<PAGE>
As filed with the Securities and Exchange Commission on May 18, 2000
Registration No. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
LEVEL 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1221, 4813, 7374 47-0210602
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
---------------
1025 Eldorado Blvd.,
Broomfield, Colorado 80021
(720) 888-1000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Thomas C. Stortz, Esq.
Group Vice President,
General Counsel and Secretary
1025 Eldorado Blvd.,
Broomfield, Colorado 80021
(720) 888-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
with a copy to:
John S. D'Alimonte, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
(212) 728-8000
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be offered
in connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Proposed
Title of each Class of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered Registered Per Note(1) Offering Price(1) Fee(2)
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<S> <C> <C> <C> <C>
10 3/4% Senior Notes due
2008.................. (Euro)500,000,000 100% (Euro)500,000,000 $117,758
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11 1/4% Senior Notes due
2010 ................. (Euro)300,000,000 100% (Euro)300,000,000 $ 70,655
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended.
(2) Calculated using the rate of (Euro)0.8921 to $1.00, the noon buying rate in
the City of New York for cable transfers in euro as announced by the
Federal Reserve Bank of New York on May 17, 2000.
---------------
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 that 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 this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated May 18, 2000
Prospectus
Level 3 Communications, Inc.
Offer to Exchange
-----------
. 10 3/4% Senior Notes due 2008
for
. Outstanding 10 3/4% Senior Notes due 2008
-----------
. 11 1/4% Senior Notes due 2010
for
. Outstanding 11 1/4% Senior Notes due 2010
-----------
Terms of Exchange Offer
. The exchange offer expires 5:00 p.m., New York City time, , 2000,
unless we extend it.
. We have applied to list the new notes on the Luxembourg Stock Exchange.
See "Risk Factors" beginning on page 12 for a discussion of matters that
participants in the exchange offer should consider.
-----------
Neither the U.S. Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense in the United States.
The date of this prospectus is , 2000.
<PAGE>
This prospectus incorporates important business and financial information
about us that is not included in or delivered with this prospectus. We will
provide this information to you at no charge upon written or oral request
directed to: Vice President, Investor Relations, Level 3 Communications, Inc.,
1025 Eldorado Blvd., Broomfield, CO 80021, 720-888-2500. In order to ensure
timely delivery of the information, any request should be made by , 2000.
----------------
Each broker-dealer that receives registered notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of those notes. The letter of transmittal accompanying this
prospectus 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. A participating broker-dealer may use this
prospectus in connection with resales of notes received in exchange for the
outstanding notes where those notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities. We have agreed
that, starting on the date of this prospectus and ending on the close of
business on the day that is 180 days following the date of this prospectus, we
will make this prospectus available to any broker-dealer for use in connection
with any of those resales. See "Plan of Distribution."
----------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary..................................................................... 1
Risk Factors................................................................ 12
Information Regarding Forward-Looking Statements............................ 20
Use of Proceeds............................................................. 21
Capitalization.............................................................. 21
The Exchange Offer.......................................................... 22
Description of Other Indebtedness of Level 3................................ 33
Description of Notes........................................................ 39
Certain Income Tax Considerations........................................... 86
General Listing Information................................................. 90
Plan of Distribution........................................................ 91
Legal Matters............................................................... 91
Experts..................................................................... 91
Where You Can Find More Information......................................... 92
Incorporation of Material Documents by Reference............................ 92
</TABLE>
Level 3 accepts responsibility for the information contained in this
Prospectus. To the best of our knowledge and belief, having taken reasonable
care to ensure that such is the case, the information contained or incorporated
by reference in this Prospectus is in accordance with the facts and does not
omit anything likely to affect the import of such information.
There are restrictions on the offer and sale of the notes in the United
Kingdom. Any action taken in connection with the notes in, from or otherwise
involving the United Kingdom must comply with all applicable provisions of the
United Kingdom Financial Services Act 1986 and Public Offers of Securities
Regulations 1995.
i
<PAGE>
Summary
This summary highlights information contained elsewhere in this prospectus
and does not contain all of the information you should consider before
tendering original notes in the exchange offer. You should carefully read the
entire prospectus, including the documents incorporated in it by reference.
Level 3 Communications, Inc. was known as Peter Kiewit Sons', Inc. prior to the
March 31, 1998 split-off of its construction and mining management businesses
from its other business. This prospectus and the letters of transmittal that
accompany it collectively constitute the exchange offer.
Level 3
We engage in the communications, information services and coal mining
businesses through ownership of operating subsidiaries and substantial equity
positions in public companies. In late 1997, we announced a business plan to
increase substantially our communications and information services business and
to expand the range of services we offer. This plan is referred to in this
prospectus as the business plan. We are implementing the business plan by
building an advanced, international, facilities based communications network
based on internet protocol technology.
As our business plan is implemented, our network will combine both local
and long distance networks and connect customers end-to-end across North
America and in Europe and the Pacific Rim. Over the next two to three years,
our network is expected to encompass:
. an intercity network covering nearly 16,000 miles in North America;
. leased or owned local networks in 56 North American markets;
. an intercity network covering approximately 4,750 miles across Europe;
. leased or owned local networks in 21 European and Pacific Rim markets;
. approximately 6.5 million square feet of gateway facilities in North
America, Europe and the Pacific Rim; and
. undersea capacity, including a 1.28 Tbps transatlantic cable system and
a 2.56 Tbps Northern Asia cable system initially connecting Hong Kong to
Tokyo.
We expect to substantially complete the North American intercity portion of
our network by the end of the year 2000. In the interim, we have leased a
national network over which we began to offer services in the third quarter of
1998. We also expect to substantially complete the first two rings of our
three-ring European intercity network by the end of the year 2000. In the
interim, we have also leased a European intercity network over which we began
to offer services in early 1999. As of March 31, 2000, we had secured 100% of
the rights-of-way required for our planned North American intercity network,
had completed construction of approximately 11,800 route miles of this network
and had approximately 4,200 route miles under construction. Also, as of March
31, 2000, we had secured substantially all of the rights-of-way required for
the first two rings of our planned European intercity network, completed
construction of approximately 3,200 route miles of this network and had
approximately 2,300 route miles under construction.
In December 1999, we began carrying customer traffic between Dallas and
Houston on the first completed and lit segment of our North American intercity
network. As of March 31, 2000, we had operational facilities based local
metropolitan networks in 23 U.S. markets and 5 European markets. Our gateways
are advanced technical facilities which provide colocation space for our
customers' equipment and facilities, link
1
<PAGE>
our networks to other communications networks and house our own network
equipment. We have gateway facilities in 30 U.S. markets and in London, Paris,
Amsterdam, Brussels and Frankfurt. We have announced the development and
construction of a 1.28 Tbps transatlantic undersea cable system, as well as the
development and construction of a 2.56 Tbps Northern Asia undersea cable system
initially connecting Hong Kong to Tokyo.
We believe that, as technology advances, a comprehensive range of both
consumer and business communications services will be provided over networks,
such as ours, utilizing internet protocol technology. These services will
include traditional voice services, as well as other data services such as
internet access. We believe this shift has begun, and over time should
accelerate, since internet protocol networks offer:
. more efficient use of network capacity than the traditional public
switched telephone networks;
. an open protocol which allows for market driven development of new uses
and applications;
. the prospect of technological advances that will address problems
currently associated with internet protocol based applications that use
the public internet; and
. an open architecture that enables new competition among suppliers and
should ultimately lead to lower network costs.
Level 3's Strategy
Key elements of our strategy include:
. Become the Low Cost Provider of Communications Services. Our network is
designed to provide high quality communications services at a lower cost
by taking advantage of efficiencies in new technologies such as packet-
switching, using open, non-proprietary interfaces in the network design
and by having an upgradable network that can more readily incorporate
future technological improvements.
. Combine Latest Generations of Fiber and Electronics. In order to achieve
unit cost reductions for transmission capacity, we have designed our
network with multiple conduits to deploy successive generations of fiber
to exploit improvements in transmission electronics. Optimizing
transmission electronics to exploit specific generations of fiber optic
technology currently provides transmission capacity on the new fiber
more cost effectively than deploying new electronics on previous
generations of fiber.
. Offer a Comprehensive Range of Communications Services. We provide a
comprehensive range of communications services over our network,
including private line, (3)VoiceSM long distance services, colocation,
internet access and managed modem. We expect to begin commercial testing
of some features associated with local voice services during the first
quarter of 2000. We are also offering dark fiber and conduits along our
local metropolitan networks and intercity networks on a long-term lease
basis.
. Provide Significant Colocation Facilities. We have been experiencing
higher demand for our colocation services from our web centric customers
than we anticipated in preparing our business plan. We believe that
providing colocation services on our network attracts web centric
customers by allowing us to offer those customers reduced bandwidth
costs, rapid provisioning of additional bandwidth, interconnection with
other third-party networks and improved network performance. Therefore,
we believe that controlling significant colocation facilities in our
gateways provides us with a competitive advantage. In addition, having
significant colocation facilities in a gateway allows the intra-facility
exchange of traffic amongst a large number of customers to occur at a
substantially lower cost than would be the case for traffic transported
to other locations.
As of December 31, 1999, we had secured approximately 3.4 million square
feet of space for our gateway facilities and had completed the buildout
of approximately 1.3 million square feet of this
2
<PAGE>
space. We believe we currently have more colocation space than any of
our competitors. In January 2000, we announced an expansion of our
business plan to increase significantly the aggregate amount of our
global gateway facilities to 6.5 million square feet over the next two
to three years.
. Provide Seamless Interconnection to the Public Switched Telephone
Network. In December 1999 we began to offer (3)Voice long distance
service to allow the seamless interconnection of internet protocol
networks with the public switched telephone network for long distance
voice transmissions. Seamless interconnection allows customers to use
our internet protocol based services without modifying existing
telephone equipment or dialing procedures (that is, without the need to
dial access codes or follow other similar special procedures). Our
managed modem service uses similar softswitch technology to seamlessly
interconnect to the public switched telephone network.
. Accelerate Market Roll-out. To support the launch of our services and
develop a customer base in advance of completing our network build, we
offer services over a combination of leased local and intercity
facilities. Over time, these leased networks will be displaced by the
networks that we are constructing.
. Target Web Centric Customers. To increase revenue-producing traffic on
our network more rapidly, we are using a direct sales force focused on
communications intensive and web centric businesses. These businesses
include internet service providers, application service providers,
content providers, systems integrators, next generation carriers, web-
hosting companies, streaming media companies and internet protocol based
storage providers. Providing continually declining bandwidth costs to
these companies is at the core of our market enabling strategy because
bandwidth generally represents a substantial portion of web centric
businesses' costs.
. Develop Advanced Business Support Systems. We are developing a
substantial, scalable and web-enabled business support system
infrastructure specifically designed to enable us to offer services
efficiently to targeted customers. We believe that this system will
reduce our operating costs, give our customers direct control over some
of the services they buy from us and allow us to grow rapidly without
redesigning the architecture of the business support system.
. Leverage Existing Information Services Capabilities. We are expanding
our existing capabilities in computer network systems integration,
consulting, outsourcing and software reengineering, with particular
emphasis on the conversion of legacy software systems to systems that
are compatible with internet protocol networks and web browser access.
. Attract and Motivate High Quality Employees. We have developed programs
designed to attract and retain employees with the technical skills
necessary to implement the business plan. The programs include our
Shareworks stock purchase plan and our Outperform Stock Option program.
Competitive Advantages
We believe that we have the following competitive advantages that, together
with our strategy, will assist us in implementing the business plan:
. Experienced Management Team. We have assembled a management team that we
believe is well suited to implement the business plan. Most of our
senior management has been involved in leading the development and
marketing of telecommunications products and in designing, constructing
and managing intercity, metropolitan and international networks.
. A More Readily Upgradable Network Infrastructure. Our network design
strategy takes advantage of recent innovations, incorporating many
features that are not present in older communications networks, and
provides us flexibility to take advantage of future developments and
innovations. We have designed the transmission network to optimize all
aspects of fiber and electronics simultaneously as a system to deliver
the lowest unit cost to our customers. As fiber and transmission
electronic
3
<PAGE>
technology changes, we expect to realize new unit cost improvements by
deploying the latest fiber and transmission electronics technology in
available empty or spare conduit in our multiple conduit network. We
believe that the spare conduit design of our network will enable us to
effect this deployment more quickly and at lower cost than other
carriers.
. Integrated End-to-End Network Platform with Significant Colocation
Facilities. We believe that the integration of our local and intercity
networks with our colocation facilities will expand the scope and reach
of our on-net customer coverage and facilitate the uniform deployment of
technological innovations as we manage our future upgrade paths.
. Systems Integration Capabilities. We believe that our ability to offer
computer outsourcing and systems integration services, particularly
services relating to allowing a customer's legacy systems to be accessed
with web browsers, will provide additional opportunities for selling our
products and services.
Our principal executive offices are located at 1025 Eldorado Boulevard,
Broomfield, Colorado 80021 and our telephone number is (720) 888-1000.
4
<PAGE>
The Exchange Offer
On February 29, 2000, we privately placed (Euro)500,000,000 aggregate
principal amount of our 10 3/4% senior notes due 2008 and (Euro)300,000,000
aggregate principal amount of our 11 1/4% senior notes due 2010, which we refer
to collectively as the original notes, in a transaction exempt from
registration under the Securities Act. In connection with the private
placement, we entered into a registration agreement, dated February 24, 2000,
with the initial purchasers of the original notes. In the registration
agreement, we agreed to register under the Securities Act an offer of our new
10 3/4% senior notes due 2008 and our new 11 1/4% senior notes due 2010, which
we refer to collectively as the new notes, in exchange for the original notes.
We also agreed to deliver this prospectus to holders of the original notes and
complete the exchange offer within 180 days of the issuance of the original
notes. In this prospectus, we refer to the original 2008 senior notes and the
new 2008 senior notes together as the 2008 senior notes, the original 2010
senior notes and the new 2010 senior notes together as the 2010 senior notes
and the original notes and the new notes together as the notes. You should read
the discussion under the heading "Description of Notes" for information
regarding the notes.
The Exchange Offer........ This is an offer to exchange (Euro)1,000 in
principal amount of new notes for each (Euro)1,000
in principal amount of original notes. The new
notes are substantially identical to the original
notes, except that:
(1) the new notes will be freely transferable,
other than as described in this prospectus;
(2) will not contain any legend restricting their
transfer;
(3) holders of the new notes will not be entitled
to certain rights of the holders of the
original notes under the registration
agreement; and
(4) the new notes will not contain any provisions
regarding the payment of special interest.
We believe that you can transfer the new notes
without complying with the registration and
prospectus delivery provisions of the Securities
Act if you:
(1) acquire the new notes in the ordinary course
of your business;
(2) are not and do not intend to become engaged in
a distribution of the new notes;
(3) are not an affiliate of Level 3;
(4) are not a broker-dealer that acquired original
notes directly from Level 3; and
(5) are not a broker-dealer that acquired original
notes as a result of market-making or other
trading activities.
If any of these conditions is not satisfied and you
transfer any new note without delivering a proper
prospectus or without qualifying for a registration
exemption, you may incur liability under the
Securities Act.
5
<PAGE>
Each broker-dealer that receives new notes for its
own account in exchange for original notes, which
it acquired 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 those new notes. See "Plan of
Distribution."
Registration Rights....... Under the registration agreement, we have agreed to
use our best efforts to commence the exchange offer
or to use our best efforts to cause the original
notes to be registered under the Securities Act so
as to permit resales. If we are not in compliance
with our obligations under the registration
agreement, special interest will accrue on the
notes under certain circumstances in addition to
the interest that is otherwise due on the notes. If
the exchange offer is completed on the terms and
within the period contemplated by this prospectus,
no special interest will be payable on the notes.
The new notes will not contain any provisions
regarding the payment of special interest. See "The
Exchange Offer--Special Interest."
Minimum Condition......... The exchange offer is not conditioned on any
minimum aggregate principal amount of original
notes being tendered for exchange.
Expiration Date........... The exchange offer will expire at 5:00 p.m., New
York City time, on , 2000, unless we extend
it.
Exchange Date............. Original notes will be accepted for exchange
beginning on the first business day following the
expiration date, upon surrender of the original
notes.
Conditions to the
Exchange Offer........... Our obligation to complete the exchange offer is
subject to various conditions. See "The Exchange
Offer--Conditions to the Exchange Offer." We
reserve the right to terminate or amend the
exchange offer at any time before the expiration
date if various specified events occur.
Withdrawal Rights......... You may withdraw the tender of your original notes
at any time before the expiration date. Any
original notes not accepted for any reason will be
returned to you without expense as promptly as
practicable after the expiration or termination of
the exchange offer.
Procedures for Tendering
Original Notes........... See "The Exchange Offer--How to Tender."
Certain Income Tax
Considerations........... The exchange of original notes for new notes by
U.S. holders will not be a taxable exchange for
U.S. federal income tax purposes, and U.S. holders
will not recognize any taxable gain or loss as a
result of the exchange.
6
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Effect on Holders of
Original Notes........... If the exchange offer is completed on the terms and
within the period contemplated by this prospectus,
holders of the original notes will have no further
registration or other rights under the registration
agreement, except under limited circumstances. See
"The Exchange Offer--Special Interest."
Holders of the original notes who do not tender
their original notes will continue to hold those
original notes. All untendered, and tendered but
unaccepted, original notes will continue to be
subject to the restrictions on transfer provided
for in the original notes and the indentures under
which the original notes have been and the new
notes are being issued. To the extent that original
notes are tendered and accepted in the exchange
offer, the trading market, if any, for the original
notes could be adversely affected. See "The
Exchange Offer--Other."
Use of Proceeds...........
Level 3 will not receive any proceeds from the
issuance of new notes in the exchange offer.
Exchange Agent............ The Bank of New York is serving as exchange agent,
and Kredietbank S.A. Luxembourgeoise is acting as
Luxembourg exchange agent, in connection with the
exchange offer.
7
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The Notes
The new notes are substantially identical to the original notes, except for
the transfer restrictions and registration rights relating to the original
notes. The new notes will evidence the same debt as the original notes and will
be entitled to the benefits of the indentures. See "Description of Notes."
Issuer.................... Level 3 Communications, Inc.
Securities Offered........ (Euro)500,000,000 aggregate principal amount of 10
3/4% senior notes due 2008 and (Euro)300,000,000
aggregate principal amount of 11 1/4% senior notes
due 2010.
Maturity.................. March 15, 2008 and March 15, 2010.
Interest.................. We will pay interest on the 2008 senior notes at
the rate of 10 3/4% per year on March 15 and
September 15 of each year, beginning on September
15, 2000. We will pay interest on the 2010 senior
notes at the rate of 11 1/4% per year on March 15
and September 15 of each year, beginning on
September 15, 2000.
Ranking................... The notes are unsecured senior obligations. The
notes rank:
. equal with any existing and future senior debt,
including without limitation the $2 billion
aggregate principal amount of our 9 1/8% senior
notes due 2008, the $833,815,000 aggregate
principal amount at maturity of our 10 1/2%
senior discount notes due 2008, the $800
million aggregate principal amount of our 11%
senior notes due 2008, the $250 million
aggregate principal amount of our 11 1/4%
senior notes due 2010 and the $675 million
aggregate principal amount at maturity of our
12 7/8% senior discount notes due 2010, and
. senior to any existing and future subordinated
debt.
We are a holding company, and the notes we
effectively subordinated to all obligations of our
subsidiaries. As of March 31, 2000, our
subsidiaries had approximately $2.146 billion in
aggregate indebtedness and other balance sheet
liabilities, excluding intercompany liabilities,
and $900 million in additional borrowings available
under our senior secured credit facility. See
"Description of Notes."
Sinking Fund.............. None.
Optional Redemption....... We may not redeem the 2008 senior notes prior to
maturity.
We may not redeem the 2010 senior notes prior to
March 15, 2005. On and after March 15, 2005, we
may, at our option, redeem these notes, in whole or
in part, at any time prior to maturity at the
redemption prices set forth under "Description of
Notes--Optional Redemption," plus any accrued and
unpaid interest on the redeemed notes to the
redemption date.
In addition, at any time prior to March 15, 2003,
we may redeem up to 35% of the aggregate principal
amount of the 2010 senior notes with the net cash
proceeds of certain private placements or
underwritten public offerings of our common stock
at a redemption
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price of 111.25% of the aggregate principal amount
of the 2010 senior notes plus any accrued and
unpaid interest on the redeemed notes to the
redemption date. However, at least 65% of the
aggregate principal amount of the 2010 senior notes
must remain outstanding immediately after any
redemption. See "Description of Notes--Optional
Redemption."
Change of Control......... If an event treated as a change of control occurs,
you will have the right to require us to repurchase
all or a portion of your notes at a price equal to
101% of the principal amount of the notes, plus any
accrued and unpaid interest to the purchase date.
See "Description of Notes--Certain Covenants--
Change of Control Triggering Event."
Covenants................. The indentures for the notes limit our ability and
the ability of our restricted subsidiaries to,
among other things:
(1) incur debt;
(2) make various payments;
(3) pay dividends and make other restricted
payments and transfers;
(4) create liens;
(5) enter into certain transactions, including
transactions with affiliates;
(6) sell assets;
(7) issue or sell capital stock of certain of our
subsidiaries; and
(8) in our case, consolidate, merge or sell
substantially all of our assets.
Each of these limitations is subject to a number of
important qualifications and exceptions. See
"Description of Notes--Certain Covenants."
Listing................... The new notes are new issues of securities for
which there is currently no established trading
market. There can be no assurance as to the
development or liquidity of any market for any of
the notes. We have applied to list the new notes on
the Luxembourg Stock Exchange. See "Risk Factors--
There is no public market for the new notes, so you
may be unable to sell the new notes."
Payment Procedures........ Payments of principal of, premium, if any, and
interest on the notes will be made in euros.
Payments with respect to notes issued in exchange
for the notes initially sold pursuant to Regulation
S under the Securities Act will be made in
immediately available funds to the common
depositary for Euroclear and Clearstream and, upon
receipt of such payments, Euroclear and Clearstream
will credit the accounts of their participants
holding notes. Payments with respect to notes
issued in exchange for the notes initially sold
pursuant to Rule 144A under the Securities Act will
be made in immediately available funds
9
<PAGE>
to a custodian for the Depository Trust Company, or
DTC. The custodian will obtain wire transfer
instructions from each DTC participant holding
notes and will wire payments directly to such
participants. DTC participants that fail to provide
wire transfer instructions will not receive
payments until such wire instructions are provided.
Pending disbursement by the custodian, funds held
by the custodian shall not accrue interest for the
benefit of participants holding the notes. See
"Description of Notes--Book-Entry System."
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<PAGE>
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Our ratio of earnings to fixed charges and preferred stock dividends for
each of the periods indicated was as follows:
<TABLE>
<CAPTION>
Three Months
Ended March
31, Fiscal Year Ended
------------ ------------------------
2000 1999 1999 1998 1997 1996 1995
------ ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
and preferred stock dividends....... -- -- -- -- 5.73 3.87 --
</TABLE>
For this ratio, earnings consist of earnings (loss) before income taxes,
minority interest and discontinued operations plus fixed charges excluding
capitalized interest. Fixed charges and preferred stock dividends consist of
interest expensed and capitalized, plus the portion of rent expense under
operating leases deemed by us to be representative of the interest factor,
plus, prior to September 30, 1995, preferred stock dividends on preferred stock
of our former subsidiary, MFS. We had deficiencies of earnings to fixed charges
and preferred stock dividends of approximately $292 million and $137 million
for the three months ended March 31, 2000 and 1999, respectively, $695 million
for the fiscal year ended 1999, approximately $36 million for the fiscal year
ended 1998 and approximately $32 million for the fiscal year ended 1995.
11
<PAGE>
Risk Factors
Before tendering original notes, prospective participants in the exchange
offer should carefully consider the following risks. The new notes, like the
original notes, entail the following risks:
We are dependent on our new business plan that relies on internet protocol
technology
The current status of our business plan makes evaluation of its risks and
rewards extremely difficult and speculative. The business plan depends upon a
shift in providing communications services over internet protocol based
networks instead of the traditional public-switched networks. Our strategy
assumes that the technology that we and others have developed solves the
problems currently associated with internet protocol based applications and
will scale for full deployment, and that others will continue to develop new
uses and applications for internet protocol based networks. The success of our
business plan depends on other assumptions as well, such as our ability to use
open, non-proprietary interfaces in our network software and hardware that
allow us to buy equipment in the future from multiple vendors. We must generate
substantial traffic volume at acceptable prices on our network in order to
realize the anticipated operating efficiencies and cost benefits of the
network.
Substantial operating losses are expected for the foreseeable future
The development of our business plan requires significant capital
expenditures. We expect to incur a large portion of these capital expenditures
before we receive any significant related revenues from our business plan.
Because of these capital expenditures and the related early operating expenses,
we expect substantial negative operating cash flow and net losses for the
foreseeable future. For the three months ended March 31, 2000, we incurred a
loss from continuing operations of $271 million and for 1999, we incurred a
loss from continuing operations of $487 million. We expect our operating losses
for the foreseeable future to be substantially higher. We may never establish a
significant customer base for our communications and information services
business, and even if we do, we may continue to sustain substantial negative
operating cash flow and net losses as a result of low prices or higher costs.
In addition, we will incur substantially higher selling, general and
administrative expenses as we develop our business plan.
Since our business plan is a significant expansion of our communications
and information services business, we believe that our historical financial
results will not provide investors with a meaningful indicator of our future
financial condition or results of operations.
A failure to finance our substantial capital requirements could adversely
affect our business plan
The implementation of our business plan and our ability to meet our
projected growth depends on our ability to secure substantial additional
financing. We estimate that the implementation of our business plan, as
currently contemplated, requires between $13 and $14 billion over the 10-year
period of the plan. However, the amount of additional financing we need could
be higher than we currently estimate. The implementation of our business plan
and our future financial results could be adversely affected if we are
unsuccessful in obtaining required financing through:
. raising debt or equity capital at the times we need on terms that we
consider acceptable;
. generating cash flow from our operations; and
. offering others fiber optic capacity on our network or access to our
conduits.
If we fail to obtain the required financing, we may be required to delay or
abandon some of our future expansion or spending plans. Our existing level of
debt and its terms may limit our ability to raise additional capital and
otherwise restrict our activities. Additional equity issuances would dilute
your ownership interest. In addition, if our operations do not produce positive
cash flow in sufficient amounts to pay our financing obligations, our future
financial results and our ability to implement our business plan will be
materially and adversely affected.
12
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Difficulties in constructing our network could increase its estimated cost and
delay its scheduled completion
The construction, operation and any upgrading of our network is a
significant undertaking. Administrative, technical, operational and other
problems that could arise may be more difficult to address and solve due to the
significant size and complexity of the planned network. We are also dependent
on timely performance by third-party suppliers and contractors. In addition,
important aspects of our network, such as voice capability, will rely on
technology that is in the development stage or that is largely commercially
unproven. This new technology also may not be compatible with existing
technology. Many of these factors and problems are beyond our control. As a
result, the entire network may not be completed as planned for the cost and in
the time frame that we currently estimate. We may be materially adversely
affected as a result of any significant increase in the estimated cost of the
network or any significant delay in its anticipated completion.
After its initial completion, future expansions and adaptations of our
network's electronic and software components may be necessary in order to
respond to:
. a growing number of customers;
. increased demands by our customers to transmit larger amounts of data;
. changes in our customers' service requirements; and
. technological advances by our competitors.
Any expansion or adaptation of our network will require substantial
additional financial, operational and managerial resources. If we are unable to
expand or adapt our network to respond to these developments on a timely basis
and at a commercially reasonable cost, then our business will be materially
adversely affected.
Our business could be materially affected by problems arising from the
commercial deployment of our voice technology for internet protocol networks
We and others have developed technology that we believe will avoid the need
for customers on a private internet protocol based network to dial access codes
or follow other special procedures to initiate a voice call. We began to
commercially deploy this technology for long distance voice service in December
1999 and problems with it may be discovered as it continues to be deployed. Our
efforts to commercially deploy this technology in a timely manner and at an
acceptable cost may not be successful, and such a failure could have a material
adverse effect on us. We are currently testing some features associated with
local voice service such as caller ID, voicemail and call forwarding. To date,
internet protocol voice telephony using the public internet has had significant
problems with quality, latency, reliability and security. Until we more fully
commercially deploy our voice telephony services, we cannot predict whether our
plans for solving these problems will work.
The commercial deployment of our voice telephony services also requires
that we develop related business support systems. Our failure to develop these
business support systems could have an adverse effect on the commercial
deployment of these services.
Our business plan requires the development of effective business support
systems to implement customer orders and to provide and bill for services
Our business plan depends on our ability to develop effective business
support systems. This is a complicated undertaking requiring significant
resources and expertise and support from third-party vendors. Business support
systems are needed for:
. implementing customer orders for services;
. provisioning, installing and delivering these services; and
. monthly billing for these services.
13
<PAGE>
Since our business plan provides for rapid growth in the number and volume
of products and services we offer, we need to develop these business support
systems on a schedule sufficient to meet our proposed service rollout dates. In
addition, we will require these business support systems to expand and adapt
with our rapid growth. The failure to develop effective business support
systems could have a material adverse effect on our ability to implement our
business plan.
We may be unable to hire and retain sufficient qualified personnel; the loss of
any of our key executive officers could adversely affect us
We believe that our future success will depend in large part on our ability
to attract and retain highly skilled, knowledgeable, sophisticated and
qualified managerial, professional and technical personnel. To implement our
business plan, we need to have a substantial number of additional employees. We
have experienced significant competition in attracting and retaining personnel
who possess the skills that we are seeking. As a result of this significant
competition, we may experience a shortage of qualified personnel. Our
businesses are managed by a small number of key executive officers,
particularly James Q. Crowe, Chief Executive Officer, R. Douglas Bradbury,
Chief Financial Officer, Kevin J. O'Hara, Chief Operating Officer and Colin
V.K. Williams, Executive Vice President. The loss of any of these key executive
officers could have a material adverse effect on us.
Inability to manage effectively our planned rapid expansion could adversely
affect our operations
Our business plan contemplates rapid expansion of our business for the
foreseeable future. This growth will increase our operating complexity and
require that we, among other things, rapidly:
. expand our employee base with highly skilled personnel;
. develop, introduce and market new products and services;
. integrate any acquired operations and joint ventures;
. secure space suitable for colocation facilities;
. develop financial and management controls and systems; and
. control expenses related to our business plan.
The significant size and complexity of our planned network and planned rate
of expansion will make it more difficult to satisfy these requirements. Our
failure to satisfy any of these requirements, or otherwise manage our growth
effectively, could have a material adverse effect on us.
If we were to make strategic investments, acquisitions or joint ventures,
our resources and management time could be diverted and we may be unable to
integrate them successfully with our existing network and services.
We must obtain and maintain permits and rights-of-way to develop our network
The operation of our networks requires that we obtain many local franchises
and other permits. We also must obtain rights to use underground conduit and
aerial pole space and other rights-of-way and fiber capacity. The process of
obtaining these franchises, permits and rights is time consuming and
burdensome. If we are unable, on acceptable terms and on a timely basis, to
obtain and maintain the franchises, permits and rights needed to implement our
business plan, the buildout of our network could be materially adversely
affected. In addition, the cancellation or non-renewal of the franchises,
permits or rights we do obtain, or the loss of the rights-of-way we have
obtained, could materially adversely affect us.
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Termination of relationships with key suppliers could cause delay and costs
Until we complete the company-owned portion of our network, we will lease
substantially all of our intercity communications capacity in North America,
Europe and possibly elsewhere. As a result, we will be dependent on the
providers of this capacity. In addition, we intend to lease a significant
amount of capacity from local exchange carriers to connect our customers to our
gateway sites. We are also dependent on third-party suppliers for substantial
amounts of fiber, conduit, computers, software, switches/routers and related
components that we will assemble and integrate into our network. If any of
these relationships are terminated or a supplier fails to provide reliable
services or equipment and we are unable to reach suitable alternative
arrangements quickly, we may experience significant delays and additional
costs. If that happens, we could be materially adversely affected.
Our industry is highly competitive with participants that have greater
resources and existing customers
The communications and information services industry is highly competitive.
Many of our existing and potential competitors have financial, personnel,
marketing and other resources significantly greater than ours. Many of these
competitors have the added competitive advantage of an existing customer base.
In addition, significant new competitors could arise as a result of:
. increased consolidation and strategic alliances in the industry
resulting from recent Congressional and FCC actions;
. allowing foreign carriers to compete in the U.S. market;
. further technological advances; and
. further deregulation and other regulatory initiatives.
If we are unable to compete successfully, our business could be materially
adversely affected.
Rapid technological changes can lead to further competition
The communications and information services industry is subject to rapid
and significant changes in technology. In addition, the introduction of new
products or technologies may reduce the cost or increase the supply of certain
services similar to those that we plan to provide. As a result, our most
significant competitors in the future may be new entrants to the communications
and information services industry. These new entrants may not be burdened by an
installed base of outdated equipment. Technological changes and the resulting
competition on our operations could have a material adverse effect on us.
Increased industry capacity and other factors could lead to lower prices for
our products and services
AT&T, MCI WorldCom, Sprint and Qwest currently own nationwide long distance
fiber optic networks. MCI WorldCom has entered into an agreement to acquire
Sprint. In Europe, GTS, MCI WorldCom and Viatel currently own intercity
networks. Qwest's network, as well as the intercity networks being deployed by
others, including Broadwing and Williams Communications in the United States
and KPNQwest, i-21 and Global Crossing in Europe, use advanced technology
similar to that of our network. In addition, there are numerous local and
regional networks. Increased capacity may cause significant decreases in the
prices for services. Prices may also decline due to capacity increases
resulting from technological advances and strategic alliances, such as long
distance capacity purchasing alliances among regional Bell operating companies.
These price declines may be particularly severe if recent trends causing
increased demand for capacity, such as Internet usage, change. Rapid growth in
the use of the Internet is a recent phenomenon, and may not continue at the
same rate. Increased competition has already led to a decline in rates charged
for various telecommunications services.
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<PAGE>
We are subject to significant regulation that could change in an adverse manner
Communications services are subject to significant regulation at the
federal, state, local and international levels. These regulations affect us and
our existing and potential competitors. Delays in receiving required regulatory
approvals, completing interconnection agreements with incumbent local exchange
carriers or the enactment of new and adverse regulations or regulatory
requirements may have a material adverse effect on us. In addition, future
legislative, judicial, and regulatory agency actions could have a material
adverse effect on us.
Recent federal legislation provides for a significant deregulation of the
U.S. telecommunications industry, including the local exchange, long distance
and cable television industries. This legislation remains subject to judicial
review and additional FCC rulemaking. As a result, we can not predict the
legislation's effect on our future operations. Many regulatory actions are
under way or are being contemplated by federal and state authorities regarding
important items. These actions could have a material adverse effect on us.
Canadian law currently does not permit us to offer services in Canada
Ownership of facilities that originate or terminate traffic in Canada is
currently limited to Canadian carriers. This restriction will block our entry
into the Canadian market unless appropriate arrangements can be made to address
it.
Potential regulation of internet service providers could adversely affect our
operations
The FCC has to date treated internet service providers as enhanced service
providers. Enhanced service providers are currently exempt from federal and
state regulations governing common carriers, including the obligation to pay
access charges and contribute to the universal service fund. The FCC is
currently examining the status of internet service providers and the services
they provide. If the FCC were to determine that internet service providers, or
the services they provide, are subject to FCC regulation, including the payment
of access charges and contribution to the universal service funds, it could
have a material adverse effect on us.
The FCC has also been considering whether local carriers are obligated to
pay compensation to each other for the transport and termination of calls to
internet service providers when a local call is placed from an end user of one
carrier to an internet service provider served by a competing local exchange
carrier. Recently, the FCC determined that it had no rule addressing inter-
carrier compensation for these calls. In the absence of a federal rule, state
commissions may elect not to require payment of reciprocal compensation for
these calls. The FCC also released for comment alternative federal rules to
govern compensation for these calls in the future. If state commissions, the
FCC or the courts determine that inter-carrier compensation does not apply,
carriers, including us, may be unable to recover their costs or will be
compensated at a significantly lower rate and may be required to refund
compensation previously paid.
Network failure or delays and errors in transmissions expose us to potential
liability
Our network will use a collection of communications equipment, software,
operating protocols and proprietary applications for the high speed
transportation of large quantities of data among multiple locations. Given the
complexity of our proposed network, it may be possible that data will be lost
or distorted. Delays in data delivery may cause significant losses to a
customer using our network. Our network may also contain undetected design
faults and software bugs that, despite our testing, may be discovered only
after the network has been installed and is in use. The failure of any
equipment or facility on the network could result in the interruption of
customer service until we effect necessary repairs or install replacement
equipment. Network failures, delays and errors could also result from natural
disasters, power losses, security breaches and computer viruses. These
failures, faults or errors could cause delays, service interruptions, expose us
to customer liability or require expensive modifications that could have a
material adverse effect on our business.
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<PAGE>
Intellectual property and proprietary rights of others could prevent us from
using necessary technology to provide internet protocol voice services
While we do not know of any technologies that are patented by others that
we believe are necessary for us to provide internet protocol voice services,
this necessary technology may in fact be patented by other parties either now
or in the future. If this technology were held under patent by another person,
we would have to negotiate a license for the use of that technology. We may not
be able to negotiate such a license at a price that is acceptable to us. The
existence of such a patent, or our inability to negotiate a license for any
such technology on acceptable terms, could force us to cease using the
technology and offering products and services incorporating the technology.
Our subsidiaries must make payments to us in order for us to make payments on
the notes
We are a holding company with no material assets other than the stock of
our subsidiaries. Accordingly, we depend upon cash payments from our
subsidiaries to meet our payment obligations, including our obligation to pay
you as a holder of notes. Our subsidiaries may not generate earnings sufficient
to enable us to meet our payment obligations. The senior secured credit
facility imposes significant restrictions on the ability of our subsidiaries to
make distributions or other payments to us. In addition, our subsidiaries may
enter into debt agreements in the future that contain similar restrictions.
Because the notes are structurally subordinated to the obligations of our
subsidiaries, you may not be fully repaid if we become insolvent
Substantially all of our operating assets are held directly by our
subsidiaries. Holders of any preferred stock of any of our subsidiaries and
creditors of any of our subsidiaries, including trade creditors, have and will
have claims relating to the assets of that subsidiary that are senior to the
notes and our other outstanding debt securities. As a result, the notes and all
of our other senior debt are structurally subordinated to the debts, preferred
stock and other obligations of our subsidiaries. The holders of the notes have
no claim to the assets of any of our subsidiaries. As of March 31, 2000, our
subsidiaries had approximately $2.146 billion in aggregate indebtedness and
other balance sheet liabilities, excluding intercompany liabilities, and $900
million in additional borrowings available under our senior secured credit
facility.
Because the notes that you hold are unsecured, you may not be fully repaid if
we become insolvent
The new notes will not be secured by any of our assets or our subsidiaries'
assets. The indentures relating to the new notes and our outstanding notes
permit us to incur secured debt. Our subsidiaries' obligations under our $1.375
billion senior secured credit facility are secured by substantially all of our
assets and are guaranteed by us. If we became insolvent the holders of any
secured debt would receive payments from the assets used as security before you
receive payments.
We have substantial existing debt and will incur substantial additional debt,
so we may be unable to make payments on the notes
As of March 31, 2000, we had approximately $7.053 billion of indebtedness,
and our subsidiaries had $900 million in additional borrowings available under
our senior secured credit facility. The indentures relating to the notes and
each other issue of our outstanding debt securities permit us to incur
substantial additional debt, and we fully expect to borrow substantial
additional funds, which may include secured borrowings, in connection with
implementing the business plan. A substantial level of debt makes it more
difficult for us to repay you. Substantial amounts of our existing debt will,
and our future debt may, mature prior to the notes.
17
<PAGE>
You may face foreign exchange risks by investing in the notes
If you are a U.S. investor, an investment in the notes will entail foreign
exchange-related risks due to, among other factors, possible significant
changes in the value of the euro relative to the U.S. dollar because of
economic, political and other factors over which we have no control.
Depreciation of the euro against the U.S. dollar could cause a decrease in the
effective yield of the notes below their stated interest rates and could result
in a loss to you on a U.S. dollar basis.
We may be unable to generate cash flow from which to make payments on the notes
We had deficiencies in our ratios of earnings to fixed charges and
preferred stock dividends of approximately $292 million for the three months
ended March 31, 2000, approximately $695 million for the fiscal year 1999 and
approximately $36 million for the fiscal year 1998. We expect to incur
substantial net operating losses for the foreseeable future. We may not become
profitable or sustain profitability in the future. Accordingly, we may not have
sufficient funds to make payments on the notes.
Future additional debt that we incur in implementing our business plan may have
a negative effect on our financial flexibility and stability
Our business plan will require us and our subsidiaries to incur substantial
amounts of additional indebtedness in the future. The extent to which we incur
additional debt, and the restrictive and financial covenants that we will be
subject to, will have important consequences to the holders of the notes. These
include the following:
. a potential impairment of our ability to obtain additional financing
for the business plan, including financing necessary to fund the
substantial net losses incurred in connection with the business plan;
. the requirement that a substantial portion of our cash flow from
operations must be dedicated to the payment of debt service, thus
reducing the funds available for the business plan; and
. potential limits on our ability to adjust rapidly to changing market
conditions and vulnerability in the event of a downturn in general
economic conditions or in the communications and information services
business.
If we experience a change in control, we may be unable to purchase the notes
you hold as required under the applicable indenture
Upon the occurrence of certain change of control events, we must make an
offer to purchase all outstanding notes at a purchase price equal to 101% of
the principal amount or the accreted value, as applicable, of the notes, plus
accrued and unpaid interest, if any. We may not have sufficient funds to pay
the purchase price for all notes tendered by holders seeking to accept the
offer to purchase. In addition, the indentures relating to the notes and our
other outstanding debt securities, the senior secured credit facility and our
other debt agreements may require us to repurchase the other debt upon a change
in control or may prohibit us from purchasing any notes before their stated
maturity, including upon a change of control. Our failure to purchase all
validly tendered notes would result in an event of default under the applicable
indenture. See "Description of Notes--Certain Covenants--Change of Control
Triggering Event."
Our senior secured credit facility may prohibit us from making payment on the
notes
Our senior secured credit facility generally does not permit us or our
subsidiaries to make payments on any outstanding indebtedness other than
regularly scheduled interest and principal payments as and when due. As a
result, our senior secured credit facility would prohibit us from making any
payment on the notes in the event that the notes are accelerated or tendered
for repurchase upon a change in control. Any such failure to make payments on
the notes would cause us to default under our indentures, which in turn is
likely to be a default under the senior secured credit facility and other
outstanding and future indebtedness.
18
<PAGE>
There is no public market for the notes, so you may be unable to sell the notes
The notes are new securities for which there is currently no market.
Consequently, the notes may be relatively illiquid, and you may be unable to
sell your notes. Though we have applied for the listing of the notes on the
Luxembourg Stock Exchange and though the notes also may be traded among
participants in Euroclear and Clearstream, we cannot assure you that a liquid
market for the notes will develop.
PKS Systems Integration LLC may have liability from its Year 2000 customer
projects
PKS Information Services, Inc. derived a substantial portion of its revenue
from projects that its subsidiary, PKS Systems Integration LLC, or PKSSI,
conducted involving Year 2000 assessment and renovation services. These
activities of PKSSI expose us to potential risks that may include problems with
services provided by PKSSI to its customers and the potential for claims
arising under PKSSI's customer contracts. PKSSI's attempts to contractually
limit its exposure to liability for Year 2000 compliance issues may not be
effective.
Foreign currency exchange rate fluctuations or repatriation could result in
losses
Our international expansion will cause our results of operations and the
value of our assets to be affected by the exchange rates between the U.S.
dollar and the currencies of the additional countries in which we have
operations and assets. In some of these countries, prices of our products and
services will be denominated in a currency other than the U.S. dollar. As a
result, we may experience economic losses solely as a result of foreign
currency exchange rate fluctuations, including a foreign currency's devaluation
against the U.S. dollar. We may also in the future acquire interests in
companies that operate in countries where the removal or conversion of currency
is restricted. In addition, similar restrictions could be imposed in countries
where we conduct business after we begin our operations.
Environmental liabilities from our historical operations could be material
Our operations and properties are subject to a wide variety of laws and
regulations relating to environmental protection, human health and safety.
These laws and regulations include those concerning the use and management of
hazardous and non-hazardous substances and wastes. We have made and will
continue to have to make significant expenditures relating to our environmental
compliance obligations. We may not at all times be in compliance with all these
requirements.
In connection with certain historical operations, we are a party to, or
otherwise involved in, legal proceedings under state and federal law involving
investigation and remediation activities at approximately 110 contaminated
properties. We could be held liable, jointly and severally, and without regard
to our own fault, for such investigation and remediation. The discovery of
additional environmental liabilities related to our historical operations or
changes in existing environmental requirements could have a material adverse
effect on us.
Significant future declines in cash flow from coal operations
Approximately 40% of our net revenues for 1999 were attributable to our
coal mining operations. The level of cash flows generated in recent periods by
our coal operations will not continue after the year 2000. These cash flow
levels will decrease because the delivery requirements under our current long-
term contracts decline significantly after that date. Moreover, without those
contracts, our coal mining operations would not be able to operate profitably
by selling their production on the spot markets. A substantial majority of our
coal mining revenues are provided by three customer contracts.
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<PAGE>
Potential liabilities and claims arising from our coal operations could be
significant
Our coal operations are subject to extensive laws and regulations that
impose stringent operational, maintenance, financial assurance, environmental
compliance, reclamation, restoration and closure requirements. These
requirements include those governing air and water emissions, waste disposal,
worker health and safety, benefits for current and retired coal miners, and
other general permitting and licensing requirements. We may not at all times be
in compliance with all of these requirements. Liabilities or claims associated
with this non-compliance could require us to incur material costs or suspend
production. Mine reclamation costs that exceed our reserves for these matters
also could require us to incur material costs.
Information Regarding Forward-Looking Statements
This prospectus contains or incorporates by reference forward-looking
statements. These forward-looking statements include, among others, statements
concerning:
. the business plan, its advantages and our strategy for implementing
the business plan;
. anticipated growth of the communications and information services
industry;
. plans to devote significant management time and capital resources to
our business;
. expectations as to our future revenues, margins, expenses and capital
requirements;
. anticipated dates on which we will begin providing certain services or
reach specific milestones in the business plan; and
. other statements of expectations, beliefs, future plans and
strategies, anticipated developments and other matters that are not
historical facts.
You should be aware that these forward-looking statements are subject to
risks and uncertainties, including financial, regulatory, environmental,
industry growth and trend projections, that could cause actual events or
results to differ materially from those expressed or implied by the statements.
The most important factors that could prevent us from achieving our stated
goals include, but are not limited to, our failure to:
. achieve and sustain profitability based on the creation and
implementation of our advanced, international, facilities based
communications network based on internet protocol technology;
. overcome significant early operating losses;
. produce sufficient capital to fund the business plan;
. develop financial and management controls, as well as additional
controls of operating expenses as well as other costs;
. attract and retain qualified management and other personnel;
. install on a timely basis the switches/routers, fiber optic cable and
associated electronics required for successful implementation of the
business plan;
. successfully complete commercial testing of our softswitch technology
for voice and fax transmission services;
. negotiate new and maintain existing peering agreements; and
. develop and implement effective business support systems for
processing customer orders and provisioning.
For a discussion of certain of these factors, see "Risk Factors."
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Use of Proceeds
Level 3 will not receive any proceeds from the issuance of the new notes in
the exchange offer. The new notes will evidence the same debt as the original
notes surrendered in exchange for the new notes. Accordingly, the issuance of
the new notes will not result in any change in the indebtedness of Level 3.
The net proceeds to Level 3 of the placement of the original notes were
approximately (Euro)779,930,000 (approximately $779,930,000), after deducting
expenses. Our net proceeds from that placement are being used for working
capital, capital expenditures, acquisitions and other general corporate
purposes in connection with the implementation of our business plan.
Pending this utilization, we are investing the net proceeds in short-term
investments.
Capitalization
The following table sets forth the consolidated capitalization of Level 3
as of March 31, 2000.
<TABLE>
<CAPTION>
March 31, 2000
---------------------
(dollars in millions)
<S> <C>
Cash and marketable securities............................ $ 7,680
=======
Total long-term debt, less current portion................ 7,047
Total stockholders' equity................................ 5,571
-------
Total capitalization...................................... $12,618
=======
</TABLE>
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The Exchange Offer
Purpose of the Exchange Offer
On February 29, 2000, Level 3 privately placed the original notes in a
transaction exempt from registration under the Securities Act. Accordingly, the
original notes may not be reoffered, resold or otherwise transferred in the
U.S. unless so registered or unless an exemption from the Securities Act
registration requirements is available. In the registration agreement, Level 3
has agreed with the initial purchasers of the original notes to, at our own
cost:
(1) file a registration statement with the SEC relating to the exchange
offer within 90 days after February 29, 2000;
(2) use our best effort to cause the exchange offer registration statement
to be declared effective under the Securities Act within 150 days
after February 29, 2000; and
(3) upon effectiveness of the exchange offer registration statement, offer
new notes in exchange for surrender of original notes.
In addition, Level 3 has agreed to keep the exchange offer open for at least 30
days, or longer if required by applicable law, after the date notice of the
exchange offer is mailed to the holders of the original notes. The new notes
are being offered under this prospectus to satisfy these obligations of Level 3
under the registration agreement.
Terms of the Exchange
Upon the terms and subject to the conditions contained in this prospectus
and in the letters of transmittal that accompany this prospectus, Level 3 is
offering to exchange (Euro)1,000 in principal amount of new notes for each
(Euro)1,000 in principal amount of original notes. The terms of the new notes
are substantially identical to the terms of the original notes for which they
may be exchanged in the exchange offer, except that:
(1) the new notes will be freely transferable, other than as described in
this prospectus;
(2) will not contain any legend restricting their transfer;
(3) holders of the new notes will not be entitled to certain rights of the
holders of the original notes under the registration agreement, which
rights will terminate on completion of the exchange offer; and
(4) the new notes will not contain any provisions regarding the payment of
special interest.
The new notes will evidence the same debt as the original notes and will be
entitled to the benefits of the indentures. See "Description of Notes."
The exchange offer is not conditioned on any minimum aggregate principal
amount of original notes being tendered for exchange.
Based on interpretations by the SEC's staff in no-action letters issued to
other parties, Level 3 believes that holders of new notes issued in the
exchange offer may transfer the new notes without complying with the
registration and prospectus delivery requirements of the Securities Act if the
holders:
(1) acquired the new notes in the ordinary course of the holders'
business;
(2) are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of the new notes;
(3) are not affiliates of Level 3 within the meaning of Rule 405 under the
Securities Act;
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(4) are not broker-dealers who acquired original notes directly from
Level 3; and
(5) are not broker-dealers who acquired original notes as a result of
market-making or other trading activities.
See "Plan of Distribution."
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of those new notes. Each of the letters of transmittal that
accompany this prospectus 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. A participating broker-
dealer may use this prospectus, as it may be amended or supplemented from time
to time, in connection with resales of new notes received in exchange for
original notes where those new notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities. Level 3 has
agreed that, starting on the date of this prospectus and ending on the close of
business on the day that is 180 days following the date of this prospectus, it
will make this prospectus available to any broker-dealer for use in connection
with any resale of this kind.
Tendering holders of original notes will not be required to pay brokerage
commissions or fees or, subject to the instructions in the applicable letter of
transmittal, transfer taxes relating to the exchange of original notes for new
notes in the exchange offer.
Shelf Registration Statement
If:
(1) applicable interpretations of the staff of the SEC do not permit Level
3 to effect an exchange offer,
(2) for any other reason the exchange offer registration statement is not
declared effective within 150 days after February 29, 2000 or the
exchange offer is not completed within 180 days after February 29,
2000,
(3) the initial purchasers so request for original notes not eligible to
be exchanged for new notes in the exchange offer, or
(4) any holder of original notes, other than an initial purchaser, is not
eligible to participate in the exchange offer or does not receive
freely tradable new notes in the exchange offer other than by reason
of the holder being an affiliate of Level 3,
Level 3 will, at its cost:
(1) as promptly as practicable, file a shelf registration statement
covering resales of the original notes or the new notes, as the case
may be,
(2) use its best efforts to cause the shelf registration statement to be
declared effective under the Securities Act, and
(3) use its best efforts to keep the shelf registration statement
effective until two years after its effective date.
For purposes of determining whether Level 3 is obligated to file a shelf
registration statement, the requirement that a participating broker-dealer
deliver this prospectus in connection with sales of new notes will not result
in those new notes being deemed not freely tradable.
If Level 3 files a shelf registration statement, it will, among other
things:
(1) provide to each holder for whom the shelf registration statement was
filed copies of the prospectus which is a part of the shelf
registration statement;
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(2) notify each of those holders when the shelf registration statement has
become effective; and
(3) take other actions as are required to permit unrestricted resales of
the original notes or the new notes, as the case may be.
A holder selling original notes or new notes under the shelf registration
statement generally must be named as a selling security holder in the related
prospectus and must deliver a prospectus to purchasers. Consequently, the
holder will be subject to the civil liability provisions under the Securities
Act in connection with those sales and will be bound by any applicable
provisions of the registration agreement, including specified indemnification
obligations.
Special Interest
Special interest will accrue on the principal amount of the original notes
and the new notes, in addition to the stated interest on the original notes and
the new notes, from and including the date on which a registration default
occurs to but excluding the date on which all registration defaults have been
cured.
The occurrence of any of the following is a registration default:
(1) neither the exchange offer registration statement nor the shelf
registration statement has been filed with the SEC on or before the
90th day following February 29, 2000,
(2) neither the exchange offer registration statement nor the shelf
registration statement has been declared effective on or before the
150th day following February 29, 2000,
(3) neither the exchange offer has been completed nor the shelf
registration statement has been declared effective on or before the
180th day following February 29, 2000, or
(4) after either the exchange offer registration statement or the shelf
registration statement has been declared effective, that registration
statement ceases to be effective or usable, subject to certain
exceptions, in connection with resales of original notes or new notes
in accordance with and during the periods specified in the
registration agreement.
Special interest will accrue at a rate of 0.50% per annum on the principal
amount during the 90-day period after the occurrence of the registration
default and will increase by 0.25% per annum at the end of each subsequent 90-
day period. In no event will the rate exceed 1.00% per annum on the principal
amount. If the exchange offer is completed on the terms and within the period
contemplated by this prospectus, no special interest will be payable.
The summary of the provisions of the registration agreement contained in
this prospectus does not purport to be complete. This summary is subject to and
is qualified in its entirety by reference to all the provisions of the
registration agreement, a copy of which is an exhibit to the registration
statement of which this prospectus is a part.
Expiration Date; Extensions; Termination; Amendments
The expiration date of the exchange offer is 5:00 p.m., New York City time,
on , 2000, unless Level 3 in its sole discretion extends the period
during which the exchange offer is open. In that case, the expiration date will
be the latest time and date to which the exchange offer is extended. Level 3
reserves the right to extend the exchange offer at any time and from time to
time before the expiration date by giving written notice to either The Bank of
New York, our exchange agent, or Kredietbank S.A. Luxembourgeoise, our
Luxembourg exchange agent, and by timely public announcement. Unless otherwise
required by applicable law or regulation, the public announcement will be made
by a release to the Dow Jones News Service. During any extension of the
exchange offer, all original notes previously tendered in the exchange offer
will remain subject to the exchange offer.
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The initial exchange date will be the first business day following the
expiration date. Level 3 expressly reserves the right to:
(1) terminate the exchange offer and not accept for exchange any original
notes for any reason, including if any of the events described below
under "--Conditions to the Exchange Offer" shall have occurred and
shall not have been waived by Level 3; and
(2) amend the terms of the exchange offer in any manner.
If any termination or amendment occurs, Level 3 will notify the exchange
agent and the Luxembourg exchange agent in writing and will either issue a
press release or give written notice to the holders of the original notes as
promptly as practicable. Unless Level 3 terminates the exchange offer prior to
5:00 p.m., New York City time, on the expiration date, Level 3 will exchange
the new notes for the original notes on the exchange date.
If:
(1) Level 3 waives any material condition to the exchange offer or amends
the exchange offer in any other material respect; and,
(2) at the time that notice of this waiver or amendment is first
published, sent or given to holders of original notes in the manner
specified above, the exchange offer is scheduled to expire at any time
earlier than the fifth business day from, and including, the date that
the notice is first so published, sent or given,
then the exchange offer will be extended until that fifth business day.
This prospectus and the letters of transmittal and other relevant materials
will be mailed by Level 3 to record holders of original notes. In addition,
these materials will be furnished to brokers, banks and similar persons whose
names, or the names of whose nominees, appear on the lists of holders for
subsequent transmittal to beneficial owners of original notes.
How to Tender
The tender to Level 3 of original notes according to one of the procedures
described below will constitute an agreement between that holder of original
notes and Level 3 in accordance with the terms and subject to the conditions
set forth in this prospectus and in the letter of transmittal.
General Procedures. A holder of an original note may tender them by:
(1) properly completing and signing the applicable letter of transmittal
or a facsimile of the letter of transmittal and delivering them,
together with the certificate or certificates representing the
original notes being tendered and any required signature guarantees,
or a timely confirmation of a book-entry transfer according to the
procedure described below, to either exchange agent at one of the
addresses set forth below under "-- Exchange Agent" on or before the
expiration date, or complying with the guaranteed delivery procedures
described below;
(2) sending an electronic instruction to Euroclear or Clearstream,
formerly Cedelbank, in compliance with the procedures established by
Euroclear and/or Clearstream, as appropriate, for transfer of book-
entry interests, in each case on or prior to the expiration date.
All references in this prospectus to a letter of transmittal include a
facsimile of the letter of transmittal.
Upon receiving an electronic instruction in accordance with their
procedures with respect to the exchange offer, Euroclear or Clearstream will
block the position of original notes that the holder of the original notes has
requested to exchange. Upon completion of the exchange offer and upon
confirmation of the receipt of the
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exchange notes from the common depositary, Euroclear or Clearstream will
simultaneously transfer the original notes out of the participants' accounts
and replace them with an equivalent amount of exchange notes. By sending this
electronic instruction, the holder of the original notes acknowledges and
agrees to be bound by the terms of the applicable letter of transmittal, and
the respective participant of Euroclear or Clearstream confirms on behalf of
itself and the beneficial owners of the original notes subject to the
instruction all provisions of the applicable letter of transmittal to an
exchange agent.
If tendered original notes are registered in the name of the signer of the
applicable letter of transmittal and the new notes to be issued in exchange for
accepted original notes are to be issued, and any untendered original notes are
to be reissued, in the name of the registered holder, the signature of the
signer need not be guaranteed. In any other case, the tendered original notes
must be endorsed or accompanied by written instruments of transfer in form
satisfactory to Level 3. They must also be duly executed by the registered
holder. In addition, the signature on the endorsement or instrument of transfer
must be guaranteed by an eligible guarantor institution that is a member of a
recognized signature guarantee medallion program within the meaning of Rule
17Ad-15 under the Exchange Act. If the new notes and/or original notes not
exchanged are to be delivered to an address other than that of the registered
holder appearing on the note register for the original notes, an eligible
guarantor institution must guarantee the signature on the applicable letter of
transmittal.
