE IF THE PAYING AGENT, IF OTHER THAN THE COMPANY OR A SUBSIDIARY THEREOF,
HOLDS AS OF 10:00 A.M. EASTERN TIME ON THE DUE DATE MONEY DEPOSITED BY THE
COMPANY IN IMMEDIATELY AVAILABLE FUNDS AND DESIGNATED FOR AND SUFFICIENT TO PAY
ALL PRINCIPAL, PREMIUM, IF ANY, AND INTEREST THEN DUE. THE COMPANY SHALL PAY ALL
LIQUIDATED DAMAGES, IF ANY, IN THE SAME MANNER ON THE DATES AND IN THE AMOUNTS
SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT.
THE COMPANY SHALL PAY INTEREST (INCLUDING POST-PETITION INTEREST IN
ANY PROCEEDING UNDER ANY BANKRUPTCY LAW) ON OVERDUE PRINCIPAL AT THE RATE OF THE
THEN APPLICABLE INTEREST RATE ON THE NOTES
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TO THE EXTENT LAWFUL; IT SHALL PAY INTEREST (INCLUDING POST-PETITION INTEREST IN
ANY PROCEEDING UNDER ANY BANKRUPTCY LAW) ON OVERDUE INSTALLMENTS OF INTEREST AND
LIQUIDATED DAMAGES (WITHOUT REGARD TO ANY APPLICABLE GRACE PERIOD) AT THE SAME
RATE TO THE EXTENT LAWFUL.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
THE COMPANY SHALL MAINTAIN IN THE BOROUGH OF MANHATTAN, THE CITY OF
NEW YORK, AN OFFICE OR AGENCY (WHICH MAY BE AN OFFICE OF THE TRUSTEE OR AN
AFFILIATE OF THE TRUSTEE, REGISTRAR OR CO-REGISTRAR) WHERE NOTES MAY BE
SURRENDERED FOR REGISTRATION OF TRANSFER OR FOR EXCHANGE AND WHERE NOTICES AND
DEMANDS TO OR UPON THE COMPANY IN RESPECT OF THE NOTES AND THIS INDENTURE MAY BE
SERVED. THE COMPANY SHALL GIVE PROMPT WRITTEN NOTICE TO THE TRUSTEE OF THE
LOCATION, AND ANY CHANGE IN THE LOCATION, OF SUCH OFFICE OR AGENCY. IF AT ANY
TIME THE COMPANY SHALL FAIL TO MAINTAIN ANY SUCH REQUIRED OFFICE OR AGENCY OR
THE COMPANY SHALL FAIL TO FURNISH THE TRUSTEE WITH THE ADDRESS THEREOF, SUCH
PRESENTATIONS, SURRENDERS, NOTICES AND DEMANDS MAY BE MADE OR SERVED AT THE
CORPORATE TRUST OFFICE OF THE TRUSTEE.
THE COMPANY MAY ALSO FROM TIME TO TIME DESIGNATE ONE OR MORE OTHER
OFFICES OR AGENCIES WHERE THE NOTES MAY BE PRESENTED OR SURRENDERED FOR ANY OR
ALL SUCH PURPOSES AND MAY FROM TIME TO TIME RESCIND SUCH DESIGNATIONS; PROVIDED,
HOWEVER, THAT NO SUCH DESIGNATION OR RESCISSION SHALL IN ANY MANNER RELIEVE THE
COMPANY OF ITS OBLIGATION TO MAINTAIN AN OFFICE OR AGENCY IN THE BOROUGH OF
MANHATTAN, THE CITY OF NEW YORK FOR SUCH PURPOSES. THE COMPANY SHALL GIVE PROMPT
WRITTEN NOTICE TO THE TRUSTEE OF ANY SUCH DESIGNATION OR RESCISSION AND OF ANY
CHANGE IN THE LOCATION OF ANY SUCH OTHER OFFICE OR AGENCY.
THE COMPANY HEREBY DESIGNATES THE CORPORATE TRUST OFFICE OF THE
TRUSTEE AS ONE SUCH OFFICE OR AGENCY OF THE COMPANY IN ACCORDANCE WITH SECTION
2.03.
SECTION 4.03 REPORTS.
(a) WHETHER OR NOT REQUIRED BY THE RULES AND REGULATIONS OF THE SEC, SO
LONG AS ANY NOTES ARE OUTSTANDING, THE COMPANY SHALL FURNISH TO THE HOLDERS OF
NOTES (I) ALL QUARTERLY AND ANNUAL FINANCIAL INFORMATION THAT WOULD BE REQUIRED
TO BE CONTAINED IN A FILING WITH THE SEC ON FORMS 10-Q AND 10-K IF THE COMPANY
WERE REQUIRED TO FILE SUCH FORMS, INCLUDING A "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" THAT DESCRIBES THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE COMPANY AND ITS
CONSOLIDATED SUBSIDIARIES AND, WITH RESPECT TO THE ANNUAL INFORMATION ONLY, A
REPORT THEREON BY THE COMPANY'S CERTIFIED INDEPENDENT ACCOUNTANTS AND (II) ALL
CURRENT REPORTS THAT WOULD BE REQUIRED TO BE FILED WITH THE SEC ON FORM 8-K IF
THE COMPANY WERE REQUIRED TO FILE SUCH REPORTS. TO THE EXTENT THERE IS A
MATERIAL DIFFERENCE BETWEEN THE CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF (I) THE COMPANY AND (II) THE COMPANY AND ITS RESTRICTED
SUBSIDIARIES SEPARATE FROM THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE UNRESTRICTED SUBSIDIARIES OF THE COMPANY, THE COMPANY SHALL ALSO INCLUDE,
EITHER ON THE FACE OF THE FINANCIAL STATEMENTS OR IN A FOOTNOTE THERETO, THE
CONSOLIDATED CASH FLOW AND FIXED CHARGE COVERAGE RATIO OF THE COMPANY AND ITS
RESTRICTED SUBSIDIARIES. IN ADDITION, WHETHER OR NOT REQUIRED BY THE RULES AND
REGULATIONS OF THE SEC, THE COMPANY SHALL FILE A COPY OF ALL SUCH INFORMATION
AND REPORTS WITH THE SEC FOR PUBLIC AVAILABILITY (UNLESS THE SEC WILL NOT ACCEPT
SUCH A FILING) AND MAKE SUCH INFORMATION AVAILABLE TO SECURITIES ANALYSTS AND
PROSPECTIVE INVESTORS UPON REQUEST. THE COMPANY SHALL AT ALL TIMES COMPLY WITH
TIA SS. 314(A). NOTWITHSATNDING ANYTHING TO THE CONTRARY HEREIN, THE TRUSTEE
SHALL HAVE NO DUTY TO REVIEW SUCH DOCUMENTS FOR PURPOSES OF DETERMINING
COMPLIANCE WITH ANY PROVISIONS OF THIS INDENTURE.
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(b) FOR SO LONG AS ANY NOTES REMAIN OUTSTANDING, THE COMPANY AND ITS
RESTRICTED SUBSIDIARIES SHALL FURNISH TO THE HOLDERS AND TO SECURITIES ANALYSTS
AND PROSPECTIVE INVESTORS, UPON THEIR REQUEST, THE INFORMATION REQUIRED TO BE
DELIVERED PURSUANT TO RULE 144A(D)(4) UNDER THE SECURITIES ACT.
SECTION 4.04 COMPLIANCE CERTIFICATE.
(a) THE COMPANY SHALL DELIVER TO THE TRUSTEE, WITHIN 120 DAYS AFTER THE
END OF EACH FISCAL YEAR, AN OFFICERS' CERTIFICATE STATING THAT A REVIEW OF THE
ACTIVITIES OF THE COMPANY AND ITS SUBSIDIARIES DURING THE PRECEDING FISCAL YEAR
HAS BEEN MADE UNDER THE SUPERVISION OF THE SIGNING OFFICERS WITH A VIEW TO
DETERMINING WHETHER THE COMPANY HAS KEPT, OBSERVED, PERFORMED AND FULFILLED ITS
OBLIGATIONS UNDER THIS INDENTURE AND FURTHER STATING, AS TO EACH SUCH OFFICER
SIGNING SUCH CERTIFICATE, THAT TO THE BEST OF HIS OR HER KNOWLEDGE THE COMPANY
HAS KEPT, OBSERVED, PERFORMED AND FULFILLED EACH AND EVERY COVENANT CONTAINED IN
THIS INDENTURE AND IS NOT IN DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY OF
THE TERMS, PROVISIONS AND CONDITIONS OF THIS INDENTURE (OR, IF A DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED, DESCRIBING ALL SUCH DEFAULTS OR EVENTS OF
DEFAULT OF WHICH HE OR SHE MAY HAVE KNOWLEDGE AND WHAT ACTION THE COMPANY IS
TAKING OR PROPOSES TO TAKE WITH RESPECT THERETO) AND THAT TO THE BEST OF HIS OR
HER KNOWLEDGE, NO EVENT HAS OCCURRED AND REMAINS IN EXISTENCE BY REASON OF WHICH
PAYMENTS ON ACCOUNT OF THE PRINCIPAL OF OR INTEREST, IF ANY, ON THE NOTES IS
PROHIBITED OR IF SUCH EVENT HAS OCCURRED, A DESCRIPTION OF THE EVENT AND WHAT
ACTION THE COMPANY IS TAKING OR PROPOSES TO TAKE WITH RESPECT THERETO.
(b) THE COMPANY SHALL, SO LONG AS ANY OF THE NOTES ARE OUTSTANDING,
DELIVER TO THE TRUSTEE, WITHIN THIRTY DAYS AFTER ANY OFFICER BECOMING AWARE OF
ANY DEFAULT OR EVENT OF DEFAULT, AN OFFICERS' CERTIFICATE SPECIFYING SUCH
DEFAULT OR EVENT OF DEFAULT AND WHAT ACTION THE COMPANY IS TAKING OR PROPOSES TO
TAKE WITH RESPECT THERETO.
SECTION 4.05 TAXES.
THE COMPANY SHALL PAY, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO
PAY, PRIOR TO DELINQUENCY, ALL MATERIAL TAXES, ASSESSMENTS, AND GOVERNMENTAL
LEVIES EXCEPT SUCH AS ARE CONTESTED IN GOOD FAITH AND BY APPROPRIATE PROCEEDINGS
OR WHERE THE FAILURE TO EFFECT SUCH PAYMENT IS NOT ADVERSE IN ANY MATERIAL
RESPECT TO THE HOLDERS OF THE NOTES.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS.
THE COMPANY COVENANTS (TO THE EXTENT THAT IT MAY LAWFULLY DO SO)
THAT IT SHALL NOT AT ANY TIME INSIST UPON, PLEAD, OR IN ANY MANNER WHATSOEVER
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY STAY, EXTENSION OR USURY LAW
WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, THAT MAY AFFECT THE
COVENANTS OR THE PERFORMANCE OF THIS INDENTURE; AND THE COMPANY (TO THE EXTENT
THAT IT MAY LAWFULLY DO SO) HEREBY EXPRESSLY WAIVES ALL BENEFIT OR ADVANTAGE OF
ANY SUCH LAW, AND COVENANTS THAT IT SHALL NOT, BY RESORT TO ANY SUCH LAW,
HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED TO THE
TRUSTEE, BUT SHALL SUFFER AND PERMIT THE EXECUTION OF EVERY SUCH POWER AS THOUGH
NO SUCH LAW HAS BEEN ENACTED.
SECTION 4.07 RESTRICTED PAYMENTS.
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THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY: (I) DECLARE OR PAY ANY DIVIDEND OR MAKE
ANY OTHER PAYMENT OR DISTRIBUTION ON ACCOUNT OF THE COMPANY'S OR ANY OF ITS
RESTRICTED SUBSIDIARIES' EQUITY INTERESTS (INCLUDING, WITHOUT LIMITATION, ANY
PAYMENT IN CONNECTION WITH ANY MERGER OR CONSOLIDATION INVOLVING THE COMPANY OR
ANY OF ITS RESTRICTED SUBSIDIARIES) OR TO ANY DIRECT OR INDIRECT HOLDERS OF THE
COMPANY'S OR ANY OF ITS RESTRICTED SUBSIDIARIES' EQUITY INTERESTS IN THEIR
CAPACITY AS SUCH (OTHER THAN DIVIDENDS OR DISTRIBUTIONS (A) PAYABLE IN EQUITY
INTERESTS (OTHER THAN DISQUALIFIED STOCK) OF THE COMPANY, (B) TO THE COMPANY OR
ANY WHOLLY OWNED RESTRICTED SUBSIDIARY OF THE COMPANY, (C) PAID BY A RESTRICTED
SUBSIDIARY OF THE COMPANY PRO RATA TO THE HOLDERS OF ITS CAPITAL STOCK OR (D)
PAYABLE IN EQUITY INTERESTS OF SUPERCANAL OR CONECEL); (II) PURCHASE, REDEEM OR
OTHERWISE ACQUIRE OR RETIRE FOR VALUE (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY MERGER OR CONSOLIDATION INVOLVING THE COMPANY) ANY EQUITY
INTERESTS OF THE COMPANY, ANY OF ITS SUBSIDIARIES OR ANY DIRECT OR INDIRECT
PARENT OF THE COMPANY (OTHER THAN ANY SUCH EQUITY INTERESTS OWNED BY THE COMPANY
OR ANY WHOLLY OWNED RESTRICTED SUBSIDIARY OF THE COMPANY); (III) MAKE ANY
PAYMENT ON OR WITH RESPECT TO, OR PURCHASE, REDEEM, DEFEASE OR OTHERWISE ACQUIRE
OR RETIRE FOR VALUE ANY INDEBTEDNESS OF THE COMPANY OR ANY RESTRICTED SUBSIDIARY
THAT IS SUBORDINATED TO THE NOTES, EXCEPT A PAYMENT OF INTEREST, A PAYMENT OF
PRINCIPAL AT STATED MATURITY OR A SCHEDULED REPAYMENT OR SCHEDULED SINKING FUND
PAYMENT; OR (IV) MAKE ANY RESTRICTED INVESTMENT (ALL SUCH PAYMENTS AND OTHER
ACTIONS SET FORTH IN CLAUSES (I) THROUGH (IV) OF THIS SECTION 407 BEING
COLLECTIVELY REFERRED TO AS "RESTRICTED PAYMENTS"), UNLESS, AT THE TIME OF AND
AFTER GIVING EFFECT TO SUCH RESTRICTED PAYMENT:
(a) NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING
OR WOULD OCCUR AS A CONSEQUENCE THEREOF; AND
(b) THE COMPANY WOULD, AT THE TIME OF SUCH RESTRICTED PAYMENT AND AFTER
GIVING PRO FORMA EFFECT THERETO AS IF SUCH RESTRICTED PAYMENT HAS BEEN MADE AT
THE BEGINNING OF THE APPLICABLE FOUR-QUARTER PERIOD, HAVE BEEN PERMITTED TO
INCUR AT LEAST $1.00 OF ADDITIONAL INDEBTEDNESS PURSUANT TO THE FIXED CHARGE
COVERAGE RATIO TEST SET FORTH IN THE FIRST PARAGRAPH OF SECTION 4.09 HEREOF; AND
(c) SUCH RESTRICTED PAYMENT, TOGETHER WITH THE AGGREGATE AMOUNT OF ALL
OTHER RESTRICTED PAYMENTS MADE BY THE COMPANY AND ITS RESTRICTED SUBSIDIARIES
AFTER THE CLOSING DATE (EXCLUDING RESTRICTED PAYMENTS PERMITTED BY CLAUSE (II)
THROUGH (VI) OF THE NEXT SUCCEEDING PARAGRAPH), IS LESS THAN THE SUM, WITHOUT
DUPLICATION, OF (I) 50% OF THE CUMULATIVE CONSOLIDATED NET INCOME OF THE COMPANY
FOR THE PERIOD (TAKEN AS ONE ACCOUNTING PERIOD) FROM THE BEGINNING OF THE FIRST
FISCAL QUARTER COMMENCING AFTER THE CLOSING DATE TO THE END OF THE COMPANY'S
MOST RECENTLY ENDED FISCAL QUARTER FOR WHICH INTERNAL FINANCIAL STATEMENTS ARE
AVAILABLE AT THE TIME OF SUCH RESTRICTED PAYMENT (OR, IF SUCH CONSOLIDATED NET
INCOME FOR SUCH PERIOD IS A DEFICIT, LESS 100% OF SUCH DEFICIT), PLUS (II) 100%
OF THE AGGREGATE NET CASH PROCEEDS RECEIVED BY THE COMPANY FROM THE ISSUE OR
SALE SINCE THE CLOSING DATE OF EQUITY INTERESTS OF THE COMPANY (OTHER THAN
EQUITY INTERESTS SOLD TO A SUBSIDIARY OF THE COMPANY AND OTHER THAN DISQUALIFIED
STOCK), PLUS (III) 50% OF ANY DIVIDENDS RECEIVED BY THE COMPANY OR A WHOLLY
OWNED RESTRICTED SUBSIDIARY OF THE COMPANY AFTER THE CLOSING DATE FROM AN
UNRESTRICTED SUBSIDIARY OF THE COMPANY, TO THE EXTENT THAT SUCH DIVIDENDS THAT
WERE NOT OTHERWISE INCLUDED IN CONSOLIDATED NET INCOME OF THE COMPANY FOR SUCH
PERIOD, PLUS (IV) $50.0 MILLION, PLUS (V) THE AMOUNT BY WHICH INDEBTEDNESS OF
THE COMPANY IS REDUCED ON THE COMPANY'S BALANCE SHEET UPON THE CONVERSION OR
EXCHANGE (OTHER THAN BY A RESTRICTED SUBSIDIARY) SUBSEQUENT TO THE CLOSING DATE
OF ANY INDEBTEDNESS OF THE COMPANY CONVERTIBLE OR EXCHANGEABLE FOR CAPITAL STOCK
(OTHER THAN DISQUALIFIED STOCK) OF THE COMPANY (LESS THE AMOUNT OF ANY CASH OR
OTHER PROPERTY DISTRIBUTED BY THE COMPANY UPON SUCH CONVERSION OR EXCHANGE),
PLUS (VI) AN AMOUNT EQUAL TO THE SUM OF THE NET REDUCTION IN
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INVESTMENTS IN UNRESTRICTED SUBSIDIARIES RESULTING FROM (A) DIVIDENDS,
REPAYMENTS OF THE PRINCIPAL OF LOANS OR ADVANCES OR OTHER TRANSFERS OF ASSETS TO
THE COMPANY OR ANY RESTRICTED SUBSIDIARY FROM UNRESTRICTED SUBSIDIARIES OR (B)
THE SALE OR LIQUIDATION OF ANY UNRESTRICTED SUBSIDIARIES, PLUS (VII) TO THE
EXTENT THAT ANY UNRESTRICTED SUBSIDIARY OF THE COMPANY IS DESIGNATED TO BE A
RESTRICTED SUBSIDIARY, THE SUM OF (A) THE LESSER OF (1) 100% OF THE COMPANY'S
INVESTMENT IN SUCH SUBSIDIARY, AS SHOWN ON THE COMPANY'S MOST RECENT BALANCE
SHEET, AND (2) THE FAIR MARKET VALUE OF THE COMPANY'S INVESTMENT IN SUCH
SUBSIDIARY, PLUS (B) 50% OF THE AMOUNT, IF ANY, BY WHICH THE FAIR MARKET VALUE
OF THE COMPANY'S INVESTMENT IN SUCH SUBSIDIARY EXCEEDS THE AMOUNT DETERMINED IN
THE PRECEDING CLAUSE (A).
THE FOREGOING PROVISIONS SHALL NOT PROHIBIT (I) THE PAYMENT OF ANY
DIVIDEND WITHIN 60 DAYS AFTER THE DATE OF DECLARATION THEREOF, IF AT THE DATE OF
DECLARATION SUCH PAYMENT WOULD HAVE COMPLIED WITH THE PROVISIONS OF THIS
INDENTURE; (II) THE REDEMPTION, REPURCHASE, RETIREMENT, DEFEASANCE OR OTHER
ACQUISITION OF ANY SUBORDINATED INDEBTEDNESS OR EQUITY INTERESTS OF THE COMPANY
OR ANY RESTRICTED SUBSIDIARY IN EXCHANGE FOR, OR OUT OF THE NET CASH PROCEEDS OF
THE SUBSTANTIALLY CONCURRENT SALE (OTHER THAN TO A SUBSIDIARY OF THE COMPANY)
OF, OTHER EQUITY INTERESTS OF THE COMPANY (OTHER THAN ANY DISQUALIFIED STOCK);
PROVIDED THAT THE AMOUNT OF ANY SUCH NET CASH PROCEEDS THAT ARE UTILIZED FOR ANY
SUCH REDEMPTION, REPURCHASE, RETIREMENT, DEFEASANCE OR OTHER ACQUISITION SHALL
BE EXCLUDED FROM CLAUSE (C)(II) OF THE PRECEDING PARAGRAPH; (III) THE
DEFEASANCE, REDEMPTION, REPURCHASE OR OTHER ACQUISITION OF SUBORDINATED
INDEBTEDNESS WITH THE NET CASH PROCEEDS FROM AN INCURRENCE OF PERMITTED
REFINANCING INDEBTEDNESS; (IV) THE REPURCHASE, REDEMPTION OR OTHER ACQUISITION
OR RETIREMENT FOR VALUE OF ANY EQUITY INTERESTS OF THE COMPANY OR ANY RESTRICTED
SUBSIDIARY OF THE COMPANY HELD BY EMPLOYEES, FORMER EMPLOYEES, DIRECTORS OR
FORMER DIRECTORS OF THE COMPANY (OR ANY OF ITS SUBSIDIARIES) PURSUANT TO ANY
AGREEMENT OR PLAN APPROVED BY THE COMPANY'S BOARD OF DIRECTORS; PROVIDED THAT
THE AGGREGATE PRICE PAID FOR ALL SUCH REPURCHASED, REDEEMED ACQUIRED OR RETIRED
EQUITY INTERESTS SHALL NOT EXCEED $1.0 MILLION IN ANY TWELVE-MONTH PERIOD AND NO
DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING IMMEDIATELY
AFTER SUCH TRANSACTION; (V) THE PURCHASE, REPURCHASE OR ACQUISITION OF CAPITAL
STOCK OF THE COMPANY, IN AN AMOUNT NOT TO EXCEED $5.0 MILLION, FOR DISTRIBUTION,
CONTRIBUTION OR PAYMENT TO, OR FOR THE BENEFIT OF, ANY EMPLOYEE BENEFIT PLAN OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES OR ANY TRUST ESTABLISHED BY THE COMPANY
OR ANY OF ITS SUBSIDIARIES FOR THE BENEFIT OF ITS EMPLOYEES; AND (VI) ANY
RESTRICTED PAYMENT UTILIZING CASH OR OTHER CONSIDERATION RECEIVED BY THE COMPANY
BY VIRTUE OF ITS INVESTMENT IN SUPERCANAL OR CONECEL; PROVIDED THAT CLAUSES (A)
AND (B) OF THE PRECEDING PARAGRAPH ARE SATISFIED AT THE TIME OF SUCH PAYMENT.
THE AMOUNT OF ALL RESTRICTED PAYMENTS (OTHER THAN CASH) SHALL BE THE
FAIR MARKET VALUE ON THE DATE OF THE RESTRICTED PAYMENT OF THE ASSET(S) OR
SECURITIES PROPOSED TO BE TRANSFERRED OR ISSUED BY THE COMPANY OR SUCH
RESTRICTED SUBSIDIARY, AS THE CASE MAY BE, PURSUANT TO THE RESTRICTED PAYMENT.
THE FAIR MARKET VALUE OF ANY NON-CASH RESTRICTED PAYMENT SHALL BE DETERMINED IN
GOOD FAITH BY THE BOARD OF DIRECTORS WHOSE RESOLUTION WITH RESPECT THERETO SHALL
BE DELIVERED TO THE TRUSTEE. NOT LATER THAN THE DATE OF MAKING ANY RESTRICTED
PAYMENT, THE COMPANY SHALL DELIVER TO THE TRUSTEE AN OFFICERS' CERTIFICATE
STATING THAT SUCH RESTRICTED PAYMENT IS PERMITTED AND SETTING FORTH THE BASIS
UPON WHICH THE CALCULATIONS REQUIRED BY THIS SECTION 4.07 WERE COMPUTED, WHICH
CALCULATIONS MAY BE BASED UPON THE COMPANY'S LATEST AVAILABLE FINANCIAL
STATEMENTS.
THE BOARD OF DIRECTORS MAY DESIGNATE ANY RESTRICTED SUBSIDIARY TO BE
AN UNRESTRICTED SUBSIDIARY IF SUCH DESIGNATION WOULD NOT CAUSE A DEFAULT. FOR
PURPOSES OF MAKING SUCH DETERMINATION, ALL OUTSTANDING INVESTMENTS BY THE
COMPANY AND ITS RESTRICTED SUBSIDIARIES (EXCEPT TO THE EXTENT REPAID IN CASH) IN
THE SUBSIDIARY SO DESIGNATED SHALL BE DEEMED TO BE RESTRICTED PAYMENTS AT THE
TIME OF SUCH
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DESIGNATION AND SHALL REDUCE THE AMOUNT AVAILABLE FOR RESTRICTED PAYMENTS UNDER
THE FIRST PARAGRAPH OF THIS SECTION 4.07. ALL SUCH OUTSTANDING INVESTMENTS SHALL
BE DEEMED TO CONSTITUTE INVESTMENTS IN AN AMOUNT EQUAL TO THE FAIR MARKET VALUE
OF SUCH INVESTMENTS AT THE TIME OF SUCH DESIGNATION. SUCH DESIGNATION SHALL ONLY
BE PERMITTED IF SUCH RESTRICTED PAYMENT WOULD BE PERMITTED AT SUCH TIME AND IF
SUCH RESTRICTED SUBSIDIARY OTHERWISE MEETS THE DEFINITION OF AN UNRESTRICTED
SUBSIDIARY.
ANY SUCH DESIGNATION BY THE BOARD OF DIRECTORS SHALL BE EVIDENCED TO
THE TRUSTEE BY FILING WITH THE TRUSTEE A CERTIFIED COPY OF THE BOARD RESOLUTION
GIVING EFFECT TO SUCH DESIGNATION AND AN OFFICERS' CERTIFICATE CERTIFYING THAT
SUCH DESIGNATION COMPLIED WITH THE FOREGOING CONDITIONS. IF, AT ANY TIME, ANY
UNRESTRICTED SUBSIDIARY WOULD FAIL TO MEET THE DEFINITION OF AN UNRESTRICTED
SUBSIDIARY, IT SHALL THEREAFTER CEASE TO BE AN UNRESTRICTED SUBSIDIARY FOR
PURPOSES OF THIS INDENTURE AND ANY INDEBTEDNESS OF SUCH SUBSIDIARY SHALL BE
DEEMED TO BE INCURRED BY A RESTRICTED SUBSIDIARY OF THE COMPANY AS OF SUCH DATE
(AND, IF SUCH INDEBTEDNESS IS NOT PERMITTED TO BE INCURRED AS OF SUCH DATE UNDER
SECTION 4.09 HEREOF, THE COMPANY SHALL BE IN DEFAULT OF SUCH SECTION). THE BOARD
OF DIRECTORS OF THE COMPANY MAY AT ANY TIME DESIGNATE ANY UNRESTRICTED
SUBSIDIARY TO BE A RESTRICTED SUBSIDIARY; PROVIDED THAT SUCH DESIGNATION SHALL
BE DEEMED TO BE AN INCURRENCE OF INDEBTEDNESS BY A RESTRICTED SUBSIDIARY OF THE
COMPANY OF ANY OUTSTANDING INDEBTEDNESS OF SUCH UNRESTRICTED SUBSIDIARY AND SUCH
DESIGNATION SHALL ONLY BE PERMITTED IF (I) SUCH INDEBTEDNESS IS PERMITTED UNDER
SECTION 4.09 HEREOF, CALCULATED ON A PRO FORMA BASIS AS IF SUCH DESIGNATION HAD
OCCURRED AT THE BEGINNING OF THE FOUR-QUARTER REFERENCE PERIOD, AND (II) NO
DEFAULT OR EVENT OF DEFAULT WOULD BE IN EXISTENCE IMMEDIATELY FOLLOWING SUCH
DESIGNATION.
SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES 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 TO (A)(I) PAY DIVIDENDS OR MAKE ANY OTHER
DISTRIBUTIONS TO THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES (A) ON ITS
CAPITAL STOCK OR (B) WITH RESPECT TO ANY OTHER INTEREST OR PARTICIPATION IN, OR
MEASURED BY, ITS PROFITS OR (II) PAY ANY INDEBTEDNESS OWED TO THE COMPANY OR ANY
OF ITS RESTRICTED SUBSIDIARIES, (B) MAKE LOANS OR ADVANCES TO THE COMPANY OR ANY
OF ITS RESTRICTED SUBSIDIARIES OR (C) TRANSFER ANY OF ITS PROPERTIES OR ASSETS
TO THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES, EXCEPT, WITH RESPECT TO
CLAUSES (A)-(C) ABOVE, FOR SUCH ENCUMBRANCES OR RESTRICTIONS EXISTING UNDER OR
BY REASONS OF (I) EXISTING INDEBTEDNESS AS IN EFFECT ON THE CLOSING DATE, (II)
THE CREDIT FACILITY AS IN EFFECT ON THE CLOSING DATE, AND ANY AMENDMENTS,
MODIFICATIONS, RESTATEMENTS, RENEWALS, INCREASES, SUPPLEMENTS, REFUNDINGS,
REPLACEMENTS OR REFINANCINGS THEREOF, PROVIDED THAT SUCH AMENDMENTS,
MODIFICATIONS, RESTATEMENTS, RENEWALS, INCREASES, SUPPLEMENTS, REFUNDINGS,
REPLACEMENTS OR REFINANCINGS ARE NO MORE RESTRICTIVE WITH RESPECT TO SUCH
DIVIDEND AND OTHER PAYMENT RESTRICTIONS THAN THOSE CONTAINED IN THE CREDIT
FACILITY AS IN EFFECT ON THE CLOSING DATE, (III) THIS INDENTURE AND THE NOTES,
(IV) APPLICABLE LAW, (V) ANY INSTRUMENT GOVERNING INDEBTEDNESS OR CAPITAL STOCK
OF A PERSON ACQUIRED BY THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES AS IN
EFFECT AT THE TIME OF SUCH ACQUISITION (EXCEPT TO THE EXTENT SUCH INDEBTEDNESS
WAS INCURRED IN CONNECTION WITH OR IN CONTEMPLATION OF SUCH ACQUISITION), (VI)
BY REASON OF CUSTOMARY NON-ASSIGNMENT PROVISIONS OR OTHER RESTRICTIONS IN
LEASES, LICENSES AND OTHER CONTRACTS ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESSES, (VII) PURCHASE MONEY OBLIGATIONS FOR PROPERTY ACQUIRED IN THE
ORDINARY COURSE OF BUSINESS THAT IMPOSE RESTRICTIONS OF THE NATURE DESCRIBED IN
CLAUSE (C) ABOVE ON THE PROPERTY SO ACQUIRED, (VIII) PERMITTED REFINANCING
INDEBTEDNESS, PROVIDED THAT THE RESTRICTIONS CONTAINED IN THE AGREEMENTS
GOVERNING SUCH PERMITTED REFINANCING INDEBTEDNESS ARE NO MORE RESTRICTIVE THAN
THOSE CONTAINED IN THE AGREEMENTS GOVERNING THE INDEBTEDNESS BEING REFINANCED,
(IX) IN THE CASE OF CLAUSE (C) ABOVE, ANY ENCUMBRANCE OR RESTRICTION (A) BY
VIRTUE OF ANY TRANSFER OF, AGREEMENT TO TRANSFER, OPTION OR RIGHT WITH RESPECT
TO, OR LIEN ON, ANY PROPERTY OR ASSETS OF THE COMPANY OR ANY RESTRICTED
SUBSIDIARY NOT OTHERWISE PROHIBITED BY THIS INDENTURE OR (B) CONTAINED IN
SECURITY AGREEMENTS, MORTGAGES OR CAPITALIZED LEASE OBLIGATIONS SECURING
INDEBTEDNESS OF A RESTRICTED SUBSIDIARY TO THE EXTENT SUCH ENCUMBRANCE OR
RESTRICTIONS RESTRICT THE
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TRANSFER OF THE PROPERTY SUBJECT TO SUCH SECURITY AGREEMENTS, MORTGAGES OR
CAPITALIZED LEASE OBLIGATIONS; (X) ANY RESTRICTION WITH RESPECT TO A RESTRICTED
SUBSIDIARY IMPOSED PURSUANT TO AN AGREEMENT ENTERED INTO FOR THE SALE OR
DISPOSITION OF CAPITAL STOCK OR ASSETS OF SUCH RESTRICTED SUBSIDIARY PENDING THE
CLOSING OF SUCH SALE OR DISPOSITION; AND (XI) CUSTOMARY NET WORTH PROVISIONS
CONTAINED IN LEASES AND OTHER AGREEMENT ENTERED INTO BY A RESTRICTED SUBSIDIARY
IN THE ORDINARY COURSE OF BUSINESS.
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, CREATE, INCUR, ISSUE, ASSUME, GUARANTEE
OR OTHERWISE BECOME DIRECTLY OR INDIRECTLY LIABLE, CONTINGENTLY OR OTHERWISE,
WITH RESPECT TO (COLLECTIVELY, "INCUR") ANY INDEBTEDNESS (INCLUDING ACQUIRED
DEBT) AND THAT THE COMPANY SHALL NOT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES
TO ISSUE ANY SHARES OF PREFERRED STOCK; PROVIDED, HOWEVER, THAT THE COMPANY AND
ITS FOREIGN RESTRICTED SUBSIDIARIES MAY INCUR INDEBTEDNESS (INCLUDING ACQUIRED
DEBT) AND THE RESTRICTED SUBSIDIARIES MAY ISSUE PREFERRED STOCK IF THE FIXED
CHARGE COVERAGE RATIO FOR THE COMPANY'S MOST RECENTLY ENDED FOUR FULL FISCAL
QUARTERS FOR WHICH INTERNAL FINANCIAL STATEMENTS ARE AVAILABLE IMMEDIATELY
PRECEDING THE DATE ON WHICH SUCH ADDITIONAL INDEBTEDNESS IS INCURRED OR SUCH
PREFERRED STOCK IS ISSUED WOULD HAVE BEEN AT LEAST 2.0 TO 1, DETERMINED ON A PRO
FORMA BASIS (INCLUDING A PRO FORMA APPLICATION OF THE NET PROCEEDS THEREFROM),
AS IF THE ADDITIONAL INDEBTEDNESS HAD BEEN INCURRED OR THE PREFERRED STOCK HAD
BEEN ISSUED AT THE BEGINNING OF SUCH FOUR-QUARTER PERIOD.