Any beneficial owner whose original notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender original notes should contact the holder promptly and instruct it to
tender on the beneficial owner's behalf. If the beneficial owner wishes to
tender the original notes itself, the beneficial owner must either make
appropriate arrangements to register ownership of the original notes in its
name or follow the procedures described in the immediately preceding paragraph.
The beneficial owner must make these arrangements or follow these procedures
before completing and executing the letter of transmittal and delivering the
original notes. The transfer of record ownership may take considerable time.
Book-Entry Transfer. An exchange agent will make a request to establish an
account for the original notes at each book-entry transfer facility for
purposes of the exchange offer within two business days after receipt of this
prospectus unless the exchange agent already has established an account with
the book-entry transfer facility suitable for the exchange offer. Subject to
the establishment of the account, any financial institution that is a
participant in the book-entry transfer facility's systems may make book-entry
delivery of original notes by causing a book-entry transfer facility to
transfer the original notes into one of the exchange agent's accounts at the
book-entry transfer facility in accordance with the facility's procedures.
However, although delivery of original notes may be effected through book-entry
transfer, the applicable letter of transmittal, with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by an exchange agent at one of the addresses set forth below
under "--Exchange Agent" on or before the expiration date or the guaranteed
delivery procedures described below must be complied with.
The method of delivery of original notes and all other documents is at the
election and risk of the holder. If sent by mail, it is recommended that the
holder use registered mail, return receipt requested, obtain proper insurance,
and make the mailing sufficiently in advance of the expiration date to permit
delivery to the exchange agent on or before the expiration date.
Unless an exemption applies under the applicable law and regulations
concerning backup withholding of federal income tax, an exchange agent will be
required to withhold 31% of the gross proceeds otherwise payable to a holder in
the exchange offer if the holder does not provide the holder's taxpayer
identification number and certify that the number is correct. Each tendering
holder should complete and sign the main signature form and the Substitute Form
W-9 included as part of the letter of transmittal, so as to provide the
information and certification necessary to avoid backup withholding. This will
not be required, however, if an applicable exemption exists and is proved in a
manner satisfactory to Level 3 and an exchange agent.
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Guaranteed Delivery Procedures. If a holder desires to accept the exchange
offer and time will not permit a letter of transmittal or original notes to
reach the exchange agent before the expiration date, a tender may be effected
if an exchange agent has received at one of its offices listed under "--
Exchange Agent" below on or before the expiration date a letter, telegram or
facsimile transmission from an eligible guarantor institution that:
(1) sets forth the name and address of the tendering holder, the names in
which the original notes are registered and, if possible, the
certificate numbers of the original notes to be tendered; and
(2) states that the tender is being made thereby; and
(3) guarantees that within three New York Stock Exchange trading days
after the date of execution of the letter, telegram or facsimile
transmission by the eligible guarantor institution, the original
notes, in proper form for transfer, will be delivered by the eligible
guarantor institution together with a properly completed and duly
executed letter of transmittal and any other required documents.
Unless original notes being tendered by the above-described method or a timely
confirmation of a book-entry transfer are deposited with the exchange agent
within the time period described above, accompanied or preceded by a properly
completed letter of transmittal and any other required documents, Level 3 may
reject the tender. Copies of a notice of guaranteed delivery which may be used
by eligible guarantor institutions for the purposes described in this paragraph
are being delivered with this prospectus and the letters of transmittal.
A tender will be deemed to have been received as of the date when the
tendering holder's properly completed and duly signed letter of transmittal
accompanied by the original notes or a timely confirmation of a book-entry
transfer is received by an exchange agent. Issuances of new notes in exchange
for original notes tendered by an eligible guarantor institution as described
above will be made only against deposit of the applicable letter of transmittal
and any other required documents and the tendered original notes or a timely
confirmation of a book-entry transfer.
All questions as to the validity, form, eligibility, including time of
receipt, and acceptance for exchange of any tender of original notes will be
determined by Level 3. Level 3's determination will be final and binding. Level
3 reserves the absolute right to reject any or all tenders not in proper form
or the acceptances for exchange of which may, in the opinion of counsel to
Level 3, be unlawful. Level 3 also reserves the absolute right to waive any of
the conditions of the exchange offer or any defect or irregularities in tenders
of any particular holder whether or not similar defects or irregularities are
waived in the case of other holders. None of Level 3, the exchange agents or
any other person will incur any liability for failure to give notification of
any defects or irregularities in tenders. Level 3's interpretation of the terms
and conditions of the exchange offer, including the letters of transmittal and
the instructions to the letters of transmittal, will be final and binding.
Terms and Conditions of the Letters of Transmittal
Each letter of transmittal contains, among other things, the following
terms and conditions, which are part of the exchange offer.
The party tendering original notes for exchange, or the transferor,
exchanges, assigns and transfers the original notes to Level 3 and irrevocably
constitutes and appoints our exchange agents as its agent and attorney-in-fact
to cause the original notes to be assigned, transferred and exchanged. The
transferor represents and warrants that:
(1) it has full power and authority to tender, exchange, assign and
transfer the original notes and to acquire new notes issuable upon the
exchange of the tendered original notes; and
(2) when the same are accepted for exchange, Level 3 will acquire good and
unencumbered title to the tendered original notes, free and clear of
all liens, restrictions, charges and encumbrances and not subject to
any adverse claim.
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The transferor also warrants that it will, upon request, execute and deliver
any additional documents Level 3 deems necessary or desirable to complete the
exchange, assignment and transfer of tendered original notes. The transferor
further agrees that acceptance of any tendered original notes by Level 3 and
the issuance of new notes in exchange shall constitute performance in full by
Level 3 of its obligations under the registration agreement and that Level 3
shall have no further obligations or liabilities under the registration
agreement, except in certain limited circumstances. All authority conferred by
the transferor will survive the death or incapacity of the transferor and
every obligation of the transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of the
transferor.
By tendering original notes, the transferor certifies that:
(1) it is not an affiliate of Level 3 within the meaning of Rule 405 under
the Securities Act, that it is not a broker-dealer that owns original
notes acquired directly from Level 3 or an affiliate of Level 3, that
it is acquiring the new notes offered hereby in the ordinary course of
its business and that it has no arrangement with any person to
participate in the distribution of the new notes; or
(2) it is an affiliate, as so defined, of Level 3 or of the initial
purchasers, and that it will comply with applicable registration and
prospectus delivery requirements of the Securities Act.
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of those 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.
Withdrawal Rights
Original notes tendered in the exchange offer may be withdrawn at any time
before the expiration date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by an exchange agent at one of
the addresses set forth below under "-- Exchange Agent." Any notice of
withdrawal must:
(1) specify the person named in the applicable letter of transmittal as
having tendered original notes to be withdrawn;
(2) specify the certificate numbers of original notes to be withdrawn;
(3) specify the principal amount of original notes to be withdrawn, which
must be an authorized denomination;
(4) state that the holder is withdrawing its election to have those
original notes exchanged;
(5) state the name of the registered holder of those original notes; and
(6) be signed by the holder in the same manner as the original signature
on the applicable letter of transmittal, including any required
signature guarantees, or be accompanied by evidence satisfactory to
Level 3 that the person withdrawing the tender has succeeded to the
beneficial ownership of the original notes being withdrawn.
If certificates for original notes have been delivered or otherwise identified
to an exchange agent, then prior to the release of those certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an eligible institution unless that holder is an eligible
institution.
If original notes have been tendered pursuant to the procedure for book-
entry transfer described above, the executed notice of withdrawal, guaranteed
by an eligible institution, unless that holder is an eligible institution,
must specify the name and number of the account at the book-entry transfer
facility to be credited
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with the withdrawn original notes and otherwise comply with the procedures of
that facility. All questions as to the validity, form and eligibility,
including time of receipt, of those notices will be determined by us, and our
determination shall be final and binding on all parties. Any original notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the exchange offer. Any original notes which have been tendered for
exchange but which are not exchanged for any reason will be either
(1) returned to the holder without cost to that holder or
(2) in the case of original notes tendered by book-entry transfer into the
applicable exchange agent's account at the book-entry transfer
facility pursuant to the book-entry transfer procedures described
above, those original notes will be credited to an account maintained
with the book-entry transfer facility for the original notes,
in either case as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn original notes may be
retendered by following one of the procedures described under "--How to Tender"
above at any time on or prior to the expiration date.
Acceptance of Original Notes for Exchange; Delivery of New Notes
Upon the terms and subject to the conditions of the exchange offer, the
acceptance for exchange of original notes validly tendered and not withdrawn
and the issuance of the new notes will be made on the exchange date. For the
purposes of the exchange offer, Level 3 shall be deemed to have accepted for
exchange validly tendered original notes when, as and if Level 3 has given
written notice of acceptance to the exchange agents.
An exchange agent will act as agent for the tendering holders of original
notes for the purposes of receiving new notes from Level 3 and causing the
original notes to be assigned, transferred and exchanged. Upon the terms and
subject to the conditions of the exchange offer, delivery of new notes to be
issued in exchange for accepted original notes will be made by an exchange
agent promptly after acceptance of the tendered original notes. Original notes
not accepted for exchange will be returned without expense to the tendering
holders. Or, in the case of original notes tendered by book-entry transfer, the
non-exchanged original notes will be credited to an account maintained with the
book-entry transfer facility promptly following the expiration date. If Level 3
terminates the exchange offer before the expiration date, these non-exchanged
original notes will be credited to the applicable exchange agent's account
promptly after the exchange offer is terminated.
Conditions to the Exchange Offer
Despite any other provision of the exchange offer or any extension of the
exchange offer, Level 3 will not be required to issue new notes for any
properly tendered original notes not previously accepted. Level 3 may terminate
the exchange offer by oral or written notice to the exchange agents and by
timely public announcement communicated, unless otherwise required by
applicable law or regulation, by making a release to the Dow Jones News Service
or, at its option, modify or otherwise amend the exchange offer, if:
(1) any action or proceeding is threatened, instituted or pending before,
or any injunction, order or decree is issued by, any court or
governmental agency or other governmental regulatory or administrative
agency or commission:
(A) seeking to restrain or prohibit the making or completion of the
exchange offer or any other transaction contemplated by the
exchange offer,
(B) assessing or seeking any damages as a result of the making or
completion of the exchange offer or any other transaction
contemplated by the exchange offer, or
(C) resulting in a material delay in the ability of Level 3 to accept
for exchange or exchange some or all of the original notes in the
exchange offer;
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(2) any statute, rule, regulation, order or injunction is sought,
proposed, introduced, enacted, promulgated or deemed applicable to the
exchange offer or any of the transactions contemplated by the exchange
offer by any government or governmental authority, domestic or
foreign, or any action is taken, proposed or threatened, by any
government, governmental authority, agency or court, domestic or
foreign, that in the sole judgment of Level 3 might result in any of
the consequences referred to in clauses (1)(A) or (B) above or, in the
sole judgment of Level 3, might result in the holders of new notes
having obligations relating to resales and transfers of new notes
which are greater than those described in the interpretations of the
SEC referred to in "--Terms of the Exchange" above, or would otherwise
make it inadvisable to proceed with the exchange offer; or
(3) a material adverse change has occurred in the business, condition
(financial or otherwise), operations, or prospects of Level 3.
The conditions described above are for the sole benefit of Level 3. Level 3 may
assert these conditions regarding all or any portion of the exchange offer
regardless of the circumstances, including any action or inaction by Level 3,
giving rise to the condition. Level 3 may waive these conditions in whole or in
part at any time or from time to time in its sole discretion. The failure by
Level 3 at any time to exercise any of the rights described above will not be
deemed a waiver of any of those rights, and each right will be deemed an
ongoing right which may be asserted at any time or from time to time. In
addition, Level 3 has reserved the right, despite the satisfaction of each of
the conditions described above, to terminate or amend the exchange offer.
Any determination by Level 3 concerning the fulfillment or non-fulfillment
of any conditions will be final and binding upon all parties.
In addition, Level 3 will not accept for exchange any original notes
tendered and no new notes will be issued in exchange for any original notes, if
at that time any stop order is threatened or in effect relating to:
(1) the registration statement of which this prospectus constitutes a
part; or
(2) the qualification of any of the indentures under the Trust Indenture
Act.
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Exchange Agents
The Bank of New York has been appointed as the exchange agent and
Kredietbank S.A. Luxembourgeoise as the exchange agent in Luxembourg for the
exchange offer. Letters of transmittal must be addressed to an exchange agent
at one of the addresses set forth below.
Delivery to:
Deliver to: Kredietbank S.A. Luxembourgeoise, as
The Bank of New York Luxembourg Exchange Agent
By Registered or Certified Mail: By Hand or Overnight Service:
The Bank of New York Kredietbank S.A. Luxembourgeoise
London Branch 43, Boulevard Royal
30 Cannon Street L-2955 Luxembourg
London EC4M 6YH Attention: Corporate Trust
United Kingdom fax: 352-4797 3913
Attention: Ms. Emma Wilkes telephone: 352-4797 73951
Reorganization Department
By Overnight Courier or By Hand:
The Bank of New York
London Branch
30 Cannon Street
London EC4M 6YH
United Kingdom
Attention: Ms. Emma Wilkes
Reorganization Department
By Facsimile:
44 20 7964 6399
Confirm by Telephone: 44 20 7893 7235
Delivery to an address other than as set forth in this prospectus, or
transmissions of instructions via a facsimile or telex number other than the
ones set forth herein, will not constitute a valid delivery.
Solicitation of Tenders; Expenses
Level 3 has not retained any dealer-manager or similar agent in connection
with the exchange offer and will not make any payments to brokers, dealers or
others for soliciting acceptances of the exchange offer. However, Level 3 will
pay the exchange agents reasonable and customary fees for their services and
will reimburse them for reasonable out-of-pocket expenses in connection with
their services. Level 3 will also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding tenders for their customers. The expenses to be incurred in
connection with the exchange offer, including the fees and expenses of the
exchange agents and printing, accounting and legal fees, will be paid by Level
3 and are estimated at approximately $375,000.
Appraisal Rights
Holders of original notes will not have dissenters' rights or appraisal
rights in connection with the exchange offer.
Transfer Taxes
Holders who tender their original notes for exchange will not be obligated
to pay any transfer taxes in connection with the exchange, except that holders
who instruct us to register exchange notes in the name of, or request that
original notes not tendered or not accepted in the exchange offer be returned
to, a person other than the registered tendering holder will be responsible for
the payment of any applicable transfer tax.
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Other
Participation in the exchange offer is voluntary, and holders should
carefully consider whether to accept the terms and conditions of this offer.
Holders of the original notes are urged to consult their financial and tax
advisors in making their own decisions on what action to take.
As a result of the making of this exchange offer, and upon acceptance for
exchange of all validly tendered original notes according to the terms of this
exchange offer, Level 3 will have fulfilled a covenant contained in the terms
of the original notes and the registration agreement. Holders of the original
notes who do not tender their certificates in the exchange offer will continue
to hold those certificates and will be entitled to all the rights, and
limitations applicable to the original notes under the indentures, except for
any rights under the registration agreement which by their terms terminate or
cease to have further effect as a result of the making of this exchange offer.
See "Description of Notes."
All untendered original notes will continue to be subject to the
restrictions on transfer set forth in the indentures. In general, the original
notes may not be reoffered, resold or otherwise transferred in the U.S. unless
registered under the Securities Act or unless an exemption from the Securities
Act registration requirements is available. Except under certain limited
circumstances, we do not intend to register the original notes under the
Securities Act.
In addition, any holder of original notes who tenders in the exchange offer
for the purpose of participating in a distribution of the new notes may be
deemed to have received restricted securities. If so, that holder will be
required to comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction. To the extent
that original notes are tendered and accepted in the exchange offer, the
trading market, if any, for the original notes could be adversely affected.
Level 3 may in the future seek to acquire untendered original notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. Level 3 has no present plan to acquire any original notes that
are not tendered in the exchange offer.
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Description of Other Indebtedness of Level 3
The following is a description of Level 3's material outstanding
indebtedness. The following summaries of the senior secured credit facility and
Level 3's outstanding notes are qualified in their entirety by reference to the
credit agreement and the indentures to which each issue of notes relates.
Copies of these agreements are available on request to Level 3.
Senior Secured Credit Facility
On September 30, 1999, Level 3 and certain Level 3 subsidiaries entered
into a $1.375 billion senior secured credit facility underwritten by a
syndicate of banks and other financial institutions led by Chase Securities,
Inc., as sole manager and lead arranger, Goldman Sachs Credit Partners L.P.,
J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as co-syndication
agents, and The Chase Manhattan Bank, as administrative agent. These
institutions are all affiliated with our lead underwriters for, or our initial
purchasers in, our offerings of common stock, 6% convertible notes, the
original notes and the original dollar-denominated 2008 senior notes, 2010
senior notes and 2010 senior discount notes, which were completed on February
29, 2000. The senior secured credit facility, which was amended on November 24,
1999, consists of a $450 million tranche A term loan facility, a $275 million
tranche B term loan facility and a $650 million revolving credit facility. As
of March 31, 2000, we had $475 million outstanding under the senior secured
credit facility.
All obligations under the revolving credit facility are secured by
substantially all the assets of Level 3 and, subject to certain exceptions, its
wholly owned domestic subsidiaries (other than the borrower under the term loan
facilities). These assets also secure a portion of the term loan facilities in
an amount equal to $100 million plus, with certain exceptions, the undrawn
amount of the revolving credit facility. Additionally, all obligations under
the term loan facilities are secured by the equipment that is purchased, in
whole or in part, with the proceeds of the term loan facilities and the lease
rentals derived from the lease of such equipment to the Company's operating
subsidiaries. Level 3 and, subject to certain exceptions, all its domestic
subsidiaries (other than the borrower under the term loan facilities) have
guaranteed all obligations under the revolving credit facility. Level 3 and,
subject to certain exceptions, all its domestic subsidiaries have guaranteed
all obligations under the term loan facilities.
The revolving credit facility and the tranche A term loan facility mature
on September 30, 2007, and the tranche B term loan facility matures on January
15, 2008.
Amounts drawn under the revolving credit facility and the term loans bear
interest, at the option of the Company, at an alternate base rate or the London
Interbank Offered Rate (LIBOR) plus, in each case, applicable margins based
upon, in the case of the revolving credit facility and the tranche A term loan
facility, the ratings established by Moody's and S&P for the highest rated
senior unsecured long-term debt of Level 3. The applicable margins for the
revolving credit facility and the tranche A term loan facility range from 50 to
175 basis points over the alternate base rate and from 150 to 275 basis points
over LIBOR and are fixed for the tranche B term loan facility at 250 basis
points over the alternate base rate and 350 basis points over LIBOR.
Beginning on March 31, 2004, the revolving credit facility provides for
automatic and permanent quarterly reductions of the amount available for
borrowing under that facility, commencing at $17.25 million per quarter and
increasing to approximately $61 million per quarter. The tranche A term loan
facility amortizes in consecutive quarterly payments beginning on March 31,
2004, commencing at $9 million per quarter and increasing to $58.5 million per
quarter. The tranche B term loan facility amortizes with substantially all of
the scheduled payments due in equal amounts from March 31, 2007 to January 15,
2008.
The credit agreement requires that indebtedness outstanding under the term
loan facilities be paid with all of the net proceeds with respect to certain
asset sales and, beginning December 31, 2003, with 50% of excess cash flow for
each fiscal year.
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<PAGE>
The credit agreement contains customary negative covenants restricting and
limiting the ability of Level 3, the borrowers and any other restricted
subsidiary to engage in certain activities, including but not limited to:
(1) limitations on indebtedness and the incurrence of liens;
(2) restrictions on sale leaseback transactions, consolidations, mergers,
sale of assets, transactions with affiliates and investments; and
(3) restrictions on issuance of preferred stock, dividends and
distributions on capital stock, and other similar distributions,
including distributions to Level 3 by its subsidiaries.
The credit agreement also requires Level 3 and the borrowers to comply with
specific financial and operational tests and maintain financial ratios,
including a:
(1) minimum intercity route miles completed test;
(2) minimum markets with fiber networks test;
(3) minimum telecom revenue test;
(4) maximum total debt to contributed capital ratio;
(5) maximum total debt to total telecommunications revenue ratio;
(6) maximum senior secured debt to gross property, plant and equipment
ratio; and
(7) beginning December 31, 2004, maximum total debt to EBITDA.
The credit agreement generally does not permit Level 3 or its subsidiaries
to make payments on any outstanding indebtedness, which includes the original
notes and the new notes, other than regularly scheduled interest and principal
payments as and when due.
The senior secured credit facility contains customary events of default,
including an event of default upon certain changes of control of Level 3 and
certain defaults under other indebtedness having an outstanding principal
amount exceeding $25 million.
9 1/8% Senior Notes due 2008
On April 28, 1998, Level 3 issued $2 billion aggregate principal amount of
9 1/8% senior notes due 2008 under an indenture between Level 3 and The Bank of
New York, as successor trustee to IBJ Whitehall Bank & Trust Company. The 9
1/8% senior notes are senior unsecured obligations of Level 3. They rank
equally in right of payment with Level 3's 10 1/2% senior discount notes, euro-
denominated 10 3/4% senior notes due 2008 and 11 1/4% senior notes due 2010 and
all other existing and future senior unsecured indebtedness of Level 3,
including the notes being exchanged in this offering. The notes bear interest
at a rate of 9 1/8% per annum, payable semiannually in arrears on May 1 and
November 1.
Level 3 may redeem the 9 1/8% senior notes, in whole or in part, at any
time on or after May 1, 2003. If a redemption occurs before May 1, 2006, Level
3 will pay a premium on the principal amount of the 9 1/8% senior notes
redeemed. This premium decreases annually from approximately 4.5% for a
redemption during the twelve month period beginning on May 1, 2003 to
approximately 1.5% for a redemption during the twelve month period beginning on
May 1, 2005.
In addition, at any time prior to May 1, 2001, Level 3 may redeem up to 35%
of the original aggregate principal amount of the 9 1/8% senior notes with the
net proceeds of specified public or private offerings of its common stock at a
redemption price equal to 109.125% of the principal amount of the notes
redeemed, plus accrued and unpaid interest, if any. At least 65% of the
aggregate principal amount of 9 1/8% senior notes must remain outstanding after
such a redemption.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 101% of the principal amount, plus
accrued and unpaid interest, if any.
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<PAGE>
The indenture relating to the 9 1/8% senior notes places restrictions on
the ability of Level 3 and its restricted subsidiaries to:
(1) incur additional indebtedness;
(2) pay dividends or make other restricted payments and transfers;
(3) create liens;
(4) sell assets;
(5) issue or sell capital stock of some of its subsidiaries;
(6) enter into transactions, including transactions with affiliates; and
(7) in the case of Level 3, consolidate, merge or sell substantially all
of Level 3's assets.
The holders of the 9 1/8% senior notes may force Level 3 to immediately
repay the principal on the 9 1/8% senior notes, including interest to the
acceleration date, if certain defaults exist under other indebtedness having an
outstanding principal amount of at least $25 million.
10 1/2% Senior Discount Notes due 2008
On December 2, 1998, Level 3 issued $833.815 million aggregate principal
amount at maturity of 10 1/2% senior discount notes due 2008 under an indenture
between Level 3 and The Bank of New York, as successor trustee to IBJ Whitehall
Bank & Trust Company. The 10 1/2% senior discount notes are senior unsecured
obligations of Level 3. They rank equally in right of payment with the 9 1/8%
senior notes, our euro-denominated 10 3/4% senior notes due 2008 and 11 1/4%
senior notes due 2010 and all other existing and future senior unsecured
indebtedness of Level 3, including the notes being exchanged in this offering.
The issue price of the 10 1/2% senior discount notes was approximately 60%
of the principal amount at maturity. The notes accrete at a rate of 10 1/2% per
year, compounded semiannually, to 100% of their principal amount by December 1,
2003. Cash interest will not begin to accrue on the 10 1/2% senior discount
notes until December 1, 2003, unless Level 3 elects to commence the accrual on
or after December 1, 2001. Beginning on December 1, 2003, cash interest will
accrue at a rate of 10 1/2% and will be payable semiannually on June 1 and
December 1, beginning June 1, 2004.
Level 3 may redeem the 10 1/2% senior discount notes, in whole or in part,
at any time on or after December 1, 2003. If a redemption occurs before
December 1, 2006, Level 3 will pay a premium on the accreted value of the 10
1/2% senior discount notes redeemed. This premium decreases annually from
approximately 5.25% for a redemption during the twelve month period beginning
on December 1, 2003 to approximately 1.75% for a redemption during the twelve
month period beginning on December 1, 2005.
In addition, at any time prior to December 1, 2001, Level 3 may redeem up
to 35% of the original aggregate principal amount at maturity of the 10 1/2%
senior discount notes with the net proceeds of specified public or private
offerings of its common stock at a redemption price equal to 110.5% of the
accreted value of the notes redeemed, plus accrued and unpaid interest, if any.
At least 65% of the aggregate principal amount at maturity of the 10 1/2%
senior discount notes must remain outstanding after such a redemption.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 101% of the accreted value, plus
accrued and unpaid interest, if any.
The indenture relating to the 10 1/2% senior discount notes places certain
restrictions on the actions of Level 3 and its restricted subsidiaries that are
substantially similar to those contained in the indenture relating to the 9
1/8% senior notes. The indenture also contains a provision relating to the
acceleration of the 10 1/2% senior discount notes that is substantially similar
to that contained in the indenture relating to the 9 1/8% senior notes.
35
<PAGE>
6% Convertible Subordinated Notes
On September 20, 1999, Level 3 issued $823 million aggregate principal
amount of 6% convertible subordinated notes due 2009 under an indenture between
Level 3 and The Bank of New York, as successor trustee to IBJ Whitehall Bank &
Trust Company. The 6% convertible notes are unsecured, subordinated obligations
of Level 3.
The 6% convertible notes are convertible into shares of common stock, at
the option of the holder, at any time prior to maturity, unless previously
repurchased or unless Level 3 has caused the conversion rights to expire. The
6% convertible notes may be converted at the initial rate of 15.3401 shares of
common stock per each $1,000 principal amount of notes, subject to adjustment
in certain circumstances. This is equivalent to a conversion price of
approximately $65.19 per share.
On or after September 15, 2002, Level 3 may cause the conversion rights of
the holders of 6% convertible notes to expire at any time prior to the maturity
date of the notes. Level 3 may exercise this option only if for at least 20
trading days within any period of 30 consecutive trading days, including the
last trading day of that period, the current market price of common stock
exceeds 140% of the prevailing conversion price then in effect.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 100% of the principal amount, plus
accrued and unpaid interest, if any. Level 3 will pay the repurchase price in
cash or, at Level 3's option but subject to the satisfaction of certain
conditions, in shares of common stock.
In the event of a bankruptcy, liquidation or reorganization of Level 3, an
acceleration of the 6% convertible notes due to an event of default under the
indenture, and certain other events, the payment of the principal of, premium,
if any, and interest on the 6% convertible notes will be subordinated in right
of payment to the prior full and final payment in cash of all senior debt of
Level 3.
The indenture also contains a provision relating to the acceleration of the
6% convertible notes that is substantially similar to that contained in the
indenture relating to the 9 1/8% senior notes.
Dollar-Denominated Senior Note Offering
2008 Senior Notes
On February 29, 2000, Level 3 issued $800 million principal amount of 11%
senior notes due 2008 under an indenture between Level 3 and The Bank of New
York, as trustee. The 2008 senior notes are senior unsecured obligations of the
Company. They rank equally in right of payment with Level 3's other senior
notes and senior discount notes and all other existing and future senior
unsecured indebtedness of Level 3. The notes bear interest at a rate of 11% per
annum, payable semiannually in arrears on March 15 and September 15.
Concurrently with this exchange offer, Level 3 is offering to exchange all of
its outstanding 2008 senior notes for 2008 senior notes that are registered
under the Securities Act.
The 2008 senior notes are not redeemable at the option of the Company prior
to maturity.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 101% of the principal amount, plus
accrued and unpaid interest, if any.
36
<PAGE>
The indenture relating to the 2008 senior notes places certain restrictions
on the actions of Level 3 and its restricted subsidiaries that are
substantially similar to those contained in the indenture relating to the 9
1/8% senior notes. The indenture also contains a provision relating to the
acceleration of the 2008 senior notes that is substantially similar to that
contained in the indenture relating to the 9 1/8% senior notes.
2010 Senior Notes
On February 29, 2000, Level 3 issued $250 million aggregate principal
amount of 11 1/4% senior notes due 2010 under an indenture between Level 3 and
The Bank of New York, as trustee. The 2010 senior notes are senior unsecured
obligations of the Company. They rank equally in right of payment with Level
3's other senior notes and senior discount notes and all other existing and
future senior unsecured indebtedness of Level 3. The notes bear interest at a
rate of 11 1/4% per annum, payable semiannually in arrears on March 15 and
September 15. Concurrently with this exchange offer, Level 3 is offering to
exchange all of its outstanding 2010 senior notes for 2010 senior notes that
are registered under the Securities Act.
Level 3 may redeem the 2010 senior notes, in whole or in part, at any time
on or after March 15, 2005. If a redemption occurs before March 15, 2008, Level
3 will pay a premium on the principal amount of the 2010 senior notes redeemed.
This premium will decrease annually from approximately 5.625% for a redemption
during the twelve month period beginning on March 15, 2005 to approximately
1.875% for a redemption during the twelve month period beginning on March 15,
2007.
In addition, at any time prior to March 15, 2003, Level 3 may redeem up to
35% of the original aggregate principal amount of the 2010 senior notes with
the net proceeds of specified public or private offerings of its common stock
at a redemption price equal to 111.25% of the principal amount of the notes
redeemed, plus accrued and unpaid interest, if any. At least 65% of the
aggregate principal amount of 2010 senior notes must remain outstanding after
such a redemption.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 101% of the principal amount, plus
accrued and unpaid interest, if any.
The indenture relating to the 2010 senior notes places certain restrictions
on the actions of Level 3 and its restricted subsidiaries that are
substantially similar to those contained in the indenture relating to the 9
1/8% senior notes. The indenture also contains a provision relating to the
acceleration of the 2010 senior notes that is substantially similar to that
contained in the indenture relating to the 9 1/8% senior notes.
2010 Senior Discount Notes
On February 29, 2000, Level 3 issued $675 million aggregate principal
amount at maturity of 12 7/8% senior discount notes due 2010 under an indenture
between Level 3 and The Bank of New York, as trustee. The 2010 senior discount
notes are senior unsecured obligations of the Company. They rank equally in
right of payment with Level 3's other senior discount notes and senior notes
and all other existing and future senior unsecured indebtedness of Level 3.
Concurrently with this exchange offer, Level 3 is offering to exchange all of
its outstanding 2010 senior discount notes for 2010 senior discount notes that
are registered under the Securities Act.
The issue price of the 2010 senior discount notes will be approximately
53.308% of the principal amount at maturity. The notes accrete at a rate of 12
7/8% per year, compounded semiannually, to 100% of their principal amount by
March 15, 2005. Cash interest will not begin to accrue on the 2010 senior
discount notes until March 15, 2005, unless Level 3 elects to commence the
accrual on or after March 15, 2003. Beginning on March 15, 2005, interest will
accrue at a rate of 12 7/8% and will be payable semiannually on March 15 and
September 15, beginning September 15, 2005.
Level 3 may redeem the 2010 senior discount notes, in whole or in part, at
any time on or after March 15, 2005. If a redemption occurs before March 15,
2008, Level 3 will pay a premium on the accreted value of
37
<PAGE>
the 2010 senior discount notes redeemed. This premium will decrease annually
from approximately 6.438% for a redemption during the twelve month period
beginning on March 15, 2005 to approximately 2.146% for a redemption during the
twelve month period beginning on March 15, 2007.
In addition, at any time prior to March 15, 2003, Level 3 may redeem up to
35% of the original aggregate principal amount at maturity of the 2010 senior
discount notes with the net proceeds of specified public or private offerings
of its common stock at a redemption price equal to 112.875% of the accreted
value of the notes redeemed, plus accrued and unpaid interest, if any. At least
65% of the aggregate principal amount at maturity of the notes must remain
outstanding after a such redemption.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 101% of the accreted value, plus
accrued and unpaid interest, if any.
The indenture relating to the 2010 senior discount notes places certain
restriction on the actions of Level 3 and its restricted subsidiaries that are
substantially similar to those contained in the indenture relating to the 9
1/8% senior notes. The indenture also contains a provision relating to the
acceleration of the 2010 senior discount notes that is substantially similar to
that contained in the indenture relating to the 9 1/8% senior notes.
2010 Convertible Subordinated Notes
On February 29, 2000 Level 3 issued $862.5 million aggregate principal
amount of 6% convertible subordinated notes due 2010 under an indenture between
Level 3 and The Bank of New York, as trustee. The 2010 convertible notes are
unsecured, subordinated obligations of Level 3.
The 2010 convertible notes are convertible into shares of common stock, at
the option of the holder, at any time prior to maturity, unless previously
repurchased or redeemed, or unless Level 3 has caused the conversion rights to
expire. The 2010 convertible notes may be converted at the initial rate of
7.416 shares of common stock per each $1,000 principal amount of notes, subject
to adjustment in certain circumstances. This is equivalent to a conversion
price of approximately $134.84 per share.
Prior to March 18, 2003, Level 3 may redeem the 2010 convertible notes, in
whole or in part, at the redemption prices set forth in the indenture relating
to the 2010 convertible notes plus any accrued interest to the date of
repurchase, if the current market price of Level 3's common stock equals or
exceeds certain triggering levels. Level 3 will make a make-whole payment with
respect to notes converted into common stock between the date the notes are
called for redemption and the redemption date. On or after March 18, 2003,
Level 3 may cause the rights of the holders of the 2010 convertible notes to
expire at any time prior to the maturity date of the notes. Level 3 may
exercise this option to cause the conversion rights to expire only if for at
least 20 trading days within any period of 30 consecutive trading days,
including the last trading day of that period, the current market price of
common stock exceeds 140% of the prevailing conversion price then in effect.
If an event treated as a change in control of Level 3 occurs, Level 3 will
be obligated, subject to certain conditions, to offer to purchase all of the
outstanding notes at a purchase price of 100% of the principal amount, plus
accrued and unpaid interest, if any. Level 3 will pay the repurchase price in
cash or, at Level 3's option but subject to the satisfaction of certain
conditions, in shares of common stock.
In the event of a bankruptcy, liquidation or reorganization of Level 3, an
acceleration of the 2010 convertible notes due to an event of default under the
indenture relating to the 2010 convertible notes, and certain other events, the
payment of the principal of, premium, if any, and interest on the 2010
convertible notes will be subordinated in right of payment to the prior full
and final payment in cash of all senior debt of Level 3.
The indenture relating to the 2010 convertible notes also contains a
provision relating to the acceleration of the 2010 convertible notes that is
substantially similar to that contained in the indenture relating to the 9 1/8%
senior notes.
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<PAGE>
Description of Notes
General
For purposes of this "Description of Notes," the words "Level 3, " "we,"
"us" and "our" refer only to Level 3 Communications, Inc. and do not include
its subsidiaries except for purposes of financial data determined on a
consolidated basis.
The new 2008 senior notes and 2010 senior notes, like the original 2008
senior notes and 2010 senior notes, will be issued under two separate
indentures, dated as of February 29, 2000, between Level 3 and The Bank of New
York, as trustee. The 2008 senior notes and the 2010 senior notes are each a
separate series of debt securities, and as such will vote separately on matters
under the indentures. Since many provisions of the indentures are identical,
they are described together below, but the provisions of each indenture apply
only to the notes outstanding thereunder. Accordingly, the original notes and
the new notes issued under each indenture will be considered collectively to be
a single class for all purposes under that indenture, including waivers,
amendments, redemptions and Offers to Purchase. For purposes of this
"Description of Notes," all references in this prospectus to the notes shall be
deemed to refer collectively to the original notes and the new notes.
The indentures are governed by the Trust Indenture Act of 1939. The terms
of the notes include those stated in the indentures and those made part of the
indentures by reference to the Trust Indenture Act. We urge you to read the
indentures because they, and not this description, define your rights as a
holder of the notes. The indentures have been filed as an exhibit to the
registration statement of which this prospectus is a part.
Because this section is a summary, it does not describe every aspect of the
notes. This summary is subject to and qualified in its entirety by reference to
the Trust Indenture Act and to all the provisions of the indentures, including
definitions of some terms used in the indentures. For example, in this summary,
we use capitalized words to signify defined terms that have been given special
meaning in the indentures. We describe the meaning for only the more important
terms under " -- Definitions. " Whenever we refer to particular defined terms
of the indentures in this prospectus, these defined terms are incorporated by
reference in this prospectus.
We will issue notes only in fully registered form without coupons, in
denominations of (Euro)1,000 and integral multiples of (Euro)1,000.
We intend to apply to list the new notes on the Luxembourg Stock Exchange.
Principal, Maturity and Interest
The 2008 senior notes will mature on March 15, 2008. The 2010 senior notes
will mature on March 15, 2010. The notes are limited to (Euro)500,000,000
aggregate principal amount of 2008 senior notes and (Euro)300,000,000 aggregate
principal amount of 2010 senior notes.
Interest on the 2008 Senior Notes will accrue at a rate of 10 3/4% per
annum and will be payable semi-annually in arrears on March 15 and September
15, commencing on September 15, 2000. Interest on the 2010 senior notes will
accrue at a rate of 11 1/4% per annum and will be payable semi-annually in
arrears on March 15 and September 15, commencing on September 15, 2000. We will
pay interest to those persons who were holders of record on the March 1 or
September 1 immediately preceding each interest payment date. Interest on the
2008 senior notes and the 2010 senior notes will accrue from the date of
original issuance or, if interest has already been paid, from the date it was
most recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
So long as the notes are held in the form of global securities as described
under "--Book-Entry System," deposits of principal of, premium, if any, and
interest on the notes with the custodian or common depository for the
registered holders of such global securities shall be deemed to be payment by
Level 3 of such principal, premium and interest for all purposes under the
indentures.
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<PAGE>
We will be obligated to pay special interest rate on the original notes in
the circumstances described under "The Exchange Offer--Special Interest." If
the exchange offer is completed on the terms and within the period contemplated
by this prospectus, no special interest will be payable. The new notes will not
contain any provisions regarding the payment of special interest.
Ranking
The notes will be:
. senior unsecured obligations of Level 3;
. equal in ranking, or pari passu with all our existing and future senior
debt; and
. senior in right of payment to all our future subordinated debt.
We only have a stockholder's claim on the assets of our subsidiaries,
including Level 3 Communications LLC, our principal communications company.
This stockholder's claim is junior to the claims that creditors of our
subsidiaries have against those subsidiaries. Holders of the Notes will only be
creditors of the Company, and not of our subsidiaries. Our subsidiaries will
have no direct obligation to pay the Notes or to guarantee the Notes. As a
result, all the existing and future liabilities of our subsidiaries, including
any claims of trade creditors and preferred stockholders, will be effectively
senior to the notes.
As of March 31, 2000, our subsidiaries had:
. approximately $2.146 billion in aggregate indebtedness and other balance
sheet liabilities, excluding intercompany liabilities, and $900 million
in additional borrowings available under the Credit Agreement.
Our subsidiaries have other liabilities, including contingent liabilities,
that may be significant. Although the indentures contain limitations on the
amount of additional Debt that we and the Restricted Subsidiaries may Incur,
the amounts of this Debt could be substantial. In addition, this Debt may be
Debt of our subsidiaries, in which case this Debt would be effectively senior
in right of payment to the Notes. See "--Certain Covenants--Limitation on
Consolidated Debt."
The notes are obligations exclusively of Level 3. Substantially all of our
operations are conducted through subsidiaries. Therefore, our ability to
service our debt, including the notes, is dependent upon the earnings of our
subsidiaries and their ability to distribute those earnings as dividends, loans
or other payments to us. The payment of dividends and the making of loans and
advances to us by our subsidiaries are subject to various restrictions. Future
debt of certain of the subsidiaries may prohibit the payment of dividends or
the making of loans or advances to us. In addition, the ability of our
subsidiaries to make payments, loans or advances to us is limited by the laws
of the relevant jurisdictions in which our subsidiaries are organized or
located. In certain circumstances, the prior or subsequent approval of
payments, loans or advances by subsidiaries to us is required from applicable
regulatory bodies or other governmental entities.
The notes are unsecured obligations of Level 3. Secured Debt of Level 3
will be effectively senior to the notes to the extent of the value of the
assets securing this Debt.
As of March 31, 2000, the outstanding secured Debt of the Company was as
follows:
. $475 million of indebtedness outstanding under the Credit Agreement.
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<PAGE>
See "Risk Factors--Our subsidiaries must make payments to us in order for us to
make payments on the notes," "--We have substantial existing debt and will
incur substantial additional debt, so we may be unable to make payments on the
notes" and "Description of Other Indebtedness of Level 3."
In addition, our Credit Agreement generally does not permit us or our
subsidiaries to make payments on any outstanding indebtedness other than
regularly scheduled interest and principal payments as and when due. As a
result, our Credit Agreement would prohibit us from making any payments on the
notes in the event that the notes are accelerated or tendered for repurchase
upon a Change in Control. Any such failure to make payments on the notes would
cause us to default under the indentures, which in turn is likely to be a
default under the Credit Agreement and other outstanding and future
indebtedness. See "Risk Factors--Our senior secured credit facility may
prohibit us from making payment on the notes."
Optional Redemption
The 2008 senior notes are not redeemable at the option of Level 3 prior to
maturity.
Except as set forth below, the 2010 senior notes will not be redeemable at
our option prior to March 15, 2005. Starting on that date, we may redeem all or
any portion of the 2010 senior notes, at once or over time, after giving the
required notice under the applicable indenture.
The 2010 senior notes may be redeemed at the redemption prices set forth
below, plus accrued and unpaid interest, if any, to the redemption date.
However, the holders of record on the relevant record date have the right to
receive interest due on the relevant interest payment date. The following
prices are for 2010 Senior Notes redeemed during the 12-month period commencing
on March 15 of the years set forth below, and are expressed as percentages of
principal amount.
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2005................................................................. 105.625%
2006................................................................. 103.750%
2007................................................................. 101.875%
2008 and thereafter.................................................. 100.000%
</TABLE>
Any notice to holders of 2010 senior notes of such a redemption must
include the appropriate calculation of the redemption price, but need not
include the redemption price itself. The actual redemption price, calculated as
described above, must be set forth in an Officers' Certificate delivered to the
trustee no later than two business days prior to the redemption date. As long
as the notes are listed on the Luxembourg Stock Exchange, and the rules of that
exchange require it, we will also publish notice of any redemption of any 2010
senior note in a newspaper having general circulation in Luxembourg. See "--
Notices."
In addition, at any time and from time to time, prior to March 15, 2003, we
may redeem up to a maximum of 35% of the original aggregate principal amount of
the 2010 senior notes at a redemption price equal to 111.25% of the principal
amount thereof plus accrued and unpaid interest thereon, if any, to the
redemption date with the proceeds of one or more private placements to Persons
other than Affiliates of Level 3 or underwritten public offerings of Common
Stock of Level 3 resulting in gross proceeds of at least $100 million in the
aggregate. However, holders of record on the relevant record date have the
right to receive interest due on the relevant interest payment date. In
addition, after giving effect to any such redemption of the 2010 senior notes,
at least 65% of the original aggregate principal amount of the 2010 senior
notes must remain outstanding. Any such redemption must be made within 90 days
of the applicable private placement or public offering upon not less than 30
nor more than 60 days' prior notice.
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Mandatory Redemption
Except as described under "--Certain Covenants--Change of Control
Triggering Event" and "--Limitation on Asset Dispositions," Level 3 is not
required to make mandatory redemption payments or sinking fund payments
relating to the notes.
Certain Covenants
Each indenture contains covenants that limit the ability of Level 3 and its
restricted subsidiaries to, among other things:
(1) incur debt;
(2) make various payments;
(3) pay dividends and make other restricted payments and transfers;
(4) create liens;
(5) enter into certain transactions, including transactions with
affiliates;
(6) sell assets;
(7) issue or sell capital stock of certain of its subsidiaries; and
(8) in the case of Level 3, consolidate, merge or sell substantially all
of Level 3's assets.
In addition, if a Change of Control occurs, Level 3 must within 30 days make an
offer to repurchase all outstanding notes at a price equal to 101% of the
principal amount or Accreted Value, as applicable, of the notes, plus accrued
and unpaid interest, if any, to the purchase date. The above limitations are
restrictive covenants. Restrictive covenants are promises that we make to you
about how we will run our business or about business actions that we promise
not to take. All of the covenants are subject to a number of important
qualifications and exceptions. A more detailed description of the restrictive
covenants follows below.
Limitation on Consolidated Debt. (a) Level 3 may not, and may not permit
any Restricted Subsidiary to, directly or indirectly, Incur any Debt, unless,
after giving pro forma effect to such Incurrence and the receipt and
application of the net proceeds thereof, no Default or Event of Default would
occur as a consequence of such Incurrence or be continuing following such
Incurrence and either:
(1) the ratio of
(A) the aggregate consolidated principal amount (or, in the case of
Debt issued at a discount, the Accreted Value) of Debt of Level 3
and its Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro
forma effect to the Incurrence of such Debt and any other Debt
Incurred or repaid since such balance sheet date and the receipt
and application of the net proceeds thereof, to
(B) Consolidated Cash Flow Available for Fixed Charges for the four
full fiscal quarters next preceding the Incurrence of such Debt
for which consolidated financial statements are available, would
be less than 5.0 to 1.0; or
(2) Level 3's Consolidated Capital Ratio as of the most recent available
quarterly or annual balance sheet, after giving pro forma effect to:
(X) the Incurrence of such Debt and any other Debt Incurred or repaid
since such balance sheet date,
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(Y) the issuance of any Capital Stock (other than Disqualified Stock)
of Level 3 since such balance sheet date, including the issuance
of any Capital Stock to be issued concurrently with the Incurrence
of such Debt, and
(Z) the receipt and application of the net proceeds of such Debt or
Capital Stock, as the case may be, is less than 2.25 to 1.0.
(b) Notwithstanding the foregoing limitation, Level 3 or any Restricted
Subsidiary may Incur any and all of the following (each of which shall be given
independent effect):
(1) Debt under the notes, such indenture or any Restricted Subsidiary
Guarantee;
(2) Debt under Credit Facilities in an aggregate principal amount
outstanding or available (together with all refinancing Debt
outstanding or available pursuant to clause (8) below in respect of
Debt previously Incurred pursuant to this clause (2)) at any one time
not to exceed the greater of:
(X) $750 million, which amount shall be permanently reduced by the
amount of Net Available Proceeds used to repay Debt under the
Credit Facilities, and not reinvested in Telecommunications/IS
Assets or used to purchase notes or repay other Debt, pursuant to
and as permitted by the covenant described under "--Limitation on
Asset Dispositions," and
(Y) 85% of the Eligible Receivables;
(3) Purchase Money Debt, provided that the amount of such Purchase Money
Debt does not exceed 100% of the cost of the construction,
installation, acquisition, lease, development or improvement of the
applicable Telecommunications/IS Assets;
(4) Subordinated Debt of Level 3; provided, however, that the aggregate
principal amount or, in the case of Debt issued at a discount, the
Accreted Value, of such Debt, together with any other outstanding Debt
Incurred pursuant to this clause (4), shall not exceed $500 million at
any one time (which amount shall be permanently reduced by the amount
of Net Available Proceeds used to repay Subordinated Debt of Level 3,
and not reinvested in Telecommunications/IS Assets or used to purchase
notes or repay other Debt, pursuant to and as permitted by the
covenant described under "--Limitation on Asset Dispositions"), except
to the extent such Debt in excess of $500 million:
(A) is subordinated to all other Debt of Level 3 other than Debt
Incurred pursuant to this clause (4) in excess of such $500
million limitation,
(B) does not provide for the payment of cash interest on such Debt
prior to the Stated Maturity of the notes, and
(C)(1) does not provide for payments of principal of such Debt at
stated maturity or by way of a sinking fund applicable thereto
or by way of any mandatory redemption, defeasanse, retirement
or repurchase thereof by Level 3, including any redemption,
retirement or repurchase which is contingent upon events or
circumstances but excluding any retirement required by virtue
of the acceleration of any payment with respect to such Debt
upon any event of default thereunder, in each case on or prior
to the Stated Maturity of the notes, and
(2) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by Level 3 but
excluding through conversion into Capital Stock of Level 3,
other than Disqualified Stock, without any payment by Level 3
or its Restricted Subsidiaries to the holders thereof other
than in respect of fractional shares) of such Debt at the
option of the holder thereof on or prior to the Stated
Maturity of the notes;
(5) Debt outstanding on the Measurement Date;
(6) Debt owed by Level 3 to any Restricted Subsidiary of Level 3 or Debt
owed by a Restricted Subsidiary of Level 3 to Level 3 or a Restricted
Subsidiary of Level 3; provided, however, that:
(X) upon the transfer, conveyance or other disposition by such
Restricted Subsidiary or Level 3 of any Debt so permitted to a
Person other than Level 3 or another Restricted Subsidiary of
Level 3, or
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(Y) if for any reason such Restricted Subsidiary ceases to be a
Restricted Subsidiary, the provisions of this clause (6) shall no
longer be applicable to such Debt and such Debt shall be deemed
to have been Incurred by the issuer thereof at the time of such
transfer, conveyance or other disposition or when such Restricted
Subsidiary ceases to be a Restricted Subsidiary;
(7) Debt Incurred by a Person prior to the time:
(A) such Person became a Restricted Subsidiary,
(B) such Person merges into or consolidates with a Restricted
Subsidiary, or
(C) another Restricted Subsidiary merges into or consolidates with
such Person (in a transaction in which such Person becomes a
Restricted Subsidiary), which Debt was not Incurred in
anticipation of such transaction and was outstanding prior to such
transaction;
(8) Debt Incurred to renew, extend, refinance, defease, repay, prepay,
repurchase, redeem, retire, exchange or refund (each, a refinancing)
Debt Incurred pursuant to clause (1), (2), (3), (5), (7) or (12) of
this paragraph (b) or this clause (8), in an aggregate principal
amount (or if issued at a discount, the then-Accreted Value) not to
exceed the aggregate principal amount (or if issued at a discount, the
then-Accreted Value) of and accrued interest on the Debt so refinanced
plus the amount of any premium required to be paid in connection with
such refinancing pursuant to the terms of the Debt so refinanced or
the amount of any premium reasonably determined by the board of
directors of Level 3 as necessary to accomplish such refinancing by
means of a tender offer or privately negotiated repurchase, plus the
expenses of Level 3 Incurred in connection with such refinancing;
provided, however, that:
(A) the refinancing Debt shall not be senior in right of payment to
the Debt that is being refinanced, and
(B) in the case of any refinancing of Debt Incurred pursuant to clause
(1), (5), (7) or (12) or, if such Debt previously refinanced Debt
Incurred pursuant to any such clause, this clause (8), the
refinancing Debt by its terms, or by the terms of any agreement or
instrument pursuant to which such Debt is issued,
(X) does not provide for payments of principal of such Debt at
stated maturity or by way of a sinking fund applicable thereto
or by way of any mandatory redemption, defeasance, retirement
or repurchase thereof by Level 3 (including any redemption,
retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue
of the acceleration of any payment with respect to such Debt
upon any event of default thereunder), in each case prior to
the time the same are required by the terms of the Debt being
refinanced, and
(Y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by Level 3) of such Debt
at the option of the holder thereof prior to the time the same
are required by the terms of the Debt being refinanced,
other than, in the case of clause (X) or (Y), any such payment,
redemption or other retirement (including pursuant to an offer to
purchase made by Level 3) which is conditioned upon a change of
control pursuant to provisions substantially similar to those
described under "--Change of Control Triggering Event;"
(9) Debt:
(A) in respect of performance, surety or appeal bonds, Guarantees,
letters of credit or reimbursement obligations Incurred or
provided in the ordinary course of business securing the
performance of contractual, franchise, lease, self-insurance or
license obligations and not in connection with the Incurrence of
Debt, or
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(B) in respect of customary agreements providing for indemnification,
adjustment of purchase price after closing, or similar
obligations, or from Guarantees or letters of credit, surety bonds
or performance bonds securing any such obligations of Level 3 or
any of its Restricted Subsidiaries pursuant to such agreements,
Incurred in connection with the disposition of any business,
assets or Restricted Subsidiary of Level 3 (other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary of Level
3 for the purpose of financing such acquisition) and in an
aggregate principal amount not to exceed the gross proceeds
actually received by Level 3 or any Restricted Subsidiary in
connection with such disposition;
(10) Debt consisting of Permitted Interest Rate or Currency Protection
Agreements;
(11) Debt not otherwise permitted to be Incurred pursuant to clauses (1)
through (10) above or clause (12) below, which, together with any
other outstanding Debt Incurred pursuant to this clause (11), has an
aggregate principal amount not in excess of $50 million at any time
outstanding; and
(12) the notes, Issue Date Purchase Money Debt and Debt under the Existing
Notes, the New Convertible Notes, the Dollar Notes and the related
indentures and any restricted subsidiary guarantees issued in
accordance with such related indentures.
Notwithstanding any other provision of this "--Limitation on Consolidated
Debt" covenant, the maximum amount of Debt that Level 3 or a Restricted
Subsidiary may Incur pursuant to this "--Limitation on Consolidated Debt"
covenant shall not be deemed to be exceeded due solely to the result of
fluctuations in the exchange rates of currencies.
For purposes of determining any particular amount of Debt under this "--
Limitation on Consolidated Debt" covenant,
(1) Guarantees, Liens or obligations with respect to letters of credit
supporting Debt otherwise included in the determination of such
particular amount shall not be included, and
(2) any Liens granted for the benefit of the notes pursuant to the
provisions referred to in the "--Limitation on Liens" covenant
described below
shall not be treated as Debt. For purposes of determining any particular amount
of Debt under this "--Limitation on Consolidated Debt" covenant, if any such
Debt denominated in a different currency is subject to a currency agreement
that constitutes a Permitted Interest Rate or Currency Protection Agreement
with respect to U.S. dollars covering all principal of, premium, if any, and
interest payable on such Debt, the amount of such Debt expressed in U.S.
dollars will be as provided in such currency agreement. For purposes of
determining compliance with this "--Limitation on Consolidated Debt" covenant,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt described in the above clauses, Level 3, in its sole discretion,
shall classify such item of Debt and only be required to include the amount and
type of such Debt in one of such clauses.
Limitation on Debt of Restricted Subsidiaries. Level 3 may not permit any
Restricted Subsidiary that is not a Guarantor to Incur any Debt except any and
all of the following (each of which shall be given independent effect):
(1) Restricted Subsidiary Guarantees;
(2) Debt outstanding on the Measurement Date;
(3) Debt of Restricted Subsidiaries under Credit Facilities permitted to
be Incurred pursuant to clause (2) of paragraph (b) of "--Limitation
on Consolidated Debt;"
(4) Purchase Money Debt of Restricted Subsidiaries permitted to be
Incurred pursuant to clause (3) of paragraph (b) of "--Limitation on
Consolidated Debt;"
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(5) Debt owed by a Restricted Subsidiary to Level 3 or a Restricted
Subsidiary of Level 3 permitted to be Incurred pursuant to clause (6)
of paragraph (b) of "--Limitation on Consolidated Debt;"
(6) Debt of Restricted Subsidiaries consisting of Permitted Interest Rate
or Currency Protection Agreements permitted to be Incurred pursuant to
clause (10) of paragraph (b) of "--Limitation on Consolidated Debt;"
(7) Debt of Restricted Subsidiaries permitted to be Incurred under clause
(7) of paragraph (b) of "--Limitation on Consolidated Debt" or Issue
Date Purchase Money Debt permitted to be Incurred under clause (12) of
paragraph (b) of "--Limitation on Consolidated Debt;"
(8) Debt of Restricted Subsidiaries permitted to be Incurred under clause
(9) or (11) of paragraph (b) of "--Limitation on Consolidated Debt;"
and
(9) Debt which is Incurred to refinance any Debt of a Restricted
Subsidiary permitted to be Incurred pursuant to clauses (1), (2), (3),
(4) and (7) of this paragraph or this clause (9), in an aggregate
principal amount (or if issued at a discount, the then-Accreted Value)
not to exceed the aggregate principal amount (or if issued at a
discount, the then-Accreted Value) of the Debt so refinanced, plus the
amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Debt so refinanced or the
amount of any premium reasonably determined by the board of directors
of Level 3 as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the amount of
expenses of Level 3 and the applicable Restricted Subsidiary Incurred
in connection therewith;
provided, however, that, in the case of any refinancing of Debt
Incurred pursuant to clause (1), (2) or (7) or, if such Debt
previously refinanced Debt Incurred pursuant to any such clause, this
clause (9), the refinancing Debt by its terms, or by the terms of any
agreement or instrument pursuant to which such Debt is Incurred,
(X) does not provide for payments of principal at the stated maturity
of such Debt or by way of a sinking fund applicable to such Debt
or by way of any mandatory redemption, defeasance, retirement or
repurchase of such Debt by Level 3 or any Restricted Subsidiary
(including any redemption, retirement or repurchase which is
contingent upon events or circumstances, but excluding any
retirement required by virtue of acceleration of such Debt upon an
event of default thereunder), in each case prior to the time the
same are required by the terms of the Debt being refinanced, and
(Y) does not permit redemption or other retirement (including pursuant
to an offer to purchase made by Level 3 or a Restricted
Subsidiary) of such Debt at the option of the holder thereof prior
to the stated maturity of the Debt being refinanced,
other than, in the case of clause (X) or (Y), any such payment,
redemption or other retirement (including pursuant to an offer to
purchase made by Level 3 or a Restricted Subsidiary) which is
conditioned upon the change of control of Level 3 pursuant to
provisions substantially similar to those contained in such indenture
described under "--Change of Control Triggering Event."
Notwithstanding any other provision of this "--Limitation on Debt of
Restricted Subsidiaries" covenant, the maximum amount of Debt that a Restricted
Subsidiary may Incur pursuant to this "--Limitation on Debt of Restricted
Subsidiaries" covenant shall not be deemed to be exceeded due solely as the
result of fluctuations in the exchange rates of currencies.
For purposes of determining any particular amount of Debt under this "--
Limitation on Debt of Restricted Subsidiaries" covenant, Guarantees, Liens or
obligations with respect to letters of credit supporting Debt otherwise
included in the determination of such particular amount shall not be included.
For purposes of determining compliance with this "--Limitation on Debt of
Restricted Subsidiaries" covenant, in the event that an item of Debt meets the
criteria of more than one of the types of Debt described in the above clauses,
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Level 3, in its sole discretion, shall classify such item of Debt and only be
required to include the amount and type of such Debt in one of such clauses.