THE PROVISIONS OF THE FIRST PARAGRAPH OF THIS SECTION 4.09 SHALL NOT
APPLY TO THE INCURRENCE OF ANY OF THE FOLLOWING (COLLECTIVELY, "PERMITTED
DEBT");
(i)THE INCURRENCE BY THE COMPANY AND ITS RESTRICTED SUBSIDIARIES OF
INDEBTEDNESS UNDER THE CREDIT FACILITY IN AN AGGREGATE AMOUNT NOT TO EXCEED
$150.0 MILLION AT ANY TIME OUTSTANDING, LESS THE AGGREGATE AMOUNT OF ALL NET
PROCEEDS OF ASSET SALES APPLIED TO PERMANENTLY REDUCE THE AMOUNT OF SUCH
INDEBTEDNESS;
(ii)THE INCURRENCE BY THE COMPANY OF INDEBTEDNESS REPRESENTED BY THE NOTES
AND ANY GUARANTEE OF THE NOTES BY ANY RESTRICTED SUBSIDIARY OF THE COMPANY IN
EACH CASE IN AN AGGREGATE AMOUNT NOT TO EXCEED $200.0 MILLION;
(iii)THE INCURRENCE BY THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES
OF PERMITTED REFINANCING INDEBTEDNESS IN EXCHANGE FOR, OR THE NET PROCEEDS OF
WHICH ARE USED TO REFUND, REFINANCE OR REPLACE EXISTING INDEBTEDNESS OR
INDEBTEDNESS THAT WAS PERMITTED TO BE INCURRED BY THE FIRST PARAGRAPH, OR BY
CLAUSE (II) OF THE SECOND PARAGRAPH OF THIS SECTION 4.09;
(iv)THE INCURRENCE OF INDEBTEDNESS BETWEEN OR AMONG THE COMPANY AND ANY OF
ITS RESTRICTED SUBSIDIARIES; PROVIDED, HOWEVER, THAT ANY SUBSEQUENT ISSUANCE
OR TRANSFER OF EQUITY INTERESTS THAT RESULTS IN ANY SUCH RESTRICTED
SUBSIDIARY CEASING TO BE A RESTRICTED SUBSIDIARY OR ANY SUBSEQUENT TRANSFER
OF ANY SUCH INDEBTEDNESS (EXCEPT TO THE COMPANY OR A RESTRICTED SUBSIDIARY OR
A PLEDGE OR OTHER TRANSFER THEREOF INTENDED TO CREATE A SECURITY INTEREST
THEREIN), AND ANY SALE OR OTHER TRANSFER OF ANY SUCH INDEBTEDNESS TO A PERSON
THAT IS NOT EITHER THE COMPANY OR A WHOLLY OWNED RESTRICTED SUBSIDIARY, SHALL
BE DEEMED, IN EACH CASE, TO CONSTITUTE AN INCURRENCE OF SUCH INDEBTEDNESS BY
THE COMPANY OR SUCH RESTRICTED SUBSIDIARY, AS THE CASE MAY BE;
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(v)THE INCURRENCE BY THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES OF
HEDGING OBLIGATIONS THAT ARE (A) INCURRED FOR THE PURPOSE OF FIXING OR
HEDGING INTEREST RATE RISK WITH RESPECT TO ANY FLOATING RATE INDEBTEDNESS
THAT IS PERMITTED BY THE TERMS OF THIS INDENTURE TO BE OUTSTANDING OR (B)
INCURRED FOR THE PURPOSE OF FIXING OR HEDGING CURRENCY EXCHANGE RATES OR
PRICES OF COMMODITIES USED IN THE BUSINESS OF THE COMPANY AND ITS RESTRICTED
SUBSIDIARIES;
(vi)THE GUARANTEE BY THE COMPANY OR ANY RESTRICTED SUBSIDIARY OF
INDEBTEDNESS THAT WAS PERMITTED TO BE INCURRED BY ANOTHER PROVISION OF THIS
SECTION 4.09, SUBJECT TO SECTION 4.17 HEREOF; AND
(vii)OTHER INDEBTEDNESS OF THE COMPANY OR ANY RESTRICTED SUBSIDIARY IN AN
AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING NOT TO EXCEED $25.0
MILLION.
FOR PURPOSES OF DETERMINING COMPLIANCE WITH THIS SECTION 4.09, IN
THE EVENT THAT (A) AN ITEM OF INDEBTEDNESS MEETS THE CRITERIA OF MORE THAN ONE
OF THE CATEGORIES OF PERMITTED DEBT DESCRIBED IN CLAUSES (I) THROUGH (VII) ABOVE
OR IS ENTITLED TO BE INCURRED PURSUANT TO THE FIRST PARAGRAPH OF THIS SECTION
4.09, THE COMPANY SHALL, IN ITS SOLE DISCRETION, CLASSIFY SUCH ITEM OF
INDEBTEDNESS IN ANY MANNER THAT COMPLIES WITH THIS SECTION 4.09 AND SHALL ONLY
BE REQUIRED TO INCLUDE SUCH ITEM OF INDEBTEDNESS IN ONE OF SUCH CLAUSES OR
PURSUANT TO THE FIRST PARAGRAPH HEREOF AND (B) AN ITEM OF INDEBTEDNESS MAY BE
DIVIDED AND CLASSIFIED IN MORE THAN ONE OF THE TYPES OF INDEBTEDNESS DESCRIBED
IN CLAUSES (I) THROUGHT (VII) ABOVE. ACCRUAL OF INTEREST, THE ACCRETION OF
ACCRETED VALUE AND THE PAYMENT OF INTEREST IN THE FORM OF ADDITIONAL
INDEBTEDNESS SHALL NOT BE DEEMED TO BE AN INCURRENCE OF INDEBTEDNESS FOR
PURPOSES OF THIS SECTION 4.09.
SECTION 4.10 ASSET SALES
THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, CONSUMMATE AN ASSET SALE UNLESS (I) THE COMPANY OR SUCH
RESTRICTED SUBSIDIARY, AS THE CASE MAY BE, RECEIVES CONSIDERATION AT THE TIME OF
SUCH ASSET SALE AT LEAST EQUAL TO THE FAIR MARKET VALUE (EVIDENCED BY A
RESOLUTION OF THE BOARD OF DIRECTORS SET FORTH IN AN OFFICERS' CERTIFICATE
DELIVERED TO THE TRUSTEE) OF THE ASSETS OR EQUITY INTERESTS ISSUED OR SOLD OR
OTHERWISE DISPOSED OF AND (II) AT LEAST 75% OF THE CONSIDERATION THEREFOR
RECEIVED BY THE COMPANY OR SUCH RESTRICTED SUBSIDIARY IS IN THE FORM OF CASH OR
CASH EQUIVALENTS; PROVIDED THAT THE AMOUNT OF (A) ANY LIABILITIES (AS SHOWN ON
THE COMPANY'S OR SUCH RESTRICTED SUBSIDIARY'S MOST RECENT BALANCE SHEET) OF THE
COMPANY OR SUCH RESTRICTED SUBSIDIARY (OTHER THAN CONTINGENT LIABILITIES AND
LIABILITIES THAT ARE BY THEIR TERMS SUBORDINATED TO THE NOTES OR ANY GUARANTEE
THEREOF) THAT ARE ASSUMED BY THE TRANSFEREE OF ANY SUCH ASSETS AND FOR WHICH THE
COMPANY OR SUCH RESTRICTED SUBSIDIARY IS RELEASED FROM FURTHER LIABILITY AND (B)
ANY SECURITIES, NOTES OR OTHER OBLIGATIONS RECEIVED BY THE COMPANY OR SUCH
RESTRICTED SUBSIDIARY FROM SUCH TRANSFEREE THAT ARE PROMPTLY CONVERTED BY THE
COMPANY OR SUCH RESTRICTED SUBSIDIARY INTO CASH OR CASH EQUIVALENTS (TO THE
EXTENT OF THE CASH OR CASH EQUIVALENTS RECEIVED) SHALL BE DEEMED TO BE CASH FOR
PURPOSES OF THIS PROVISION.
WITHIN 365 DAYS OF THE RECEIPT OF ANY NET PROCEEDS FROM AN ASSET
SALE, THE COMPANY MAY APPLY SUCH NET PROCEEDS, AT ITS OPTION, (A) TO REPAY
SENIOR DEBT OF THE COMPANY OR INDEBTEDNESS OF ANY RESTRICTED SUBSIDIARY (AND, IN
EACH CASE, TO CORRESPONDINGLY REDUCE COMMITMENTS WITH RESPECT THERETO IN THE
CASE OF REVOLVING BORROWINGS) OR (B) TO THE ACQUISITION OF A CONTROLLING
INTEREST IN ANOTHER BUSINESS, THE MAKING OF A CAPITAL EXPENDITURE OR THE
ACQUISITION OF OTHER LONG-TERM ASSETS. PENDING THE FINAL APPLICATION OF ANY SUCH
NET PROCEEDS, THE COMPANY MAY TEMPORARILY REDUCE SENIOR DEBT OR OTHERWISE INVEST
SUCH NET PROCEEDS IN ANY MANNER THAT IS NOT PROHIBITED BY THIS INDENTURE. ANY
NET PROCEEDS FROM ASSET SALES THAT ARE NOT APPLIED OR INVESTED AS PROVIDED IN
THE FIRST SENTENCE OF THIS PARAGRAPH SHALL BE DEEMED TO CONSTITUTE "EXCESS
PROCEEDS." WHEN THE AGGREGATE AMOUNT OF EXCESS
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PROCEEDS EXCEEDS $10.0 MILLION, THE COMPANY SHALL BE REQUIRED TO MAKE AN OFFER
TO ALL HOLDERS OF NOTES (AN "ASSET SALE OFFER") TO PURCHASE THE MAXIMUM
PRINCIPAL AMOUNT OF NOTES THAT MAY BE PURCHASED OUT OF THE EXCESS PROCEEDS AT AN
OFFER PRICE IN CASH IN AN AMOUNT EQUAL TO 100% OF THE PRINCIPAL AMOUNT THEREOF,
PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED DAMAGES, IF ANY, THEREON TO THE
DATE OF PURCHASE, IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THIS INDENTURE.
TO THE EXTENT THAT THE AGGREGATE PRINCIPAL AMOUNT OF NOTES TENDERED PURSUANT TO
AN ASSET SALE OFFER IS LESS THAN THE EXCESS PROCEEDS, THE COMPANY MAY USE ANY
REMAINING EXCESS PROCEEDS FOR GENERAL CORPORATE PURPOSES. IF THE AGGREGATE
PRINCIPAL AMOUNT OF NOTES SURRENDERED BY HOLDERS THEREOF EXCEEDS THE AMOUNT OF
EXCESS PROCEEDS, THE TRUSTEE SHALL SELECT THE NOTES TO BE PURCHASED ON A PRO
RATA BASIS. UPON COMPLETION OF AN ASSET SALE OFFER, THE AMOUNT OF EXCESS
PROCEEDS SHALL BE RESET AT ZERO.
SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO MAKE ANY PAYMENT TO, OR SELL, LEASE, TRANSFER OR OTHERWISE
DISPOSE OF ANY OF ITS PROPERTIES OR ASSETS TO, OR PURCHASE ANY PROPERTY OR
ASSETS FROM, OR ENTER INTO OR MAKE OR AMEND ANY TRANSACTION, CONTRACT,
AGREEMENT, UNDERSTANDING, LOAN, ADVANCE OR GUARANTEE WITH, OR FOR THE BENEFIT
OF, ANY AFFILIATE (EACH OF THE FOREGOING, AN "AFFILIATE TRANSACTION"), UNLESS
(A) SUCH AFFILIATE TRANSACTION IS ON TERMS THAT ARE NO LESS FAVORABLE TO THE
COMPANY OR SUCH RESTRICTED SUBSIDIARY THAN THOSE THAT WOULD HAVE BEEN OBTAINED
IN A COMPARABLE TRANSACTION BY THE COMPANY OR SUCH RESTRICTED SUBSIDIARY WITH AN
UNRELATED PERSON AND (B) THE COMPANY DELIVERS TO THE TRUSTEE (I) WITH RESPECT TO
ANY AFFILIATE TRANSACTION OR SERIES OF RELATED AFFILIATE TRANSACTIONS INVOLVING
AGGREGATE CONSIDERATION IN EXCESS OF $5.0 MILLION, A RESOLUTION OF THE BOARD OF
DIRECTORS SET FORTH IN AN OFFICERS' CERTIFICATE CERTIFYING THAT SUCH AFFILIATE
TRANSACTION COMPLIES WITH CLAUSE (A) ABOVE AND THAT SUCH AFFILIATE TRANSACTION
HAS BEEN APPROVED BY A MAJORITY OF THE DISINTERESTED MEMBERS OF THE BOARD OF
DIRECTORS AND (II) WITH RESPECT TO ANY AFFILIATE TRANSACTION OR SERIES OF
RELATED AFFILIATE TRANSACTIONS INVOLVING AGGREGATE CONSIDERATION IN EXCESS OF
$15.0 MILLION, AN OPINION AS TO THE FAIRNESS TO THE HOLDERS OF SUCH AFFILIATE
TRANSACTION FROM A FINANCIAL POINT OF VIEW ISSUED BY AN ACCOUNTING, APPRAISAL OR
INVESTMENT BANKING FIRM OF NATIONAL STANDING.
THE FOREGOING PROVISIONS SHALL NOT PROHIBIT: (I) TRANSACTIONS
BETWEEN OR AMONG THE COMPANY AND/OR ITS RESTRICTED SUBSIDIARIES; (II) ANY
RESTRICTED PAYMENT THAT IS PERMITTED BY SECTION 4.07 HEREOF, (III) ANY ISSUANCE
OF SECURITIES OR OTHER PAYMENTS, AWARDS OR GRANTS IN CASH, SECURITIES OR
OTHERWISE PURSUANT TO, OR THE FUNDING OF, EMPLOYMENT ARRANGEMENTS, STOCK OPTIONS
AND STOCK OWNERSHIP PLANS APPROVED BY THE BOARD OF DIRECTORS OF THE COMPANY;
(IV) ANY FEES, INDEMNITIES, LOANS OR ADVANCES TO EMPLOYEES IN THE ORDINARY
COURSE OF BUSINESS; (V) ANY PAYMENT APPROVED BY THE BOARD OF DIRECTORS IN
CONNECTION WITH THE REGISTRATION FOR SALE OR DISTRIBUTION BY ANY AFFILIATE OF
THE COMPANY OF ANY EQUITY INTERESTS OF THE COMPANY, INCLUDING REIMBURSEMENTS FOR
OFFERING EXPENSES, UNDERWRITING DISCOUNTS AND COMMISSIONS; (VI) PAYMENTS MADE TO
THE FEDERAL TRADE COMMISSION OR OTHER FOREIGN OR DOMESTIC GOVERNMENTAL AGENCY ON
BEHALF OF ANY AFFILIATE BY VIRTUE OF THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, OR OTHER SIMILAR FEDERAL, STATE OR FOREIGN
LAWS IN CONNECTION WITH THE ACQUISITION BY SUCH AFFILIATE OF ADDITIONAL EQUITY
INTERESTS IN THE COMPANY OR THE ACQUISITION BY THE COMPANY OR ANY RESTRICTED
SUBSIDIARY OF THE CAPITAL STOCK OR ASSETS OF ANOTHER PERSON OR THE MERGER BY THE
COMPANY OR ANY RESTRICTED SUBSIDIARY WITH ANOTHER PERSON; AND (VII) ANY
AFFILIATE TRANSACTION WITH CONECEL OR SUPERCANAL NOT INVOLVING THE PAYMENT OF
CONSIDERATION BY THE COMPANY OR ANY RESTRICTED SUBSIDIARY.
SECTION 4.12 LIENS.
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THE COMPANY SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, CREATE, INCUR, ASSUME OR SUFFER TO
EXIST ANY LIEN SECURING INDEBTEDNESS OR TRADE PAYABLES ON ANY ASSET NOW OWNED OR
HEREAFTER ACQUIRED, OR ANY INCOME OR PROFITS THEREFROM OR ASSIGN OR CONVEY ANY
RIGHT TO RECEIVE INCOME THEREFROM, EXCEPT PERMITTED LIENS, UNLESS
CONTEMPORANEOUSLY THEREWITH EFFECTIVE PROVISION IS MADE TO SECURE THE NOTES
EQUALLY AND RATABLY WITH SUCH INDEBTEDNESS OR TRADE PAYABLES FOR SO LONG AS SUCH
INDEBTEDNESS OR TRADE PAYABLES ARE SECURED BY A LIEN.
SECTION 4.13 CORPORATE EXISTENCE.
SUBJECT TO ARTICLE 5 HEREOF, THE COMPANY SHALL DO OR CAUSE TO BE
DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL FORCE AND EFFECT (I) ITS
CORPORATE EXISTENCE, AND THE CORPORATE, PARTNERSHIP OR OTHER EXISTENCE OF EACH
OF ITS SUBSIDIARIES, IN ACCORDANCE WITH THE RESPECTIVE ORGANIZATIONAL DOCUMENTS
(AS THE SAME MAY BE AMENDED FROM TIME TO TIME) OF THE COMPANY OR ANY SUCH
SUBSIDIARY AND (II) THE RIGHTS (CHARTER AND STATUTORY), LICENSES AND FRANCHISES
OF THE COMPANY AND ITS SUBSIDIARIES; PROVIDED, HOWEVER, THAT THE COMPANY SHALL
NOT BE REQUIRED TO PRESERVE WITH RESPECT TO ITSELF OR ANY OF ITS SUBSIDIARIES
ANY SUCH RIGHT, LICENSE OR FRANCHISE, OR THE CORPORATE, PARTNERSHIP OR OTHER
EXISTENCE OF ANY OF ITS SUBSIDIARIES, IF THE BOARD OF DIRECTORS SHALL DETERMINE
THAT THE PRESERVATION THEREOF IS NO LONGER DESIRABLE IN THE CONDUCT OF THE
BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, AND THAT THE
LOSS THEREOF IS NOT ADVERSE IN ANY MATERIAL RESPECT TO THE HOLDERS OF THE NOTES.
SECTION 4.14 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) UPON THE OCCURRENCE OF A CHANGE OF CONTROL, THE COMPANY SHALL MAKE AN
OFFER (A "CHANGE OF CONTROL OFFER") TO EACH HOLDER TO REPURCHASE ALL OR ANY PART
(EQUAL TO $1,000 OR AN INTEGRAL MULTIPLE THEREOF) OF SUCH HOLDER'S NOTES AT AN
OFFER PRICE IN CASH EQUAL TO 101% OF THE PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED
AND UNPAID INTEREST AND LIQUIDATED DAMAGES, IF ANY, THEREON, TO THE DATE OF
PURCHASE (THE "CHANGE OF CONTROL PAYMENT"). WITHIN 30 DAYS FOLLOWING A CHANGE OF
CONTROL, THE COMPANY SHALL MAIL A NOTICE TO EACH HOLDER DESCRIBING THE
TRANSACTION OR TRANSACTIONS THAT CONSTITUTE THE CHANGE OF CONTROL AND STATING:
(1) THAT THE CHANGE OF CONTROL OFFER IS BEING MADE PURSUANT TO THIS SECTION 4.14
AND THAT ALL NOTES TENDERED WILL BE ACCEPTED FOR PAYMENT; (2) THE PURCHASE PRICE
AND THE PURCHASE DATE, WHICH SHALL BE NO EARLIER THAN 30 DAYS AND NO LATER THAN
60 DAYS FROM THE DATE SUCH NOTICE IS MAILED (THE "CHANGE OF CONTROL PAYMENT
DATE"); (3) THAT ANY NOTE NOT TENDERED WILL CONTINUE TO ACCRUE INTEREST; (4)
THAT, UNLESS THE COMPANY DEFAULTS IN THE PAYMENT OF THE CHANGE OF CONTROL
PAYMENT, ALL NOTES ACCEPTED FOR PAYMENT PURSUANT TO THE CHANGE OF CONTROL OFFER
SHALL CEASE TO ACCRUE INTEREST AFTER THE CHANGE OF CONTROL PAYMENT DATE; (5)
THAT HOLDERS ELECTING TO HAVE ANY NOTES PURCHASED PURSUANT TO A CHANGE OF
CONTROL OFFER WILL BE REQUIRED TO SURRENDER THE NOTES, WITH THE FORM ENTITLED
"OPTION OF HOLDER TO ELECT PURCHASE" ON THE REVERSE OF THE NOTES COMPLETED, TO
THE PAYING AGENT AT THE ADDRESS SPECIFIED IN THE NOTICE PRIOR TO THE CLOSE OF
BUSINESS ON THE THIRD BUSINESS DAY PRECEDING THE CHANGE OF CONTROL PAYMENT DATE;
(6) THAT HOLDERS WILL BE ENTITLED TO WITHDRAW THEIR ELECTION IF THE PAYING AGENT
RECEIVES, NOT LATER THAN THE CLOSE OF BUSINESS ON THE SECOND BUSINESS DAY
PRECEDING THE CHANGE OF CONTROL PAYMENT DATE, A TELEGRAM, TELEX, FACSIMILE
TRANSMISSION OR LETTER SETTING FORTH THE NAME OF THE HOLDER, THE PRINCIPAL
AMOUNT OF NOTES DELIVERED FOR PURCHASE, AND A STATEMENT THAT SUCH HOLDER IS
WITHDRAWING HIS ELECTION TO HAVE THE NOTES PURCHASED; AND (7) THAT HOLDERS WHOSE
NOTES ARE BEING PURCHASED ONLY IN PART WILL BE ISSUED NEW NOTES EQUAL IN
PRINCIPAL AMOUNT TO THE UNPURCHASED PORTION OF THE NOTES SURRENDERED, WHICH
UNPURCHASED PORTION MUST BE EQUAL TO $1,000 IN PRINCIPAL AMOUNT OR AN INTEGRAL
MULTIPLE THEREOF. THE COMPANY SHALL COMPLY WITH THE REQUIREMENTS OF RULE 14E-1
UNDER THE EXCHANGE ACT AND ANY OTHER SECURITIES LAWS AND REGULATIONS THEREUNDER
TO THE EXTENT SUCH LAWS AND
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REGULATIONS ARE APPLICABLE IN CONNECTION WITH THE REPURCHASE OF NOTES IN
CONNECTION WITH A CHANGE OF CONTROL.
(b) ON THE CHANGE OF CONTROL PAYMENT DATE, THE COMPANY SHALL, TO THE
EXTENT LAWFUL, (1) ACCEPT FOR PAYMENT ALL NOTES OR PORTIONS THEREOF PROPERLY
TENDERED PURSUANT TO THE CHANGE OF CONTROL OFFER, (2) DEPOSIT WITH THE PAYING
AGENT AN AMOUNT EQUAL TO THE CHANGE OF CONTROL PAYMENT IN RESPECT OF ALL NOTES
OR PORTIONS THEREOF SO TENDERED AND (3) DELIVER OR CAUSE TO BE DELIVERED TO THE
TRUSTEE THE NOTES SO ACCEPTED TOGETHER WITH AN OFFICERS' CERTIFICATE STATING THE
AGGREGATE PRINCIPAL AMOUNT OF NOTES OR PORTIONS THEREOF BEING PURCHASED BY THE
COMPANY. THE PAYING AGENT SHALL PROMPTLY MAIL TO EACH HOLDER OF NOTES SO
TENDERED THE CHANGE OF CONTROL PAYMENT FOR SUCH NOTES, AND THE TRUSTEE SHALL
PROMPTLY AUTHENTICATE AND MAIL (OR CAUSE TO BE TRANSFERRED BY BOOK ENTRY) TO
EACH HOLDER A NEW NOTE EQUAL IN PRINCIPAL AMOUNT TO ANY UNPURCHASED PORTION OF
THE NOTES SURRENDERED, IF ANY; PROVIDED THAT EACH SUCH NEW NOTE SHALL BE IN A
PRINCIPAL AMOUNT OF $1,000 OR AN INTEGRAL MULTIPLE THEREOF. PRIOR TO COMPLYING
WITH THE PROVISIONS OF THIS SECTION 4.14, BUT IN ANY EVENT WITHIN 90 DAYS
FOLLOWING A CHANGE OF CONTROL, THE COMPANY SHALL EITHER REPAY ALL OUTSTANDING
SENIOR DEBT OR OBTAIN THE REQUISITE CONSENTS, IF ANY, UNDER ALL AGREEMENTS
GOVERNING OUTSTANDING SENIOR DEBT TO PERMIT THE REPURCHASE OF NOTES REQUIRED BY
THIS SECTION 4.14.
(c) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 4.14, THE
COMPANY SHALL NOT BE REQUIRED TO MAKE A CHANGE OF CONTROL OFFER FOLLOWING A
CHANGE OF CONTROL IF A THIRD PARTY MAKES THE CHANGE OF CONTROL OFFER IN THE
MANNER, AT THE TIMES AND OTHERWISE IN COMPLIANCE WITH THE REQUIREMENTS SET FORTH
IN THIS SECTION 4.14 AND SECTION 3.09 HEREOF AND PURCHASES ALL NOTES VALIDLY
TENDERED AND NOT WITHDRAWN UNDER SUCH CHANGE OF CONTROL OFFER.
1 THE REQUIREMENTS SET FORTH IN THIS SECTION 4.14 SHALL BE APPLICABLE
WHETHER OR NOT ANY OTHER PROVISIONS OF THE INDENTURE ARE APPLICABLE; PROVIDED,
HOWEVER, THAT THE COMPANY SHALL NOT BE OBLIGATED TO REPURCHASE THE NOTES UPON A
CHANGE OF CONTROL IF THE COMPANY HAS IRREVOCABLY ELECTED TO REDEEM ALL OF THE
NOTES UNDER SECTION 3.07 HEREOF.
SECTION 4.15 LIMITATION ON OTHER SENIOR SUBORDINATED DEBT.
NOTWITHSTANDING THE PROVISIONS OF SECTION 4.09 HEREOF, THE COMPANY
SHALL NOT DIRECTLY OR INDIRECTLY INCUR ANY INDEBTEDNESS THAT IS SUBORDINATE OR
JUNIOR IN RIGHT OF PAYMENT TO ANY SENIOR DEBT OF THE COMPANY AND SENIOR IN ANY
RESPECT IN RIGHT OF PAYMENT TO THE NOTES.
SECTION 4.16 PAYMENTS FOR CONSENT.
NEITHER THE COMPANY NOR ANY OF RESTRICTED SUBSIDIARIES SHALL,
DIRECTLY OR INDIRECTLY, PAY OR CAUSE TO BE PAID ANY CONSIDERATION, WHETHER BY
WAY OF INTEREST, FEE OR OTHERWISE, TO ANY HOLDER OF ANY NOTES FOR OR AS AN
INDUCEMENT TO ANY CONSENT, WAIVER OR AMENDMENT OF ANY OF THE TERMS OR PROVISIONS
OF THIS INDENTURE OR THE NOTES UNLESS SUCH CONSIDERATION IS OFFERED TO BE PAID
OR IS PAID TO ALL HOLDERS OF THE NOTES THAT CONSENT, WAIVE OR AGREE TO AMEND IN
THE TIME FRAME SET FORTH IN THE SOLICITATION DOCUMENTS RELATING TO SUCH CONSENT,
WAIVER OR AGREEMENT.
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SECTION 4.17 LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY RESTICTED
SUBSIDIARIES.
THE COMPANY SHALL NOT PERMIT ANY RESTRICTED SUBSIDIARY, DIRECTLY OR
INDIRECTLY, TO GUARANTEE ANY INDEBTEDNESS OF THE COMPANY OTHER THAN THE NOTES
(THE "OTHER COMPANY INDEBTEDNESS"), UNLESS SUCH RESTRICTED SUBSIDIARY
CONTEMPORANEOUSLY EXECUTES AND DELIVERS A SUPPLEMENTAL INDENTURE TO THE
INDENTURE PROVIDING FOR A GUARANTEE OF PAYMENT OF THE NOTES BY SUCH RESTRICTED
SUBSIDIARY TO THE SAME EXTENT AS THE GUARANTEE (THE "OTHER COMPANY INDEBTEDNESS
GUARANTEE") OF THE OTHER COMPANY INDEBTEDNESS (INCLUDING WAIVER OF SUBROGATION,
IF ANY). ANY GUARANTEE OF THE NOTES BY A RESTRICTED SUBSIDIARY PURSUANT TO THIS
SECTION 4.17 SHALL BE SUBORDINATED IN RIGHT OF PAYMENT TO ALL EXISTING AND
FUTURE SENIOR DEBT OF SUCH RESTRICTED SUBSIDIARY TO THE SAME EXTENT AS THE NOTES
ARE SUBORDINATED TO SENIOR DEBT OF THE COMPANY.
EACH GUARANTEE OF THE NOTES CREATED BY A RESTRICTED SUBSIDIARY
PURSUANT TO THE PROVISIONS DESCRIBED IN THE FOREGOING PARAGRAPH SHALL BE IN FORM
AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND SHALL PROVIDE, AMONG OTHER THINGS,
THAT IT SHALL BE AUTOMATICALLY AND UNCONDITIONALLY RELEASED AND DISCHARGED UPON
(I) ANY SALE, EXCHANGE OR TRANSFER PERMITTED BY THIS INDENTURE OF (A) ALL OF THE
COMPANY'S CAPITAL STOCK IN SUCH RESTRICTED SUBSIDIARY, OR (B) THE SALE OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE RESTRICTED SUBSIDIARY AND UPON THE
APPLICATION OF THE NET PROCEEDS FROM SUCH SALE IN ACCORDANCE WITH THE
REQUIREMENTS OF SECTION 3.09 AND 4.10 HEREOF; OR (II) THE RELEASE OR DISCHARGE
OF THE OTHER COMPANY INDEBTEDNESS GUARANTEE THAT RESULTED IN THE CREATION OF
SUCH GUARANTEE OF THE NOTES, EXCEPT A DISCHARGE OR RELEASE BY OR AS A RESULT OF
PAYMENT UNDER SUCH OTHER COMPANY INDEBTEDNESS GUARANTEE.
ARTICLE 5.
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
THE COMPANY SHALL NOT CONSOLIDATE OR MERGE WITH OR INTO, OR SELL,
ASSIGN, TRANSFER, LEASE, CONVEY OR OTHERWISE DISPOSE OF ALL OR SUBSTANTIALLY ALL
OF ITS CONSOLIDATED PROPERTIES OR ASSETS IN ONE OR MORE RELATED TRANSACTIONS, TO
ANOTHER CORPORATION, PERSON OR ENTITY UNLESS (I) THE COMPANY IS THE SURVIVING
CORPORATION OR THE ENTITY OR THE PERSON FORMED BY OR SURVIVING ANY SUCH
CONSOLIDATION OR MERGER (IF OTHER THAN THE COMPANY) OR TO WHICH SUCH SALE,
ASSIGNMENT, TRANSFER, LEASE, CONVEYANCE OR OTHER DISPOSITION SHALL HAVE BEEN
MADE IS A CORPORATION ORGANIZED OR EXISTING UNDER THE LAWS OF THE UNITED STATES,
ANY STATE THEREOF OR THE DISTRICT OF COLUMBIA; (II) THE ENTITY OR PERSON FORMED
BY OR SURVIVING ANY SUCH CONSOLIDATION OR MERGER (IF OTHER THAN THE COMPANY) OR
THE ENTITY OR PERSON TO WHICH SUCH SALE, ASSIGNMENT, TRANSFER, LEASE, CONVEYANCE
OR OTHER DISPOSITION SHALL HAVE BEEN MADE ASSUMES ALL THE OBLIGATIONS OF THE
COMPANY UNDER THE NOTES AND THIS INDENTURE PURSUANT TO A SUPPLEMENTAL INDENTURE
IN A FORM REASONABLY SATISFACTORY TO THE TRUSTEE; (III) IMMEDIATELY AFTER SUCH
TRANSACTION NO DEFAULT OR EVENT OF DEFAULT EXISTS; AND (IV) EXCEPT IN THE CASE
OF A MERGER OF THE COMPANY WITH OR INTO A WHOLLY OWNED RESTRICTED SUBSIDIARY OF
THE COMPANY, OR THE MERGER OF A WHOLLY OWNED RESTRICTED SUBSIDIARY WITH OR INTO
THE COMPANY, THE COMPANY OR THE PERSON FORMED BY OR SURVIVING ANY SUCH
CONSOLIDATION OR MERGER OR TO WHICH SUCH SALE, ASSIGNMENT, TRANSFER, LEASE,
CONVEYANCE OR OTHER DISPOSITION SHALL HAVE BEEN MADE (A) WILL HAVE CONSOLIDATED
NET WORTH IMMEDIATELY AFTER THE TRANSACTION EQUAL TO OR GREATER THAN THE
CONSOLIDATED NET WORTH OF THE COMPANY IMMEDIATELY PRECEDING THE TRANSACTION AND
(B) WILL, AT THE TIME OF SUCH TRANSACTION AND AFTER GIVING PRO FORMA EFFECT
THERETO AS IF SUCH TRANSACTION HAD OCCURRED AT THE BEGINNING OF THE APPLICABLE
FOUR-QUARTER PERIOD, BE PERMITTED TO INCUR AT LEAST $1.00 OF ADDITIONAL
INDEBTEDNESS PURSUANT TO THE FIXED CHARGE COVERAGE RATIO TEST SET FORTH IN THE
FIRST PARAGRAPH OF SECTION 4.09 HEREOF.
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SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
UPON ANY CONSOLIDATION OR MERGER, OR ANY SALE, ASSIGNMENT, TRANSFER,
LEASE, CONVEYANCE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS
OF THE COMPANY IN ACCORDANCE WITH SECTION 5.01 HEREOF, THE SUCCESSOR CORPORATION
FORMED BY SUCH CONSOLIDATION OR INTO OR WITH WHICH THE COMPANY IS MERGED OR TO
WHICH SUCH SALE, ASSIGNMENT, TRANSFER, LEASE, CONVEYANCE OR OTHER DISPOSITION IS
MADE SHALL SUCCEED TO, AND BE SUBSTITUTED FOR (SO THAT FROM AND AFTER THE DATE
OF SUCH CONSOLIDATION, MERGER, SALE, LEASE, CONVEYANCE OR OTHER DISPOSITION, THE
PROVISIONS OF THIS INDENTURE REFERRING TO THE "COMPANY" SHALL REFER INSTEAD TO
THE SUCCESSOR CORPORATION AND NOT TO THE COMPANY, AND MAY EXERCISE EVERY RIGHT
AND POWER OF THE COMPANY UNDER THIS INDENTURE WITH THE SAME EFFECT AS IF SUCH
SUCCESSOR PERSON HAD BEEN NAMED AS THE COMPANY, HEREIN; PROVIDED, HOWEVER, THAT
THE PREDECESSOR COMPANY SHALL NOT BE RELIEVED FROM THE OBLIGATION TO PAY THE
PRINCIPAL OF AND INTEREST ON THE NOTES EXCEPT IN THE CASE OF A MERGER OR
CONSOLIDATION OR SALE OF THE COMPANY'S ASSETS THAT MEETS THE REQUIREMENTS OF
SECTION 5.01 HEREOF.
ARTICLE 6.
DEFAULTS AND REMEDIES.
SECTION 6.01 EVENTS OF DEFAULT.
AN "EVENT OF DEFAULT" OCCURS IF:
(A) THE COMPANY DEFAULTS IN THE PAYMENT WHEN DUE OF INTEREST ON, OR
LIQUIDATED DAMAGES, IF ANY, WITH RESPECT TO, THE NOTES AND SUCH DEFAULT
CONTINUES FOR A PERIOD OF 30 DAYS (WHETHER OR NOT PROHIBITED BY ARTICLE 10
HEREOF);
(B) THE COMPANY DEFAULTS IN THE PAYMENT WHEN DUE OF THE PRINCIPAL OF OR
PREMIUM, IF ANY, ON THE NOTES (WHETHER OR NOT PROHIBITED BY ARTICLE 10 HEREOF);
(C) THE COMPANY FAILS TO COMPLY WITH ANY OF THE PROVISIONS OF SECTION
5.01 HEREOF;
(D) THE COMPANY FAILS TO COMPLY WITH ANY OF THE PROVISIONS OF SECTION
4.07, 4.09, 4.10 OR 4.14 HEREOF 30 DAYS AFTER WRITTEN NOTICE BY THE TRUSTEE OR
THE HOLDERS OF AT LEAST 25% IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES;
(E) THE COMPANY FAILS TO COMPLY WITH ANY OF ITS OTHER AGREEMENTS IN THIS
INDENTURE OR THE NOTES FOR 60 DAYS AFTER WRITTEN NOTICE BY THE TRUSTEE OR THE
HOLDERS OF AT LEAST 25% IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES;
(F) A DEFAULT OCCURS AND IS CONTINUING UNDER ANY MORTGAGE, INDENTURE OR
INSTRUMENT UNDER WHICH THERE MAY BE ISSUED OR BY WHICH THERE MAY BE SECURED OR
EVIDENCED ANY INDEBTEDNESS FOR MONEY BORROWED BY THE COMPANY OR ANY OF ITS
SIGNIFICANT SUBSIDIARIES (OR THE PAYMENT OF WHICH IS GUARANTEED BY THE COMPANY
OR ANY OF ITS SIGNIFICANT SUBSIDIARIES), WHETHER SUCH INDEBTEDNESS OR GUARANTEE
NOW EXISTS OR IS CREATED AFTER THE CLOSING DATE, WHICH DEFAULT (I) IS CAUSED BY
A FAILURE TO PAY PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON SUCH
INDEBTEDNESS PRIOR TO THE EXPIRATION OF THE GRACE PERIOD PROVIDED IN SUCH
INDEBTEDNESS ON THE DATE OF SUCH DEFAULT (A "PAYMENT DEFAULT") OR (II) RESULTS
IN THE ACCELERATION OF SUCH INDEBTEDNESS PRIOR TO ITS EXPRESS MATURITY AND, IN
EACH CASE, THE PRINCIPAL AMOUNT OF ANY SUCH INDEBTEDNESS, TOGETHER WITH THE
PRINCIPAL AMOUNT OF ANY OTHER SUCH INDEBTEDNESS UNDER WHICH
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THERE HAS BEEN A PAYMENT DEFAULT OR THE MATURITY OF WHICH HAS BEEN SO
ACCELERATED, AGGREGATES $15.0 MILLION OR MORE.
(G) THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES FAILS TO PAY FINAL
JUDGMENTS AGGREGATING IN EXCESS OF $15.0 MILLION AND EITHER (I) ANY CREDITOR
COMMENCES ENFORCEMENT PROCEEDINGS UPON ANY SUCH JUDGMENT OR (II) SUCH JUDGMENTS
ARE NOT PAID, DISCHARGED OR STAYED FOR A PERIOD OF 60 DAYS;
(H) THE COMPANY, ANY OF ITS RESTRICTED SUBSIDIARIES THAT CONSTITUTES A
SIGNIFICANT SUBSIDIARY OR ANY GROUP OF RESTRICTED SUBSIDIARIES OF THE COMPANY
THAT, TAKEN TOGETHER, WOULD CONSTITUTE A SIGNIFICANT SUBSIDIARY PURSUANT TO OR
WITHIN THE MEANING OF BANKRUPTCY LAW:
(I)COMMENCES A VOLUNTARY CASE,
(II)CONSENTS TO THE ENTRY OF AN ORDER FOR RELIEF AGAINST IT IN AN
INVOLUNTARY CASE,
(III) CONSENTS TO THE APPOINTMENT OF A CUSTODIAN OF IT OR FOR ALL OR
SUBSTANTIALLY ALL OF ITS PROPERTY, OR
(IV)MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS;
(I)A COURT OF COMPETENT JURISDICTION ENTERS AN ORDER OR DECREE UNDER ANY
BANKRUPTCY LAW THAT:
(I)IS FOR RELIEF AGAINST THE COMPANY, ANY OF ITS RESTRICTED SUBSIDIARIES
THAT CONSTITUTES A SIGNIFICANT SUBSIDIARY OR ANY GROUP OF RESTRICTED
SUBSIDIARIES OF THE COMPANY THAT, TAKEN TOGETHER, WOULD CONSTITUTE A
SIGNIFICANT SUBSIDIARY IN AN INVOLUNTARY CASE;
(II)APPOINTS A CUSTODIAN OF THE COMPANY, ANY OF ITS RESTRICTED
SUBSIDIARIES THAT CONSTITUTES A SIGNIFICANT SUBSIDIARY OR ANY GROUP OF
RESTRICTED SUBSIDIARIES OF THE COMPANY THAT, TAKEN TOGETHER, WOULD
CONSTITUTE A SIGNIFICANT SUBSIDIARY OR FOR ALL OR SUBSTANTIALLY ALL OF THE
PROPERTY OF THE COMPANY, ANY OF ITS RESTRICTED SUBSIDIARIES THAT CONSTITUTES
A SIGNIFICANT SUBSIDIARY OR ANY GROUP OF RESTRICTED SUBSIDIARIES OF THE
COMPANY THAT, TAKEN TOGETHER, WOULD CONSTITUTE A SIGNIFICANT SUBSIDIARY; OR
(III) ORDERS THE LIQUIDATION OF THE COMPANY, ANY OF ITS RESTRICTED
SUBSIDIARIES THAT CONSTITUTE SIGNIFICANT SUBSIDIARY OR ANY GROUP OF
RESTRICTED SUBSIDIARIES OF THE COMPANY, THAT, TAKEN TOGETHER, WOULD
CONSTITUTE A SIGNIFICANT SUBSIDIARY;
AND THE ORDER OR DECREE REMAINS UNSTAYED AND IN EFFECT FOR 60 CONSECUTIVE
DAYS; OR
(J) EXCEPT AS PERMITTED BY THIS INDENTURE, ANY GUARANTEE OF THE NOTES
BY ANY RESTRICTED SUBSIDIARY WHICH IS SIGNIFICANT SUBSIDIARY IS HELD IN ANY
JUDICIAL PROCEEDING TO BE UNENFORCEABLE OR INVALID OR SHALL CEASE FOR ANY REASON
TO BE IN FULL FORCE AND EFFECT OR ANY RESTRICTED SUBSIDIARY WHICH IS A
SIGNIFICANT SUBSIDIARY SHALL DENY OR DISAFFIRM ITS OBLIGATIONS UNDER ANY
GUARANTEE OF THE NOTES.
SECTION 6.02 ACCELERATION.
IF ANY EVENT OF DEFAULT (OTHER THAN AN EVENT OF DEFAULT SPECIFIED
IN CLAUSE (H) OR (I) OF SECTION 6.01 HEREOF) OCCURS AND IS CONTINUING, THE
TRUSTEE OR THE HOLDERS OF AT LEAST 25% IN
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PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY DECLARE ALL THE NOTES TO
BE DUE AND PAYABLE IMMEDIATELY. UPON ANY SUCH DECLARATION, THE NOTES SHALL
BECOME DUE AND PAYABLE IMMEDIATELY. NOTWITHSTANDING THE FOREGOING, IF AN
EVENT OF DEFAULT SPECIFIED IN CLAUSES (H) OR (I) OF SECTION 6.01 HEREOF
OCCURS WITH RESPECT TO THE COMPANY, ANY OF ITS RESTRICTED SUBSIDIARIES THAT
CONSTITUTE SIGNIFICANT SUBSIDIARY OR ANY GROUP OF RESTRICTED SUBSIDIARIES OF
THE COMPANY THAT, TAKEN TOGETHER, WOULD CONSTITUTE A SIGNIFICANT SUBSIDIARY,
ALL OUTSTANDING NOTES SHALL BE DUE AND PAYABLE IMMEDIATELY WITHOUT FURTHER
ACTION OR NOTICE. HOLDERS OF THE NOTES MAY NOT ENFORCE THIS INDENTURE OR THE
NOTES EXCEPT AS PROVIDED HEREIN. THE HOLDERS OF A MAJORITY IN AGGREGATE
PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES BY WRITTEN NOTICE TO THE
TRUSTEE MAY ON BEHALF OF ALL OF THE HOLDERS RESCIND AN ACCELERATION AND ITS
CONSEQUENCES IF THE RESCISSION WOULD NOT CONFLICT WITH ANY JUDGMENT OR DECREE
AND IF ALL EXISTING EVENTS OF DEFAULT (EXCEPT NONPAYMENT OF PRINCIPAL,
INTEREST OR PREMIUM THAT HAS BECOME DUE SOLELY BECAUSE OF THE ACCELERATION)
HAVE BEEN CURED OR WAIVED.
IF AN EVENT OF DEFAULT OCCURS ON OR AFTER FEBRUARY 1, 2003 BY
REASON OF ANY WILLFUL ACTION (OR INACTION) TAKEN (OR NOT TAKEN) BY OR ON
BEHALF OF THE COMPANY WITH THE INTENTION OF AVOIDING PAYMENT OF THE PREMIUM
THAT THE COMPANY WOULD HAVE HAD TO PAY IF THE COMPANY THEN HAD ELECTED TO
REDEEM THE NOTES PURSUANT TO SECTION 3.07 HEREOF, THEN, UPON ACCELERATION OF
THE NOTES, AN EQUIVALENT PREMIUM SHALL ALSO BECOME AND BE IMMEDIATELY DUE AND
PAYABLE, TO THE EXTENT PERMITTED BY LAW, ANYTHING IN THIS INDENTURE OR IN THE
NOTES TO THE CONTRARY NOTWITHSTANDING. IF AN EVENT OF DEFAULT OCCURS PRIOR TO
FEBRUARY 1, 2003 BY REASON OF ANY WILLFUL ACTION (OR INACTION) TAKEN (OR NOT
TAKEN) BY OR ON BEHALF OF THE COMPANY WITH THE INTENTION OF AVOIDING THE
PROHIBITION ON REDEMPTION OF THE NOTES PRIOR TO SUCH DATE, THEN, UPON
ACCELERATION OF THE NOTES, A PREMIUM SHALL ALSO BECOME AND BE IMMEDIATELY DUE
AND PAYABLE SO THAT THE COMPANY SHALL BE OBLIGATED TO PAY AN AMOUNT
(EXPRESSED AS PERCENTAGES OF PRINCIPAL AMOUNT), FOR EACH OF THE YEARS
BEGINNING ON FEBRUARY 1 OF THE YEARS AS SET FORTH BELOW:
YEAR PERCENTAGE
---- ----------
1998...................................110.333%
1999...................................109.042%
2000...................................107.750%
2001...................................106.458%
2002...................................105.167%
SECTION 6.03 OTHER REMEDIES.
IF AN EVENT OF DEFAULT OCCURS AND IS CONTINUING, THE
TRUSTEE MAY PURSUE ANY AVAILABLE REMEDY TO COLLECT THE PAYMENT OF
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON THE NOTES OR TO ENFORCE
THE PERFORMANCE OF ANY PROVISION OF THE NOTES OR THIS INDENTURE.
THE TRUSTEE MAY MAINTAIN A PROCEEDING EVEN IF IT DOES
NOT POSSESS ANY OF THE NOTES OR DOES NOT PRODUCE ANY OF THEM IN THE
PROCEEDING. A DELAY OR OMISSION BY THE TRUSTEE OR ANY HOLDER OF A
NOTE IN EXERCISING ANY RIGHT OR REMEDY ACCRUING UPON AN EVENT OF
DEFAULT SHALL NOT IMPAIR THE RIGHT OR REMEDY OR CONSTITUTE A WAIVER
OF OR ACQUIESCENCE IN THE EVENT OF DEFAULT. ALL REMEDIES ARE
CUMULATIVE TO THE EXTENT PERMITTED BY LAW.
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SECTION 6.04 WAIVER OF PAST DEFAULTS.
HOLDERS OF NOT LESS THAN A MAJORITY IN AGGREGATE
PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES BY NOTICE TO THE
TRUSTEE MAY ON BEHALF OF THE HOLDERS OF ALL OF THE NOTES WAIVE AN
EXISTING DEFAULT OR EVENT OF DEFAULT AND ITS CONSEQUENCES HEREUNDER,
EXCEPT A CONTINUING DEFAULT OR EVENT OF DEFAULT IN THE PAYMENT OF
THE PRINCIPAL OF, OR PREMIUM, INTEREST AND LIQUIDATED DAMAGES, IF
ANY, ON THE NOTES (INCLUDING IN CONNECTION WITH AN OFFER TO
PURCHASE) (PROVIDED, HOWEVER, THAT THE HOLDERS OF A MAJORITY IN
AGGREGATE PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY RESCIND
AN ACCELERATION AND ITS CONSEQUENCES, INCLUDING ANY RELATED PAYMENT
DEFAULT THAT RESULTED FROM SUCH ACCELERATION). UPON ANY SUCH WAIVER,
SUCH DEFAULT SHALL CEASE TO EXIST, AND ANY EVENT OF DEFAULT ARISING
THEREFROM SHALL BE DEEMED TO HAVE BEEN CURED FOR EVERY PURPOSE OF
THIS INDENTURE; BUT NO SUCH WAIVER SHALL EXTEND TO ANY SUBSEQUENT OR
OTHER DEFAULT OR IMPAIR ANY RIGHT CONSEQUENT THEREON.
SECTION 6.05 CONTROL BY MAJORITY.
HOLDERS OF A MAJORITY IN PRINCIPAL AMOUNT OF THE THEN
OUTSTANDING NOTES MAY DIRECT THE TIME, METHOD AND PLACE OF
CONDUCTING ANY PROCEEDING FOR EXERCISING ANY REMEDY AVAILABLE TO THE
TRUSTEE OR EXERCISING ANY TRUST OR POWER CONFERRED ON IT. HOWEVER,
THE TRUSTEE MAY REFUSE TO FOLLOW ANY DIRECTION THAT CONFLICTS WITH
LAW OR THIS INDENTURE THAT THE TRUSTEE DETERMINES MAY BE UNDULY
PREJUDICIAL TO THE RIGHTS OF OTHER HOLDERS OF NOTES OR THAT MAY
INVOLVE THE TRUSTEE IN PERSONAL LIABILITY.
SECTION 6.06 LIMITATION ON SUITS.
A HOLDER OF A NOTE MAY PURSUE A REMEDY WITH RESPECT TO
THIS INDENTURE OR THE NOTES ONLY IF:
(A) THE HOLDER OF A NOTE GIVES TO THE TRUSTEE WRITTEN
NOTICE OF A CONTINUING EVENT OF DEFAULT;
(B) THE HOLDERS OF AT LEAST 25% IN PRINCIPAL AMOUNT OF
THE THEN OUTSTANDING NOTES MAKE A WRITTEN REQUEST TO THE TRUSTEE TO
PURSUE THE REMEDY;
(C) SUCH HOLDER OF A NOTE OR HOLDERS OF NOTES OFFER AND,
IF REQUESTED, PROVIDE TO THE TRUSTEE INDEMNITY SATISFACTORY TO THE
TRUSTEE AGAINST ANY LOSS, LIABILITY OR EXPENSE;
(D) THE TRUSTEE DOES NOT COMPLY WITH THE REQUEST WITHIN
60 DAYS AFTER RECEIPT OF THE REQUEST AND THE OFFER AND, IF
REQUESTED, THE PROVISION OF INDEMNITY; AND
(E) DURING SUCH 60-DAY PERIOD THE HOLDERS OF A MAJORITY
IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES DO NOT GIVE THE
TRUSTEE A DIRECTION INCONSISTENT WITH THE REQUEST.
A HOLDER OF A NOTE MAY NOT USE THIS INDENTURE TO
PREJUDICE THE RIGHTS OF ANOTHER HOLDER OF A NOTE OR TO OBTAIN A
PREFERENCE OR PRIORITY OVER ANOTHER HOLDER OF A NOTE.
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SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS INDENTURE,
THE RIGHT OF ANY HOLDER OF A NOTE TO RECEIVE PAYMENT OF PRINCIPAL,
PREMIUM AND LIQUIDATED DAMAGES, IF ANY, AND INTEREST ON THE NOTE, ON
OR AFTER THE RESPECTIVE DUE DATES EXPRESSED IN THE NOTE (INCLUDING
IN CONNECTION WITH AN OFFER TO PURCHASE), OR TO BRING SUIT FOR THE
ENFORCEMENT OF ANY SUCH PAYMENT ON OR AFTER SUCH RESPECTIVE DATES,
SHALL NOT BE IMPAIRED OR AFFECTED WITHOUT THE CONSENT OF SUCH
HOLDER.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
IF AN EVENT OF DEFAULT SPECIFIED IN SECTION 6.01(A) OR
(B) OCCURS AND IS CONTINUING, THE TRUSTEE IS AUTHORIZED TO RECOVER
JUDGMENT IN ITS OWN NAME AND AS TRUSTEE OF AN EXPRESS TRUST AGAINST
THE COMPANY FOR THE WHOLE AMOUNT OF PRINCIPAL OF, PREMIUM AND
LIQUIDATED DAMAGES, IF ANY, AND INTEREST REMAINING UNPAID ON THE
NOTES AND INTEREST ON OVERDUE PRINCIPAL AND, TO THE EXTENT LAWFUL,
INTEREST AND SUCH FURTHER AMOUNT AS SHALL BE SUFFICIENT TO COVER THE
COSTS AND EXPENSES OF COLLECTION, INCLUDING THE REASONABLE
COMPENSATION, EXPENSES, DISBURSEMENTS AND ADVANCES OF THE TRUSTEE,
ITS AGENTS AND COUNSEL.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
THE TRUSTEE IS AUTHORIZED TO FILE SUCH PROOFS OF CLAIM
AND OTHER PAPERS OR DOCUMENTS AS MAY BE NECESSARY OR ADVISABLE IN
ORDER TO HAVE THE CLAIMS OF THE TRUSTEE (INCLUDING ANY CLAIM FOR THE
REASONABLE COMPENSATION, EXPENSES, DISBURSEMENTS AND ADVANCES OF THE
TRUSTEE, ITS AGENTS AND COUNSEL) AND THE HOLDERS OF THE NOTES
ALLOWED IN ANY JUDICIAL PROCEEDINGS RELATIVE TO THE COMPANY (OR ANY
OTHER OBLIGOR UPON THE NOTES), ITS CREDITORS OR ITS PROPERTY AND
SHALL BE ENTITLED AND EMPOWERED TO COLLECT, RECEIVE AND DISTRIBUTE
ANY MONEY OR OTHER PROPERTY PAYABLE OR DELIVERABLE ON ANY SUCH
CLAIMS AND ANY CUSTODIAN IN ANY SUCH JUDICIAL PROCEEDING IS HEREBY
AUTHORIZED BY EACH HOLDER TO MAKE SUCH PAYMENTS TO THE TRUSTEE, AND
IN THE EVENT THAT THE TRUSTEE SHALL CONSENT TO THE MAKING OF SUCH
PAYMENTS DIRECTLY TO THE HOLDERS, TO PAY TO THE TRUSTEE ANY AMOUNT
DUE TO IT FOR THE REASONABLE COMPENSATION, EXPENSES, DISBURSEMENTS
AND ADVANCES OF THE TRUSTEE, ITS AGENTS AND COUNSEL, AND ANY OTHER
AMOUNTS DUE THE TRUSTEE UNDER SECTION 7.07 HEREOF. TO THE EXTENT
THAT THE PAYMENT OF ANY SUCH COMPENSATION, EXPENSES, DISBURSEMENTS
AND ADVANCES OF THE TRUSTEE, ITS AGENTS AND COUNSEL, AND ANY OTHER
AMOUNTS DUE THE TRUSTEE UNDER SECTION 7.07 HEREOF OUT OF THE ESTATE
IN ANY SUCH PROCEEDING, SHALL BE DENIED FOR ANY REASON, PAYMENT OF
THE SAME SHALL BE SECURED BY A LIEN ON, AND SHALL BE PAID OUT OF,
ANY AND ALL DISTRIBUTIONS, DIVIDENDS, MONEY, SECURITIES AND OTHER
PROPERTIES THAT THE HOLDERS MAY BE ENTITLED TO RECEIVE IN SUCH
PROCEEDING WHETHER IN LIQUIDATION OR UNDER ANY PLAN OF
REORGANIZATION OR ARRANGEMENT OR OTHERWISE. NOTHING HEREIN CONTAINED
SHALL BE DEEMED TO AUTHORIZE THE TRUSTEE TO AUTHORIZE OR CONSENT TO
OR ACCEPT OR ADOPT ON BEHALF OF ANY HOLDER ANY PLAN OF
REORGANIZATION, ARRANGEMENT, ADJUSTMENT OR COMPOSITION AFFECTING THE
NOTES OR THE RIGHTS OF ANY HOLDER, OR TO AUTHORIZE THE TRUSTEE TO
VOTE IN RESPECT OF THE CLAIM OF ANY HOLDER IN ANY SUCH PROCEEDING.
SECTION 6.10 PRIORITIES.
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SUBJECT TO THE SUBORDINATION PROVISIONS OF ARTICLE 10
HEREOF, IF THE TRUSTEE COLLECTS ANY MONEY PURSUANT TO THIS ARTICLE
6, IT SHALL PAY OUT THE MONEY IN THE FOLLOWING ORDER:
FIRST: TO THE TRUSTEE, ITS AGENTS AND ATTORNEYS FOR
AMOUNTS DUE UNDER SECTION 7.07 HEREOF, INCLUDING PAYMENT OF ALL
COMPENSATION, EXPENSE AND LIABILITIES INCURRED, AND ALL ADVANCES
MADE, BY THE TRUSTEE AND THE COSTS AND EXPENSES OF COLLECTION;
SECOND: TO HOLDERS OF NOTES FOR AMOUNTS DUE AND UNPAID
ON THE NOTES FOR PRINCIPAL, PREMIUM AND LIQUIDATED DAMAGES, IF ANY,
AND INTEREST, RATABLY, WITHOUT PREFERENCE OR PRIORITY OF ANY KIND,
ACCORDING TO THE AMOUNTS DUE AND PAYABLE ON THE NOTES FOR PRINCIPAL,
PREMIUM AND LIQUIDATED DAMAGES, IF ANY AND INTEREST, RESPECTIVELY;
AND
THIRD: TO THE COMPANY OR TO SUCH PARTY AS A COURT OF
COMPETENT JURISDICTION SHALL DIRECT.
THE TRUSTEE MAY FIX A RECORD DATE AND PAYMENT DATE FOR
ANY PAYMENT TO HOLDERS OF NOTES PURSUANT TO THIS SECTION 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
IN ANY SUIT FOR THE ENFORCEMENT OF ANY RIGHT OR REMEDY
UNDER THIS INDENTURE OR IN ANY SUIT AGAINST THE TRUSTEE FOR ANY
ACTION TAKEN OR OMITTED BY IT AS A TRUSTEE, A COURT IN ITS
DISCRETION MAY REQUIRE THE FILING BY ANY PARTY LITIGANT IN THE SUIT
OF AN UNDERTAKING TO PAY THE COSTS OF THE SUIT, AND THE COURT IN ITS
DISCRETION MAY ASSESS REASONABLE COSTS, INCLUDING REASONABLE
ATTORNEYS' FEES, AGAINST ANY PARTY LITIGANT IN THE SUIT, HAVING DUE
REGARD TO THE MERITS AND GOOD FAITH OF THE CLAIMS OR DEFENSES MADE
BY THE PARTY LITIGANT. THIS SECTION 6.11 DOES NOT APPLY TO A SUIT BY
THE TRUSTEE, A SUIT BY A HOLDER OF A NOTE PURSUANT TO SECTION 6.07
HEREOF, OR A SUIT BY HOLDERS OF MORE THAN 10% IN PRINCIPAL AMOUNT OF
THE THEN OUTSTANDING NOTES.
ARTICLE 7.
TRUSTEE.
SECTION 7.01 DUTIES OF TRUSTEE.
(A) IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
THE TRUSTEE SHALL EXERCISE SUCH OF THE RIGHTS AND POWERS VESTED IN
IT BY THIS INDENTURE, AND USE THE SAME DEGREE OF CARE AND SKILL IN
ITS EXERCISE, AS A PRUDENT MAN WOULD EXERCISE OR USE UNDER THE
CIRCUMSTANCES IN THE CONDUCT OF HIS OWN AFFAIRS.
(B) EXCEPT DURING THE CONTINUANCE OF AN EVENT OF DEFAULT:
(I)THE DUTIES OF THE TRUSTEE SHALL BE DETERMINED SOLELY BY THE EXPRESS
PROVISIONS OF THIS INDENTURE AND THE TRUSTEE NEED PERFORM ONLY THOSE DUTIES
THAT ARE SPECIFICALLY SET FORTH IN THIS INDENTURE AND NO OTHERS, AND NO
IMPLIED COVENANTS OR OBLIGATIONS SHALL BE READ INTO THIS INDENTURE AGAINST
THE TRUSTEE; AND
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(II)IN THE ABSENCE OF BAD FAITH ON ITS PART, THE TRUSTEE MAY CONCLUSIVELY
RELY, AS TO THE TRUTH OF THE STATEMENTS AND THE CORRECTNESS OF THE OPINIONS
EXPRESSED THEREIN, UPON CERTIFICATES OR OPINIONS FURNISHED TO THE TRUSTEE AND
CONFORMING TO THE REQUIREMENTS OF THIS INDENTURE. HOWEVER, THE TRUSTEE SHALL
EXAMINE THE CERTIFICATES AND OPINIONS TO DETERMINE WHETHER OR NOT THEY
CONFORM TO THE REQUIREMENTS OF THIS INDENTURE.
(C) THE TRUSTEE MAY NOT BE RELIEVED FROM LIABILITIES FOR ITS
OWN NEGLIGENT ACTION, ITS OWN NEGLIGENT FAILURE TO ACT, OR ITS OWN
WILLFUL MISCONDUCT, EXCEPT THAT:
(I)THIS PARAGRAPH DOES NOT LIMIT THE EFFECT OF PARAGRAPH (B) OF THIS
SECTION 7.01;
(II)THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT MADE IN GOOD
FAITH BY A RESPONSIBLE OFFICER, UNLESS IT IS PROVED THAT THE TRUSTEE WAS
NEGLIGENT IN ASCERTAINING THE PERTINENT FACTS; AND
(III) THE TRUSTEE SHALL NOT BE LIABLE WITH RESPECT TO ANY ACTION IT TAKES
OR OMITS TO TAKE IN GOOD FAITH IN ACCORDANCE WITH A DIRECTION RECEIVED BY IT
PURSUANT TO SECTION 6.05 HEREOF.
(D) WHETHER OR NOT THEREIN EXPRESSLY SO PROVIDED, EVERY
PROVISION OF THIS INDENTURE THAT IN ANY WAY RELATES TO THE TRUSTEE
IS SUBJECT TO PARAGRAPHS (A), (B) AND (C) OF THIS SECTION 7.01.
(E) NO PROVISION OF THIS INDENTURE SHALL REQUIRE THE TRUSTEE
TO EXPEND OR RISK ITS OWN FUNDS OR INCUR ANY LIABILITY. THE TRUSTEE
SHALL BE UNDER NO OBLIGATION TO EXERCISE ANY OF ITS RIGHTS AND
POWERS UNDER THIS INDENTURE AT THE REQUEST OF ANY HOLDERS, UNLESS
SUCH HOLDER SHALL HAVE OFFERED TO THE TRUSTEE SECURITY AND INDEMNITY
SATISFACTORY TO IT AGAINST ANY LOSS, LIABILITY OR EXPENSE.
(F) THE TRUSTEE SHALL NOT BE LIABLE FOR INTEREST ON ANY MONEY
RECEIVED BY IT EXCEPT AS THE TRUSTEE MAY AGREE IN WRITING WITH THE
COMPANY. MONEY HELD IN TRUST BY THE TRUSTEE NEED NOT BE SEGREGATED
FROM OTHER FUNDS EXCEPT TO THE EXTENT REQUIRED BY LAW.
SECTION 7.02 RIGHTS OF TRUSTEE.
(A) THE TRUSTEE MAY CONCLUSIVELY RELY UPON ANY DOCUMENT
BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED OR PRESENTED BY
THE PROPER PERSON. THE TRUSTEE NEED NOT INVESTIGATE ANY FACT OR
MATTER STATED IN THE DOCUMENT.
(B) BEFORE THE TRUSTEE ACTS OR REFRAINS FROM ACTING, IT MAY
REQUIRE AN OFFICERS' CERTIFICATE OR AN OPINION OF COUNSEL OR BOTH.
THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ACTION IT TAKES OR OMITS TO
TAKE IN GOOD FAITH IN RELIANCE ON SUCH OFFICERS' CERTIFICATE OR
OPINION OF COUNSEL. THE TRUSTEE MAY CONSULT WITH COUNSEL AND THE
WRITTEN
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ADVICE OF SUCH COUNSEL OR ANY OPINION OF COUNSEL SHALL BE FULL AND
COMPLETE AUTHORIZATION AND PROTECTION FROM LIABILITY IN RESPECT OF
ANY ACTION TAKEN, SUFFERED OR OMITTED BY IT HEREUNDER IN GOOD FAITH
AND IN RELIANCE THEREON.
(C) THE TRUSTEE MAY ACT THROUGH ITS ATTORNEYS AND AGENTS AND
SHALL NOT BE RESPONSIBLE FOR THE MISCONDUCT OR NEGLIGENCE OF ANY
AGENT APPOINTED WITH DUE CARE.
(D) THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ACTION IT TAKES
OR OMITS TO TAKE IN GOOD FAITH THAT IT BELIEVES TO BE AUTHORIZED OR
WITHIN THE RIGHTS OR POWERS CONFERRED UPON IT BY THIS INDENTURE.
(E) UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THIS INDENTURE,
ANY DEMAND, REQUEST, DIRECTION OR NOTICE FROM THE COMPANY SHALL BE
SUFFICIENT IF SIGNED BY AN OFFICER OF THE COMPANY.
(F) THE TRUSTEE SHALL BE UNDER NO OBLIGATION TO EXERCISE ANY
OF THE RIGHTS OR POWERS VESTED IN IT BY THIS INDENTURE AT THE
REQUEST OR DIRECTION OF ANY OF THE HOLDERS UNLESS SUCH HOLDERS SHALL
HAVE OFFERED TO THE TRUSTEE REASONABLE SECURITY OR INDEMNITY AGAINST
THE COSTS, EXPENSES AND LIABILITIES THAT MIGHT BE INCURRED BY IT IN
COMPLIANCE WITH SUCH REQUEST OR DIRECTION.
(G) EXCEPT WITH RESPECT TO SECTION 4.01, THE TRUSTEE SHALL
HAVE NO DUTY TO INQUIRE AS TO THE PERFORMANCE OF THE COMPANY WITH
RESPECT TO THE COVENANTS CONTAINED IN ARTICLE 4. IN ADDITION, THE
TRUSTEE SHALL NOT BE DEEMED TO HAVE KNOWLEDGE OF AN EVENT OF DEFAULT
EXCEPT (I) ANY DEFAULT OR EVENT OF DEFAULT OCCURRING PURSUANT TO
SECTIONS 4.01, 6.01(A) OR 6.01(B) OR (II) ANY DEFAULT OR EVENT OF
DEFAULT OF WHICH THE TRUSTEE SHALL HAVE RECEIVED WRITTEN
NOTIFICATION OR OBTAINED ACTUAL KNOWLEDGE.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
THE TRUSTEE IN ITS INDIVIDUAL OR ANY OTHER CAPACITY MAY
BECOME THE OWNER OR PLEDGEE OF NOTES AND MAY OTHERWISE DEAL WITH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WITH THE SAME RIGHTS IT
WOULD HAVE IF IT WERE NOT TRUSTEE. HOWEVER, IN THE EVENT THAT THE
TRUSTEE ACQUIRES ANY CONFLICTING INTEREST IT MUST ELIMINATE SUCH
CONFLICT WITHIN 90 DAYS, APPLY TO THE SEC FOR PERMISSION TO CONTINUE
AS TRUSTEE OR RESIGN. ANY AGENT MAY DO THE SAME WITH LIKE RIGHTS AND
DUTIES. THE TRUSTEE IS ALSO SUBJECT TO SECTIONS 7.10 AND 7.11
HEREOF.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
THE TRUSTEE SHALL NOT BE RESPONSIBLE FOR AND MAKES NO
REPRESENTATION AS TO THE VALIDITY OR ADEQUACY OF THIS INDENTURE OR
THE NOTES, IT SHALL NOT BE ACCOUNTABLE FOR THE COMPANY'S USE OF THE
PROCEEDS FROM THE NOTES OR ANY MONEY PAID TO THE COMPANY OR UPON THE
COMPANY'S DIRECTION UNDER ANY PROVISION OF THIS INDENTURE, IT SHALL
NOT BE RESPONSIBLE FOR THE USE OR APPLICATION OF ANY MONEY RECEIVED
BY ANY PAYING AGENT OTHER THAN THE TRUSTEE, AND IT SHALL NOT BE
RESPONSIBLE FOR ANY STATEMENT OR RECITAL HEREIN OR
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ANY STATEMENT IN THE NOTES OR ANY OTHER DOCUMENT IN CONNECTION WITH
THE SALE OF THE NOTES OR PURSUANT TO THIS INDENTURE OTHER THAN ITS
CERTIFICATE OF AUTHENTICATION.
SECTION 7.05 NOTICE OF DEFAULTS.
IF A DEFAULT OR EVENT OF DEFAULT OCCURS AND IS
CONTINUING AND IF IT IS KNOWN TO THE TRUSTEE, THE TRUSTEE SHALL MAIL
TO HOLDERS OF NOTES A NOTICE OF THE DEFAULT OR EVENT OF DEFAULT
WITHIN 90 DAYS AFTER IT OCCURS. EXCEPT IN THE CASE OF A DEFAULT OR
EVENT OF DEFAULT IN PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, OR
INTEREST ON ANY NOTE, THE TRUSTEE MAY WITHHOLD THE NOTICE IF AND SO
LONG AS A COMMITTEE OF ITS RESPONSIBLE OFFICERS IN GOOD FAITH
DETERMINES THAT WITHHOLDING THE NOTICE IS IN THE INTERESTS OF THE
HOLDERS OF THE NOTES.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
WITHIN 60 DAYS AFTER EACH MAY 15 BEGINNING WITH THE MAY
15 FOLLOWING THE DATE OF THIS INDENTURE, AND FOR SO LONG AS NOTES
REMAIN OUTSTANDING, THE TRUSTEE SHALL MAIL TO THE HOLDERS OF THE
NOTES A BRIEF REPORT DATED AS OF SUCH REPORTING DATE THAT COMPLIES
WITH TIA SS. 313(A) (BUT IF NO EVENT DESCRIBED IN TIA SS. 313(A) HAS
OCCURRED WITHIN THE TWELVE MONTHS PRECEDING THE REPORTING DATE, NO
REPORT NEED BE TRANSMITTED). THE TRUSTEE ALSO SHALL COMPLY WITH TIA
SS. 313(B)(2). THE TRUSTEE SHALL ALSO TRANSMIT BY MAIL ALL REPORTS
AS REQUIRED BY TIA SS. 313(C).