Limitation on Restricted Payments. (a) Level 3 may not, and may not permit
any Restricted Subsidiary to:
(1) directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders
thereof, excluding any dividends or distributions which are made
solely to Level 3 or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other stockholders
of such Restricted Subsidiary on a pro rata basis or on a basis that
results in the receipt by Level 3 or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a
pro rata basis) or any dividends or distributions payable solely in
shares of Capital Stock of Level 3 (other than Disqualified Stock) or
in options, warrants or other rights to acquire Capital Stock of Level
3 (other than Disqualified Stock);
(2) purchase, redeem, or otherwise retire or acquire for value:
(X) any Capital Stock of Level 3 or any Restricted Subsidiary of Level
3, or
(Y) any options, warrants or rights to purchase or acquire shares of
Capital Stock of Level 3 or any Restricted Subsidiary or any
securities convertible or exchangeable into shares of Capital
Stock of Level 3 or any Restricted Subsidiary,
except, in any such case, any such purchase, redemption or retirement
or acquisition for value:
(A) paid to Level 3 or a Restricted Subsidiary (or, in the case of any
such purchase, redemption or other retirement or acquisition for
value with respect to a Restricted Subsidiary that is not a Wholly
Owned Subsidiary, to the other stockholders of such Restricted
Subsidiary on a pro rata basis or on a basis that results in the
receipt by Level 3 or a Restricted Subsidiary of payments of
greater value than it would receive on a pro rata basis), or
(B) paid solely in shares of Capital Stock (other than Disqualified
Stock) of Level 3;
(3) make any Investment (other than an Investment in Level 3 or a
Restricted Subsidiary or a Permitted Investment) in any Person,
including the Designation of any Restricted Subsidiary as an
Unrestricted Subsidiary, or the Revocation of any such Designation,
according to the covenant described under "--Limitation on
Designations of Unrestricted Subsidiaries;"
(4) redeem, defease, repurchase, retire or otherwise acquire or retire for
value, prior to any scheduled maturity, repayment or sinking fund
payment, Debt of Level 3 which is subordinate in right of payment to
the notes (other than any redemption, defeasance, repurchase,
retirement or other acquisition or retirement for value made in
anticipation of satisfying a scheduled maturity, repayment or sinking
fund obligation due within one year thereof); and
(5) issue, transfer, convey, sell or otherwise dispose of Capital Stock of
any Restricted Subsidiary to a Person other than Level 3 or another
Restricted Subsidiary if the result thereof is that such Restricted
Subsidiary shall cease to be a Restricted Subsidiary, in which event
the amount of such Restricted Payment shall be the Fair Market Value
of the remaining interest, if any, in such former Restricted
Subsidiary held by Level 3 and the other Restricted Subsidiaries
(each of clauses (1) through (5) above being a Restricted Payment) if:
(A) an Event of Default, or an event that with the passing of time or the
giving of notice, or both, would constitute an Event of Default, shall
have occurred and be continuing, or
(B) upon giving effect to such Restricted Payment, Level 3 could not Incur
at least $1.00 of additional Debt pursuant to the terms of the
indentures described in paragraph (a) of "--Limitation on Consolidated
Debt" above, or
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(C) upon giving effect to such Restricted Payment, the aggregate of all
Restricted Payments made on or after the Measurement Date, including
Restricted Payments made pursuant to clause (a) or (b) of the proviso
at the end of this sentence, and Permitted Investments made on or
after the Measurement Date pursuant to clause (9) or (10) of the
definition thereof (the amount of any such Restricted Payment or
Permitted Investment, if made other than in cash, to be based upon
Fair Market Value) exceeds the sum of:
(X) 50% of cumulative Consolidated Net Income (or, in the case that
Consolidated Net Income shall be negative, 100% of such negative
amount) since the end of the last full fiscal quarter prior to the
Measurement Date through the last day of the last full fiscal
quarter ending at least 45 days prior to the date of such
Restricted Payment, plus
(Y) in the case of any Revocation made after the Measurement Date, an
amount equal to the lesser of the portion (proportionate to Level
3's equity interest in the Subsidiary to which such Revocation
relates) of the Fair Market Value of the net assets of such
Subsidiary at the time of Revocation and the amount of Investments
previously made (and treated as a Restricted Payment) by Level 3
or any Restricted Subsidiary in such Subsidiary;
provided, however, that Level 3 or a Restricted Subsidiary of Level 3
may, without regard to the limitations in clause (C) but subject to
clauses (A) and (B), make:
(a) Restricted Payments in an aggregate amount not to exceed the sum
of $50 million and the aggregate net cash proceeds received after
the Measurement Date
(i) as capital contributions to Level 3, from the issuance (other
than to a Subsidiary or an employee stock ownership plan or
trust established by Level 3 or any such Subsidiary for the
benefit of their employees) of Capital Stock (other than
Disqualified Stock) of Level 3, and
(ii) from the issuance or sale of Debt of Level 3 or any
Restricted Subsidiary (other than to a Subsidiary, Level 3 or
an employee stock ownership plan or trust established by
Level 3 or any such Subsidiary for the benefit of their
employees) that after the Measurement Date has been converted
into or exchanged for Capital Stock (other than Disqualified
Stock) of Level 3, and
(b) Investments in Persons engaged in the Telecommunications/IS
Business in an aggregate amount not to exceed the after-tax gain
on the sale, after the Measurement Date, of Special Assets to the
extent sold for cash, Cash Equivalents, Telecommunications/IS
Assets or the assumption of Debt of Level 3 or any Restricted
Subsidiary (other than Debt that is subordinated to the notes or
any applicable Restricted Subsidiary Guarantee) and release of
Level 3 and all Restricted Subsidiaries from all liability on the
Debt assumed.
The aggregate net cash proceeds referred to in the immediately
preceding clauses (a)(i) and (a)(ii) shall not be utilized to make
Restricted Payments pursuant to such clauses to the extent such
proceeds have been utilized to make Permitted Investments under clause
(9) of the definition of "Permitted Investments."
(b) Notwithstanding the foregoing limitation:
(1) Level 3 may pay any dividend on Capital Stock of any class of Level 3
within 60 days after the declaration thereof if, on the date when the
dividend was declared, Level 3 could have paid such dividend in
accordance with the foregoing provisions; provided, however, that at
the time of such payment of such dividend, no other Event of Default
shall have occurred and be continuing (or result therefrom);
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(2) Level 3 may repurchase any shares of its Common Stock or options to
acquire its Common Stock from Persons who were formerly directors,
officers or employees of Level 3 or any of its Subsidiaries or other
Affiliates in an amount not to exceed $3 million in any 12-month
period;
(3) Level 3 and any Restricted Subsidiary may refinance any Debt otherwise
permitted by clause (8) of paragraph (b) under "--Limitation on
Consolidated Debt" above or clause (9) under "--Limitation on Debt of
Restricted Subsidiaries" above;
(4) Level 3 and any Restricted Subsidiary may retire or repurchase any
Capital Stock of Level 3 or of any Restricted Subsidiary or any
Subordinated Debt of Level 3 in exchange for, or out of the proceeds
of the substantially concurrent sale (other than to a Subsidiary of
Level 3 or an employee stock ownership plan or trust established by
Level 3 or any such Subsidiary for the benefit of their employees) of,
Capital Stock (other than Disqualified Stock) of Level 3, provided
that the proceeds from any such exchange or sale of Capital Stock
shall be excluded from any calculation pursuant to clause (a)(i) in
the proviso at the end of paragraph (a) above or pursuant to clause
(B) of the definition of "Invested Capital"; and
(5) Level 3 may pay cash dividends in any amount not in excess of $50
million in any 12-month period in respect of Preferred Stock of Level
3 (other than Disqualified Stock).
The Restricted Payments described in the foregoing clauses (1), (2) and (5)
shall be included in the calculation of Restricted Payments; the Restricted
Payments described in clauses (3) and (4) shall be excluded in the calculation
of Restricted Payments.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. (a) Level 3 may not, and may not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction (other than pursuant
to law or regulation) on the ability of any Restricted Subsidiary:
(1) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock owned by Level 3 or any
other Restricted Subsidiary or pay any Debt or other obligation owed
to Level 3 or any other Restricted Subsidiary;
(2) to make loans or advances to Level 3 or any other Restricted
Subsidiary; or
(3) to transfer any of its Property to Level 3 or any other Restricted
Subsidiary;
(b) Notwithstanding the foregoing limitation, Level 3 may, and may permit
any Restricted Subsidiary to, create or otherwise cause or suffer to exist:
(1) any encumbrance or restriction pursuant to any agreement in effect on
the Measurement Date;
(2) any customary (as conclusively determined in good faith by the Chief
Financial Officer of Level 3) encumbrance or restriction applicable to
a Restricted Subsidiary that is contained in an agreement or
instrument governing or relating to Debt contained in any Credit
Facilities or Purchase Money Debt,
(A) provided that such encumbrances and restrictions permit the
distribution of funds to Level 3 in an amount sufficient for Level
3 to make the timely payment of interest, premium (if any) and
principal (whether at stated maturity, by way of a sinking fund
applicable thereto, by way of any mandatory redemption,
defeasance, retirement or repurchase thereof, including upon the
occurrence of designated events or circumstances or by virtue of
acceleration upon an event of default, or by way of redemption or
retirement at the option of the holder of the Debt, including
pursuant to offers to purchase) according to the terms of such
indenture and the notes and other Debt that is solely an
obligation of Level 3, but
(B) provided further that such agreement may nevertheless contain
customary (as so determined) net worth, leverage, invested capital
and other financial covenants, customary (as so
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determined) covenants regarding the merger of or sale of all or
any substantial part of the assets of Level 3 or any Restricted
Subsidiary, customary (as so determined) restrictions on
transactions with affiliates and customary (as so determined)
subordination provisions governing Debt owed to Level 3 or any
Restricted Subsidiary;
(3) any encumbrance or restriction pursuant to an agreement relating to
any Acquired Debt, which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person so acquired;
(4) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Debt Incurred pursuant to an agreement referred to in
clause (1), (2) or (3) of this paragraph (b), provided, however, that
the provisions contained in such agreement relating to such
encumbrance or restriction are no more restrictive (as so determined)
in any material respect than the provisions contained in the agreement
the subject thereof;
(5) in the case of clause (3) of paragraph (a) above, any encumbrance or
restriction contained in any security agreement (including a Capital
Lease Obligation) securing Debt of Level 3 or a Restricted Subsidiary
otherwise permitted under such indenture, but only to the extent such
restrictions restrict the transfer of the Property subject to such
security agreement;
(6) in the case of clause (3) of paragraph (a) above, customary
provisions:
(A) that restrict the subletting, assignment or transfer of any
Property that is a lease, license, conveyance or similar contract,
(B) contained in asset sale or other asset disposition agreements
limiting the transfer of the Property being sold or disposed of
pending the closing of such sale or disposition, or
(C) arising or agreed to in the ordinary course of business, not
relating to any Debt,
and that do not, individually or in the aggregate, detract from the
value of Property of Level 3 or any Restricted Subsidiary in any
manner material to Level 3 or any Restricted Subsidiary;
(7) any encumbrance or restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all of the Capital Stock
or Property of such Restricted Subsidiary, provided that the
consummation of such transaction would not result in a Default or an
Event of Default, that such restriction terminates if such transaction
is abandoned and that the consummation or abandonment of such
transaction occurs within one year of the date such agreement was
entered into; and
(8) any encumbrance or restriction pursuant to such indenture and the
notes.
Limitation on Liens. Level 3 may not, and may not permit any Restricted
Subsidiary to, directly or indirectly, Incur or suffer to exist any Lien on or
with respect to any Property now owned or acquired after the Measurement Date
to secure any Debt without making, or causing such Restricted Subsidiary to
make, effective provision for securing the notes equally and ratably with such
Debt as to such Property for so long as such Debt will be so secured or in the
event such Debt is Debt of Level 3 or a Guarantor which is subordinate in
right of payment to the notes or the applicable Restricted Subsidiary
Guarantee, prior to such Debt as to such Property for so long as such Debt
will be so secured.
The foregoing restrictions shall not apply to:
(1) Liens existing on the Measurement Date and securing Debt outstanding
on the Measurement Date or Incurred on or after the Measurement Date
pursuant to any Credit Facility to secure Debt permitted to be
Incurred pursuant to clause (2) of paragraph (b) under "--Limitation
on Consolidated Debt;"
(2) Liens securing Debt in an amount which, together with the aggregate
amount of Debt then outstanding or available under all Credit
Facilities (together with all refinancing Debt then
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outstanding or available pursuant to clause (8) of paragraph (b) of
"--Limitation on Consolidated Debt" in respect of Debt previously
Incurred under Credit Facilities), does not exceed 1.5 times Level 3's
Consolidated Cash Flow Available for Fixed Charges for the four full
fiscal quarters preceding the Incurrence of such Lien for which Level
3's consolidated financial statements are available, determined on a
pro forma basis as if such Debt had been Incurred and the proceeds
thereof had been applied at the beginning of such four fiscal
quarters;
(3) Liens in favor of Level 3 or any Restricted Subsidiary; provided,
however, that any subsequent issue or transfer of Capital Stock or
other event that results in any such Restricted Subsidiary ceasing to
be a Restricted Subsidiary or any subsequent transfer of the Debt
secured by any such Lien (except to Level 3 or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Lien by the issuer thereof;
(4) Liens to secure Purchase Money Debt permitted to be Incurred pursuant
to clause (3) of paragraph (b) under "--Limitation on Consolidated
Debt," provided that any such Lien may not extend to any Property
other than the Telecommunications/IS Assets installed, constructed,
acquired, leased, developed or improved with the proceeds of such
Purchase Money Debt and any improvements or accessions thereto (it
being understood that all Debt to any single lender or group of
related lenders or outstanding under any single credit facility, and
in any case relating to the same group or collection of
Telecommunications/IS Assets financed thereby, shall be considered a
single Purchase Money Debt, whether drawn at one time or from time to
time);
(5) Liens to secure Acquired Debt, provided that:
(A) such Lien attaches to the acquired Property prior to the time of
the acquisition of such Property, and
(B) such Lien does not extend to or cover any other Property;
(6) Liens to secure Debt Incurred to refinance, in whole or in part, Debt
secured by any Lien referred to in the foregoing clauses (1), (4) and
(5) or this clause (6) so long as such Lien does not extend to any
other Property (other than improvements and accessions to the original
Property) and the principal amount of Debt so secured is not increased
except as otherwise permitted under clause (8) of paragraph (b) of "--
Limitation on Consolidated Debt" or clause (9) of "--Limitation on
Debt of Restricted Subsidiaries;"
(7) Liens not otherwise permitted by the foregoing clauses (1) through (6)
securing Debt in an aggregate amount not to exceed 5% of Level 3's
Consolidated Tangible Assets;
(8) Liens granted after the Issue Date pursuant to "--Limitation on Liens"
to secure the notes; and
(9) Permitted Liens.
Limitation on Sale and Leaseback Transactions. Level 3 may not, and may
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
assume, Guarantee or otherwise become liable with respect to any Sale and
Leaseback Transaction, unless:
(1) Level 3 or such Restricted Subsidiary would be entitled to Incur Debt
in an amount equal to the Attributable Value of the Sale and Leaseback
Transaction pursuant to the covenant described under "--Limitation on
Consolidated Debt" above, and a Lien pursuant to the covenant
described under "--Limitation on Liens" above, equal in amount to the
Attributable Value of the Sale and Leaseback Transaction, without also
securing the notes; and
(2) the Sale and Leaseback Transaction is treated as an Asset Disposition
and all of the conditions of such indenture described under "--
Limitation on Asset Dispositions" below (including the provisions
concerning the application of Net Available Proceeds) are satisfied
with respect to such
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Sale and Leaseback Transaction, treating all of the consideration
received in such Sale and Leaseback Transaction as Net Available
Proceeds for purposes of such covenant.
Limitation on Asset Dispositions. Level 3 may not, and may not permit any
Restricted Subsidiary to, make any Asset Disposition unless:
(1) Level 3 or the Restricted Subsidiary, as the case may be, receives
consideration for such disposition at least equal to the Fair Market
Value for the Property sold or disposed of as determined by the board
of directors of Level 3 in good faith and evidenced by a resolution of
the board of directors of Level 3 filed with the trustee; and
(2) at least 75% of the consideration for such disposition consists of
cash or Cash Equivalents or the assumption of Debt of Level 3 or any
Restricted Subsidiary (other than Debt that is subordinated to the
notes or any applicable Restricted Subsidiary Guarantee) and release
of Level 3 and all Restricted Subsidiaries from all liability on the
Debt assumed (or if less than 75%, the remainder of such consideration
consists of Telecommunications/IS Assets); provided, however, that, to
the extent such disposition involves Special Assets, all or any
portion of the consideration may, at Level 3's election, consist of
Property other than cash, Cash Equivalents, the assumption of Debt or
Telecommunications/IS Assets.
The Net Available Proceeds (or any portion thereof) from Asset Dispositions
may be applied by Level 3 or a Restricted Subsidiary, to the extent Level 3 or
such Restricted Subsidiary elects (or is required by the terms of any Debt):
(1) to the permanent repayment or reduction of Debt then outstanding under
any Credit Facility, to the extent such Credit Facility would require
such application or prohibit payments pursuant to the Offer to
Purchase described in the following paragraph (other than Debt owed to
Level 3 or any Affiliate of Level 3); or
(2) to reinvest in Telecommunications/IS Assets (including by means of an
Investment in Telecommunications/IS Assets by a Restricted Subsidiary
with Net Available Proceeds received by Level 3 or another Restricted
Subsidiary).
Any Net Available Proceeds from an Asset Disposition not applied in
accordance with the preceding paragraph within 360 days (or, in the case of a
disposition of Special Assets identified in clause (1) of the definition
thereof in which the Net Available Proceeds exceed $500 million, 540 days) from
the date of the receipt of such Net Available Proceeds shall constitute Excess
Proceeds. When the aggregate amount of Excess Proceeds exceeds $10 million,
Level 3 will be required to make an Offer to Purchase with such Excess Proceeds
on a pro rata basis according to principal amount (or, in the case of Debt
issued at a discount, the Accreted Value) for:
(1) outstanding notes at a price in cash equal to 100% of the principal
amount or Accreted Value, as applicable, of the notes on the purchase
date plus accrued and unpaid interest (if any) thereon (subject to the
right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date); and
(2) any other Debt of Level 3 or any Guarantor that is pari passu with the
notes, or any Debt of a Restricted Subsidiary that is not a Guarantor,
at a price no greater than 100% of the principal amount thereof plus
accrued and unpaid interest (if any) to the purchase date (or 100% of
the then-Accreted Value plus accrued and unpaid interest (if any) to
the purchase date in the case of original issue discount Debt), to the
extent, in the case of this clause (2), required under the terms
thereof (other than Debt owed to Level 3 or any Affiliate of Level 3).
To the extent there are any remaining Excess Proceeds following the
completion of the Offer to Purchase, Level 3 shall apply such Excess Proceeds
to the repayment of other Debt of Level 3 or any Restricted Subsidiary, to the
extent permitted or required under the terms thereof. Any other remaining
Excess Proceeds
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may be applied to any use as determined by Level 3 which is not otherwise
prohibited by such indenture, and the amount of Excess Proceeds shall be reset
to zero.
Limitation on Issuance and Sales of Capital Stock of Restricted
Subsidiaries. Level 3 may not, and may not permit any Restricted Subsidiary to,
issue, transfer, convey, sell or otherwise dispose of any shares of Capital
Stock of a Restricted Subsidiary or securities convertible or exchangeable
into, or options, warrants, rights or any other interest with respect to,
Capital Stock of a Restricted Subsidiary to any Person other than Level 3 or a
Restricted Subsidiary except:
(1) a sale of all of the Capital Stock of such Restricted Subsidiary owned
by Level 3 and any Restricted Subsidiary that complies with the
provisions described under "--Limitation on Asset Dispositions" above
to the extent such provisions apply;
(2) in a transaction that results in such Restricted Subsidiary becoming a
Joint Venture, provided:
(A) such transaction complies with the provisions described under "--
Limitation on Asset Dispositions" above to the extent such
provisions apply, and
(B) the remaining interest of Level 3 or any other Restricted
Subsidiary in such Joint Venture would have been permitted as a
new Restricted Payment or Permitted Investment under the
provisions of "--Limitation on Restricted Payments" above;
(3) the issuance, transfer, conveyance, sale or other disposition of
shares of such Restricted Subsidiary so long as after giving effect to
such transaction such Restricted Subsidiary remains a Restricted
Subsidiary and such transaction complies with the provisions described
under "--Limitation on Asset Dispositions" to the extent such
provisions apply;
(4) the transfer, conveyance, sale or other disposition of shares required
by applicable law or regulation;
(5) if required, the issuance, transfer, conveyance, sale or other
disposition of directors' qualifying shares;
(6) Disqualified Stock issued in exchange for, or upon conversion of, or
the proceeds of the issuance of which are used to refinance, shares of
Disqualified Stock of such Restricted Subsidiary, provided that the
amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such
Disqualified Stock shall have redemption obligations no earlier than
those required by, the Disqualified Stock being exchanged, converted
or refinanced;
(7) in a transaction where Level 3 or a Restricted Subsidiary acquires at
the same time not less than its Proportionate Interest in such
issuance of Capital Stock;
(8) Capital Stock issued and outstanding on the Measurement Date;
(9) Capital Stock of a Restricted Subsidiary issued and outstanding prior
to the time that such Person becomes a Restricted Subsidiary so long
as such Capital Stock was not issued in contemplation of such Person's
becoming a Restricted Subsidiary or otherwise being acquired by Level
3; and
(10) an issuance of Preferred Stock of a Restricted Subsidiary (other
than Preferred Stock convertible or exchangeable into Common Stock
of any Restricted Subsidiary) otherwise permitted by such indenture.
Transactions with Affiliates. Level 3 will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, sell, lease, transfer,
or otherwise dispose of any of its Property to, or purchase any Property from,
or enter into any contract, agreement, understanding, loan, advance, Guarantee
or transaction (including the rendering of services) with or for the benefit
of, any Affiliate (each of the foregoing, an Affiliate Transaction), unless:
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(a) such Affiliate Transaction or series of Affiliate Transactions is:
(1) in the best interest of Level 3 or such Restricted Subsidiary, and
(2) on terms that are no less favorable to Level 3 or such Restricted
Subsidiary than those that would have been obtained in a comparable
arm's-length transaction by Level 3 or such Restricted Subsidiary with
a Person that is not an Affiliate (or, in the event that there are no
comparable transactions involving Persons who are not Affiliates of
Level 3 or the relevant Restricted Subsidiary to apply for comparative
purposes, is otherwise on terms that, taken as a whole, Level 3 has
determined to be fair to Level 3 or the relevant Restricted
Subsidiary); and
(b) Level 3 delivers to the trustee:
(1) with respect to any Affiliate Transaction or series of Affiliate
Transactions involving aggregate payments in excess of $10 million but
less than $15 million, a certificate of the chief executive, operating
or financial officer of Level 3 evidencing such officer's
determination that such Affiliate Transaction or series of Affiliate
Transactions complies with clause (a) above, and
(2) with respect to any Affiliate Transaction or series of Affiliate
Transactions involving aggregate payments equal to or in excess of $15
million, a board resolution certifying that such Affiliate Transaction
or series of Affiliate Transactions complies with clause (a) above and
that such Affiliate Transaction or series of Affiliate Transactions
has been approved by the board of directors, including a majority of
the disinterested members of the board of directors,
provided that, in the event that there shall not be at least two
disinterested members of the board of directors with respect to the
Affiliate Transaction, Level 3 shall, in addition to such board
resolution, file with the trustee a written opinion from an investment
banking firm of national standing in the United States which, in the
good faith judgment of the board of directors of Level 3, is
independent with respect to Level 3 and its Affiliates and qualified
to perform such task, which opinion shall be to the effect that the
consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to Level 3 or
such Restricted Subsidiary.
Notwithstanding the foregoing, the following shall not be deemed Affiliate
Transactions:
(1) any employment agreement entered into by Level 3 or any of its
Restricted Subsidiaries in the ordinary course of business and
consistent with industry practice;
(2) any agreement or arrangement with respect to the compensation of a
director or officer of Level 3 or any Restricted Subsidiary approved
by a majority of the disinterested members of the board of directors
and consistent with industry practice;
(3) transactions between or among Level 3 and its Restricted Subsidiaries,
provided that no more than 5% of the Voting Stock (on a fully diluted
basis) of any such Restricted Subsidiary is owned by an Affiliate of
Level 3 (other than a Restricted Subsidiary);
(4) Restricted Payments and Permitted Investments permitted by the
covenant described under "--Limitation on Restricted Payments" (other
than Investments in Affiliates that are not Level 3 or Restricted
Subsidiaries);
(5) transactions pursuant to the terms of any agreement or arrangement as
in effect on the Measurement Date; and
(6) transactions with respect to wireline or wireless transmission
capacity, the lease or sharing or other use of cable or fiber optic
lines, equipment, rights-of-way or other access rights, between Level
3 (or any Restricted Subsidiary) and any other Person, provided that,
in the case of this clause (6), such transaction complies with clause
(a) in the immediately preceding paragraph.
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Change of Control Triggering Event. Within 30 days of the occurrence of
both a Change of Control and a Rating Decline with respect to the notes (a
Change of Control Triggering Event), Level 3 will be required to make an Offer
to Purchase all outstanding notes at a price in cash equal to 101% of the
principal amount or Accreted Value, as applicable, of the notes on the purchase
date plus any accrued and unpaid interest (if any) to such purchase date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
A Change of Control means the occurrence of any of the following events:
(1) if any person or group (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, other than any one or more of the
Permitted Holders, becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act, except that a person will be deemed to
have beneficial ownership of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of 35% or
more of the total voting power of the Voting Stock of Level 3;
provided, however, that the Permitted Holders are the beneficial
owners (as defined in Rule 13d-3 under the Exchange Act, except that a
person will be deemed to have beneficial ownership of all shares that
any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, in the aggregate of a lesser percentage of the total
voting power of the Voting Stock of Level 3 than such other person or
group
(for purposes of this clause (1), such person or group shall be deemed
to beneficially own any Voting Stock of a corporation (the specified
corporation) held by any other corporation (the parent corporation) so
long as such person or group beneficially owns, directly or
indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of such parent corporation); or
(2) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the
assets of Level 3 and the Restricted Subsidiaries, considered as a
whole (other than a disposition of such assets as an entirety or
virtually as an entirety to a Wholly Owned Restricted Subsidiary or
one or more Permitted Holders) shall have occurred; or
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of Level 3
(together with any new directors whose election or appointment by such
board or whose nomination for election by the shareholders of Level 3
was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the board of
directors of Level 3 then in office; or
(4) the shareholders of Level 3 shall have approved any plan of
liquidation or dissolution of Level 3.
In the event that Level 3 makes an Offer to Purchase the notes, Level 3
intends to comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
The existence of the holders' right to require, subject to certain
conditions, Level 3 to repurchase notes upon a Change of Control Triggering
Event may deter a third party from acquiring Level 3 in a transaction that
constitutes a Change of Control. If an Offer to Purchase is made, there can be
no assurance that Level 3 will have sufficient funds to pay the Purchase Price
for all notes tendered by holders seeking to accept the Offer to Purchase. In
addition, instruments governing other Debt of Level 3 may prohibit Level 3 from
purchasing any notes prior to their Stated Maturity, including pursuant to an
Offer to Purchase, or require that such Debt be repurchased upon a Change of
Control. In the event that an Offer to Purchase occurs at a time when Level 3
does not have sufficient available funds to pay the Purchase Price for all
notes tendered pursuant to such Offer
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to Purchase or a time when Level 3 is prohibited from purchasing the notes, and
Level 3 is unable either to obtain the consent of the holders of the relevant
Debt or to repay such Debt, an Event of Default would occur under the
indentures.
In addition, one of the events that constitutes a Change of Control under
the indentures is a sale, transfer, assignment, lease, conveyance or other
disposition of all or substantially all of the assets of Level 3. The indenture
will be governed by New York law, and there is no established definition under
New York law of substantially all of the assets of a corporation. Accordingly,
if Level 3 were to engage in a transaction in which it disposed of less than
all of its assets, a question of interpretation could arise as to whether such
disposition was of substantially all of its assets and whether Level 3 was
required to make an Offer to Purchase.
Except as described herein with respect to a Change of Control, the
indentures do not contain any other provisions that permit holders of notes to
require that Level 3 repurchase or redeem notes in the event of a takeover,
recapitalization or similar restructuring.
Reports. Whether or not Level 3 is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, Level 3 shall file with the
SEC the annual reports, quarterly reports and other documents which Level 3
would have been required to file with the SEC pursuant to such Section 13(a) or
15(d) or any successor provision thereto if Level 3 were subject thereto, such
documents to be filed with the SEC on or prior to the respective dates (the
Required Filing Dates) by which Level 3 would have been required to file them.
Level 3 shall also in any event:
(1) within 15 days of each Required Filing Date:
(A) transmit by mail to all holders, as their names and addresses
appear in the Security Register, without cost to such holders, and
(B) file with the trustee copies of the annual reports, quarterly
reports and other documents (without exhibits) which Level 3 would
have been required to file with the SEC pursuant to Section 13(a)
or 15(d) of the Exchange Act or any successor provisions thereto
if Level 3 were subject thereto; and
(2) if filing such documents by Level 3 with the SEC is not permitted
under the Exchange Act, promptly upon written request, supply copies
of such documents (without exhibits) to any prospective holder.
Limitation on Designations of Unrestricted Subsidiaries. The indentures
provide that Level 3 will not designate any Subsidiary of Level 3 (other than a
newly created Subsidiary in which no Investment has previously been made) as an
Unrestricted Subsidiary under the applicable indenture (a Designation) unless:
(1) no Default or Event of Default shall have occurred and be continuing
at the time of or after giving effect to such Designation;
(2) immediately after giving effect to such Designation, Level 3 would be
able to Incur $1.00 of Debt under paragraph (a) of "--Limitation on
Consolidated Debt;" and
(3) Level 3 would not be prohibited under the applicable indenture from
making an Investment at the time of Designation (assuming the
effectiveness of such Designation) in an amount (the Designation
Amount) equal to the portion (proportionate to the Level 3's equity
interest in such Restricted Subsidiary) of the Fair Market Value of
the net assets of such Restricted Subsidiary on such date.
In the event of any such Designation, Level 3 shall be deemed to have made
an Investment constituting a Restricted Payment pursuant to the covenant "--
Limitation on Restricted Payments" for all purposes of the applicable indenture
in the Designation Amount; provided, however, that, upon a Revocation of any
such Designation of a Subsidiary, Level 3 shall be deemed to continue to have a
permanent Investment in an Unrestricted Subsidiary of an amount (if positive)
equal to:
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(1) Level 3's Investment in such Subsidiary at the time of such
Revocation; less
(2) the portion (proportionate to the Level 3's equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time of such Revocation.
At the time of any Designation of any Subsidiary as an Unrestricted
Subsidiary, such Subsidiary shall not own any Capital Stock of Level 3 or any
Restricted Subsidiary. The applicable indenture further provides that neither
Level 3 nor any Restricted Subsidiary shall at any time:
(1) provide credit support for, or a Guarantee of, any Debt of any
Unrestricted Subsidiary (including any undertaking, agreement or
instrument evidencing such Debt); provided that Level 3 or a
Restricted Subsidiary may pledge Capital Stock or Debt of any
Unrestricted Subsidiary on a nonrecourse basis such that the pledgee
has no claim whatsoever against Level 3 other than to obtain such
pledged Capital Stock or Debt;
(2) be directly or indirectly liable for any Debt of any Unrestricted
Subsidiary; or
(3) be directly or indirectly liable for any Debt which provides that the
holder thereof may (upon notice, lapse of time or both) declare a
default thereon or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Debt, Lien or other obligation of any
Unrestricted Subsidiary (including any right to take enforcement
action against such Unrestricted Subsidiary),
except in the case of clause (1) or (2) to the extent permitted under "--
Limitation on Restricted Payments" and "--Transactions with Affiliates."
Unless Designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of Level 3 will be classified as a Restricted Subsidiary; provided,
however, that such Subsidiary shall not be designated as a Restricted
Subsidiary and shall be automatically classified as an Unrestricted Subsidiary
if either of the requirements set forth in clauses (1) and (2) of the
immediately following paragraph will not be satisfied immediately following
such classification. Except as provided in the first sentence of this "--
Limitation on Designations of Unrestricted Subsidiaries," no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.
The applicable indenture provides that a Designation may be revoked (a
Revocation) by a resolution of the board of directors of Level 3 delivered to
the trustee, provided that Level 3 will not make any Revocation unless:
(1) no Default or Event of Default shall have occurred and be continuing
at the time of and after giving effect to such Revocation; and
(2) all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time,
have been permitted to be Incurred at such time for all purposes of
the applicable indenture.
All Designations and Revocations must be evidenced by resolutions of the
board of directors of Level 3 delivered to the trustee:
(1) certifying compliance with the foregoing provisions; and
(2) giving the effective date of such Designation or Revocation, such
delivery to the trustee to occur within 45 days after the end of the
fiscal quarter of Level 3 in which such Designation or Revocation is
made (or, in the case of a Designation or Revocation made during the
last fiscal quarter of Level 3's fiscal year, within 90 days after
the end of such fiscal year).
Mergers, Consolidations and Certain Sales of Assets
Level 3 may not, in a single transaction or a series of related
transactions, consolidate with or merge into any other Person or Persons or
permit any other Person to consolidate with or merge into Level 3 or, directly
or
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indirectly, transfer, sell, lease, convey or otherwise dispose of all or
substantially all its assets to any other Person or Persons unless:
(1) in a transaction in which Level 3 is not the surviving Person or in
which Level 3 transfers, sells, leases, conveys or otherwise disposes
of all or substantially all of its assets to any other Person, the
resulting, surviving or transferee Person (the successor entity) is
organized under the laws of the United States or any State thereof or
the District of Columbia and shall expressly assume, by a supplemental
indenture executed and delivered to the trustee in form satisfactory
to the trustee, all of Level 3's obligations under the indentures;
(2) immediately before and after giving effect to such transaction and
treating any Debt which becomes an obligation of Level 3 (or the
successor entity) or a Restricted Subsidiary as a result of such
transaction as having been Incurred by Level 3 or such Restricted
Subsidiary at the time of the transaction, no Default or Event of
Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the Consolidated
Net Worth of Level 3 (or the successor entity) is equal to or greater
than that of Level 3 immediately prior to the transaction;
(4) immediately after giving effect to such transaction and treating any
Debt which becomes an obligation of Level 3 (or the successor entity)
or a Restricted Subsidiary as a result of such transaction as having
been Incurred by Level 3 or such Restricted Subsidiary at the time of
the transaction, Level 3 (or the successor entity) could Incur at
least $1.00 of additional Debt pursuant to the provisions of the
indentures described in paragraph (a) under "--Covenants--Limitation
on Consolidated Debt" above;
(5) if, as a result of any such transaction, Property of Level 3 (or the
successor entity) or any Restricted Subsidiary would become subject to
a Lien prohibited by the provisions of the indentures described under
"--Covenants--Limitation on Liens" above, Level 3 (or the successor
entity) shall have secured the notes as required by said covenant;
(6) in the case of a transfer, sale, lease, conveyance or other
disposition of all or substantially all of the assets of Level 3, such
assets shall have been transferred as an entirety or virtually as an
entirety to one Person and such Person shall have complied with all
the provisions of this paragraph; and
(7) certain other conditions are met.
The successor entity shall succeed to, and be substituted for, and may
exercise every right and power of Level 3 under the indentures, and the
predecessor Company, except in the case of a lease, shall be released from all
its obligations under the indentures.
Definitions
Set forth below is a summary of some of the defined terms used in the
indentures. Reference is made to the indentures for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
Accreted Value of any Debt issued at a price less than the principal amount
at stated maturity, means, as of any date of determination, an amount equal to
the sum of:
(1) the issue price of such Debt as determined in accordance with Section
1273 of the Internal Revenue Code or any successor provisions plus
(2) the aggregate of the portions of the original issue discount (the
excess of the amounts considered as part of the "stated redemption
price at maturity" of such Debt within the meaning of Section
1273(a)(2) of the Internal Revenue Code or any successor provisions,
whether denominated as principal or interest, over the issue price of
such Debt) that shall theretofore have accrued pursuant to Section
1272 of the Internal Revenue Code (without regard to Section
1272(a)(7) of the Internal
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Revenue Code) from the date of issue of such Debt to the date of
determination minus all amounts theretofore paid in respect of such
Debt, which amounts are considered as part of the "stated redemption
price at maturity" of such Debt within the meaning of Section
1273(a)(2) of the Internal Revenue Code or any successor provisions
(whether such amounts paid were denominated principal or interest).
Acquired Debt means, with respect to any specified Person:
(1) Debt of any other Person existing at the time such Person merges with
or into or consolidates with or becomes a Subsidiary of such specified
Person; and
(2) Debt secured by a Lien encumbering any Property acquired by such
specified Person, which Debt was not incurred in anticipation of, and
was outstanding prior to, such merger, consolidation or acquisition.
Affiliate of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, control when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms controlling and controlled
have meanings correlative to the foregoing. For purposes of the covenants
described under "--Covenants--Transactions with Affiliates" and "--Limitation
on Asset Dispositions" and the definition of Telecommunications/IS Assets
only, Affiliate shall also mean any beneficial owner of shares representing
10% or more of the total voting power of the Voting Stock (on a fully diluted
basis) of Level 3 or of rights or warrants to purchase such Voting Stock
(whether or not currently exercisable) and any Person who would be an
Affiliate of any such beneficial owner pursuant to the first sentence hereof.
Asset Disposition means any transfer, conveyance, sale, lease, issuance or
other disposition by Level 3 or any Restricted Subsidiary in one or more
related transactions (including a consolidation or merger or other sale of any
such Restricted Subsidiary with, into or to another Person in a transaction in
which such Restricted Subsidiary ceases to be a Restricted Subsidiary of Level
3, but excluding a disposition by a Restricted Subsidiary to Level 3 or a
Restricted Subsidiary or by Level 3 to a Restricted Subsidiary) of:
(1) shares of Capital Stock or other ownership interests of a Restricted
Subsidiary (other than as permitted by clause (5), (6), (7) or (9) of
the covenant described under "--Covenants--Limitation on Issuance and
Sales of Capital Stock of Restricted Subsidiaries"),
(2) substantially all of the assets of Level 3 or any Restricted
Subsidiary representing a division or line of business or
(3) other Property of Level 3 or any Restricted Subsidiary outside of the
ordinary course of business (excluding any transfer, conveyance, sale,
lease or other disposition of equipment that is obsolete or no longer
used by or useful to Level 3, provided that Level 3 has delivered to
the trustee an Officers' Certificate stating that such criteria are
satisfied);
provided in each case that the aggregate consideration for such transfer,
conveyance, sale, lease or other disposition is equal to $5 million or more in
any 12-month period.
The following shall not be Asset Dispositions:
(1) Permitted Telecommunications Capital Asset Dispositions that comply
with clause (1) of the first paragraph under "--Covenants--Limitation
on Asset Dispositions;"
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(2) when used with respect to Level 3, any Asset Disposition permitted
pursuant to "--Mergers, Consolidations and Certain Sales of Assets"
which constitutes a disposition of all or substantially all of the
assets of Level 3 and the Restricted Subsidiaries taken as a whole;
(3) Receivables sales constituting Debt under Qualified Receivable
Facilities permitted to be Incurred pursuant to "--Covenants--
Limitation on Consolidated Debt;" and
(4) any disposition that constitutes a Permitted Investment or a
Restricted Payment permitted by the covenant described under "--
Covenants--Limitation on Restricted Payments."
Attributable Value means, as to any particular lease under which any Person
is at the time liable other than a Capital Lease Obligation, and at any date as
of which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof (including any period for which such lease has been extended) as
determined in accordance with generally accepted accounting principles,
discounted from the last date of such remaining term to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which
is terminable by the lessee upon the payment of penalty, such net amount shall
also include the lesser of the amount of such penalty (in which case no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated) or the rent which would
otherwise be required to be paid if such lease is not so terminated.
Attributable Value means, as to a Capital Lease Obligation, the principal
amount thereof.
Capital Lease Obligation of any Person means the obligation to pay rent or
other payment amount under a lease of (or other Debt arrangements conveying the
right to use) Property of such Person which is required to be classified and
accounted for as a capital lease or a liability on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles (a
Capital Lease). The stated maturity of such obligation shall be the date of the
last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty. The principal amount of such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with generally accepted accounting principles.
Capital Stock of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general
or limited, of such Person and any rights (other than debt securities
convertible or exchangeable into an equity interest), warrants or options to
acquire an equity interest in such Person.
Cash Equivalents means:
(1) Government Securities maturing, or subject to tender at the option of
the holder thereof, within two years after the date of acquisition
thereof;
(2) time deposits and certificates of deposit of any commercial bank
organized in the U.S. having capital and surplus in excess of $500
million or a commercial bank organized under the law of any other
country that is a member of the OECD having total assets in excess of
$500 million (or its foreign currency equivalent at the time) with a
maturity date not more than one year from the date of acquisition;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above
entered into with:
(A) any bank meeting the qualifications specified in clause (2) above,
or
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(B) any primary government securities dealer reporting to the Market
Reports Division of the Federal Reserve Bank of New York;
(4) direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof maturing, or subject to tender at the option of the holder
thereof, within 90 days after the date of acquisition thereof,
provided that, at the time of acquisition, the long-term debt of such
state, political subdivision or public instrumentality has a rating
of A (or higher) from S&P or A-2 (or higher) from Moody's (or, if at
any time neither S&P nor Moody's shall be rating such obligations,
then an equivalent rating from such other nationally recognized
rating service acceptable to the trustee);
(5) commercial paper issued by the parent corporation of any commercial
bank organized in the United States having capital and surplus in
excess of $500 million or a commercial bank organized under the laws
of any other country that is a member of the OECD having total assets
in excess of $500 million (or its foreign currency equivalent at the
time), and commercial paper issued by others having one of the two
highest ratings obtainable from either S&P or Moody's (or, if at any
time neither S&P nor Moody's shall be rating such obligations, then
from such other nationally recognized rating service acceptable to
the trustee) and in each case maturing within one year after the date
of acquisition;
(6) overnight bank deposits and bankers' acceptances at any commercial
bank organized in the U.S. having capital and surplus in excess of
$500 million or a commercial bank organized under the laws of any
other country that is a member of the OECD having total assets in
excess of $500 million (or its foreign currency equivalent at the
time);
(7) deposits available for withdrawal on demand with a commercial bank
organized in the U.S. having capital and surplus in excess of $500
million or a commercial bank organized under the laws of any other
country that is a member of the OECD having total assets in excess of
$500 million (or its foreign currency equivalent at the time); and
(8) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (1) through
(7).
Change of Control has the meaning set forth under "--Covenants--Change of
Control Triggering Event" above.
Change of Control Triggering Event has the meaning set forth under "--
Covenants--Change of Control Triggering Event" above.
Common Stock of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of
such Person, to shares of Capital Stock of any other class of such Person.
Consolidated Capital Ratio means as of the date of determination the ratio
of the aggregate amount of Debt of Level 3 and its Restricted Subsidiaries on a
consolidated basis as at the date of determination to the sum of:
(1) $2.024 billion;
(2) the aggregate net proceeds to Level 3 from the issuance or sale of any
Capital Stock (including Preferred Stock) of Level 3 other than
Disqualified Stock subsequent to the Measurement Date;
(3) the aggregate net proceeds from the issuance or sale of Debt of Level
3 or any Restricted Subsidiary subsequent to the Measurement Date
convertible or exchangeable into Capital Stock of Level 3 other than
Disqualified Stock, in each case upon conversion or exchange thereof
into Capital Stock of Level 3 subsequent to the Measurement Date; and
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(4) the after-tax gain on the sale, subsequent to the Measurement Date, of
Special Assets to the extent such Special Assets have been sold for
cash, Cash Equivalents, Telecommunications/IS Assets or the assumption
of Debt of Level 3 or any Restricted Subsidiary (other than Debt that
is subordinated to the notes or any applicable Restricted Subsidiary
Guarantee) and release of Level 3 and all Restricted Subsidiaries from
all liability on the Debt assumed.
However, for purposes of calculation of the Consolidated Capital Ratio, the
net proceeds from the issuance or sale of Capital Stock or Debt described in
clause (2) or (3) above shall not be included to the extent:
(X) such proceeds have been utilized to make a Permitted Investment under
clause (9) of the definition thereof or a Restricted Payment; or
(Y) such Capital Stock or Debt shall have been issued or sold to Level 3,
a Subsidiary of Level 3 or an employee stock ownership plan or trust
established by Level 3 or any such Subsidiary for the benefit of their
employees.
Consolidated Cash Flow Available for Fixed Charges for any period means the
Consolidated Net Income of Level 3 and its Restricted Subsidiaries for such
period increased by the sum of (to the extent reducing Consolidated Net Income
for such period):
(1) Consolidated Interest Expense of Level 3 and its Restricted
Subsidiaries for such period, plus
(2) Consolidated Income Tax Expense of Level 3 and its Restricted
Subsidiaries for such period, plus
(3) consolidated depreciation and amortization expense and any other non-
cash items (other than any such non-cash item to the extent that it
represents an accrual of or reserve for cash expenditures in any
future period);
however, there shall be excluded therefrom the Consolidated Cash Flow Available
for Fixed Charges (if positive) of any Restricted Subsidiary (calculated
separately for such Restricted Subsidiary in the same manner as provided above
for Level 3) that is subject to a restriction which prevents the payment of
dividends or the making of distributions to Level 3 or another Restricted
Subsidiary to the extent of such restrictions.
Consolidated Income Tax Expense for any period means the aggregate amounts
of the provisions for income taxes of Level 3 and its Restricted Subsidiaries
for such period calculated on a consolidated basis in accordance with generally
accepted accounting principles.
Consolidated Interest Expense for any period means the interest expense
included in a consolidated income statement (excluding interest income) of
Level 3 and its Restricted Subsidiaries for such period in accordance with
generally accepted accounting principles, including without limitation or
duplication (or, to the extent not so included, with the addition of):
(1) the amortization of Debt discounts and issuance costs, including
commitment fees;
(2) any payments or fees with respect to letters of credit, bankers'
acceptances or similar facilities;
(3) net costs with respect to interest rate swap or similar agreements or
foreign currency hedge, exchange or similar agreements (including
fees);
(4) Preferred Stock Dividends (other than dividends paid in shares of
Preferred Stock that is not Disqualified Stock) declared and paid or
payable;
(5) accrued Disqualified Stock Dividends, whether or not declared or
paid;
(6) interest on Debt guaranteed by Level 3 and its Restricted
Subsidiaries;
(7) the portion of any Capital Lease Obligation or Sale and Leaseback
Transaction paid during such period that is allocable to interest
expense;
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(8) interest Incurred in connection with investments in discontinued
operations; and
(9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan
or trust to pay interest or fees to any Person (other than Level 3 or
a Restricted Subsidiary) in connection with Debt Incurred by such
plan or trust.
Consolidated Net Income for any period means the net income (or loss) of
Level 3 and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom:
(1) for purposes of the covenant described under "--Covenants--Limitation
on Restricted Payments" only, the net income (or loss) of any Person
acquired by Level 3 or a Restricted Subsidiary in a pooling-of-
interests transaction for any period prior to the date of such
transaction;
(2) the net income (or loss) of any Person that is not a Restricted
Subsidiary except to the extent of the amount of dividends or other
distributions actually paid to Level 3 or a Restricted Subsidiary by
such Person during such period (except, for purposes of the covenant
described under "--Covenants--Limitation on Restricted Payments"
only, to the extent such dividends or distributions have been
subtracted from the calculation of the amount of Investments to
support the actual making of Investments);
(3) gains or losses realized upon the sale or other disposition of any
Property of Level 3 or its Restricted Subsidiaries that is not sold
or disposed of in the ordinary course of business (it being
understood that Permitted Telecommunications Capital Asset
Dispositions shall be considered to be in the ordinary course of
business);
(4) gains or losses realized upon the sale or other disposition of any
Special Assets;
(5) all extraordinary gains and extraordinary losses, determined in
accordance with generally accepted accounting principles;
(6) the cumulative effect of changes in accounting principles;
(7) non-cash gains or losses resulting from fluctuations in currency
exchange rates;
(8) any non-cash expense related to the issuance to employees or
directors of Level 3 or any Restricted Subsidiary of:
(A) options to purchase Capital Stock of Level 3 or such Restricted
Subsidiary; or
(B) other compensatory rights;
provided, in either case, that such options or rights, by their terms
can be redeemed at the option of the holder of such option or right
only for Capital Stock; and
(9) with respect to a Restricted Subsidiary that is not a Wholly Owned
Subsidiary any aggregate net income (or loss) in excess of Level 3's
or any Restricted Subsidiary's pro rata share of the net income (or
loss) of such Restricted Subsidiary that is not a Wholly Owned
Subsidiary; provided further that there shall further be excluded
therefrom the net income (but not net loss) of any Restricted
Subsidiary that is subject to a restriction which prevents the
payment of dividends or the making of distributions to Level 3 or
another Restricted Subsidiary to the extent of such restriction.
Consolidated Net Worth of any Person means the stockholders' equity of such
Person, determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to Disqualified Stock
of such Person.
Consolidated Tangible Assets of any Person means the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a consolidated
balance sheet of such Person and its Subsidiaries after deducting therefrom all
goodwill, trade
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names, trademarks, patents, unamortized debt discount and expense and other
like intangibles, which in each case under generally accepted accounting
principles would be included on such consolidated balance sheet.
Credit Agreement means the Credit Agreement dated as of September 30, 1999,
among Level 3, certain subsidiaries of Level 3, the lenders parties thereto and
The Chase Manhattan Bank, as Administrative Agent and Collateral Agent.
Credit Facilities means one or more credit agreements, loan agreements or
similar facilities, secured or unsecured, providing for revolving credit loans,
term loans and/or letters of credit, including the Credit Agreement and any
Qualified Receivable Facility, entered into from time to time by Level 3 and
its Restricted Subsidiaries, and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified, restated or
replaced from time to time.
Debt means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent:
(1) every obligation of such Person for money borrowed;
(2) every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in
connection with the acquisition of Property;
(3) every reimbursement obligation of such Person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of such Person;
(4) every obligation of such Person issued or assumed as the deferred
purchase price of Property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business);
(5) every Capital Lease Obligation of such Person and all Attributable
Value in respect of Sale and Leaseback Transactions entered into by
such Person;
(6) all obligations to redeem or repurchase Disqualified Stock issued by
such Person;
(7) the liquidation preference of any Preferred Stock (other than
Disqualified Stock, which is covered by the preceding clause (6))
issued by any Restricted Subsidiary of such Person;
(8) every obligation under Interest Rate or Currency Protection
Agreements of such Person; and
(9) every obligation of the type referred to in clauses (1) through (8)
of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed.
The "amount" or "principal amount" of Debt at any time of determination as used
herein represented by:
(A) any Debt issued at a price that is less than the principal amount at
maturity thereof, shall be, except as otherwise set forth herein, the
Accreted Value of such Debt at such time, or
(B) in the case of any Receivables sale constituting Debt, the amount of
the unrecovered purchase price (that is, the amount paid for
Receivables that has not been actually recovered from the collection
of such Receivables) paid by the purchaser (other than Level 3 or a
Wholly Owned Restricted Subsidiary of Level 3) thereof.
The amount of Debt represented by an obligation under an Interest Rate or
Currency Protection Agreement shall be equal to:
(X) zero if such obligation has been Incurred pursuant to clause (10)
of paragraph (b) of the covenant described under "--Covenants--
Limitation on Consolidated Debt," or
(Y) the notional amount of such obligation if not Incurred pursuant to
such clause.
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Default means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.
Disqualified Stock of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final Stated Maturity of the notes;
provided, however, that any Preferred Stock which would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require Level 3 to repurchase or redeem such Preferred Stock upon the
occurrence of a change of control occurring prior to the final Stated Maturity
of the notes shall not constitute Disqualified Stock if the change of control
provisions applicable to such Preferred Stock are no more favorable to the
holders of such Preferred Stock than the provisions applicable to the notes
contained in the covenant described under "--Covenants--Change of Control
Triggering Event" and such Preferred Stock specifically provides that Level 3
will not repurchase or redeem any such stock pursuant to such provisions prior
to Level 3's repurchase of such notes as are required to be repurchased
pursuant to the covenant described under "--Covenants--Change of Control
Triggering Event."
Disqualified Stock Dividends means all dividends with respect to
Disqualified Stock of Level 3 held by Persons other than a Wholly Owned
Restricted Subsidiary. The amount of any such dividend shall be equal to the
quotient of such dividend divided by the difference between one and the maximum
statutory federal income tax rate (expressed as a decimal number between 1 and
0) applicable to Level 3 for the period during which such dividends were paid.
Dollar Notes means, collectively, Level 3's 11% Senior Notes due 2008 in an
aggregate principal amount not to exceed $800,000,000, Level 3's 11 1/4% Senior
Notes due 2010 in an aggregate principal amount not to exceed $250,000,000 and
Level 3's 12 7/8% Senior Discount Notes due 2010 in an aggregate principal
amount at maturity not to exceed $675,000,000.
Eligible Receivables means, at any time, Receivables of Level 3 and its
Restricted Subsidiaries, as evidenced on the most recent quarterly consolidated
balance sheet of Level 3 as at a date at least 45 days prior to such time,
arising in the ordinary course of business of Level 3 or any Restricted
Subsidiary.
European Economic Area means the member nations of the European Economic
Area pursuant to the Oporto Agreement on the European Economic Area dated May
2, 1992, as amended.
European Government Obligation means direct non-callable obligations of, or
non-callable obligations permitted by, any member nation of the European Union,
the payment or guarantee of which is secured by the pledge of the full faith
and credit of the respective nation, provided that such nation has a credit
rating at least equal to that of the highest rated member nation of the
European Economic Area.
European Union means the member nations to the third stage of economic and
monetary union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
February 7, 1992.
Event of Default has the meaning set forth under "--Events of Default"
below.
Exchange Act means the Securities Exchange Act of 1934, as amended (or any
successor act), and the rules and regulations thereunder (or respective
successors thereto).
Existing Notes means the 9 1/8% Senior Notes, the 10 1/2% Senior Discount
Notes and the 6% Convertible Notes.
Fair Market Value means, with respect to any Property, the price that could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under pressure or
compulsion to complete the transaction. Unless otherwise specified in the
indentures, Fair Market Value shall be determined by the board of directors of
Level 3 acting in good faith and shall be evidenced by a resolution of the
board of directors of Level 3 delivered to the trustee.
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Government Securities means direct obligations of, or obligations fully
and unconditionally guaranteed or insured by, the United States or any agency
or instrumentality thereof for the payment of which obligations or guarantee
the full faith and credit of the United States is pledged and which are not
callable or redeemable at the issuer's option (unless, for purposes of the
definition of "Cash Equivalents" only, the obligations are redeemable or
callable at a price not less than the purchase price paid by Level 3 or the
applicable Restricted Subsidiary, together with all accrued and unpaid
interest (if any) on such Government Securities).
Guarantee by any Person means any obligation, direct or indirect,
contingent or otherwise, of such Person guaranteeing, or having the economic
effect of guaranteeing, any Debt of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, and any obligation, direct or
indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Debt,
including any such obligations arising by virtue of partnership
arrangements or by agreements to keep-well;
(2) to purchase Property or services or to take-or-pay for the purpose of
assuring the holder of such Debt of the payment of such Debt;
(3) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Debt; or
(4) entered into for the purpose of assuring in any other manner the
obligee against loss in respect thereof, in whole or in part
(and Guaranteed, Guaranteeing and Guarantor shall have meanings correlative to
the foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
Guarantor means a Restricted Subsidiary of Level 3 that has executed a
Restricted Subsidiary Guarantee.
Incur means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other
obligation including the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on
the balance sheet of such Person (and Incurrence, Incurred, Incurrable and
Incurring shall have meanings correlative to the foregoing); provided,
however, that a change in generally accepted accounting principles that
results in an obligation of such Person that exists at such time becoming Debt
shall not be deemed an Incurrence of such Debt and that neither the accrual of
interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt. Debt otherwise incurred by a Person before it becomes a
Subsidiary of Level 3 shall be deemed to have been Incurred at the time at
which it becomes a Subsidiary.
Interest Rate or Currency Protection Agreement of any Person means any
forward contract, futures contract, swap, option or other financial agreement
or arrangement (including caps, floors, collars and similar agreements)
relating to, or the value of which is dependent upon, interest rates or
currency exchange rates or indices.
Invested Capital means the sum of:
(1) $500 million;
(2) the aggregate net proceeds received by Level 3 from the issuance or
sale of any Capital Stock, including Preferred Stock, of Level 3 but
excluding Disqualified Stock, subsequent to the Measurement Date; and
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(3) the aggregate net proceeds from the issuance or sale of Debt of Level
3 or any Restricted Subsidiary subsequent to the Measurement Date
convertible or exchangeable into Capital Stock of Level 3 other than
Disqualified Stock, in each case upon conversion or exchange thereof
into Capital Stock of Level 3 subsequent to the Measurement Date.
However, the net proceeds from the issuance or sale of Capital Stock or
Debt described in clause (2) or (3) shall be excluded from any computation of
Invested Capital to the extent:
(A) utilized to make a Restricted Payment; or
(B) such Capital Stock or Debt shall have been issued or sold to Level 3,
a Subsidiary of Level 3 or an employee stock ownership plan or trust
established by Level 3 or any such Subsidiary for the benefit of their
employees.
Investment by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, purchase, redemption, retirement or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, or Incurrence of, or payment on, a Guarantee of any
obligation of, any other Person; provided that Investments shall exclude
commercially reasonable extensions of trade credit.
The amount, as of any date of determination, of any Investment shall be:
(1) the original cost of such Investment, plus
(2) the cost of all additions, as of such date, thereto, and minus
(3) the amount, as of such date, of any portion of such Investment repaid
to such Person in cash as a repayment of principal or a return of
capital, as the case may be (except to the extent such repaid amount
has been included in Consolidated Net Income to support the actual
making of Restricted Payments),
but without any other adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment. In
determining the amount of any Investment involving a transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such transfer.
Issue Date means the date on which the notes are initially issued.
Issue Date Purchase Money Debt means Purchase Money Debt outstanding on the
Issue Date; provided, that the amount of such Purchase Money Debt when Incurred
did not exceed 100% of the cost of the construction, installation, acquisition,
lease, development or improvement of the applicable Telecommunications/IS
Assets.
Issue Date Rating means the respective ratings assigned to the notes by the
Rating Agencies on the Issue Date.
Joint Venture means a Person in which Level 3 or a Restricted Subsidiary
holds not more than 50% of the shares of Voting Stock.
Lien means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest,
lien, charge, easement (other than any easement not materially impairing
usefulness), encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property (including any Capital Lease Obligation, conditional sale or
other title retention agreement having substantially the same economic effect
as any of the foregoing and any Sale and Leaseback Transaction). For purposes
of this definition the sale, lease, conveyance or other transfer by Level 3 or
any of its Subsidiaries of, including the grant of indefeasible rights
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of use or equivalent arrangements with respect to, dark or lit communications
fiber capacity or communications conduit shall not constitute a Lien.