A COPY OF EACH REPORT AT THE TIME OF ITS MAILING TO THE
HOLDERS OF NOTES SHALL BE MAILED TO THE COMPANY AND FILED WITH THE
SEC AND EACH STOCK EXCHANGE ON WHICH THE NOTES ARE LISTED IN
ACCORDANCE WITH TIA SS. 313(D). THE COMPANY SHALL PROMPTLY NOTIFY
THE TRUSTEE WHEN THE NOTES ARE LISTED ON ANY STOCK EXCHANGE.
SECTION 7.07 COMPENSATION AND INDEMNITY.
THE COMPANY SHALL PAY TO THE TRUSTEE FROM TIME TO TIME
REASONABLE COMPENSATION FOR ITS ACCEPTANCE OF THIS INDENTURE AND
SERVICES HEREUNDER. THE TRUSTEE'S COMPENSATION SHALL NOT BE LIMITED
BY ANY LAW ON COMPENSATION OF A TRUSTEE OF AN EXPRESS TRUST. THE
COMPANY SHALL REIMBURSE THE TRUSTEE PROMPTLY UPON REQUEST FOR ALL
REASONABLE DISBURSEMENTS, ADVANCES AND EXPENSES INCURRED OR MADE BY
IT IN ADDITION TO THE COMPENSATION FOR ITS SERVICES. SUCH EXPENSES
SHALL INCLUDE THE REASONABLE COMPENSATION, DISBURSEMENTS AND
EXPENSES OF THE TRUSTEE'S AGENTS AND COUNSEL.
THE COMPANY SHALL INDEMNIFY THE TRUSTEE AGAINST ANY AND
ALL LOSSES, LIABILITIES OR EXPENSES INCURRED BY IT ARISING OUT OF OR
IN CONNECTION WITH THE ACCEPTANCE OR ADMINISTRATION OF ITS DUTIES
UNDER THIS INDENTURE, INCLUDING THE COSTS AND EXPENSES OF ENFORCING
THIS INDENTURE AGAINST THE COMPANY (INCLUDING THIS SECTION 7.07) AND
DEFENDING ITSELF AGAINST ANY CLAIM (WHETHER ASSERTED BY THE COMPANY,
ANY HOLDER OR ANY OTHER PERSON) OR LIABILITY IN CONNECTION WITH THE
EXERCISE OR PERFORMANCE OF ANY OF ITS POWERS OR DUTIES HEREUNDER,
EXCEPT TO THE EXTENT ANY SUCH LOSS, LIABILITY OR EXPENSE MAY BE
ATTRIBUTABLE TO ITS NEGLIGENCE OR BAD FAITH. THE TRUSTEE SHALL
NOTIFY THE COMPANY PROMPTLY OF ANY CLAIM FOR WHICH IT MAY SEEK
INDEMNITY. FAILURE BY THE TRUSTEE TO SO NOTIFY THE COMPANY SHALL NOT
RELIEVE THE COMPANY OF ITS OBLIGATIONS HEREUNDER. THE
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COMPANY SHALL DEFEND THE CLAIM AND THE TRUSTEE SHALL COOPERATE IN
THE DEFENSE. THE TRUSTEE MAY HAVE SEPARATE COUNSEL AND THE COMPANY
SHALL PAY THE REASONABLE FEES AND EXPENSES OF SUCH COUNSEL. THE
COMPANY NEED NOT PAY FOR ANY SETTLEMENT MADE WITHOUT ITS CONSENT,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.
THE OBLIGATIONS OF THE COMPANY UNDER THIS SECTION 7.07
SHALL SURVIVE THE SATISFACTION AND DISCHARGE OF THIS INDENTURE.
TO SECURE THE COMPANY'S PAYMENT OBLIGATIONS IN THIS
SECTION 7.07, THE TRUSTEE SHALL HAVE A LIEN PRIOR TO THE NOTES ON
ALL MONEY OR PROPERTY HELD OR COLLECTED BY THE TRUSTEE, EXCEPT THAT
HELD IN TRUST TO PAY PRINCIPAL AND INTEREST ON PARTICULAR NOTES.
SUCH LIEN SHALL SURVIVE THE SATISFACTION AND DISCHARGE OF THIS
INDENTURE.
WHEN THE TRUSTEE INCURS EXPENSES OR RENDERS SERVICES
AFTER AN EVENT OF DEFAULT SPECIFIED IN SECTION 6.01(H) OR (I) HEREOF
OCCURS, THE EXPENSES AND THE COMPENSATION FOR THE SERVICES
(INCLUDING THE FEES AND EXPENSES OF ITS AGENTS AND COUNSEL) ARE
INTENDED TO CONSTITUTE EXPENSES OF ADMINISTRATION UNDER ANY
BANKRUPTCY LAW.
THE TRUSTEE SHALL COMPLY WITH THE PROVISIONS OF TIA SS.
313(B)(2) TO THE EXTENT APPLICABLE.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
A RESIGNATION OR REMOVAL OF THE TRUSTEE AND APPOINTMENT
OF A SUCCESSOR TRUSTEE SHALL BECOME EFFECTIVE ONLY UPON THE
SUCCESSOR TRUSTEE'S ACCEPTANCE OF APPOINTMENT AS PROVIDED IN THIS
SECTION 7.08.
THE TRUSTEE MAY RESIGN IN WRITING AT ANY TIME AND BE
DISCHARGED FROM THE TRUST HEREBY CREATED BY SO NOTIFYING THE
COMPANY. THE HOLDERS OF NOTES OF A MAJORITY IN PRINCIPAL AMOUNT OF
THE THEN OUTSTANDING NOTES MAY REMOVE THE TRUSTEE BY SO NOTIFYING
THE TRUSTEE AND THE COMPANY IN WRITING. THE COMPANY MAY REMOVE THE
TRUSTEE IF:
(A) THE TRUSTEE FAILS TO COMPLY WITH SECTION 7.10 HEREOF;
(B) THE TRUSTEE IS ADJUDGED A BANKRUPT OR AN INSOLVENT OR AN
ORDER FOR RELIEF IS ENTERED WITH RESPECT TO THE TRUSTEE UNDER ANY
BANKRUPTCY LAW;
(C) A CUSTODIAN OR PUBLIC OFFICER TAKES CHARGE OF THE TRUSTEE
OR ITS PROPERTY; OR
(D) THE TRUSTEE BECOMES INCAPABLE OF ACTING.
IF THE TRUSTEE RESIGNS OR IS REMOVED OR IF A VACANCY
EXISTS IN THE OFFICE OF TRUSTEE FOR ANY REASON, THE COMPANY SHALL
PROMPTLY APPOINT A SUCCESSOR TRUSTEE. WITHIN ONE YEAR AFTER THE
SUCCESSOR TRUSTEE TAKES OFFICE, THE HOLDERS OF A MAJORITY IN
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PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY APPOINT A
SUCCESSOR TRUSTEE TO REPLACE THE SUCCESSOR TRUSTEE APPOINTED BY THE
COMPANY.
IF A SUCCESSOR TRUSTEE DOES NOT TAKE OFFICE WITHIN 60
DAYS AFTER THE RETIRING TRUSTEE RESIGNS OR IS REMOVED, THE RETIRING
TRUSTEE, THE COMPANY, OR THE HOLDERS OF NOTES OF AT LEAST 10% IN
PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY PETITION ANY
COURT OF COMPETENT JURISDICTION FOR THE APPOINTMENT OF A SUCCESSOR
TRUSTEE.
IF THE TRUSTEE, AFTER WRITTEN REQUEST BY ANY HOLDER OF A
NOTE WHO HAS BEEN A HOLDER OF A NOTE FOR AT LEAST SIX MONTHS, FAILS
TO COMPLY WITH SECTION 7.10 HEREOF, SUCH HOLDER OF A NOTE MAY
PETITION ANY COURT OF COMPETENT JURISDICTION FOR THE REMOVAL OF THE
TRUSTEE AND THE APPOINTMENT OF A SUCCESSOR TRUSTEE.
A SUCCESSOR TRUSTEE SHALL DELIVER A WRITTEN ACCEPTANCE
OF ITS APPOINTMENT TO THE RETIRING TRUSTEE AND TO THE COMPANY.
THEREUPON, THE RESIGNATION OR REMOVAL OF THE RETIRING TRUSTEE SHALL
BECOME EFFECTIVE, AND THE SUCCESSOR TRUSTEE SHALL HAVE ALL THE
RIGHTS, POWERS AND DUTIES OF THE TRUSTEE UNDER THIS INDENTURE. THE
SUCCESSOR TRUSTEE SHALL MAIL A NOTICE OF ITS SUCCESSION TO HOLDERS
OF THE NOTES. THE RETIRING TRUSTEE SHALL PROMPTLY TRANSFER ALL
PROPERTY HELD BY IT AS TRUSTEE TO THE SUCCESSOR TRUSTEE, PROVIDED
ALL SUMS OWING TO THE TRUSTEE HEREUNDER HAVE BEEN PAID AND SUBJECT
TO THE LIEN PROVIDED FOR IN SECTION 7.07 HEREOF. NOTWITHSTANDING
REPLACEMENT OF THE TRUSTEE PURSUANT TO THIS SECTION 7.08, THE
COMPANY'S OBLIGATIONS UNDER SECTION 7.07 HEREOF SHALL CONTINUE FOR
THE BENEFIT OF THE RETIRING TRUSTEE.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
IF THE TRUSTEE CONSOLIDATES, MERGES OR CONVERTS INTO, OR
TRANSFERS ALL OR SUBSTANTIALLY ALL OF ITS CORPORATE TRUST BUSINESS
TO, ANOTHER CORPORATION, THE SUCCESSOR CORPORATION WITHOUT ANY
FURTHER ACT SHALL BE THE SUCCESSOR TRUSTEE.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
THERE SHALL AT ALL TIMES BE A TRUSTEE HEREUNDER THAT IS
A CORPORATION ORGANIZED AND DOING BUSINESS UNDER THE LAWS OF THE
UNITED STATES OF AMERICA OR OF ANY STATE THEREOF THAT IS AUTHORIZED
UNDER SUCH LAWS TO EXERCISE CORPORATE TRUSTEE POWER, THAT IS SUBJECT
TO SUPERVISION OR EXAMINATION BY FEDERAL OR STATE AUTHORITIES AND
THAT HAS A COMBINED CAPITAL AND SURPLUS OF AT LEAST $50.0 MILLION AS
SET FORTH IN ITS MOST RECENT PUBLISHED ANNUAL REPORT OF CONDITION.
THIS INDENTURE SHALL ALWAYS HAVE A TRUSTEE WHO SATISFIES
THE REQUIREMENTS OF TIA SS. 310(A)(1), (2) AND (5). THE TRUSTEE IS
SUBJECT TO TIA SS. 310(B).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
THE TRUSTEE IS SUBJECT TO TIA SS. 311(A), EXCLUDING ANY
CREDITOR RELATIONSHIP LISTED IN TIA SS. 311(B). A TRUSTEE WHO HAS
RESIGNED OR BEEN REMOVED SHALL BE SUBJECT TO TIA SS. 311(A) TO THE
EXTENT INDICATED THEREIN.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
THE COMPANY MAY, AT THE OPTION OF ITS BOARD OF DIRECTORS
EVIDENCED BY A RESOLUTION SET FORTH IN AN OFFICERS' CERTIFICATE, AT
ANY TIME, ELECT TO HAVE EITHER SECTION 8.02 OR 8.03 HEREOF BE
APPLIED TO ALL OUTSTANDING NOTES UPON COMPLIANCE WITH THE CONDITIONS
SET FORTH BELOW IN THIS ARTICLE 8.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.
UPON THE COMPANY'S EXERCISE UNDER SECTION 8.01 HEREOF OF
THE OPTION APPLICABLE TO THIS SECTION 8.02, THE COMPANY SHALL,
SUBJECT TO THE SATISFACTION OF THE CONDITIONS SET FORTH IN SECTION
8.04 HEREOF, BE DEEMED TO HAVE BEEN DISCHARGED FROM ITS OBLIGATIONS
WITH RESPECT TO ALL OUTSTANDING NOTES ON THE DATE THE CONDITIONS SET
FORTH BELOW ARE SATISFIED (HEREINAFTER, "LEGAL DEFEASANCE"). FOR
THIS PURPOSE, LEGAL DEFEASANCE MEANS THAT THE COMPANY SHALL BE
DEEMED TO HAVE PAID AND DISCHARGED THE ENTIRE INDEBTEDNESS
REPRESENTED BY THE OUTSTANDING NOTES WHICH SHALL THEREAFTER BE
DEEMED TO BE "OUTSTANDING" ONLY FOR THE PURPOSES OF SECTION 8.05
HEREOF AND THE OTHER SECTIONS OF THIS INDENTURE REFERRED TO IN (A)
AND (B) BELOW, AND TO HAVE SATISFIED ALL OF ITS OTHER OBLIGATIONS
UNDER SUCH NOTES AND THIS INDENTURE (AND THE TRUSTEE, ON DEMAND OF
AND AT THE EXPENSE OF THE COMPANY, SHALL EXECUTE PROPER INSTRUMENTS
ACKNOWLEDGING THE SAME), EXCEPT FOR THE FOLLOWING PROVISIONS WHICH
SHALL SURVIVE UNTIL OTHERWISE TERMINATED OR DISCHARGED HEREUNDER:
(A) THE RIGHTS OF HOLDERS OF OUTSTANDING NOTES TO RECEIVE PAYMENTS
IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, INTEREST AND LIQUIDATED
DAMAGES, IF ANY, ON THE NOTES WHEN SUCH PAYMENTS ARE DUE SOLELY FROM
THE TRUST FUND DESCRIBED IN SECTION 8.04 HEREOF, AND AS MORE FULLY
SET FORTH IN SUCH SECTION, (B) THE COMPANY'S OBLIGATIONS WITH
RESPECT TO THE NOTES UNDER SECTIONS 2.03, 2.04, 2.05, 2.06, 2.07 AND
SECTION 4.02 HEREOF, (C) THE RIGHTS, POWERS, TRUSTS, DUTIES AND
IMMUNITIES OF THE TRUSTEE HEREUNDER AND THE COMPANY'S OBLIGATIONS IN
CONNECTION THEREWITH AND (D) THIS ARTICLE 8. SUBJECT TO COMPLIANCE
WITH THIS ARTICLE 8, THE COMPANY MAY EXERCISE ITS OPTION UNDER THIS
SECTION 8.02 NOTWITHSTANDING THE PRIOR EXERCISE OF ITS OPTION UNDER
SECTION 8.03 HEREOF.
SECTION 8.03 COVENANT DEFEASANCE.
UPON THE COMPANY'S EXERCISE UNDER SECTION 8.01 HEREOF OF
THE OPTION APPLICABLE TO THIS SECTION 8.03, THE COMPANY SHALL,
SUBJECT TO THE SATISFACTION OF THE CONDITIONS SET FORTH IN SECTION
8.04 HEREOF, BE RELEASED FROM ITS OBLIGATIONS UNDER THE COVENANTS
CONTAINED IN SECTIONS 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.14, 4.16 AND 4.17 HEREOF AND THE OPERATION OF SECTION
5.01(IV) WITH RESPECT TO THE OUTSTANDING NOTES ON AND AFTER THE DATE
THE CONDITIONS SET FORTH IN SECTION 8.04 ARE SATISFIED (HEREINAFTER,
"COVENANT DEFEASANCE"), AND THE NOTES SHALL THEREAFTER BE DEEMED NOT
"OUTSTANDING" FOR THE PURPOSES OF ANY DIRECTION, WAIVER, CONSENT OR
DECLARATION OR ACT OF HOLDERS (AND THE CONSEQUENCES OF ANY THEREOF)
IN CONNECTION WITH SUCH COVENANTS, BUT SHALL CONTINUE TO BE DEEMED
"OUTSTANDING" FOR ALL OTHER PURPOSES HEREUNDER (IT BEING UNDERSTOOD
THAT SUCH NOTES SHALL NOT BE DEEMED OUTSTANDING FOR ACCOUNTING
PURPOSES). FOR THIS PURPOSE, "COVENANT DEFEASANCE" MEANS THAT, WITH
RESPECT TO THE OUTSTANDING NOTES THE COMPANY MAY OMIT TO COMPLY WITH
AND SHALL HAVE NO LIABILITY IN RESPECT OF ANY TERM, CONDITION OR
LIMITATION SET FORTH IN ANY SUCH
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COVENANT, WHETHER DIRECTLY OR INDIRECTLY, BY REASON OF ANY REFERENCE
ELSEWHERE HEREIN TO ANY SUCH COVENANT OR BY REASON OF ANY REFERENCE
IN ANY SUCH COVENANT TO ANY OTHER PROVISION HEREIN OR IN ANY OTHER
DOCUMENT AND SUCH OMISSION TO COMPLY SHALL NOT CONSTITUTE A DEFAULT
OR AN EVENT OF DEFAULT UNDER SECTION 6.01 HEREOF, BUT, EXCEPT AS
SPECIFIED ABOVE, THE REMAINDER OF THIS INDENTURE, SUCH NOTES SHALL
BE UNAFFECTED THEREBY. IN ADDITION, UPON THE COMPANY'S EXERCISE
UNDER SECTION 8.01 HEREOF OF THE OPTION APPLICABLE TO THIS SECTION
8.03 HEREOF, SUBJECT TO THE SATISFACTION OF THE CONDITIONS SET FORTH
IN SECTION 8.04 HEREOF, SECTIONS 6.01(D) THROUGH 6.01(G) HEREOF
SHALL NOT CONSTITUTE EVENTS OF DEFAULT.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
THE FOLLOWING SHALL BE THE CONDITIONS TO THE APPLICATION
OF EITHER SECTION 8.02 OR 8.03 HEREOF TO THE OUTSTANDING NOTES:
IN ORDER TO EXERCISE EITHER LEGAL DEFEASANCE OR COVENANT
DEFEASANCE:
(A) THE COMPANY MUST IRREVOCABLY DEPOSIT WITH THE TRUSTEE, IN
TRUST, FOR THE BENEFIT OF THE HOLDERS OF THE NOTES, CASH IN U.S.
DOLLARS, NON-CALLABLE GOVERNMENT SECURITIES, OR A COMBINATION
THEREOF, IN SUCH AMOUNTS AS WILL BE SUFFICIENT, IN THE OPINION OF A
NATIONALLY RECOGNIZED FIRM OF INDEPENDENT PUBLIC ACCOUNTANTS, TO PAY
THE PRINCIPAL OF AND PREMIUM, INTEREST AND LIQUIDATED DAMAGES, IF
ANY, ON THE OUTSTANDING NOTES ON THE STATED MATURITY OR ON THE
APPLICABLE REDEMPTION DATE, AS THE CASE MAY BE, AND THE COMPANY MUST
SPECIFY WHETHER THE NOTES ARE BEING DEFEASED TO MATURITY OR TO A
PARTICULAR REDEMPTION DATE;
(B) IN THE CASE OF AN ELECTION UNDER SECTION 8.02 HEREOF, THE
COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE AN OPINION OF COUNSEL IN
THE UNITED STATES REASONABLY ACCEPTABLE TO THE TRUSTEE CONFIRMING
THAT (I) THE COMPANY HAS RECEIVED FROM, OR THERE HAS BEEN PUBLISHED
BY, THE INTERNAL REVENUE SERVICE A RULING OR (II) SINCE THE CLOSING
DATE, THERE HAS BEEN A CHANGE IN THE APPLICABLE FEDERAL INCOME TAX
LAW, IN EITHER CASE TO THE EFFECT THAT, AND BASED THEREON SUCH
OPINION OF COUNSEL SHALL CONFIRM THAT, THE HOLDERS OF THE
OUTSTANDING NOTES WILL NOT RECOGNIZE INCOME, GAIN OR LOSS FOR
FEDERAL INCOME TAX PURPOSES AS A RESULT OF SUCH LEGAL DEFEASANCE AND
WILL BE SUBJECT TO FEDERAL INCOME TAX ON THE SAME AMOUNTS, IN THE
SAME MANNER AND AT THE SAME TIMES AS WOULD HAVE BEEN THE CASE IF
SUCH LEGAL DEFEASANCE HAD NOT OCCURRED;
(C) IN THE CASE OF AN ELECTION UNDER SECTION 8.03 HEREOF, THE
COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE AN OPINION OF COUNSEL IN
THE UNITED STATES REASONABLY ACCEPTABLE TO THE TRUSTEE CONFIRMING
THAT THE HOLDERS OF THE OUTSTANDING NOTES WILL NOT RECOGNIZE INCOME,
GAIN OR LOSS FOR FEDERAL INCOME TAX PURPOSES AS A RESULT OF SUCH
COVENANT DEFEASANCE AND WILL BE SUBJECT TO FEDERAL INCOME TAX ON THE
SAME AMOUNTS, IN THE SAME MANNER AND AT THE SAME TIMES AS WOULD HAVE
BEEN THE CASE IF SUCH COVENANT DEFEASANCE HAD NOT OCCURRED;
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(D) NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING ON THE DATE OF SUCH DEPOSIT (OTHER THAN A DEFAULT OR
EVENT OF DEFAULT RESULTING FROM THE BORROWING OF FUNDS TO BE APPLIED
TO SUCH DEPOSIT) OR INSOFAR AS SECTIONS 6.01(H) OR 6.01(I) HEREOF IS
CONCERNED, AT ANY TIME IN THE PERIOD ENDING ON THE 91ST DAY AFTER
THE DATE OF DEPOSIT;
(E) SUCH LEGAL DEFEASANCE OR COVENANT DEFEASANCE SHALL NOT
RESULT IN A BREACH OR VIOLATION OF, OR CONSTITUTE A DEFAULT UNDER,
ANY MATERIAL AGREEMENT OR INSTRUMENT (OTHER THAN THIS INDENTURE) TO
WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH
THE COMPANY OR ANY OF ITS SUBSIDIARIES IS BOUND;
(F) THE COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE AN
OPINION OF COUNSEL TO THE EFFECT THAT AFTER THE 91ST DAY FOLLOWING
THE DEPOSIT, THE TRUST FUNDS WILL NOT BE SUBJECT TO THE EFFECT OF
ANY APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR
LAWS AFFECTING CREDITORS' RIGHTS GENERALLY;
(G) THE COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE AN
OFFICERS' CERTIFICATE STATING THAT THE DEPOSIT WAS NOT MADE BY THE
COMPANY WITH THE INTENT OF PREFERRING THE HOLDERS OF NOTES OVER THE
OTHER CREDITORS OF THE COMPANY OR WITH THE INTENT OF DEFEATING,
HINDERING, DELAYING OR DEFRAUDING ANY OTHER CREDITORS OF THE COMPANY
OR OTHERS; AND
(H) THE COMPANY SHALL HAVE DELIVERED TO THE TRUSTEE AN
OFFICERS' CERTIFICATE AND AN OPINION OF COUNSEL, EACH STATING THAT
ALL CONDITIONS PRECEDENT PROVIDED FOR OR RELATING TO THE LEGAL
DEFEASANCE OR THE COVENANT DEFEASANCE HAVE BEEN COMPLIED WITH.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
SUBJECT TO SECTION 8.06 HEREOF, ALL MONEY AND
NON-CALLABLE GOVERNMENT SECURITIES (INCLUDING THE PROCEEDS THEREOF)
DEPOSITED WITH THE TRUSTEE (OR OTHER QUALIFYING TRUSTEE,
COLLECTIVELY FOR PURPOSES OF THIS SECTION 8.05, THE "TRUSTEE")
PURSUANT TO SECTION 8.04 HEREOF IN RESPECT OF THE OUTSTANDING NOTES
SHALL BE HELD IN TRUST AND APPLIED BY THE TRUSTEE, IN ACCORDANCE
WITH THE PROVISIONS OF SUCH NOTES AND THIS INDENTURE, TO THE
PAYMENT, EITHER DIRECTLY OR THROUGH ANY PAYING AGENT (INCLUDING THE
COMPANY ACTING AS PAYING AGENT) AS THE TRUSTEE MAY DETERMINE, TO THE
HOLDERS OF SUCH NOTES OF ALL SUMS DUE AND TO BECOME DUE THEREON IN
RESPECT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, BUT SUCH MONEY
NEED NOT BE SEGREGATED FROM OTHER FUNDS EXCEPT TO THE EXTENT
REQUIRED BY LAW.
THE COMPANY SHALL PAY AND INDEMNIFY THE TRUSTEE AGAINST
ANY TAX, FEE OR OTHER CHARGE IMPOSED ON OR ASSESSED AGAINST THE CASH
OR NON-CALLABLE GOVERNMENT SECURITIES DEPOSITED PURSUANT TO SECTION
8.04 HEREOF OR THE PRINCIPAL AND INTEREST RECEIVED IN RESPECT
THEREOF OTHER THAN ANY SUCH TAX, FEE OR OTHER CHARGE WHICH BY LAW IS
FOR THE ACCOUNT OF THE HOLDERS OF THE OUTSTANDING NOTES.
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ANYTHING IN THIS ARTICLE 8 TO THE CONTRARY
NOTWITHSTANDING, THE TRUSTEE SHALL DELIVER OR PAY TO THE COMPANY
FROM TIME TO TIME UPON THE REQUEST OF THE COMPANY ANY MONEY OR
NON-CALLABLE GOVERNMENT SECURITIES HELD BY IT AS PROVIDED IN SECTION
8.04 HEREOF WHICH, IN THE OPINION OF A NATIONALLY RECOGNIZED FIRM OF
INDEPENDENT PUBLIC ACCOUNTANTS EXPRESSED IN A WRITTEN CERTIFICATION
THEREOF DELIVERED TO THE TRUSTEE (WHICH MAY BE THE OPINION DELIVERED
UNDER SECTION 8.04(A) HEREOF), ARE IN EXCESS OF THE AMOUNT THEREOF
THAT WOULD THEN BE REQUIRED TO BE DEPOSITED TO EFFECT AN EQUIVALENT
LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
SECTION 8.06 REPAYMENT TO COMPANY.
ANY MONEY DEPOSITED WITH THE TRUSTEE OR ANY PAYING
AGENT, OR THEN HELD BY THE COMPANY, IN TRUST FOR THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, INTEREST AND LIQUIDATED DAMAGES, IF ANY, ON
ANY NOTE AND REMAINING UNCLAIMED FOR TWO YEARS AFTER SUCH PRINCIPAL,
AND PREMIUM, IF ANY, OR INTEREST HAS BECOME DUE AND PAYABLE SHALL BE
PAID TO THE COMPANY ON ITS REQUEST OR (IF THEN HELD BY THE COMPANY)
AND SHALL BE DISCHARGED FROM SUCH TRUST; AND THE HOLDER OF SUCH NOTE
SHALL THEREAFTER, AS A GENERAL CREDITOR, LOOK ONLY TO THE COMPANY
FOR PAYMENT THEREOF, AND ALL LIABILITY OF THE TRUSTEE OR SUCH PAYING
AGENT WITH RESPECT TO SUCH TRUST MONEY, AND ALL LIABILITY OF THE
COMPANY AS TRUSTEE THEREOF, SHALL THEREUPON CEASE; PROVIDED,
HOWEVER, THAT THE TRUSTEE OR SUCH PAYING AGENT, BEFORE BEING
REQUIRED TO MAKE ANY SUCH REPAYMENT, SHALL, IF THE COMPANY SO
REQUESTS AND AT THE EXPENSE OF THE COMPANY, CAUSE TO BE PUBLISHED
ONCE, IN THE NEW YORK TIMES AND THE WALL STREET JOURNAL (NATIONAL
EDITION), NOTICE THAT SUCH MONEY REMAINS UNCLAIMED AND THAT, AFTER A
DATE SPECIFIED THEREIN, WHICH SHALL NOT BE LESS THAN 30 DAYS FROM
THE DATE OF SUCH NOTIFICATION OR PUBLICATION, ANY UNCLAIMED BALANCE
OF SUCH MONEY THEN REMAINING WILL BE REPAID TO THE COMPANY.
SECTION 8.07 REINSTATEMENT.
IF THE TRUSTEE OR PAYING AGENT IS UNABLE TO APPLY ANY
U.S. DOLLARS OR NON-CALLABLE GOVERNMENT SECURITIES IN ACCORDANCE
WITH SECTION 8.02 OR 8.03 HEREOF, AS THE CASE MAY BE, BY REASON OF
ANY ORDER OR JUDGMENT OF ANY COURT OR GOVERNMENTAL AUTHORITY
ENJOINING, RESTRAINING OR OTHERWISE PROHIBITING SUCH APPLICATION,
THEN THE COMPANY'S OBLIGATIONS UNDER THIS INDENTURE AND THE NOTES
SHALL BE REVIVED AND REINSTATED AS THOUGH NO DEPOSIT HAD OCCURRED
PURSUANT TO SECTION 8.02 OR 8.03 HEREOF UNTIL SUCH TIME AS THE
TRUSTEE OR PAYING AGENT IS PERMITTED TO APPLY ALL SUCH MONEY IN
ACCORDANCE WITH SECTION 8.02 OR 8.03 HEREOF, AS THE CASE MAY BE;
PROVIDED, HOWEVER, THAT, IF THE COMPANY MAKES ANY PAYMENT OF
PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON ANY NOTE FOLLOWING THE
REINSTATEMENT OF ITS OBLIGATIONS, THE COMPANY SHALL BE SUBROGATED TO
THE RIGHTS OF THE HOLDERS OF SUCH NOTES TO RECEIVE SUCH PAYMENT FROM
THE MONEY HELD BY THE TRUSTEE OR PAYING AGENT.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
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NOTWITHSTANDING SECTION 9.02 OF THIS INDENTURE, THE
COMPANY AND THE TRUSTEE MAY AMEND OR SUPPLEMENT THIS INDENTURE OR
THE NOTES WITHOUT THE CONSENT OF ANY HOLDER OF A NOTE:
(A) TO CURE ANY AMBIGUITY, DEFECT OR INCONSISTENCY;
(B) TO PROVIDE FOR UNCERTIFICATED NOTES IN ADDITION TO OR IN
PLACE OF CERTIFICATED NOTES;
(C) TO PROVIDE FOR THE ASSUMPTION OF THE COMPANY'S
OBLIGATIONS TO THE HOLDERS OF THE NOTES IN THE CASE OF A MERGER OR
CONSOLIDATION PURSUANT TO ARTICLE 5 HEREOF;
(D) TO MAKE ANY CHANGE THAT WOULD PROVIDE ANY ADDITIONAL
RIGHTS OR BENEFITS TO THE HOLDERS OF NOTES OR THAT DOES NOT
ADVERSELY AFFECT THE LEGAL RIGHTS HEREUNDER OF ANY SUCH HOLDER; OR
(E) TO COMPLY WITH REQUIREMENTS OF THE SEC IN ORDER TO EFFECT
OR MAINTAIN THE QUALIFICATION OF THIS INDENTURE UNDER THE TIA.
UPON THE REQUEST OF THE COMPANY ACCOMPANIED BY A
RESOLUTION OF ITS BOARD OF DIRECTORS AUTHORIZING THE EXECUTION OF
ANY SUCH AMENDED OR SUPPLEMENTAL INDENTURE, AND UPON RECEIPT BY THE
TRUSTEE OF THE DOCUMENTS DESCRIBED IN SECTION 7.02 HEREOF, THE
TRUSTEE SHALL JOIN WITH THE COMPANY IN THE EXECUTION OF ANY AMENDED
OR SUPPLEMENTAL INDENTURE AUTHORIZED OR PERMITTED BY THE TERMS OF
THIS INDENTURE AND TO MAKE ANY FURTHER APPROPRIATE AGREEMENTS AND
STIPULATIONS THAT MAY BE THEREIN CONTAINED, BUT THE TRUSTEE SHALL
NOT BE OBLIGATED TO ENTER INTO SUCH AMENDED OR SUPPLEMENTAL
INDENTURE THAT AFFECTS ITS OWN RIGHTS, DUTIES OR IMMUNITIES UNDER
THIS INDENTURE OR OTHERWISE.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES.
EXCEPT AS PROVIDED BELOW IN THIS SECTION 9.02, THE
COMPANY AND THE TRUSTEE MAY AMEND OR SUPPLEMENT THIS INDENTURE
(INCLUDING SECTIONS 3.09, 4.10 AND 4.14 HEREOF) AND THE NOTES WITH
THE CONSENT OF THE HOLDERS OF AT LEAST A MAJORITY IN PRINCIPAL
AMOUNT OF THE NOTES THEN OUTSTANDING (INCLUDING, WITHOUT LIMITATION,
CONSENTS OBTAINED IN CONNECTION WITH A PURCHASE OF, OR TENDER OFFER
OR EXCHANGE OFFER FOR, NOTES), AND, SUBJECT TO SECTIONS 6.04 AND
6.07 HEREOF, ANY EXISTING DEFAULT OR EVENT OF DEFAULT OR COMPLIANCE
WITH ANY PROVISION OF THIS INDENTURE OR THE NOTES MAY BE WAIVED WITH
THE CONSENT OF THE HOLDERS OF A MAJORITY IN PRINCIPAL AMOUNT OF THE
THEN OUTSTANDING NOTES (INCLUDING CONSENTS OBTAINED IN CONNECTION
WITH A TENDER OFFER OR EXCHANGE OFFER FOR NOTES).
UPON THE REQUEST OF THE COMPANY ACCOMPANIED BY A
RESOLUTION OF ITS BOARD OF DIRECTORS AUTHORIZING THE EXECUTION OF
ANY SUCH AMENDED OR SUPPLEMENTAL INDENTURE, AND UPON THE FILING WITH
THE TRUSTEE OF EVIDENCE SATISFACTORY TO THE TRUSTEE OF THE CONSENT
OF THE HOLDERS OF NOTES AS AFORESAID, AND UPON RECEIPT BY THE
TRUSTEE OF THE DOCUMENTS DESCRIBED IN SECTION 7.02 HEREOF, THE
TRUSTEE SHALL JOIN WITH THE
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COMPANY IN THE EXECUTION OF SUCH AMENDED OR SUPPLEMENTAL INDENTURE
UNLESS SUCH AMENDED OR SUPPLEMENTAL INDENTURE DIRECTLY AFFECTS THE
TRUSTEE'S OWN RIGHTS, DUTIES OR IMMUNITIES UNDER THIS INDENTURE OR
OTHERWISE, IN WHICH CASE THE TRUSTEE MAY IN ITS DISCRETION, BUT
SHALL NOT BE OBLIGATED TO, ENTER INTO SUCH AMENDED OR SUPPLEMENTAL
INDENTURE.
IT SHALL NOT BE NECESSARY FOR THE CONSENT OF THE HOLDERS
OF NOTES UNDER THIS SECTION 9.02 TO APPROVE THE PARTICULAR FORM OF
ANY PROPOSED AMENDMENT OR WAIVER, BUT IT SHALL BE SUFFICIENT IF SUCH
CONSENT APPROVES THE SUBSTANCE THEREOF.
AFTER AN AMENDMENT, SUPPLEMENT OR WAIVER UNDER THIS
SECTION 9.02 BECOMES EFFECTIVE, THE COMPANY SHALL MAIL TO THE
HOLDERS OF NOTES AFFECTED THEREBY A NOTICE BRIEFLY DESCRIBING THE
AMENDMENT, SUPPLEMENT OR WAIVER. ANY FAILURE OF THE COMPANY TO MAIL
SUCH NOTICE, OR ANY DEFECT THEREIN, SHALL NOT, HOWEVER, IN ANY WAY
IMPAIR OR AFFECT THE VALIDITY OF ANY SUCH AMENDED OR SUPPLEMENTAL
INDENTURE OR WAIVER. SUBJECT TO SECTIONS 6.04 AND 6.07 HEREOF, THE
HOLDERS OF A MAJORITY IN AGGREGATE PRINCIPAL AMOUNT OF THE NOTES
THEN OUTSTANDING MAY WAIVE COMPLIANCE IN A PARTICULAR INSTANCE BY
THE COMPANY WITH ANY PROVISION OF THIS INDENTURE OR THE NOTES.
HOWEVER, WITHOUT THE CONSENT OF EACH HOLDER AFFECTED, AN AMENDMENT
OR WAIVER UNDER THIS SECTION 9.02 MAY NOT (WITH RESPECT TO ANY NOTES
HELD BY A NON-CONSENTING HOLDER):
(A) REDUCE THE PRINCIPAL AMOUNT OF NOTES WHOSE HOLDERS MUST
CONSENT TO AN AMENDMENT, SUPPLEMENT OR WAIVER;
(B) REDUCE THE PRINCIPAL OF OR CHANGE THE FIXED MATURITY OF
ANY NOTE OR ALTER THE PROVISIONS WITH RESPECT TO THE REDEMPTION OF
THE NOTES, EXCEPT WITH RESPECT TO SECTIONS 3.09, 4.10 AND 4.14
HEREOF;
(C) REDUCE THE RATE OF OR CHANGE THE TIME FOR PAYMENT OF
INTEREST ON ANY NOTE;
(D) WAIVE A DEFAULT OR EVENT OF DEFAULT IN THE PAYMENT OF
PRINCIPAL OF OR PREMIUM, INTEREST OR LIQUIDATED DAMAGES, IF ANY, ON
THE NOTES (EXCEPT A RESCISSION OF ACCELERATION OF THE NOTES BY THE
HOLDERS OF AT LEAST A MAJORITY IN AGGREGATE PRINCIPAL AMOUNT OF THE
NOTES AND A WAIVER OF THE PAYMENT DEFAULT THAT RESULTED FROM SUCH
ACCELERATION);
(E) MAKE ANY NOTE PAYABLE IN MONEY OTHER THAN THAT STATED IN
THE NOTES;
(F) MAKE ANY CHANGE IN THE PROVISIONS OF THIS INDENTURE
RELATING TO WAIVERS OF PAST DEFAULTS OR THE RIGHTS OF HOLDERS OF
NOTES TO RECEIVE PAYMENTS OF PRINCIPAL OF OR PREMIUM, INTEREST OR
LIQUIDATED DAMAGES, IF ANY, ON THE NOTES; OR
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(G) WAIVE A REDEMPTION PAYMENT WITH RESPECT TO ANY NOTE
(OTHER THAN A PAYMENT REQUIRED BY SECTION 3.09, 4.10, OR 4.14
HEREOF); OR
(H) MAKE ANY CHANGE IN THE FOREGOING AMENDMENT AND WAIVER
PROVISIONS.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
EVERY AMENDMENT OR SUPPLEMENT TO THIS INDENTURE AND THE
NOTES SHALL BE SET FORTH IN A AMENDED OR SUPPLEMENTAL INDENTURE THAT
COMPLIES WITH THE TIA AS THEN IN EFFECT.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
UNTIL AN AMENDMENT, SUPPLEMENT OR WAIVER BECOMES
EFFECTIVE, A CONSENT TO IT BY A HOLDER OF A NOTE IS A CONTINUING
CONSENT BY THE HOLDER OF A NOTE AND EVERY SUBSEQUENT HOLDER OF A
NOTE OR PORTION OF A NOTE THAT EVIDENCES THE SAME DEBT AS THE
CONSENTING HOLDER'S NOTE, EVEN IF NOTATION OF THE CONSENT IS NOT
MADE ON ANY NOTE. HOWEVER, ANY SUCH HOLDER OF A NOTE OR SUBSEQUENT
HOLDER OF A NOTE MAY REVOKE THE CONSENT AS TO ITS NOTE IF THE
TRUSTEE RECEIVES WRITTEN NOTICE OF REVOCATION BEFORE THE DATE THE
WAIVER, SUPPLEMENT OR AMENDMENT BECOMES EFFECTIVE. AN AMENDMENT,
SUPPLEMENT OR WAIVER BECOMES EFFECTIVE IN ACCORDANCE WITH ITS TERMS
AND THEREAFTER BINDS EVERY HOLDER.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.
THE TRUSTEE MAY PLACE AN APPROPRIATE NOTATION ABOUT AN
AMENDMENT, SUPPLEMENT OR WAIVER ON ANY NOTE THEREAFTER
AUTHENTICATED. THE COMPANY MAY ISSUE AND THE TRUSTEE SHALL, UPON
RECEIPT OF AN AUTHENTICATION ORDER, AUTHENTICATE NEW NOTES IN
EXCHANGE FOR ALL NOTES THAT REFLECT THE AMENDMENT, SUPPLEMENT OR
WAIVER.
FAILURE TO MAKE THE APPROPRIATE NOTATION OR ISSUE A NEW
NOTE SHALL NOT AFFECT THE VALIDITY AND EFFECT OF SUCH AMENDMENT,
SUPPLEMENT OR WAIVER.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
THE TRUSTEE SHALL SIGN ANY AMENDED OR SUPPLEMENTAL
INDENTURE AUTHORIZED PURSUANT TO THIS ARTICLE 9 IF THE AMENDMENT OR
SUPPLEMENT DOES NOT ADVERSELY AFFECT THE RIGHTS, DUTIES, LIABILITIES
OR IMMUNITIES OF THE TRUSTEE. THE COMPANY MAY NOT SIGN AN AMENDMENT
OR SUPPLEMENTAL INDENTURE UNTIL THE BOARD OF DIRECTORS APPROVES IT.
IN EXECUTING ANY AMENDED OR SUPPLEMENTAL INDENTURE, THE TRUSTEE
SHALL BE ENTITLED TO RECEIVE AND (SUBJECT TO SECTION 7.01 HEREOF)
SHALL BE FULLY PROTECTED IN RELYING UPON, IN ADDITION TO THE
DOCUMENTS REQUIRED BY SECTION 11.04 HEREOF, AN OFFICERS' CERTIFICATE
AND AN OPINION OF COUNSEL STATING THAT THE EXECUTION OF SUCH AMENDED
OR SUPPLEMENTAL INDENTURE IS AUTHORIZED OR PERMITTED BY THIS
INDENTURE.
ARTICLE 10.
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE.
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THE COMPANY AGREES, AND EACH HOLDER BY ACCEPTING A NOTE
AGREES, THAT THE INDEBTEDNESS EVIDENCED BY THE NOTES IS SUBORDINATED
IN RIGHT OF PAYMENT, TO THE EXTENT AND IN THE MANNER PROVIDED IN
THIS ARTICLE 10, TO THE PRIOR PAYMENT IN FULL IN CASH OR CASH
EQUIVALENTS OF ALL SENIOR DEBT OF THE COMPANY (IN EACH CASE, WHETHER
OUTSTANDING ON THE DATE HEREOF OR HEREAFTER CREATED, INCURRED,
ASSUMED OR GUARANTEED), AS APPLICABLE, AND THAT THE SUBORDINATION IS
FOR THE BENEFIT OF THE HOLDERS OF SENIOR DEBT.
SECTION 10.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
UPON ANY DISTRIBUTION TO CREDITORS OF THE COMPANY IN A
LIQUIDATION OR DISSOLUTION OF THE COMPANY OR IN A BANKRUPTCY,
REORGANIZATION, INSOLVENCY, RECEIVERSHIP OR SIMILAR PROCEEDING
RELATING TO THE COMPANY OR ITS PROPERTY, IN AN ASSIGNMENT FOR THE
BENEFIT OF CREDITORS OR ANY MARSHALING OF THE COMPANY'S ASSETS AND
LIABILITIES:
(A) HOLDERS OF SENIOR DEBT OF THE COMPANY SHALL BE ENTITLED
TO RECEIVE PAYMENT IN FULL OF ALL OBLIGATIONS DUE IN RESPECT OF SUCH
SENIOR DEBT (INCLUDING INTEREST AFTER THE COMMENCEMENT OF ANY SUCH
PROCEEDING AT THE RATE SPECIFIED IN THE APPLICABLE SENIOR DEBT)
BEFORE THE HOLDERS OF NOTES SHALL BE ENTITLED TO RECEIVE ANY PAYMENT
WITH RESPECT TO THE NOTES (EXCEPT THAT HOLDERS MAY RECEIVE (I)
PERMITTED JUNIOR SECURITIES AND (II) PAYMENTS AND OTHER
DISTRIBUTIONS MADE FROM ANY DEFEASANCE TRUST CREATED PURSUANT TO
SECTION 8.01 HEREOF); AND
(B) UNTIL ALL OBLIGATIONS WITH RESPECT TO SENIOR DEBT (AS
PROVIDED IN CLAUSE (A) ABOVE) ARE PAID IN FULL, ANY DISTRIBUTION TO
WHICH THE HOLDERS OF NOTES WOULD BE ENTITLED BUT FOR THIS ARTICLE 10
SHALL BE MADE TO HOLDERS OF SENIOR DEBT (EXCEPT THAT HOLDERS OF
NOTES MAY RECEIVE (I) PERMITTED JUNIOR SECURITIES AND (II) PAYMENTS
AND OTHER DISTRIBUTIONS MADE FROM ANY DEFEASANCE TRUST CREATED
PURSUANT TO SECTION 8.01 HEREOF), AS THEIR INTERESTS MAY APPEAR.
SECTION 10.03 DEFAULT ON DESIGNATED SENIOR DEBT.
THE COMPANY SHALL NOT MAKE ANY PAYMENT UPON OR IN
RESPECT OF THE NOTES INCLUDING PURSUANT TO SECTION 3.07, 3.09, 4.10
OR 4.14 HEREOF (OTHER THAN, IN EACH CASE, (I) PERMITTED JUNIOR
SECURITIES AND (II) PAYMENTS AND OTHER DISTRIBUTIONS MADE FROM ANY
DEFEASANCE TRUST CREATED PURSUANT TO SECTION 8.01 HEREOF) IF:
(A) A DEFAULT IN THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM
OR INTEREST ON ANY DESIGNATED SENIOR DEBT OCCURS AND IS CONTINUING
BEYOND ANY APPLICABLE PERIOD OF GRACE; OR
(B) ANY OTHER DEFAULT OCCURS AND IS CONTINUING WITH RESPECT
TO ANY DESIGNATED SENIOR DEBT THAT PERMITS HOLDERS OF THE DESIGNATED
SENIOR DEBT AS TO WHICH SUCH DEFAULT RELATES TO ACCELERATE ITS
MATURITY AND THE TRUSTEE RECEIVES A NOTICE OF DEFAULT (A "PAYMENT
BLOCKAGE NOTICE") FROM THE COMPANY OR THE HOLDERS OF SUCH
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DESIGNATED SENIOR DEBT. IF THE TRUSTEE RECEIVES ANY SUCH PAYMENT
BLOCKAGE NOTICE, NO SUBSEQUENT PAYMENT BLOCKAGE NOTICE SHALL BE
EFFECTIVE FOR PURPOSES OF THIS SECTION UNLESS AND UNTIL 360 DAYS
SHALL HAVE ELAPSED SINCE THE EFFECTIVENESS OF THE IMMEDIATELY PRIOR
PAYMENT BLOCKAGE NOTICE. NO NONPAYMENT DEFAULT THAT EXISTED OR WAS
CONTINUING ON THE DATE OF DELIVERY OF ANY PAYMENT BLOCKAGE NOTICE TO
THE TRUSTEE SHALL BE, OR BE MADE, THE BASIS FOR A SUBSEQUENT PAYMENT
BLOCKAGE NOTICE UNLESS SUCH DEFAULT SHALL HAVE BEEN CURED OR WAIVED
FOR A PERIOD OF AT LEAST 90 DAYS.
THE COMPANY MAY AND SHALL RESUME PAYMENTS ON THE NOTES:
(1) IN THE CASE OF A PAYMENT DEFAULT, UPON THE DATE ON
WHICH SUCH DEFAULT IS CURED OR WAIVED, OR
(2) IN THE CASE OF A NONPAYMENT DEFAULT, THE EARLIER OF
THE DATE ON WHICH SUCH NONPAYMENT DEFAULT IS CURED OR WAIVED OR 180
DAYS AFTER THE DATE ON WHICH THE APPLICABLE PAYMENT BLOCKAGE NOTICE
IS RECEIVED, UNLESS THE MATURITY OF ANY DESIGNATED SENIOR DEBT HAS
BEEN ACCELERATED,
IF THIS ARTICLE 10 OTHERWISE PERMITS THE PAYMENT.
SECTION 10.04 ACCELERATION OF SECURITIES.
IF PAYMENT OF THE NOTES IS ACCELERATED BECAUSE OF AN
EVENT OF DEFAULT, THE COMPANY SHALL PROMPTLY NOTIFY HOLDERS OF
SENIOR DEBT OF THE ACCELERATION.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER.
IN THE EVENT THAT THE TRUSTEE OR ANY HOLDER RECEIVES ANY
PAYMENT OF ANY OBLIGATIONS WITH RESPECT TO THE NOTES AT A TIME WHEN
THE TRUSTEE OR SUCH HOLDER, AS APPLICABLE, HAS ACTUAL KNOWLEDGE THAT
SUCH PAYMENT IS PROHIBITED BY SECTION 10.03 HEREOF, SUCH PAYMENT
SHALL BE HELD BY THE TRUSTEE OR SUCH HOLDER, AS APPLICABLE, IN TRUST
FOR THE BENEFIT OF, AND SHALL BE PAID FORTHWITH OVER AND DELIVERED,
UPON WRITTEN REQUEST, TO, THE HOLDERS OF SENIOR DEBT OF THE COMPANY
AS THEIR INTERESTS MAY APPEAR OR THEIR REPRESENTATIVE UNDER THIS
INDENTURE OR OTHER AGREEMENT (IF ANY) PURSUANT TO WHICH SUCH SENIOR
DEBT MAY HAVE BEEN ISSUED, AS THEIR RESPECTIVE INTERESTS MAY APPEAR,
FOR APPLICATION TO THE PAYMENT OF ALL OBLIGATIONS WITH RESPECT TO
SUCH SENIOR DEBT REMAINING UNPAID TO THE EXTENT NECESSARY TO PAY
SUCH OBLIGATIONS IN FULL IN ACCORDANCE WITH THEIR TERMS, AFTER
GIVING EFFECT TO ANY CONCURRENT PAYMENT OR DISTRIBUTION TO OR FOR
THE HOLDERS OF SUCH SENIOR DEBT.
WITH RESPECT TO THE HOLDERS OF SENIOR DEBT OF THE
COMPANY, THE TRUSTEE UNDERTAKES TO PERFORM ONLY SUCH OBLIGATIONS ON
THE PART OF THE TRUSTEE AS ARE SPECIFICALLY SET FORTH IN THIS
ARTICLE 10, AND NO IMPLIED COVENANTS OR OBLIGATIONS WITH RESPECT TO
THE HOLDERS OF SUCH SENIOR DEBT SHALL BE READ INTO THIS INDENTURE
AGAINST THE TRUSTEE. THE TRUSTEE SHALL NOT BE DEEMED TO OWE ANY
FIDUCIARY DUTY TO THE HOLDERS OF SUCH SENIOR DEBT, AND SHALL NOT BE
LIABLE TO ANY SUCH HOLDERS IF THE TRUSTEE SHALL PAY OVER OR
DISTRIBUTE TO OR ON BEHALF OF HOLDERS OR THE COMPANY OR ANY OTHER
PERSON MONEY OR ASSETS TO WHICH ANY HOLDERS OF SUCH SENIOR DEBT
SHALL BE ENTITLED BY VIRTUE OF THIS ARTICLE 10, EXCEPT IF SUCH
PAYMENT IS MADE AS A RESULT OF THE WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE OF THE TRUSTEE.
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SECTION 10.06 NOTICE BY COMPANY.
THE COMPANY SHALL PROMPTLY NOTIFY THE TRUSTEE AND THE
PAYING AGENT OF ANY FACTS KNOWN TO IT THAT WOULD CAUSE A PAYMENT OF
ANY OBLIGATIONS WITH RESPECT TO THE NOTES TO VIOLATE THIS ARTICLE
10, BUT FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE
SUBORDINATION OF THE NOTES TO THE SENIOR DEBT OF THE COMPANY AS
PROVIDED IN THIS ARTICLE 10.
SECTION 10.07 SUBROGATION.
AFTER ALL SENIOR DEBT OF THE COMPANY IS PAID IN FULL AND
UNTIL THE NOTES ARE PAID IN FULL, HOLDERS OF NOTES SHALL BE
SUBROGATED (EQUALLY AND RATABLY WITH ALL OTHER INDEBTEDNESS PARI
PASSU WITH THE NOTES) TO THE RIGHTS OF HOLDERS OF SUCH SENIOR DEBT
TO RECEIVE DISTRIBUTIONS APPLICABLE TO SUCH SENIOR DEBT TO THE
EXTENT THAT DISTRIBUTIONS OTHERWISE PAYABLE TO THE HOLDERS OF NOTES
HAVE BEEN APPLIED TO THE PAYMENT OF SUCH SENIOR DEBT. A DISTRIBUTION
MADE UNDER THIS ARTICLE 10 TO HOLDERS OF SENIOR DEBT OF THE COMPANY
THAT OTHERWISE WOULD HAVE BEEN MADE TO HOLDERS OF NOTES IS NOT, AS
BETWEEN THE COMPANY AND HOLDERS, A PAYMENT BY THE COMPANY ON THE
NOTES.
SECTION 10.08 RELATIVE RIGHTS.
THIS ARTICLE 10 DEFINES THE RELATIVE RIGHTS OF HOLDERS
OF NOTES AND HOLDERS OF SENIOR DEBT OF THE COMPANY. NOTHING IN THIS
INDENTURE SHALL:
(1) IMPAIR, AS BETWEEN THE COMPANY AND HOLDERS OF NOTES,
THE OBLIGATION OF THE COMPANY, WHICH IS ABSOLUTE AND UNCONDITIONAL,
TO PAY PRINCIPAL OF AND INTEREST ON THE NOTES IN ACCORDANCE WITH
THEIR TERMS;
(2) AFFECT THE RELATIVE RIGHTS OF HOLDERS OF NOTES AND
CREDITORS OF THE COMPANY OTHER THAN THEIR RIGHTS IN RELATION TO
HOLDERS OF SENIOR DEBT OF THE COMPANY; OR
(3) PREVENT THE TRUSTEE OR ANY HOLDER OF NOTES FROM
EXERCISING ITS AVAILABLE REMEDIES UPON A DEFAULT OR EVENT OF
DEFAULT, SUBJECT TO THE RIGHTS OF HOLDERS AND OWNERS OF SENIOR DEBT
OF THE COMPANY TO RECEIVE DISTRIBUTIONS AND PAYMENTS OTHERWISE
PAYABLE TO HOLDERS OF NOTES.
IF THE COMPANY FAILS BECAUSE OF THIS ARTICLE 10 TO PAY
PRINCIPAL OF OR INTEREST ON A NOTE ON THE DUE DATE, THE FAILURE IS
STILL A DEFAULT OR EVENT OF DEFAULT.
SECTION 10.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
NO RIGHT OF ANY HOLDER OF SENIOR DEBT OF THE COMPANY TO
ENFORCE THE SUBORDINATION OF THE INDEBTEDNESS EVIDENCED BY THE NOTES
SHALL BE IMPAIRED BY ANY ACT OR FAILURE TO ACT BY THE COMPANY OR ANY
HOLDER OR BY THE FAILURE OF THE COMPANY OR ANY HOLDER TO COMPLY WITH
THIS INDENTURE.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
67
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WHENEVER A DISTRIBUTION IS TO BE MADE OR A NOTICE GIVEN
TO HOLDERS OF SENIOR DEBT OF THE COMPANY THE DISTRIBUTION MAY BE
MADE AND THE NOTICE GIVEN TO THEIR REPRESENTATIVE.
UPON ANY PAYMENT OR DISTRIBUTION OF ASSETS OF THE
COMPANY REFERRED TO IN THIS ARTICLE 10, THE TRUSTEE AND THE HOLDERS
OF NOTES SHALL BE ENTITLED TO RELY UPON ANY ORDER OR DECREE MADE BY
ANY COURT OF COMPETENT JURISDICTION OR UPON ANY CERTIFICATE OF SUCH
REPRESENTATIVE OR OF THE LIQUIDATING TRUSTEE OR AGENT OR OTHER
PERSON MAKING ANY DISTRIBUTION TO THE TRUSTEE OR TO THE HOLDERS OF
NOTES FOR THE PURPOSE OF ASCERTAINING THE PERSONS ENTITLED TO
PARTICIPATE IN SUCH DISTRIBUTION, THE HOLDERS OF THE SENIOR DEBT OF
THE COMPANY AND OTHER INDEBTEDNESS OF THE COMPANY, THE AMOUNT
THEREOF OR PAYABLE THEREON, THE AMOUNT OR AMOUNTS PAID OR
DISTRIBUTED THEREON AND ALL OTHER FACTS PERTINENT THERETO OR TO THIS
ARTICLE 10.
SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
NOTWITHSTANDING THE PROVISIONS OF THIS ARTICLE 10 OR ANY
OTHER PROVISION OF THIS INDENTURE, THE TRUSTEE SHALL NOT BE CHARGED
WITH KNOWLEDGE OF THE EXISTENCE OF ANY FACTS THAT WOULD PROHIBIT THE
MAKING OF ANY PAYMENT OR DISTRIBUTION BY THE TRUSTEE, AND THE
TRUSTEE AND THE PAYING AGENT MAY CONTINUE TO MAKE PAYMENTS ON THE
NOTES, UNLESS THE TRUSTEE SHALL HAVE RECEIVED AT ITS CORPORATE TRUST
OFFICE AT LEAST FIVE BUSINESS DAYS PRIOR TO THE DATE OF SUCH PAYMENT
WRITTEN NOTICE OF FACTS THAT WOULD CAUSE THE PAYMENT OF ANY
OBLIGATIONS WITH RESPECT TO THE NOTES TO VIOLATE THIS ARTICLE 10.
ONLY THE COMPANY, A HOLDER OF SENIOR DEBT OR A REPRESENTATIVE MAY
GIVE THE NOTICE.; PROVIDED, HOWEVER, THAT IF THE HOLDERS OF ANY
SENIOR DEBT HAVE A REPRESENTATIVE, ONLY THE REPRESENTATIVE MAY GIVE
SUCH NOTICE. NOTHING IN THIS ARTICLE 10 SHALL IMPAIR THE CLAIMS OF,
OR PAYMENTS TO, THE TRUSTEE UNDER OR PURSUANT TO SECTION 7.07
HEREOF.
THE TRUSTEE IN ITS INDIVIDUAL OR ANY OTHER CAPACITY MAY
HOLD SENIOR DEBT OF THE COMPANY WITH THE SAME RIGHTS IT WOULD HAVE
IF IT WERE NOT TRUSTEE. ANY AGENT MAY DO THE SAME WITH LIKE RIGHTS.
SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION.
EACH HOLDER OF NOTES, BY THE HOLDER'S ACCEPTANCE
THEREOF, AUTHORIZES AND DIRECTS THE TRUSTEE ON SUCH HOLDER'S BEHALF
TO TAKE SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE TO EFFECTUATE
THE SUBORDINATION AS PROVIDED IN THIS ARTICLE 10, AND APPOINTS THE
TRUSTEE TO ACT AS SUCH HOLDER'S ATTORNEY-IN-FACT FOR ANY AND ALL
SUCH PURPOSES. IF THE TRUSTEE DOES NOT FILE A PROPER PROOF OF CLAIM
OR PROOF OF DEBT IN THE FORM REQUIRED IN ANY PROCEEDING REFERRED TO
IN SECTION 6.09 HEREOF AT LEAST 30 DAYS BEFORE THE EXPIRATION OF THE
TIME TO FILE SUCH CLAIM, A REPRESENTATIVE OF DESIGNATED SENIOR DEBT
IS HEREBY AUTHORIZED TO FILE AN APPROPRIATE CLAIM FOR AND ON BEHALF
OF THE HOLDERS OF THE NOTES.
SECTION 10.13 AMENDMENTS.
THE PROVISIONS OF THIS ARTICLE 10 SHALL NOT BE AMENDED
OR MODIFIED WITHOUT THE WRITTEN CONSENT OF THE HOLDERS OF ALL SENIOR
DEBT OF THE COMPANY.
ARTICLE 11.
MISCELLANEOUS
68
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SECTION 11.01 TRUST INDENTURE ACT CONTROLS.
IF ANY PROVISION OF THIS INDENTURE LIMITS, QUALIFIES OR
CONFLICTS WITH THE DUTIES IMPOSED BY TIA SS. 318(C), THE IMPOSED
DUTIES SHALL CONTROL.
SECTION 11.02 NOTICES.
ANY NOTICE OR COMMUNICATION BY THE COMPANY OR THE
TRUSTEE TO THE OTHERS IS DULY GIVEN IF IN WRITING AND DELIVERED IN
PERSON OR MAILED BY FIRST CLASS MAIL (REGISTERED OR CERTIFIED,
RETURN RECEIPT REQUESTED), TELEX, TELECOPIER OR OVERNIGHT AIR
COURIER GUARANTEEING NEXT DAY DELIVERY, TO THE OTHERS' ADDRESS
IF TO THE COMPANY:
MASTEC, INC.
3155 N.W. 77TH AVENUE
SUITE 300
MIAMI, FLORIDA 33122-1205
TELECOPIER NO.: (305) 406-1908
ATTENTION: CHIEF FINANCIAL OFFICER
AND
TELECOPIER NO.: (305) 406-1907
ATTENTION: LEGAL DEPARTMENT
WITH A COPY TO:
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
2200 MUSEUM TOWER BUILDING
150 WEST FLAGLER STREET
MIAMI, FLORIDA 33130
TELECOPIER NO.: (305) 789-3395
ATTENTION: STEVEN D. RUBIN
69
<PAGE>
IF TO THE TRUSTEE:
FIRST TRUST NATIONAL ASSOCIATION
180 EAST FIFTH STREET
ST. PAUL, MINNESOTA
TELECOPIER NO.: (612) 244-0711
ATTENTION: CORPORATE TRUST ADMINISTRATION
THE COMPANY OR THE TRUSTEE, BY NOTICE TO THE OTHERS MAY DESIGNATE
ADDITIONAL OR DIFFERENT ADDRESSES FOR SUBSEQUENT NOTICES OR COMMUNICATIONS.
ALL NOTICES AND COMMUNICATIONS (OTHER THAN THOSE SENT TO HOLDERS)
SHALL BE DEEMED TO HAVE BEEN DULY GIVEN: AT THE TIME DELIVERED BY HAND, IF
PERSONALLY DELIVERED; FIVE BUSINESS DAYS AFTER BEING DEPOSITED IN THE MAIL,
POSTAGE PREPAID, IF MAILED; WHEN ANSWERED BACK, IF TELEXED; WHEN RECEIPT
ACKNOWLEDGED, IF TELECOPIED; AND THE NEXT BUSINESS DAY AFTER TIMELY DELIVERY TO
THE COURIER, IF SENT BY OVERNIGHT AIR COURIER GUARANTEEING NEXT DAY DELIVERY.
ANY NOTICE OR COMMUNICATION TO A HOLDER SHALL BE MAILED BY FIRST
CLASS MAIL, CERTIFIED OR REGISTERED, RETURN RECEIPT REQUESTED, OR BY OVERNIGHT
AIR COURIER GUARANTEEING NEXT DAY DELIVERY TO ITS ADDRESS SHOWN ON THE REGISTER
KEPT BY THE REGISTRAR. ANY NOTICE OR COMMUNICATION SHALL ALSO BE SO MAILED TO
ANY PERSON DESCRIBED IN TIA SS. 313(C), TO THE EXTENT REQUIRED BY THE TIA.
FAILURE TO MAIL A NOTICE OR COMMUNICATION TO A HOLDER OR ANY DEFECT IN IT SHALL
NOT AFFECT ITS SUFFICIENCY WITH RESPECT TO OTHER HOLDERS.
IF A NOTICE OR COMMUNICATION IS MAILED IN THE MANNER PROVIDED ABOVE
WITHIN THE TIME PRESCRIBED, IT IS DULY GIVEN, WHETHER OR NOT THE ADDRESSEE
RECEIVES IT.
IF THE COMPANY MAILS A NOTICE OR COMMUNICATION TO HOLDERS, IT SHALL
MAIL A COPY TO THE TRUSTEE AND EACH AGENT AT THE SAME TIME.
SECTION 11.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
HOLDERS MAY COMMUNICATE PURSUANT TO TIA SS. 312(B) WITH OTHER
HOLDERS WITH RESPECT TO THEIR RIGHTS UNDER THIS INDENTURE OR THE NOTES. THE
COMPANY, THE TRUSTEE, THE REGISTRAR AND ANYONE ELSE SHALL HAVE THE PROTECTION OF
TIA SS. 312(C).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
UPON ANY REQUEST OR APPLICATION BY THE COMPANY TO THE TRUSTEE TO
TAKE ANY ACTION UNDER THIS INDENTURE, THE COMPANY SHALL FURNISH TO THE TRUSTEE:
(A) AN OFFICERS' CERTIFICATE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE TRUSTEE (WHICH SHALL INCLUDE THE STATEMENTS SET FORTH IN
SECTION 11.05 HEREOF) STATING THAT, IN THE OPINION
70
<PAGE>
OF THE SIGNERS, ALL CONDITIONS PRECEDENT AND COVENANTS, IF ANY, PROVIDED FOR IN
THIS INDENTURE RELATING TO THE PROPOSED ACTION HAVE BEEN SATISFIED; AND
(B) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE TRUSTEE (WHICH SHALL INCLUDE THE STATEMENTS SET FORTH IN
SECTION 11.05 HEREOF) STATING THAT, IN THE OPINION OF SUCH COUNSEL, ALL SUCH
CONDITIONS PRECEDENT AND COVENANTS HAVE BEEN SATISFIED.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
EACH CERTIFICATE OR OPINION WITH RESPECT TO COMPLIANCE WITH A
CONDITION OR COVENANT PROVIDED FOR IN THIS INDENTURE (OTHER THAN A CERTIFICATE
PROVIDED PURSUANT TO TIA SS. 314(A)(4)) SHALL COMPLY WITH THE PROVISIONS OF TIA
SS. 314(E) AND SHALL INCLUDE:
(A) A STATEMENT THAT THE PERSON MAKING SUCH CERTIFICATE OR OPINION
HAS READ SUCH COVENANT OR CONDITION;
(B) A BRIEF STATEMENT AS TO THE NATURE AND SCOPE OF THE EXAMINATION
OR INVESTIGATION UPON WHICH THE STATEMENTS OR OPINIONS CONTAINED IN SUCH
CERTIFICATE OR OPINION ARE BASED;
(C) A STATEMENT THAT, IN THE OPINION OF SUCH PERSON, HE OR SHE HAS
MADE SUCH EXAMINATION OR INVESTIGATION AS IS NECESSARY TO ENABLE HIM TO EXPRESS
AN INFORMED OPINION AS TO WHETHER OR NOT SUCH COVENANT OR CONDITION HAS BEEN
SATISFIED; AND
(D) A STATEMENT AS TO WHETHER OR NOT, IN THE OPINION OF SUCH PERSON,
SUCH CONDITION OR COVENANT HAS BEEN SATISFIED.
SECTION 11.06 RULES BY TRUSTEE AND AGENTS.
THE TRUSTEE MAY MAKE REASONABLE RULES FOR ACTION BY OR AT A MEETING
OF HOLDERS. THE REGISTRAR OR PAYING AGENT MAY MAKE REASONABLE RULES AND SET
REASONABLE REQUIREMENTS FOR ITS FUNCTIONS.
SECTION 11.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
NO DIRECTOR, OFFICER, EMPLOYEE, INCORPORATOR OR STOCKHOLDER OF THE
COMPANY AS SUCH, SHALL HAVE ANY LIABILITY FOR ANY OBLIGATIONS OF THE COMPANY
UNDER THE NOTES, OR THIS INDENTURE OR FOR ANY CLAIM BASED ON, IN RESPECT OF, OR
BY REASON OF, SUCH OBLIGATIONS OR THEIR CREATION. EACH HOLDER BY ACCEPTING A
NOTE WAIVES AND RELEASES ALL SUCH LIABILITY. THE WAIVER AND RELEASE ARE PART OF
THE CONSIDERATION FOR ISSUANCE OF THE NOTES.
SECTION 11.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
71
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SECTION 11.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
THIS INDENTURE MAY NOT BE USED TO INTERPRET ANY OTHER INDENTURE,
LOAN OR DEBT AGREEMENT OF THE COMPANY OR ITS SUBSIDIARIES OR OF ANY OTHER
PERSON. ANY SUCH INDENTURE, LOAN OR DEBT AGREEMENT MAY NOT BE USED TO INTERPRET
THIS INDENTURE.
SECTION 11.10 SUCCESSORS.
ALL AGREEMENTS OF THE COMPANY IN THIS INDENTURE AND THE NOTES SHALL
BIND ITS SUCCESSORS. ALL AGREEMENTS OF THE TRUSTEE IN THIS INDENTURE SHALL BIND
ITS SUCCESSORS.
SECTION 11.11 SEVERABILITY.
IN CASE ANY PROVISION IN THIS INDENTURE AND THE NOTES SHALL BE
INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF
THE REMAINING PROVISIONS SHALL NOT IN ANY WAY BE AFFECTED OR IMPAIRED THEREBY.
SECTION 11.12 COUNTERPART ORIGINALS.
THE PARTIES MAY SIGN ANY NUMBER OF COPIES OF THIS INDENTURE. EACH
SIGNED COPY SHALL BE AN ORIGINAL, BUT ALL OF THEM TOGETHER REPRESENT THE SAME
AGREEMENT.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
THE TABLE OF CONTENTS, CROSS-REFERENCE TABLE AND HEADINGS OF THE
ARTICLES AND SECTIONS OF THIS INDENTURE HAVE BEEN INSERTED FOR CONVENIENCE OF
REFERENCE ONLY, ARE NOT TO BE CONSIDERED A PART OF THIS INDENTURE AND SHALL IN
NO WAY MODIFY OR RESTRICT ANY OF THE TERMS OR PROVISIONS HEREOF.
[SIGNATURES ON FOLLOWING PAGE]
72
<PAGE>
SIGNATURES
DATED AS OF FEBRUARY 4, 1998
MASTEC, INC.
BY:
NAME:
TITLE
FIRST TRUST NATIONAL ASSOCIATION,
AS TRUSTEE
BY:
NAME: RICHARD H. PROKOSCH
TITLE: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT A
(FACE OF GLOBAL NOTE)
CUSIP
7 3/4% SERIES A SENIOR SUBORDINATED NOTES DUE 2008
NO. $
MASTEC, INC.