Measurement Date means April 28, 1998, the date the 9 1/8% Senior Notes
were originally issued.
Moody's means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business
with respect thereto shall not have been transferred to any successor Person,
then Moody's shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the trustee by a written
notice given to Level 3.
Net Available Proceeds from any Asset Disposition by any Person means cash
or cash equivalents received (including amounts received by way of sale or
discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such Property) therefrom by
such Person, net of:
(1) all legal, title and recording taxes, expenses and commissions and
other fees and expenses (including appraisals, brokerage commissions
and investment banking fees) Incurred and all federal, state,
provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Asset Disposition;
(2) all payments made by such Person or its Subsidiaries on any Debt which
is secured by such Property in accordance with the terms of any Lien
upon or with respect to such Property or which must by the terms of
such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from
such Asset Disposition;
(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or Joint Ventures of such Person as a
result of such Asset Disposition; and
(4) appropriate amounts to be provided by such Person or any Subsidiary
thereof, as the case may be, as a reserve in accordance with generally
accepted accounting principles against any liabilities associated with
such Property and retained by such Person or any Subsidiary thereof,
as the case may be, after such Asset Disposition, including
liabilities under any indemnification obligations and severance and
other employee termination costs associated with such Asset
Disposition, in each case as determined by the board of directors of
such Person, in its reasonable good faith judgment evidenced by a
resolution of the board of directors filed with the trustee;
(1) provided, however, that any reduction in such reserve within
twelve months following the consummation of such Asset Disposition
will be, for all purposes of the indentures and the notes, treated
as a new Asset Disposition at the time of such reduction with Net
Available Proceeds equal to the amount of such reduction; and
(2) provided further, however, that, in the event that any
consideration for a transaction (which would otherwise constitute
Net Available Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment will be made,
at such time as such portion of the consideration is released to
such Person or its Restricted Subsidiary from escrow, such portion
shall be treated for all purposes of the indentures and the Notes
as a new Asset Disposition at the time of such release from escrow
with Net Available Proceeds equal to the amount of such portion of
consideration released from escrow.
New Convertible Notes means Level 3's 6% Convertible Subordinated Notes due
2010 in an aggregate principal amount not to exceed $862,500,000, originally
issued on February 29, 2000.
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9 1/8% Senior Notes means Level 3's 9 1/8% Senior Notes Due 2008 in an
aggregate principal amount not to exceed $2,000,000,000, originally issued on
April 28, 1998.
Offer to Purchase means a written offer (the Offer) sent by Level 3 by
first-class mail, postage prepaid, to each holder of notes at its address
appearing in the Note Register on the date of the Offer offering to purchase up
to the principal amount of notes, specified in such Offer at the purchase price
specified in such Offer (as determined pursuant to the indentures). Unless
otherwise required by applicable law, the Offer shall specify an expiration
date (the Expiration Date) of the Offer to Purchase which shall be, subject to
any contrary requirements of applicable law, not less than 30 days or more than
60 days after the date of such Offer and a settlement date (the Purchase Date)
for purchase of notes within five Business Days after the Expiration Date.
Level 3 shall notify the trustee at least 15 Business Days (or such shorter
period as is acceptable to the trustee) prior to the mailing of the Offer of
Level 3's obligation to make an Offer to Purchase, and the Offer shall be
mailed by Level 3 or, at Level 3's request, by the trustee in the name and at
the expense of Level 3.
The Offer shall contain information concerning the business of Level 3 and
its Subsidiaries which Level 3 in good faith believes will enable such holders
to make an informed decision with respect to the Offer to Purchase, which at a
minimum will include:
(1) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the documents required to be filed
with the trustee pursuant to the indentures (which requirements may be
satisfied by delivery of such documents together with the Offer);
(2) a description of material developments in Level 3's business
subsequent to the date of the latest of such financial statements
referred to in clause (1) (including a description of the events
requiring Level 3 to make the Offer to Purchase);
(3) if applicable, appropriate pro forma financial information concerning
the Offer to Purchase and the events requiring Level 3 to make the
Offer to Purchase; and
(4) any other information required by applicable law to be included
therein.
The Offer shall contain all instructions and materials necessary to enable
such holders to tender notes pursuant to the Offer to Purchase. The Offer shall
also state:
(1) the section of the indentures pursuant to which the Offer to Purchase
is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of notes offered to be purchased by
Level 3 pursuant to the Offer to Purchase (including, if less than
100%, the manner by which such has been determined pursuant to the
section of the indentures requiring the Offer to Purchase) (the
Purchase Amount);
(4) the purchase price to be paid by Level 3 for (Euro)1,000 aggregate
principal amount of notes accepted for payment (as specified pursuant
to the indentures) (the Purchase Price);
(5) that the holder may tender all or any portion of the notes registered
in the name of such holder and that any portion of a note tendered
must be tendered in an integral multiple of (Euro)1,000 principal
amount;
(6) the place or places where notes are to be surrendered for tender
pursuant to the Offer to Purchase;
(7) that any notes not tendered or tendered but not purchased by Level 3
will continue to accrue interest;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each note being accepted for payment pursuant to the
Offer to Purchase and that interest thereon, if any, shall cease to
accrue on and after the Purchase Date;
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(9) that each holder electing to tender a note pursuant to the Offer to
Purchase will be required to surrender such note at the place or
places specified in the Offer prior to the close of business on the
Expiration Date (such note being, if Level 3 or the trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to Level 3 and the trustee duly
executed by, the holder thereof or his attorney duly authorized in
writing);
(10) that holders will be entitled to withdraw all or any portion of
notes tendered if Level 3 (or the Paying Agent) receives, not later
than the close of business on the Expiration Date, a telegram,
telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of the notes the holder tendered,
the certificate number of the note the holder tendered and a
statement that such holder is withdrawing all or a portion of his
tender;
(11) that:
(A) if notes in an aggregate principal amount less than or equal to
the Purchase Amount are duly tendered and not withdrawn pursuant
to the Offer to Purchase, Level 3 shall purchase all such notes;
and
(B) if notes in an aggregate principal amount in excess of the
Purchase Amount are tendered and not withdrawn pursuant to the
Offer to Purchase, Level 3 shall purchase notes having an
aggregate principal amount equal to the Purchase Amount on a pro
rata basis (with such adjustments as may be deemed appropriate so
that only notes in denominations of (Euro)1,000 principal amount
or integral multiples thereof shall be purchased); and
(12) that in the case of any holder whose note is purchased only in part,
Level 3 shall execute, and the trustee shall authenticate and
deliver to the holder of such note without service charge, a new
note or notes, of any authorized denomination as requested by such
holder, in an aggregate principal amount equal to and in exchange
for the unpurchased portion of the note so tendered.
Any Offer to Purchase shall be governed by and effected in accordance with
the Offer for such Offer to Purchase.
Officers' Certificate means a certificate signed by the Chairman of the
board of directors of Level 3, a Vice Chairman of the board of directors of
Level 3, the President or a Vice President, and by the Chief Financial Officer,
the Chief Accounting Officer, the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of Level 3 and delivered to
the trustee, which shall comply with the indentures.
Opinion of Counsel means an opinion of counsel acceptable to the trustee
(who may be counsel to Level 3, including an employee of Level 3).
OECD shall mean the Organization for Economic Cooperation and Development.
Permitted Holders means the members of Level 3's Board of Directors on the
Measurement Date and their respective estates, spouses, ancestors, and lineal
descendants, the legal representatives of any of the foregoing and the trustees
of any bona fide trusts of which the foregoing are the sole beneficiaries or
the grantors, or any Person of which the foregoing "beneficially owns" (as
defined in Rule 13d-3 under the Exchange Act) at least 66 2/3% of the total
voting power of the Voting Stock of such Person.
Permitted Interest Rate or Currency Protection Agreement of any Person
means any Interest Rate or Currency Protection Agreement entered into with one
or more financial institutions in the ordinary course of business that is
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and not for purposes of
speculation and which, in the case of an interest rate agreement, shall have a
notional amount no greater than the principal amount at maturity due with
respect to the Debt being hedged thereby.
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Permitted Investments means:
(1) Cash Equivalents;
(2) investments in prepaid expenses;
(3) negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits;
(4) loans, advances or extensions of credit to employees and directors
made in the ordinary course of business and consistent with past
practice;
(5) obligations under Permitted Interest Rate or Currency Protection
Agreements;
(6) bonds, notes, debentures and other securities received as a result of
Asset Dispositions pursuant to and in compliance with "--Covenants--
Limitation on Asset Dispositions;"
(7) Investments in any Person as a result of which such Person becomes a
Restricted Subsidiary;
(8) Investments made prior to the Measurement Date;
(9) Investments made after the Measurement Date in Persons engaged in the
Telecommunications/IS Business in an aggregate amount not to exceed
Invested Capital;
(10) solely in connection with the defeasance of euro-denominated Debt
permitted under the indentures, European Government Obligations; and
(11) additional Investments in an aggregate amount not to exceed $200
million.
Permitted Liens means:
(1) Liens for taxes, assessments, governmental charges, levies or claims
which are not yet delinquent or which are being contested in good
faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with generally
accepted accounting principles shall have been made therefor;
(2) other Liens incidental to the conduct of Level 3's and its Restricted
Subsidiaries' businesses or the ownership of its Property not
securing any Debt, and which do not in the aggregate materially
detract from the value of Level 3's and its Restricted Subsidiaries'
Property when taken as a whole, or materially impair the use thereof
in the operation of its business;
(3) Liens, pledges and deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and
other types of statutory obligations;
(4) Liens, pledges or deposits made to secure the performance of tenders,
bids, leases, public or statutory obligations, sureties, stays,
appeals, indemnities, performance or other similar bonds and other
obligations of like nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money,
the obtaining of advances or credit or the payment of the deferred
purchase price of Property and which do not in the aggregate
materially impair the use of Property in the operation of the
business of Level 3 and the Restricted Subsidiaries taken as a
whole);
(5) zoning restrictions, servitudes, easements, rights-of-way,
restrictions and other similar charges or encumbrances incurred in
the ordinary course of business which, in the aggregate, do not
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of
Level 3 or its Restricted Subsidiaries; and
(6) any interest or title of a lessor in the Property subject to any
lease other than a Capital Lease.
Permitted Telecommunications Capital Asset Disposition means the transfer,
conveyance, sale, lease or other disposition of optical fiber and/or conduit
and any related equipment used in a Segment (as defined) of Level 3's
communications network that:
(1) constitute capital assets in accordance with generally accepted
accounting principles; and
(2) after giving effect to such disposition, would result in Level 3
retaining at least either:
(A) 24 optical fibers per route mile on such Segment as deployed at
the time of such disposition; or
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(B) 12 optical fibers and one empty conduit per route mile on such
Segment as deployed at such time.
Segment means:
(X) with respect to Level 3's intercity network, the through-portion of
such network between two local networks (e.g., Omaha to Denver); and
(Y) with respect to a local network of Level 3 (e.g., Dallas), the entire
through-portion of such network, excluding the spurs which branch off
the through-portion.
Person means any individual, corporation, company, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
Preferred Stock of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital
Stock of any other class of such Person.
Preferred Stock Dividends means all dividends with respect to Preferred
Stock of Restricted Subsidiaries held by Persons other than Level 3 or a Wholly
Owned Restricted Subsidiary. The amount of any such dividend shall be equal to
the quotient of such dividend divided by the difference between one and the
maximum statutory federal income rate (expressed as a decimal number between 1
and 0) applicable to the issuer of such Preferred Stock for the period during
which such dividends were paid.
Property means, with respect to any Person, any interest of such Person in
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required pursuant to the indentures,
the value of any Property shall be its Fair Market Value.
Proportionate Interest in any issuance of Capital Stock of a Restricted
Subsidiary means a ratio:
(1) the numerator of which is the aggregate amount of Capital Stock of
such Restricted Subsidiary beneficially owned by Level 3 and the
Restricted Subsidiaries; and
(2) the denominator of which is the aggregate amount of Capital Stock of
such Restricted Subsidiary beneficially owned by all Persons
(excluding, in the case of this clause (2), any Investment made in
connection with such issuance).
Purchase Money Debt means Debt (including Acquired Debt and Capital Lease
Obligations, mortgage financings and purchase money obligations) incurred for
the purpose of financing all or any part of the cost of construction,
installation, acquisition, lease, development or improvement by Level 3 or any
Restricted Subsidiary of any Telecommunications/IS Assets of Level 3 or any
Restricted Subsidiary and including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified or restated from time to time.
Qualified Receivable Facility means Debt of Level 3 or any Subsidiary
Incurred from time to time pursuant to either:
(1) credit facilities secured by Receivables; or
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(2) Receivables purchase facilities, and including any related notes,
Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.
Rating Agencies means Moody's and S&P.
Rating Date means the earlier of the date of public notice of the
occurrence of a Change of Control or of the intention of Level 3 to effect a
Change of Control.
Rating Decline shall be deemed to have occurred if, no later than 90 days
after the Rating Date (which period shall be extended so long as the rating of
the notes is under publicly announced consideration for possible downgrade by
any of the Rating Agencies), either of the Rating Agencies assigns or reaffirms
a rating to the notes that is lower than the applicable Issue Date Rating (or
the equivalent thereof). If, prior to the Rating Date, either of the ratings
assigned to the notes by the Rating Agencies is lower than the applicable Issue
Date Rating, then a Rating Decline will be deemed to have occurred if such
rating is not changed by the 90th day following the Rating Date. A downgrade
within rating categories, as well as between rating categories, will be
considered a Rating Decline.
Receivables means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money and
proceeds and products thereof in each case generated in the ordinary course of
business.
Restricted Subsidiary means:
(1) a Subsidiary of Level 3 or of a Restricted Subsidiary that has not
been designated or classified as an Unrestricted Subsidiary pursuant
to and in compliance with "--Covenants--Limitation on Designations
of Unrestricted Subsidiaries;" and
(2) an Unrestricted Subsidiary that is redesignated as a Restricted
Subsidiary pursuant to such covenant.
Restricted Subsidiary Guarantee means a supplemental indenture to any
indenture in form satisfactory to the trustee, providing for an unconditional
Guarantee of payment in full of the principal of, premium, if any, and interest
on the notes under such indenture. Any such Restricted Subsidiary Guarantee
shall not be subordinate to any Debt of the Restricted Subsidiary providing the
Restricted Subsidiary Guarantee.
S&P means Standard & Poor's Ratings Service or, if Standard & Poor's
Ratings Service shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have
been transferred to a successor Person, such successor Person; provided,
however, that if Standard & Poor's Rating Service ceases rating debt securities
having a maturity at original issuance of at least one year and its ratings
business with respect thereto shall not have been transferred to any successor
Person, then S&P shall mean any other national recognized rating agency (other
than Moody's) that rates debt securities having a maturity at original issuance
of at least one year and that shall have been designated by the trustee by a
written notice given to Level 3.
Sale and Leaseback Transaction of any Person means any direct or indirect
arrangement pursuant to which any Property is sold or transferred by such
Person or a Restricted Subsidiary of such person and is thereafter leased back
from the purchaser or transferee thereof by such Person or one of its
Restricted Subsidiaries. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty.
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Significant Subsidiary means any Subsidiary that would be a Significant
Subsidiary of Level 3 within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
Special Assets means:
(1) the Capital Stock or assets of Cable Michigan, Inc., RCN Corporation,
Commonwealth Telephone Enterprises, Inc., KCP, Inc. and California
Private Transportation Company, L.P. (and any intermediate holding
companies or other entities formed solely for the purpose of owning
such Capital Stock or assets) owned, directly or indirectly, by Level
3 or any Restricted Subsidiary on the Measurement Date; and
(2) any Property, other than cash, Cash Equivalents and
Telecommunications/IS Assets, received as consideration for the
disposition after the Measurement Date of Special Assets (as
contemplated by the first proviso under "--Covenants-- Limitation on
Asset Dispositions").
6% Convertible Notes means Level 3's 6% Convertible Subordinated Notes due
2009 in an aggregate principal amount not to exceed $823,000,000, originally
issued on September 14, 1999.
Stated Maturity when used with respect to a note or any installment of
interest thereon, means the date specified in such note as the fixed date on
which the principal of such note or such installment of interest is due and
payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such note at the option
of the holder thereof upon the happening of any contingency beyond the control
of Level 3 unless such contingency has occurred).
Subordinated Debt means Debt of Level 3 that is not secured by any Lien on
or with respect to any Property now owned or acquired after the Measurement
Date and as to which the payment of principal of (and premium, if any) and
interest and other payment obligations in respect of such Debt shall be
subordinate to the prior payment in full in cash of the notes to at least the
following extent:
(1) no payments of principal of (or premium, if any) or interest on or
otherwise due (including by acceleration or for additional amounts) in
respect of, or repurchases, redemptions or other retirements of, such
Debt (collectively referred to as payments of such Debt) may be
permitted for so long as any default (after giving effect to any
applicable grace periods) in the payment of principal (or premium, if
any) or interest on the notes exists, including as a result of
acceleration;
(2) in the event that any other Default exists with respect to the notes,
upon notice by holders of 25% or more in aggregate principal amount of
the notes to the trustee, the trustee shall have the right to give
notice to Level 3 and the holders of such Debt (or trustees or agents
therefor) of a payment blockage, and thereafter no payments of such
Debt may be made for a period of 179 days from the date of such
notice, provided that not more than one such payment blockage notice
may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to the notes during such period;
(3) if payment of such Debt is accelerated when any notes are outstanding,
no payments of such Debt may be made until three Business Days after
the trustee receives notice of such acceleration and, thereafter, such
payments may only be made to the extent the terms of such Debt permit
payment at that time; and
(4) such Debt may not:
(A) provide for payments of principal of such Debt at the stated
maturity thereof or by way of a sinking fund applicable thereto or
by way of any mandatory redemption, defeasance, retirement or
repurchase thereof by Level 3 (including any redemption,
retirement or repurchase which is contingent upon events or
circumstances but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in
each case prior to the final Stated Maturity of the notes, or
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(B) permit redemption or other retirement (including pursuant to an
offer to purchase made by Level 3) of such other Debt at the
option of the holder thereof prior to the final Stated Maturity of
the notes,
other than, in the case of clause (A) or (B), any such payment,
redemption or other retirement (including pursuant to an offer to
purchase made by Level 3) which is conditioned upon:
(a) a change of control of Level 3 pursuant to provisions
substantially similar to those described under "--Covenants--
Change of Control Triggering Event" (and which shall provide that
such Debt will not be repurchased pursuant to such provisions
prior to Level 3's repurchase of the notes required to be
repurchased by Level 3 pursuant to the provisions described under
"--Covenants--Change of Control Triggering Event"), or
(b) a sale or other disposition of assets pursuant to provisions
substantially similar to those described under "--Covenants--
Limitation on Asset Dispositions" (and which shall provide that
such Debt will not be repurchased pursuant to such provisions
prior to Level 3's repurchase of the notes required to be
repurchased by Level 3 pursuant to the provision described under
"--Covenants--Limitation on Asset Dispositions").
Subsidiary of any Person means:
(1) a corporation more than 50% of the combined voting power of the
outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or
by such Person and one or more Subsidiaries thereof; or
(2) any other Person (other than a corporation) in which such Person, or
one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policies,
management and affairs thereof.
Telecommunications/IS Assets means:
(1) any Property (other than cash, cash equivalents and securities) to be
owned by Level 3 or any Restricted Subsidiary and used in the
Telecommunications/IS Business;
(2) for purposes of the covenants described under "--Covenants--
Limitation on Consolidated Debt" and "--Limitation on Liens" only,
Capital Stock of any Person; or
(3) for all other purposes of the indentures, Capital Stock of a Person
that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by Level 3 or another Restricted Subsidiary
from any Person other than an Affiliate of Level 3;
provided, however, that, in the case of clause (2) or (3), such Person is
primarily engaged in the Telecommunications/IS Business.
Telecommunications/IS Business means the business of:
(1) transmitting, or providing services relating to the transmission of,
voice, video or data through owned or leased transmission facilities;
(2) constructing, creating, developing or marketing communications
networks, related network transmission equipment, software and other
devices for use in a communications business;
(3) computer outsourcing, data center management, computer systems
integration, reengineering of computer software for any purpose
(including, without limitation, for the purposes of porting computer
software from one operating environment or computer platform to
another or to address issues commonly referred to as "Year 2000
issues"); or
(4) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in (1), (2)
or (3) above;
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provided that the determination of what constitutes a Telecommunications/IS
Business shall be made in good faith by the board of directors of Level 3.
10 1/2% Senior Discount Notes means Level 3's 10 1/2% Senior Discount Notes
due 2008 in an aggregate principal amount at maturity not to exceed
$833,815,000, originally issued on November 24, 1998.
Unrestricted Subsidiary means:
(1) 91 Holding Corp. (the subsidiary that holds indirectly Level 3's
interests in the SR91 tollroad);
(2) any Subsidiary of an Unrestricted Subsidiary; and
(3) any Subsidiary of Level 3 designated as such pursuant to and in
compliance with "--Certain Covenants--Limitation on Designations of
Unrestricted Subsidiaries" and not thereafter redesignated as a
Restricted Subsidiary as permitted pursuant thereto.
Voting Stock of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only for
so long as no senior class of securities has such voting power by reason of any
contingency.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person all
of the outstanding Voting Stock or other ownership interests (other than
directors' qualifying shares) of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
Events of Default
The occurrence of any of the following described events with respect to the
notes of any series will be Events of Default under the indenture under which
the applicable series of notes are issued:
(1) failure to pay principal of, or premium, if any, on, any note when
due;
(2) failure to pay any interest on any note when due, continued for 30
days;
(3) default in the payment of principal and interest on notes required to
be purchased by an Offer to Purchase as described under "--Certain
Covenants--Change of Control Triggering Event" when due and payable;
(4) failure to perform or comply with the provisions described under "--
Mergers, Consolidations and Certain Sales of Assets" and "--Certain
Covenants--Limitation on Asset Dispositions;"
(5) failure to perform any other covenant or agreement of Level 3 under
the applicable indenture or the notes, continued for 60 days after
written notice to Level 3 by the trustee or holders of at least 25% in
aggregate principal amount of the notes then outstanding;
(6) default under the terms of any instrument evidencing or securing Debt
of Level 3 or any Restricted Subsidiary having an outstanding
principal amount of not less than $25 million or its foreign currency
equivalent at the time individually or in the aggregate, which default
results in the acceleration of the payment of that indebtedness or
constitutes the failure to pay that indebtedness when due, after
expiration of any applicable grace period;
(7) the rendering of a judgment or judgments against Level 3 or any
Restricted Subsidiary in an aggregate amount in excess of $25 million
or its foreign currency equivalent at the time and shall not be
waived, satisfied or discharged for any period of 45 consecutive days
during which a stay of enforcement shall not be in effect;
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(8) any Restricted Subsidiary Guarantee ceases to be in full force and
effect, other than in accordance with the terms of that Subsidiary
Guaranty, or any Guarantor denies or disaffirms its obligations under
its Restricted Subsidiary Guarantee; and
(9) certain events of bankruptcy, insolvency or reorganization affecting
Level 3 or any Significant Subsidiary.
Subject to the provisions of the applicable indenture relating to the duties of
the trustee in case an Event of Default shall occur and be continuing, the
trustee will not be under any obligation to exercise any of its rights or
powers under the applicable indenture at the request or direction of any of the
holders of notes, unless those holders shall have offered to the trustee
reasonable indemnity. Subject to provisions for the indemnification of the
trustee, the holders of a majority in aggregate principal amount of the notes
of a series of notes then outstanding will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the trustee with respect
to such series of notes.
If any Event of Default, other than an Event of Default described in clause
(9) above regarding Level 3, shall occur and be continuing, either the trustee
or the holders of at least 25% in aggregate principal amount of any series of
notes then outstanding may accelerate the maturity of all notes of such series.
However, after an acceleration but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of the
notes of a series of notes, then outstanding may, under certain circumstances,
rescind and annul the acceleration if all Events of Default, other than the
non-payment of accelerated principal relating to such series have been cured or
waived as provided in the indentures. If an Event of Default specified in
clause (9) above occurs regarding Level 3, the outstanding notes will
automatically become immediately due and payable without any declaration or
other act on the part of the trustee or any holder. For information as to
waiver of defaults, see "--Amendment, Supplement and Waiver."
No holder of any note will have any right to institute any proceeding
relating to the indentures or for any remedy under such indenture, unless:
(1) the holder shall have previously given to the trustee written notice
of a continuing Event of Default with respect to the holder's series
of notes;
(2) the holders of at least 25% in aggregate principal amount of such
series then outstanding shall have made written request and offered
reasonable indemnity to the trustee to institute the proceeding as
trustee; and
(3) the trustee has not have received from the holders of a majority in
aggregate principal amount of such series of notes then outstanding a
direction inconsistent with this request and failed to institute the
proceeding within 60 days.
However, these limitations do not apply to a suit instituted by a holder of a
note for enforcement of payment of the principal of, and premium, if any, or
interest on the note on or after the respective due dates expressed in the
note.
Within 30 days after the occurrence of any event which with the giving of
notice and the lapse of time would become an Event of Default, Level 3 must
deliver to the Trustee written notice in the form of an Officers' Certificate
of the event, its status and what action Level 3 is taking or proposes to take
regarding the event. Level 3 also will be required to deliver to the trustee
annually a statement as to the performance by Level 3 of certain of its
obligations under the indentures and as to any default in its performance.
Amendment, Supplement and Waiver
Level 3 and the trustee may, at any time and from time to time, without
notice to or consent of any holders of notes, enter into one or more indentures
supplemental to the indentures relating to any series:
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(1) evidence the succession of another Person to Level 3 and the
assumption by the successor of the covenants of Level 3 in the
indentures and the notes;
(2) add to the covenants of Level 3, for the benefit of the holders, or
surrender any right or power conferred on Level 3 by the indentures;
(3) add any additional Events of Defaults;
(4) provide for uncertificated notes in addition to or in place of
certificated notes;
(5) evidence and provide for the acceptance of appointment under the
indentures of a successor trustee;
(6) secure the notes;
(7) comply with the Trust Indenture Act or the Securities Act, including
Regulation S under the Securities Act;
(8) add additional Guarantees relating to the notes or release Guarantors
from Restricted Subsidiary Guarantees as provided by the terms of the
indentures;
(9) cure any ambiguity in the indentures, correct or supplement any
provision in the indentures which may be inconsistent with any other
provision in the indentures or add any other provision relating to
matters or questions arising under the indentures; or
(10) to make any change in the provisions of the indentures or the notes
relating to book-entry procedures for global securities to facilitate
trading or transferring the notes in book-entry form;
as long as these actions do not adversely affect the interests of the holders
in any material respect.
With the consent of the holders of at least a majority in principal amount
of the outstanding notes of a series, Level 3 and the trustee may enter into
one or more supplemental indentures to add any provisions to or change in any
manner or eliminate any of the provisions of any indentures or modify in any
manner the rights of the holders. However, with respect to any series of notes
no supplemental indenture shall, without the consent of the holder of each
outstanding note of that series:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any note of that series, or reduce the principal amount
of any note or the interest on any note that would be due and payable
upon the Stated Maturity of the note, or change the place of payment
where, or the coin or currency in which, any note of that series or
any premium or interest on the note is payable, or impair the right
to institute suit for the enforcement of any such payment on or after
the Stated Maturity of the note;
(2) reduce the percentage in principal amount of the outstanding notes of
that series, the consent of whose holders is necessary for any
related supplemental indenture or required for any waiver of
compliance with certain provisions of the indentures or certain
Defaults under the indentures;
(3) subordinate in right of payment, or otherwise subordinate, the notes
of that series to any other Debt;
(4) except as otherwise required by the indentures, release any security
interest that may have been granted in favor of the holders of the
notes;
(5) reduce the premium payable upon the redemption of any note nor change
the time at which any note may be redeemed, as described under "--
Optional Redemption;"
(6) reduce the premium payable upon a Change of Control Triggering Event
or, at any time after a Change of Control Triggering Event has
occurred, change the time at which the Offer to Purchase relating to
the Change of Control Triggering Event must be made or at which the
notes of that series must be repurchased according to the Offer to
Purchase;
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(7) at any time after Level 3 is obligated to make an Offer to Purchase
with the Net Available Proceeds from Asset Dispositions, change the
time at which the Offer to Purchase must be made or at which the
notes must be repurchased according to the Offer to Purchase;
(8) make any change in any Restricted Subsidiary Guarantee that would
adversely affect the holders of the notes; or
(9) modify any provision of this paragraph, except to increase any
percentage described in this paragraph.
The holders of not less than a majority in principal amount of the
outstanding notes of a series may, on behalf of the holders of all the notes of
that series, waive any past Default under the indentures and its consequences,
except a Default:
(1) in the payment of the principal or Accreted Value, as applicable, of,
or premium, if any, or interest on any note; or
(2) relating to a covenant or provision of the indentures which under the
last sentence of the prior paragraph cannot be modified or amended
without the consent of the holder of each outstanding note affected.
The 2008 senior notes and the 2010 senior notes each are a separate series
of debt securities, and as such will vote separately on matters under the
indentures. In addition, the waiver of any condition or covenant with respect
to a series of notes requiring absence of a Default or Event of Default may be
obtained with consent of the requisite percentage of the holders of only the
series of notes as to which there is a Default or Event of Default.
Satisfaction and Discharge of the Indentures, Defeasance
Level 3 may terminate its obligations under the indentures with respect to
any series of notes when:
(1) either:
(A) all outstanding notes of that series have been delivered to the
trustee for cancelation, or
(B) all notes of that series not previously delivered to the trustee
for cancelation have become due and payable, will become due and
payable within one year or are to be called for redemption within
one year under irrevocable arrangements satisfactory to the
trustee for the giving of notice of redemption by the trustee in
the name and at the expense of Level 3, and Level 3 has
irrevocably deposited or caused to deposited with the trustee
funds in an amount sufficient to pay and discharge the entire
indebtedness on the notes of that series not previously delivered
to the trustee for cancelation, for principal of, or premium, if
any, on, and interest on, the notes of that series;
(2) Level 3 has paid or caused to be paid all other sums payable by Level
3 under the applicable indenture with respect to that series; and
(3) Level 3 has delivered an Officers' Certificate and an Opinion of
Counsel relating to compliance with the conditions set forth in the
applicable indenture.
Level 3, at its election, shall:
(1) be deemed to have paid and discharged its debt on any series of notes
and the applicable indenture shall cease to be of further effect as to
all outstanding notes of that series, except as to:
(A) rights of registration of transfer, substitution and exchange of
notes and Level 3's right of optional redemption,
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(B) rights of holders to receive payment of principal of, premium, if
any, and interest on the notes, but not the Purchase Price
referred to under "--Certain Covenants--Change of Control
Triggering Event" or under "--Limitation on Asset Dispositions,"
and any rights of the holders relating to that amount,
(C) the rights, obligations and immunities of the trustee under the
applicable indenture, and
(D) certain other specified provisions in the applicable indenture,
or
(2) cease to be under any obligation to comply with various restrictive
covenants, including those described under "--Certain Covenants," and
terminate the operation of certain Events of Default, after the
irrevocable deposit by Level 3 with the trustee, in trust for the
benefit of the holders of any series of notes, at any time prior to
the maturity of that series of notes, of:
(A) money in an amount,
(B) Government Securities or European Government Obligations which
through the payment of interest and principal will provide, not
later than one day before the due date of payment in respect of
the notes, money in an amount, or
(C) a combination of money and Government Securities,
sufficient to pay and discharge the principal of, premium, if any, on,
and interest on, that series of notes then outstanding on the dates on
which any of these payments are due in accordance with the terms of
the applicable indenture and of that series of notes.
This defeasance or covenant defeasance shall be deemed to occur only if
specified conditions are satisfied, including, among other things, delivery by
Level 3 to the trustee of an Opinion of Counsel acceptable to the trustee to
the effect that:
(1) the deposit, defeasance and discharge will not be deemed, or result
in, a taxable event relating to the holders for U.S. federal income
tax purposes, and
(2) Level 3's deposit will not result in the related trust or the trustee
being subject to regulation under the Investment Company Act of 1940.
Money denominated in currency other than euros and Government Securities
deposited pursuant to this paragraph shall be subject in their entirety,
including principal, interest and premium, if any, to a customary currency
agreement that is of a duration not less than the defeasance period that fixes
the exchange rate of such money or Government Securities into euros, and that
constitutes a Permitted Interest Rate or Currency Protection Agreement for the
benefit of the Trustee. The amount of money and Government Securities expressed
in euros will be as provided in the currency agreement. The counterparty to the
currency agreement shall be a commercial bank organized in the United States
having capital and surplus in excess of $500 million or a commercial bank
organized under the laws of any country that is a member of the OECD having
total assets in excess of $500 million, or its foreign currency equivalent at
the time. The counterparty may obtain from Level 3 an opinion of counsel to the
effect that the currency agreement has been duly authorized and entered into by
Level 3.
Governing Law
The indentures and the notes will be governed by the laws of the State of
New York, without reference to principles of conflicts of law.
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The Trustee
The Bank of New York is the trustee under the indentures. The address of
the trustee is 101 Barclay Street, Floor 21 West, New York, New York 10286. The
trustee is also the trustee with respect to the indentures relating to Level
3's 9 1/8% Senior Notes, 10 1/2% Senior Discount Notes, 6% Convertible Notes,
the Dollar Notes and the New Convertible Notes.
Paying Agent and Registrar for the Notes
Level 3 has appointed The Bank of New York as registrar (the Registrar) and
as paying agent in respect of the Global Notes (the US Paying Agent) and
Kredietbank S.A. Luxembourgeoise as paying agent in Luxembourg (the Luxembourg
Paying Agent). The US Paying Agent and the Luxembourg Paying Agent are
collectively referred to herein as the Paying Agents. Level 3 shall ensure that
for as long as any notes are outstanding there will always be a registrar and a
paying agent to perform the functions assigned to them in the indentures. Level
3 has agreed to appoint the Luxembourg Paying Agent as transfer agent in the
event the notes are issued in definitive registered form.
Application has been made to list the notes on the Luxembourg Stock
Exchange. So long as the notes are listed on the Luxembourg Stock Exchange and
the rules of such Exchange so require, Level 3 will maintain a paying agent and
transfer agent in Luxembourg. If the notes are listed on any other securities
exchange, Level 3 will satisfy any requirement at such securities exchange as
to paying agents. So long as the notes are listed on the Luxembourg Stock
Exchange, any change in the Paying Agent or transfer agent shall be notified to
holders in accordance with the procedures described in "--Notices."
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of Level 3, as
such, shall have any liability for any obligations of Level 3 under the notes
or the indentures or for any claim based on, in respect of, or by reason of,
these obligations or their creation, solely by reason of its status as
director, officer, employee, incorporator or stockholder of Level 3. By
accepting a note each holder waives and releases all liability of this kind.
The waiver and release are part of the consideration for issuance of the notes.
Nevertheless, the waiver may not be effective to waive liabilities under the
federal securities laws, and the SEC has taken the view that these types of
waivers are against public policy.
Notices
So long as the notes are listed on the Luxembourg Stock Exchange and it is
required by the rules of the Luxembourg Stock Exchange, Level 3 will make
publication of notices to the holders of the notes in a leading newspaper
having general circulation in Luxembourg or, if such publication is not
practicable, in one other leading daily newspaper with general circulation in
Europe, such newspaper being published on each business day in morning
editions, whether or not it is published in Saturday, Sunday or holiday
editions. For so long as the notes are listed on the Luxembourg Stock Exchange,
a copy of all notices will be provided by Level 3 to the Luxembourg Stock
Exchange.
Listing
Application has been made to list the notes on the Luxembourg Stock
Exchange. The legal notice relating to the issue of the new notes and the
articles of association of Level 3 will be registered prior to the listing with
the Registrar of the District Court in Luxembourg, where such documents are
available for inspection and where copies thereof can be obtained upon request.
In addition, if and as long as the new notes are listed on the Luxembourg Stock
Exchange, an agent for making payments on, and transfers of the new notes will
be maintained in Luxembourg. Level 3 has initially designated Kredietbank S. A.
Luxembourgeoise as its agent for such purposes.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the indentures.
Level 3, the registrant and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and Level 3
may require a holder to pay any taxes and fees required by law or permitted by
the indentures.
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Book-Entry System
The notes sold pursuant to Rule 144A under the Securities Act were
initially issued in the form of one or more global securities, or the 144A
global notes, and the notes sold to offshore investors pursuant to Regulation S
under the Securities Act were initially issued in the form of one or more
global securities, or the Regulation S global notes. All global securities are
held in book-entry form. The 144A global notes were deposited on the date of
the closing with a custodian on behalf of the Depository Trust Company, or DTC,
and DTC or its nominee initially was the sole registered holder of the notes.
The Regulation S global notes were deposited with a common depositary for the
Euroclear System and for Clearstream, formerly known as Cedelbank, and the
common depositary or its nominee initially was the sole registered holder of
the notes.
Notes issued in exchange for the Regulation S global notes will be
represented by one or more global notes and deposited with the applicable
trustee as common depositary for, and registered in the name of, Euroclear and
Clearstream. These notes are referred to as the Euroclear global notes. Notes
issued in exchange for the 144A global notes will be represented by one or more
global notes and deposited with the applicable trustee as custodian for, and
registered in the name of, a nominee of DTC. These notes are referred to as the
DTC global notes. Each of the global notes so issued in exchange is referred to
as a global note.
Ownership of beneficial interests in a global note is limited to persons
who have accounts with DTC or Euroclear and Clearstream, participants, or
persons who hold interests through participants. Ownership of beneficial
interests in a global note is shown on, and the transfer of that ownership is
effected only through, records maintained by DTC, Euroclear or Clearstream, as
applicable, or their respective nominees, with respect to interests of
participants, and the records of participants, with respect to interests of
persons other than participants. Qualified institutional buyers may hold their
interests in a global note, directly through DTC, if they are participants in
such system or indirectly through organizations which are participants in such
system.
Note holders may hold their interests in a Regulation S global note
directly through Euroclear or Clearstream, if they are participants in such
systems, or indirectly through organizations that are participants in such
systems.
So long as DTC, Euroclear or Clearstream, as applicable, or any nominee, is
the registered owner or holder of a global note, DTC, Euroclear or Clearstream,
or such nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by such global note for all purposes under the
indentures pursuant to which the notes were issued. No beneficial owner of an
interest in a global note is permitted to transfer that interest except in
accordance with DTC's, Euroclear's or Clearstream's applicable procedures, in
addition to those provided for under the indentures.
Payments made with respect to a global note are made to DTC, Euroclear or
Clearstream, as applicable, or their nominees, as the registered owner thereof.
Neither Level 3, the trustee nor any paying agent has any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
We expect that DTC, Euroclear or Clearstream, as applicable, or their
nominees, upon receipt of any payment in respect of a global note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in such global note as shown on their
respective records. We also expect that payments by participants to owners of
beneficial interests in such global note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Payment of principal of, premium, if any, and interest on notes represented
by a Euroclear global note will be made in euros in immediately available funds
to the common depositary for Euroclear and Clearstream
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or its nominee, as the case may be, as the sole registered owner and the sole
holder of the Euroclear global notes for all purposes under the indentures.
Level 3 has been advised by Euroclear and Clearstream that upon receipt of any
payment of principal of, premium, if any, or interest on any Euroclear global
note by the common depositary, Euroclear or Clearstream, as the case may be,
will immediately credit, on its book-entry registration and transfer system,
the accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal or face amount of the
Euroclear global note, as shown on the records of Euroclear or Clearstream.
Payment of principal of, premium, if any, and interest on notes represented
by a DTC global note will be made in euros in immediately available funds to a
custodian for DTC. Level 3 has been advised by DTC, as the sole registered
owner of the DTC global notes, that upon receipt of any payment of principal of
or interest on any DTC global note by DTC's custodian, the custodian will
transfer those payments directly to DTC's participants in amounts proportionate
to their respective beneficial interests in the principal or face amount of the
DTC global note as shown on the records of DTC. On the record date for any
payment with respect to Notes represented by a DTC global note, DTC will
provide the custodian with a list of participants holding beneficial interests
in the DTC global notes, after which the custodian will solicit wire transfer
instructions from such participants for use in connection with those payments.
Participants that do not provide wire transfer instructions to the custodian
will not receive payments until wire instructions are provided. Pending
disbursement by the custodian, funds held by the custodian will not accrue
interest for the benefit of participants holding beneficial interests in the
DTC global notes.
So long as the notes are held in the form of global securities, deposits of
principal of, premium, if any, and interest on the notes with the custodian for
DTC or the common depositary for Euroclear and Clearstream shall be deemed to
be payment by Level 3 of such principal, premium, if any, and interest for all
purposes under the Indentures.
Payments by participants to owners of beneficial interests in a global
security held through those participants will be governed by standing
instructions and customary practices as is now the case with securities held
for customer accounts registered in street name and will be the sole
responsibility of those participants. Owners of beneficial interests in a
global security who elect to receive payment in any currency
other than euro must make foreign exchange conversion arrangements at their own
expense. Investors may be subject to foreign exchange risks that may have
important economic and tax consequences for them.
Transfers between participants in DTC are effected in accordance with DTC's
procedures, and are settled in same-day funds. Transfers between participants
in Euroclear and Clearstream are effected in the ordinary way in accordance
with their respective rules and operating procedures. Transactions settled
through DTC, Euroclear and Clearstream are settled on a T+3 basis.
We expect that DTC, Euroclear or Clearstream, as applicable, will take any
action permitted to be taken by a holder of notes, including the presentation
of notes for exchange, only at the direction of one or more participants to
whose account the interest in a global note is credited and only in respect of
such portion of the securities as to which such participant or participants has
or have given such direction.
A global security may not be transferred except as a whole by DTC,
Euroclear and Clearstream to its nominee or a successor. A global security is
exchangeable for certificated notes only if:
(a) DTC or Euroclear and Clearstream notify Level 3 that they are
unwilling or unable to act as a clearing agency and we do not
appoint a successor clearing agency within 90 days, or DTC or
Euroclear and Clearstream notify Level 3 that they are unwilling or
unable to continue as a depositary or a common depositary, as the
case may be, for such global security;
(b) Level 3 in its discretion at any time determines not to have all
the notes represented by such global security; or
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(c) a Default or an Event of Default relating to the notes represented
by the global security has occurred and is continuing.
Any global security that is exchangeable for certificated notes in
accordance with the preceding sentence will be exchanged for certificated notes
in authorized denominations and registered in the names as the depositary or
the common depositary, as the case may be, holding the global security may
direct. However, a global security is only exchangeable, for a global security
of like denomination to be registered in the name of the depositary or the
common depositary, as the case may be, or its nominee. If a global security
becomes exchangeable for certificated notes,
(a) certificated notes will be issued only in fully registered form in
denominations of (Euro)1,000 or integral multiples of (Euro)1,000;
(b) payment of principal of, premium, if any, and interest on, the
certificated notes will be payable, and the transfer of the
certificated notes will be registrable, at the office or agency of
Level 3 maintained for those purposes; and
(c) no service charge will be made for any registration of transfer or
exchange of the certificated notes, although Level 3 may require
payment of a sum sufficient to cover any tax or governmental charge
imposed in connection with the issuance.
Except as set forth above, owners of beneficial interests in a global
security will not be entitled to have the notes represented by such global
security registered in their names, will not receive or be entitled to receive
physical delivery of certificated notes in definitive form and will not be
considered to be the owners or holders of any notes under such global security.
Accordingly, each Person owning a beneficial interest in a global security must
rely on the procedures of DTC, Euroclear or Clearstream, as the case may be,
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a holder
under the indentures. Level 3 understands that under existing industry
practices, in the event that Level 3 requests any action of holders or that an
owner of a beneficial interest in a global security desires to give or take any
action which a holder is entitled to give or take under the indentures, DTC,
Euroclear or Clearstream, as the case may be, would authorize the participants
holding the relevant beneficial interest to give or take such action and
participants would authorize beneficial owners owning through those
participants to give or take the action or would otherwise act upon the
instructions of beneficial owners owning through them.
DTC has advised Level 3 that DTC is a limited-purpose trust company
organized under the Banking Law of the State of New York, a member of the
Federal Reserve System, a clearing corporation within the meaning of the New
York Uniform Commercial Code and a clearing agency registered under the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, which may include the initial purchasers, banks, trust
companies, clearing corporations and certain other organizations some of whom,
or their representatives, own DTC. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies, that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in global securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of Level 3, the Trustee or the
initial purchasers will have any responsibility for the performance by DTC or
its participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
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We understand that Euroclear and Clearstream each hold securities for their
account holders and facilitate the clearance and settlement of securities
transactions by electronic book-entry transfer between their respective account
holders, thereby eliminating the need for physical movements of certificates
and any risks from lack of simultaneous transfers of securities.
Euroclear and Clearstream provide to their participants, among other
things, services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Euroclear and Clearstream interface with domestic securities markets.
Euroclear and Clearstream participants are financial institutions such as
underwriters, securities brokers and dealers, banks, trust companies and
certain other organizations. Indirect access to Euroclear or Clearstream is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodian relationship with a Euroclear or
Clearstream participant, either directly or indirectly. The respective systems
of Euroclear and Clearstream have established an electronic bridge between
their two systems which enables their respective account holders to settle
trades with each other.
An account holder's overall contractual relations with either Euroclear or
Clearstream are governed by the respective rules and operating procedures of
Euroclear or Clearstream and any applicable laws. Both Euroclear and
Clearstream act under those rules and operating procedures only on behalf of
their respective account holders, and have no record of or relationship with
persons holding through their respective holders.
Subject to compliance with the transfer restrictions applicable to the
global notes, cross-market transfers between the participants in DTC, on the
one hand, and Euroclear or Clearstream participants, on the other hand, are
effected through DTC in accordance with DTC's rules on behalf of each of
Euroclear or Clearstream by its common depositary; however, such cross-market
transactions require delivery of instructions to Euroclear or Clearstream by
the counterparty in such system in accordance with the rules and procedures and
within the established deadlines, Brussels time, of such system. Euroclear or
Clearstream will, if the transaction meets its settlement requirements, deliver
instructions to its common depositary to take action to effect final settlement
on its behalf by delivering or receiving interests in the global notes in DTC,
and making or receiving payment in accordance with normal procedures for same-
day funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the common depositary for
Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global note from a
participant in DTC are credited and any such crediting is reported to the
relevant Euroclear or Clearstream participant, during the securities settlement
processing day, which must be a business day for Euroclear and Clearstream,
immediately following the settlement date of DTC. Cash received in Euroclear or
Clearstream as a result of sales of interest in a global note by or through a
Euroclear or Clearstream participant to a participant in DTC are received with
value on the settlement date of DTC but are available in the relevant Euroclear
or Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream are expected to continue to follow
the foregoing procedures in order to facilitate transfers of interests in a
global note among participants of DTC, Euroclear and Clearstream, as the case
may be, they are under no obligation to continue to perform such procedures,
and such procedures may be discontinued at any time. None of Level 3, the
trustee or any paying agent has any responsibility for the performance by DTC,
Euroclear or Clearstream or their respective participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
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Certain Income Tax Considerations
Luxembourg Tax Considerations
The information set out below is a summary only of Luxembourg tax laws in
effect on the date hereof and which may change from time to time. Because the
summary does not address all tax considerations, under Luxembourg or other
laws, prospective investors should consult their professional advisors as to
the tax consequences of the purchase, ownership and disposition of the notes,
including in particular the effect of tax laws of any other jurisdiction.
The following summary outlines certain Luxembourg tax consequences for
holders of notes.
Under Luxembourg tax laws currently in effect, there is no withholding tax
on payment of principal, interest, nor on accrued but unpaid interest in
respect of the notes, nor is any Luxembourg withholding tax payable upon the
redemption, repurchase or exchange of the notes. Holders of notes who are non-
residents of Luxembourg and who do not hold notes through a permanent
establishment in Luxembourg are not liable for Luxembourg income tax on
payments of principal, interest, or accrued but unpaid interest, nor upon
redemption, repurchase or exchange of the notes, nor on capital gains on sale
of any notes.
Holders of notes resident in Luxembourg who are fully taxable ("Luxembourg
Resident Holders"), or who have a permanent establishment in Luxembourg (a
"Luxembourg Permanent Establishment") with whom the holding of the notes is
connected, must for income tax purposes include any interest received in their
taxable income.
Individual Luxembourg Resident Holders of notes are not subject to taxation
on capital gains upon the disposal of notes unless the disposal of notes
precedes the acquisition thereof or the notes are disposed of within six months
of the date of acquisition thereof. Upon a sale, repurchase or redemption of
notes, individual Luxembourg Resident Holders will, however, need to include
the portion of the purchase, repurchase or redemption price corresponding to
accrued but unpaid interest in their taxable income.
A corporate entity, or societes de capitaux, which is a Luxembourg Resident
Holder of notes (a "Corporate Entity") or a Luxembourg Permanent Establishment
will need to include in its taxable income the difference between the purchase,
repurchase or redemption price (including accrued but unpaid interest) and the
lower of cost or book value of the notes sold, repurchased or redeemed. Such
holders should not be liable for any Luxembourg income tax on payment of
principal, on exchange nor upon redemption of notes.
An exchange of notes pursuant to the Exchange Offer should not give rise to
recognition of any gain or income for Luxembourg tax purposes.
No stamp, value added, issue, registration, transfer or similar taxes or
duties will be payable in Luxembourg by the holders of the notes as a
consequence of the issue of the notes, nor will any such tax be payable as a
consequence of a subsequent transfer, redemption or exchange of the notes.
United States Tax Considerations
The following is a summary of certain U.S. Federal income tax consequences
associated with the ownership and disposition of the notes. Except with respect
to the discussion of backup withholding below, the discussion is limited to tax
considerations applicable to a holder which is a "U.S. Holder." A U.S. Holder
is:
(1) an individual who is a citizen or resident of the U.S.;
(2) a corporation or other entity taxable as a corporation created or
organized under the laws of the U.S. or any political subdivision of or
in the U.S.;
(3) an estate or trust the income of which is subject to U.S. federal
income tax regardless of its source;
(4) a trust subject to the primary supervision of a U.S. court and the
control of one or more U.S. persons; or
(5) a person whose worldwide income or gain is otherwise subject to U.S.
federal income tax on a net income basis.
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This discussion also does not address the U.S. Federal income tax
consequences of notes not held as capital assets within the meaning of section
1221 of the Internal Revenue Code, and does not deal with special situations,
such as those of dealers in securities or currencies, traders in securities
that elect to mark to market, financial institutions, life insurance companies,
tax-exempt organizations, persons that hold the notes as a hedge or part of a
straddle or conversion transaction, or that have a functional currency other
than the U.S. dollar, and investors in pass-through entities. The discussion is
limited to the tax consequences to initial holders that purchase at the "issue
price" and therefore does not address U.S. tax rules that may be relevant to
subsequent holders, such as the "market discount" rules. For this purpose the
"issue price" of a note is the first price at which a substantial amount of the
notes is sold to the public for money, excluding sales to bond houses, brokers
or similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. It does not describe any tax consequences
arising out of the tax laws of any state, local or foreign jurisdiction. This
discussion is based upon the provisions of the Internal Revenue Code, and
regulations, rulings and judicial decisions under the Internal Revenue Code as
of the date of this filing. At any time and without prior notice, these
authorities may be repealed, revoked or modified so as to result in Federal
income tax consequences different from those discussed below.
You should consult your tax advisor concerning the application of Federal
income tax laws, as well as the laws of any state, local or foreign taxing
jurisdiction, to your particular situation.
Payment of Interest. Interest on the notes will be taxable to a U.S. Holder
as ordinary interest income in accordance with the U.S. Holder's method of tax
accounting. Such interest will generally be U.S. source income for purposes of
computing the foreign tax credit limitation.
The notes will be denominated in a currency unit other than the U.S.
dollar, i.e., in euro, sometimes referred to as the "foreign currency."
Accordingly, any interest income will be determined in euros and will be
translated into U.S. dollars as follows:
(1) if the U.S. Holder uses the cash method of accounting, the interest
income will be translated at the exchange rate in effect on the date of
receipt of the interest payment;
(2) if the U.S. Holder uses the accrual method of accounting, the U.S.
dollar value of the accrued interest income will be determined by
translating such income at the average rate of exchange for the accrual
period, or with respect to an accrual period that spans two taxable
years, at the average rate for the partial period within the taxable
year; and
(3) if the U.S. Holder uses the accrual method of accounting, it can elect
to translate the accrued interest income using the rate of exchange on
the last day of the accrual period or, with respect to an accrual
period that spans two taxable years, using the rate of exchange on the
last day of the taxable year. If the last day of an accrual period is
within five business days of the receipt of the accrued income, a U.S.
Holder may translate such income using the rate of exchange on the date
of receipt of the interest income. This election will apply to other
debt obligations held by the U.S. Holder and may not be changed without
the consent of the Internal Revenue Service.
A U.S. Holder that uses the accrual method of accounting may recognize
exchange gain or loss (which will be treated as ordinary income or loss)
attributable to fluctuations in exchange rates with respect to accrued interest
income on the date such income is received. The amount of ordinary income or
loss recognized will equal the difference, if any, between:
(1) the U.S. dollar value of the euro payment received (determined on the
date such payment is received) in respect of such accrual period; and
(2) the U.S. dollar value of income that has accrued during such accrual
period (as determined above).
A U.S. Holder on the cash basis method of accounting will not recognize
exchange gain or loss with respect to the receipt of interest income.
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Sale, Exchange and Retirement of Notes. Upon the sale, exchange or
retirement of notes, a U.S. Holder will generally recognize gain or loss equal
to the difference between:
(1) the amount realized upon the disposition, as determined below, other
than amounts attributable to accrued interest; and
(2) the U.S. Holder's adjusted tax basis in the notes (as determined
below).
Except with respect to any exchange gain or loss (as described below), such
gain or loss will be capital gain or loss. The deductibility of capital losses
is subject to limitations.
The amount realized by a U.S. Holder that receives foreign currency
(including euros) on a sale, exchange (other than an exchange of notes for new
notes (or pursuant to an exchange offer)), retirement or other disposition of a
note will be based on:
(1) the U.S. dollar value of the foreign currency on the date of
disposition in the case of an accrual basis U.S. Holder;
(2) the U.S. dollar value of the foreign currency on the date payment is
received in the case of a cash basis U.S. Holder; or
(3) the U.S. dollar value of the foreign currency on the date of settlement
if the notes are traded on an established securities market and the
holder is a cash basis U.S. Holder. An accrual basis U.S. Holder may
elect the same treatment required of cash basis taxpayers with respect
to purchases and sales of publicly traded notes, provided the election
is applied consistently. Any such election cannot be changed without
the consent of the IRS.
A U.S. Holder's adjusted tax basis in a note will equal the U.S. dollar cost
of the note (determined on the date of purchase) to such U.S. Holder. If a U.S.
Holder purchases a note with previously owned foreign currency, the U.S. Holder
will recognize ordinary income or loss in an amount equal to the difference, if
any, between such U.S. Holder's tax basis in the foreign currency and the U.S.
dollar fair market value of the foreign currency used to purchase the note,
determined on the date of purchase.
Upon the sale, exchange or retirement of notes, a U.S. Holder may recognize
exchange gain or loss attributable to fluctuation in currency exchange rates
equal to the difference between:
(1) the U.S. dollar value of the purchase price of the note, determined on
the date such payment is received or the note is disposed of; and
(2) the U.S. dollar value of the purchase or acquisition cost of such note,
determined on the date the U.S. Holder acquired the note.
Such exchange gain or loss will be taxable as ordinary income or loss and
will not be treated as interest income or expense. Such foreign currency gain
or loss will be recognized only to the extent of the total gain or loss
realized by the U.S. Holder on the sale, exchange or retirement of the note.
Exchange Offer. The exchange of notes for new notes pursuant to the exchange
offer will not be taxable to the holders of the notes.
Any additional payments made by the Company to the holders of the notes in
connection with its failure to comply with certain of its obligations to
register the notes under the Registration Agreement will be taxable income and
may be characterized as additional interest income for tax purposes.
U.S. Information Reporting and Backup Withholding. Under the Code, a holder
of notes may be subject, under certain circumstances, to "backup withholding"
at a 31% rate with respect to interest payments thereon or the gross proceeds
thereof. This withholding generally applies only if the holder:
(1) in the case of a U.S. Holder, fails to furnish a correct social
security or other taxpayer identification number within a reasonable
time after the request therefor; or
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(2) in the case of a non-U.S. Holder, fails to furnish proper certification
of foreign status.
Any amount withheld from a payment to a holder under backup withholding
rules will be refunded or allowed as a credit against such holder's U.S.
federal income tax liability, provided that the required information is
furnished to the U.S. Internal Revenue Service. Holders of notes should consult
their tax advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining such an exemption.
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General Listing Information
Listing
Level 3 has applied to list the notes on the Luxembourg Stock Exchange. In
connection therewith, the constitutional documents of Level 3 and a legal
notice (Notice Legale) relating to the issue of the notes will be deposited
prior to listing with the Chief Registrar of the District Court of Luxembourg
(Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg), where such
documents may be examined and copies obtained free of charge. Our Certificate
of Incorporation will be published in the Memorial, Journal Officiel du Grand-
Duche de Luxembourg, Recueil des Societes et Associations. It may be inspected
by any interested person at the Registre du Commerce du Tribunal
d'Arrondissement de Luxembourg. So long as the notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange require it, the Agency
Agreement, if any, the Indenture and the Euro Registration Agreement will be
available at the specified office of the paying agent in Luxembourg. So long as
the notes are listed on the Luxembourg Stock Exchange and the rules of such
Stock Exchange shall so require, copies, current and future, all audited annual
financial statements and quarterly financial statements of Level 3 will be
available during normal business hours on any weekday at the offices of such
paying agent in Luxembourg.
So long as the notes are listed on the Luxembourg Stock Exchange, and the
rules of the Luxembourg Stock Exchange shall so require, an agent appointed to
make payments on, and transfers of, the notes will be maintained in Luxembourg.
Level 3 will have appointed Kredietbank S.A. Luxembourgeoise as their listing
agent, paying agent and transfer agent in Luxembourg. Level 3 reserves the
right to vary such appointment. The paying agent in Luxembourg will act as
intermediary between the holders and Level 3.
We may remove the notes from listing on the Luxembourg Stock Exchange,
particularly if necessary to avoid any new withholding taxes.
Clearing Systems
The International Securities Identification Number for the new 2008 senior
notes is and for the new 2010 senior notes is ,and the common code
for the new 2008 senior notes is ,and for the new 2010 senior notes is
.
Consents and Authorizations
Level 3 has obtained all necessary consents, approvals and authorization in
the jurisdiction of its incorporation in connection with the issue and
performance of the notes. The issue of the notes has been authorized by
resolutions of the Board of Directors of Level 3.
No Significant or Material Change
Except as disclosed or incorporated by reference in this Offering
Memorandum, there has been no significant change in the financial position of
Level 3 and no material adverse change in the financial position or prospects
of Level 3 since December 31, 1999.
No Litigation
Level 3 is not involved in, or has no knowledge of a threat of, any
litigation, administrative proceedings or arbitration which, in the judgment of
Level 3, is or may be material in the context of the issue of the notes, except
as disclosed herein.