PROMISES TO PAY TO
OR REGISTERED ASSIGNS,
THE PRINCIPAL SUM OF
DOLLARS ON __________, 2008.
INTEREST PAYMENT DATES: AUGUST 1 AND FEBRUARY 1
RECORD DATES: JULY 15 AND JANUARY 15
DATED: _________, 1998
MASTEC, INC.
BY:
NAME
TITLE:
BY:
NAME:
TITLE:
THIS IS ONE OF THE GLOBAL NOTES REFERRED TO
IN THE WITHIN-MENTIONED INDENTURE:
A-1
<PAGE>
FIRST TRUST NATIONAL ASSOCIATION,
AS TRUSTEE
BY: _____________________________
A-2
<PAGE>
(BACK OF NOTE)
7 3/4% SERIES A SENIOR SUBORDINATED NOTES DUE 2008
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF U.S. PERSONS,
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.
CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANINGS ASSIGNED TO
THEM IN THE INDENTURE REFERRED TO BELOW UNLESS OTHERWISE INDICATED.
A-3
<PAGE>
1. INTEREST. MASTEC, INC., A DELAWARE CORPORATION (THE "COMPANY"),
PROMISES TO PAY INTEREST ON THE PRINCIPAL AMOUNT OF THIS NOTE AT 7 3/4% PER
ANNUM FROM FEBRUARY 4, 1998 UNTIL MATURITY AND SHALL PAY THE LIQUIDATED DAMAGES
PAYABLE PURSUANT TO SECTION 5 OF THE REGISTRATION RIGHTS AGREEMENT REFERRED TO
BELOW. THE COMPANY WILL PAY INTEREST AND LIQUIDATED DAMAGES SEMI-ANNUALLY ON
AUGUST 1 AND FEBRUARY 1 OF EACH YEAR, OR IF ANY SUCH DAY IS NOT A BUSINESS DAY,
ON THE NEXT SUCCEEDING BUSINESS DAY (EACH AN "INTEREST PAYMENT DATE"). INTEREST
ON THE NOTES WILL ACCRUE FROM THE MOST RECENT DATE TO WHICH INTEREST HAS BEEN
PAID OR, IF NO INTEREST HAS BEEN PAID, FROM THE DATE OF ISSUANCE; PROVIDED THAT
IF THERE IS NO EXISTING DEFAULT IN THE PAYMENT OF INTEREST, AND IF THIS NOTE IS
AUTHENTICATED BETWEEN A RECORD DATE REFERRED TO ON THE FACE HEREOF AND THE NEXT
SUCCEEDING INTEREST PAYMENT DATE, INTEREST SHALL ACCRUE FROM SUCH NEXT
SUCCEEDING INTEREST PAYMENT DATE; PROVIDED, FURTHER, THAT THE FIRST INTEREST
PAYMENT DATE SHALL BE AUGUST 1, 1998. THE COMPANY SHALL PAY INTEREST (INCLUDING
POST-PETITION INTEREST IN ANY PROCEEDING UNDER ANY BANKRUPTCY LAW) ON OVERDUE
PRINCIPAL AND PREMIUM, IF ANY, FROM TIME TO TIME ON DEMAND AT THE RATE THEN IN
EFFECT; IT SHALL PAY INTEREST (INCLUDING POST-PETITION INTEREST IN ANY
PROCEEDING UNDER ANY BANKRUPTCY LAW) ON OVERDUE INSTALLMENTS OF INTEREST AND
LIQUIDATED DAMAGES (WITHOUT REGARD TO ANY APPLICABLE GRACE PERIODS) FROM TIME TO
TIME ON DEMAND AT THE SAME RATE TO THE EXTENT LAWFUL. INTEREST WILL BE COMPUTED
ON THE BASIS OF A 360-DAY YEAR OF TWELVE 30-DAY MONTHS.
2. METHOD OF PAYMENT. THE COMPANY WILL PAY INTEREST ON THE NOTES
(EXCEPT DEFAULTED INTEREST) AND LIQUIDATED DAMAGES TO THE PERSONS WHO ARE
REGISTERED HOLDERS OF NOTES AT THE CLOSE OF BUSINESS ON THE JULY 15 OR JANUARY
15 NEXT PRECEDING THE INTEREST PAYMENT DATE, EVEN IF SUCH NOTES ARE CANCELED
AFTER SUCH RECORD DATE AND ON OR BEFORE SUCH INTEREST PAYMENT DATE, EXCEPT AS
PROVIDED IN SECTION 2.12 OF THE INDENTURE WITH RESPECT TO DEFAULTED INTEREST.
THE NOTES WILL BE PAYABLE AS TO PRINCIPAL, PREMIUM AND LIQUIDATED DAMAGES, IF
ANY, AND INTEREST AT THE OFFICE OR AGENCY OF THE COMPANY MAINTAINED FOR SUCH
PURPOSE WITHIN OR WITHOUT THE CITY AND STATE OF NEW YORK, OR, AT THE OPTION OF
THE COMPANY, PAYMENT OF INTEREST AND LIQUIDATED DAMAGES MAY BE MADE BY CHECK
MAILED TO THE HOLDERS AT THEIR ADDRESSES SET FORTH IN THE REGISTER OF HOLDERS;
PROVIDED THAT ALL PAYMENT OF PRINCIPAL, PREMIUM, INTEREST AND LIQUIDATED
DAMAGES, IF ANY, WITH RESPECT TO NOTES THE HOLDERS OF WHICH HAVE GIVEN WIRE
TRANSFER INSTRUCTIONS TO THE TRUSTEE WILL BE REQUIRED TO BE MADE BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO THE ACCOUNTS SPECIFIED BY THE HOLDERS
THEREOF. SUCH PAYMENT SHALL BE IN SUCH COIN OR CURRENCY OF THE UNITED STATES OF
AMERICA AS AT THE TIME OF PAYMENT IS LEGAL TENDER FOR PAYMENT OF PUBLIC AND
PRIVATE DEBTS.
3. PAYING AGENT AND REGISTRAR. INITIALLY, FIRST TRUST NATIONAL
ASSOCIATION, THE TRUSTEE UNDER THE INDENTURE, WILL ACT AS PAYING AGENT AND
REGISTRAR. THE COMPANY MAY CHANGE ANY PAYING AGENT OR REGISTRAR WITHOUT NOTICE
TO ANY HOLDER. THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY ACT IN ANY SUCH
CAPACITY.
4. INDENTURE. THE COMPANY ISSUED THE NOTES UNDER AN INDENTURE DATED
AS OF JANUARY 4, 1998 (THE "INDENTURE") AMONG THE COMPANY AND THE TRUSTEE. THE
TERMS OF THE NOTES INCLUDE THOSE STATED IN THE INDENTURE AND THOSE MADE PART OF
THE INDENTURE BY REFERENCE TO THE TRUST INDENTURE ACT OF 1939, AS AMENDED (15
U.S. CODE SS.SS. 77AAA-77BBBB) (THE "TIA"). THE NOTES ARE SUBJECT TO ALL SUCH
TERMS, AND HOLDERS ARE REFERRED TO THE INDENTURE AND THE TIA FOR A STATEMENT OF
SUCH TERMS. TO THE EXTENT ANY PROVISION OF THIS NOTE CONFLICTS WITH THE EXPRESS
PROVISIONS OF THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL GOVERN AND BE
CONTROLLING. THE NOTES ARE GENERAL, UNSECURED OBLIGATIONS OF THE COMPANY LIMITED
TO $250.0 MILLION, OF WHICH $150.0 MILLION WILL BE ISSUED ON THE CLOSING DATE.
5. OPTIONAL REDEMPTION.
(A) EXCEPT AS SET FORTH IN SUBPARAGRAPH (B) OF THIS PARAGRAPH 5, THE
NOTES SHALL NOT BE REDEEMABLE AT THE COMPANY'S OPTION PRIOR TO FEBRUARY 1, 2003.
THEREAFTER, THE NOTES SHALL BE SUBJECT TO REDEMPTION AT ANY TIME AT THE OPTION
OF THE COMPANY, IN WHOLE OR IN PART, UPON NOT LESS THAN 30 NOR MORE THAN 60
DAYS' NOTICE, AT THE REDEMPTION PRICES (EXPRESSED AS PERCENTAGES OF PRINCIPAL
AMOUNT) SET FORTH BELOW, PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED
DAMAGES, IF ANY, THEREON TO
A-4
<PAGE>
THE APPLICABLE REDEMPTION DATE, IF REDEEMED DURING THE TWELVE-MONTH PERIOD
BEGINNING ON FEBRUARY 1 OF THE YEARS INDICATED BELOW:
YEAR PERCENTAGE
- ---- ----------
2003..................................... 103.875%
2004..................................... 102.583%
2005..................................... 101.292%
2006 AND THEREAFTER...................... 100.0
00%
(B) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (A) OF THIS
PARAGRAPH 5, PRIOR TO FEBRUARY 1, 2003, THE COMPANY MAY REDEEM UP TO ONE-THIRD
OF THE AGGREGATE PRINCIPAL AMOUNT OF NOTES AT A REDEMPTION PRICE OF 107.750% OF
THE PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED
DAMAGES, IF ANY, THEREON TO THE REDEMPTION DATE, WITH THE NET CASH PROCEEDS OF
AN OFFERING OF EQUITY INTERESTS (OTHER THAN DISQUALIFIED STOCK) OF THE COMPANY;
PROVIDED THAT (I) AT LEAST $133.3 MILLION IN PRINCIPAL AMOUNT OF NOTES
ORIGINALLY ISSUED UNDER THE INDENTURE REMAINS OUTSTANDING IMMEDIATELY AFTER THE
OCCURRENCE OF SUCH REDEMPTION AND (II) SUCH REDEMPTION SHALL OCCUR WITHIN 90
DAYS OF THE DATE OF THE CONSUMMATION OF SUCH OFFERING.
6. MANDATORY REDEMPTION.
EXCEPT AS SET FORTH IN PARAGRAPH 7 BELOW, THE COMPANY SHALL NOT BE
REQUIRED TO MAKE MANDATORY REDEMPTION PAYMENTS WITH RESPECT TO THE NOTES.
7. REPURCHASE AT OPTION OF HOLDER.
(A) UPON THE OCCURRENCE OF A CHANGE OF CONTROL, THE COMPANY SHALL BE
OBLIGATED TO MAKE AN OFFER (A "CHANGE OF CONTROL OFFER") TO EACH HOLDER OF NOTES
TO REPURCHASE ALL OR ANY PART (EQUAL TO $1,000 OR AN INTEGRAL MULTIPLE THEREOF)
OF SUCH HOLDER'S NOTES AT AN OFFER PRICE IN CASH EQUAL TO 101% OF THE PRINCIPAL
AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED DAMAGES, IF ANY,
THEREON TO THE DATE OF PURCHASE (THE "CHANGE OF CONTROL PAYMENT"). WITHIN 30
DAYS FOLLOWING A CHANGE OF CONTROL, THE COMPANY SHALL MAIL A NOTICE TO EACH
HOLDER SETTING FORTH THE PROCEDURES GOVERNING THE CHANGE OF CONTROL OFFER AS
REQUIRED BY THE INDENTURE.
(B) IF THE COMPANY OR ANY OF ITS RESTRICTED SUBSIDIARIES CONSUMMATES
AN ASSET SALE, PROMPTLY AFTER EACH DATE ON WHICH THE AGGREGATE AMOUNT OF EXCESS
PROCEEDS EXCEEDS $10.0 MILLION, THE COMPANY SHALL COMMENCE AN OFFER TO ALL
HOLDERS OF NOTES (AN "ASSET SALE OFFER") PURSUANT TO SECTION 3.09 OF THE
INDENTURE TO PURCHASE THE MAXIMUM PRINCIPAL AMOUNT OF NOTES THAT MAY BE
PURCHASED OUT OF THE EXCESS PROCEEDS AT AN OFFER PRICE IN CASH IN AN AMOUNT
EQUAL TO 100% OF THE PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST
AND LIQUIDATED DAMAGES, IF ANY, THEREON TO THE DATE OF PURCHASE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE INDENTURE. TO THE EXTENT THAT THE AGGREGATE
AMOUNT OF NOTES TENDERED PURSUANT TO AN ASSET SALE OFFER IS LESS THAN THE EXCESS
PROCEEDS, THE COMPANY MAY USE ANY REMAINING EXCESS PROCEEDS FOR GENERAL
CORPORATE PURPOSES. IF THE AGGREGATE PRINCIPAL AMOUNT OF NOTES SURRENDERED BY
HOLDERS THEREOF EXCEEDS THE AMOUNT OF EXCESS PROCEEDS, THE TRUSTEE SHALL SELECT
THE NOTES TO BE PURCHASED ON A PRO RATA BASIS. HOLDERS OF NOTES THAT ARE THE
SUBJECT OF AN OFFER TO PURCHASE WILL RECEIVE AN ASSET SALE OFFER FROM THE
COMPANY PRIOR TO ANY RELATED PURCHASE DATE AND MAY ELECT TO HAVE SUCH NOTES
PURCHASED BY COMPLETING THE FORM ENTITLED "OPTION OF HOLDER TO ELECT PURCHASE"
ON THE REVERSE OF THE NOTES.
A-5
<PAGE>
8. NOTICE OF REDEMPTION. NOTICE OF REDEMPTION WILL BE MAILED BY
FIRST CLASS MAIL AT LEAST 30 DAYS BUT NOT MORE THAN 60 DAYS BEFORE THE
REDEMPTION DATE TO EACH HOLDER OF NOTES TO BE REDEEMED AT ITS REGISTERED
ADDRESS. NOTES IN DENOMINATIONS LARGER THAN $1,000 MAY BE REDEEMED IN PART BUT
ONLY IN WHOLE MULTIPLES OF $1,000, UNLESS ALL OF THE NOTES HELD BY A HOLDER ARE
TO BE REDEEMED. ON AND AFTER THE REDEMPTION DATE INTEREST CEASES TO ACCRUE ON
NOTES OR PORTIONS THEREOF CALLED FOR REDEMPTION.
9. DENOMINATIONS, TRANSFER, EXCHANGE. THE NOTES ARE IN REGISTERED
FORM WITHOUT COUPONS IN DENOMINATIONS OF $1,000 AND INTEGRAL MULTIPLES OF
$1,000. THE TRANSFER OF NOTES MAY BE REGISTERED AND NOTES MAY BE EXCHANGED AS
PROVIDED IN THE INDENTURE. THE REGISTRAR AND THE TRUSTEE MAY REQUIRE A HOLDER,
AMONG OTHER THINGS, TO FURNISH APPROPRIATE ENDORSEMENTS AND TRANSFER DOCUMENTS
AND THE COMPANY MAY REQUIRE A HOLDER TO PAY ANY TAXES AND FEES REQUIRED BY LAW
OR PERMITTED BY THE INDENTURE. THE COMPANY NEED NOT EXCHANGE OR REGISTER THE
TRANSFER OF ANY NOTE OR PORTION OF A NOTE SELECTED FOR REDEMPTION, EXCEPT FOR
THE UNREDEEMED PORTION OF ANY NOTE BEING REDEEMED IN PART. ALSO, THE COMPANY
NEED NOT EXCHANGE OR REGISTER THE TRANSFER OF ANY NOTES FOR A PERIOD OF 15 DAYS
BEFORE A SELECTION OF NOTES TO BE REDEEMED OR DURING THE PERIOD BETWEEN A RECORD
DATE AND THE CORRESPONDING INTEREST PAYMENT DATE.
10. SUBORDINATION. EACH HOLDER BY ACCEPTING A NOTE AGREES THAT THE
PAYMENT OF PRINCIPAL OF AND PREMIUM, INTEREST AND LIQUIDATED DAMAGES, IF ANY, ON
EACH NOTE IS SUBORDINATED IN RIGHT OF PAYMENT, TO THE EXTENT AND IN THE MANNER
PROVIDED IN ARTICLE 10 OF THE INDENTURE, TO THE PRIOR PAYMENT IN FULL OF ALL
SENIOR DEBT OF THE COMPANY (WHETHER OUTSTANDING ON THE DATE OF THE INDENTURE OR
THEREAFTER INCURRED, ASSUMED OR GUARANTEED), AND THE SUBORDINATION IS FOR THE
BENEFIT OF THE HOLDERS OF SUCH SENIOR DEBT.
11. PERSONS DEEMED OWNERS. THE REGISTERED HOLDER OF A NOTE MAY BE
TREATED AS ITS OWNER FOR ALL PURPOSES.
12. AMENDMENT, SUPPLEMENT AND WAIVER. SUBJECT TO CERTAIN EXCEPTIONS,
THE INDENTURE OR THE NOTES MAY BE AMENDED OR SUPPLEMENTED WITH THE CONSENT OF
THE HOLDERS OF AT LEAST A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN
OUTSTANDING, AND ANY EXISTING DEFAULT OR COMPLIANCE WITH ANY PROVISION OF THE
INDENTURE OR THE NOTES MAY BE WAIVED WITH THE CONSENT OF THE HOLDERS OF A
MAJORITY IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES. WITHOUT THE CONSENT
OF ANY HOLDER OF NOTES, THE COMPANY AND THE TRUSTEE MAY AMEND OR SUPPLEMENT THE
INDENTURE OR THE NOTES TO CURE ANY AMBIGUITY, DEFECT OR INCONSISTENCY, TO
PROVIDE FOR UNCERTIFICATED NOTES IN ADDITION TO OR IN PLACE OF CERTIFICATED
NOTES, TO PROVIDE FOR THE ASSUMPTION OF THE COMPANY'S OBLIGATIONS TO HOLDERS OF
THE NOTES IN CASE OF A MERGER OR CONSOLIDATION, TO MAKE ANY CHANGE THAT WOULD
PROVIDE ANY ADDITIONAL RIGHTS OR BENEFITS TO THE HOLDERS OF THE NOTES OR THAT
DOES NOT ADVERSELY AFFECT THE LEGAL RIGHTS UNDER THE INDENTURE OF ANY SUCH
HOLDER, OR TO COMPLY WITH THE REQUIREMENTS OF THE SEC IN ORDER TO EFFECT OR
MAINTAIN THE QUALIFICATION OF THE INDENTURE UNDER THE TIA.
13. DEFAULTS AND REMEDIES. EVENTS OF DEFAULT INCLUDE: (I) DEFAULT
FOR 30 DAYS IN THE PAYMENT WHEN DUE OF INTEREST ON, OR LIQUIDATED DAMAGES, IF
ANY, WITH RESPECT TO, THE NOTES (WHETHER OR NOT PROHIBITED BY ARTICLE 10 OF THE
INDENTURE); (II) DEFAULT IN PAYMENT WHEN DUE OF PRINCIPAL OF OR PREMIUM, IF ANY,
ON THE NOTES (WHETHER OR NOT PROHIBITED BY ARTICLE 10 OF THE INDENTURE); (III)
FAILURE BY THE COMPANY TO COMPLY WITH ANY OF THE PROVISIONS OF SECTION 5.01 OF
THE INDENTURE; (IV) FAILURE BY THE COMPANY TO COMPLY WITH SECTION 4.07, 4.09,
4.10 OR 4.14 OF THE INDENTURE; (V) FAILURE BY THE COMPANY OR ANY OF ITS
RESTRICTED SUBSIDIARIES FOR 60 DAYS AFTER WRITTEN NOTICE BY THE TRUSTEE OR THE
HOLDERS OF AT LEAST 25% IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES TO
COMPLY WITH ANY OF ITS OTHER AGREEMENTS IN THE INDENTURE OR THE NOTES; (VI)
DEFAULT UNDER CERTAIN OTHER AGREEMENTS RELATING TO INDEBTEDNESS OF THE COMPANY
WHICH DEFAULT (A) IS CAUSED BY A FAILURE TO PAY PRINCIPAL OF OR PREMIUM, IF ANY,
OR INTEREST ON SUCH INDEBTEDNESS AT FINAL MATURITY (A "PAYMENT DEFAULT") OR (B)
RESULTS IN THE ACCELERATION OF SUCH INDEBTEDNESS PRIOR TO ITS EXPRESS MATURITY
AND, IN EACH CASE, THE PRINCIPAL AMOUNT OF ANY SUCH INDEBTEDNESS UNDER WHICH
THERE HAS BEEN A PAYMENT DEFAULT OR THE MATURITY OF WHICH HAS BEEN SO
ACCELERATED, AGGREGATES $15.0 MILLION OR MORE; (VII) FAILURE BY THE COMPANY OR
ANY OF ITS RESTRICTED SUBSIDIARIES TO PAY FINAL JUDGMENTS AGGREGATING IN EXCESS
OF $15.0 MILLION AND EITHER (A) ANY
A-6
<PAGE>
CREDITOR COMMENCES ENFORCEMENT PROCEEDINGS UPON ANY SUCH JUDGMENT OR (B) SUCH
JUDGMENTS ARE NOT PAID, DISCHARGED OR STAYED FOR A PERIOD OF 60 DAYS; (VIII)
EXCEPT AS PERMITTED BY THE INDENTURE, ANY GUARANTEE OF THE NOTES BY ANY
RESTRICTED SUBSIDIARY WHICH IS A SIGNIFICANT SUBSIDIARY SHALL BE HELD IN ANY
JUDICIAL PROCEEDING TO BE UNENFORCEABLE OR INVALID OR SHALL CEASE FOR ANY REASON
TO BE IN FULL FORCE AND EFFECT OR ANY RESTRICTED SUBSIDIARY WHICH IS A
SIGNIFICANT SUBSIDIARY SHALL DENY OR DISAFFIRM ITS OBLIGATIONS UNDER ANY
GUARANTEE OF THE NOTES; AND (IX) CERTAIN EVENTS OF BANKRUPTCY OR INSOLVENCY WITH
RESPECT TO THE COMPANY, ANY OF ITS RESTRICTED SUBSIDIARIES THAT CONSTITUTES A
SIGNIFICANT SUBSIDIARY OR ANY GROUP OF RESTRICTED SUBSIDIARIES THAT, TAKEN
TOGETHER, WOULD CONSTITUTE A SIGNIFICANT SUBSIDIARY. IF ANY EVENT OF DEFAULT
OCCURS AND IS CONTINUING, THE TRUSTEE OR THE HOLDERS OF AT LEAST 25% IN
PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY DECLARE ALL THE NOTES TO BE
DUE AND PAYABLE IMMEDIATELY. NOTWITHSTANDING THE FOREGOING, IN THE CASE OF AN
EVENT OF DEFAULT ARISING FROM CERTAIN EVENTS OF BANKRUPTCY OR INSOLVENCY, ALL
OUTSTANDING NOTES WILL BECOME DUE AND PAYABLE WITHOUT FURTHER ACTION OR NOTICE.
HOLDERS OF THE NOTES MAY NOT ENFORCE THE INDENTURE OR THE NOTES EXCEPT AS
PROVIDED IN THE INDENTURE. SUBJECT TO CERTAIN LIMITATIONS, HOLDERS OF A MAJORITY
IN PRINCIPAL AMOUNT OF THE THEN OUTSTANDING NOTES MAY DIRECT THE TRUSTEE IN ITS
EXERCISE OF ANY TRUST OR POWER. THE TRUSTEE MAY WITHHOLD FROM HOLDERS OF THE
NOTES NOTICE OF ANY CONTINUING DEFAULT OR EVENT OF DEFAULT (EXCEPT A DEFAULT OR
EVENT OF DEFAULT RELATING TO THE PAYMENT OF PRINCIPAL OR INTEREST) IF IT
DETERMINES THAT WITHHOLDING NOTICE IS IN THEIR INTEREST. THE HOLDERS OF A
MAJORITY IN AGGREGATE PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING BY NOTICE
TO THE TRUSTEE MAY ON BEHALF OF THE HOLDERS OF ALL OF THE NOTES WAIVE ANY
EXISTING DEFAULT OR EVENT OF DEFAULT AND ITS CONSEQUENCES UNDER THE INDENTURE
EXCEPT A CONTINUING DEFAULT OR EVENT OF DEFAULT IN THE PAYMENT OF INTEREST ON,
OR THE PRINCIPAL OF, THE NOTES. THE COMPANY IS REQUIRED TO DELIVER TO THE
TRUSTEE ANNUALLY A STATEMENT REGARDING COMPLIANCE WITH THE INDENTURE, AND THE
COMPANY IS REQUIRED, WITHIN 30 DAYS AFTER BECOMING AWARE OF ANY DEFAULT OR EVENT
OF DEFAULT, TO DELIVER TO THE TRUSTEE A STATEMENT SPECIFYING SUCH DEFAULT OR
EVENT OF DEFAULT.
14. TRUSTEE DEALINGS WITH COMPANY. THE TRUSTEE, IN ITS INDIVIDUAL OR
ANY OTHER CAPACITY, MAY MAKE LOANS TO, ACCEPT DEPOSITS FROM, AND PERFORM
SERVICES FOR THE COMPANY OR ITS AFFILIATES, AND MAY OTHERWISE DEAL WITH THE
COMPANY OR ITS AFFILIATES, AS IF IT WERE NOT THE TRUSTEE.
15. NO RECOURSE AGAINST OTHERS. A DIRECTOR, OFFICER, EMPLOYEE,
INCORPORATOR OR STOCKHOLDER OF THE COMPANY, AS SUCH, SHALL NOT HAVE ANY
LIABILITY FOR ANY OBLIGATIONS OF THE COMPANY UNDER THE NOTES OR THE INDENTURE OR
FOR ANY CLAIM BASED ON, IN RESPECT OF, OR BY REASON OF, SUCH OBLIGATIONS OR
THEIR CREATION. EACH HOLDER BY ACCEPTING A NOTE WAIVES AND RELEASES ALL SUCH
LIABILITY. THE WAIVER AND RELEASE ARE PART OF THE CONSIDERATION FOR THE ISSUANCE
OF THE NOTES.
16. AUTHENTICATION. THIS NOTE SHALL NOT BE VALID UNTIL AUTHENTICATED
BY THE MANUAL SIGNATURE OF THE TRUSTEE OR AN AUTHENTICATING AGENT.
17. ABBREVIATIONS. CUSTOMARY ABBREVIATIONS MAY BE USED IN THE NAME
OF A HOLDER OR AN ASSIGNEE, SUCH AS: TEN COM (= TENANTS IN COMMON), TEN ENT (=
TENANTS BY THE ENTIRETIES), JT TEN (= JOINT TENANTS WITH RIGHT OF SURVIVORSHIP
AND NOT AS TENANTS IN COMMON), CUST (= CUSTODIAN), AND U/G/M/A (= UNIFORM GIFTS
TO MINORS ACT).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. IN ADDITION TO THE RIGHTS PROVIDED TO HOLDERS OF
NOTES UNDER THE INDENTURE, HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES SHALL HAVE ALL THE RIGHTS SET FORTH IN THE REGISTRATION RIGHTS
AGREEMENT DATED AS OF JANUARY 4, 1998, AMONG THE COMPANY AND THE PARTIES NAMED
ON THE SIGNATURE PAGES THEREOF (THE "REGISTRATION RIGHTS AGREEMENT").
18. CUSIP NUMBERS. PURSUANT TO A RECOMMENDATION PROMULGATED BY THE
COMMITTEE ON UNIFORM SECURITY IDENTIFICATION PROCEDURES, THE COMPANY HAS CAUSED
CUSIP NUMBERS TO BE PRINTED ON THE NOTES AND THE TRUSTEE MAY USE CUSIP NUMBERS
IN NOTICES OF REDEMPTION AS A CONVENIENCE TO HOLDERS. NO REPRESENTATION IS MADE
AS TO THE ACCURACY OF SUCH NUMBERS EITHER AS
A-7
<PAGE>
PRINTED ON THE NOTES OR AS CONTAINED IN ANY NOTICE OF REDEMPTION AND RELIANCE
MAY BE PLACED ONLY ON THE OTHER IDENTIFICATION NUMBERS PLACED THEREON.
THE COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE AND/OR THE REGISTRATION RIGHTS AGREEMENT.
REQUESTS MAY BE MADE TO:
MASTEC, INC.
3155 N.W. 77TH AVENUE
SUITE 300
MIAMI, FLORIDA 33122-1205
ATTENTION: CHIEF FINANCIAL OFFICER
A-8
<PAGE>
ASSIGNMENT FORM
TO ASSIGN THIS NOTE, FILL IN THE FORM BELOW: (I) OR (WE) ASSIGN AND TRANSFER
THIS NOTE TO
- --------------------------------------------------------------------------------
(INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE)
AND IRREVOCABLY APPOINT
TO TRANSFER THIS NOTE ON THE BOOKS OF THE COMPANY. THE AGENT MAY SUBSTITUTE
ANOTHER TO ACT FOR HIM.
- --------------------------------------------------------------------------------
DATE:
YOUR SIGNATURE:
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE NOTE)
SIGNATURE GUARANTEE.
A-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY THE COMPANY
PURSUANT TO SECTION 4.10 OR 4.14 OF THE INDENTURE, CHECK THE BOX BELOW:
SECTION 4.10 SECTION 4.14
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THE NOTE PURCHASED BY THE
COMPANY PURSUANT TO SECTION 4.10 OR SECTION 4.14 OF THE INDENTURE, STATE THE
AMOUNT YOU ELECT TO HAVE PURCHASED:
$_________
DATE: YOUR SIGNATURE:
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE NOTE)
TAX IDENTIFICATION NO:
SIGNATURE GUARANTEE.
A-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR AN
INTEREST IN ANOTHER GLOBAL NOTE OR FOR A DEFINITIVE NOTE, OR EXCHANGES OF A PART
OF ANOTHER GLOBAL NOTE OR DEFINITIVE NOTE FOR AN INTEREST IN THIS GLOBAL NOTE,
HAVE BEEN MADE:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
AMOUNT OF AMOUNT OF OF
DECREASE IN INCREASE IN THIS GLOBAL NOTE SIGNATURE OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT FOLLOWING SUCH AUTHORIZED OFFICER
OF THIS GLOBAL OF DECREASE (OR OF TRUSTEE OR
DATE OF NOTE THIS GLOBAL NOTE INCREASE) NOTE CUSTODIAN
EXCHANGE ---------------- ---------------- ----------------- ------------------
--------
<S> <C> <C> <C> <C>
</TABLE>
A-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
MASTEC, INC.
3155 N.W. 77TH AVENUE
SUITE 300
MIAMI, FLORIDA 33122-1205
FIRST TRUST NATIONAL ASSOCIATION
180 E. 5TH STREET
ST. PAUL, MINNESOTA 55101
RE: 7 3/4% SENIOR SUBORDINATED NOTES DUE 2008
REFERENCE IS HEREBY MADE TO THE INDENTURE, DATED AS OF JANUARY 4,
1998 (THE "INDENTURE"), AMONG MASTEC, INC. (THE "COMPANY") AND FIRST TRUST
NATIONAL ASSOCIATION, AS TRUSTEE. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE INDENTURE.
______________, (THE "TRANSFEROR") OWNS AND PROPOSES TO TRANSFER THE
NOTE[S] OR INTEREST IN SUCH NOTE[S] SPECIFIED IN ANNEX A HERETO, IN THE
PRINCIPAL AMOUNT OF $___________ IN SUCH NOTE[S] OR INTERESTS (THE "TRANSFER"),
TO __________ (THE "TRANSFEREE"), AS FURTHER SPECIFIED IN ANNEX A HERETO. IN
CONNECTION WITH THE TRANSFER, THE TRANSFEROR HEREBY CERTIFIES THAT:
[CHECK ALL THAT APPLY]
1. G CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. THE TRANSFER IS BEING
EFFECTED PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, THE
TRANSFEROR HEREBY FURTHER CERTIFIES THAT THE BENEFICIAL INTEREST OR DEFINITIVE
NOTE IS BEING TRANSFERRED TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVED
AND BELIEVES IS PURCHASING THE BENEFICIAL INTEREST OR DEFINITIVE NOTE FOR ITS
OWN ACCOUNT, OR FOR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH SUCH PERSON
EXERCISES SOLE INVESTMENT DISCRETION, AND SUCH PERSON AND EACH SUCH ACCOUNT IS A
"QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A AND SUCH TRANSFER IS IN COMPLIANCE WITH
ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. UPON
CONSUMMATION OF THE PROPOSED TRANSFER IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE, THE TRANSFERRED BENEFICIAL INTEREST OR DEFINITIVE NOTE WILL BE
SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE PLACEMENT
LEGEND PRINTED ON THE 144A GLOBAL NOTE AND/OR THE DEFINITIVE NOTE AND IN THE
INDENTURE AND THE SECURITIES ACT.
2. G CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A DEFINITIVE
NOTE PURSUANT TO REGULATION S. THE TRANSFER IS BEING EFFECTED PURSUANT TO AND IN
ACCORDANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT AND, ACCORDINGLY,
THE TRANSFEROR HEREBY FURTHER CERTIFIES THAT (I) THE TRANSFER IS NOT BEING MADE
TO A PERSON IN THE UNITED STATES AND (X) AT THE TIME THE BUY ORDER WAS
ORIGINATED, THE TRANSFEREE WAS OUTSIDE THE UNITED STATES OR SUCH TRANSFEROR AND
ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVED AND BELIEVES THAT THE
TRANSFEREE WAS OUTSIDE THE UNITED STATES OR (Y) THE TRANSACTION WAS EXECUTED IN,
ON OR THROUGH
B-1
<PAGE>
THE FACILITIES OF A DESIGNATED OFFSHORE SECURITIES MARKET AND NEITHER SUCH
TRANSFEROR NOR ANY PERSON ACTING ON ITS BEHALF KNOWS THAT THE TRANSACTION WAS
PREARRANGED WITH A BUYER IN THE UNITED STATES, (II) NO DIRECTED SELLING EFFORTS
HAVE BEEN MADE IN CONTRAVENTION OF THE REQUIREMENTS OF RULE 903(B) OR RULE
904(B) OF REGULATION S UNDER THE SECURITIES ACT, (III) THE TRANSACTION IS NOT
PART OF A PLAN OR SCHEME TO EVADE THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (IV) IF THE PROPOSED TRANSFER IS BEING MADE PRIOR TO THE
EXPIRATION OF THE RESTRICTED PERIOD, THE TRANSFER IS NOT BEING MADE TO A U.S.
PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (OTHER THAN AN INITIAL
PURCHASER). UPON CONSUMMATION OF THE PROPOSED TRANSFER IN ACCORDANCE WITH THE
TERMS OF THE INDENTURE, THE TRANSFERRED BENEFICIAL INTEREST OR DEFINITIVE NOTE
WILL BE SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE
PLACEMENT LEGEND PRINTED ON THE REGULATION S GLOBAL NOTE, THE TEMPORARY
REGULATION S GLOBAL NOTE AND/OR THE DEFINITIVE NOTE AND IN THE INDENTURE AND THE
SECURITIES ACT.