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Plan of Distribution
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of those new notes. Each letter of transmittal that accompanies
this prospectus 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. A participating broker-dealer may use this
prospectus, in connection with resales of new notes received in exchange for
original notes where those new notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities. Level 3 has
agreed that, starting on the date of this prospectus and ending on the close of
business on the day that is 180 days following the date of this prospectus, it
will make this prospectus available to any broker-dealer for use in connection
with any of those resales. In addition, until , 2000, all dealers
effecting transactions in the notes may be required to deliver a prospectus.
Level 3 will not receive any proceeds from any sale of new notes by broker-
dealers. New notes received by broker-dealers for their own account in the
exchange offer may be sold from time to time in one or more transactions. These
sales may be made in the over-the-counter market, in negotiated transactions,
through the writing of options on the new notes or a combination of these
methods of resale, and may be at market prices prevailing at the time of
resale, at prices related to the prevailing market prices or negotiated prices.
Any resale of this kind may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any of these broker-dealers and/or the purchasers of any of
these new notes. Any broker-dealer that resells new notes that were received by
it for its own account in the exchange offer and any broker or dealer that
participates in a distribution of these new notes may be deemed to be an
underwriter within the meaning of the Securities Act. If this is the case, any
profit of any of these resales of new notes and any commissions or concessions
received by any of these 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.
For a period of 180 days after the date of this prospectus, Level 3 will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests those
documents in its letter of transmittal. Level 3 has agreed to pay all expenses
incident to the exchange offer, other than the expenses of counsel for the
holders of the original notes and commissions or concessions of any brokers or
dealers. Level 3 also has agreed to indemnify the holders of the original
notes, including any broker-dealers, against various liabilities, including
liabilities under the Securities Act.
Legal Matters
Willkie Farr & Gallagher, New York, New York, will pass upon the validity
of the new notes offered in this prospectus for Level 3.
Experts
The consolidated financial statements of Level 3 Communications, Inc. as of
Decembr 31, 1999 and 1998 and for the years then ended, incorporated by
reference in this registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in giving said report.
The consolidated statements of operations, cash flows, changes in
stockholders' equity and comprehensive income (loss) of Level 3 Communications,
Inc. for the year ended December 27, 1997, as well as the consolidated balance
sheets of RCN Corporation and Subsidiaries as of December 31, 1999 and 1998 and
the related statements of operations, cash flows, comprehensive income, and
changes in stockholders' equity for each of the three years in the period ended
December 31, 1999, incorporated by reference in this registration statement,
have been incorporated herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
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Where You Can Find More Information
Level 3 files annual, quarterly and current reports, proxy statements and
other information with the SEC. We have also filed with the SEC a registration
statement on Form S-4 to register the new notes being offered in this
prospectus. This prospectus, which forms part of the registration statement,
does not contain all of the information included in the registration
statement. For further information about Level 3 and the new notes offered in
this prospectus, you should refer to the registration statement and its
exhibits. Our SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document
we file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. These documents are also available at the public
reference rooms at the SEC's regional offices in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
at the offices of The Nasdaq National Market, in Washington, D.C.
Incorporation of Material Documents by Reference
We are incorporating by reference in the prospectus the information we
file with the SEC. This means that we can disclose important information to
you by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information that we
file later with the SEC will automatically update and supersede this
information. We are incorporating by reference our documents listed below and
any future filings we make with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 prior to the termination of this
Offering.
. Annual Reports on Form 10-K and Form 10-K/A for the fiscal year ended
December 31, 1999;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2000; and
. Current reports on Forms 8-K, filed February 4, 2000, February 7, 2000,
February 18, 2000, February 25, 2000 and on February 29, 2000 and on Forms
8-K/A, filed November 9, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Vice President, Investor Relations
Level 3 Communications, Inc.
1025 Eldorado Blvd.
Broomfield, CO 80021
(720) 888-2500
Copies of these documents will be available, if and so long as any notes
are listed on the Luxembourg Stock Exchange, at the specified office of the
listing agent in Luxembourg.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of those documents.
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REGISTERED OFFICE OF LEVEL 3 COMMUNICATIONS, INC.
1025 Eldorado Boulevard
Broomfield, Colorado 80021
U.S.A.
LEGAL ADVISORS
To Level 3 Communications, Inc. as to United States law:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
U.S.A.
ACCOUNTANTS
Arthur Andersen LLP
1225 17th Street, Suite 3100
Denver, Colorado 80202-5531
U.S.A.
TRUSTEE AND PAYING AGENT LISTING, PAYING AND TRANSFER AGENT
The Bank of New York Kredietbank S.A. Luxembourgeoise
101 Barclay Street Corporate Trusts and Agencies
Floor 21 West 43 Boulevard Royal
New York, New York 10286 2955 Luxembourg
U.S.A.
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We have not authorized any person to give you any information or to make any
representations about the exchange offer other than those contained in this
prospectus. If you are given any information or representations that are not
discussed in this prospectus, you must not rely on that information or those
representations. This prospectus is not an offer to sell or a solicitation of
an offer to buy any securities other than the securities to which it relates.
In addition, this prospectus is not an offer to sell or the solicitation of an
offer to buy those securities in any jurisdiction in which the offer or
solicitation is not authorized, or in which the person making the offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make an offer or solicitation. The delivery of this prospectus and any
exchange made under this prospectus do not, under any circumstances, mean that
there has not been any change in the affairs of Level 3 since the date of this
prospectus or that information contained in this prospectus is correct as of
any time subsequent to its date.
[LOGO]
Level 3 Communications, Inc.
10 3/4% Senior Notes due 2008
11 1/4% Senior Notes due 2010
----------------
Prospectus
----------------
, 2000
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final action of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or
agent in defending such action, provided that the director or officer
undertakes to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation. A corporation may
indemnify such person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action by
or in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him or her against the expenses (including attorneys' fees) which he
or she actually and reasonably incurred in connection therewith. The
indemnification provided is not deemed to be exclusive of any other rights to
which an officer or director may be entitled under any corporation's by-law,
agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Article XI of the Company's
Restated Certificate of Incorporation (the "Certificate") and the Company's By-
laws (the "By- laws") provide that the Company shall indemnify each person who
is or was a director, officer or employee of the Company (including the heirs,
executors, administrators or estate of such person) or is or was serving at the
request of the Company as director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, to the fullest extent
permitted under subsections 145(a), (b), and (c) of the DGCL or any successor
statute. The indemnification provided by the Certificate and the By-laws shall
not be deemed exclusive of any other rights to which any of those seeking
indemnification or advancement of expenses may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person. Expenses
(including attorneys' fees) incurred in defending a civil, criminal,
administrative or investigative action, suit or proceeding upon receipt of an
undertaking by or on behalf of the indemnified person to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Company. The Certificate further provides that a director of
the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) for 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) for any transaction from which the director
derived an improper personal benefit. If the DGCL is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Company shall be eliminated
or limited to the fullest extent permitted by the DGCL as so amended.
The By-laws provide that the Company may purchase and maintain insurance on
behalf of its directors, officers, employees and agents against any liabilities
asserted against such persons arising out of such capacities.
II-1
<PAGE>
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.1 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 10 3/4% Senior
Notes due 2008.
4.2 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 11 1/4% Senior
Notes due 2010.
4.3 --Registration Agreement dated February 24, 2000 between the
Company and the Initial Purchasers.
5 --Opinion of Willkie Farr & Gallagher.*
8 --Opinion of Willkie Farr & Gallagher with respect to certain tax
matters.*
12 --Statement Regarding Computation of Ratio of Earnings to Fixed
Charges.
23.1 --Consent of PricewaterhouseCoopers LLP.
23.2 --Consent of PricewaterhouseCoopers LLP.
23.3 --Consent of Arthur Andersen LLP.
23.4 --Consent of Willkie Farr & Gallagher (included in their opinions
filed as Exhibits 5 and 8).*
24 --Power of Attorney (included on the signature pages hereto).
25.1 --Statement on Form T-1 of Eligibility of Trustee relating to the
10 3/4% Senior Notes due 2008.
25.2 --Statement on Form T-1 of Eligibility of Trustee relating to the
11 1/4% Senior Notes due 2010.
99.1 --Form of Letter of Transmittal relating to the 10 3/4% Senior
Notes due 2008.
99.2 --Form of Notice of Guaranteed Delivery relating to the 10 3/4%
Senior Notes due 2008.
99.3 --Form of Letter to Clients relating to the 10 3/4% Senior Notes
due 2008.
99.4 --Form of Letter to Nominees relating to the 10 3/4% Senior Notes
due 2008.
99.5 --Guidelines for Certification of Taxpayer Identification Number
relating to the 10 3/4% Senior Notes due 2008.
99.6 --Form of Letter of Transmittal relating to the 11 1/4% Senior
Notes due 2010.
99.7 --Form of Notice of Guaranteed Delivery relating to the 11 1/4%
Senior Notes due 2010.
99.8 --Form of Letter to Clients relating to the 11 1/4% Senior Notes
due 2010.
99.9 --Form of Letter to Nominees relating to the 11 1/4% Senior Notes
due 2010.
99.10 --Guidelines for Certification of Taxpayer Identification Number
relating to the 11 1/4% Senior Notes due 2010.
</TABLE>
- --------
* To be filed by amendment.
(b) Financial Statement Schedules:
All schedules have been omitted because they are not applicable or not
required or the required information is included in the financial statements or
notes thereto, which are incorporated herein by reference.
II-2
<PAGE>
Item 22. Undertakings.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of registrants
pursuant to the provisions described under Item 20 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities 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 court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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 the 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
this Registration Statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Broomfield, State of
Colorado, on the 18th day of May, 2000.
Level 3 Communications, Inc.
By: /s/ Thomas C. Stortz
__________________________________
Name: Thomas C. Stortz
Title: Group Vice President,
General Counsel and Secretary
POWER OF ATTORNEY
The undersigned officers and directors of Level 3 Communications, Inc.,
hereby severally constitute and appoint James Q. Crowe, R. Douglas Bradbury,
Thomas C. Stortz and Neil J. Eckstein, and each of them, attorneys-in-fact for
the undersigned, in any and all capacities, with the power of substitution, to
sign any amendments to this Registration Statement (including post-effective
amendments) and any subsequent registration statement for the same offering
which may be filed under Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all interests and purposes as he might
or could do in person, hereby ratifying and confirming all that each said
attorney-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons, in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Walter Scott, Jr. Chairman of the Board May 18, 2000
______________________________________
Walter Scott, Jr.
/s/ James Q. Crowe President, Chief Executive May 18, 2000
______________________________________ Officer and Director
James Q. Crowe
/s/ R. Douglas Bradbury Executive Vice President, May 18, 2000
______________________________________ Chief Financial Officer
R. Douglas Bradbury and Vice Chairman of the
Board (principal
financial officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Eric J. Mortensen Vice President and May 18, 2000
______________________________________ Controller (principal
Eric J. Mortensen accounting officer)
/s/ Philip B. Fletcher Director May 18, 2000
______________________________________
Philip B. Fletcher
/s/ William L. Grewcock Director May 18, 2000
______________________________________
William L. Grewcock
/s/ Richard R. Jaros Director May 18, 2000
______________________________________
Richard R. Jaros
/s/ Robert E. Julian Director May 18, 2000
______________________________________
Robert E. Julian
/s/ David C. McCourt Director May 18, 2000
______________________________________
David C. McCourt
/s/ Kenneth E. Stinson Director May 18, 2000
______________________________________
Kenneth E. Stinson
/s/ Michael B. Yanney Director May 18, 2000
______________________________________
Michael B. Yanney
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.1 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 10 3/4% Senior
Notes due 2008.
4.2 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 11 1/4% Senior
Notes due 2010.
4.3 --Registration Agreement dated February 24, 2000 between the
Company and the Initial Purchasers.
5 --Opinion of Willkie Farr & Gallagher.*
8 --Opinion of Willkie Farr & Gallagher with respect to certain tax
matters.*
12 --Statement Regarding Computation of Ratio of Earnings to Fixed
Charges.
23.1 --Consent of PricewaterhouseCoopers LLP.
23.2 --Consent of PricewaterhouseCoopers LLP.
23.3 --Consent of Arthur Andersen LLP.
23.4 --Consent of Willkie Farr & Gallagher (included in their opinions
filed as Exhibits 5 and 8).*
24 --Power of Attorney (included on the signature pages hereto).
25.1 --Statement on Form T-1 of Eligibility of Trustee relating to the
10 3/4% Senior Notes due 2008.
25.2 --Statement on Form T-1 of Eligibility of Trustee relating to the
11 1/4% Senior Notes due 2010.
99.1 --Form of Letter of Transmittal relating to the 10 3/4% Senior
Notes due 2008.
99.2 --Form of Notice of Guaranteed Delivery relating to the 10 3/4%
Senior Notes due 2008.
99.3 --Form of Letter to Clients relating to the 10 3/4% Senior Notes
due 2008.
99.4 --Form of Letter to Nominees relating to the 10 3/4% Senior Notes
due 2008.
99.5 --Guidelines for Certification of Taxpayer Identification Number
relating to the 10 3/4% Senior Notes due 2008.
99.6 --Form of Letter of Transmittal relating to the 11 1/4% Senior
Notes due 2010.
99.7 --Form of Notice of Guaranteed Delivery relating to the 11 1/4%
Senior Notes due 2010.
99.8 --Form of Letter to Clients relating to the 11 1/4% Senior Notes
due 2010.
99.9 --Form of Letter to Nominees relating to the 11 1/4% Senior Notes
due 2010.
99.10 --Guidelines for Certification of Taxpayer Identification Number
relating to the 11 1/4% Senior Notes due 2010.
</TABLE>
- --------
* To be filed by amendment.
<PAGE>
Execution Copy
Exhibit 4.1
================================================================================
LEVEL 3 COMMUNICATIONS, INC.,
Issuer
to
THE BANK OF NEW YORK,
as Trustee
- --------------------------------------------------------------------------------
Euro Securities Indenture
Dated as of February 29, 2000
- --------------------------------------------------------------------------------
(Euro)500,000,000
10 3/4% Senior Euro Notes Due 2008
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES.................................................................... 1
RECITALS OF THE COMPANY.................................................... 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.................................................. 2
Accreted Value............................................... 3
Acquired Debt................................................ 3
Act.......................................................... 3
Affiliate.................................................... 3
Affiliate Transaction........................................ 4
Agent Member................................................. 4
Asset Disposition............................................ 4
Attributable Value........................................... 5
Board of Directors........................................... 5
Board Resolution............................................. 5
Business Day................................................. 6
Capital Lease Obligation..................................... 6
Capital Stock................................................ 6
Cash Equivalents............................................. 6
Change of Control............................................ 7
Change of Control Triggering Event........................... 7
Clearstream.................................................. 7
Code......................................................... 7
Commission................................................... 7
Common Depositary............................................ 7
Common Stock................................................. 7
Company...................................................... 7
Company Order................................................ 7
Consolidated Capital Ratio................................... 9
Consolidated Cash Flow Available for
Fixed Charges.............................................. 9
Consolidated Income Tax Expense.............................. 10
Consolidated Interest Expense................................ 10
Consolidated Net Income...................................... 11
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Consolidated Net Worth....................................... 12
Consolidated Tangible Assets................................. 12
Corporate Trust Office....................................... 12
Credit Agreement............................................. 12
Credit Facilities............................................ 12
Debt......................................................... 12
Default...................................................... 14
Defaulted Interest........................................... 14
Depository................................................... 14
Designation.................................................. 14
Designation Amount........................................... 14
Disqualified Stock........................................... 14
Disqualified Stock Dividends................................. 14
Dollar Notes................................................. 15
Eligible Receivables......................................... 15
euro......................................................... 15
Euroclear.................................................... 15
Euro Notes................................................... 15
European Government Obligation............................... 15
European Union............................................... 15
Event of Default............................................. 16
Exchange Act................................................. 16
Exchange Securities.......................................... 16
Excess Proceeds.............................................. 16
Existing Notes............................................... 16
Expiration Date.............................................. 16
Fair Market Value............................................ 16
Federal Bankruptcy Code...................................... 16
Global Security.............................................. 16
Government Securities........................................ 16
Guarantee.................................................... 17
Guarantor.................................................... 17
Holder....................................................... 17
Incur........................................................ 17
Indenture.................................................... 18
Initial Foreign Purchaser.................................... 18
Initial Purchasers........................................... 18
Initial Securities........................................... 18
Institutional Accredited Investor............................ 18
Institutional Accredited Investor Global Security............ 18
Interest Payment Date........................................ 18
Interest Rate or Currency Protection Agreement............... 19
Invested Capital............................................. 19
Investment................................................... 19
Issue Date................................................... 20
Issue Date Purchase Money Debt............................... 20
Issue Date Rating............................................ 20
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
Joint Venture................................................ 20
Lien......................................................... 20
Maturity..................................................... 21
Measurement Date............................................. 21
Moody's...................................................... 21
Net Available Proceeds....................................... 21
New Convertible Notes........................................ 22
9 1/8% Senior Notes.......................................... 22
Non-Global Purchasers........................................ 22
Offer........................................................ 22
Offer to Purchase............................................ 23
Officers' Certificate........................................ 25
Opinion of Counsel........................................... 26
OECD......................................................... 26
Outstanding.................................................. 26
Paying Agent................................................. 27
Permitted Holders............................................ 27
Permitted Interest Rate or Currency
Protection Agreement....................................... 27
Permitted Investments........................................ 28
Permitted Liens.............................................. 28
Permitted Telecommunications Capital
Asset Disposition.......................................... 29
Person....................................................... 29
Physical Security............................................ 29
Predecessor Security......................................... 30
Preferred Stock.............................................. 30
Preferred Stock Dividends.................................... 30
Private Exchange Offer....................................... 30
Private Exchange Securities.................................. 30
Private Placement Legend..................................... 30
Property..................................................... 30
Proportionate Interest....................................... 31
Purchase Amount.............................................. 31
Purchase Date................................................ 31
Purchase Money Debt.......................................... 31
Purchase Price............................................... 31
Qualified Institutional Buyer or QIB......................... 31
Qualified Receivable Facility................................ 31
Rating Agencies.............................................. 32
Rating Date.................................................. 32
Rating Decline............................................... 32
Receivables.................................................. 32
refinancing.................................................. 32
Registered Exchange Offer.................................... 32
Registration Agreement....................................... 32
Registration Default......................................... 33
Regular Record Date.......................................... 33
Regulation S................................................. 33
Regulation S Global Security................................. 33
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
Required Filing Dates........................................ 33
Responsible Officer.......................................... 33
Restricted Payment........................................... 33
Restricted Subsidiary........................................ 33
Restricted Subsidiary Guarantee.............................. 33
Revocation................................................... 34
Rule 144A.................................................... 34
Rule 144A Global Security.................................... 34
S&P.......................................................... 34
Sale and Leaseback Transaction............................... 34
Securities................................................... 34
Securities Act............................................... 34
Security Register............................................ 35
Shelf Registration Statement................................. 35
Significant Subsidiary....................................... 35
6% Convertible Notes......................................... 35
Special Assets............................................... 35
Special Interest............................................. 35
Special Record Date.......................................... 35
Stated Maturity.............................................. 35
Subordinated Debt............................................ 36
Subsidiary................................................... 36
Telecommunications/IS Assets................................. 36
Telecommunications/IS Business............................... 38
10 1/2% Senior Discount Notes................................ 38
Trust Indenture Act or TIA................................... 38
Trustee...................................................... 38
Unrestricted Subsidiary...................................... 38
Vice President............................................... 39
Voting Stock................................................. 39
Wholly Owned Subsidiary...................................... 39
SECTION 102. Compliance Certificates and Opinions......................... 39
SECTION 103. Form of Documents Delivered to Trustee....................... 40
SECTION 104. Acts of Holders.............................................. 41
SECTION 105. Notices, etc., to Trustee and Company........................ 43
SECTION 106. Notice to Holders; Waiver.................................... 44
SECTION 107. Effect of Headings and Table of
Contents................................................... 44
SECTION 108. Successors and Assigns....................................... 44
SECTION 109. Separability Clause.......................................... 45
SECTION 110. Benefits of Indenture........................................ 45
SECTION 111. Governing Law................................................ 45
SECTION 112. Conflict with Trust Indenture Act............................ 45
SECTION 113. Legal Holidays............................................... 46
SECTION 114. No Personal Liability of Directors,
Officers, Employees and Stockholders....................... 46
SECTION 115. Independence of Covenants.................................... 46
SECTION 116. Exhibits..................................................... 46
SECTION 117. Counterparts................................................. 47
</TABLE>
(iv)
<PAGE>
<TABLE>
<S> <C>
SECTION 118. Duplicate Originals.......................................... 47
ARTICLE TWO SECURITY FORMS
SECTION 201. Forms Generally............................................... 47
ARTICLE THREE THE SECURITIES
SECTION 301. Title and Terms.............................................. 48
SECTION 302. Denominations................................................ 49
SECTION 303. Execution, Authentication, Delivery and Dating............... 49
SECTION 304. Temporary Securities......................................... 52
SECTION 305. Registration, Registration of Transfer
and Exchange............................................... 53
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............. 54
SECTION 307. Payment of Interest; Interest Rights Preserved............... 55
SECTION 308. Persons Deemed Owners........................................ 57
SECTION 309. Cancellation................................................. 58
SECTION 310. Computation of Interest...................................... 58
SECTION 311. CUSIP Number................................................. 58
SECTION 312. Book-Entry Provisions for Global
Securities................................................. 59
SECTION 313. Special Transfer Provisions.................................. 62
ARTICLE FOUR SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..................... 69
SECTION 402. Application of Trust Money.................................. 70
ARTICLE FIVE REMEDIES
SECTION 501. Events of Default............................................ 71
SECTION 502. Acceleration of Maturity; Rescission and Annulment........... 73
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee................................. 74
SECTION 504. Trustee May File Proofs of Claim............................. 75
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................. 76
SECTION 506. Application of Money Collected............................... 77
SECTION 507. Limitation on Suits.......................................... 77
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest............................ 78
</TABLE>
(V)
<PAGE>
<TABLE>
<S> <C>
SECTION 509. Restoration of Rights and Remedies........................... 78
SECTION 510. Rights and Remedies Cumulative............................... 79
SECTION 511. Delay or Omission Not Waiver................................. 79
SECTION 512. Control by Holders........................................... 79
SECTION 513. Waiver of Past Defaults...................................... 80
SECTION 514. Waiver of Stay or Extension Laws............................. 80
ARTICLE SIX THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.......................... 81
SECTION 602. Notice of Default............................................ 82
SECTION 603. Certain Rights of Trustee.................................... 83
SECTION 604. Trustee Not Responsible for Recitals or Issuance
of Securities.............................................. 85
SECTION 605. May Hold Securities.......................................... 85
SECTION 606. Money Held in Trust.......................................... 85
SECTION 607. Compensation and Reimbursement............................... 85
SECTION 608. Corporate Trustee Required; Eligibility;
Conflicting Interests...................................... 87
SECTION 609. Resignation and Removal; Appointment of Successor............ 87
SECTION 610. Acceptance of Appointment by
Successor.................................................. 89
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business................................................... 89
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of
Holders.................................................... 91
SECTION 702. Reports by Trustee........................................... 91
SECTION 703. Reports by Company........................................... 91
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain
Terms...................................................... 92
SECTION 802. Successor Company Substituted................................ 93
SECTION 803. Guarantor May Consolidate, etc., Only on Certain
Terms...................................................... 94
SECTION 804. Successor Guarantor Substituted.............................. 96
ARTICLE NINE SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent
</TABLE>
(vi)
<PAGE>
<TABLE>
<S> <C>
of Holders................................................. 97
SECTION 902. Supplemental Indentures With Consent of Holders............ 98
SECTION 903. Execution of Supplemental Indentures....................... 99
SECTION 904. Effect of Supplemental Indentures.......................... 100
SECTION 905. Conformity with Trust Indenture Act........................ 100
SECTION 906. Reference in Securities to Supplemental Indentures......... 100
SECTION 907. Notice of Supplemental Indentures.......................... 100
ARTICLE TEN COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and
Interest.................................................. 101
SECTION 1002. Maintenance of Office or Agency............................. 101
SECTION 1003. Money for Security Payments to Be Held in Trust............. 102
SECTION 1004. Corporate Existence......................................... 104
SECTION 1005. Maintenance of Properties................................... 104
SECTION 1006. Insurance................................................... 105
SECTION 1007. Reports..................................................... 105
SECTION 1008. Statement by Officers as to Default......................... 105
SECTION 1009. Change of Control Triggering Event.......................... 106
SECTION 1010. Limitation on Consolidated Debt............................. 110
SECTION 1011. Limitation on Debt of Restricted............................ 115
Subsidiaries
SECTION 1012. Limitation on Restricted Payments........................... 117
SECTION 1013. Limitation on Dividend and Other
Payment Restrictions Affecting
Restricted Subsidiaries................................... 121
SECTION 1014. Limitation on Liens......................................... 123
SECTION 1015. Limitation on Sale and Leaseback
Transactions.............................................. 125
SECTION 1016. Limitation on Asset Dispositions............................ 125
SECTION 1017. Limitation on Issuance and Sales of
Capital Stock of Restricted
Subsidiaries ............................................. 128
SECTION 1018. Transactions with Affiliates................................ 130
SECTION 1019. Limitation on Designations of Unrestricted
Subsidiaries.............................................. 132
</TABLE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
[INTENTIONALLY OMITTED]
(vii)
<PAGE>
<TABLE>
<S> <C>
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance................................................ 135
SECTION 1202. Defeasance and Discharge.................................... 135
SECTION 1203. Covenant Defeasance......................................... 137
SECTION 1204. Conditions to Defeasance or Covenant Defeasance............. 137
SECTION 1205. Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions............. 140
SECTION 1206. Reinstatement............................................... 140
</TABLE>
EXHIBIT A - Form of Security
EXHIBIT B - Form of Supplemental Indenture
(viii)
<PAGE>
EURO SECURITIES INDENTURE, dated as of February 29, 2000 between Level
3 Communications, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company"), having its principal
office at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, and The Bank of
New York, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 10 3/4%
Senior Euro Notes Due 2008 (the "Initial Securities") and, if and when issued
pursuant to a Registered Exchange Offer or Private Exchange Offer pursuant to
the Registration Agreement for the Initial Securities, 10 3/4% Senior Euro Notes
Due 2008 (the "Exchange Securities" and, together with the Initial Securities,
the "Securities"), of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of each of the Company and the Trustee, in
accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
<PAGE>
2
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, including the recitals set forth
above, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean United States generally accepted
accounting principles as in effect on the date of this Indenture;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section, paragraph or other subdivision;
(e) unless otherwise indicated, references to Articles, Sections,
paragraphs or other subdivisions are references to such Articles, Sections,
paragraphs or other subdivisions of this Indenture; and
<PAGE>
3
(f) "or" is not exclusive and "including" means including without
limitation.
"Accreted Value" of any Debt issued at a price less than the principal
amount at stated maturity, means, as of any date of determination, an amount
equal to the sum of (a) the issue price of such Debt as determined in accordance
with Section 1273 of the Code or any successor provisions plus (b) the aggregate
of the portions of the original issue discount (the excess of the amounts
considered as part of the "stated redemption price at maturity" of such Debt
within the meaning of Section 1273(a)(2) of the Code or any successor
provisions, whether denominated as principal or interest, over the issue price
of such Debt) that shall theretofore have accrued pursuant to Section 1272 of
the Code (without regard to Section 1272(a)(7) of the Code) from the date of
issue of such Debt to the date of determination, minus all amounts theretofore
paid in respect of such Debt, which amounts are considered as part of the
"stated redemption price at maturity" of such Debt within the meaning of Section
1273(a)(2) of the Code or any successor provisions (whether such amounts paid
were denominated principal or interest).
"Acquired Debt" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Subsidiary of such specified Person and (ii) Debt
secured by a Lien encumbering any Property acquired by such specified Person,
which Debt was not incurred in anticipation of, and was outstanding prior to,
such merger, consolidation or acquisition.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
<PAGE>
4
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 1016 and 1018 and the definition of "Telecommunications/IS
Assets" only, "Affiliate" shall also mean any beneficial owner of shares
representing 10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
Voting Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Affiliate Transaction" has the meaning specified in Section 1018
"Agent Member" has the meaning specified in Section 312.
"Asset Disposition" means any transfer, conveyance, sale, lease,
issuance or other disposition by the Company or any Restricted Subsidiary in one
or more related transactions (including a consolidation or merger or other sale
of any such Restricted Subsidiary with, into or to another Person in a
transaction in which such Restricted Subsidiary ceases to be a Restricted
Subsidiary of the Company, but excluding a disposition by a Restricted
Subsidiary to the Company or a Restricted Subsidiary or by the Company to a
Restricted Subsidiary) of (i) shares of Capital Stock or other ownership
interests of a Restricted Subsidiary (other than as permitted by clause (v),
(vi), (vii) or (ix) of Section 1017), (ii) substantially all of the assets of
the Company or any Restricted Subsidiary representing a division or line of
business or (iii) other Property of the Company or any Restricted Subsidiary
outside of the ordinary course of business (excluding any transfer, conveyance,
sale, lease or other disposition of equipment that is obsolete or no longer used
by or useful to the Company, provided that the Company has delivered to the
--------
Trustee an Officers' Certificate stating that such criteria are satisfied);
provided in each case that the aggregate consideration for such transfer,
- --------
conveyance, sale, lease or other disposition is equal to $5,000,000 or more in
any 12-month period. The following shall not be Asset Dispositions: (i)
Permitted Telecommunications Capital Asset Dispositions that comply with clause
(i) of the first paragraph of Section 1016, (ii) when used with respect to the
Company, any Asset
<PAGE>
5
Disposition permitted pursuant to Article Eight which constitutes a disposition
of all or substantially all of the assets of the Company and the Restricted
Subsidiaries taken as a whole, (iii) Receivables sales constituting Debt under
Qualified Receivable Facilities permitted to be Incurred pursuant to Section
1010 and (iv) any disposition that constitutes a Permitted Investment or a
Restricted Payment permitted by Section 1012.
"Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount of
rent required to be paid by such Person under such lease during the remaining
term thereof (including any period for which such lease has been extended) as
determined in accordance with generally accepted accounting principles,
discounted from the last date of such remaining term to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of penalty, such net amount shall also
include the lesser of the amount of such penalty (in which case no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated) or the rent which would otherwise be
required to be paid if such lease is not so terminated. "Attributable Value"
means, as to a Capital Lease Obligation, the principal amount thereof.
"Board of Directors" means the board of directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
<PAGE>
6
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amount under a lease of (or other Debt arrangements
conveying the right to use) Property of such Person which is required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles (a "Capital Lease"). The stated maturity of such obligation shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty. The principal amount of such obligation shall be
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general
or limited, of such Person and any rights (other than debt securities
convertible or exchangeable into an equity interest), warrants or options to
acquire an equity interest in such Person.
"Cash Equivalents" means (i) Government Securities maturing, or subject
to tender at the option of the holder thereof, within two years after the date
of acquisition thereof, (ii) time deposits and certificates of deposit of any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the law of any
other country that is a member of the OECD having total assets in excess of
$500,000,000 (or its foreign currency equivalent at the time) with a maturity
date not more than one year from the date of acquisition, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with (x) any bank meeting
the qualifications specified in
<PAGE>
7
clause (ii) above or (y) any primary government securities dealer reporting to
the Market Reports Division of the Federal Reserve Bank of New York, (iv) direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing, or
subject to tender at the option of the holder thereof, within 90 days after the
date of acquisition thereof, provided that, at the time of acquisition, the
--------
long-term debt of such state, political subdivision or public instrumentality
has a rating of A (or higher) from S&P or A-2 (or higher) from Moody's (or, if
at any time neither S&P nor Moody's shall be rating such obligations, then an
equivalent rating from such other nationally recognized rating service
acceptable to the Trustee), (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD having total assets in
excess of $500,000,000 (or its foreign currency equivalent at the time), and
commercial paper issued by others having one of the two highest ratings
obtainable from either S&P or Moody's (or, if at any time neither S&P nor
Moody's shall be rating such obligations, then from such other nationally
recognized rating service acceptable to the Trustee) and in each case maturing
within one year after the date of acquisition, (vi) overnight bank deposits and
bankers' acceptances at any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $500,000,000 (or its for eign currency
equivalent at the time), (vii) deposits available for withdrawal on demand with
a commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the laws of any
other country that is a member of the OECD having total assets in excess of
$500,000,000 (or its foreign currency equivalent at the time) and (viii)
investments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vii).
"Change of Control" has the meaning specified in Section 1009.
<PAGE>
8
"Change of Control Triggering Event" has the meaning specified in
Section 1009.
"Clearstream" means Clearstream International, a clearing and
settlement organization.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Depositary" means The Bank of New York Depositary (Nominees) Ltd.
and its nominees and successors, as common depositary for Euroclear and
Clearstream.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Order" or "Company Request" means a written request or order
signed in the name of the Company by the Chairman of the Board of Directors, a
Vice Chairman of the Board of Directors, the President or a Vice President, and
by the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee.
<PAGE>
9
"Consolidated Capital Ratio" means as of the date of determination the
ratio of (i) the aggregate amount of Debt of the Company and its Restricted
Subsidiaries on a consolidated basis as at the date of determination to (ii) the
sum of (a) $2,024,000,000, (b) the aggregate net proceeds to the Company from
the issuance or sale of any Capital Stock (including Preferred Stock) of the
Company other than Disqualified Stock subsequent to the Measurement Date, (c)
the aggregate net proceeds from the issuance or sale of Debt of the Company or
any Restricted Subsidiary subsequent to the Measurement Date convertible or
exchangeable into Capital Stock of the Company other than Disqualified Stock, in
each case upon conversion or exchange thereof into Capital Stock of the Company
subsequent to the Measurement Date and (d) the after-tax gain on the sale,
subsequent to the Measurement Date, of Special Assets to the extent such Special
Assets have been sold for cash, Cash Equivalents, Telecommunications/IS Assets
or the assumption of Debt of the Company or any Restricted Subsidiary (other
than Debt that is subordinated to the Securities or any applicable Restricted
Subsidiary Guarantee) and release of the Company and all Restricted Subsidiaries
from all liability on the Debt assumed; provided, however, that, for purposes of
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calculation of the Consolidated Capital Ratio, the net proceeds from the
issuance or sale of Capital Stock or Debt described in clause (b) or (c) above
shall not be included to the extent (x) such proceeds have been utilized to make
a Permitted Investment under clause (i) of the definition thereof or a
Restricted Payment or (y) such Capital Stock or Debt shall have been issued or
sold to the Company, a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees.
"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of, to the extent reducing Consolidated Net
Income for such period, (i) Consolidated Interest Expense of the Company and its
Restricted Subsidiaries for such period, plus (ii) Consolidated Income Tax
Expense of the Company and its Restricted Subsidiaries for such period, plus
(iii) consolidated depreciation and amortization expense and any other non-cash
items (other than any such non-cash item to the extent that it represents an
accrual of
<PAGE>
10
or reserve for cash expenditures in any future period); provided, however, that
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there shall be excluded therefrom the Consolidated Cash Flow Available for Fixed
Charges (if positive) of any Restricted Subsidiary (calculated separately for
such Restricted Subsidiary in the same manner as provided above for the Company)
that is subject to a restriction which prevents the payment of dividends or the
making of distributions to the Company or another Restricted Subsidiary to the
extent of such restrictions.
"Consolidated Income Tax Expense" for any period means the aggregate
amounts of the provisions for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" for any period means the interest
expense included in a consolidated income statement (excluding interest income)
of the Company and its Restricted Subsidiaries for such period in accordance
with generally accepted accounting principles, including without limitation or
duplication (or, to the extent not so included, with the addition of), (i) the
amortization of Debt discounts and issuance costs, including commitment fees;
(ii) any payments or fees with respect to letters of credit, bankers'
acceptances or similar facilities; (iii) net costs with respect to interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements (including fees); (iv) Preferred Stock Dividends (other than
dividends paid in shares of Preferred Stock that is not Disqualified Stock)
declared and paid or payable; (v) accrued Disqualified Stock Dividends, whether
or not declared or paid; (vi) interest on Debt guaranteed by the Company and its
Restricted Subsidiaries; (vii) the portion of any Capital Lease Obligation or
Sale and Leaseback Transaction paid during such period that is allocable to
interest expense; (viii) interest Incurred in connection with investments in
discontinued operations; and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the Company
or a Restricted Subsidiary) in connection with Debt Incurred by such plan or
trust.
<PAGE>
11
"Consolidated Net Income" for any period means the net income (or loss)
of the Company and its Restricted Subsi diaries for such period determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom (a) for purposes of Section 1012
- --------
only, the net income (or loss) of any Person acquired by the Company or a
Restricted Subsidiary in a pooling-of-interests transaction for any period
prior to the date of such transaction, (b) the net income (or loss) of any
Person that is not a Restricted Subsidiary except to the extent of the amount of
dividends or other distributions actually paid to the Company or a Restricted
Subsidiary by such Person during such period (except, for purposes of Section
1012 only, to the extent such dividends or distributions have been subtracted
from the calculation of the amount of Investments to support the actual making
of Investments), (c) gains or losses realized upon the sale or other disposition
of any Property of the Company or its Restricted Subsidiaries that is not sold
or disposed of in the ordinary course of business (it being understood that
Permitted Telecommunications Capital Asset Dispositions shall be considered to
be in the ordinary course of business), (d) gains or losses realized upon the
sale or other disposition of any Special Assets, (e) all extraordinary gains
and extraordinary losses, determined in accordance with generally accepted
accounting principles, (f) the cumulative effect of changes in accounting
principles, (g) non-cash gains or losses resulting from fluctuations in currency
exchange rates, (h) any non-cash expense related to the issuance to employees or
directors of the Company or any Restricted Subsidiary of (1) options to purchase
Capital Stock of the Company or such Restricted Subsidiary or (2) other
compensatory rights; provided, in either case, that such options or rights, by
--------
their terms can be redeemed at the option of the holder of such option or right
only for Capital Stock, and (i) with respect to a Restricted Subsidiary that is
not a Wholly Owned Subsidiary any aggregate net income (or loss) in excess of
the Company's or any Restricted Subsidiary's pro rata share of the net income
(or loss) of such Restricted Subsidiary that is not a Wholly Owned Subsidiary;
provided further that there shall further be excluded therefrom the net income
- ----------------
(but not net loss) of any Restricted Subsidiary that is subject to a restriction
which prevents the payment of dividends or the making of
<PAGE>
12
distributions to the Company or another Restricted Subsidiary to the extent of
such restriction.
"Consolidated Net Worth" of any Person means the stockholders' equity
of such Person, determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to Disqualified Stock
of such Person.
"Consolidated Tangible Assets" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Subsidiaries after deducting
therefrom all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 101 Barclay Street, Floor 21W, New York, New York 10286.
"Credit Agreement" means the Credit Agreement dated as of September 30,
1999, among the Company, certain subsi diaries of the Company, the lenders
parties thereto and The Chase Manhattan Bank, as Administrative Agent and
Collateral Agent.
"Credit Facilities" means one or more credit agree ments, loan
agreements or similar facilities, secured or unsecured, providing for revolving
credit loans, term loans and/or letters of credit, including the Credit
Agreement and any Qualified Receivable Facility, entered into from time to time
by the Company and its Restricted Subsidiaries, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the
<PAGE>
13
assets of such Person and whether or not contingent, (i) every obligation of
such Person for money borrowed, (ii) every obligation of such Person evidenced
by bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of Property, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of Property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business), (v) every Capital Lease Obligation of such
Person and all Attributable Value in respect of Sale and Leaseback Transactions
entered into by such Person, (vi) all obligations to redeem or repurchase
Disqualified Stock issued by such Person, (vii) the liquidation preference of
any Preferred Stock (other than Disqualified Stock, which is covered by the
preceding clause (vi)) issued by any Restricted Subsidiary of such Person,
(viii) every obligation under Interest Rate or Currency Protection Agreements of
such Person and (ix) every obligation of the type referred to in clauses (i)
through (viii) of another Person and all dividends of another Person the payment
of which, in either case, such Person has Guaranteed. The "amount" or "principal
amount" of Debt at any time of determination as used herein represented by (a)
any Debt issued at a price that is less than the principal amount at maturity
thereof, shall be, except as otherwise set forth herein, the Accreted Value of
such Debt at such time or (b) in the case of any Receivables sale constituting
Debt, the amount of the unrecovered purchase price (that is, the amount paid for
Receivables that has not been actually recovered from the collection of such
Receivables) paid by the purchaser (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company) thereof. The amount of Debt represented by
an obligation under an Interest Rate or Currency Protection Agreement shall be
equal to (x) zero if such obligation has been Incurred pursuant to clause (x) of
paragraph (b) of Section 1010 or (y) the notional amount of such obligation if
not Incurred pursuant to such clause.
<PAGE>
14
"Default" means any event, act or condition the occurrence of which is,
or after notice or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designation" and "Designation Amount" have the respective meanings
specified in Section 1019.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final Stated Maturity of the Securities;
provided, however, that any Preferred Stock which would not constitute
- -------- -------
Disqualified Stock but for provisions thereof giving holders thereof the right
to require the Company to repurchase or redeem such Preferred Stock upon the
occurrence of a change of control occurring prior to the final Stated Maturity
of the Securities shall not constitute Disqualified Stock if the change of
control provisions applicable to such Preferred Stock are no more favorable to
the holders of such Preferred Stock than the provisions applicable to the
Securities contained in Section 1009 and such Preferred Stock specifically
provides that the Company will not repurchase or redeem any such stock pursuant
to such provisions prior to the Company's repurchase of such Securities as are
required to be repurchased pursuant to Section 1009.
"Disqualified Stock Dividends" means all dividends with respect to
Disqualified Stock of the Company held by Persons other than a Wholly Owned
Restricted Subsidiary. The amount of any such dividend shall be equal to the
quotient of such dividend divided by the difference between one and the maximum
statutory federal income tax rate (expressed as a decimal number between 1 and
0) applicable to the Company for the period during which such dividends were
paid.
<PAGE>
15
"Dollar Notes" means, collectively, the Company's 11% Senior Notes due
2008 in an aggregate principal amount not to exceed $800,000,000, the Company's
11 1/4% Senior Notes due 2010 in an aggregate amount not to exceed $250,000,000
and the Company's 12 7/8% Senior Discount Notes due 2010 in an aggregate
principal amount at maturity not to exceed $675,000,000.
"Eligible Receivables" means, at any time, Receivables of the Company
and its Restricted Subsidiaries, as evidenced on the most recent quarterly
consolidated balance sheet of the Company as at a date at least 45 days prior to
such time, arising in the ordinary course of business of the Company or any
Restricted Subsidiary.
"euro" means the single currency at the start of the third stage of
economic and monetary union on January 1, 1999, pursuant to the Treaty
establishing the European Economic Community as amended by the Treaty on
European Union, signed at Maastricht on February 7, 1992, and the Treaty signed
at Amsterdam on October 2, 1997.
"Euroclear" means the Euroclear System, a clearing and settlement
organization.
"Euro Notes" means the Company's 11 1/4% Senior Euro Notes due 2010 in
an aggregate principal amount not to exceed (Euro)300,000,000.
"European Government Obligation" means direct non-callable obligations
of, or non-callable obligations permitted by, any state member of the European
Union, the payment or guarantee of which is secured by the pledge of the full
faith and credit of the respective nation, provided that such nation has a
--------
credit rating at least equal to that of the highest rated member nation of the
member nations of the European Union.
"European Union" means the state members to the third stage of economic
and monetary union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
<PAGE>
16
February 7, 1992, and the Treaty signed at Amsterdam on October 2, 1997.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Exchange Securities" has the meaning stated in the first recital of
this Indenture.
"Excess Proceeds" has the meaning specified in Section 1016.
"Existing Notes" means the 9 1/8% Senior Notes, the 10 1/2% Senior
Discount Notes and the 6% Convertible Notes.
"Expiration Date" has the meaning specified in "Offer to Purchase"
below.
"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction. Unless otherwise specified herein,
Fair Market Value shall be determined by the Board of Directors acting in good
faith and shall be evidenced by a Board Resolution delivered to the Trustee.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Global Security" means a Rule 144A Global Security, an Institutional
Accredited Investor Global Security or a Regulation S Global Security, as the
case may be.
"Government Securities" means direct obligations of, or obligations
fully and unconditionally guaranteed or insured by, the United States of America
or any agency or instrumentality thereof for the payment of which obligations
or guarantee the full faith and credit of the United States is
<PAGE>
17
pledged and which are not callable or redeemable at the issuer's option (unless,
for purposes of the definition of "Cash Equivalents" only, the obligations are
redeemable or callable at a price not less than the purchase price paid by the
Company or the applicable Restricted Subsidiary, together with all accrued and
unpaid interest (if any) on such Government Securities).
"Guarantee" by any Person means any obligation, direct or indirect,
contingent or otherwise, of such Person guaranteeing, or having the economic
effect of guaranteeing, any Debt of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Debt, including any such obligations arising by virtue of partnership
arrangements or by agreements to keep-well, (ii) to purchase Property or
services or to take-or-pay for the purpose of assuring the holder of such Debt
of the payment of such Debt, (iii) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Debt or (iv) entered into for the
purpose of assuring in any other manner the obligee against loss in respect
thereof, in whole or in part (and "Guaranteed", "Guaranteeing" and "Guarantor"
shall have meanings correlative to the foregoing); provided, however, that the
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Guarantee by any Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary course of business.
"Guarantor" means a Restricted Subsidiary of the Company that has
executed a Restricted Subsidiary Guarantee, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Guarantor" shall mean such successor Person.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or
<PAGE>
18
otherwise become liable in respect of such Debt or other obligation including
the recording, as required pursuant to generally accepted accounting principles
or otherwise, of any such Debt or other obligation on the balance sheet of such
Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided, however, that a change in
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generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an Incurrence
of such Debt and that neither the accrual of interest nor the accretion of
original issue discount shall be deemed an Incurrence of Debt. Debt otherwise
incurred by a Person before it becomes a Subsidiary of the Company shall be
deemed to have been Incurred at the time at which it becomes a Subsidiary.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Foreign Purchaser" means each non U.S. person (within the
meaning of Regulation S) that purchased Initial Securities from the Initial
Purchasers in offshore transactions meeting the requirements of Regulation S.
"Initial Purchasers" means Salomon Smith Barney International Limited,
Goldman Sachs International, Morgan Stanley & Co. International Limited, Chase
Securities Inc., J.P. Morgan Securities Ltd., Credit Suisse First Boston
(Europe) Limited, Barclays Capital Inc., Credit Lyonnais SA, Kleinwort Benson
Limited and Societe Generale.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"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.
"Institutional Accredited Investor Global Security" has the meaning
specified in Section 303.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
<PAGE>
19
"Interest Rate or Currency Protection Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including caps, floors, collars and similar
agreements) relating to, or the value of which is dependent upon, interest rates
or currency exchange rates or indices.
"Invested Capital" means the sum of (a) $500,000,000, (b) the aggregate
net proceeds received by the Company from the issuance or sale of any Capital
Stock, including Preferred Stock, of the Company but excluding Disqualified
Stock, subsequent to the Measurement Date, and (c) the aggregate net proceeds
from the issuance or sale of Debt of the Company or any Restricted Subsidiary
subsequent to the Measurement Date convertible or exchangeable into Capital
Stock of the Company other than Disqualified Stock, in each case upon conversion
or exchange thereof into Capital Stock of the Company subsequent to the
Measurement Date; provided, however, that the net proceeds from the issuance or
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sale of Capital Stock or Debt described in clause (b) or (c) shall be excluded
from any computation of Invested Capital to the extent (i) utilized to make a
Restricted Payment or (ii) such Capital Stock or Debt shall have been issued or
sold to the Company, a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, purchase, redemption, retirement or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, or Incurrence of, or payment on, a Guarantee of any
obligation of, any other Person; provided that Investments shall exclude
--------
commercially reasonable extensions of trade credit. The amount, as of any date
of determina tion, of any Investment shall be the original cost of such
Investment, plus the cost of all additions, as of such date, thereto and minus
the amount, as of such date, of any portion of such Investment repaid to such
Person in cash as a repayment of principal or a return of capital, as the case
may be (except to the extent such repaid amount has been
<PAGE>
20
included in Consolidated Net Income to support the actual making of Restricted
Payments), but without any other adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
In determining the amount of any Investment involving a transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such transfer.
"Issue Date" means the date on which the Initial Securities are
initially issued.
"Issue Date Purchase Money Debt" means Purchase Money Debt outstanding
on the Issue Date; provided, that the amount of such Purchase Money Debt when
--------
Incurred did not exceed 100% of the cost of the construction, installation,
acquisition, lease, development or improvement of the applicable
Telecommunications/IS Assets.
"Issue Date Rating" means B3 in the case of Moody's and B in the case
of S&P, which are the respective ratings assigned to the Securities by the
Rating Agencies on the Issue Date.
"Joint Venture" means a Person in which the Company or a Restricted
Subsidiary holds not more than 50% of the shares of Voting Stock.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness), encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or
with respect to such Property (including any Capital Lease Obligation,
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing and any Sale and Leaseback
Transaction). For purposes of this definition the sale, lease, conveyance or
other transfer by the Company or any of its Subsidiaries of, including the grant
of indefeasible rights of use or equivalent arrangements with respect to, dark
or lit communications fiber capacity or communications conduit shall not
constitute a Lien.
<PAGE>
21
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration or otherwise.
"Measurement Date" means April 28, 1998, the date the 91/8% Senior
Notes were originally issued.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
-------- -------
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Trustee by a written
notice given to the Company.
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or cash equivalents received (including amounts received by way of sale or
discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such Property) therefrom by
such Person, net of (i) all legal, title and recording taxes, expenses and
commissions and other fees and expenses (including appraisals, brokerage
commissions and investment banking fees) Incurred and all federal, state,
provincial, foreign and local taxes required to be accrued as a liability as a
consequence of such Asset Disposition, (ii) all payments made by such Person or
its Subsidiaries on any Debt which is secured by such Property in accordance
with the terms of any Lien upon or with respect to such Property or which must
by the terms of such Lien, or in order to obtain a necessary consent to such
Asset Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition, (iii) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or Joint
<PAGE>
22
Ventures of such Person as a result of such Asset Disposition and (iv)
appropriate amounts to be provided by such Person or any Subsidiary thereof, as
the case may be, as a reserve in accordance with generally accepted accounting
principles against any liabilities associated with such Property and retained by
such Person or any Subsidiary thereof, as the case may be, after such Asset
Disposition, including liabilities under any indemnification obligations and
severance and other employee termination costs associated with such Asset
Disposition, in each case as determined by the board of directors of such
Person, in its reasonable good faith judgment evidenced by a Board Resolution
filed with the Trustee; provided, however, that any reduction in such reserve
-------- -------
within twelve months following the consummation of such Asset Disposition will
be, for all purposes of this Indenture and the Securities, treated as a new
Asset Disposition at the time of such reduction with Net Available Proceeds
equal to the amount of such reduction; provided further, however, that, in the
---------------- -------
event that any consideration for a transaction (which would otherwise constitute
Net Available Proceeds) is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, at such time as such
portion of the consideration is released to such Person or its Restricted
Subsidiary from escrow, such portion shall be treated for all purposes of this
Indenture and the Securities as a new Asset Disposition at the time of such
release from escrow with Net Available Proceeds equal to the amount of such
portion of consideration released from escrow.
"New Convertible Notes" means the Company's 6% Convertible Subordinated
Notes due 2010 in an aggregate principal amount not to exceed $862,500,000.
"9 1/8% Senior Notes" means the Company's 91/8% Senior Notes due 2008 in
an aggregate principal amount not to exceed $2,000,000,000, originally issued on
April 28, 1998.
"Non-Global Purchasers" has the meaning specified in Section 303.
"Offer" has the meaning specified in "Offer to Purchase" below.
<PAGE>
23
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first-class mail, postage prepaid, to each Holder of Securities at its
address appearing in the Security Register on the date of the Offer offering to
purchase up to the principal amount of Securities specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Securities within five Business Days after
the Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain information concerning the business of the Company and its Subsidiaries
which the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at a minimum will
include (i) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the Trustee
pursuant to this Indenture (which requirements may be satisfied by delivery of
such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Offer to Purchase), (iii) if
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase and
(iv) any other information required by applicable law to be included therein).
The Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase. The Offer shall
also state:
<PAGE>
24
a. the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
b. the Expiration Date and the Purchase Date;
c. the aggregate principal amount of the Outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100% of the Outstanding Securities, the manner by
which such has been determined pursuant to the Section hereof requiring the
Offer to Purchase) (the "Purchase Amount");
d. the purchase price to be paid by the Company for (Euro)1,000
aggregate principal amount of Securities accepted for payment (as specified
pursuant to this Indenture) (the "Purchase Price");
e. that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of (Euro)1,000 principal
amount;
f. the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
g. that any Securities not tendered or tendered but not purchased
by the Company will continue to accrue interest;
h. that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the Offer
to Purchase and that interest thereon, if any, shall cease to accrue on and
after the Purchase Date;
i. that each Holder electing to tender a Security pursuant to the
Offer to Purchase will be required to surrender such Security at the place
or places specified in the Offer prior to the close of business on the
Expiration Date (such Security being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in
<PAGE>
25
form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing);
j. that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or the Paying Agent) receives, not
later than the close of business on the Expiration Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security the Holder tendered, the certificate number of the
Security the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
k. that (i) if Securities in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (ii) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Securities having an
aggregate principal amount equal to the Purchase Amount on a pro rata basis
--- ----
(with such adjustments as may be deemed appropriate so that only Securities
in denominations of (Pounds)1,000 principal amount or integral multiples
thereof shall be purchased); and
l. that in the case of any Holder whose Security is purchased only
in part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Security so tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, a Vice Chairman of the Board of Directors, the President
or a Vice President, and by the Chief Financial Officer, the Chief Accounting
Officer, the Treasurer, an Assistant Treasurer, the
<PAGE>
26
Controller, the Secretary or an Assistant Secretary of the Company and delivered
to the Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means an opinion of counsel acceptable to the
Trustee (who may be counsel to the Company, including an employee of the
Company).
"OECD" shall mean the Organization for Economic Cooperation and
Development.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) on and after any maturity date, Securities, or portions
thereof, for whose payment money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided that the Trustee or the Paying Agent, as applicable,
--------
is not prohibited from paying such money to the Holders;
(iii) Securities, except to the extent provided in Sections 1202
and 1203, with respect to which the Company has effected defeasance or
covenant defeasance as provided in Article Twelve; and
(iv) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
<PAGE>
27
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities
owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in making such calculation or in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which any Responsible Officer of the Trustee knows
to be so owned or as to which the Trustee has received written notice shall
be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any)
or interest on any Securities on behalf of the Company.
"Permitted Holders" means the members of the Company's Board of
Directors on the Measurement Date and their respective estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rule 13d-3 under the Exchange Act) at least
662/3% of the total voting power of the Voting Stock of such Person.
"Permitted Interest Rate or Currency Protection Agreement" of any Person
means any Interest Rate or Currency Protection Agreement entered into with one
or more financial institutions in the ordinary course of business that is
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and not for purposes of
speculation and which,
<PAGE>
28
in the case of an interest rate agreement, shall have a notional amount no
greater than the principal amount at maturity due with respect to the Debt being
hedged thereby.
"Permitted Investments" means (a) Cash Equivalents; (b) investments in
prepaid expenses; (c) negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (d)
loans, advances or extensions of credit to employees and directors made in the
ordinary course of business and consistent with past practice; (e) obligations
under Permitted Interest Rate or Currency Protection Agreements; (f) bonds,
notes, debentures and other securities received as a result of Asset
Dispositions pursuant to and in compliance with Section 1016; (g) Investments in
any Person as a result of which such Person becomes a Restricted Subsidiary; (h)
Investments made prior to the Measurement Date; (i) Investments made after the
Measurement Date in Persons engaged in the Telecommunications/IS Business in an
aggregate amount not to exceed Invested Capital; (j) solely in connection with
the defeasance of euro-denominated Debt permitted under this Indenture, European
Government Obligations; and (k) additional Investments in an aggregate amount
not to exceed $200,000,000.
"Permitted Liens" means (a) Liens for taxes, assessments, governmental
charges, levies or claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with generally
accepted accounting principles shall have been made therefor; (b) other Liens
incidental to the conduct of the Company's and its Restricted Subsidiaries'
businesses or the ownership of its Property not securing any Debt, and which do
not in the aggregate materially detract from the value of the Company's and its
Restricted Subsidiaries' Property when taken as a whole, or materially impair
the use thereof in the operation of its business; (c) Liens, pledges and
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of statutory obligations;
(d) Liens, pledges or deposits made to secure the performance of tenders, bids,
leases, public or statutory obligations, sureties, stays, appeals, indemnities,
performance or other
<PAGE>
29
similar bonds and other obligations of like nature incurred in the ordinary
course of business (exclusive of obligations for the payment of borrowed money,
the obtaining of advances or credit or the payment of the deferred purchase
price of Property and which do not in the aggregate materially impair the use of
Property in the operation of the business of the Company and the Restricted
Subsidiaries taken as a whole); (e) zoning restrictions, servitudes, easements,
rights-of-way, restrictions and other similar charges or encumbrances incurred
in the ordinary course of business which, in the aggregate, do not materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Company or its Restricted
Subsidiaries; and (f) any interest or title of a lessor in the Property subject
to any lease other than a Capital Lease.
"Permitted Telecommunications Capital Asset Disposition" means the
transfer, conveyance, sale, lease or other disposition of optical fiber and/or
conduit and any related equipment used in a Segment (as defined) of the
Company's communications network that (i) constitute capital assets in
accordance with generally accepted accounting principles and (ii) after giving
effect to such disposition, would result in the Company retaining at least
either (A) 24 optical fibers per route mile on such Segment as deployed at the
time of such disposition or (B) 12 optical fibers and one empty conduit per
route mile on such Segment as deployed as such time. "Segment" means (x) with
respect to the Company's intercity network, the through-portion of such network
between two local networks (i.e., Omaha to Denver) and (y) with respect to a
local network of the Company (i.e., Dallas), the entire through-portion of such
network, excluding the spurs which branch off the through-portion.
"Person" means any individual, corporation, company, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Physical Security" has the meaning specified in Section 303.
<PAGE>
30
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital
Stock of any other class of such Person.
"Preferred Stock Dividends" means all dividends with respect to Preferred
Stock of Restricted Subsidiaries held by Persons other than the Company or a
Wholly Owned Restricted Subsidiary. The amount of any such dividend shall be
equal to the quotient of such dividend divided by the difference between one and
the maximum statutory federal income rate (expressed as a decimal number between
1 and 0) applicable to the issuer of such Preferred Stock for the period during
which such dividends were paid.
"Private Exchange Offer" means the offer by the Company, pursuant to
Section 2(f) of the Registration Agreement, to issue and deliver to certain
purchasers, in exchange for the Initial Securities held by such purchasers as
part of their initial distribution, a like aggregate principal amount of Private
Exchange Securities.
"Private Exchange Securities" means the Exchange Securities to be
issued pursuant to this Indenture in connection with a Private Exchange Offer
pursuant to the Registration Agreement.
"Private Placement Legend" means the third paragraph of the legend set
forth in the Securities in the form set forth in Exhibit A.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible,
<PAGE>
31
including Capital Stock in, and other securities of, any other Person. For
purposes of any calculation required pursuant to this Indenture, the value of
any Property shall be its Fair Market Value.
"Proportionate Interest" in any issuance of Capital Stock of a
Restricted Subsidiary means a ratio (i) the numerator of which is the aggregate
amount of all Capital Stock of such Restricted Subsidiary beneficially owned by
the Company and the Restricted Subsidiaries and (ii) the denominator of which is
the aggregate amount of Capital Stock of such Restricted Subsidiary beneficially
owned by all Persons (excluding, in the case of this clause (ii), any Investment
made in connection with such issuance).
"Purchase Amount" has the meaning specified in "Offer to Purchase" above.
"Purchase Date" has the meaning specified in "Offer to Purchase" above.
"Purchase Money Debt" means Debt (including Acquired Debt and Capital Lease
Obligations, mortgage financings and purchase money obligations) incurred for
the purpose of financing all or any part of the cost of construction,
installation, acquisition, lease, development or improvement by the Company or
any Restricted Subsidiary of any Telecommunications/IS Assets of the Company or
any Restricted Subsidiary and including any related notes, Guarantees collateral
documents, instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified or restated from time to time.
"Purchase Price" has the meaning specified in "Offer to Purchase" above.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A.
"Qualified Receivable Facility" means Debt of the Company or any
Subsidiary Incurred from time to time pursuant to either (x) credit facilities
secured by Receivables or (y) Receivables purchase facilities, and including any
related notes, Guarantees, collateral
<PAGE>
32
documents, instruments and agreements executed in connection therewith, as the
same may be amended, supplemented, modified or restated from time to time.
"Rating Agencies" means Moody's and S&P.
"Rating Date" means the earlier of the date of public notice of the
occurrence of a Change of Control or of the intention of the Company to effect a
Change of Control.
"Rating Decline" shall be deemed to have occurred if, no later than 90
days after the Rating Date (which period shall be extended so long as the rating
of the Securities is under publicly announced consideration for possible
downgrade by any of the Rating Agencies), either of the Rating Agencies assigns
or reaffirms a rating to the Securities that is lower than the applicable Issue
Date Rating (or the equivalent thereof). If, prior to the Rating Date, either of
the ratings assigned to the Securities by the Rating Agencies is lower than the
applicable Issue Date Rating, then a Rating Decline will be deemed to have
occurred if such rating is not changed by the 90th day following the Rating
Date. A downgrade within rating categories, as well as between rating
categories, will be considered a Rating Decline.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money and
proceeds and products thereof in each case generated in the ordinary course of
business.
"refinancing" has the meaning specified in Section 1010(b)(viii).
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Agreement, to certain Holders of Initial Securities, to issue
and deliver to such Holders, in exchange for the Initial Securities, a like
aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Euro Registration Agreement dated
February 24, 2000, between the Company and the Initial Purchasers relating to
the Initial Securities.
<PAGE>
33
"Registration Default" has the meaning specified in Exhibit A.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the March 1 or September 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning specified in Section 303.
"Required Filing Dates" has the meaning specified in Section 1007.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Trustee's Corporate Trust Office, including any vice
president, any assistant secretary, any assistant treasurer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers, and also 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 Payment" has the meaning specified in Section 1012.
"Restricted Subsidiary" means (a) a Subsidiary of the Company or of a
Restricted Subsidiary that has not been designated or classified as an
Unrestricted Subsidiary pursuant to and in compliance with Section 1019 and (b)
an Unrestricted Subsidiary that is redesignated as a Restricted Subsidiary
pursuant to such Section.
"Restricted Subsidiary Guarantee" means a supplemental indenture to this
Indenture in substantially the form set forth in Exhibit B hereto, providing for
an unconditional Guarantee of payment in full of the principal of, premium, if
any, and interest on the Securities. Any such Restricted Subsidiary Guarantee
shall not be subordinate to any Debt of
<PAGE>
34
the Restricted Subsidiary providing the Restricted Subsidiary Guarantee.
"Revocation" has the meaning specified in Section 1019.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Security" has the meaning specified in Section 303.
"S&P" means Standard & Poor's Ratings Service or, if Standard & Poor's
Ratings Service shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
-------- -------
that if Standard & Poor's Rating Service ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"S&P" shall mean any other national recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Trustee by a written
notice given to the Company.
"Sale and Leaseback Transaction" of any Person means any direct or
indirect arrangement pursuant to which any Property is sold or transferred by
such Person or a Restricted Subsidiary of such person and is thereafter leased
back from the purchaser or transferee thereof by such Person or one of its
Restricted Subsidiaries. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended (or any
successor act), and the rules and regulations thereunder (or respective
successors thereto).
<PAGE>
35
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Shelf Registration Statement" means a registration statement issued by
the Company in connection with the offer and sale of Initial Securities pursuant
to the Registration Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"6% Convertible Notes" means the Company's 6% Convertible Subordinated
Notes due 2009 in an aggregate principal amount not to exceed $823,000,000,
originally issued on September 14, 1999.
"Special Assets" means (a) the Capital Stock or assets of Cable
Michigan, Inc., RCN Corporation, Commonwealth Telephone Enterprises, Inc., KCP,
Inc. and California Private Transportation Company, L.P. (and any intermediate
holding companies or other entities formed solely for the purpose of owning such
Capital Stock or assets) owned, directly or indirectly, by the Company or any
Restricted Subsidiary on the Measurement Date, and (b) any Property, other than
cash, Cash Equivalents and Telecommunications/IS Assets, received as
consideration for the disposition after the Measurement Date of Special Assets
(as contemplated by the first proviso in Section 1016).
"Special Interest" has the meaning specified in Exhibit A.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to a Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable, including pursuant to any mandatory repurchase
provision (but excluding any provision providing for the repurchase of such
Security at the option of the
<PAGE>
36
Holder thereof upon the happening of any contingency beyond the control of the
Company unless such contingency has occurred).
"Subordinated Debt" means Debt of the Company (a) that is not secured by
any Lien on or with respect to any Property now owned or acquired after the
Measurement Date and (b) as to which the payment of principal of (and premium,
if any) and interest and other payment obligations in respect of such Debt shall
be subordinate to the prior payment in full in cash of the Securities to at
least the following extent: (i) no payments of principal of (or premium, if any)
or interest on or otherwise due (including by acceleration or for additional
amounts) in respect of, or repurchases, redemptions or other retirements of,
such Debt (collectively, "payments of such Debt") may be permitted for so long
as any default (after giving effect to any applicable grace periods) in the
payment of principal (or premium, if any) or interest on the Securities exists,
including as a result of acceleration; (ii) in the event that any other Default
exists with respect to the Securities, upon notice by Holders of 25% or more in
aggregate principal amount of the Securities to the Trustee, the Trustee shall
have the right to give notice to the Company and the holders of such Debt (or
trustees or agents therefor) of a payment blockage, and thereafter no payments
of such Debt may be made for a period of 179 days from the date of such notice,
provided that not more than one such payment blockage notice may be given in any
- --------
consecutive 360-day period, irrespective of the number of defaults with respect
to the Securities during such period; (iii) if payment of such Debt is
accelerated when any Securities are Outstanding, no payments of such Debt may be
made until three Business Days after the Trustee receives notice of such
acceleration and, thereafter, such payments may only be made to the extent the
terms of such Debt permit payment at that time; and (iv) such Debt may not (x)
provide for payments of principal of such Debt at the stated maturity thereof or
by way of a sinking fund applicable thereto or by way of any mandatory
redemption, defeasance, retirement or repurchase thereof by the Company
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default
<PAGE>
37
thereunder), in each case prior to the final Stated Maturity of the Securities
or (y) permit redemption or other retire ment (including pursuant to an offer to
purchase made by the Company) of such other Debt at the option of the holder
thereof prior to the final Stated Maturity of the Securities, other than, in
the case of clause (x) or (y), any such payment, redemption or other retirement
(including pursuant to an offer to purchase made by the Company) which is
conditioned upon (A) a change of control of the Company pursuant to provisions
substantially similar to those described in Section 1009 (and which shall
provide that such Debt will not be repurchased pursuant to such provisions prior
to the Company's repurchase of the Securities required to be repurchased by the
Company pursuant to the provisions described in Section 1009) or (B) a sale or
other disposition of assets pursuant to provisions substantially similar
to those described in Section 1016 (and which shall provide that such Debt will
not be repurchased pursuant to such provisions prior to the Company's repurchase
of the Securities required to be repurchased by the Company pursuant to the
provision described in Section 1016).
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other Subsi-
diaries thereof, directly or indirectly, has at least a majority ownership and
power to direct the policies, management and affairs thereof.
"Telecommunications/IS Assets" means (a) any Property (other than cash,
cash equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in the Telecommunications/IS Business; (b) for purposes of
Sections 1010 and 1014 only, Capital Stock of any Person; or (c) for all other
purposes of this Indenture, Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary from any Person other than an Affiliate of the
Company; provided, however, that, in the
-------- -------
<PAGE>
38
case of clause (b) or (c), such Person is primarily engaged in the
Telecommunications/IS Business.
"Telecommunications/IS Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii)
constructing, creating, developing or marketing communications networks, related
network transmission equipment, software and other devices for use in a
communications business, (iii) computer outsourcing, data center management,
computer systems integration, reengineering of computer software for any purpose
(including, without limitation, for the purposes of porting computer software
from one operating environment or computer platform to another or to address
issues commonly referred to as "Year 2000 issues") or (iv) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in (i), (ii) or (iii) above; provided that the
--------
determination of what constitutes a Telecommunications/IS Business shall be made
in good faith by the Board of Directors.
"10 1/2% Senior Discount Notes" means the Company's 10 1/2% Senior
Discount Notes due 2008 in an aggregate principal amount at maturity not to
exceed $833,815,000, originally issued on November 24, 1998.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force at the date as of which this Indenture was executed, except as provided
in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (a) 91 Holding Corp.; (b) any
Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 1019 and not
thereafter redesignated as a Restricted Subsidiary as permitted pursuant
thereto.
<PAGE>
39
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Voting Stock or other ownership interests (other
than directors' qualifying shares) of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 102. Compliance Certificates and Opinions.
-------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
<PAGE>
40
(2) 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;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
---------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
<PAGE>
41
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated (with
proper identification of each matter covered therein) and form one instrument.
SECTION 104. Acts of Holders.
----------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
<PAGE>
42
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
--------
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security. However, any such Holder or future Holder may revoke the request,
demand, authorization, direction, notice, consent, waiver or other Act of the
Holder as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date such Act becomes effective.
<PAGE>
43
SECTION 105. Notices, etc., to Trustee and Company.
--------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company or any Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or such Guarantor addressed to it (in the case of a
Guarantor, in care of the Company) at the address of the Company's
principal office specified in the first paragraph of this Indenture, or at
any other address previously furnished in writing to the Trustee by the
Company.
<PAGE>
44
SECTION 106. Notice to Holders; Waiver.
--------------------------
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder as it appears
in the Security Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Notices shall be
effective only upon receipt. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
<PAGE>
45
SECTION 109. Separability Clause.
--------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture.
----------------------
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Security Registrar and their successors hereunder and the Holders any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
--------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK BUT 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.
SECTION 112. Conflict with Trust Indenture Act.
----------------------------------
The Trust Indenture Act shall apply as a matter of contract to this
Indenture for purposes of interpretation, construction and defining the rights
and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with any provision of the Trust Indenture Act or another provision
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such provision or requirement of the
Trust Indenture Act shall control.
If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
<PAGE>
46
SECTION 113. Legal Holidays.
---------------
In any case where any Interest Payment Date, or Stated Maturity or
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of principal (or
premium, if any) or interest need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or at the Stated Maturity or Maturity; provided that
--------
no interest shall accrue for the period from and after such Interest Payment
Date, Stated Maturity or Maturity, as the case may be.
SECTION 114. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders.
- -------------
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or any Guarantor under the Securities or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation,
solely by reason of its status as a director, officer, employee, incorporator or
stockholder of the Company or a Guarantor. By accepting a Security, each Holder
waives and releases all such liability (but only such liability). The waiver and
release are part of the consideration for issuance of the Securities.
SECTION 115. Independence of Covenants.
--------------------------
All covenants and agreements in this Indenture shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default if such action is taken or condition exists.
SECTION 116. Exhibits.
---------
All exhibits attached hereto are by this reference made a part hereof with
the same effect as if herein set forth in full.
<PAGE>
47
SECTION 117. Counterparts.
-------------
This Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
SECTION 118. Duplicate Originals.
--------------------
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
----------------
The Securities and the Trustee's certificate of authentication with respect
thereto shall be in substantially the form set forth in Exhibit A hereto, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or system
on which the Securities may be listed or eligible for trading or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange or system on which the Securities may be listed
or eligible for trading, all as determined by the officers of the Company
executing such Securities, as evidenced by their execution of such Securities.
<PAGE>
48
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
----------------
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to (Euro)500,000,000, except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306,
906, 1009 or 1016.
The Securities shall be known and designated as the "10 3/4% Senior Euro
Notes Due 2008" of the Company. Their Stated Maturity shall be March 15, 2008,
and they shall bear interest at the rate of 10 3/4% per annum from February 29,
2000, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable on September 15, 2000 and semiannually
thereafter on March 15 and September 15 in each year and at said Stated
Maturity, until the principal thereof is paid or duly provided for.
Principal of, premium, if any, and interest on the Securities will be
payable, and the Securities may be exchanged or transferred, at the office or
agency of the Company in The City of New York, which, unless otherwise provided
by the Company, will be the offices of the Trustee. At the option of the
Company, interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Security Register.
The interest rate on the Securities is subject to increase by the addition
of Special Interest and otherwise, all as set forth or referred to in the text
of the Securities appearing in Exhibit A hereto.
The Securities are not redeemable prior to maturity.
At the election of the Company, the entire Debt on the Securities or
certain of the Company's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article Twelve.
<PAGE>
49
SECTION 302. Denominations.
--------------
The Securities will be issued without coupons and in fully registered form
only, in minimum denominations of (Euro)1,000 principal amount and integral
multiples thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
-----------------------------------------------
The Securities shall be executed on behalf of the Company by its Chairman,
its President or a Vice President, under its corporate seal reproduced thereon
and attested by its Secretary or an Assistant Secretary. The signature of any of
these officers on the Securities may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such
<PAGE>
50
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
The Trustee shall authenticate and deliver (1) initially one or more Global
Securities for original issue in an aggregate principal amount not to exceed
(Euro)500,000,000 and (2) Exchange Securities for issue only in a Registered
Exchange Offer or a Private Exchange Offer pursuant to the Registration
Agreement, for a like principal amount of Initial Securities, upon receipt of a
Company Order, which shall specify the amount of Securities to be authenticated,
whether the Securities are to be Initial Securities or Exchange Securities, the
date on which such Securities are to be authenticated and direct the Trustee to
authenticate such Securities.
Except as described below, the Securities will be deposited with, or on
behalf of, the Depository, and registered in the name of Cede & Co. as the
Depository's nominee in the form of a global note certificate substantially in
the form of Exhibit A (the "Rule 144A Global Security"), for credit to the
respective accounts of the beneficial owners of the Securities represented
thereby.
Securities transferred to persons outside the United States pursuant to
sales in accordance with Regulation S under the Securities Act shall be
deposited with, or on behalf of, the Common Depositary, and registered in the
name of Cede & Co. as the Common Depositary's nominee in the form of one or more
global note certificates substantially in the form of Exhibit A (each a
"Regulation S Global Security"), for credit to the respective accounts of the
beneficial owners of the Securities represented thereby, provided that upon such
--------
deposit all such Securities shall be credited to or through accounts maintained
at the Depository by or on behalf of the Euroclear System or Clearstream,
societe anonyme.
Securities transferred to Institutional Accredited Investors will be
deposited with, or on behalf of, the Depository, and registered in the name of
Cede & Co. as the Depository's nominee in the form of one or more global note
certificates substantially in the form of Exhibit A (each a "Institutional
Accredited Investor Global Security"), for
<PAGE>
51
credit to the respective accounts of the beneficial owners of the Securities
represented thereby.
Securities transferred to any persons who are not Qualified Institutional
Buyers or Institutional Accredited Investors (other than persons outside the
United States pursuant to sales or transfers in accordance with Regulation S
under the Securities Act) (collectively, "Non- Global Purchasers") will be
issued in registered definitive form without coupons substantially in the form
of Exhibit A (the "Physical Securities"). Upon the transfer to a Qualified
Institutional Buyer, an Institutional Accredited Investor or to a person outside
the United States pursuant to a sale or transfer in accordance with Regulation S
under the Securities Act of Physical Securities initially issued to a Non-Global
Purchaser, such Physical Security will be exchanged for an interest in a Global
Security representing the principal amount of Securities being transferred.
In case the Company, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall transfer, sell, lease, convey or
otherwise dispose of all or substantially all its assets to any other Person,
and the successor Person resulting from such consolidation, or surviving such
merger, or into which the Company shall have been merged, or the Person which
shall have received a transfer, sale, lease, conveyance or other disposition as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article Eight, any of the Securities authenticated or delivered
prior to such consolidation, merger, transfer, sale, lease, conveyance or other
disposition may, from time to time, at the request of the successor Person, be
exchanged for other Securities executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Securities surrendered for such exchange and of
like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to
<PAGE>
52
them, shall provide for the exchange of all Securities at the time Outstanding
for Securities authenticated and delivered in such new name.
SECTION 304. Temporary Securities.
---------------------
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
<PAGE>
53
SECTION 305. Registration, Registration of Transfer and Exchange.
----------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as the Company may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Security
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the "Security Registrar") for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be duly
<PAGE>
54
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any transfer tax or other similar governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1009 or 1016 not
involving any transfer.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
-------------------------------------------------
If (i) any mutilated Security is surrendered to the Trustee or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity sufficient to save each of
them harmless, then, in the absence of actual notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other similar
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security
<PAGE>
55
shall constitute an original additional contractual obligation of the Company,
whether or not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 1002;
provided, however, that each installment of interest may at the Company's option
- -------- -------
be paid by mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears in the Security Register.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of such Holder having
been a Holder on the Regular Record Date, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") may be paid by the Company, at its election in each
case, as provided in paragraph (1) or (2) below:
<PAGE>
56
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided for in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following paragraph (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or system on which the Securities may be listed or
eligible for trading, and upon such notice as may be required by such
exchange or system, if, after notice given by the Company to the Trustee of
the proposed
<PAGE>
57
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the trustee in its sole discretion.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
----------------------
Prior to the due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Sections 305 and 307) interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
<PAGE>
58
SECTION 309. Cancellation.
-------------
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be disposed of by the Trustee in accordance with its customary procedures unless
by Company Order the Company shall direct that cancelled Securities be returned
to it.
SECTION 310. Computation of Interest.
------------------------
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 311. CUSIP Number.
-------------
The Company in issuing the Securities may use a "CUSIP" number (if then
generally in use), and if so, the Trustee may use the CUSIP numbers in notices
of exchange as a convenience to Holders; provided, however, that any such notice
-------- -------
may state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Securities, and that reliance
may be placed only on the other identification numbers printed on the
Securities. The Company shall promptly notify the Trustee in writing of any
change in the CUSIP number of the Securities.
<PAGE>
59
SECTION 312. Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) The Rule 144A Global Securities and Institutional Accredited Investor
Global Securities initially shall (i) be registered in the name of The
Depository Trust Company or its nominee, (ii) be deposited with the Trustee as
custodian for the Depository and (iii) bear legends as set forth in Exhibit A.
The Regulation S Global Securities initially shall (i) be registered in the name
of The Bank of New York Depositary (Nominees) Ltd., as Common Depositary for
Euroclear and Clearstream, or its nominee, (ii) be deposited with the Common
Depositary and (iii) bear legends as set forth in the Exhibit A.
Members of, or participants in, the Depository, Euroclear or Clearstream
("Agent Members") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository or the Common Depositary,
or the Trustee as its custodian, or under the Global Security, and the
Depository and the Common Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Securities for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall (i) prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or (ii) impair, as between a
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depository or the Common Depositary, as the case may be,
their respective successors or their respective nominees. Interests of
beneficial owners in a Rule 144A Global Security may be transferred or exchanged
for interests in an Institutional Accredited Investor Global Security or a
Regulation S Global Security, interests of beneficial owners in an Institutional
Accredited Investor Global Security may be transferred or exchanged for
interests in a Rule 144A Global Security or a Regulation S Global Security and
interests of beneficial owners in a Regulation S Global Security may be
transferred
<PAGE>
60
or exchanged for interests in a Rule 144A Global Security or an Institutional
Accredited Investor Global Security, in each case in accordance with the rules
and procedures of the Depository, the Common Depositary, Euroclear, Clearstream
and the provisions of Section 313. Interests of beneficial owners in the Global
Securities may be transferred or exchanged for Physical Securities in accordance
with the rules and procedures of the Depository and the provisions of Section
313. In addition, Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in a Global Security if (i)
the Depository or the Common Depositary, as the case may be, notifies the
Company that it is unwilling or unable to continue as a depository for such
Global Security or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, and a successor depository is not appointed
by the Company within 90 days, (ii) the Company executes and delivers to the
Trustee a notice that such Global Security shall be so transferable, registrable
and exchangeable, and such transfer shall be registrable, or (iii) there shall
have occurred and be continuing a Default or Event of Default with respect to
the Securities represented by such Global Security.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Security Registrar shall (if one or more Physical Securities
are to be issued) reflect on its books and records the date and a decrease in
the principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and principal amount of authorized
denominations.
(d) In connection with the transfer of Global Securities as an entirety to
beneficial owners pursuant to paragraph (b), the Global Securities shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of
<PAGE>
61
Physical Securities of like tenor of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in a Global
Security pursuant to paragraph (b) or (c) of this Section 312 shall, except as
otherwise provided by paragraph (d) of Section 313, bear the legend regarding
transfer restrictions applicable to the Physical Securities set forth in Exhibit
A.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent 'Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
(g) In the event that a Global Security is exchanged for Physical
Securities pursuant to this Section 312 prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of Sections 312 and 313 (including the certification requirements set
forth on the reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A, Regulation S or such other applicable exemption
from registration under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(h) Payment of principal of, premium, if any, and interest on Regulation S
Global Securities will be made in euros or in such coin or currency of the
European Union as at the time of payment is legal tender for payment of public
and private debts in immediately available funds to the Common Depositary for
Euroclear and Clearstream or its nominee, as the case may be, as the sole
registered owner and the sole holder of the Regulation S Global Securities for
all purposes under this Indenture. Payment of principal of, premium, if any, and
interest on 144A Global Securities will be made in euros or in such coin or
currency of the European Union as at the time of payment is legal tender for
payment of public and private debts in immediately available funds to the
Trustee, as custodian for DTC. On
<PAGE>
62
the record date for any payment with respect to the 144A Global Securities, the
Trustee, as custodian for DTC, shall request that DTC provide a list of DTC
participants holding beneficial interests in the 144A Global Securities. If DTC
provides such list, the Trustee, as custodian for DTC, shall solicit wire
transfer instructions from such participants for use in connection with such
payments of principal of, premium, if any, and interest on, 144A Global
Securities. Pending disbursement by the Trustee, as custodian for DTC, funds
held by the Trustee shall not accrue interest for the benefit of participants
holding beneficial interests in the 144A Global Securities.
(i) So long as the Securities are held in the form of Global Securities,
deposits of principal of, premium, if any, and interest on the Securities with
the Trustee, as custodian for DTC, or the Common Depositary shall be deemed to
be payment by the Company of such principal, premium, if any, and interest for
all purposes under this Indenture.
SECTION 313. Special Transfer Provisions.
----------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
--------------------------------------------------------
provisions shall apply with respect to the registration of any proposed transfer
of a Security to any Institutional Accredited Investor which is not a QIB
(excluding transfers to non-U.S. persons):
(1) The Security Registrar shall register the transfer of any Security
if (x) the requested transfer is not prior to that date which is two years
(or such shorter period as may be prescribed by Rule 144(k) under the
Securities Act or any successor provision thereunder) after the later of
the original issue date of such Security (or of any Predecessor Security)
or three months after the last day on which the Company or any Affiliate of
the Company was the owner of such Security or any Predecessor Security or
(y) such transfer is being made by a proposed transferor who has checked
the box provided for on the form of Security stating, or who has otherwise
advised the Company and the Security Registrar in writing, that the
transfer has been made to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
the proposed transferee has delivered to the Security Registrar a
certificate
<PAGE>
63
containing certain representations and agreements (the form of which
certificate can be obtained from the Trustee or the Company), provided that
no Initial Foreign Purchaser or any foreign purchaser who has purchased
Securities from an Initial Foreign Purchaser or from any person other than
a QIB or an Institutional Accredited Investor pursuant to paragraph (b)
below shall be permitted to transfer any Securities so purchased by it to
an Institutional Accredited Investor pursuant to this paragraph (a) prior
to the date that is 40 days following the Issue Date.
(2) Subject to paragraph (1) above, if (i) the proposed transferee is
an Agent Member, and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an interest in the
Institutional Accredited Investor Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the
Depository's, the Common Depositary's (or Euroclear's and Clearstream's, as
the case may be) and the Security Registrar's procedures, the Security
Registrar shall reflect on the Security Register the date and an increase
in the principal amount of the Institutional Accredited Investor Global
Security in an amount equal to the principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred, and (ii) the proposed transferor is an Agent
Member holding a beneficial interest in a Rule 144A Global Security or a
Regulation S Global Security, upon receipt by the Security Registrar of
instructions given in accordance with the Depository's, the Common
Depositary's (or Euroclear's and Clearstream's, as the case may be) and the
Security Registrar's procedures, the Security Registrar shall reflect on
its books and records the date of such transfer and (A) a decrease in the
principal amount of such Rule 144A Global Security or Regulation S Global
Security, as the case may be, in an amount equal to the principal amount
of the beneficial interest in a Global Security to be transferred, and (B)
an increase in the principal amount of an Institutional Accredited
Investor Global Security in an amount equal to the principal amount to be
transferred.
<PAGE>
64
(b) Transfers to Non-U.S. Persons. The following provisions shall
------------------------------
apply with respect to the registration of any proposed transfer of a Security to
any non-U.S. person:
(1) The Security Registrar shall register the transfer of any
Security if (x) the requested transfer is not prior to that date which
is two years (or such shorter period as may be prescribed by Rule
144(k) under the Securities Act or any successor provision thereunder)
after the later of the original issue date of such Security (or of any
Predecessor Security) or three months after the last day on which the
Company or any Affiliate of the Company was the owner of such Security
or any Predecessor Security or (y) such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or who has otherwise advised the Company and the
Security Registrar in writing, that the transfer has been made outside
the U.S. in an offshore transaction within the meaning of Regulation S
in compliance with the exemption from registration under the Securities
Act provided by Rule 904 under the Securities Act, provided that, if
--------
such transfer is being effected by an Initial Foreign Purchaser or any
foreign purchaser who has purchased Securities from an Initial Foreign
Purchaser or from any person other than a QIB or an Institutional
Accredited Investor pursuant to this paragraph (b) prior to the date
that is 40 days following the Issue Date, the transferee shall have
certified to the Company and the Trustee that such transferee is a non-
U.S. person (within the meaning of Regulation S) and that such
transferee is acquiring the Securities in an offshore transaction
(within the meaning of Regulation S).
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the Securities to be transferred
consist of Physical Securities which after transfer are to be evidenced
by an interest in the Regulation S Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the
Depository's, the Common Depositary's (or Euroclear's and
Clearstream's, as the case may be) and the Security Registrar's
procedures, the Security Registrar shall reflect on the Security
<PAGE>
65
Register the date and an increase in the principal amount of the
Regulation S Global Security in an amount equal to the principal amount
of the Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred, and (ii) the proposed
transferor is an Agent Member holding a beneficial interest in a Rule
144A Global Security or an Institutional Accredited Investor Global
Security, upon receipt by the Security Registrar of instructions given
in accordance with the Depository's, the Common Depositary's (or
Euroclear's and Clearstream's, as the case may be) and the Security
Registrar's procedures, the Security Registrar shall reflect on its
books and records the date of such transfer and (A) a decrease in the
principal amount of such Rule 144A Global Security or Institutional
Accredited Investor Global Security, as the case may be, in an amount
equal to the principal amount to be transferred and (B) an increase in
the principal amount of a Regulation S Global Security in an amount
equal to the principal amount to be transferred.
(c) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Security to any QIB
(excluding transfers to non-U.S. persons):
<PAGE>
66
(1) The Security Registrar shall register the transfer of any
Security if (x) the requested transfer is not prior to that date which
is two years (or such shorter period as may be prescribed by Rule
144(k) under the Securities Act or any successor provision thereunder)
after the later of the original issue date of such Security (or of any
Predecessor Security) or three months after the last day on which the
Company or any Affiliate of the Company was the owner of such Security
or any Predecessor Security or (y) such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or who has otherwise advised the Company and the
Security Registrar in writing, that the transfer has been made in
compliance with the exemption from registration under the Securities
Act provided under Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Security Registrar in writing,
that such transferee represents and warrants that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that each of it and any such
account is a QIB within the meaning of Rule 144A and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
the foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the Securities to be transferred
consist of Physical Securities which after transfer are to be evidenced
by an interest in the Rule 144A Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the
Depository's and the Security Registrar's procedures, the Security
Registrar shall reflect on the Security Register the date and an
increase in the principal amount of the Rule 144A Global Security in an
amount equal to the principal
<PAGE>
67
amount of the Physical Securities to be transferred, and the Trustee
shall cancel the Physical Securities so transferred, and (ii) the
proposed transferor is an Agent Member holding a beneficial interest in
an Institutional Accredited Investor Global Security or a Regulation S
Global Security, upon receipt by the Security Registrar of instructions
given in accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall reflect on its books and
records the date of such transfer and (A) a decrease in the principal
amount of such Institutional Accredited Investor Global Security or
Regulation S Global Security, as the case may be, in an amount equal to
the principal amount to be transferred and (B) an increase in the
principal amount of a Rule 144A Global Security in an amount equal to
the principal amount to be transferred.
(d) Private Placement Legend. (1) Upon the registration of transfer,
------------------------
exchange or replacement of Securities, the Security Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the transfer or
exchange of Initial Securities contemplated by paragraph (d)(2) or (d)(3) below
has occurred or (ii) (x) the circumstances contemplated by clause (a)(1)(x),
(b)(1)(x) or (c)(1)(x) of this Section 313 exist and (y) there is delivered to
the Security Registrar and the Trustee an Opinion of Counsel reasonably satisfac
tory to the Company and the Trustee to the effect that neither such legend nor
the related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act.
(2) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring that any such Initial Security be issued in global form will
cease to apply, and an Initial Security in certificated or global form
without legends will be available to the transferee of the Holder of
such Initial Securities upon exchange of such transferring Holder's
certificated Initial Security. Upon the occurrence of any of the
circumstances
<PAGE>
68
described in this paragraph, the Company will deliver an Officers'
Certificate to the Trustee instructing the Trustee to issue Securities
without legends.
(3) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of
such Initial Securities are offered Exchange Securities (other than
Private Exchange Securities) in exchange for their Initial Securities,
all requirements pertaining to such Initial Securities that Initial
Securities be issued in global form will cease to apply, and
certificated Initial Securities with the Private Placement Legend will
be available to Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer. Upon the occurrence of
any of the circumstances described in this paragraph, the Company will
deliver an Officers' Certificate to the Trustee instructing the Trustee
to issue Securities without legends.
(4) Upon the consummation of a Private Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Private Exchange Securities in exchange
for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will continue to apply, and Private Exchange
Securities in global form will be available to Holders that exchange
such Initial Securities in such Private Exchange Offer.
(e) Other Transfers. If a Holder proposes to transfer a Security
---------------
pursuant to any exemption from the registration requirements of the Securities
Act other than as provided for by Sections 313(a), 313(b) and 313(c) and other
than pursuant to Section 313(d)(4), the Security Registrar shall only register
such transfer or exchange if such transferor delivers to the Security Registrar
and the Trustee an Opinion of Counsel satisfactory to the Company and the
Security Registrar that such transfer is in compliance with the Securities Act
and the terms of this Indenture.
<PAGE>
69
(f) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 312 or this Section
313 for a period of two years, during which time such letters, notices and other
written communications shall at the written request of the Company be delivered
to the Company. After retaining any such copies of letters, notices and other
written communications for a period of at least two years, all such copies may
be destroyed by the Trustee. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable prior written notice to the
Security Registrar.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
----------------------------------------
This Indenture shall cease to be of further effect (subject to Section
1206 and except as to surviving rights of registration of transfer, transfer,
exchange and replacement of Securities expressly provided for herein or pursuant
hereto) and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(1) either
(a) all Outstanding Securities have been
delivered to the Trustee for cancellation; or
(b) all such Securities not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
<PAGE>
70
(ii) will become due and payable within
one year,
and the Company, in the case of (i) or (ii) above, has
irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the
entire indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of
(and premium, if any, on), and interest on, the Securities to
Maturity;
(2) the Company has paid or caused to be paid all
other sums payable by the Company hereunder; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations under Sections 607 and 609 and, if money shall have been deposited
with the Trustee pursuant to clause (1)(b) of this Section 401, the obligations
of the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.
SECTION 402. Application of Trust Money.
---------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
<PAGE>
71
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
------------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) failure to pay principal of (or premium, if any, on) any
Security when due; or
(2) failure to pay any interest on any Security when due,
continued for 30 days; or
(3) default in the payment of principal of (and premium, if
any) and interest on Securities required to be purchased pursuant to an
Offer to Purchase pursuant to Section 1009 when due and payable; or
(4) failure to perform or comply with the provisions of
Section 801, 803 or 1016; or
(5) failure to perform any covenant or agreement of the
Company or any Guarantor in this Indenture or in any Security (other
than a covenant a default in whose performance is elsewhere in this
Section specifically dealt with) continued for 60 days after written
notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of the Outstanding Securities, which notice
shall specify the default and state that such notice is a "Notice of
Default" hereunder; or
(6) default under the terms of any instrument evidencing or
securing Debt of the Company or any Restricted Subsidiary having an
outstanding principal amount of not less than $25,000,000 or its
foreign currency equivalent at the time which default results in the
acceleration of the payment of such indebtedness or constitutes the
failure to pay such indebtedness
<PAGE>
72
when due (after expiration of any applicable grace period); or
(7) the rendering of a judgment or judgments against the
Company or any Restricted Subsidiary in an aggregate amount in excess
of $25,000,000 or its foreign currency equivalent at the time and shall
not be waived, satisfied or discharged for any period of 45 consecutive
days during which a stay of enforcement shall not be in effect; or
(8) any Restricted Subsidiary Guarantee ceases to be in full
force and effect (other than in accordance with the terms of such
Restricted Subsidiary Guarantee) or any Guarantor denies or disaffirms
its obligations under its Restricted Subsidiary Guarantee; or
(9) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company or any Significant
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Significant Subsidiary under the
Federal Bankruptcy Code or any other applicable federal, state or
foreign law, or appointing a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Company or
any Significant Subsidiary or of any substantial part of its Property,
or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(10) the institution by the Company or any Significant
Subsidiary of proceedings to be adjudicated a bankrupt or insolvent, or
the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under the Federal Bankruptcy
Code or any other applicable federal, state or foreign law, or the
consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, custodian or sequestrator
(or other similar official) of the Company or any Significant
Subsidiary or of any
<PAGE>
73
substantial part of its Property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 501(9) or 501(10) with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities may declare the principal amount
of all the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal amount shall become immediately due and payable. If
an Event of Default specified in Section 501(9) or 501(10) occurs with respect
to the Company, the principal amount of all the Securities shall ipso facto
---- -----
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article Five, the Holders of a
majority in aggregate principal amount of the Outstanding Securities, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Outstanding
Securities,
(B) all unpaid principal of (and premium, if any, on)
any Outstanding Securities which has become due otherwise than
by such declaration of acceleration, and interest on such
unpaid principal at the rate borne by the Securities,
<PAGE>
74
(C) to the extent that payment of such interest is
lawful, interest on overdue interest at the rate borne by the
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
amounts of principal of (or premium, if any, on) Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if
(a) default is made in the payment of any interest
on any Security when due, continued for 30 days, or
(b) default is made in the payment of the
principal of (or premium, if any, on) any Security when
due,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Securities the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the
<PAGE>
75
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company or any
other obligor upon the Securities and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company or
any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
---------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the Property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel)
and of the Holders allowed in such judicial proceeding, and
<PAGE>
76
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and
to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator or sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
<PAGE>
77
SECTION 506. Application of Money Collected.
-------------------------------
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or
Persons entitled thereto.
SECTION 507. Limitation on Suits.
--------------------
No Holder of any Securities shall have any right to institute any
proceeding with respect to this Indenture or for any other remedy hereunder,
unless
(1) such Holder shall have previously given to the
Trustee written notice of a continuing Event of
Default;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request
and offered reasonable indemnity to the Trustee to institute such
proceeding as trustee; and
(3) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Securities a
direction inconsistent
<PAGE>
78
with such request and shall have failed to institute such proceeding
within 60 days;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, including
Section 507, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment as provided herein (including, if
applicable, Article Twelve) and in such Security of the principal of (and
premium, if any) and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
-----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
<PAGE>
79
SECTION 510. Rights and Remedies Cumulative.
-------------------------------
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
-------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that
--------
(1) such direction shall not be in conflict with
any rule of law or with this Indenture,
(2) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with
such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unjustly prejudicial to the Holders not
consenting.
<PAGE>
80
SECTION 513. Waiver of Past Defaults.
------------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all the Securities,
waive any past Default hereunder and its consequences, except a Default
(1) in the payment of the principal of (or
premium, if any) or interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite majority have consented to such waiver and attaching
such consents upon which, subject to Section 104, the Trustee may conclusively
rely. Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
---------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which 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 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 had been enacted.
<PAGE>
81
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
------------------------------------
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but, in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section 601;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible
<PAGE>
82
Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or indemnity reasonably satisfactory
to it against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.
SECTION 602. Notice of Default.
------------------
If a Default occurs and is continuing, the Trustee shall transmit, in
the manner and to the extent provided in TIA Section 313(c), notice of such
Default within 60 days after it is known to any Responsible Officer of the
Trustee or written notice of it is received by the Trustee; provided, however,
-------- -------
that, except in the case of a Default in the payment of the principal of (or
premium, if any) or interest on any Security, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, a trust committee of directors or Responsible Officers of the Trustee
in good faith determines that the withholding of such notice is in the interest
of the Holders.
<PAGE>
83
The Trustee is not required to take notice or deemed to have
notice of any Event of Default with respect to the Securities, except an Event
of Default under Section 501(1), (2), (3) or (4) hereof (provided that in the
case of Section 501(4), such Event of Default constitutes a failure to purchase
Securities pursuant to an Offer to Purchase pursuant to Section 1016), unless
the Trustee shall have received written notice at its Corporate Trust Office
(which notice shall reference the Securities, the Company and the Indenture) of
such Event of Default from the Company or any Holder or unless a Responsible
Officer of the Trustee shall otherwise have knowledge thereof.
SECTION 603. Certain Rights of Trustee.
--------------------------
Subject to Section 601 and to the provisions of TIA Sections 315(a)
through 315(d):
(1) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, receive and rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
<PAGE>
84
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee may act through counsel, agents, custodians
and nominees and shall not be responsible for the misconduct or negligence
of any such person appointed and supervised with due care and in good
faith;
(6) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
<PAGE>
85
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
- -----------
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 605. May Hold Securities.
--------------------
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust.
--------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
-------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
as shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all
<PAGE>
86
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to the Trustee's negligence, willful misconduct or bad faith;
and
(3) to indemnify the Trustee and its directors, officers,
employees and agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence, willful misconduct or bad
faith on the part of any of them, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself or themselves against any claim or liability
in connection with the exercise or performance of any of its or their
powers or duties hereunder.
The obligations of the Company under this Section 607 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any,
on) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(9) or (10), the expenses (including
the reasonable charges and expenses of its counsel) of and the compensation for
such services are intended to constitute expenses of administration under any
applicable federal, state or foreign bankruptcy, insolvency or other
similar law.
The provisions of this Section 607 shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee.
<PAGE>
87
SECTION 608. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests.
- ----------
(a) There shall be at all times a Trustee hereunder which shall be
subject to and comply with the provisions of Section 310(a)(1) of the Trust
Indenture Act and shall have a combined capital and surplus of at least
$50,000,000. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then, for the purposes
of this Section 608, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time a Responsible Officer of the
Trustee shall have actual knowledge that the Trustee ceases to be eligible in
accordance with the provisions of this Section 608, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article Six.
(b) The Trustee shall be subject to and comply with Section 310(b) of
the Trust Indenture Act.
SECTION 609. Resignation and Removal; Appointment of Successor.
--------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 610 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
<PAGE>
88
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section
608(a) and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If
the Company does not promptly appoint a successor Trustee after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority in
aggregate principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee. In either case, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted
<PAGE>
89
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 106. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust Office.
(g) The retiring Trustee shall not be liable for any of the acts or
omissions of any successor Trustee appointed hereunder.
SECTION 610. Acceptance of Appointment by Successor.
---------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article Six.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
------------------------------------------------------------
<PAGE>
90
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided that such
--------
Person shall be otherwise qualified and eligible under this Article Six, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion, consolidation or transfer of assets to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee.
In all such cases such certificates shall have the full force and effect which
this Indenture provides that the certificate of authentication of the Trustee
shall have; provided, however, that the right to adopt the certificate of
-------- -------
authentication of any predecessor Trustee or to authenticate Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion, consolidation or transfer of assets.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
---------------------------------------------
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
-------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
A copy of each such report at the time of its mailing to Holders shall
be filed with the Commission and the principal national securities exchange (if
any) on which the Securities are listed.
The Company shall notify a Responsible Officer of the Trustee if the
Securities become listed on any national securities exchange or of any delisting
thereof.
SECTION 703. Reports by Company.
-------------------
The Company shall file with the Trustee and deliver to the Holders of
Securities the reports and other information required to be provided by it
pursuant to Section 1007.
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92
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
-----------------------------------------------------
The Company shall not, in a single transaction or a series of related
transactions, (i) consolidate with or merge into any other Person or Persons or
permit any other Person to consolidate with or merge into the Company or (ii)
directly or indirectly, transfer, sell, lease, convey or otherwise dispose of
all or substantially all its assets to any other Person or Persons, unless:
(1) in a transaction in which the Company is not the surviving
Person or in which the Company transfers, sells, leases, conveys or
otherwise disposes of all or substantially all of its assets to any other
Person, the resulting, surviving or transferee Person (the "successor
entity") is organized under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's obligations under this
Indenture;
(2) immediately before and after giving effect to such transaction
and treating any Debt which becomes an obligation of the Company (or the
successor entity) or a Restricted Subsidiary as a result of such
transaction as having been Incurred by the Company or such Restricted
Subsidiary at the time of the transaction, no Default or Event of Default
shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or the successor entity) is equal to
or greater than that of the Company immediately prior to the transaction;
(4) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company (or the
successor entity) or
<PAGE>
93
a Restricted Subsidiary as a result of such transaction as having been
Incurred by the Company or such Restricted Subsidiary at the time of the
transaction, the Company (or the successor entity) could Incur at least
$1.00 of additional Debt pursuant to the provisions of paragraph (a) of
Section 1010;
(5) if, as a result of any such transaction, Property of the
Company (or the successor entity) or any Restricted Subsidiary would
become subject to a Lien prohibited by the provisions of Section 1014,
the Company (or the successor entity) shall have secured the Securities
as required by said covenant;
(6) in the case of a transfer, sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company,
such assets shall have been transferred as an entirety or virtually as an
entirety to one Person and such Person shall have complied with all the
provisions of this paragraph; and
(7) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, stating that such consolidation,
merger, transfer, sale, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with, and, with respect to such Officers' Certificate,
setting forth the manner of determination of the Consolidated Net Worth, in
accordance with clause (3) of this Section 801, of the Company or, if
applicable, of the successor entity as required pursuant to the foregoing.
SECTION 802. Successor Company Substituted.
------------------------------
<PAGE>
94
Upon any consolidation of the Company with or merger of the Company
with or into any other Person or any transfer, sale, lease, conveyance or other
disposition of all or substantially all the assets of the Company to any Person
or Persons in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such transfer,
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and the predecessor Company (which term shall for this
purpose mean the Person named as the "Company" in the first paragraph of this
Indenture or any successor Person which shall have become such in the manner
described in Section 801), except in the case of a lease, shall be released from
all its obligations and covenants under this Indenture and the Securities and
may be dissolved and liquidated.
SECTION 803. Guarantor May Consolidate, etc., Only on Certain Terms.
-------------------------------------------------------
The Company shall not permit any Guarantor to, in a single transaction
or a series of related transactions, (i) consolidate with or merge into any
other Person or Persons (other than the Company or another Guarantor) or permit
any other Person (other than the Company or another Guarantor) to consolidate
with or merge into such Guarantor or (ii) directly or indirectly, transfer,
sell, lease, convey or otherwise dispose of all or substantially all its assets
to any other Person or Persons (other than the Company or another Guarantor),
unless:
(1) in a transaction in which such Guarantor is not the
surviving Person or in which such Guarantor transfers, sells, leases,
conveys or otherwise disposes of all or substantially all of its assets to
any other Person, the resulting, surviving or transferee Person (the
"successor guarantor") is organized under the laws of the United States of
America or any State thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture executed and delivered to the
Trustee in form satisfactory to the Trustee, all of such Guarantor's
obligations under this Indenture;
<PAGE>
95
(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes an obligation of the
Company or a Restricted Subsidiary (including the successor guarantor) as a
result of such transaction as having been Incurred by the Company or such
Restricted Subsidiary at the time of the transaction, no Default or Event
of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company is equal to or greater than that of
the Company immediately prior to the transaction;
(4) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a
Restricted Subsidiary (including the successor guarantor) as a result of
such transaction as having been Incurred by the Company or such Restricted
Subsidiary at the time of the transaction, the Company could Incur at least
$1.00 of additional Debt pursuant to the provisions of paragraph (a) of
Section 1010;
(5) if, as a result of any such transaction, Property of the
Company or any Restricted Subsidiary (including the successor guarantor)
would become subject to a Lien prohibited by the provisions of Section
1014, the Company shall have secured the Securities as required by said
covenant;
(6) in the case of a transfer, sale, lease, conveyance or
other disposition of all or substantially all of the assets of such
Guarantor, such assets shall have been transferred as an entirety or
virtually as an entirety to one Person and such Person shall have complied
with all the provisions of this paragraph; and
(7) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, stating that such consolidation,
merger, transfer, sale, lease, conveyance or other disposition and, if a
supplemental indenture is required in
<PAGE>
96
connection with such transaction, such supplemental indenture, complies
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with, and, with respect to
such Officers' Certificate, setting forth the manner of determination of
the Consolidated Net Worth, in accordance with clause (3) of this Section
803, of such Guarantor or, if applicable, of the successor guarantor as
required pursuant to the foregoing.
SECTION 804. Successor Guarantor Substituted.
--------------------------------
Upon any consolidation of a Guarantor with or merger of a Guarantor
with or into any other Person or any transfer, sale, lease, conveyance or other
disposition of all or substantially all the assets of a Guarantor to any Person
or Persons in accordance with Section 803, the successor Person formed by such
consolidation or into which such Guarantor is merged or to which such transfer,
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, such Guarantor under
this Indenture with the same effect as if such successor Person had been named
as a Guarantor herein, and the predecessor Guarantor (which term shall for this
purpose mean the Person named as the "New Guarantor" in the first paragraph of
the applicable supplemental indenture or any successor Person which shall have
become such in the manner described in Section 803), except in the case of a
lease, shall be released from all its obligations and covenants under its
Restricted Subsidiary Guarantee and the Securities and may be dissolved and
liquidated.
<PAGE>
97
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
---------------------------------------------------
The Company and the Trustee may, at any time and from time to time,
without notice to or consent of any Holders of Securities, enter into one or
more indentures supplemental hereto:
(1) to evidence the succession of another Person to the
Company or a Guarantor and the assumption by such successor of the
covenants of the Company or such Guarantor herein and in the
Securities; or
(2) to add to the covenants of the Company, for
the benefit of the Holders, or to surrender any right
or power conferred upon the Company hereby; or
(3) to add any additional Events of Default; or
(4) to provide for uncertificated Securities in
addition to or in place of certificated Securities; or
(5) to evidence and provide for the acceptance of
appointment hereunder of a successor Trustee pursuant
to the requirements of Section 610; or
(6) to secure the Securities; or
(7) to comply with the Trust Indenture Act or the
Securities Act (including Regulation S promulgated
thereunder); or
(8) to add additional Guarantees with respect to the
Securities or to release Guarantors from Restricted Subsidiary
Guarantees as provided by the terms of this Indenture; or
(9) to cure any ambiguity herein, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to add any other provision with respect to matters or
questions arising under this Indenture; provided such
--------
<PAGE>
98
actions shall not adversely affect the interests of the Holders in any
material respect; or
(10) to make any change to Section 312 of this Indenture or
the Securities relating to book-entry procedures for Global Securities
to facilitate trading or transferring the Securities in book-entry
form.
SECTION 902. Supplemental Indentures With Consent of Holders.
------------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of such Holders delivered
to the Company and the Trustee, the Company and the Trustee may enter into one
or more indentures supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or waiving or otherwise modifying in any manner the rights of the
Holders, provided that no such supplemental indenture shall, without the consent
--------
of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the interest thereon that would be due and payable
upon the Stated Maturity thereof, or change the place of payment where,
or the coin or currency in which, any Security or any premium or
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof; or
(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is necessary for
any such supplemental indenture or required for any waiver of
compliance with certain provisions of this Indenture or certain
Defaults hereunder; or
(3) subordinate in right of payment, or otherwise
subordinate, the Securities to any other Debt; or
<PAGE>
99
(4) except as otherwise provided herein, release any security
interest that may have been granted in favor of the Holders of the
Securities; or
(5) reduce the premium payable upon a Change of Control
Triggering Event or, at any time after a Change of Control Triggering
Event has occurred, change the time at which the Offer to Purchase
relating thereto must be made or at which the Securities must be
repurchased pursuant to such Offer to Purchase; or
(6) at any time after the Company is obligated to make an
Offer to Purchase with the Net Available Proceeds from Asset
Dispositions, change the time at which such Offer to Purchase must be
made or at which the Securities must be repurchased pursuant thereto;
or
(7) make any change in any Restricted Subsidiary
Guarantee that would adversely affect the Holders of
the Securities; or
(8) modify any provision of this Section 902 (except to
increase any percentage set forth herein).
It shall not be necessary for any Act of Holders under this Section 902
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
-------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate stating that all
conditions precedent to the execution of such supplemental indenture have been
fulfilled. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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100
SECTION 904. Effect of Supplemental Indentures.
----------------------------------
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
------------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform as a matter of contract or law to the requirements of the Trust
Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
---------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may bear a notation in form
approved by the Trustee and the Company as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
SECTION 907. Notice of Supplemental Indentures.
----------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Article Nine, the Company shall give
notice thereof to the Holders of each Outstanding Security affected, in the
manner provided for in Section 106, setting forth in general terms the substance
of such supplemental indenture.
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101
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
----------------------------------------------------
The Company covenants and agrees for the benefit of the Holders that it
shall duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
--------------------------------
The Company shall maintain in The City of New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Corporate Trust Office of the Trustee shall be such
office or agency of the Company, unless the Company shall designate and maintain
some other office or agency for one or more of such purposes. The Company shall
give prompt written notice to the Trustee of any change in the location of any
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; 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 City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of
<PAGE>
102
any such designation or rescission and any change in the location of any such
other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
------------------------------------------------
If the Company shall at any time act as its own Paying Agent, it shall,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest;
<PAGE>
103
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(4) indemnify the Trustee and its officers, directors,
employees and agents against any loss, cost or liability caused by, or
incurred as a result of, such Paying Agent's acts or omissions.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured 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, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
<PAGE>
104
SECTION 1004. Corporate Existence.
--------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary of the Company; provided, however, that the Company shall not be
-------- -------
required to preserve, with respect to the Company, any such right or franchise
or, with respect to any such Subsidiary (subject to all the other covenants in
this Indenture), any such corporate existence, right or franchise, if the Board
of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries as
a whole and that the loss thereof is not disadvantageous in any material respect
to the Holders.
SECTION 1005. Maintenance of Properties.
--------------------------
The Company shall cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
-------- -------
nothing in this Section 1005 shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
<PAGE>
105
SECTION 1006. Insurance.
----------
The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by companies similarly
situated and owning like properties.
SECTION 1007. Reports.
--------
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file them. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents (without exhibits) which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act or any successor provisions thereto if the Company were subject
thereto and (b) if filing such documents by the Company with the Commission is
not permitted under the Exchange Act, promptly upon written request, supply
copies of such documents (without exhibits) to any prospective Holder.
SECTION 1008. Statement by Officers as to Default.
------------------------------------
<PAGE>
106
(a) The Company shall deliver to the Trustee, on the date of delivery
of each annual report to be delivered pursuant to Section 1007, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance during the period covered by such report with all conditions and
covenants under this Indenture. If the signer has knowledge of any noncompliance
that occurred during such period, the certificate shall describe its status and
what action the Company has taken or is taking or proposes to take with respect
thereto. For purposes of this Section 1008(a), such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of Debt of
the Company or any Restricted Subsidiary gives any notice or takes any other
action with respect to a claimed default (other than with respect to Debt in the
principal amount of less than $25,000,000 or its foreign currency equivalent at
the time), the Company shall, within 30 days of such occurrence, notice or other
action, deliver to the Trustee by registered or certified mail or by telegram,
telex or facsimile transmission an Officers' Certificate specifying such event,
notice or other action, its status and what action the Company is taking or
purposes to take with respect thereto.
SECTION 1009. Change of Control Triggering Event.
-----------------------------------
(a) Upon the occurrence of a Change of Control Triggering Event, each
Holder shall have the right to require that the Company repurchase such Holder's
Securities in whole or in part in integral multiples of (EURO) 1,000, in
accordance with the procedures set forth in this Section 1009 and this
Indenture.
(b) Within 30 days of the occurrence of both a Change of Control and a
Rating Decline with respect to the Securities (a "Change of Control Triggering
Event"), the Company will be required to make an Offer to Purchase all
Outstanding Securities at a price in cash equal to 101% of the principal amount
of the Securities on the purchase date, plus accrued and unpaid interest (if
any) to such purchase
<PAGE>
107
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
(c) The Company and the Trustee shall perform their respective
obligations for the Offer to Purchase as specified in the Offer. Prior to the
Purchase Date, the Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Offer, (ii) irrevocably deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted (provided that such deposit
may be made no later than 10:00 A.M. New York City time on the Purchase Date if
the Company elects) and (iii) deliver or cause to be delivered to the Trustee
all Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Purchase Price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security or Securities
equal in principal amount to any unpurchased portion of the Security surrendered
as requested by the Holder. Any Security not accepted for payment shall be
promptly mailed or delivered by the Company to the Holder thereof. In the event
that the aggregate Purchase Price is less than the amount delivered by the
Company to the Trustee or the Paying Agent, the Trustee or the Paying Agent, as
the case may be, shall deliver the excess to the Company immediately after the
Purchase Date.
(d) A "Change of Control" means the occurrence of any of the following
events:
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108
(i) if any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor
provisions to either of the foregoing), including any group acting for
the purpose of acquiring, holding, voting or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act, other
than any one or more of the Permitted Holders, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act, except that a
person will be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the total voting power of the Voting
Stock of the Company; provided, however, that the Permitted Holders are
-------- -------
the "beneficial owners" (as defined in Rule 13d-3 under the Exchange
Act, except that a person will be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of
time), directly or indirectly, in the aggregate of a lesser percentage
of the total voting power of the Voting Stock of the Company than such
other person or group (for purposes of this clause (i), such person or
group shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as such person or group beneficially
owns, directly or indirectly, in the aggregate a majority of the total
voting power of the Voting Stock of such parent corporation); or
(ii) the sale, transfer, assignment, lease, conveyance or
other disposition, directly or indirectly, of all or substantially all
the assets of the Company and the Restricted Subsidiaries, considered
as a whole (other than a disposition of such assets as an entirety or
virtually as an entirety to a Wholly Owned Restricted Subsidiary or one
or more Permitted Holders) shall have occurred; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any
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109
new directors whose election or appointment by such board or whose
nomination for election by the shareholders of the Company was approved
by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in
office; or
(iv) the shareholders of the Company shall have approved any
plan of liquidation or dissolution of the Company.
(e) The Company shall not be required to make an Offer to Purchase upon
a Change of Control Triggering Event if a third party makes the Offer to
Purchase in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to an Offer to Purchase made
by the Company and purchases all Securities validly tendered and not withdrawn
under such Offer to Purchase.
(f) In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this
Section by virtue thereof.
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110
SECTION 1010. Limitation on Consolidated Debt.