3. G CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. THE TRANSFER IS
BEING EFFECTED IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS APPLICABLE TO
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES
AND PURSUANT TO AND IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE
BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND ACCORDINGLY THE
TRANSFEROR HEREBY FURTHER CERTIFIES THAT (CHECK ONE):
(A) G SUCH TRANSFER IS BEING EFFECTED PURSUANT TO AND IN ACCORDANCE
WITH RULE 144 UNDER THE SECURITIES ACT;
OR
(B) G SUCH TRANSFER IS BEING EFFECTED TO THE COMPANY;
OR
(C) G SUCH TRANSFER IS BEING EFFECTED PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH THE
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT;
OR
(D) G SUCH TRANSFER IS BEING EFFECTED TO AN INSTITUTIONAL ACCREDITED
INVESTOR AND PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OTHER THAN RULE 144A, RULE 144 OR RULE 904, AND THE TRANSFEROR
HEREBY FURTHER CERTIFIES THAT IT HAS NOT ENGAGED IN ANY GENERAL SOLICITATION
WITHIN THE MEANING OF REGULATION D UNDER THE SECURITIES ACT AND THE TRANSFER
COMPLIES WITH THE TRANSFER RESTRICTIONS APPLICABLE TO BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE OR RESTRICTED DEFINITIVE NOTES AND THE REQUIREMENTS OF
THE EXEMPTION CLAIMED, WHICH CERTIFICATION IS SUPPORTED BY (1) A CERTIFICATE
EXECUTED BY THE TRANSFEREE IN THE FORM OF EXHIBIT D TO THE INDENTURE AND (2) IF
SUCH TRANSFER IS IN RESPECT OF A PRINCIPAL AMOUNT OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL PROVIDED BY THE TRANSFEROR
OR THE TRANSFEREE (A COPY OF WHICH THE TRANSFEROR HAS ATTACHED TO THIS
CERTIFICATION), TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT. UPON CONSUMMATION OF THE PROPOSED TRANSFER IN ACCORDANCE WITH
THE TERMS OF THE INDENTURE, THE TRANSFERRED BENEFICIAL INTEREST OR DEFINITIVE
NOTE WILL BE SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE
PLACEMENT LEGEND PRINTED ON THE IAI GLOBAL NOTE AND/OR THE DEFINITIVE NOTES AND
IN THE INDENTURE AND THE SECURITIES ACT.
4. G CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
B-2
<PAGE>
(A) G CHECK IF TRANSFER IS PURSUANT TO RULE 144. (I) THE TRANSFER IS
BEING EFFECTED PURSUANT TO AND IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES
ACT AND IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE
AND ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
AND (II) THE RESTRICTIONS ON TRANSFER CONTAINED IN THE INDENTURE AND THE PRIVATE
PLACEMENT LEGEND ARE NOT REQUIRED IN ORDER TO MAINTAIN COMPLIANCE WITH THE
SECURITIES ACT. UPON CONSUMMATION OF THE PROPOSED TRANSFER IN ACCORDANCE WITH
THE TERMS OF THE INDENTURE, THE TRANSFERRED BENEFICIAL INTEREST OR DEFINITIVE
NOTE WILL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE
PRIVATE PLACEMENT LEGEND PRINTED ON THE RESTRICTED GLOBAL NOTES, ON RESTRICTED
DEFINITIVE NOTES AND IN THE INDENTURE.
(B) G CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (I) THE
TRANSFER IS BEING EFFECTED PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR RULE
904 UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS
CONTAINED IN THE INDENTURE AND ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND (II) THE RESTRICTIONS ON TRANSFER CONTAINED IN
THE INDENTURE AND THE PRIVATE PLACEMENT LEGEND ARE NOT REQUIRED IN ORDER TO
MAINTAIN COMPLIANCE WITH THE SECURITIES ACT. UPON CONSUMMATION OF THE PROPOSED
TRANSFER IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, THE TRANSFERRED
BENEFICIAL INTEREST OR DEFINITIVE NOTE WILL NO LONGER BE SUBJECT TO THE
RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE PLACEMENT LEGEND PRINTED ON
THE RESTRICTED GLOBAL NOTES, ON RESTRICTED DEFINITIVE NOTES AND IN THE
INDENTURE.
(C) G CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (I) THE
TRANSFER IS BEING EFFECTED PURSUANT TO AND IN COMPLIANCE WITH AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OTHER THAN RULE 144, RULE
903 OR RULE 904 AND IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS CONTAINED IN
THE INDENTURE AND ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND (II) THE RESTRICTIONS ON TRANSFER CONTAINED IN THE INDENTURE
AND THE PRIVATE PLACEMENT LEGEND ARE NOT REQUIRED IN ORDER TO MAINTAIN
COMPLIANCE WITH THE SECURITIES ACT. UPON CONSUMMATION OF THE PROPOSED TRANSFER
IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, THE TRANSFERRED BENEFICIAL
INTEREST OR DEFINITIVE NOTE WILL NOT BE SUBJECT TO THE RESTRICTIONS ON TRANSFER
ENUMERATED IN THE PRIVATE PLACEMENT LEGEND PRINTED ON THE RESTRICTED GLOBAL
NOTES OR RESTRICTED DEFINITIVE NOTES AND IN THE INDENTURE.
THIS CERTIFICATE AND THE STATEMENTS CONTAINED HEREIN ARE MADE FOR
YOUR BENEFIT AND THE BENEFIT OF THE COMPANY.
[INSERT NAME OF TRANSFEROR]
BY:
NAME:
TITLE:
DATED: ,
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. THE TRANSFEROR OWNS AND PROPOSES TO TRANSFER THE FOLLOWING:
[CHECK ONE OF (A) OR (B)]
(A) G A BENEFICIAL INTEREST IN THE:
(I) G 144A GLOBAL NOTE (CUSIP ________), OR
(II) G REGULATION S GLOBAL NOTE (CUSIP ________ ), OR
(III) G IAI GLOBAL NOTE (CUSIP_________); OR
(B) G A RESTRICTED DEFINITIVE NOTE.
2. AFTER THE TRANSFER THE TRANSFEREE WILL HOLD:
[CHECK ONE]
(A) G A BENEFICIAL INTEREST IN THE:
(I) G 144A GLOBAL NOTE (CUSIP_________), OR
(II) G REGULATION S GLOBAL NOTE (CUSIP_________), OR
(III) G IAI GLOBAL NOTE (CUSIP_________); OR
(IV) G UNRESTRICTED GLOBAL NOTE (CUSIP_________); OR
(B) G A RESTRICTED DEFINITIVE NOTE; OR
(C) G AN UNRESTRICTED DEFINITIVE NOTE,
IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
(CUSIP______________)
MASTEC, INC.
3155 N.W. 77TH AVENUE
SUITE 300
MIAMI, FLORIDA 33122-1205
FIRST TRUST NATIONAL ASSOCIATION
180 E. 5TH STREET
ST. PAUL, MINNESOTA 55101
RE: 7 3/4% SENIOR SUBORDINATED NOTES DUE 2008
REFERENCE IS HEREBY MADE TO THE INDENTURE, DATED AS OF JANUARY 4,
1998 (THE "INDENTURE"), AMONG MASTEC, INC. (THE "COMPANY") AND FIRST TRUST
NATIONAL ASSOCIATION, AS TRUSTEE. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE INDENTURE.
____________, (THE "OWNER") OWNS AND PROPOSES TO EXCHANGE THE
NOTE[S] OR INTEREST IN SUCH NOTE[S] SPECIFIED HEREIN, IN THE PRINCIPAL AMOUNT OF
$____________ IN SUCH NOTE[S] OR INTERESTS (THE "EXCHANGE"). IN CONNECTION WITH
THE EXCHANGE, THE OWNER HEREBY CERTIFIES THAT:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(A) G CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. IN CONNECTION
WITH THE EXCHANGE OF THE OWNER'S BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE
FOR A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE IN AN EQUAL PRINCIPAL
AMOUNT, THE OWNER HEREBY CERTIFIES (I) THE BENEFICIAL INTEREST IS BEING ACQUIRED
FOR THE OWNER'S OWN ACCOUNT WITHOUT TRANSFER, (II) SUCH EXCHANGE HAS BEEN
EFFECTED IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS APPLICABLE TO THE GLOBAL
NOTES AND PURSUANT TO AND IN ACCORDANCE WITH THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), (III) THE RESTRICTIONS ON TRANSFER
CONTAINED IN THE INDENTURE AND THE PRIVATE PLACEMENT LEGEND ARE NOT REQUIRED IN
ORDER TO MAINTAIN COMPLIANCE WITH THE SECURITIES ACT AND (IV) THE BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE IS BEING ACQUIRED IN COMPLIANCE WITH ANY
APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
(B) G CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. IN CONNECTION WITH THE EXCHANGE OF
THE OWNER'S BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE FOR AN UNRESTRICTED
DEFINITIVE NOTE, THE OWNER HEREBY CERTIFIES (I) THE DEFINITIVE NOTE IS BEING
ACQUIRED FOR THE OWNER'S OWN ACCOUNT WITHOUT TRANSFER, (II) SUCH EXCHANGE HAS
BEEN EFFECTED IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS APPLICABLE TO THE
RESTRICTED GLOBAL NOTES AND PURSUANT TO AND IN ACCORDANCE WITH THE SECURITIES
ACT, (III) THE RESTRICTIONS ON TRANSFER CONTAINED IN THE INDENTURE AND THE
PRIVATE PLACEMENT LEGEND ARE NOT REQUIRED IN ORDER TO MAINTAIN COMPLIANCE WITH
THE
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<PAGE>
SECURITIES ACT AND (IV) THE DEFINITIVE NOTE IS BEING ACQUIRED IN COMPLIANCE WITH
ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
(C) G CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. IN CONNECTION WITH THE
OWNER'S EXCHANGE OF A RESTRICTED DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE, THE OWNER HEREBY CERTIFIES (I) THE BENEFICIAL INTEREST
IS BEING ACQUIRED FOR THE OWNER'S OWN ACCOUNT WITHOUT TRANSFER, (II) SUCH
EXCHANGE HAS BEEN EFFECTED IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS
APPLICABLE TO RESTRICTED DEFINITIVE NOTES AND PURSUANT TO AND IN ACCORDANCE WITH
THE SECURITIES ACT, (III) THE RESTRICTIONS ON TRANSFER CONTAINED IN THE
INDENTURE AND THE PRIVATE PLACEMENT LEGEND ARE NOT REQUIRED IN ORDER TO MAINTAIN
COMPLIANCE WITH THE SECURITIES ACT AND (IV) THE BENEFICIAL INTEREST IS BEING
ACQUIRED IN COMPLIANCE WITH ANY APPLICABLE BLUE SKY SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES.
(D) G CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. IN CONNECTION WITH THE OWNER'S EXCHANGE OF A
RESTRICTED DEFINITIVE NOTE FOR AN UNRESTRICTED DEFINITIVE NOTE, THE OWNER HEREBY
CERTIFIES (I) THE UNRESTRICTED DEFINITIVE NOTE IS BEING ACQUIRED FOR THE OWNER'S
OWN ACCOUNT WITHOUT TRANSFER, (II) SUCH EXCHANGE HAS BEEN EFFECTED IN COMPLIANCE
WITH THE TRANSFER RESTRICTIONS APPLICABLE TO RESTRICTED DEFINITIVE NOTES AND
PURSUANT TO AND IN ACCORDANCE WITH THE SECURITIES ACT, (III) THE RESTRICTIONS ON
TRANSFER CONTAINED IN THE INDENTURE AND THE PRIVATE PLACEMENT LEGEND ARE NOT
REQUIRED IN ORDER TO MAINTAIN COMPLIANCE WITH THE SECURITIES ACT AND (IV) THE
UNRESTRICTED DEFINITIVE NOTE IS BEING ACQUIRED IN COMPLIANCE WITH ANY APPLICABLE
BLUE SKY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(A) G CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. IN CONNECTION WITH THE EXCHANGE OF
THE OWNER'S BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE FOR A RESTRICTED
DEFINITIVE NOTE WITH AN EQUAL PRINCIPAL AMOUNT, THE OWNER HEREBY CERTIFIES THAT
THE RESTRICTED DEFINITIVE NOTE IS BEING ACQUIRED FOR THE OWNER'S OWN ACCOUNT
WITHOUT TRANSFER. UPON CONSUMMATION OF THE PROPOSED EXCHANGE IN ACCORDANCE WITH
THE TERMS OF THE INDENTURE, THE RESTRICTED DEFINITIVE NOTE ISSUED WILL CONTINUE
TO BE SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE
PLACEMENT LEGEND PRINTED ON THE RESTRICTED DEFINITIVE NOTE AND IN THE INDENTURE
AND THE SECURITIES ACT.
(B) G CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. IN CONNECTION WITH THE EXCHANGE
OF THE OWNER'S RESTRICTED DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN THE
[CHECK ONE] "144A GLOBAL NOTE, "REGULATION S GLOBAL NOTE," IAI GLOBAL NOTE WITH
AN EQUAL PRINCIPAL AMOUNT, THE OWNER HEREBY CERTIFIES (I) THE BENEFICIAL
INTEREST IS BEING ACQUIRED FOR THE OWNER'S OWN ACCOUNT WITHOUT TRANSFER AND (II)
SUCH EXCHANGE HAS BEEN EFFECTED IN COMPLIANCE WITH THE TRANSFER RESTRICTIONS
APPLICABLE TO THE RESTRICTED GLOBAL NOTES AND PURSUANT TO AND IN ACCORDANCE WITH
THE SECURITIES ACT, AND IN COMPLIANCE WITH ANY APPLICABLE BLUE SKY SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. UPON CONSUMMATION OF THE PROPOSED
EXCHANGE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, THE BENEFICIAL INTEREST
ISSUED WILL BE SUBJECT TO THE RESTRICTIONS ON TRANSFER ENUMERATED IN THE PRIVATE
PLACEMENT LEGEND PRINTED ON THE RELEVANT RESTRICTED GLOBAL NOTE AND IN THE
INDENTURE AND THE SECURITIES ACT.
2
<PAGE>
THIS CERTIFICATE AND THE STATEMENTS CONTAINED HEREIN ARE MADE FOR
YOUR ENEFIT AND THE BENEFIT OF THE COMPANY.
__________________________________
[INSERT NAME OF OWNER]
BY: _______________________________
NAME:
TITLE:
DATED: ________________, ____
3
<PAGE>
EXHIBIT D
FORM OF LETTER TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
WE ARE DELIVERING THIS LETTER IN CONNECTION WITH AN OFFERING OF 7
3/4% SENIOR SUBORDINATED NOTES DUE 2008 (THE "NOTES") OF MASTEC, INC., A
DELAWARE CORPORATION (THE "COMPANY"), ALL AS DESCRIBED IN THE OFFERING CIRCULAR
(THE "OFFERING CIRCULAR") RELATING TO SUCH OFFERING.
WE HEREBY CONFIRM THAT:
(I) WE ARE AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR AN ENTITY IN WHICH ALL OF THE EQUITY OWNERS ARE ACCREDITED INVESTORS
WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AN "INSTITUTIONAL ACCREDITED INVESTOR");
(II) ANY PURCHASE OF NOTES BY US WILL BE FOR OUR OWN ACCOUNT OR THE
ACCOUNT OF ONE OR MORE OTHER INSTITUTIONAL ACCREDITED INVESTORS;
(III) IN THE EVENT THAT WE PURCHASE ANY NOTES, WE WILL ACQUIRE NOTES
HAVING A MINIMUM PURCHASE PRICE OF AT LEAST $100,000 FOR OUR OWN ACCOUNT AND FOR
EACH SEPARATE ACCOUNT FOR WHICH WE ARE ACTING;
(IV) WE HAVE SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT WE ARE CAPABLE OF EVALUATING THE MERITS AND RISKS OF PURCHASING
NOTES;
(V) WE ARE NOT ACQUIRING NOTES WITH A VIEW TO ANY DISTRIBUTION
THEREOF IN A TRANSACTION THAT WOULD VIOLATE THE SECURITIES ACT OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION;
PROVIDED THAT THE DISPOSITION OF OUR PROPERTY AND THE PROPERTY OF ANY ACCOUNTS
FOR WHICH WE ARE ACTING AS FIDUCIARY SHALL REMAIN AT ALL TIMES WITHIN OUR
CONTROL; AND
(VI) WE HAVE RECEIVED A COPY OF THE OFFERING CIRCULAR AND
ACKNOWLEDGE THAT WE HAVE HAD ACCESS TO SUCH FINANCIAL AND OTHER INFORMATION, AND
HAVE BEEN AFFORDED THE OPPORTUNITY TO ASK SUCH QUESTIONS OF REPRESENTATIVES OF
THE COMPANY AND RECEIVE ANSWERS THERETO, AS WE DEEM NECESSARY IN CONNECTION WITH
OUR DECISION TO PURCHASE THE NOTES.
WE UNDERSTAND THAT THE NOTES ARE BEING OFFERED IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE SECURITIES ACT AND
THAT THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, AND WE AGREE,
ON OUR OWN BEHALF AND ON BEHALF OF ANY ACCOUNTS FOR WHICH WE ACQUIRE ANY NOTES,
THAT SUCH NOTES MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(I) TO A PERSON WHOM WE REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (II) TO THE COMPANY OR
(III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, AND, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
F-1
<PAGE>
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION. WE UNDERSTAND THAT THE
REGISTRAR WILL NOT BE REQUIRED TO ACCEPT FOR REGISTRATION OF TRANSFER ANY NOTES,
EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE COMPANY THAT THE
FOREGOING RESTRICTIONS ON TRANSFER HAVE BEEN COMPLIED WITH.
WE ACKNOWLEDGE THAT YOU, THE COMPANY AND OTHERS WILL RELY UPON OUR
CONFIRMATIONS, ACKNOWLEDGMENTS AND AGREEMENTS SET FORTH HEREIN, AND WE AGREE TO
NOTIFY YOU PROMPTLY IN WRITING IF ANY OF OUR REPRESENTATIONS OR WARRANTIES
HEREIN CEASES TO BE ACCURATE AND COMPLETE.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
_____________________________________
[INSERT NAME OF ACCREDITED INVESTOR]
BY:__________________________________
NAME:
TITLE:
DATED: __________________, ____
F-2
EXHIBIT 4.3
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of February 4, 1998
by and among
MASTEC, INC.
and
JEFFERIES & COMPANY, INC.
BANCBOSTON SECURITIES INC.
CIBC OPPENHEIMER CORP.
NATIONSBANC MONTGOMERY SECURITIES LLC
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of February 4, 1998 by and among MasTec, Inc., a Delaware
corporation (the "COMPANY") and Jefferies & Company, Inc., BancBoston Securities
Inc., CIBC Oppenheimer Corp. and NationsBanc Montgomery Securities LLC (each an
"INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom
has agreed to purchase the Company's 7-3/4% Senior Subordinated Notes due 2008
(the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
January 30, 1998 (the "PURCHASE AGREEMENT"), by and among the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Series A Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 9(k)
of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them in the Indenture, dated February
4, 1998, between the Company and First Trust National Association, as trustee
(the "TRUSTEE"), relating to the Series A Notes and the Series B Notes (the
"INDENTURE").
The parties hereby agree as follows:
SECTION
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
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EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company under the Act of the
Series B Notes. pursuant to the Exchange Offer Registration Statement, pursuant
to which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Series B Notes in an aggregate principal
amount equal to the aggregate principal amount of the Transfer Restricted
Securities that are tendered by such Holders in connection with such exchange
offer.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act, to certain "accredited
investors," as such term is defined in Rule 501(a)(1), (2), (3), (5) and (7) of
Regulation D under the Act and pursuant to Regulation S under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
PROSPECTUS: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) that is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
REGULATION S: Regulation S promulgated under the Act.
RESTRICTED BROKER-DEALER: Any Broker-Dealer that holds Series B
Notes that were acquired in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its affiliates).
RULE 144: Rule 144 promulgated under the Act.
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<PAGE>
SERIES B NOTES: The Company's 7-3/4% Series B Senior Notes due 2008
to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to
occur of (a) the date on which such Series A Note is exchanged in the Exchange
Offer and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Series A Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Series A Note is disposed of
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Series A Note is distributed to
the public pursuant to Rule 144 under the Act or is saleable pursuant to Rule
144(k) (as any successor provision) under the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
A. Unless the Exchange Offer shall not be permitted by applicable
federal law or Commission Policy (after the procedures set forth in Section
6(a)(i) below have been complied with), the Company shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date (the "EXCHANGE OFFER FILING DATE"), but in no
event later than 60 days after the Closing Date (such 60th day being the "FILING
DEADLINE"), (ii) use its best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 120 days after the Closing Date (such 120th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Series B Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Series B Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and to permit resales of Series B
Notes by Restricted Broker-Dealers that tendered into the Exchange Offer for
Series A Notes that such Broker-Dealer acquired for its own account as a result
of market making activities or other trading activities (other than
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<PAGE>
Series A Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
B. The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to be effective continuously, and shall keep the
Exchange Offer open for a period of not less than the minimum period required
under applicable federal and state securities laws to Consummate the Exchange
Offer; PROVIDED, HOWEVER, that in no event shall such period be less than 20
Business Days. The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Series B Notes shall be included in the Exchange Offer Registration Statement.
The Company shall use its best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter.
C. The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Transfer Restricted
Securities acquired directly from the Company or any Affiliate of the Company),
may exchange such Transfer Restricted Securities pursuant to the Exchange Offer;
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer and that the
Prospectus contained in the Exchange Offer Registration Statement may be used to
satisfy such prospectus delivery requirement. Such "Plan of Distribution"
section shall also contain all other information with respect to such sales by
such Broker-Dealers that the Commission may require in order to permit such
sales pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Transfer Restricted Securities held by
any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy, rules or regulations after the date of this
Agreement. See the Shearman & Sterling no-action letter (available July 2,
1993).
To the extent necessary to ensure that the Exchange Offer
Registration Statement is available for sales of Series B Notes by Restricted
Broker-Dealers, the Company agrees to use its best efforts to keep the Exchange
Offer Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of 180 days from
the date on which the Exchange Offer is Consummated, or such shorter period as
will terminate when all Restricted Broker Dealers have sold all Series B Notes
held by them. The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request at any time during such period.
SECTION
4. SHELF REGISTRATION
A. SHELF REGISTRATION. If (i) the Exchange Offer is not permitted by
applicable law (after the Company has complied with the procedures set forth in
Section 6(a)(i) below) or (ii) if any
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<PAGE>
Holder of Transfer Restricted Securities shall notify the Company within 20 days
following the Consummation of the Exchange Offer that (A) such Holder was
prohibited by law or Commission policy from participating in the Exchange Offer
or (B) such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Series A Notes acquired directly from the Company or any of its
Affiliates, then the Company shall:
(1) cause to be filed, on or prior to 60 days after the earlier of
(i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above and
(ii) the date on which the Company receives the notice specified in clause (a)
(ii) above, (such earlier date, the "FILING DEADLINE"), a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")),
relating to all Transfer Restricted Securities, and
(2) use its best efforts to cause such Shelf Registration Statement
to become effective on or prior to 120 days after the Filing Deadline (such
120th day the "EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law, then
the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (1) above; PROVIDED that, in such event, the
Company shall remain obligated to meet the Effectiveness Deadline set forth in
clause (2).
The Company shall use its best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented and amended as required by and subject to the provisions of
Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the Act,
or such shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto. The
Company shall not be deemed to have breached its obligation pursuant to the
preceding sentence if it shall be required to amend the Shelf Registration
Statement or the effectiveness of the Shelf Registration Statement shall be
suspended, or the prospectus contained in the Shelf Registration Statement shall
not be usable, as a result of a corporate transaction involving the Company that
is not adequately reflected in the Shelf Registration Statement; PROVIDED that
the failure to keep the Shelf Registration Statement effective and usable for
such reasons shall last no longer than 30 days in any 12-month period
(whereafter liquidated damages pursuant to Section 5 shall accrue). Any such
period during which the Company fails to keep the Shelf Registration Statement
effective and usable is referred to as a "Suspension Period." A Suspension
Period shall commence on and include the date that the Company gives notice that
the Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable and shall end
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on the earlier to occur of (i) the date when each seller of Transfer Restricted
Securities covered by such Shelf Registration Statement either receives copies
of the supplemented or amended prospectus or is advised in writing by the
Company that the use of the prospectus may be resumed and (ii) the expiration of
the 30 days in any 12-month period during which one or more Suspension Periods
has been in effect; PROVIDED that the period during which the Shelf Registration
Statement is required to be kept continuously effective shall be increased by
the total number of days of all such Suspension Periods.
B. PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated within 30 Business Days after the
Effectiveness Deadline or (iv) except as provided in Section 4(a)(2), any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within five days by a
post-effective amendment to such Registration Statement or an additional
Registration Statement that cures such failure and that is itself declared
effective (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), then the Company hereby agrees to pay to each Holder of
Transfer Restricted Securities affected thereby liquidated damages in an amount
equal to $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of such Registration Default. The amount of the liquidated
damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of liquidated damages of $.20 per week per $1,000 in principal amount of
Transfer Restricted Securities; PROVIDED that the Company shall in no event be
required to pay liquidated damages for more than one Registration Default at any
given time. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of
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the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. All obligations of the Company set forth in the preceding paragraph that
are outstanding with respect to any Transfer Restricted Security at the time
such security ceases to be a Transfer Restricted Security shall survive until
such time as all such obligations with respect to such Security shall have been
satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
A. EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its best efforts to effect such exchange and to
permit the resale of Series B Notes by Restricted Broker-Dealers that tendered
in the Exchange Offer Series A Notes that such Restricted Broker-Dealer acquired
for its own account as a result of its market making activities or other trading
activities (other than Series A Notes acquired directly from the Company or any
of its Affiliates) being sold in accordance with the intended method or methods
of distribution thereof, and shall comply with all of the following provisions:
(i). If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the Exchange Offer,
that in the reasonable opinion of counsel to the Company there is a question as
to whether the Exchange Offer is permitted by applicable federal law, the
Company hereby agrees to seek a no-action letter or other favorable decision
from the Commission allowing the Company to Consummate an Exchange Offer for
such Transfer Restricted Securities. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission Policy. In connection with the foregoing, the Company hereby agrees
to (A) participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that such
an Exchange Offer should be permitted and (C) diligently pursue a resolution
(which need not be favorable) by the Commission staff.
(ii). As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation, any
Holder who is a Broker Dealer) shall furnish, prior to the Consummation of the
Exchange Offer, a written representation to the Company (which may be contained
in the letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it
is not engaged in, and does not intend to engage in, and
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has no arrangement or understanding with any person to participate in, a
distribution of the Series B Notes within the meaning of the Act, (C) it is
acquiring the Series B Notes in its ordinary course of business and (D) it is
not acting on behalf of any person who could not make the foregoing
representations. Each Holder using the Exchange Offer to participate in a
distribution of the Series B Notes hereby acknowledges and agrees that, if the
resales are of Series B Notes obtained by such Holder in exchange for Series A
Notes acquired directly from the Company or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement, rely on
the position of the Commission enunciated in MORGAN STANLEY AND CO., INC.
(available June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), as interpreted in the Commission's letter to SHEARMAN & STERLING
dated July 2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K.
(iii). Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the Commission (A)
stating that the Company is registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991)
as interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2,
1993, and, if applicable, any no-action letter obtained pursuant to clause (i)
above, (B) including a representation that the Company has not entered into any
arrangement or understanding with any Person to distribute the Series B Notes to
be received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the distribution
of the Series B Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth in any
no-action letter obtained pursuant to clause (i) above, if applicable.
B. SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
C. GENERAL PROVISIONS. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company shall:
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(i). use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for the
period specified in Section 3 or 4 of this Agreement, as applicable. Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to such Registration Statement curing such
defect, and, if Commission review is required, use its best efforts to cause
such amendment to be declared effective as soon as practicable.
(ii). prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as the case may be; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
and comply with the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii). advise the selling Holders promptly and, if requested by such
Persons, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
(iv). subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or
post-effective
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amendment to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(v). use its reasonable best efforts to furnish to Jefferies &
Company, Inc. and each selling Holder specifically named in any Registration
Statement or Prospectus in connection with such sale, if any, before filing with
the Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (excluding all documents incorporated by reference after the initial
filing of such Registration Statement which do not refer to the selling
Holders), which documents will be subject to the review and comment of such
selling Holders in connection with such sale, if any, for a period of at least
five Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference
which refer to the selling Holders) to which the selling Holders of the Transfer
Restricted Securities covered by such Registration Statement in connection with
such sale, if any, shall reasonably object within five Business Days after the
receipt thereof. A selling Holder shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable requirements of the Act;
(vi). promptly after the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to the selling Holders in connection with such sale, if
any;
(vii). make available at reasonable times for inspection by a
representative of the selling Holders participating in any disposition pursuant
to such Registration Statement and holding at least a majority in aggregate
principal amount of the Transfer Restricted Securities and any attorney or
accountant retained by such representative, all relevant financial and other
records, pertinent corporate documents of the Company and use its reasonable
best efforts to cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by any such representative of such
selling Holders, attorney or accountant to conduct a reasonable due diligence
investigation within the meaning of the Act in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness; PROVIDED, HOWEVER, that the Company need
not make available or supply any information pursuant to this paragraph (vii) to
the extent such information may not be disclosed pursuant to any confidentiality
agreement to which the Company or any of its subsidiaries is a party or such
disclosure would jeopardize any applicable attorney-client, work product or
other privilege;
(viii). if requested by any selling Holders in connection with such sale,
if any, promptly include in any Registration Statement or Prospectus, pursuant
to a supplement or
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<PAGE>
post-effective amendment if necessary, such information as such selling Holders
may reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer Restricted
Securities; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is notified of
the matters to be included in such Prospectus supplement or post-effective
amendment;
(ix). furnish to each selling Holder specifically named in any Shelf
Registration Statement, in connection with such sale, if any, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents incorporated
by reference therein and all exhibits (including exhibits incorporated therein
by reference);
(x). deliver to each selling Holder, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company hereby
consents to the use (in accordance with law) of the Prospectus and any amendment
or supplement thereto by each of the selling Holders in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(xi). in the case of a Shelf Registration Statement, upon the request
of the Holders of at least a majority in aggregate principal amount of the
Transfer Restricted Securities being sold, enter into such customary agreements
(including underwriting agreements in customary form) and make such customary
representations and warranties and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to such Shelf Registration Statement contemplated
by this Agreement as may be reasonably requested by the Holders of at least a
majority in aggregate principal amount of the Transfer Restricted Securities
being sold in connection with any sale or resale pursuant to such Shelf
Registration Statement and in such connection, the Company shall:
(A) upon request of the Holders of at least a majority in
aggregate principal amount of the Transfer Restricted Securities
being sold, furnish (or in the case of paragraphs (2) and (3), use
its best efforts to cause to be furnished) to each selling Holder,
upon the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated such date, signed on behalf of
the Company by (A) the President or any Vice President and (B)
a principal financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set forth in
paragraphs (a) through (c) of Section 9 of the Purchase
Agreement and such other similar matters as the selling
Holders may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Shelf Registration Statement, as the case may be, of counsel
for the Company covering matters similar to those set forth in
paragraphs (e) and (f) of Section 9 of the Purchase Agreement
and such other matter as the selling Holders may reasonably
request,
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and in any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness
of such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to the
extent such counsel deems appropriate upon the statements of
officers and other representatives of the Company) and without
independent check or verification, except as specified), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date,
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel
assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial
data included in any Registration Statement contemplated by
this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement, from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 8(h) of the Purchase
Agreement;
Notwithstanding the foregoing, the Company shall not be obligated to
enter into any underwriting agreement or to facilitate such disposition in an
underwritten offering pursuant to any Shelf Registration Statement unless
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities elect to dispose of such Transfer Restricted Securities in such an
underwritten offering
(xii). prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling Holders may
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction where
it is not now so subject;
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(xiii). issue, upon the request of any Holder of Series A Notes covered
by any Shelf Registration Statement contemplated by this Agreement, Series B
Notes having an aggregate principal amount equal to the aggregate principal
amount of Series A Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be registered in
the name of such Holder or in the name of the purchaser(s) of such Series B
Notes, as the case may be; in return, the Series A Notes held by such Holder
shall be surrendered to the Company for cancellation; PROVIDED, FURTHER, that
such Series B Notes shall continue to bear restrictive legends until such Notes
are no longer Transfer Restricted Securities;
(xiv). in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to register
such Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale of
Transfer Restricted Securities;
(xv). use its reasonable best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (ix) above;
(xvi). provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Registration Statement covering such Transfer
Restricted Securities and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities which are in a form eligible
for deposit with the Depository Trust Company;
(xvii). otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to any applicable Registration Statement, as soon
as practicable, a consolidated earnings statement meeting the requirements of
Rule 158 (which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xviii). cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and
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(xix). provide promptly to each Holder upon request each document filed
with the Commission pursuant to the requirements of Section 13 or Section 15(d)
of the Exchange Act.
Notwithstanding the foregoing, nothing in this Agreement shall be
deemed to require the Company to register any of its Series A Notes or Series B
Notes pursuant to the Exchange Act.
D. RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice from the Company
of the existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder's has received copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof,
or (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Holder's possession which have been replaced
by the Company with more recently dated Prospectuses or (ii) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.
SECTION
7. REGISTRATION EXPENSES
A. All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Series B Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company and, subject to Section 7(b) below, the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Series B Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance). The Company shall not have any
obligation to pay any underwriting fees, discounts or commission attributable to
the sale of any Series A Notes or Series B Notes pursuant to this Agreement.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the
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expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
B. In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins unless another firm shall be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION
8. INDEMNIFICATION
A. The Company agrees to indemnify and hold harmless (i) each Holder
and (ii) each person, if any, who controls (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"INDEMNIFIED HOLDER"), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any legal or other
expenses reasonably incurred in connection with investigating or defending any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any holder or any prospective purchaser of Series B
Notes, or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
an untrue statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Holders furnished in writing to
the Company by or on behalf of any of the Holders, expressly for use in such
Registration Statement, preliminary prospectus or Prospectus; PROVIDED, HOWEVER,
that the indemnification contained in this paragraph (a) with respect to any
preliminary prospectus provided by the Company shall not inure to the benefit of
any Initial Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, claim, damage, liability or judgment
arising from the sale of the Notes by such Initial Purchaser to any person if
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such preliminary prospectus was corrected in the
Prospectus and the Initial Purchaser sold Notes to that person without sending
or giving at or prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented) if the Company has previously
furnished sufficient copies thereof to the Initial Purchaser on a timely basis
to permit such sending or giving.
15
<PAGE>
B. Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company, and its directors
and officers, and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company, to the
same extent as the foregoing indemnity from the Company to each of the
Indemnified Holders, but only with respect to information relating to such
Indemnified Holder furnished in writing to the Company by or on behalf of such
Indemnified Holder expressly for use in any Registration Statement. In no event
shall any Indemnified Holder be liable or responsible for any amount in excess
of the amount by which the total amount received by such Indemnified Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds the amount paid to the Company by such Indemnified Holder for
such Transfer Restricted Securities.
C. In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), an Indemnified Holder shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Indemnified Holder). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses reasonably
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Indemnified Holders, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if (a) the settlement is entered into more than thirty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party), (b) such
indemnifying party shall have received notice of the terms of such settlement at
least twenty
16
<PAGE>
business days prior to such settlement being entered into and (c) prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
D. To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Company, on the one hand, and of the Indemnified Holder,
on the other hand, in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by the
Indemnified Holder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder or its
related Indemnified Holders shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total received by such Holder
with respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid to the Company by
such Holder for
17
<PAGE>
such Transfer Restricted Securities PLUS (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Transfer Restricted Securities held by each of the Holders hereunder and not
joint.