--------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Debt, unless, after giving pro
forma effect to such Incurrence and the receipt and application of the net
proceeds thereof, no Default or Event of Default would occur as a consequence of
such Incurrence or be continuing following such Incurrence and either (i) the
ratio of (A) the aggregate consolidated principal amount (or, in the case of
Debt issued at a discount, the then-Accreted Value) of Debt of the Company and
its Restricted Subsidiaries outstanding as of the most recent available
quarterly or annual balance sheet, after giving pro forma effect to the
Incurrence of such Debt and any other Debt Incurred or repaid since such balance
sheet date and the receipt and application of the net proceeds thereof, to (B)
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters next preceding the Incurrence of such Debt for which consolidated
financial statements are available, would be less than 5.0 to 1.0, or (ii) the
Company's Consolidated Capital Ratio as of the most recent available quarterly
or annual balance sheet, after giving pro forma effect to (x) the Incurrence of
such Debt and any other Debt Incurred or repaid since such balance sheet date,
(y) the issuance of any Capital Stock (other than Disqualified Stock) of the
Company since such balance sheet date, including the issuance of any Capital
Stock to be issued concurrently with the Incurrence of such Debt, and (z) the
receipt and application of the net proceeds of such Debt or Capital Stock, as
the case may be, is less than 2.25 to 1.0.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may Incur any and all of the following (each of which
shall be given independent effect):
(i) Debt under the Securities, this Indenture or
any Restricted Subsidiary Guarantee;
(ii) Debt under Credit Facilities in an aggregate principal
amount outstanding or available (together with all refinancing Debt
outstanding or available pursuant to clause (viii) below in respect of
Debt previously Incurred pursuant to this clause (ii)) at
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111
any one time not to exceed the greater of (x) $750,000,000, which
amount shall be permanently reduced by the amount of Net Available
Proceeds used to repay Debt under the Credit Facilities, and not
reinvested in Telecommunications/IS Assets or used to purchase
Securities or repay other Debt, pursuant to and as permitted by Section
1016, and (y) 85% of the Eligible Receivables;
(iii) Purchase Money Debt, provided that the amount of such
--------
Purchase Money Debt does not exceed 100% of the cost of the
construction, installation, acquisition, lease, development or
improvement of the applicable Telecommunications/IS Assets;
(iv) Subordinated Debt of the Company; provided, however, that
-------- -------
the aggregate principal amount (or, in the case of Debt issued at a
discount, the Accreted Value) of such Debt, together with any other
outstanding Debt Incurred pursuant to this clause (iv), shall not
exceed $500,000,000 at any one time (which amount shall be permanently
reduced by the amount of Net Available Proceeds used to repay
Subordinated Debt of the Company, and not reinvested in
Telecommunications/IS Assets or used to purchase Securities or repay
other Debt, pursuant to and as permitted by Section 1016), except to
the extent such Debt in excess of $500,000,000 (A) is subordinated to
all other Debt of the Company other than Debt Incurred pursuant to this
clause (iv) in excess of such $500,000,000 limitation, (B) does not
provide for the payment of cash interest on such Debt prior to the
Stated Maturity of the Securities and (C) (1) does not provide for
payments of principal of such Debt at stated maturity or by way of a
sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by the Company (including
any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by
virtue of the acceleration of any payment with respect to such Debt
upon any event of default thereunder), in each case on or prior to the
Stated Maturity of the Securities, and (2) does not permit redemption
or other retirement (including pursuant to an offer to purchase
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112
made by the Company but excluding through conversion into Capital Stock
of the Company, other than Disqualified Stock, without any payment by
the Company or its Restricted Subsidiaries to the holders thereof other
than in respect of fractional shares) of such Debt at the option of the
holder thereof on or prior to the Stated Maturity of the Securities;
(v) Debt outstanding on the Measurement Date;
(vi) Debt owed by the Company to any Restricted Subsidiary
of the Company or Debt owed by a Restricted Subsidiary of the Company
to the Company or a Restricted Subsidiary of the Company; provided,
--------
however, that (x) upon the transfer, conveyance or other disposition by
-------
such Restricted Subsidiary or the Company of any Debt so permitted to a
Person other than the Company or another Restricted Subsidiary of the
Company or (y) if for any reason such Restricted Subsidiary ceases to
be a Restricted Subsidiary, the provisions of this clause (vi) shall no
longer be applicable to such Debt and such Debt shall be deemed to have
been Incurred by the issuer thereof at the time of such transfer,
conveyance or other disposition or when such Restricted Subsidiary
ceases to be a Restricted Subsidiary;
(vii) Debt Incurred by a Person prior to the time (A) such
Person became a Restricted Subsidiary, (B) such Person merges into or
consolidates with a Restricted Subsidiary or (C) another Restricted
Subsidiary merges into or consolidates with such Person (in a
transaction in which such Person becomes a Restricted Subsidiary),
which Debt was not Incurred in anticipation of such transaction and was
outstanding prior to such transaction;
(viii) Debt Incurred to renew, extend, refinance, defease,
repay, prepay, repurchase, redeem, retire, exchange or refund (each, a
"refinancing") Debt Incurred pursuant to clause (i), (ii), (iii), (v),
(vii) or (xii) of this paragraph (b) or this clause (viii), in an
aggregate principal amount (or if issued at a discount, the
then-Accreted Value) not to exceed the aggregate principal amount (or
if issued at a discount, the then-Accreted Value) of and accrued
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113
interest on the Debt so refinanced plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Debt so refinanced or the amount of any premium reasonably
determined by the Board of Directors as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated
repurchase, plus the expenses of the Company Incurred in connection
with such refinancing; provided, however, that (A) the refinancing Debt
-------- -------
shall not be senior in right of payment to the Debt that is being
refinanced and (B) in the case of any refinancing of Debt Incurred
pursuant to clause (i), (v), (vii) or (xii) or, if such Debt previously
refinanced Debt Incurred pursuant to any such clause, this clause
(viii), the refinancing Debt by its terms, or by the terms of any
agreement or instrument pursuant to which such Debt is issued, (x) does
not provide for payments of principal of such Debt at stated maturity
or by way of a sinking fund applicable thereto or by way of any
mandatory redemption, defeasance, retirement or repurchase thereof by
the Company (including any redemption, retirement or repurchase which
is contingent upon events or circumstances, but excluding any
retirement required by virtue of the acceleration of any payment with
respect to such Debt upon any event of default thereunder), in each
case prior to the time the same are required by the terms of the Debt
being refinanced and (y) does not permit redemption or other retirement
(including pursuant to an offer to purchase made by the Company) of
such Debt at the option of the holder thereof prior to the time the
same are required by the terms of the Debt being refinanced, other
than, in the case of clause (x) or (y), any such payment, redemption or
other retirement at the option of the holder of such Debt (including
pursuant to an offer to purchase made by the Company) which is
conditioned upon a change of control pursuant to provisions
substantially similar to those described under Section 1009;
(ix) Debt (A) in respect of performance, surety or appeal
bonds, Guarantees, letters of credit or reimbursement obligations
Incurred or provided in the ordinary course of business securing the
performance of contractual, franchise, lease, self-insurance or
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114
license obligations and not in connection with the Incurrence of Debt
or (B) in respect of customary agreements providing for
indemnification, adjustment of purchase price after closing, or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any such obligations of the Company or any
of its Restricted Subsidiaries pursuant to such agreements, Incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary of the Company (other than Guarantees of Indebtedness
Incurred by any Person acquiring all or any portion of such business,
assets or Restricted Subsidiary of the Company for the purpose of
financing such acquisition) and in an aggregate principal amount not to
exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition;
(x) Debt consisting of Permitted Interest Rate or
Currency Protection Agreements;
(xi) Debt not otherwise permitted to be Incurred pursuant to
clauses (i) through (x) above or clause (xii) below, which, together
with any other outstanding Debt Incurred pursuant to this clause (xi),
has an aggregate principal amount not in excess of $50,000,000 at any
time outstanding; and
(xii) Issue Date Purchase Money Debt and Debt under the
Existing Notes, the New Convertible Notes, the Dollar Notes, the Euro
Notes and the related indentures and any restricted subsidiary
Guarantees issued in accordance with such related indentures.
(c) Notwithstanding any other provision of this Section 1010, the
maximum amount of Debt that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 1010 shall not be deemed to be exceeded due solely to
the result of fluctuations in the exchange rates of currencies.
(d) For purposes of determining any particular amount of Debt under
this Section 1010, (i) Guarantees, Liens or obligations with respect to letters
of credit supporting Debt otherwise included in the determination of such
<PAGE>
115
particular amount shall not be included and (ii) any Liens granted for the
benefit of the Securities pursuant to the provisions referred to in the first
paragraph of Section 1014 shall not be treated as Debt. For purposes of
determining any particular amount of Debt under this Section 1010, if any such
Debt denominated in a different currency is subject to a currency agreement that
constitutes a Permitted Interest Rate or Currency Protection Agreement with
respect to U.S. dollars covering all principal of, premium, if any, and interest
payable on such Debt, the amount of such Debt expressed in U.S. dollars will be
as provided in such currency agreement. For purposes of determining compliance
with this Section 1010, in the event that an item of Debt meets the criteria of
more than one of the types of Debt described in the above clauses, the Company,
in its sole discretion, shall classify such item of Debt and only be required to
include the amount and type of such Debt in one of such clauses.
SECTION 1011. Limitation on Debt of Restricted Subsidiaries.
----------------------------------------------
The Company shall not permit any Restricted Subsidiary that is not a
Guarantor to Incur any Debt except any and all of the following (each of which
shall be given independent effect):
(i) Restricted Subsidiary Guarantees;
(ii) Debt outstanding on the Measurement Date;
(iii) Debt of Restricted Subsidiaries under Credit Facilities
permitted to be Incurred pursuant to clause (ii) of paragraph (b) of
Section 1010;
(iv) Purchase Money Debt of Restricted Subsidiaries
permitted to be Incurred pursuant to clause (iii) of paragraph (b) of
Section 1010;
(v) Debt owed by a Restricted Subsidiary to the Company or
a Restricted Subsidiary of the Company permitted to be Incurred
pursuant to clause (vi) of paragraph (b) of Section 1010;
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116
(vi) Debt of Restricted Subsidiaries consisting of Permitted
Interest Rate or Currency Protection Agreements permitted to be
Incurred pursuant to clause (x) of paragraph (b) of Section 1010;
(vii) Debt of Restricted Subsidiaries permitted to be
Incurred under clause (vii) of paragraph (b) of Section 1010 or Issue
Date Purchase Money Debt permitted to be Incurred under clause (xii) of
paragraph (b) of Section 1010;
(viii) Debt of Restricted Subsidiaries permitted to
be Incurred under clause (ix) or (xi) of paragraph (b)
of Section 1010; and
(ix) Debt which is Incurred to refinance any Debt of a
Restricted Subsidiary permitted to be Incurred pursuant to clauses (i),
(ii), (iii), (iv) and (vii) of this paragraph or this clause (ix), in
an aggregate principal amount (or if issued at a discount, the then-
Accreted Value) not to exceed the aggregate principal amount (or if
issued at a discount, the then-Accreted Value) of the Debt so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt so
refinanced or the amount of any premium reasonably determined by the
Board of Directors as necessary to accomplish such refinancing by means
of a tender offer or privately negotiated repurchase, plus the amount
of expenses of the Company and the applicable Restricted Subsidiary
Incurred in connection therewith; provided, however, that, in the case
-------- -------
of any refinancing of Debt Incurred pursuant to clause (i), (ii) or
(vii) or, if such Debt previously refinanced Debt Incurred pursuant to
any such clause, this clause (ix), the refinancing Debt by its terms,
or by the terms of any agreement or instrument pursuant to which such
Debt is Incurred, (x) does not provide for payments of principal at the
stated maturity of such Debt or by way of a sinking fund applicable to
such Debt or by way of any mandatory redemption, defeasance, retirement
or repurchase of such Debt by the Company or any Restricted Subsidiary
(including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by
virtue of
<PAGE>
117
acceleration of such Debt upon an event of default thereunder), in each
case prior to the time the same are required by the terms of the Debt
being refinanced and (y) does not permit redemption or other retirement
(including pursuant to an offer to purchase made by the Company or a
Restricted Subsidiary) of such Debt at the option of the holder thereof
prior to the stated maturity of the Debt being refinanced, other than,
in the case of clause (x) or (y), any such payment, redemption or other
retirement (including pursuant to an offer to purchase made by the
Company or a Restricted Subsidiary) which is conditioned upon the
change of control of the Company pursuant to provisions substantially
similar to those contained in Section 1009.
Notwithstanding any other provision of this Section 1011, the maximum
amount of Debt that a Restricted Subsidiary may Incur pursuant to this Section
1011 shall not be deemed to be exceeded due solely as the result of fluctuations
in the exchange rates of currencies.
For purposes of determining any particular amount of Debt under this
Section 1011, Guarantees, Liens or obligations with respect to letters of credit
supporting Debt otherwise included in the determination of such particular
amount shall not be included. For purposes of determining compliance with this
Section 1011, in the event that an item of Debt meets the criteria of more than
one of the types of Debt described in the above clauses, the Company, in its
sole discretion, shall classify such item of Debt and only be required to
include the amount and type of such Debt in one of such clauses.
SECTION 1012. Limitation on Restricted Payments.
----------------------------------
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118
(a) The Company (i) shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders thereof,
excluding any dividends or distributions which are made solely to the Company or
a Restricted Subsidiary (and, if such Restricted Subsidiary is not a Wholly
Owned Subsidiary, to the other stockholders of such Restricted Subsidiary on a
pro rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value than it
would receive on a pro rata basis) or any dividends or distributions payable
solely in shares of Capital Stock of the Company (other than Disqualified Stock)
or in options, warrants or other rights to acquire Capital Stock of the Company
(other than Disqualified Stock); (ii) shall not, and shall not permit any
Restricted Subsidiary to, purchase, redeem, or otherwise retire or acquire for
value (x) any Capital Stock of the Company or any Restricted Subsidiary of the
Company or (y) any options, warrants or rights to purchase or acquire shares of
Capital Stock of the Company or any Restricted Subsidiary or any securities
convertible or exchangeable into shares of Capital Stock of the Company or any
Restricted Subsidiary, except, in any such case, any such purchase, redemption
or retirement or acquisition for value (A) paid to the Company or a Restricted
Subsidiary (or, in the case of any such purchase, redemption or other retirement
or acquisition for value with respect to a Restricted Subsidiary that is not a
Wholly Owned Subsidiary, to the other stockholders of such Restricted Subsidiary
on a pro rata basis or on a basis that results in the receipt by the Company or
a Restricted Subsidiary of payments of greater value than it would receive on a
pro rata basis) or (B) paid solely in shares of Capital Stock (other than
Disqualified Stock) of the Company; (iii) shall not make, or permit any
Restricted Subsidiary to make, any Investment (other than an Investment in the
Company or a Restricted Subsidiary or a Permitted Investment) in any Person,
including the Designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, or the Revocation of any such Designation, according to Section
1019; (iv) shall not, and shall not permit any Restricted Subsidiary to, redeem,
defease, repurchase, retire or otherwise acquire or retire for value, prior to
any scheduled maturity, repayment or sinking fund payment, Debt of the Company
which is subordinate
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119
in right of payment to the Securities (other than any redemption, defeasance,
repurchase, retirement or other acquisition or retirement for value made in
anticipation of satisfying a scheduled maturity, repayment or sinking fund
obligation due within one year thereof); and (v) shall not, and shall not permit
any Restricted Subsidiary to, issue, transfer, convey, sell or otherwise dispose
of Capital Stock of any Restricted Subsidiary to a Person other than the Company
or another Restricted Subsidiary if the result thereof is that such Restricted
Subsidiary shall cease to be a Restricted Subsidiary, in which event the amount
of such "Restricted Payment" shall be the Fair Market Value of the remaining
interest, if any, in such former Restricted Subsidiary held by the Company and
the other Restricted Subsidiaries (each of clauses (i) through (v) being a
"Restricted Payment") if: (1) an Event of Default, or an event that with the
passing of time or the giving of notice, or both, would constitute an Event of
Default, shall have occurred and be continuing, or (2) upon giving effect to
such Restricted Payment, the Company could not Incur at least $1.00 of
additional Debt pursuant to paragraph (a) of Section 1010, or (3) upon giving
effect to such Restricted Payment, the aggregate of all Restricted Payments made
on or after the Measurement Date, including Restricted Payments made pursuant to
clause (A) or (B) of the proviso at the end of this sentence, and Permitted
Investments made on or after the Measurement Date pursuant to clause (i) or (j)
of the definition thereof (the amount of any such Restricted Payment or
Permitted Investment, if made other than in cash, to be based upon Fair Market
Value) exceeds the sum of: (a) 50% of cumulative Consolidated Net Income (or, in
the case that Consolidated Net Income shall be negative, 100% of such negative
amount) since the end of the last full fiscal quarter prior to the Measurement
Date through the last day of the last full fiscal quarter ending at least 45
days prior to the date of such Restricted Payment and (b) plus, in the case of
any Revocation made after the Measurement Date, an amount equal to the lesser of
the portion (proportionate to the Company's equity interest in the Subsidiary to
which such Revocation relates) of the Fair Market Value of the net assets of
such Subsidiary at the time of Revocation and the amount of Investments
previously made (and treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Subsidiary; provided, however, that the Company or
-------- -------
a Restricted Subsidiary of the Company
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120
may, without regard to the limitations in clause (3) but subject to clauses (1)
and (2), make (A) Restricted Payments in an aggregate amount not to exceed the
sum of $50,000,000 and the aggregate net cash proceeds received after the
Measurement Date (i) as capital contributions to the Company, from the issuance
(other than to a Subsidiary or an employee stock ownership plan or trust
established by the Company or any such Subsidiary for the benefit of their
employees) of Capital Stock (other than Disqualified Stock) of the Company, and
(ii) from the issuance or sale of Debt of the Company or any Restricted
Subsidiary (other than to a Subsidiary, the Company or an employee stock
ownership plan or trust established by the Company or any such Subsidiary for
the benefit of their employees) that after the Measurement Date has been
converted into or exchanged for Capital Stock (other than Disqualified Stock) of
the Company and (B) Investments in Persons engaged in the Telecommunications/IS
Business in an aggregate amount not to exceed the after-tax gain on the sale,
after the Measurement Date, of Special Assets to the extent sold for cash, Cash
Equivalents, Telecommunications/IS Assets or the assumption of Debt of the
Company or any Restricted Subsidiary (other than Debt that is subordinated to
the Securities or any applicable Restricted Subsidiary Guarantee) and release
of the Company and all Restricted Subsidiaries from all liability on the Debt
assumed. The aggregate net cash proceeds referred to in the immediately
preceding clauses (A)(i) and (A)(ii) shall not be utilized to make Restricted
Payments pursuant to such clauses to the extent such proceeds have been utilized
to make Permitted Investments under clause (i) of the definition of "Permitted
Investments."
(b) Notwithstanding the foregoing limitation, (i) the Company may pay
any dividend on Capital Stock of any class of the Company within 60 days after
the declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions; provided, however, that at the time of such payment of such
-------- -------
dividend, no other Event of Default shall have occurred and be continuing (or
result therefrom); (ii) the Company may repurchase any shares of its Common
Stock or options to acquire its Common Stock from Persons who were formerly
directors, officers or employees of the Company or any of its Subsidiaries or
other Affiliates in an amount not to exceed $3,000,000 in any 12-month period;
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121
(iii) the Company and any Restricted Subsidiary may refinance any Debt otherwise
permitted by clause (viii) of paragraph (b) of Section 1010 or clause (ix) of
Section 1011; (iv) the Company and any Restricted Subsidiary may retire or
repurchase any Capital Stock of the Company or of any Restricted Subsidiary or
any Subordinated Debt of the Company in exchange for, or out of the proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company or
an employee stock ownership plan or trust established by the Company or any such
Subsidiary for the benefit of their employees) of, Capital Stock (other than
Disqualified Stock) of the Company, provided that the proceeds from any such
--------
exchange or sale of Capital Stock shall be excluded from any calculation
pursuant to clause (A)(i) in the proviso at the end of paragraph (a) above or
pursuant to clause (b) of the definition of "Invested Capital"; and (v) the
Company may pay cash dividends in any amount not in excess of $50,000,000 in any
12-month period in respect of Preferred Stock of the Company (other than
Disqualified Stock). The Restricted Payments described in the foregoing clauses
(i), (ii) and (v) shall be included in the calculation of Restricted Payments;
the Restricted Payments described in clauses (iii) and (iv) shall be excluded in
the calculation of Restricted Payments.
SECTION 1013. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries.
- ---------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction (other than pursuant
to law or regulation) on the ability of any Restricted Subsidiary (i) to pay
dividends (in cash or otherwise) or make any other distributions in respect of
its Capital Stock owned by the Company or any other Restricted Subsidiary or pay
any Debt or other obligation owed to the Company or any other Restricted
Subsidiary, (ii) to make loans or advances to the Company or any other
Restricted Subsidiary or (iii) to transfer any of its Property to the Company or
any other Restricted Subsidiary.
(b) Notwithstanding the foregoing limitation, the Company may, and may
permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist (i) any
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122
encumbrance or restriction pursuant to any agreement in effect on the
Measurement Date, (ii) any customary (as conclusively determined in good faith
by the Chief Financial Officer of the Company) encumbrance or restriction
applicable to a Restricted Subsidiary that is contained in an agreement or
instrument governing or relating to Debt contained in any Credit Facilities or
Purchase Money Debt, provided that such encumbrances and restrictions permit the
--------
distribution of funds to the Company in an amount sufficient for the Company to
make the timely payment of interest, premium (if any) and principal (whether at
stated maturity, by way of a sinking fund applicable thereto, by way of any
mandatory redemption, defeasance, retirement or repurchase thereof, including
upon the occurrence of designated events or circumstances or by virtue of
acceleration upon an event of default, or by way of redemption or retirement at
the option of the holder of the Debt, including pursuant to offers to purchase)
according to the terms of this Indenture and the Securities and other Debt that
is solely an obligation of the Company, but provided further that such agreement
----------------
may nevertheless contain customary (as so determined) net worth, leverage,
invested capital and other financial covenants, customary (as so determined)
covenants regarding the merger of or sale of all or any substantial part of the
assets of the Company or any Restricted Subsidiary, customary (as so determined)
restrictions on transactions with affiliates and customary (as so determined)
subordination provisions governing Debt owed to the Company or any Restricted
Subsidiary, (iii) any encumbrance or restriction pursuant to an agreement
relating to any Acquired Debt, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person so acquired, (iv) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Debt Incurred pursuant to an agreement
referred to in clause (i), (ii) or (iii) of this paragraph (b), provided,
--------
however, that the provisions contained in such agreement relating to such
- -------
encumbrance or restriction are no more restrictive (as so determined) in any
material respect than the provisions contained in the agreement the subject
thereof, (v) in the case of clause (iii) of paragraph (a) above, any encumbrance
or restriction contained in any security agreement (including a Capital Lease
Obligation) securing Debt of the Company or a Restricted Subsidiary otherwise
permitted under this
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123
Indenture, but only to the extent such restrictions restrict the transfer of the
Property subject to such security agreement, (vi) in the case of clause (iii) of
paragraph (a) above, customary provisions (A) that restrict the subletting,
assignment or transfer of any Property that is a lease, license, conveyance or
similar contract, (B) contained in asset sale or other asset disposition
agreements limiting the transfer of the Property being sold or disposed of
pending the closing of such sale or disposition or (C) arising or agreed to in
the ordinary course of business, not relating to any Debt, and that do not,
individually or in the aggregate, detract from the value of Property of the
Company or any Restricted Subsidiary in any manner material to the Company or
any Restricted Subsidiary, (vii) any encumbrance or restriction with respect to
a Restricted Subsidiary imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or Property of such Restricted Subsidiary, provided that the consummation
of such transaction would not result in a Default or an Event of Default, that
such restriction terminates if such transaction is abandoned and that the
consummation or abandonment of such transaction occurs within one year of the
date such agreement was entered into, and (viii) any encumbrance or restriction
pursuant to this Indenture and the Securities.
SECTION 1014. Limitation on Liens.
--------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, Incur or suffer to exist any Lien on or with respect to
any Property now owned or acquired after the Measurement Date to secure any Debt
without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities (x) equally and ratably with such Debt as
to such Property for so long as such Debt will be so secured or (y) in the event
such Debt is Debt of the Company or a Guarantor which is subordinate in right of
payment to the Securities or the applicable Restricted Subsidiary Guarantee,
prior to such Debt as to such Property for so long as such Debt will be so
secured.
The foregoing restrictions shall not apply to:
(i) Liens existing on the Measurement Date and securing Debt
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outstanding on the Measurement Date or Incurred by the Company or a Restricted
Subsidiary on or after the Measurement Date pursuant to any Credit Facility to
secure Debt permitted to be Incurred by the Company or such Restricted
Subsidiary pursuant to clause (ii) of paragraph (b) under Section 1010; (ii)
Liens securing Debt in an amount which, together with the aggregate amount of
Debt then outstanding or available under all Credit Facilities (together with
all refinancing Debt then outstanding or available pursuant to clause (viii) of
paragraph (b) of Section 1010 in respect of Debt previously Incurred under
Credit Facilities), does not exceed 1.5 times the Company's Consolidated Cash
Flow Available for Fixed Charges for the four full fiscal quarters preceding the
Incurrence of such Lien for which the Company's consolidated financial
statements are available, determined on a pro forma basis as if such Debt had
been Incurred and the proceeds thereof had been applied at the beginning of such
four fiscal quarters; (iii) Liens in favor of the Company or any Restricted
Subsidiary; provided, however, that any subsequent issue or transfer of Capital
-------- -------
Stock or other event that results in any such Restricted Subsidiary ceasing to
be a Restricted Subsidiary or any subsequent transfer of the Debt secured by any
such Lien (except to the Company or a Restricted Subsidiary) shall be deemed, in
each case, to constitute the Incurrence of such Lien by the issuer thereof; (iv)
Liens Incurred by the Company or a Restricted Subsidiary to secure Purchase
Money Debt permitted to be Incurred by the Company or such Restricted Subsidiary
pursuant to clause (iii) of paragraph (b) under Section 1010, provided that any
--------
such Lien may not extend to any Property other than the Telecommunications/IS
Assets installed, constructed, acquired, leased, developed or improved with the
proceeds of such Purchase Money Debt and any improvements or accessions thereto
(it being understood that all Debt to any single lender or group of related
lenders or outstanding under any single credit facility, and in any case
relating to the same group or collection of Telecommunications/IS Assets
financed thereby, shall be considered a single Purchase Money Debt, whether
drawn at one time or from time to time); (v) Liens to secure Acquired Debt,
provided that (a) such Lien attaches to the acquired Property prior to the time
- --------
of the acquisition of such Property and (b) such Lien does not extend to or
cover any other Property; (vi) Liens to secure Debt Incurred to
<PAGE>
125
refinance, in whole or in part, Debt secured by any Lien referred to in the
foregoing clauses (i), (iv) and (v) or this clause (vi) so long as such Lien
does not extend to any other Property (other than improvements and accessions to
the original Property) and the principal amount of Debt so secured is not
increased except as otherwise permitted under clause (viii) of paragraph (b) of
Section 1010 or clause (ix) of Section 1011; (vii) Liens not otherwise permitted
by the foregoing clauses (i) through (vi) securing Debt in an aggregate amount
not to exceed 5% of the Company's Consolidated Tangible Assets; (viii) Liens
granted after the Issue Date pursuant to this Section 1014 to secure the
Securities; and (ix) Permitted Liens.
SECTION 1015. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, assume, Guarantee or otherwise become liable
with respect to any Sale and Leaseback Transaction, unless (i) the Company or
such Restricted Subsidiary would be entitled to Incur (a) Debt in an amount
equal to the Attributable Value of the Sale and Leaseback Transaction pursuant
to Section 1010 and (b) a Lien pursuant to Section 1014, equal in amount to the
Attributable Value of the Sale and Leaseback Transaction, without also securing
the Securities, and (ii) the Sale and Leaseback Transaction is treated as an
Asset Disposition and all of the conditions of Section 1016 (including the
provisions concerning the application of Net Available Proceeds) are satisfied
with respect to such Sale and Leaseback Transaction, treating all of the
consideration received in such Sale and Leaseback Transaction as Net Available
Proceeds for purposes of such Section 1015.
SECTION 1016. Limitation on Asset Dispositions.
---------------------------------
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126
The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Disposition unless: (i) the Company or the Restricted Subsidiary,
as the case may be, receives consideration for such disposition at least equal
to the Fair Market Value for the Property sold or disposed of as determined by
the Board of Directors in good faith and evidenced by a Board Resolution filed
with the Trustee; and (ii) at least 75% of the consideration for such
disposition consists of cash or Cash Equivalents or the assumption of Debt of
the Company or any Restricted Subsidiary (other than Debt that is subordinated
to the Securities or any applicable Restricted Subsidiary Guarantee) and release
of the Company and all Restricted Subsidiaries from all liability on the Debt
assumed (or if less than 75%, the remainder of such consideration consists of
Telecommunications/IS Assets); provided, however, that, to the extent such
-------- -------
disposition involves Special Assets, all or any portion of the consideration
may, at the Company's election, consist of Property other than cash, Cash
Equivalents, the assumption of Debt or Telecommunications/IS Assets.
The Net Available Proceeds (or any portion thereof) from Asset Dispositions
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt): (1) to the permanent repayment or reduction of Debt then outstanding
under any Credit Facility, to the extent such Credit Facility would require such
application or prohibit payments pursuant to the Offer to Purchase described in
the following paragraph (other than Debt owed to the Company or any Affiliate of
the Company); or (2) to reinvest in Telecommunications/IS Assets (including by
means of an Investment in Telecommunications/IS Assets by a Restricted
Subsidiary with Net Available Proceeds received by the Company or another
Restricted Subsidiary).
Any Net Available Proceeds from an Asset Disposition not applied in
accordance with the preceding paragraph within 360 days (or, in the case of a
disposition of Special Assets identified in clause (a) of the definition thereof
in which the Net Available Proceeds exceed $500,000,000, 540 days) from the date
of the receipt of such Net Available Proceeds shall constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
<PAGE>
127
Company will be required to make an Offer to Purchase with such Excess Proceeds
on a pro rata basis according to principal amount (or, in the case of Debt
issued at a discount, the then-Accreted Value) for (x) Outstanding Securities at
a price in cash equal to 100% of the principal amount of the Securities on the
purchase date plus accrued and unpaid interest (if any) thereon (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) and (y) any other Debt of the Company or
any Guarantor that is pari passu with the Securities, or any Debt of a
---- -----
Restricted Subsidiary that is not a Guarantor, at a price no greater than 100%
of the principal amount thereof plus accrued and unpaid interest (if any) to the
purchase date (or 100% of the then-Accreted Value plus accrued and unpaid
interest (if any) to the purchase date in the case of original issue discount
Debt), to the extent, in the case of this clause (y), required under the terms
thereof (other than Debt owed to the Company or any Affiliate of the Company).
To the extent there are any remaining Excess Proceeds following the completion
of the Offer to Purchase, the Company shall apply such Excess Proceeds to the
repayment of other Debt of the Company or any Restricted Subsidiary, to the
extent permitted or required under the terms thereof. Any other remaining Excess
Proceeds may be applied to any use as determined by the Company which is not
otherwise prohibited by this Indenture, and the amount of Excess Proceeds shall
be reset to zero.
The Company and the Trustee shall perform their respective obligations for
the Offer to Purchase as specified in the Offer. Prior to the Purchase Date, the
Company shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Offer, (ii) irrevocably deposit with the Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the Purchase Price of all
Securities or portions thereof so accepted (provided that such deposit may be
made no later than 10:00 A.M. New York City time on the Purchase Date if the
Company elects) and (iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of
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128
Securities so accepted payment in an amount equal to the Purchase Price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security or Securities equal in principal amount to any unpurchased portion of
the Security surrendered as requested by the Holder. Any Security not accepted
for payment shall be promptly mailed or delivered by the Company to the Holder
thereof. In the event that the aggregate Purchase Price is less than the amount
delivered by the Company to the Trustee or the Paying Agent, the Trustee or the
Paying Agent, as the case may be, shall deliver the excess to the Company
immediately after the Purchase Date.
Not later than the date upon which written notice of an Offer to Purchase
is delivered to the Trustee, the Company shall deliver to the Trustee an
Officers' Certificate as to (i) the amount of the Offer, (ii) the allocation of
the Net Available Proceeds from the Asset Disposition pursuant to which such
Offer is being made and (iii) the compliance of such allocation with the
provisions of this Section 1016.
In the event that the Company makes an Offer to Purchase the Securities,
the Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 1017. Limitation on Issuance and Sales of Capital Stock of
----------------------------------------------------
Restricted Subsidiaries.
- -----------------------
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129
The Company shall not, and shall not permit any Restricted Subsidiary to,
issue, transfer, convey, sell or otherwise dispose of any shares of Capital
Stock of a Restricted Subsidiary or securities convertible or exchangeable into,
or options, warrants, rights or any other interest with respect to, Capital
Stock of a Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary except (i) a sale of all of the Capital Stock of such
Restricted Subsidiary owned by the Company and any Restricted Subsidiary that
complies with the provisions of Section 1016 to the extent such provisions
apply, (ii) in a transaction that results in such Restricted Subsidiary becoming
a Joint Venture, provided (x) such transaction complies with the provisions of
--------
Section 1016 to the extent such provisions apply and (y) the remaining interest
of the Company or any other Restricted Subsidiary in such Joint Venture would
have been permitted as a new Restricted Payment or Permitted Investment under
the provisions of Section 1012, (iii) the issuance, transfer, conveyance, sale
or other disposition of shares of such Restricted Subsidiary so long as after
giving effect to such transaction such Restricted Subsidiary remains a
Restricted Subsidiary and such transaction complies with the provisions of
Section 1016 to the extent such provisions apply, (iv) the transfer, conveyance,
sale or other disposition of shares required by applicable law or regulation,
(v) if required, the issuance, transfer, conveyance, sale or other disposition
of directors' qualifying shares, (vi) Disqualified Stock issued in exchange
for, or upon conversion of, or the proceeds of the issuance of which are used to
refinance, shares of Disqualified Stock of such Restricted Subsidiary, provided
--------
that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being exchanged, converted or refinanced, (vii) in a
transaction where the Company or a Restricted Subsidiary acquires at the same
time not less than its Proportionate Interest in such issuance of Capital Stock,
(viii) Capital Stock issued and outstanding on the Measurement Date, (ix)
Capital Stock of a Restricted Subsidiary issued and outstanding prior to the
time that such Person becomes a Restricted Subsidiary so long as such Capital
Stock was not issued in contemplation of such Person's becoming a Restricted
Subsidiary or otherwise being
<PAGE>
130
acquired by the Company and (x) an issuance of Preferred Stock of a Restricted
Subsidiary (other than Preferred Stock convertible or exchangeable into Common
Stock of any Restricted Subsidiary) otherwise permitted by this Indenture. In
the event of (a) the consummation of a transaction referred to in any of the
foregoing clauses that results in a Guarantor no longer being a Restricted
Subsidiary and (b) the execution and delivery of a supplemental indenture
providing for such release in form satisfactory to the Trustee, any such
Guarantor shall be released from all its obligations under its Restricted
Subsidiary Guarantee.
SECTION 1018. Transactions with Affiliates.
-----------------------------
<PAGE>
131
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, sell, lease, transfer, or otherwise
dispose of any of its Property to, or purchase any Property from, or enter into
any contract, agreement, understanding, loan, advance, Guarantee or transaction
(including the rendering of services) with or for the benefit of, any Affiliate
(each of the foregoing, an "Affiliate Transaction"), unless (a) such Affiliate
Transaction or series of Affiliate Transactions is (i) in the best interest of
the Company or such Restricted Subsidiary and (ii) on terms that are no less
favorable to the Company or such Restricted Subsidiary than those that would
have been obtained in a comparable arm's-length transaction by the Company or
such Restricted Subsidiary with a Person that is not an Affiliate (or, in the
event that there are no comparable transactions involving Persons who are not
Affiliates of the Company or the relevant Restricted Subsidiary to apply for
comparative purposes, is otherwise on terms that, taken as a whole, the Company
has determined to be fair to the Company or the relevant Restricted Subsidiary)
and (b) the Company delivers to the Trustee (i) with respect to any Affiliate
Transaction or series of Affiliate Transactions involving aggregate payments in
excess of $10,000,000 but less than $15,000,000, a certificate of the chief
executive, operating or financial officer of the Company evidencing such
officer's determina tion that such Affiliate Transaction or series of Affiliate
Transactions complies with clause (a) above and (ii) with respect to any
Affiliate Transaction or series of Affiliate Transactions involving aggregate
payments equal to or in excess of $15,000,000, a Board Resolution certifying
that such Affiliate Transaction or series of Affiliate Transactions complies
with clause (a) above and that such Affiliate Transaction or series of Affiliate
Transactions has been approved by the Board of Directors, including a majority
of the disinterested members of the Board of Directors, provided that, in the
--------
event that there shall not be at least two disinterested members of the Board of
Directors with respect to the Affiliate Transaction, the Company shall, in
addition to such Board Resolution, file with the Trustee a written opinion from
an investment banking firm of national standing in the United States which, in
the good faith judgment of the Board of Directors, is independent with respect
to the Company and its Affiliates and qualified to perform such task, which
opinion
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132
shall be to the effect that the consideration to be paid or received in
connection with such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary.
Notwithstanding the foregoing, the following shall not be deemed Affiliate
Transactions: (i) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with industry practice; (ii) any agreement or arrangement with respect to the
compensation of a director or officer of the Company or any Restricted
Subsidiary approved by a majority of the disinterested members of the Board of
Directors and consistent with industry practice; (iii) transactions between or
among the Company and its Restricted Subsidiaries, provided that no more than 5%
--------
of the Voting Stock (on a fully diluted basis) of any such Restricted Subsidiary
is owned by an Affiliate of the Company (other than a Restricted Subsidiary);
(iv) Restricted Payments and Permitted Investments permitted by Section 1012
(other than Investments in Affiliates that are not the Company or Restricted
Subsidiaries); (v) transactions pursuant to the terms of any agreement or
arrangement as in effect on the Measurement Date; and (vi) transactions with
respect to wireline or wireless transmission capacity, the lease or sharing or
other use of cable or fiber optic lines, equipment, rights-of-way or other
access rights, between the Company (or any Restricted Subsidiary) and any other
Person, provided that, in the case of this clause (vi), such transaction
--------
complies with clause (a) in the immediately preceding paragraph.
SECTION 1019. Limitation on Designations of Unrestricted Subsidiaries.
-------------------------------------------------------
The Company shall not designate any Subsidiary of the Company (other than a
newly created Subsidiary in which no Investment has previously been made) as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
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133
(b) immediately after giving effect to such Designation, the Company
would be able to Incur $1.00 of Debt under paragraph (a) of Section 1010;
and
(c) the Company would not be prohibited under any provision of this
Indenture from making an Investment at the time of Designation (assuming
the effectiveness of such Designation) in an amount (the "Designation
Amount") equal to the portion (proportionate to the Company's equity
interest in such Restricted Subsidiary) of the Fair Market Value of the net
assets of such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to Section 1012
for all purposes of this Indenture in the Designation Amount; provided, however,
-------- -------
that, upon a Revocation of any such Designation of a Subsidiary, the Company
shall be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary of an amount (if positive) equal to (i) the Company's "Investment" in
such Subsidiary at the time of such Revocation less (ii) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the Fair
Market Value of the net assets of such Subsidiary at the time of such
Revocation. At the time of any Designation of any Subsidiary as an Unrestricted
Subsidiary, such Subsi diary shall not own any Capital Stock of the Company or
any Restricted Subsidiary. In addition, neither the Company nor any Restricted
Subsidiary shall at any time (x) provide credit support for, or a Guarantee of,
any Debt of any Unrestricted Subsidiary (including any undertaking, agree ment
or instrument evidencing such Debt); provided that the Company or a Restricted
--------
Subsidiary may pledge Capital Stock or Debt of any Unrestricted Subsidiary on a
nonrecourse basis such that the pledgee has no claim whatsoever against the
Company other than to obtain such pledged Capital Stock or Debt, (y) be directly
or indirectly liable for any Debt of any Unrestricted Subsidiary or (z) be
directly or 111 indirectly liable for any Debt which provides that the holder
thereof may (upon notice, lapse of time or both) declare a default thereon or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity upon the occurrence of a default with respect to any Debt,
Lien or other obligation of any Unrestricted Subsidiary
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134
(including any right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (x) or (y) to the extent permitted
under Sections 1012 and 1018.
Unless Designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company will be classified as a Restricted Subsidiary;
provided, however, that such Subsidiary shall not be designated as a Restricted
- -------- -------
Subsidiary and shall be automatically classified as an Unrestricted Subsidiary
if either of the requirements set forth in clauses (a) and (b) of the
immediately following paragraph will not be satisfied immediately following such
classification. Except as provided in the first sentence of this Section 1019,
no Restricted Subsidiary may be redesig nated as an Unrestricted Subsidiary.
A Designation may be revoked (a "Revocation") by a Board Resolution
delivered to the Trustee, provided that the Company will not make any Revocation
--------
unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(b) all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have
been permitted to be Incurred at such time for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board Resolutions
delivered to the Trustee (i) certifying compliance with the foregoing provisions
and (ii) giving the effective date of such Designation or Revocation, such
delivery to the Trustee to occur within 45 days after the end of the fiscal
quarter of the Company in which such Designation or Revocation is made (or, in
the case of a Designation or Revocation made during the last fiscal quarter of
the Company's fiscal year, within 90 days after the end of such fiscal year).
Upon Designation of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Section 1019, such Restricted Subsidiary shall, by delivery
of a supplemental indenture providing for such release in form satisfactory to
the
<PAGE>
135
Trustee, be released from any Restricted Subsidiary Guarantee previously made by
such Subsidiary.
ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 1202 or Section 1203 be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article Twelve.
SECTION 1202. Defeasance and Discharge.
-------------------------
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136
Upon the Company's exercise under Section 1201 of the option applicable to
this Section 1202, the Company shall be deemed to have been discharged from its
obligations with respect to all Outstanding Securities on the date the
conditions set forth in Section 1204 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1205 and the other Sections of this Indenture referred to in
clauses (A) and (B) below, and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (B)
rights of Holders to receive payment of principal of, premium, if any, and
interest on such Securities (but not the Purchase Price referred to under
Section 1009 or 1016) and any rights of the Holders with respect to such
amounts, (C) the rights, obligations and immunities of the Trustee under the
Indenture and (D) this Article Twelve. Subject to compliance with this Article
Twelve, the Company may exercise its option under this Section 1202
notwithstanding the prior exercise of its option under Section 1203 with respect
to the Securities. If the Company exercises its option under this Section 1202,
each Guarantor, if any, shall be released from all its obligations under its
Restricted Subsidiary Guarantee.
<PAGE>
137
SECTION 1203. Covenant Defeasance.
--------------------
Upon the Company's exercise under Section 1201 of the option applicable to
this Section 1203, the Company shall be released from its obligations under any
covenant contained in Sections 801(3), (4) and (5), in Sections 803, 1005, 1006
and 1007 and Sections 1009 through 1019 and from the operation of Sections
501(6), (7), (8), (9) and (10) (but, in the case of Sections 501(9) and (10),
with respect only to Significant Subsidiaries), with respect to the Outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities shall thereafter be
deemed not to be "Outstanding" for the purposes of any direction, waiver,
consent, declaration or other Act of Holders (and the consequences of any
thereof) in connection with such provisions, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such provision, whether directly or
indirectly, by reason of any reference elsewhere herein to any such provision or
by reason of any reference in any such provision 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 501(3), (4), (5), (6), (7), (8),
(9) or (10) (but, in the case of Section 501(9) or (10), with respect only to
Significant Subsidiaries) but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. If the Company
exercises its option under this Section 1203, each Guarantor, if any, shall be
released from all its obligations under its Restricted Subsidiary Guarantee.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section 1202
or Section 1203 to the Outstanding Securities:
<PAGE>
138
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 608 who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, at any
time prior to the Maturity of the Securities: (A) money in an amount, or
(B) Government Securities or European Government Obligations which through
the payment of interest and principal will provide, not later than one day
before the due date of payment in respect of the Securities, money in an
amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge the principal of (and premium, if any, on) and interest on, the
Outstanding Securities on the Stated Maturity of such principal (and
premium, if any) or installment of interest; provided that the Trustee (or
--------
such other trustee) shall have been irrevocably instructed in writing to
apply such money or the proceeds of such Government Securities to said
payments with respect to the Securities.
(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as paragraphs (9) and (10) of Section 501 are concerned with
respect to the Company, at any time during the period ending on the 123rd
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound.
(4) In the case of an election under Section 1202, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
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139
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such 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 defeasance
had not occurred.
(5) In the case of an election under Section 1203, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1202
or the covenant defeasance under Section 1203 (as the case may be) have
been complied with.
(7) The Company shall have delivered to the Trustee an Opinion of
Counsel acceptable to the Trustee to the effect that such defeasance will
not result in the trust relating thereto or the Trustee being subject to
regulation under the Investment Company Act of 1940.
(8) Money denominated in currency other than euros and Government
Securities deposited pursuant to this Section 1204 shall be subject in
their entirety (including principal, interest and premium, if any) to a
customary currency agreement that is of a duration not less than the
defeasance period that fixes the exchange rate of such money or Government
Securities
<PAGE>
140
into euros, and that constitutes a Permitted Interest Rate or Currency
Protection Agreement for the benefit of the Trustee. The amount of such
money and Government Securities expressed in euros will be as provided in
such currency agreement. The counterparty to such currency agreement shall
be a commercial bank organized in the United States having capital and
surplus in excess of $500 million or a commercial bank organized under the
laws of any country that is a member of the OECD having total assets in
excess of $500 million (or its foreign currency equivalent at the time).
Such counterparty may obtain from the Company an Opinion of Counsel to the
effect that such currency agreement has been duly authorized and entered
into by the Company.
SECTION 1205. Deposited Money and Government Securities to Be Held in
-------------------------------------------------------
Trust; Other Miscellaneous Provisions.
- -------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
1205, the "Trustee") pursuant to Section 1204 in respect of the Outstanding
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities of
all sums due and to become due thereon in respect of principal, premium, if any,
and interest, but such money need not be segregated from other funds except to
the extent required by law or to the extent the Company acts as its own Paying
Agent.
The Company shall pay and indemnify the Trustee and (if applicable) its
officers, directors, employees and agents against any tax, fee or other charge
imposed on or assessed against the Government Securities deposited pursuant to
Section 1204 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the Outstanding Securities.
<PAGE>
141
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it as provided in Section
1204 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance, as
applicable, in accordance with this Article Twelve.
SECTION 1206. Reinstatement.
--------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 401 or 1205 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and any Guarantor's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 401, 1202 or 1203, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance therewith; provided, however, that if the Company or any
-------- -------
Guarantor makes any payment of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Company or such
Guarantor shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
<PAGE>
142
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ Thomas C. Stortz
------------------------
Name: Thomas C. Stortz
Title: Group Vice President,
General Counsel and
Secretary
Attest: /s/ Neil J. Eckstein
----------------------------
Name: Neil J. Eckstein
Title: Assistant Secretary
THE BANK OF NEW YORK, as Trustee
By: /s/ Van K. Brown
------------------------
Name: Van K. Brown
Title: Assistant Vice
President
Attest: /s/ Remo J. Reale
-------------------------
Name: Remo J. Reale
Title: Vice President
<PAGE>
EXHIBIT A
Form of Face of Security
------------------------
[If a Global Security, then insert:] THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[If a Global Security, then insert:] UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE [DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC")][BANK OF NEW YORK DEPOSITARY (NOMINEES) LIMITED ("BONY")],
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] [THE BANK
OF NEW YORK DEPOSITARY (NOMINEES) LIMITED] OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF [DTC] [BONY] (AND ANY PAYMENT IS MADE TO
[CEDE & CO.] [BONY] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF [DTC] [BONY]), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, [CEDE & CO.] [BONY], HAS AN INTEREST HEREIN.
[Private Placement Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG
AS THIS SECURITY IS ELIGIBLE FOR
<PAGE>
A-2
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), PROVIDED THAT, IF SUCH
TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS
DEFINED BELOW) PRIOR TO THE DATE THAT IS 40 DAYS FOLLOWING THE ISSUE DATE, A
CERTIFICATE THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE
IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY
PURSUANT TO THIS CLAUSE (4) PRIOR TO THE DATE THAT IS 40 DAYS FOLLOWING THE
ISSUE DATE), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
<PAGE>
A-3
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT.
[If a Physical Security, then insert:] IN CONNECTION WITH ANY TRANSFER, THE
HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND
OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
<PAGE>
A-4
LEVEL 3 COMMUNICATIONS, INC.
10 3/4% Senior Euro Note Due 2008
CUSIP No.
No. [up to] $
Level 3 Communications, Inc., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________, or registered assigns, the principal sum of [if a Global
Security, then insert: up to] _________ Dollars [if a Global Security, then
insert: (the outstanding principal amount of which shall be reflected in the
attached Schedule of Increases or Decreases in Global Security and the records
of the Trustee which, taken together with the outstanding principal amounts of
all other Outstanding Securities, shall not exceed (EURO)500,000,000 in the
aggregate at any time)] on March 15, 2008, at the office or agency of the
Company referred to below, and to pay interest thereon, in cash in arrears
semiannually on March 15 and September 15 in each year, commencing on September
15, 2000, accruing from February 29, 2000 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 10 3/4% per annum, until the principal hereof is paid or duly provided for.
The Company shall pay interest on overdue principal at the rate borne by the
Securities, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
[Delete this paragraph if an Exchange Security (other than a Private Exchange
Security).] The Holder of this Security is entitled to the benefits of a Euro
Registration Agreement, dated as of February 24, 2000, between the Company and
the Purchasers named therein (the "Registration Agreement"). Capitalized terms
used in this paragraph but not defined herein have the meanings assigned to them
in the Registration Agreement. In the event that (i) neither the Exchange Offer
Registration Statement nor the Shelf Registration Statement has been filed with
the Commission on or prior to the 90th day following the date of the original
issuance of the Securities, (ii) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been declared effective on or
prior to the 150th day
<PAGE>
A-5
following the date of the original issuance of the Securities, (iii) neither the
Registered Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective on or prior to the 180th day following the
date of the original issuance of the Securities, or (iv) after the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable in connection with resales of the
Securities at any time that the Company is obligated to maintain the
effectiveness thereof pursuant to the Registration Agreement (each such event
referred to in clauses (i) through (iv) above being referred to herein as a
"Registration Default"), interest (the "Special Interest") shall accrue (in
addition to stated interest on the Securities) from and including the date on
which the first such Registration Default shall occur to but excluding the date
on which all Registration Defaults have been cured, at a rate per annum equal to
0.50% of the principal amount of the Securities; provided, however, that such
-------- -------
rate per annum shall increase by 0.25% per annum from and including the 91st day
after the first such Registration Default (and each successive 91st day
thereafter) unless and until all Registration Defaults have been cured;
provided further, however, that in no event shall the Special Interest accrue at
- ---------------- -------
a rate in excess of 1.00% per annum. Accrued Special Interest, if any, shall be
paid in cash in arrears semiannually on March 15 and September 15 in each year;
and the amount of accrued Special Interest shall be determined on the basis of
the number of days actually elapsed. Any accrued and unpaid interest (including
Special Interest) on this Security upon the issuance of an Exchange Security in
exchange for this Security shall cease to be payable to the Holder hereof but
such accrued and unpaid interest (including Special Interest) shall be payable
on the next Interest Payment Date for such Exchange Security to the Holder
thereof on the related Regular Record Date.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
<PAGE>
A-6
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and such defaulted interest,
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities, may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in said Indenture. Payment
of the principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in The
City of New York, or at such other office or agency of the Company as may be
maintained for such purpose, in euros or such coin or currency of the European
Union as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
A-7
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_______________ LEVEL 3 COMMUNICATIONS, INC.
By:________________________________
Authorized Signatory
Attest:______________
<PAGE>
A-8
Form of Reverse of Security
---------------------------
This Security is one of a duly authorized issue of securities of the
Company designated as its 10 3/4% Senior Euro Notes Due 2008 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to (EURO)500,000,000, which may be
issued under an indenture (herein called the "Indenture") dated as of February
29, 2000 between the Company and The Bank of New York, as trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Securities not redeemable prior to maturity.
Upon the occurrence of a Change of Control Triggering Event, the Holder of
this Security may require the Company, subject to certain limitations provided
in the Indenture, to repurchase this Security at a purchase price in cash in an
amount equal to 101% of the principal amount thereof, plus accrued and unpaid
interest (if any) to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).
To guarantee the due and punctual payment of the principal, premium (if
any) and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Guarantors, if any, will
unconditionally guarantee such obligations on a senior unsecured basis pursuant
to the terms of the Indenture.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and
<PAGE>
A-9
payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and Defaults and Events of Default, upon compliance by the Company
with certain conditions set forth therein, which provisions apply to this
Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Without the consent of any
Holder of Securities, the Company and the Trustee may amend or modify the
Indenture for certain purposes specified therein, including the release of
Guarantors, if any, from Restricted Subsidiary Guarantees as provided by the
terms of the Indenture. Any such consent or waiver by or on behalf of the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable on the Security Register of
the Company,
<PAGE>
A-10
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained for such purpose in The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of (EURO)1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK BUT 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.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
A-11
Form of Trustee's Certificate of Authentication
------------------------------------------------
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________________
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, as Trustee
By:
_________________________________
Authorized Signatory
<PAGE>
A-12
Assignment Form
---------------
If you, the holder, want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to _________________________________
________________________________________________________________________________
(Insert assignee's social security or tax ID number)
_________________________________
(Print or type assignee's name, address and zip code)
_________________________________
_________________________________
_________________________________
and irrevocably appoint____________________________
of ______________________________
______________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
<PAGE>
A-13
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the date that is two years (or such shorter
period as may be prescribed by Rule 144(k) under the Securities Act or any
successor provision thereunder) after the later of the date of original issuance
of such Securities (or any Predecessor Security) or three months after the last
date, if any, on which such Securities (or any Predecessor Security) were owned
by the Company or any Affiliate of the Company, the undersigned confirms that
such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [_] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) [_] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933, provided that, if
such transfer is being effected by certain transferors specified
in the Indenture prior to the date that is 40 days following the
Issue Date, a certificate which may be obtained from the Company
or the Trustee is delivered by the transferee to the Company and
the Trustee; or
(5) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7)
<PAGE>
A-14
under the Securities Act of 1933) that has furnished to the
Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the
Trustee or the Company), provided that certain transferors
specified in the Indenture may not transfer this Security
pursuant to this clause (5) prior to the date that is 40 days
following the Issue Date; or
(6) [_] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5) or
-------- -------
(6) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
Dated: _______________ Your signature: __________________________________
(Sign
exactly as your name appears on the other side of this
Security)
By:
____________________________________________________
NOTICE: To be executed by an executive officer
Signature Guarantee: ____________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account
<PAGE>
A-15
with respect to which it exercises sole investment discretion and that it and
any such account is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act of 1933 and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A (including the information specified in Rule 144A(d)(4)) or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:_____________________ ____________________________________
NOTICE: To be executed by an
executive officer
<PAGE>
A-16
Option of Holder to Elect Purchase
----------------------------------
If you wish to have this Security purchased by the Company pursuant to
Section 1009 or 1016 of the Indenture, check the box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 1009 or 1016 of the Indenture, state the amount:
$___________________.
Dated: ________________ Your Signature: ________________________________
(Sign exactly as your name appears on the other side of
this Security)
<PAGE>
A-17
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is EURO[ ].
The following increases or decreases in this Global Security have been made:
Date of Amount of Amount of Principal amount Signature of
Transfer decrease in increase in of this Global authorized
Principal Amount Principal Amount Security signatory of
of this Global of this Global following such Trustee or
Security Security decrease or Security Registrar
increase
<PAGE>
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of , among [GUARANTOR] (the "New
Guarantor"), a subsidiary of Level 3 Communications, Inc. (or its
successor), a Delaware corporation (the "Company"), LEVEL 3
COMMUNICATIONS, INC., on behalf of itself and the Guarantors (the
"Existing Guarantors"), if any, under the Indenture referred to
below, and THE BANK OF NEW YORK, a New York banking corporation,
as trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture dated as of February 29, 2000 (the "Indenture"; capitalized
terms used but not defined herein having the meanings assigned thereto in the
Indenture), providing for the issuance of an aggregate principal amount of up to
(Euro) 300,000,000 of 11 3/4% Senior Euro Notes Due 2008 (the "Securities");
WHEREAS the Indenture permits the New Guarantor to execute and deliver
to the Trustee a supplemental indenture pursuant to which the New Guarantor
shall unconditionally guarantee all the Company's obligations under the
Securities pursuant to a Guarantee on the terms and conditions set forth herein;
WHEREAS the Guarantee contained in this Supplemental Indenture shall
constitute a "Restricted Subsidiary Guarantee", and the New Guarantor shall
constitute a "Guarantor", for all purposes of the Indenture; and
WHEREAS pursuant to Section 901 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture;
<PAGE>
B-2
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Guaranties. The New Guarantor hereby unconditionally guarantees,
-----------
jointly and severally, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of (and premium, if any)
and interest on the Securities when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under the Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). The New Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from the New Guarantor and that the New
Guarantor will remain bound under this Supplemental Indenture notwithstanding
any extension or renewal of any Obligation.
The New Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. The New Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of the New Guarantor hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or any
other Person under the Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of the
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Obligations; or (f) any change in the
ownership of the New Guarantor.
The New Guarantor further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and
<PAGE>
B-3
waives any right to require that any resort be had by any Holder or the Trustee
to any security held for payment of the Obligations.
Except as expressly set forth in Sections 803, 1017, 1019, 1202 and
1203 of the Indenture, the obligations of the New Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the New Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under the
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of the New Guarantor or would otherwise operate as a
discharge of the New Guarantor as a matter of law or equity.
The New Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or (premium, if any) interest on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against the New
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of (or premium, if any) or interest on any Obligation when and as the same shall
become due, whether at Stated Maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, the New Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Obligations,
<PAGE>
B-4
(ii) accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
The New Guarantor agrees that it shall not be entitled to any right of
subrogation in respect of any Obligations guaranteed hereby until payment in
full in cash of all Obligations. The New Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article Five of the Indenture for the purposes of the New
Guarantor's Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Five of the Indenture, such Obligations
(whether or not due and payable) shall forthwith become due and payable by the
New Guarantor for the purposes of this Section.
The New Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 1.
2. Contribution. Each of the Company and the New Guarantor (a
-------------
"Contributing Party") agrees that, in the event a payment shall be made by any
other Guarantor under any Restricted Subsidiary Guarantee (the "Claiming
Guarantor"), the Contributing Party shall indemnify the Claiming Guarantor in an
amount equal to the amount of such payment multiplied by a fraction, the
numerator of which shall be the net worth of the Contributing Party (which, in
the case of the Company, shall be measured on the Issue Date, and in the case of
the New Guarantor, on the date hereof) and the denominator of which shall be the
aggregate net worth of the Company on the Issue Date and the Guarantors on
respective dates of the Supplemental Indentures executed and delivered by such
Guarantors.
3. Successors and Assigns. This Supplemental Indenture shall be
-----------------------
binding upon the New Guarantor and its successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party
<PAGE>
B-5
in the Indenture and in the Securities shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
of this Indenture.
4. No Waiver. Neither a failure nor a delay on the part of either
----------
the Trustee or the Holders in exercising any right, power or privilege under
this Supplemental Indenture, the Indenture or the Securities shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein and therein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Supplemental Indenture, the Indenture
or the Securities at law, in equity, by statute or otherwise.
5. Modification. No modification, amendment or waiver of any
-------------
provision of this Supplemental Indenture, nor the consent to any departure by
the New Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the New Guarantor in any case shall entitle the
New Guarantor to any other or further notice or demand in the same, similar or
other circumstances.
6. Opinion of Counsel. Concurrently with the execution and delivery
-------------------
of this Supplemental Indenture, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that this Supplemental Indenture has been duly
authorized, executed and delivered by each of the New Guarantor and the Company
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors'
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Guarantee of the New Guarantor is a legal,
valid and binding obligation of the New Guarantor, enforceable against the New
Guarantor in accordance with its terms.
7. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
- ----------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
<PAGE>
B-6
heretofore or hereafter authenticated and delivered shall be bound hereby.
8. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
--------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT 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.
9. Counterparts. The parties may sign any number of copies of this
-------------
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. Effect of Headings. The Section headings herein are for
-------------------
convenience only and shall not effect the construction thereof.
<PAGE>
B-7
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
__________________________________
Name:
Title:
LEVEL 3 COMMUNICATIONS, INC., on behalf of
itself and the Existing Guarantors, if any,
by
__________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
by
__________________________________
Name:
Title:
<PAGE>
EXECUTION COPY
EXHIBIT 4.2
================================================================================
LEVEL 3 COMMUNICATIONS, INC.,
Issuer
to
THE BANK OF NEW YORK,
as Trustee
- --------------------------------------------------------------------------------
Euro Securities Indenture
Dated as of February 29, 2000
- --------------------------------------------------------------------------------
(Euro)300,000,000
11 1/4% Senior Euro Notes Due 2010
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES.................................................................... 1
RECITALS OF THE COMPANY.................................................... 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.................................................. 2
Accreted Value............................................... 3
Acquired Debt................................................ 3
Act.......................................................... 3
Affiliate.................................................... 3
Affiliate Transaction........................................ 4
Agent Member................................................. 4
Asset Disposition............................................ 4
Attributable Value........................................... 5
Board of Directors........................................... 5
Board Resolution............................................. 5
Business Day................................................. 6
Capital Lease Obligation..................................... 6
Capital Stock................................................ 6
Cash Equivalents............................................. 6
Change of Control............................................ 7
Change of Control Triggering Event........................... 7
Clearstream.................................................. 7
Code......................................................... 7
Commission................................................... 7
Common Depositary............................................ 7
Common Stock................................................. 7
Company...................................................... 7
Company Order................................................ 7
Consolidated Capital Ratio................................... 9
Consolidated Cash Flow Available for
Fixed Charges.............................................. 9
Consolidated Income Tax Expense.............................. 10
Consolidated Interest Expense................................ 10
Consolidated Net Income...................................... 11
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Consolidated Net Worth....................................... 12
Consolidated Tangible Assets................................. 12
Corporate Trust Office....................................... 12
Credit Agreement............................................. 12
Credit Facilities............................................ 12
Debt......................................................... 12
Default...................................................... 14
Defaulted Interest........................................... 14
Depository................................................... 14
Designation.................................................. 14
Designation Amount........................................... 14
Disqualified Stock........................................... 14
Disqualified Stock Dividends................................. 14
Dollar Notes................................................. 15
Eligible Receivables......................................... 15
euro......................................................... 15
Euroclear.................................................... 15
Euro Notes................................................... 15
European Government Obligation............................... 15
European Union............................................... 15
Event of Default............................................. 16
Exchange Act................................................. 16
Exchange Securities.......................................... 16
Excess Proceeds.............................................. 16
Existing Notes............................................... 16
Expiration Date.............................................. 16
Fair Market Value............................................ 16
Federal Bankruptcy Code...................................... 16
Global Security.............................................. 16
Government Securities........................................ 16
Guarantee.................................................... 17
Guarantor.................................................... 17
Holder....................................................... 17
Incur........................................................ 17
Indenture.................................................... 18
Initial Foreign Purchaser.................................... 18
Initial Purchasers........................................... 18
Initial Securities........................................... 18
Institutional Accredited Investor............................ 18
Institutional Accredited Investor Global Security............ 18
Interest Payment Date........................................ 18
Interest Rate or Currency Protection Agreement............... 19
Invested Capital............................................. 19
Investment................................................... 19
Issue Date................................................... 20
Issue Date Purchase Money Debt............................... 20
Issue Date Rating............................................ 20
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
Joint Venture................................................ 20
Lien......................................................... 20
Maturity..................................................... 21
Measurement Date............................................. 21
Moody's...................................................... 21
Net Available Proceeds....................................... 21
New Convertible Notes........................................ 22
9 1/8% Senior Notes.......................................... 22
Non-Global Purchasers........................................ 22
Offer........................................................ 22
Offer to Purchase............................................ 23
Officers' Certificate........................................ 25
Opinion of Counsel........................................... 26
OECD......................................................... 26
Outstanding.................................................. 26
Paying Agent................................................. 27
Permitted Holders............................................ 27
Permitted Interest Rate or Currency
Protection Agreement....................................... 27
Permitted Investments........................................ 28
Permitted Liens.............................................. 28
Permitted Telecommunications Capital
Asset Disposition.......................................... 29
Person....................................................... 29
Physical Security............................................ 29
Predecessor Security......................................... 30
Preferred Stock.............................................. 30
Preferred Stock Dividends.................................... 30
Private Exchange Offer....................................... 30
Private Exchange Securities.................................. 30
Private Placement Legend..................................... 30
Property..................................................... 30
Proportionate Interest....................................... 31
Purchase Amount.............................................. 31
Purchase Date................................................ 31
Purchase Money Debt.......................................... 31
Purchase Price............................................... 31
Qualified Institutional Buyer or QIB......................... 31
Qualified Receivable Facility................................ 31
Rating Agencies.............................................. 32
Rating Date.................................................. 32
Rating Decline............................................... 32
Receivables.................................................. 32
refinancing.................................................. 32
Registered Exchange Offer.................................... 32
Registration Agreement....................................... 32
Registration Default......................................... 33
Regular Record Date.......................................... 33
Regulation S................................................. 33
Regulation S Global Security................................. 33
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
Required Filing Dates........................................ 33
Responsible Officer.......................................... 33
Restricted Payment........................................... 33
Restricted Subsidiary........................................ 33
Restricted Subsidiary Guarantee.............................. 33
Revocation................................................... 34
Rule 144A.................................................... 34
Rule 144A Global Security.................................... 34
S&P.......................................................... 34
Sale and Leaseback Transaction............................... 34
Securities................................................... 34
Securities Act............................................... 34
Security Register............................................ 35
Shelf Registration Statement................................. 35
Significant Subsidiary....................................... 35
6% Convertible Notes......................................... 35
Special Assets............................................... 35
Special Interest............................................. 35
Special Record Date.......................................... 35
Stated Maturity.............................................. 35
Subordinated Debt............................................ 36
Subsidiary................................................... 36
Telecommunications/IS Assets................................. 36
Telecommunications/IS Business............................... 38
10 1/2% Senior Discount Notes................................ 38
Trust Indenture Act or TIA................................... 38
Trustee...................................................... 38
Unrestricted Subsidiary...................................... 38
Vice President............................................... 39
Voting Stock................................................. 39
Wholly Owned Subsidiary...................................... 39
SECTION 102. Compliance Certificates and Opinions......................... 39
SECTION 103. Form of Documents Delivered to Trustee....................... 40
SECTION 104. Acts of Holders.............................................. 41
SECTION 105. Notices, etc., to Trustee and Company........................ 43
SECTION 106. Notice to Holders; Waiver.................................... 44
SECTION 107. Effect of Headings and Table of
Contents................................................... 44
SECTION 108. Successors and Assigns....................................... 44
SECTION 109. Separability Clause.......................................... 45
SECTION 110. Benefits of Indenture........................................ 45
SECTION 111. Governing Law................................................ 45
SECTION 112. Conflict with Trust Indenture Act............................ 45
SECTION 113. Legal Holidays............................................... 46
SECTION 114. No Personal Liability of Directors,
Officers, Employees and Stockholders....................... 46
SECTION 115. Independence of Covenants.................................... 46
SECTION 116. Exhibits..................................................... 46
SECTION 117. Counterparts................................................. 47
</TABLE>
(iv)
<PAGE>
<TABLE>
<S> <C>
SECTION 118. Duplicate Originals.......................................... 47
ARTICLE TWO SECURITY FORMS
SECTION 201. Forms Generally............................................... 47
ARTICLE THREE THE SECURITIES
SECTION 301. Title and Terms.............................................. 48
SECTION 302. Denominations................................................ 49
SECTION 303. Execution, Authentication, Delivery and Dating............... 49
SECTION 304. Temporary Securities......................................... 52
SECTION 305. Registration, Registration of Transfer
and Exchange............................................... 53
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............. 54
SECTION 307. Payment of Interest; Interest Rights Preserved............... 55
SECTION 308. Persons Deemed Owners........................................ 57
SECTION 309. Cancellation................................................. 58
SECTION 310. Computation of Interest...................................... 58
SECTION 311. CUSIP Number................................................. 58
SECTION 312. Book-Entry Provisions for Global
Securities................................................. 59
SECTION 313. Special Transfer Provisions.................................. 62
ARTICLE FOUR SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..................... 69
SECTION 402. Application of Trust Money.................................. 70
ARTICLE FIVE REMEDIES
SECTION 501. Events of Default............................................ 71
SECTION 502. Acceleration of Maturity; Rescission and Annulment........... 73
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee................................. 74
SECTION 504. Trustee May File Proofs of Claim............................. 75
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................. 76
SECTION 506. Application of Money Collected............................... 77
SECTION 507. Limitation on Suits.......................................... 77
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest............................ 78
</TABLE>
(V)
<PAGE>
<TABLE>
<S> <C>
SECTION 509. Restoration of Rights and Remedies........................... 78
SECTION 510. Rights and Remedies Cumulative............................... 79
SECTION 511. Delay or Omission Not Waiver................................. 79
SECTION 512. Control by Holders........................................... 79
SECTION 513. Waiver of Past Defaults...................................... 80
SECTION 514. Waiver of Stay or Extension Laws............................. 80
ARTICLE SIX THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.......................... 81
SECTION 602. Notice of Default............................................ 82
SECTION 603. Certain Rights of Trustee.................................... 83
SECTION 604. Trustee Not Responsible for Recitals or Issuance
of Securities.............................................. 85
SECTION 605. May Hold Securities.......................................... 85
SECTION 606. Money Held in Trust.......................................... 85
SECTION 607. Compensation and Reimbursement............................... 85
SECTION 608. Corporate Trustee Required; Eligibility;
Conflicting Interests...................................... 87
SECTION 609. Resignation and Removal; Appointment of Successor............ 87
SECTION 610. Acceptance of Appointment by
Successor.................................................. 89
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business................................................... 89
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of
Holders.................................................... 91
SECTION 702. Reports by Trustee........................................... 91
SECTION 703. Reports by Company........................................... 91
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain
Terms...................................................... 92
SECTION 802. Successor Company Substituted................................ 93
SECTION 803. Guarantor May Consolidate, etc., Only on Certain
Terms...................................................... 94
SECTION 804. Successor Guarantor Substituted.............................. 96
ARTICLE NINE SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent
</TABLE>
(vi)
<PAGE>
<TABLE>
<S> <C>
of Holders................................................. 97
SECTION 902. Supplemental Indentures With Consent of Holders............ 98
SECTION 903. Execution of Supplemental Indentures....................... 99
SECTION 904. Effect of Supplemental Indentures.......................... 100
SECTION 905. Conformity with Trust Indenture Act........................ 100
SECTION 906. Reference in Securities to Supplemental Indentures......... 100
SECTION 907. Notice of Supplemental Indentures.......................... 100
ARTICLE TEN COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and
Interest.................................................. 101
SECTION 1002. Maintenance of Office or Agency............................. 101
SECTION 1003. Money for Security Payments to Be Held in Trust............. 102
SECTION 1004. Corporate Existence......................................... 104
SECTION 1005. Maintenance of Properties................................... 104
SECTION 1006. Insurance................................................... 105
SECTION 1007. Reports..................................................... 105
SECTION 1008. Statement by Officers as to Default......................... 105
SECTION 1009. Change of Control Triggering Event.......................... 106
SECTION 1010. Limitation on Consolidated Debt............................. 110
SECTION 1011. Limitation on Debt of Restricted............................ 115
Subsidiaries
SECTION 1012. Limitation on Restricted Payments........................... 117
SECTION 1013. Limitation on Dividend and Other
Payment Restrictions Affecting
Restricted Subsidiaries................................... 121
SECTION 1014. Limitation on Liens......................................... 123
SECTION 1015. Limitation on Sale and Leaseback
Transactions.............................................. 125
SECTION 1016. Limitation on Asset Dispositions............................ 125
SECTION 1017. Limitation on Issuance and Sales of
Capital Stock of Restricted
Subsidiaries ............................................. 128
SECTION 1018. Transactions with Affiliates................................ 130
SECTION 1019. Limitation on Designations of Unrestricted
Subsidiaries.............................................. 132
</TABLE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
[INTENTIONALLY OMITTED]
(vii)
<PAGE>
<TABLE>
<S> <C>
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance................................................ 135
SECTION 1202. Defeasance and Discharge.................................... 135
SECTION 1203. Covenant Defeasance......................................... 137
SECTION 1204. Conditions to Defeasance or Covenant Defeasance............. 137
SECTION 1205. Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions............. 140
SECTION 1206. Reinstatement............................................... 140
</TABLE>
EXHIBIT A - Form of Security
EXHIBIT B - Form of Supplemental Indenture
(viii)
<PAGE>
EURO SECURITIES INDENTURE, dated as of February 29, 2000 between Level
3 Communications, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company"), having its principal
office at 1025 Eldorado Boulevard, Broomfield, Colorado 80021, and The Bank of
New York, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 11 1/4%
Senior Euro Notes Due 2010 (the "Initial Securities") and, if and when issued
pursuant to a Registered Exchange Offer or Private Exchange Offer pursuant to
the Registration Agreement for the Initial Securities, 11 1/4% Senior Euro Notes
Due 2010 (the "Exchange Securities" and, together with the Initial Securities,
the "Securities"), of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of each of the Company and the Trustee, in
accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
<PAGE>
2
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, including the recitals set forth
above, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean United States generally accepted
accounting principles as in effect on the date of this Indenture;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section, paragraph or other subdivision;
(e) unless otherwise indicated, references to Articles,
Sections, paragraphs or other subdivisions are references to such Articles,
Sections, paragraphs or other subdivisions of this Indenture; and
<PAGE>
3
(f) "or" is not exclusive and "including" means including without
limitation.
"Accreted Value" of any Debt issued at a price less than the principal
amount at stated maturity, means, as of any date of determination, an amount
equal to the sum of (a) the issue price of such Debt as determined in accordance
with Section 1273 of the Code or any successor provisions plus (b) the aggregate
of the portions of the original issue discount (the excess of the amounts
considered as part of the "stated redemption price at maturity" of such Debt
within the meaning of Section 1273(a)(2) of the Code or any successor
provisions, whether denominated as principal or interest, over the issue price
of such Debt) that shall theretofore have accrued pursuant to Section 1272 of
the Code (without regard to Section 1272(a)(7) of the Code) from the date of
issue of such Debt to the date of determination, minus all amounts theretofore
paid in respect of such Debt, which amounts are considered as part of the
"stated redemption price at maturity" of such Debt within the meaning of Section
1273(a)(2) of the Code or any successor provisions (whether such amounts paid
were denominated principal or interest).
"Acquired Debt" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Subsidiary of such specified Person and (ii) Debt
secured by a Lien encumbering any Property acquired by such specified Person,
which Debt was not incurred in anticipation of, and was outstanding prior to,
such merger, consolidation or acquisition.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
<PAGE>
4
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 1016 and 1018 and the definition of "Telecommunications/IS
Assets" only, "Affiliate" shall also mean any beneficial owner of shares
representing 10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
Voting Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Affiliate Transaction" has the meaning specified in Section 1018.
"Agent Member" has the meaning specified in Section 312.
"Asset Disposition" means any transfer, conveyance, sale, lease,
issuance or other disposition by the Company or any Restricted Subsidiary in one
or more related transactions (including a consolidation or merger or other sale
of any such Restricted Subsidiary with, into or to another Person in a
transaction in which such Restricted Subsidiary ceases to be a Restricted
Subsidiary of the Company, but excluding a disposition by a Restricted
Subsidiary to the Company or a Restricted Subsidiary or by the Company to a
Restricted Subsidiary) of (i) shares of Capital Stock or other ownership
interests of a Restricted Subsidiary (other than as permitted by clause (v),
(vi), (vii) or (ix) of Section 1017), (ii) substantially all of the assets of
the Company or any Restricted Subsidiary representing a division or line of
business or (iii) other Property of the Company or any Restricted Subsidiary
outside of the ordinary course of business (excluding any transfer, conveyance,
sale, lease or other disposition of equipment that is obsolete or no longer used
by or useful to the Company, provided that the Company has delivered to the
--------
Trustee an Officers' Certificate stating that such criteria are satisfied);
provided in each case that the aggregate consideration for such transfer,
- --------
conveyance, sale, lease or other disposition is equal to $5,000,000 or more in
any 12-month period. The following shall not be Asset Dispositions: (i)
Permitted Telecommunications Capital Asset Dispositions that comply with clause
(i) of the first paragraph of Section 1016, (ii) when used with respect to the
Company, any Asset
<PAGE>
5
Disposition permitted pursuant to Article Eight which constitutes a disposition
of all or substantially all of the assets of the Company and the Restricted
Subsidiaries taken as a whole, (iii) Receivables sales constituting Debt under
Qualified Receivable Facilities permitted to be Incurred pursuant to Section
1010 and (iv) any disposition that constitutes a Permitted Investment or a
Restricted Payment permitted by Section 1012.
"Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount of
rent required to be paid by such Person under such lease during the remaining
term thereof (including any period for which such lease has been extended) as
determined in accordance with generally accepted accounting principles,
discounted from the last date of such remaining term to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of penalty, such net amount shall also
include the lesser of the amount of such penalty (in which case no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated) or the rent which would otherwise be
required to be paid if such lease is not so terminated. "Attributable Value"
means, as to a Capital Lease Obligation, the principal amount thereof .
"Board of Directors" means the board of directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
<PAGE>
6
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amount under a lease of (or other Debt arrangements
conveying the right to use) Property of such Person which is required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles (a "Capital Lease"). The stated maturity of such obligation shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty. The principal amount of such obligation shall be
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general
or limited, of such Person and any rights (other than debt securities
convertible or exchangeable into an equity interest), warrants or options to
acquire an equity interest in such Person.
"Cash Equivalents" means (i) Government Securities maturing, or subject
to tender at the option of the holder thereof, within two years after the date
of acquisition thereof, (ii) time deposits and certificates of deposit of any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the law of any
other country that is a member of the OECD having total assets in excess of
$500,000,000 (or its foreign currency equivalent at the time) with a maturity
date not more than one year from the date of acquisition, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with (x) any bank meeting
the qualifications specified in
<PAGE>
7
clause (ii) above or (y) any primary government securities dealer reporting to
the Market Reports Division of the Federal Reserve Bank of New York, (iv) direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing, or
subject to tender at the option of the holder thereof, within 90 days after the
date of acquisition thereof, provided that, at the time of acquisition, the
--------
long-term debt of such state, political subdivision or public instrumentality
has a rating of A (or higher) from S&P or A-2 (or higher) from Moody's (or, if
at any time neither S&P nor Moody's shall be rating such obligations, then an
equivalent rating from such other nationally recognized rating service
acceptable to the Trustee), (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD having total assets in
excess of $500,000,000 (or its foreign currency equivalent at the time), and
commercial paper issued by others having one of the two highest ratings
obtainable from either S&P or Moody's (or, if at any time neither S&P nor
Moody's shall be rating such obligations, then from such other nationally
recognized rating service acceptable to the Trustee) and in each case maturing
within one year after the date of acquisition, (vi) overnight bank deposits and
bankers' acceptances at any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $500,000,000 (or its foreign currency
equivalent at the time), (vii) deposits available for withdrawal on demand with
a commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the laws of any
other country that is a member of the OECD having total assets in excess of
$500,000,000 (or its foreign currency equivalent at the time) and (viii) invest-
ments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vii).
"Change of Control" has the meaning specified in Section 1009.
<PAGE>
8
"Change of Control Triggering Event" has the meaning specified in
Section 1009.
"Clearstream" means Clearstream International, a clearing and
settlement organization.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Depositary" means The Bank of New York Depositary (Nominees) Ltd.
and its nominees and successors, as common depositary for Euroclear and
Clearstream.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Order" or "Company Request" means a written request or order
signed in the name of the Company by the Chairman of the Board of Directors, a
Vice Chairman of the Board of Directors, the President or a Vice President, and
by the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee.
<PAGE>
9
"Consolidated Capital Ratio" means as of the date of determination the
ratio of (i) the aggregate amount of Debt of the Company and its Restricted
Subsidiaries on a consolidated basis as at the date of determination to (ii) the
sum of (a) $2,024,000,000, (b) the aggregate net proceeds to the Company from
the issuance or sale of any Capital Stock (including Preferred Stock) of the
Company other than Disqualified Stock subsequent to the Measurement Date, (c)
the aggregate net proceeds from the issuance or sale of Debt of the Company or
any Restricted Subsidiary subsequent to the Measurement Date convertible or
exchangeable into Capital Stock of the Company other than Disqualified Stock, in
each case upon conversion or exchange thereof into Capital Stock of the Company
subsequent to the Measurement Date and (d) the after-tax gain on the sale,
subsequent to the Measurement Date, of Special Assets to the extent such Special
Assets have been sold for cash, Cash Equivalents, Telecommunications/IS Assets
or the assumption of Debt of the Company or any Restricted Subsidiary (other
than Debt that is subordinated to the Securities or any applicable Restricted
Subsidiary Guarantee) and release of the Company and all Restricted Subsidiaries
from all liability on the Debt assumed; provided, however, that, for purposes of
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calculation of the Consolidated Capital Ratio, the net proceeds from the
issuance or sale of Capital Stock or Debt described in clause (b) or (c) above
shall not be included to the extent (x) such proceeds have been utilized to make
a Permitted Investment under clause (i) of the definition thereof or a
Restricted Payment or (y) such Capital Stock or Debt shall have been issued or
sold to the Company, a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees.
"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of, to the extent reducing Consolidated Net
Income for such period, (i) Consolidated Interest Expense of the Company and its
Restricted Subsidiaries for such period, plus (ii) Consolidated Income Tax
Expense of the Company and its Restricted Subsidiaries for such period, plus
(iii) consolidated depreciation and amortization expense and any other non-cash
items (other than any such non-cash item to the extent that it represents an
accrual of
<PAGE>
10
or reserve for cash expenditures in any future period); provided, however, that
-------- -------
there shall be excluded therefrom the Consolidated Cash Flow Available for Fixed
Charges (if positive) of any Restricted Subsidiary (calculated separately for
such Restricted Subsidiary in the same manner as provided above for the Company)
that is subject to a restriction which prevents the payment of dividends or the
making of distributions to the Company or another Restricted Subsidiary to the
extent of such restrictions.
"Consolidated Income Tax Expense" for any period means the aggregate
amounts of the provisions for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" for any period means the interest
expense included in a consolidated income statement (excluding interest income)
of the Company and its Restricted Subsidiaries for such period in accordance
with generally accepted accounting principles, including without limitation or
duplication (or, to the extent not so included, with the addition of), (i) the
amortization of Debt discounts and issuance costs, including commitment fees;
(ii) any payments or fees with respect to letters of credit, bankers'
acceptances or similar facilities; (iii) net costs with respect to interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements (including fees); (iv) Preferred Stock Dividends (other than
dividends paid in shares of Preferred Stock that is not Disqualified Stock)
declared and paid or payable; (v) accrued Disqualified Stock Dividends, whether
or not declared or paid; (vi) interest on Debt guaranteed by the Company and its
Restricted Subsidiaries; (vii) the portion of any Capital Lease Obligation or
Sale and Leaseback Transaction paid during such period that is allocable to
interest expense; (viii) interest Incurred in connection with investments in
discontinued operations; and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the Company
or a Restricted Subsidiary) in connection with Debt Incurred by such plan or
trust.
<PAGE>
11
"Consolidated Net Income" for any period means the net income (or loss)
of the Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom (a) for purposes of Section 1012
- --------
only, the net income (or loss) of any Person acquired by the Company or a
Restricted Subsidiary in a pooling-of-interests transaction for any period
prior to the date of such transaction, (b) the net income (or loss) of any
Person that is not a Restricted Subsidiary except to the extent of the amount of
dividends or other distributions actually paid to the Company or a Restricted
Subsidiary by such Person during such period (except, for purposes of Section
1012 only, to the extent such dividends or distributions have been subtracted
from the calculation of the amount of Investments to support the actual making
of Investments), (c) gains or losses realized upon the sale or other disposition
of any Property of the Company or its Restricted Subsidiaries that is not sold
or disposed of in the ordinary course of business (it being understood that
Permitted Telecommunications Capital Asset Dispositions shall be considered to
be in the ordinary course of business), (d) gains or losses realized upon the
sale or other disposition of any Special Assets, (e) all extraordinary gains
and extraordinary losses, determined in accor dance with generally accepted
accounting principles, (f) the cumulative effect of changes in accounting
principles, (g) non-cash gains or losses resulting from fluctuations in currency
exchange rates, (h) any non-cash expense related to the issuance to employees or
directors of the Company or any Restricted Subsidiary of (1) options to purchase
Capital Stock of the Company or such Restricted Subsidiary or (2) other
compensatory rights; provided, in either case, that such options or rights, by
--------
their terms can be redeemed at the option of the holder of such option or right
only for Capital Stock, and (i) with respect to a Restricted Subsidiary that is
not a Wholly Owned Subsidiary any aggregate net income (or loss) in excess of
the Company's or any Restricted Subsidiary's pro rata share of the net income
(or loss) of such Restricted Subsidiary that is not a Wholly Owned Subsidiary;
provided further that there shall further be excluded therefrom the net income
- ----------------
(but not net loss) of any Restricted Subsidiary that is subject to a restriction
which prevents the payment of dividends or the making of
<PAGE>
12
distributions to the Company or another Restricted Subsidiary to the extent of
such restriction.
"Consolidated Net Worth" of any Person means the stockholders' equity
of such Person, determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to Disqualified Stock
of such Person.
"Consolidated Tangible Assets" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Subsidiaries after
deducting therefrom all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 101 Barclay Street, Floor 21W, New York, New York 10286.
"Credit Agreement" means the Credit Agreement dated as of September 30,
1999, among the Company, certain subsidiaries of the Company, the lenders
parties thereto and The Chase Manhattan Bank, as Administrative Agent and
Collateral Agent.
"Credit Facilities" means one or more credit agreements, loan
agreements or similar facilities, secured or unsecured, providing for revolving
credit loans, term loans and/or letters of credit, including the Credit
Agreement and any Qualified Receivable Facility, entered into from time to time
by the Company and its Restricted Subsidiaries, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the
<PAGE>
13
assets of such Person and whether or not contingent, (i) every obligation of
such Person for money borrowed, (ii) every obligation of such Person evidenced
by bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of Property, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of Property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business), (v) every Capital Lease Obligation of such
Person and all Attributable Value in respect of Sale and Leaseback Transactions
entered into by such Person, (vi) all obligations to redeem or repurchase
Disqualified Stock issued by such Person, (vii) the liquidation preference of
any Preferred Stock (other than Disqualified Stock, which is covered by the
preceding clause (vi)) issued by any Restricted Subsidiary of such Person,
(viii) every obligation under Interest Rate or Currency Protection Agreements of
such Person and (ix) every obligation of the type referred to in clauses (i)
through (viii) of another Person and all dividends of another Person the payment
of which, in either case, such Person has Guaranteed. The "amount" or "principal
amount" of Debt at any time of determination as used herein represented by (a)
any Debt issued at a price that is less than the principal amount at maturity
thereof, shall be, except as otherwise set forth herein, the Accreted Value of
such Debt at such time or (b) in the case of any Receivables sale constituting
Debt, the amount of the unrecovered purchase price (that is, the amount paid for
Receivables that has not been actually recovered from the collection of such
Receivables) paid by the purchaser (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company) thereof. The amount of Debt represented by
an obligation under an Interest Rate or Currency Protection Agreement shall be
equal to (x) zero if such obligation has been Incurred pursuant to clause (x) of
paragraph (b) of Section 1010 or (y) the notional amount of such obligation if
not Incurred pursuant to such clause.
<PAGE>
14
"Default" means any event, act or condition the occurrence of which is,
or after notice or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designation" and "Designation Amount" have the respective meanings
specified in Section 1019.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final Stated Maturity of the Securities;
provided, however, that any Preferred Stock which would not constitute
- -------- -------
Disqualified Stock but for provisions thereof giving holders thereof the right
to require the Company to repurchase or redeem such Preferred Stock upon the
occurrence of a change of control occurring prior to the final Stated Maturity
of the Securities shall not constitute Disqualified Stock if the change of
control provisions applicable to such Preferred Stock are no more favorable to
the holders of such Preferred Stock than the provisions applicable to the
Securities contained in Section 1009 and such Preferred Stock specifically
provides that the Company will not repurchase or redeem any such stock pursuant
to such provisions prior to the Company's repurchase of such Securities as are
required to be repurchased pursuant to Section 1009.
"Disqualified Stock Dividends" means all dividends with respect to
Disqualified Stock of the Company held by Persons other than a Wholly Owned
Restricted Subsidiary. The amount of any such dividend shall be equal to the
quotient of such dividend divided by the difference between one and the maximum
statutory federal income tax rate (expressed as a decimal number between 1 and
0) applicable to the Company for the period during which such dividends were
paid.
<PAGE>
15
"Dollar Notes" means, collectively, the Company's 11% Senior Notes due
2008 in an aggregate principal amount not to exceed $800,000,000, the Company's
11 1/4% Senior Notes due 2010 in an aggregate amount not to exceed $250,000,000
and the Company's 12 7/8% Senior Discount Notes due 2010 in an aggregate
principal amount at maturity not to exceed $675,000,000.
"Eligible Receivables" means, at any time, Receivables of the Company
and its Restricted Subsidiaries, as evidenced on the most recent quarterly
consolidated balance sheet of the Company as at a date at least 45 days prior to
such time, arising in the ordinary course of business of the Company or any
Restricted Subsidiary.
"euro" means the single currency at the start of the third stage of
economic and monetary union on January 1, 1999, pursuant to the Treaty
establishing the European Economic Community as amended by the Treaty on
European Union, signed at Maastricht on February 7, 1992, and the Treaty signed
at Amsterdam on October 2, 1997.
"Euroclear" means the Euroclear System, a clearing and settlement
organization.
"Euro Notes" means the Company's 10 3/4% Senior Euro Notes due 2008 in
an aggregate principal amount not to exceed (U)500,000,000.
"European Government Obligation" means direct non- callable obligations
of, or non-callable obligations permitted by, any state members of the European
Union, the payment or guarantee of which is secured by the pledge of the full
faith and credit of the respective nation, provided that such nation has a
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credit rating at least equal to that of the highest rated member nation of the
member nations of the European Union.
"European Union" means the state members to the third stage of economic
and monetary union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
February 7, 1992, and the Treaty signed at Amsterdam on October 2, 1997.
<PAGE>
16
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Exchange Securities" has the meaning stated in the first recital of
this Indenture.
"Excess Proceeds" has the meaning specified in Section 1016.
"Existing Notes" means the 9 1/8% Senior Notes, the 10 1/2% Senior
Discount Notes and the 6% Convertible Notes.
"Expiration Date" has the meaning specified in "Offer to Purchase"
below.
"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction. Unless otherwise specified herein,
Fair Market Value shall be determined by the Board of Directors acting in good
faith and shall be evidenced by a Board Resolution delivered to the Trustee.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Global Security" means a Rule 144A Global Security, an Institutional
Accredited Investor Global Security or a Regulation S Global Security, as the
case may be.
"Government Securities" means direct obligations of, or obligations fully
and unconditionally guaranteed or insured by, the United States of America or
any agency or instrumentality thereof for the payment of which obligations or
guarantee the full faith and credit of the United States is pledged and which
are not callable or redeemable at the issuer's option (unless, for purposes of
the definition of
<PAGE>
17
"Cash Equivalents" only, the obligations are redeemable or callable at a price
not less than the purchase price paid by the Company or the applicable
Restricted Subsidiary, together with all accrued and unpaid interest (if any) on
such Government Securities).
"Guarantee" by any Person means any obligation, direct or indirect,
contingent or otherwise, of such Person guaranteeing, or having the economic
effect of guaranteeing, any Debt of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Debt, including any such obligations arising by virtue of partnership
arrangements or by agreements to keep-well, (ii) to purchase Property or
services or to take-or-pay for the purpose of assuring the holder of such Debt
of the payment of such Debt, (iii) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Debt or (iv) entered into for the
purpose of assuring in any other manner the obligee against loss in respect
thereof, in whole or in part (and "Guaranteed", "Guaranteeing" and "Guarantor"
shall have meanings correlative to the foregoing); provided, however, that the
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Guarantee by any Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary course of business.
"Guarantor" means a Restricted Subsidiary of the Company that has
executed a Restricted Subsidiary Guarantee, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Guarantor" shall mean such successor Person.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including the recording, as required pursuant to
<PAGE>
18
generally accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and "Incurrence", "Incurred",
"Incurrable" and "Incurring" shall have meanings correlative to the foregoing);
provided, however, that a change in generally accepted accounting principles
- -------- -------
that results in an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt and that neither the accrual
of interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt. Debt otherwise incurred by a Person before it becomes a
Subsidiary of the Company shall be deemed to have been Incurred at the time at
which it becomes a Subsidiary.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Foreign Purchaser" means each non U.S. person (within the
meaning of Regulation S) that purchased Initial Securities from the Initial
Purchasers in offshore transactions meeting the requirements of Regulation S.
"Initial Purchasers" means Salomon Smith Barney International Limited,
Goldman Sachs International, Morgan Stanley & Co. International Limited, Chase
Securities Inc., J.P. Morgan Securities Ltd., Credit Suisse First Boston
(Europe) Limited, Barclays Capital Inc., Credit Lyonnais SA, Kleinwort Benson
Limited and Societe Generale.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"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.
"Institutional Accredited Investor Global Security" has the meaning
specified in Section 303.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
<PAGE>
19
"Interest Rate or Currency Protection Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including caps, floors, collars and similar
agreements) relating to, or the value of which is dependent upon, interest rates
or currency exchange rates or indices.
"Invested Capital" means the sum of (a) $500,000,000, (b) the aggregate
net proceeds received by the Company from the issuance or sale of any Capital
Stock, including Preferred Stock, of the Company but excluding Disqualified
Stock, subsequent to the Measurement Date, and (c) the aggregate net proceeds
from the issuance or sale of Debt of the Company or any Restricted Subsidiary
subsequent to the Measurement Date convertible or exchangeable into Capital
Stock of the Company other than Disqualified Stock, in each case upon conversion
or exchange thereof into Capital Stock of the Company subsequent to the
Measurement Date; provided, however, that the net proceeds from the issuance or
-------- -------
sale of Capital Stock or Debt described in clause (b) or (c) shall be excluded
from any computation of Invested Capital to the extent (i) utilized to make a
Restricted Payment or (ii) such Capital Stock or Debt shall have been issued or
sold to the Company, a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, purchase, redemption, retirement or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, or Incurrence of, or payment on, a Guarantee of any
obligation of, any other Person; provided that Investments shall exclude
--------
commercially reasonable extensions of trade credit. The amount, as of any date
of determination, of any Investment shall be the original cost of such
Investment, plus the cost of all additions, as of such date, thereto and minus
the amount, as of such date, of any portion of such Investment repaid to such
Person in cash as a repayment of principal or a return of capital, as the case
may be (except to the extent such repaid amount has been
<PAGE>
20
included in Consolidated Net Income to support the actual making of Restricted
Payments), but without any other adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
In determining the amount of any Investment involving a transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such transfer.
"Issue Date" means the date on which the Initial Securities are
initially issued.
"Issue Date Purchase Money Debt" means Purchase Money Debt outstanding
on the Issue Date; provided, that the amount of such Purchase Money Debt when
--------
Incurred did not exceed 100% of the cost of the construction, installation,
acquisition, lease, development or improvement of the applicable
Telecommunications/IS Assets.
"Issue Date Rating" means B3 in the case of Moody's and B in the case
of S&P, which are the respective ratings assigned to the Securities by the
Rating Agencies on the Issue Date.
"Joint Venture" means a Person in which the Company or a Restricted
Subsidiary holds not more than 50% of the shares of Voting Stock.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness), encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or
with respect to such Property (including any Capital Lease Obligation,
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing and any Sale and Leaseback
Transaction). For purposes of this definition the sale, lease, conveyance or
other transfer by the Company or any of its Subsidiaries of, including the grant
of indefeasible rights of use or equivalent arrangements with respect to, dark
or lit communications fiber capacity or communications conduit shall not
constitute a Lien.
<PAGE>
21
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.
"Measurement Date" means April 28, 1998, the date the 91/8% Senior
Notes were originally issued.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's
Investors Service, Inc. shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
-------- -------
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Trustee by a written
notice given to the Company.
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or cash equivalents received (including amounts received by way of sale or
discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such Property) therefrom by
such Person, net of (i) all legal, title and recording taxes, expenses and
commissions and other fees and expenses (including appraisals, brokerage
commissions and investment banking fees) Incurred and all federal, state,
provincial, foreign and local taxes required to be accrued as a liability as a
consequence of such Asset Disposition, (ii) all payments made by such Person or
its Subsidiaries on any Debt which is secured by such Property in accordance
with the terms of any Lien upon or with respect to such Property or which must
by the terms of such Lien, or in order to obtain a necessary consent to such
Asset Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition, (iii) all distributions and other payments required to be
<PAGE>
22
made to minority interest holders in Subsidiaries or Joint Ventures of such
Person as a result of such Asset Disposition and (iv) appropriate amounts to be
provided by such Person or any Subsidiary thereof, as the case may be, as a
reserve in accordance with generally accepted accounting principles against any
liabilities associated with such Property and retained by such Person or any
Subsidiary thereof, as the case may be, after such Asset Disposition, including
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by the board of directors of such Person, in its reasonable good
faith judgment evidenced by a Board Resolution filed with the Trustee; provided,
--------
however, that any reduction in such reserve within twelve months following the
- -------
consummation of such Asset Disposition will be, for all purposes of this
Indenture and the Securities, treated as a new Asset Disposition at the time of
such reduction with Net Available Proceeds equal to the amount of such
reduction; provided further, however, that, in the event that any consideration
---------------- -------
for a transaction (which would otherwise constitute Net Available Proceeds) is
required to be held in escrow pending determination of whether a purchase price
adjustment will be made, at such time as such portion of the consideration is
released to such Person or its Restricted Subsidiary from escrow, such portion
shall be treated for all purposes of this Indenture and the Securities as a new
Asset Disposition at the time of such release from escrow with Net Available
Proceeds equal to the amount of such portion of consideration released from
escrow.
"New Convertible Notes" means the Company's 6% Convertible Subordinated
Notes due 2010 in an aggregate principal amount not to exceed $862,500,000.
"9 1/8% Senior Notes" means the Company's 9 1/8% Senior Notes due 2008
in an aggregate principal amount not to exceed $2,000,000,000, originally issued
on April 28, 1998.
"Non-Global Purchasers" has the meaning specified in Section 303.
"Offer" has the meaning specified in "Offer to Purchase" below.
<PAGE>
23
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first-class mail, postage prepaid, to each Holder of Securities at
its address appearing in the Security Register on the date of the Offer offering
to purchase up to the principal amount of Securities specified in such Offer at
the purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30
days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Securities within five Business Days after
the Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain information concerning the business of the Company and its Subsidiaries
which the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at a minimum will
include (i) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the Trustee
pursuant to this Indenture (which requirements may be satisfied by delivery
of such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Offer to Purchase), (iii) if
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase and
(iv) any other information required by applicable law to be included therein).
The Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase. The Offer shall
also state:
<PAGE>
24
a. the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
b. the Expiration Date and the Purchase Date;
c. the aggregate principal amount of the Outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100% of the Outstanding
Securities, the manner by which such has been determined pursuant to
the Section hereof requiring the Offer to Purchase) (the "Purchase
Amount");
d. the purchase price to be paid by the Company for
(Euro)1,000 aggregate principal amount of Securities accepted for
payment (as specified pursuant to this Indenture) (the "Purchase
Price");
e. that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
(U)1,000 principal amount;
f. the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
g. that any Securities not tendered or tendered but not
purchased by the Company will continue to accrue interest;
h. that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon, if any, shall cease
to accrue on and after the Purchase Date;
i. that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Company or
the Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Trustee duly
<PAGE>
25
executed by, the Holder thereof or his attorney duly authorized in
writing);
j. that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or the Paying Agent)
receives, not later than the close of business on the Expiration Date,
a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder tendered, the
certificate number of the Security the Holder tendered and a statement
that such Holder is withdrawing all or a portion of his tender;
k. that (i) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (ii) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
--- ----
appropriate so that only Securities in denominations of (Euro)1,000
principal amount or integral multiples thereof shall be purchased); and
l. that in the case of any Holder whose Security is purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, a Vice Chairman of the Board of Directors, the President
or a Vice President, and by the Chief Financial Officer, the Chief Accounting
Officer, the Treasurer, an Assistant Treasurer, the Controller, the Secretary or
an Assistant Secretary of the
<PAGE>
26
Company and delivered to the Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means an opinion of counsel acceptable to the
Trustee (who may be counsel to the Company, including an employee of the
Company).
"OECD" shall mean the Organization for Economic Cooperation and
Development.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(ii) on and after any maturity or redemption date, Securities,
or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that (a) the
--------
Trustee or the Paying Agent, as applicable, is not prohibited from
paying such money to the Holders and (b) if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture;
(iii) Securities, except to the extent provided in Sections
1202 and 1203, with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Twelve; and
(iv) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in
<PAGE>
27
whose hands the Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which any
Responsible Officer of the Trustee knows to be so owned or as to which the
Trustee has received written notice shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or such
other obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any)
or interest on any Securities on behalf of the Company.
"Permitted Holders" means the members of the Company's Board of
Directors on the Measurement Date and their respective estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rule 13d-3 under the Exchange Act) at least
662/3% of the total voting power of the Voting Stock of such Person.
"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is
<PAGE>
28
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and not for purposes of
speculation and which, in the case of an interest rate agreement, shall have a
notional amount no greater than the principal amount at maturity due with
respect to the Debt being hedged thereby.
"Permitted Investments" means (a) Cash Equivalents; (b) investments in
prepaid expenses; (c) negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (d)
loans, advances or extensions of credit to employees and directors made in the
ordinary course of business and consistent with past practice; (e) obligations
under Permitted Interest Rate or Currency Protection Agreements; (f) bonds,
notes, debentures and other securities received as a result of Asset
Dispositions pursuant to and in compliance with Section 1016; (g) Investments in
any Person as a result of which such Person becomes a Restricted Subsidiary; (h)
Investments made prior to the Measurement Date; (i) Investments made after the
Measurement Date in Persons engaged in the Telecommunications/IS Business in an
aggregate amount not to exceed Invested Capital; (j) solely in connection with
the defeasance of euro-denominated Debt permitted under this Indenture, European
Government Obligations; and (k) additional Investments in an aggregate amount
not to exceed $200,000,000.
"Permitted Liens" means (a) Liens for taxes, assessments, governmental
charges, levies or claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with generally
accepted accounting principles shall have been made therefor; (b) other Liens
incidental to the conduct of the Company's and its Restricted Subsidiaries'
businesses or the ownership of its Property not securing any Debt, and which do
not in the aggregate materially detract from the value of the Company's and its
Restricted Subsidiaries' Property when taken as a whole, or materially impair
the use thereof in the operation of its business; (c) Liens, pledges and
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of statutory obligations;
(d) Liens,
<PAGE>
29
pledges or deposits made to secure the performance of tenders, bids, leases,
public or statutory obligations, sureties, stays, appeals, indemnities,
performance or other similar bonds and other obligations of like nature incurred
in the ordinary course of business (exclusive of obligations for the payment of
borrowed money, the obtaining of advances or credit or the payment of the
deferred purchase price of Property and which do not in the aggregate materially
impair the use of Property in the operation of the business of the Company and
the Restricted Subsidiaries taken as a whole); (e) zoning restrictions,
servitudes, easements, rights-of- way, restrictions and other similar charges or
encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the Property subject
thereto or materially interfere with the ordinary conduct of the business of the
Company or its Restricted Subsidiaries; and (f) any interest or title of a
lessor in the Property subject to any lease other than a Capital Lease.
"Permitted Telecommunications Capital Asset Disposi tion" means the
transfer, conveyance, sale, lease or other disposition of optical fiber and/or
conduit and any related equipment used in a Segment (as defined) of the
Company's communications network that (i) constitute capital assets in
accordance with generally accepted accounting principles and (ii) after giving
effect to such disposition, would result in the Company retaining at least
either (A) 24 optical fibers per route mile on such Segment as deployed at the
time of such disposition or (B) 12 optical fibers and one empty conduit per
route mile on such Segment as deployed as such time. "Segment" means (x) with
respect to the Company's intercity network, the through-portion of such network
between two local networks (i.e., Omaha to Denver) and (y) with respect to a
local network of the Company (i.e., Dallas), the entire through-portion of such
network, excluding the spurs which branch off the through-portion.
"Person" means any individual, corporation, company, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
<PAGE>
30
"Physical Security" has the meaning specified in Section 303.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital
Stock of any other class of such Person.
"Preferred Stock Dividends" means all dividends with respect to
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Restricted Subsidiary. The amount of any such dividend
shall be equal to the quotient of such dividend divided by the difference
between one and the maximum statutory federal income rate (expressed as a
decimal number between 1 and 0) applicable to the issuer of such Preferred Stock
for the period during which such dividends were paid.
"Private Exchange Offer" means the offer by the Company, pursuant to
Section 2(f) of the Registration Agreement, to issue and deliver to certain
purchasers, in exchange for the Initial Securities held by such purchasers as
part of their initial distribution, a like aggregate principal amount of Private
Exchange Securities.
"Private Exchange Securities" means the Exchange Securities to be
issued pursuant to this Indenture in connection with a Private Exchange Offer
pursuant to the Registration Agreement.
"Private Placement Legend" means the third paragraph of the legend set
forth in the Securities in the form set forth in Exhibit A.
<PAGE>
31
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"Proportionate Interest" in any issuance of Capital Stock of a
Restricted Subsidiary means a ratio (i) the numerator of which is the aggregate
amount of all Capital Stock of such Restricted Subsidiary beneficially owned by
the Company and the Restricted Subsidiaries and (ii) the denominator of which is
the aggregate amount of Capital Stock of such Restricted Subsidiary beneficially
owned by all Persons (excluding, in the case of this clause (ii), any Investment
made in connection with such issuance).
"Purchase Amount" has the meaning specified in "Offer to Purchase"
above.
"Purchase Date" has the meaning specified in "Offer to Purchase" above.
"Purchase Money Debt" means Debt (including Acquired Debt and Capital
Lease Obligations, mortgage financings and purchase money obligations) incurred
for the purpose of financing all or any part of the cost of construction,
installation, acquisition, lease, development or improvement by the Company or
any Restricted Subsidiary of any Telecommunications/IS Assets of the Company or
any Restricted Subsidiary and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified or restated from
time to time.
"Purchase Price" has the meaning specified in "Offer to Purchase"
above.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A.
"Qualified Receivable Facility" means Debt of the Company or any
Subsidiary Incurred from time to time
<PAGE>
32
pursuant to either (x) credit facilities secured by Receivables or (y)
Receivables purchase facilities, and including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, supplemented, modified or restated from
time to time.
"Rating Agencies" means Moody's and S&P.
"Rating Date" means the earlier of the date of public notice of the
occurrence of a Change of Control or of the intention of the Company to effect a
Change of Control.
"Rating Decline" shall be deemed to have occurred if, no later than 90
days after the Rating Date (which period shall be extended so long as the rating
of the Securities is under publicly announced consideration for possible
downgrade by any of the Rating Agencies), either of the Rating Agencies assigns
or reaffirms a rating to the Securities that is lower than the applicable Issue
Date Rating (or the equivalent thereof). If, prior to the Rating Date, either of
the ratings assigned to the Securities by the Rating Agencies is lower than the
applicable Issue Date Rating, then a Rating Decline will be deemed to have
occurred if such rating is not changed by the 90th day following the Rating
Date. A downgrade within rating categories, as well as between rating
categories, will be considered a Rating Decline.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money and
proceeds and products thereof in each case generated in the ordinary course of
business.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"refinancing" has the meaning specified in Section 1010(b)(viii).
<PAGE>
33
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Agreement, to certain Holders of Initial Securities, to issue
and deliver to such Holders, in exchange for the Initial Securities, a like
aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Euro Registration Agreement dated
February 24, 2000, between the Company and the Initial Purchasers relating to
the Initial Securities.
"Registration Default" has the meaning specified in Exhibit A.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the March 1 or September 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning specified in Section
303.
"Required Filing Dates" has the meaning specified in Section 1007.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Trustee's Corporate Trust Office, including any vice
president, any assistant secretary, any assistant treasurer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers, and also 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 Payment" has the meaning specified in Section 1012.
"Restricted Subsidiary" means (a) a Subsidiary of the Company or of a
Restricted Subsidiary that has not been
<PAGE>
34
designated or classified as an Unrestricted Subsidiary pursuant to and in
compliance with Section 1019 and (b) an Unrestricted Subsidiary that is
redesignated as a Restricted Subsidiary pursuant to such Section.
"Restricted Subsidiary Guarantee" means a supplemental indenture to
this Indenture in substantially the form set forth in Exhibit B hereto,
providing for an unconditional Guarantee of payment in full of the principal of,
premium, if any, and interest on the Securities. Any such Restricted Subsidiary
Guarantee shall not be subordinate to any Debt of the Restricted Subsidiary
providing the Restricted Subsidiary Guarantee.
"Revocation" has the meaning specified in Section 1019.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Security" has the meaning specified in Section 303.
"S&P" means Standard & Poor's Ratings Service or, if Standard & Poor's
Ratings Service shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
-------- -------
that if Standard & Poor's Rating Service ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"S&P" shall mean any other national recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Trustee by a written
notice given to the Company.
"Sale and Leaseback Transaction" of any Person means any direct or
indirect arrangement pursuant to which any Property is sold or transferred by
such Person or a Restricted Subsidiary of such person and is thereafter leased
back from the purchaser or transferee thereof by such Person or one of its
Restricted Subsidiaries. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrange-
<PAGE>
35
ment may be terminated by the lessee without payment of a penalty.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended (or any
successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Shelf Registration Statement" means a registration statement issued by
the Company in connection with the offer and sale of Initial Securities pursuant
to the Registration Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"6% Convertible Notes" means the Company's 6% Convertible Subordinated
Notes due 2009 in an aggregate principal amount not to exceed $823,000,000,
originally issued on September 14, 1999.
"Special Assets" means (a) the Capital Stock or assets of Cable
Michigan, Inc., RCN Corporation, Commonwealth Telephone Enterprises, Inc., KCP,
Inc. and California Private Transportation Company, L.P. (and any intermediate
holding companies or other entities formed solely for the purpose of owning such
Capital Stock or assets) owned, directly or indirectly, by the Company or any
Restricted Subsidiary on the Measurement Date, and (b) any Property, other than
cash, Cash Equivalents and Telecommunications/IS Assets, received as
consideration for the disposition after the Measurement Date of Special Assets
(as contemplated by the first proviso in Section 1016).
"Special Interest" has the meaning specified in Exhibit A.
<PAGE>
36
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to a Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
Security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the Company unless such contingency has
occurred).
"Subordinated Debt" means Debt of the Company (a) that is not secured
by any Lien on or with respect to any Property now owned or acquired after the
Measurement Date and (b) as to which the payment of principal of (and premium,
if any) and interest and other payment obligations in respect of such Debt shall
be subordinate to the prior payment in full in cash of the Securities to at
least the following extent: (i) no payments of principal of (or premium, if any)
or interest on or otherwise due (including by acceleration or for additional
amounts) in respect of, or repurchases, redemptions or other retirements of,
such Debt (collectively, "payments of such Debt") may be permitted for so long
as any default (after giving effect to any applicable grace periods) in the
payment of principal (or premium, if any) or interest on the Securities exists,
including as a result of acceleration; (ii) in the event that any other Default
exists with respect to the Securities, upon notice by Holders of 25% or more in
aggregate principal amount of the Securities to the Trustee, the Trustee shall
have the right to give notice to the Company and the holders of such Debt (or
trustees or agents therefor) of a payment blockage, and thereafter no payments
of such Debt may be made for a period of 179 days from the date of such notice,
provided that not more than one such payment blockage notice may be given in any
- --------
consecutive 360- day period, irrespective of the number of defaults with respect
to the Securities during such period; (iii) if payment of such Debt is
accelerated when any Securities are Outstanding, no payments of such Debt may be
made until three Business Days after the Trustee receives notice of
<PAGE>
37
such acceleration and, thereafter, such payments may only be made to the extent
the terms of such Debt permit payment at that time; and (iv) such Debt may not
(x) provide for payments of principal of such Debt at the stated maturity
thereof or by way of a sinking fund applicable thereto or by way of any
mandatory redemption, defeasance, retirement or repurchase thereof by the
Company (including any redemption, retirement or repurchase which is contingent
upon events or circumstances but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each case
prior to the final Stated Maturity of the Securities or (y) permit redemption or
other retire ment (including pursuant to an offer to purchase made by the
Company) of such other Debt at the option of the holder thereof prior to the
final Stated Maturity of the Securities, other than, in the case of clause (x)
or (y), any such payment, redemption or other retirement (including pursuant to
an offer to purchase made by the Company) which is conditioned upon (A) a change
of control of the Company pursuant to provisions substantially similar to those
described in Section 1009 (and which shall provide that such Debt will not be
repurchased pursuant to such provisions prior to the Company's repurchase of the
Securities required to be repurchased by the Company pursuant to the provisions
described in Section 1009) or (B) a sale or other disposi tion of assets
pursuant to provisions substantially similar to those described in Section 1016
(and which shall provide that such Debt will not be repurchased pursuant to such
provisions prior to the Company's repurchase of the Securities required to be
repurchased by the Company pursuant to the provision described in Section 1016).
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other Subsi
diaries thereof, directly or indirectly, has at least a majority ownership and
power to direct the policies, management and affairs thereof.
<PAGE>
38
"Telecommunications/IS Assets" means (a) any Property (other than cash,
cash equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in the Telecommunications/IS Business; (b) for purposes of
Sections 1010 and 1014 only, Capital Stock of any Person; or (c) for all other
purposes of this Indenture, Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary from any Person other than an Affiliate of the
Company; provided, however, that, in the case of clause (b) or (c), such Person
-------- -------
is primarily engaged in the Telecommunications/IS Business.
"Telecommunications/IS Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii)
constructing, creating, developing or marketing communications networks, related
network transmission equipment, software and other devices for use in a
communications business, (iii) computer outsourcing, data center management,
computer systems integration, reengineering of computer software for any
purpose (including, without limitation, for the purposes of porting computer
software from one operating environment or computer platform to another or to
address issues commonly referred to as "Year 2000 issues") or (iv) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in (i), (ii) or (iii) above; provided that the
--------
determination of what constitutes a Telecommunications/IS Business shall be made
in good faith by the Board of Directors.
"10 1/2% Senior Discount Notes" means the Company's 10 1/2% Senior
Discount Notes due 2008 in an aggregate principal amount at maturity not to
exceed $833,815,000, originally issued on November 24, 1998.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force at the date as of which this Indenture was executed, except as provided
in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable
<PAGE>
39
provisions of this Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
"Unrestricted Subsidiary" means (a) 91 Holding Corp.; (b) any
Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 1019 and not
thereafter redesignated as a Restricted Subsidiary as permitted pursuant
thereto.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Voting Stock or other ownership interests (other
than directors' qualifying shares) of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
<PAGE>
40
SECTION 102. Compliance Certificates and Opinions.
-------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
---------------------------------------
<PAGE>
41
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated (with
proper identification of each matter covered therein) and form one instrument.
<PAGE>
42
SECTION 104. Acts of Holders.
----------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization,
<PAGE>
43
direction, notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. Notwithstanding TIA Section 316(c), such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the date 30 days prior to the first
solicitation of Holders generally in connection therewith and not later than the
date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
--------
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security. However, any such Holder or future Holder may revoke the request,
demand, authorization, direction, notice, consent, waiver or other Act of the
Holder as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date such Act becomes effective.
<PAGE>
44
SECTION 105. Notices, etc., to Trustee and Company.
--------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company or any Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or such Guarantor addressed to it (in the case of a
Guarantor, in care of the Company) at the address of the Company's
principal office specified in the first paragraph of this Indenture, or at
any other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
--------------------------
<PAGE>
45
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder as it appears
in the Security Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Notices shall be
effective only upon receipt. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
<PAGE>
46
SECTION 109. Separability Clause.
--------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture.
----------------------
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Security Registrar and their successors hereunder and the Holders any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
--------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK BUT 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.
SECTION 112. Conflict with Trust Indenture Act.
----------------------------------
The Trust Indenture Act shall apply as a matter of contract to this
Indenture for purposes of interpretation, construction and defining the rights
and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with any provision of the Trust Indenture Act or another provision
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such provision or requirement of the
Trust Indenture Act shall control.
If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
<PAGE>
47
SECTION 113. Legal Holidays.
---------------
In any case where any Interest Payment Date, Redemption Date, or Stated
Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal (or premium, if any) or interest need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity or Maturity; provided that no interest shall accrue for the
--------
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be.
SECTION 114. No Personal Liability of Directors, Officers, Employees
-------------------------------------------------------
and Stockholders.
- ----------------
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or any Guarantor under the Securities or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation,
solely by reason of its status as a director, officer, employee, incorporator or
stockholder of the Company or a Guarantor. By accepting a Security, each Holder
waives and releases all such liability (but only such liability). The waiver and
release are part of the consideration for issuance of the Securities.
SECTION 115. Independence of Covenants.
--------------------------
All covenants and agreements in this Indenture shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default if such action is taken or condition exists.
SECTION 116. Exhibits.
---------
All exhibits attached hereto are by this reference made a part hereof with
the same effect as if herein set forth in full.
<PAGE>
48
SECTION 117. Counterparts.
-------------
This Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
SECTION 118. Duplicate Originals.
--------------------
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
----------------
The Securities and the Trustee's certificate of authentication with respect
thereto shall be in substantially the form set forth in Exhibit A hereto, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or system
on which the Securities may be listed or eligible for trading or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange or system on which the Securities may be listed
or eligible for trading, all as determined by the officers of the Company
executing such Securities, as evidenced by their execution of such Securities.
<PAGE>
49
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
----------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to (Euro)300,000,000, except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306,
906, 1009, 1016 or 1108.
The Securities shall be known and designated as the "11 1/4% Senior Euro
Notes Due 2010" of the Company. Their Stated Maturity shall be March 15, 2010,
and they shall bear interest at the rate of 11 1/4% per annum from February 29,
2000, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable on September 15, 2000 and semiannually
thereafter on March 15 and September 15 in each year and at said Stated
Maturity, until the principal thereof is paid or duly provided for.
Principal of, premium, if any, and interest on the Securities will be
payable, and the Securities may be exchanged or transferred, at the office or
agency of the Company in The City of New York, which, unless otherwise provided
by the Company, will be the offices of the Trustee. At the option of the
Company, interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Security Register.
The interest rate on the Securities is subject to increase by the addition
of Special Interest and otherwise, all as set forth or referred to in the text
of the Securities appearing in Exhibit A hereto.
The Securities shall be redeemable as provided in Article Eleven.
At the election of the Company, the entire Debt on the Securities or
certain of the Company's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article Twelve.
<PAGE>
50
SECTION 302. Denominations.
--------------
The Securities will be issued without coupons and in fully registered form
only, in minimum denominations of (Euro)1,000 principal amount and integral
multiples thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its Chairman,
its President or a Vice President, under its corporate seal reproduced thereon
and attested by its Secretary or an