SECTION
9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. MISCELLANEOUS
A. REMEDIES. The parties hereto acknowledge and agree that any
failure by the Company or any of the Holders to comply with any of their
obligations under this Agreement may result in material irreparable injury to
the Initial Purchasers, Holders or the Company, as the case may be, for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers, Holders or the Company, as the case may be, may obtain
such relief as may be required to specifically enforce the other parties'
obligations under this Agreement. The Company and each Holder further agree to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
B. NO INCONSISTENT AGREEMENTS. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any Person the right to include any
securities of the Company in any Registration Statement pursuant to this
Agreement. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.
C. AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of
18
<PAGE>
a majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Company of its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of Holders
whose securities are being tendered pursuant to the Exchange Offer or sold
pursuant to a Registration Statement and that does not affect directly or
indirectly the rights of other Holders whose securities are not being tendered
pursuant to such Exchange Offer or sold pursuant to a Registration Statement may
be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer or being sold
pursuant to such Registration Statement.
D. THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
E. NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i). if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the Indenture;
and
(ii). if to the Company:
MasTec, Inc.
3155 N.W. 77th Avenue, Suite 300
Miami, Florida 33122-1205
Telecopier No.: (301) 406-1907
Attention: Jose M. Sariego, Esq.
With a copy to:
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
220 Museum Tower Building
150 West Flagler Street
Miami, Florida 22120
Telecopier No.: (305) 789-3395
Attention: Steven D. Rubin
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
19
<PAGE>
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf
Registration Statement, as the case may be, notice shall be delivered to
Jefferies & Company, Inc., on behalf of the Initial Purchasers (in the form
attached hereto as Exhibit A) and shall be addressed to: Attention: Compliance
Department, 11100 Santa Monica Boulevard, Los Angeles, California 90025.
F. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; PROVIDED, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to receive
the benefits hereof.
G. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
H. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
I. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
J. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
K. ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
MASTEC, INC.
By:
Name:
Title:
JEFFERIES & COMPANY, INC.
By:
Name:
Title:
BANCBOSTON SECURITIES INC.
By:
Name:
Title:
CIBC OPPENHEIMER CORP.
By:
Name:
Title:
NATIONSBANC MONTGOMERY SECURITIES LLC
By:
Name:
Title:
21
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Attention: Compliance Department
Fax: (310) ___-____
From: MasTec, Inc.
Re: Senior Subordinated Notes due 2008
Date:___, 199_
For your information only (NO ACTION REQUIRED):
Today, ______, 199_, we filed [an A/B Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and Exchange
Commission. We currently expect this registration statement to be declared
effective within __ business days of the date hereof.
EXHIBIT 5.1
LAW OFFICES
STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A.
MUSEUM TOWER
150 WEST FLAGLER STREET
MIAMI, FLORIDA 33130
---------
MIAMI (305) 789-3200 o BROWARD (954) 463-5440
FAX (305) 789-3395
<TABLE>
<CAPTION>
<S> <C> <C> <C>
E. RICHARD ALHADEFF ALICE R. HUNEYCUTT PATRICIA A. REDMOND OWEN S. FREED
LOUISE JACOWITZ ALLEN RICHARD B. JACKSON ELIZABETH G. RICE SENIOR COUNSEL
STUART D. AMES THEODORE A. JEWELL GLENN M. RISSMAN
LAWRENCE J. BAILIN MICHAEL I. KEYES CARL D. ROSTON DAVID M. SMITH
PATRICK A. BARRY TEDDY D. KLINGHOFFER DAVID A. ROTHSTEIN LAND USE CONSULTANT
AMANDA C. BARRY ROBERT T. KOFMAN BETTY CHANG ROWE
SHAWN BAYNE THOMAS A. LASH STEVEN D. RUBIN
LISA K. BENNETT PAUL TAGER LEHR CLAIRE SAADY TAMPA OFFICE
SUSAN FLEMING BENNETT VERNON L. LEWIS MIMI L. SALL SUITE 2200
LISA K. BERG WENDELL T. LOCKE NICOLE S. SAYFIE SUNTRUST FINANCIAL CENTRE
MARK J. BERNET KEVIN B. LOVE RICHARD E. SCHATZ 401 EAST JACKSON STREET
HANS C. BEYER JOY SPILLIS LUNDEEN LESTER E. SEGAL TAMPA, FLORIDA 33602
MARTIN G. BURKETT GEOFFREY MacDONALD MARTIN S. SIMKOVIC
CLAIRE BAILEY CARRAWAY MICHAEL C. MARSH CURTIS H. SITTERSON (813) 223-4800
ELLEN I. CHO BRIAN J. McDONOUGH RONNI D. SOLOMON
SETH THOMAS CRAINE ANTONIO R. MENENDEZ MARK D. SOLOV
PETER L. DESIDERIO FRANCISCO J. MENENDEZ EUGENE E. STEARNS FORT LAUDERDALE OFFICE
MARK P. DIKEMAN ALISON W. MILLER JENNIFER D. STEARNS SUITE 1900
SHARON QUINN DIXON VICKI LYNN MONROE BRADFORD SWING 200 EAST BROWARD BOULEVARD
ALAN H. FEIN HAROLD D. MOOREFIELD, JR. ANNETTE TORRES FORT LAUDERDALE, FLORIDA 33301
ANGELO M. FILIPPI JOHN N. MURATIDES DENNIS R. TURNER
ANDREA F. FISHER JOHN K. OLSON RONALD L. WEAVER (954) 462-9500
ROBERT E. GALLAGHER, JR. ROBERT C. OWENS ROBERT I. WEISSLER
CHAVA E. GENET JAY P. W. PHILP PATRICIA G. WELLES
LATASHA A. GETHERS DARRIN J. QUAM THOMAS H. WILLIAMS, JR.
PATRICIA K. GREEN NICOLE R. RAMIREZ MARTIN B. WOODS
JOSEPH K. HALL JOHN M. RAWICZ
</TABLE>
February 11, 1998
MasTec, Inc.
3155 N.W. 77th Avenue
Miami, Florida 33122-1205
Dear Sirs:
We have acted as counsel to MasTec, Inc., a Delaware corporation (the
"Company"), in connection with the proposed exchange (the "Exchange") by the
Company of 7 3/4% Series B Senior Subordinated Notes Due 2008 ("New Notes") for
an equal principal amount of its outstanding 7 3/4% Senior Subordinated Notes
Due 2008 ("Old Notes").
In connection with the proposed Exchange, we have examined the
Company's Certificate of Incorporation and By-laws, as presently in effect, the
Company's relevant corporate proceedings, the draft Registration Statement on
Form S-4 covering the proposed Exchange (the "Registration Statement"),
including the Prospectus filed as a part of the Registration Statement, the
Indenture dated February 4, 1998, in respect of the Old Notes and the New Notes
(the "Indenture"), and such other documents, records, certificates of public
officials, statutes and decisions as we considered necessary to express the
opinions contained herein. In the examination of such documents, we have assumed
the genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity to the original documents of all
documents submitted to us as certified or photostatic copies.
STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A.
<PAGE>
MASTEC, INC.
February 11, 1998
Page 2
We understand that the New Notes are to be issued to the holders of the
Old Notes in the Exchange and are to be available for resale by such holders,
all in the manner described in the Prospectus, which is a part of the
Registration Statement, and in the Indenture.
Based on the foregoing, we are of the opinion that:
1. The issuance of the New Notes to the holders of the Old Notes
pursuant to the terms of the Exchange and the Indenture have been duly
authorized by proper corporate action of the Company.
2. When the Registration Statement shall have been declared
effective by order of the Securities and Exchange Commission and the New Notes
have been duly issued to and exchanged for the Old Notes, all in accordance with
the terms of the Exchange, the Indenture and the Registration Statement, such
New Notes will be validly issued and will constitute binding obligations of the
Company, subject, as to enforcement (i) to any applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
relating to or affecting creditors' rights and remedies generally and (ii) to
general principles of judicial discretion and equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity or in a bankruptcy
proceeding and except that (i) rights to contribution or indemnification may be
limited by the laws, rules or regulations of any governmental authority or
agency thereof or by public policy and (ii) waivers as to usury, stay or
extension laws may be unenforceable).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to any reference to us in the Prospectus which is a
part hereof.
Sincerely,
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
SWM/dr
STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A.
EXHIBIT 12.1
<TABLE>
<CAPTION>
MASTEC, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------ ---------------------------
1992 1993 1994 1995 1996 1996 1997
--------- ---------- ----------- ---------- ----------- ----------- ------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before income
taxes........................... $9,581 $7,353 $10,291 $385 $50,719 $30,911 $52,927
Fixed Charges:
Interest expense............... 98 302 3,846 5,306 11,940 8,577 8,413
Interest portion of rent
expense........................ -- -- 1,157 1,362 1,681 1,690 1,980
--------- ---------- ----------- ---------- ----------- ----------- ------------
Total fixed charges............. 98 302 5,003 6,668 13,621 10,267 10,393
--------- ---------- ----------- ---------- ----------- ----------- ------------
Earnings (for purposes of
fixed charges).................. 9,679 7,655 15,294 7,053 64,340 41,178 63,320
--------- ---------- ----------- ---------- ----------- ----------- ------------
Ratio of earnings to fixed
charges......................... 98.8x 25.3x 3.1x 1.1x 4.7x 4.0x 6.1x
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion and incorporation by reference in the
registration statement of MasTec, Inc. on Form S-4 of our report dated December
5, 1997 on our audits of the consolidated financial statements of MasTec, Inc.
and subsidiaries as of December 31, 1996 and 1995, and for the years ended
December 31, 1996, 1995 and 1994, which report is included in the registration
statement and incorporated by reference in the Annual Report on Form 10-K/A. We
also consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
Miami, Florida
February 12, 1998
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST TRUST NATIONAL ASSOCIATION
---------------------------------------------------
(Exact name of Trustee as specified in its charter)
UNITED STATES 41-0257700
----------------------- ------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
FIRST TRUST CENTER
180 EAST FIFTH STREET
ST. PAUL, MINNESOTA 55101
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
MASTEC, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 59-1259279
- ----------------------- -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
3155 N.W. 77TH AVENUE
MIAMI, FLORIDA 33122-1205
- --------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
7 3/4% SERIES B SENIOR SUBORDINATED NOTES DUE 2008
--------------------------------------------------
(Title of the Indenture Securities)
<PAGE>
GENERAL
1. General Information Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers. Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation. None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number 333-
42147.
* Incorporated by reference to Registration Number 22-27000.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 5th day of February,
1998.
FIRST TRUST NATIONAL ASSOCIATION
/s/ RICHARD H. PROKOSCH
-----------------------
Richard H. Prokosch
Assistant Vice President
/s/ KATHE M BARRETT
- -------------------
Kathe M Barrett
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: February 5, 1998
FIRST TRUST NATIONAL ASSOCIATION
/s/ RICHARD H. PROKOSCH
-----------------------
Richard H. Prokosch
Assistant Vice President
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR
7-3/4% SENIOR SUBORDINATED NOTES DUE 2008
OF
MASTEC, INC.
PURSUANT TO THE EXCHANGE OFFER IN RESPECT OF ALL OF
THEIR OUTSTANDING 7-3/4% SENIOR SUBORDINATED NOTES DUE 2008
FOR
7-3/4% SERIES B SENIOR SUBORDINATED NOTES DUE 2008
PURSUANT TO THE PROSPECTUS DATED ___________, 1998
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1998, OR SUCH LATER DATE AND TIME TO WHICH THE EXCHANGE OFFER MAY BE EXTENDED
(THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN PRIOR TO THE
EXPIRATION DATE.
TO: FIRST TRUST NATIONAL ASSOCIATION (THE "EXCHANGE AGENT")
<TABLE>
<CAPTION>
<S> <C> <C>
By Registered or Certified
Mail or Overnight Courier: By Facsimile: By Hand Delivery:
(612) 244-1145
3rd Floor Corporate Trust 3rd Floor Bond Drop Window
First Trust National Association For Information Call: First Trust National Association
180 East Fifth Street (612) 244-0444 180 East Fifth Street
St. Paul, Minnesota 55101 St. Paul Minnesota 55101
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DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS TO A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD
NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW)
THEIR OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the
Prospectus (the "Prospectus"), dated February ___, 1998, of MasTec, Inc. (the
"Company"), which, together with this Letter of Transmittal and the Instructions
hereto (the "Letter of Transmittal"), constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 7 3/4% Series B
Senior Subordinated Notes due 2008 (the "New Notes") that have been registered
under the Securities Act of 1933, as amended (the "Securities Act") for each
$1,000 principal amount of its outstanding 7 3/4% Senior Subordinated Notes due
2008 (the "Old Notes"), upon the terms and subject to the conditions set forth
in the Prospectus.
This Letter of Transmittal is to be used by Holders if: (i)
certificates representing Old Notes are to be physically delivered to the
Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by
book-entry transfer to the Exchange Agent's account at The Depository Trust
Company ("DTC") pursuant to the procedures set forth in the Prospectus under
"The Exchange Offer--Procedures for Tendering" by any financial institution that
is a participant in DTC and whose name appears on a security position listing as
the owner of Old Notes (such participants, acting on behalf of Holders (as
defined below), are referred to herein, together with such Holders, as "Acting
Holders"); or (iii) tender of Old Notes is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer--Guaranteed Delivery Procedures." Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any persons:
(i) in whose name Old Notes are registered on the books of the Issuer or any
other person who has obtained a properly completed bond power from the
<PAGE>
registered Holder or (ii) whose Old Notes are held of record by DTC and who
desires to deliver such Old Notes by book-entry transfer at DTC.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this Letter of Transmittal in its entirety.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
The instructions included with this Letter of Transmittal must be
followed. Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Exchange Agent. See Instruction 10 herein.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD
NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
List below the Old Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule to
this Letter of Transmittal. Tenders of Old Notes will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
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<CAPTION>
===================================================================================================
DESCRIPTION OF OLD NOTES (See
INSTRUCTIONS 3 AND 4)
===================================================================================================
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS: CERTIFICATE(S) TENDERED
PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED SCHEDULE IF NECESSARY)
- ------------------------------------------------ ------------------------------------------------
AGGREGATE
CERTIFICATE PRINCIPAL PRINCIPAL
NUMBER(S)* AMOUNT OF AMOUNT
CERTIFICATES* TENDERED**
---------------- ------------- ----------
<S> <C> <C> <C>
---------------- ------------- ----------
TOTAL PRINCIPAL
AMOUNT
TENDERED
<FN>
- -----------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Old Notes
evidenced by any certificates delivered to the Exchange Agent are being
tendered. See Instruction 4 of this Letter of Transmittal.
======================================================================================================
</FN>
</TABLE>
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):__________________________________________
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<PAGE>
Window Ticket No. (if any): ______________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Name of Eligible Institution which Guaranteed Delivery:___________________
If Delivered by Book-Entry Transfer, the Account Number:__________________
Transaction Code Number:__________________________________________________
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:____________________________________________
Account Number:___________________________________________________________
Transaction Code Number:__________________________________________________
Principal Amount of Tendered Notes:_______________________________________
If Holders desire to tender Old Notes pursuant to the Exchange Offer and (i)
time will not permit this Letter of Transmittal, certificates representing Old
Notes or other required documents to reach the Exchange Agent prior to the
Expiration Date, or (ii) the procedures for book-entry transfer cannot be
completed prior to the Expiration Date, such Holders may effect a tender of such
Old Notes in accordance with the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures." See Instruction 2 below.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENT OR SUPPLEMENTS
THERETO.
PLEASE NOTE: THE COMPANY HAS AGREED THAT, FOR A PERIOD OF 180 DAYS AFTER
THE EXPIRATION DATE, IT WILL MAKE COPIES OF THE PROSPECTUS AVAILABLE TO ANY
PARTICIPATING BROKER-DEALER FOR USE IN CONNECTION WITH RESALES OF THE NEW
NOTES.
Name:_____________________________________________________________________
Address:__________________________________________________________________
Attention:________________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
-3-
<PAGE>
Ladies and Gentlemen:
Subject to the terms of the Exchange Offer, the undersigned hereby
tenders to the Company the principal amount of Old Notes indicated above.
Subject to and effective upon acceptance for exchange of the principal amount of
Old Notes tendered in accordance with this Letter of Transmittal, the
undersigned sell, assigns and transfers to, or upon the order of, the Company
all right, title and interest in and to the Old Notes that are being tendered
hereby and irrevocably constitutes and appoints the Exchange Agent the true and
lawful agent and attorney-in-fact of the undersigned (with full knowledge that
the Exchange Agent also acts as the agent of the Company and as Trustee under
the Indenture for the Old Notes and the New Notes) with respect to such Old
Notes, with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest), to (a) deliver certificates
for such Old Notes to the Company, or transfer ownership of such Old Notes on
the account books maintained by DTC, together, in either such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Company, (b) present such Old Notes for transfer on the Company's books and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Old Notes, all in accordance with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to validly tender, sell, assign and transfer the Old
Notes tendered hereby and, the Company will acquire good, valid and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claims, when the same are acquired
by the Company. The undersigned also acknowledges that this Exchange Offer is
being made in reliance upon an interpretation by the staff of the Securities and
Exchange Commission that the New Notes issued in exchange for the Old Notes
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by the holders thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Notes are acquired in the ordinary
course of such holders' business and such holders have no arrangement with any
person to participate in the distribution of such New Notes. The undersigned
acknowledges that if he or she is participating in the Exchange Offer for the
purpose of distributing the New Notes, the undersigned must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of the New Notes. If the undersigned is
a broker-dealer that will receive New Notes for its own account in exchange for
Old Notes and the undersigned represents that such Old Notes were acquired as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Notes, the undersigned will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
The undersigned represents that (i) the New Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of such Holder's
business, (ii) such Holder has no arrangements with any person to participate in
the distribution of such New Notes and (iii) such Holder is not an "affiliate,"
as defined under Rule 405 of the Securities Act, of the Company or, if such
Holder is an affiliate, that such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
The undersigned will, upon request, execute any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Old Notes tendered hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Old Notes when, as and if the Company has given oral
or written notice thereof to the Exchange Agent. If any tendered Old Notes are
not accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for
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<PAGE>
any such unaccepted Old Notes will be returned (except as noted below with
respect to tenders through DTC), without expense, to the undersigned at the
address shown below or at a different address shown below or at a different
address as may be indicated under "Special Issuance Instructions" as soon as
practicable following the Expiration Date.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by and shall survive the death or incapacity of the undersigned.
The undersigned understands that the valid tender of Old Notes pursuant
to the procedures described under the caption "The Exchange Offer--Procedures
for Tendering" in the Prospectus and in the Instructions hereto will constitute
a binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated herein under "Special Issuance
Instructions," please issue the certificates representing the New Notes issued
in exchange for the Old Notes accepted for exchange and return any Old Notes not
tendered or not exchanged in the name(s) of the undersigned (or in such event in
the case of Old Notes tendered by DTC, by credit to the account at DTC).
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please send the certificates representing the New Notes issued in exchange for
the Old Notes accepted for exchange and any certificates for Old Notes not
tendered or not exchanged (and accompanying documents, as appropriate) to the
undersigned at the address(es) shown below the undersigned's signatures, unless,
in either event, tender is being made through DTC. In the event that both the
Special Issuance Instructions and the Special Delivery Instructions are
completed, please issue the certificates representing the New Notes issued in
exchange for the Old Notes accepted for exchange and return any certificates for
Old Notes not tendered or not exchanged in the name(s) of, and send said
certificates to, the person or persons so indicated. The undersigned recognizes
that the Company has no obligation pursuant to the Special Issuance Instructions
and Special Delivery Instructions to transfer any Old Notes from the name of the
registered holder(s) thereof if the Company does not accept for exchange any of
the Old Notes so tendered.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD NOTES REGARDLESS
OF WHETHER OLD NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Notes
exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if
tendered by a participant in DTC, exactly as such participant's name appears on
a security position listing as the owner of Old Notes, or by person(s)
authorized to become registered Holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below under "Capacity" and submit evidence satisfactory to the Issuer of
such person's authority to so act. See Instruction 5 herein.
If the signature appearing below is not of the registered Holder(s) of
the Old Notes, then the registered Holder(s) must sign a valid proxy.
X_________________________ Date:_______________________
X_________________________ Date:_______________________
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<PAGE>
Signature(s) of Holder(s) or Address:___________________________
Authorized Signatory
___________________________________
(including zip code)
Name(s):________________________ Area Code and Telephone No.:______
________________________________
(Please Print)
Capacity:_______________________
Social Security No.:____________
SIGNATURE GUARANTEE (SEE INSTRUCTIONS 1 AND 5 HEREIN)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
______________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
______________________________________________________
(Address (including zip code) and Telephone Number
(including area code) of Firm)
______________________________________________________
(Authorized Signatures)
______________________________________________________
(Printed Name)
______________________________________________________
(Title)
Date:____________________
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<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 5, 6 And 7)
To be completed ONLY if certificates for Old Notes in a principal amount not
tendered are to be issued in the name of, or the New Notes issued pursuant to
the Exchange Offer are to be issued to the order of, someone other than the
person or persons whose signature(s) appear(s) within this Letter of Transmittal
or issued to an address different from that shown in the box entitled
"Description of Old Notes" within this Letter of Transmittal, or if Old Notes
tendered by book-entry transfer that are not accepted for exchange are to be
credited to an account maintained at DTC.
Name:__________________________________________________________________________
(Please print or type)
Address________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Taxpayer Identification or Social Security No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 And 7)
To be completed ONLY if certificates for Old Notes in a principal amount not
tendered or not accepted for exchange or the New Notes issued pursuant to the
Exchange Offer are to be sent to someone other than the person or persons whose
signature(s) appear(s) within this Letter of Transmittal or to an address
different from that shown in the box entitled "Description of Old Notes" within
this Letter of Transmittal.
Name:__________________________________________________________________________
(Please print or type)
Address________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Taxpayer Identification or Social Security No.)
- --------------------------------------------------------------------------------
-7-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. No signature guarantee is required on this
Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered Holder(s) (including any participant in DTC whose name appears on a
security position listing as the owner of the Old Notes) of Old Notes tendered
herewith, unless such Holder(s) has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Issuance Instructions" on
page 7 hereof or (ii) if such Old Notes are tendered for the account of a firm
which is a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having and office, branch or agency in the United States (each, an
"Eligible Institution," and, collectively, "Eligible Institutions"). In all
other cases all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution (See Instruction 5).
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. For Old Notes
to be validly tendered pursuant to the Exchange Offer, (i) certificates for all
tendered Old Notes (or a confirmation of a book-entry into the Exchange Agent's
account at DTC of all Old Notes delivered electronically), together with a
properly completed and duly executed copy of this Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at the address set forth herein, prior to 5:00 p.m., New York
City time, on the Expiration Date.
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available or (ii) who cannot deliver their Old Notes and all
other required documents to the Exchange Agent prior to the Expiration Date must
tender their Old Notes by properly completing and duly executing the Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in
the Prospectus. Pursuant to such procedure:(i) such tender must be made by or
through an Eligible Institution, (ii) prior to the Expiration Date, the Exchange
Agent must have received a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the Holder of the Old Notes, the certificate
number or numbers of the Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within five business days after the
Expiration Date, this Letter of Transmittal (or facsimile thereof) together with
the certificate(s) representing the Old Notes (or a confirmation of electronic
book-entry delivery into the Exchange Agent's account at DTC) and any of the
required documents will be deposited by the Eligible Institution with the
Exchange Agent and (iii) the certificates for all tendered Old Notes in proper
form for transfer (or a confirmation of electronic mail delivery of book-entry
delivery into the Exchange Agent's account at DTC), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees, and any other required documents, must be
received by the Exchange Agent within five business days after the Expiration
Date, all as provided in the Prospectus under the caption "Guaranteed Delivery
Procedures." Any Holder of Old Notes who wishes to tender his Old Notes pursuant
to the guaranteed delivery procedures described above must ensure that the
Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m. New
York City time, on the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR OLD
NOTES, IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. AS AN ALTERNATIVE TO DELIVERY BY MAIL, THE HOLDER MAY WISH TO USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NEITHER THE COMPANY NOR THE EXCHANGE AGENT IS
UNDER ANY OBLIGATION TO NOTIFY ANY TENDERING HOLDER OF THE COMPANY'S ACCEPTANCE
OF TENDERED OLD NOTES PRIOR TO THE COMPLETION OF THE EXCHANGE OFFER. NO LETTER
OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY.
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<PAGE>
3. INADEQUATE SPACE. If the space provided is inadequate, the
information required under "Description of Old Notes" should be listed on a
separate signed schedule and attached hereto.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted in all
denominations of $1,000 and integral multiples in excess thereof. If tenders are
to be made with respect to less than the entire principal amount of Old Notes
evidenced by any certificate, fill in the principal amount of Old Notes which
are tendered in column four of the "Description of Old Notes" box. In the case
of partial tenders, Old Notes for the principal amount of the Old Notes not
tendered and a certificate or certificates representing New Notes issued in
exchange for any Old Notes accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box in this Letter of Transmittal or unless tender is made through DTC, as
promptly as practicable after the Old Notes are accepted for exchange. All Old
Notes represented by the certificates delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS.
If this Letter of Transmittal (or facsimile hereof) is signed by the registered
Holder of the Old Notes tendered hereby, the signature must correspond with the
name as written on the face of the Old Notes without alteration, enlargement or
any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or
bond powers are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and proper
evidence satisfactory to the Company of his authority so to act must be
submitted with this Letter of Transmittal.
When this Letter of Transmittal is signed by the registered Holder(s)
of the Old Notes listed and transmitted hereby and the certificate(s) for New
Notes issued in exchange thereof is to be issued (or any untendered principal
amount of Old Notes is to be reissued) to the registered Holders(s), no
endorsements of certificates or separate bond powers are required. In any other
case, such Holder(s) must either properly endorse the Old Notes tendered or
transmit a properly completed separate bond power with this Letter of
Transmittal, with the signatures on such certificates or bond powers guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered Holder(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered Holder(s) appear on the
certificates. Signatures on such certificates or bond powers must be guaranteed
by an Eligible Institution.
6. TRANSFER TAXES. Except as set forth in this Instruction 6, the
Company will pay any transfer taxes payable with respect to the exchange of Old
Notes pursuant to the Exchange Offer. If, however, certificates representing New
Notes or Old Notes for principal amounts not tendered or accepted for exchange
are to be registered or issued in the name of any persons other than the
registered Holder(s) of the Old Notes tendered hereby, or if tendered Old Notes
are registered in the name of any person other than the person(s) signing this
Letter of Transmittal, or if a transfer tax is imposed for any reason other than
the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any
such transfer taxes (whether imposed on the registered Holder or
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<PAGE>
any other person) will be payable by the tendering Holder. If satisfactory
evidence of the payment of such taxes or exemption therefrom is not submitted
with this Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering holder.
7. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should
indicate, in the applicable spaces, the name and address to which New Notes or
substitute Old Notes for principal amounts not tendered or not accepted for
exchange are to be issued or sent, if different from the name and address of the
person signing this Letter of Transmittal (or in the case of tender of the Old
Notes through DTC, if different from DTC). In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
8. SUBSTITUTE FORM W-9. The tendering holder is required to provide the
Exchange Agent with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below,
and to certify that the holder is not subject to backup withholding by checking
the box in Part 2 of the form. Failure to provide the information on the
Substitute Form W-9 may subject the tendering holder to 31% federal income tax
withholding on payments made by the Company on account of New Notes issued
pursuant to the Exchange Offer. The box in Part 3 of the Substitute Form W-9 may
be checked if the tendering holder has not been issued a TIN and has applied for
a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is
checked and the Company (or the Transfer Agent with respect to the New Notes) is
not provided with a TIN within 60 days, the Transfer Agent will withhold 31% on
all payments thereafter until a TIN is provided to the Transfer Agent. Foreign
Note holders are required to submit Form W-8 in order to avoid backup
withholding.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Old Notes to be deemed invalidly tendered, but may require the Company or the
Transfer Agent with respect to the New Notes, broker or custodian to withhold
31% of the amount of any payments made on account of the New Notes. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
9. MUTILATED, LOST OR DESTROYED CERTIFICATES. If any certificate(s)
representing Old Notes has been lost or destroyed, the Holder should promptly
notify the Exchange Agent. The Holder will then be instructed as to the
procedure to be followed in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until procedures for
replacing lost or destroyed certificates have been followed.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance or additional copies of the Prospectus, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Substitute Form W-9 may
be directed to the Exchange Agent at its address set forth above.
11. VALIDITY OF TENDERS. All questions as to the validity, form
eligibility (including time of receipt), and acceptance of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of the Company or its counsel, be
unlawful. The Company also reserves the right in its sole discretion to waive
any conditions of the Exchange Offer or defects or irregularities in tenders of
Old Notes as to any ineligibility of any Holder who seeks to tender Old Notes in
the Exchange Offer. The interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) by the Company shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Old Notes must be
cured within such time as the Company shall determine. The Company will use
reasonable efforts to
-10-
<PAGE>
give notification of defects or irregularities with respect to tenders of Old
Notes, but shall not incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such effects or
irregularities have been cured or waived.
12. WAIVER OF CONDITIONS. The Company reserves the absolute right to
amend, waive, or modify specified conditions in the Exchange Offer in the case
of any tendered Old Notes.
13. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Old Notes on transmittal of this Letter of Transmittal will
be accepted.
14. ACCEPTANCE OF TENDERED OLD NOTES AND ISSUANCE OF NEW NOTES; RETURN
OF OLD NOTES. Subject to the terms and conditions of the Exchange Offer, the
Company will accept for exchange all validly tendered Old Notes as soon as
practicable after the Expiration Date and will issue Old Notes therefor as soon
as practicable thereafter. For purposes of the Exchange Offer, the Company shall
be deemed to have accepted tendered Old Notes when, as and if the Company has
given written and oral notice thereof to the Exchange Agent. If any tendered Old
Note are not exchange pursuant to the Exchange Offer for any reason, such
unexchanged Old Notes will be returned, without expense, to the undersigned at
the address shown above (or credited to the undersigned's account at the
Book-Entry Transfer Facility designated above) or at a different address as my
be indicated under "Special Delivery Instructions."
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer--Withdrawal of Tenders."
IMPORTANT TAX INFORMATION
Under federal income tax law, a person exchanging Old Notes for New
Notes must provide the Exchange Agent with his correct TIN on Substitute Form
W-9 on this Letter of Transmittal. If the Holder is an individual, his TIN is
his social security number. If the correct TIN is not provided, the Holder may
be subject to a penalty imposed by the Internal Revenue Service and payments
made pursuant to the Exchange Offer may be subject to backup withholding of 31%
Certain persons (including, among others, all corporations and certain
foreign individuals) are not subject to backup withholding. In order for a
foreign individual to qualify as an exempt recipient, that person must submit a
statement, signed under penalties of perjury, attesting to his exempt status.
Such statements can be obtained from the Exchange Agent.
-11-
<PAGE>
<TABLE>
<CAPTION>
PAYOR'S NAME: MASTEC, INC.
- --------------------------------------------------------------------------------
<S> <C> <C>
PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER
RIGHT AND CERTIFY BY SIGNING AND DATING OR EMPLOYER
BELOW IDENTIFICATION NUMBER
---------------------
Part 2 - Check the box if you are NOT subject to backup withholding under the provisions of
SUBSTITUTE Section 3408(a)(1)(C) of the Internal Revenue Code of 1986 because (1) you have not been notified
Form W-9 that you are subject to backup withholding as a result of failure to report all interest or dividends
Department of the Treasury or (2) the Internal Revenue Service has notified you that you are no longer subject to backup
Internal Revenue Service withholding. [ ]
Payer's Request for Part 3 - CERTIFICATION - UNDER THE PENALTIES OF
Taxpayer Identification PERJURY.
Number ("TIN") and
Certification I CERTIFY THAT THE INFORMATION PROVIDED ON
THIS FORM IS TRUE, CORRECT, AND COMPLETE.
Awaiting
Print Your Name:_____________________________ TIN [ ]
Address:_____________________________________
_____________________________________________
Signature:___________________________________
Date:________________________________________
--------------------------------------------------------------------------
</TABLE>
Note: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within 60 days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
_________________________________________ ____________________
Signature Date
-12-
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7-3/4% SENIOR SUBORDINATED NOTES DUE 2008 (THE "OLD NOTES")
OF
MASTEC, INC.
This form, or one substantially equivalent hereto, must be used to
tender Old Notes pursuant to the Exchange Offer described in the Prospectus
dated ________, 1998 (the "Prospectus") of MasTec, Inc. (the "Company"), if a
holder of Old Notes cannot deliver a Letter of Transmittal to the Exchange Agent
listed below (the "Exchange Agent") or cannot either deliver the Old Note to be
tendered or complete the procedure for book-entry transfer prior to 5:00 p.m.,
New York City time, on ___________, 1998 or such later date and time to which
the Exchange Offer may be extended (the "Expiration Date"). This form, or one
substantially equivalent hereto, must be delivered by hand or sent by facsimile
transmission or mail to the Exchange Agent, and must be received by the Exchange
Agent on or prior to the Expiration Date. See "The Exchange Offer--Procedures
for Tendering" in the Prospectus. Capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Prospectus.
TO: FIRST TRUST NATIONAL ASSOCIATION
By Mail, by Hand or Overnight Delivery:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
By Facsimile:
(612) 244-1145
Confirm by Telephone:
(612) 244-0444
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
-1-
<PAGE>
Ladies and Gentlemen:
The undersigned hereby represents that he or she is the holder of the
Old Notes indicated below and that the Letter of Transmittal cannot be delivered
to the Exchange Agent and/or either the certificates representing such Old Notes
cannot be delivered to the Exchange Agent or the procedure for book-entry
transfer cannot be completed prior to the Expiration Date. The undersigned
hereby tenders the Old Notes indicated below pursuant to the guaranteed delivery
procedures set forth in the Prospectus and the Letter of Transmittal, receipt of
which is hereby acknowledged.
Name(s) of Tender Holder(s):_________________________________________
(Please Print or Type)
_________________________________________
(Signature)
Address(es):_________________________________________________________
Telephone Number(s):_________________________________________________
Name(s) in which Old Notes are registered____________________________
AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
CERTIFICATE NO(S) (IF APPLICABLE)* AMOUNT REPRESENTED AMOUNT TENDERED
- ---------------------------------- ------------------- ------------------
OR ACCOUNT NUMBER AT THE
BOOK-ENTRY FACILITY
* Need not be completed by book-entry holders.
-2-
<PAGE>
GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealer, Inc., a commercial
bank or trust company having an office or a correspondent in the United States
or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, hereby guarantees that the
undersigned will deliver to the Exchange Agent the certificates representing the
Old Notes being tendered hereby in proper form for transfer (or a confirmation
of book-entry transfer of such Old Notes, into the Exchange Agent's account at
the book-entry transfer facility) with delivery of a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, all within five business
days after the Expiration Date.
Name of Firm: Authorized Signature:
______________________________ Name:______________________________
(Please Print or Type
Address:______________________
Title:_____________________________
______________________
(include zip code)
Dated:_____________________________
Telephone No.:________________
The institution that completes this form must communicate the guarantee
to the Exchange Agent and must deliver the certificates representing any Old
Notes (or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account at the book-entry transfer facility) and the Letter of
Transmittal to the Exchange Agent within the time period shown herein. Failure
to do so could result in a financial loss to such institution.
-3-
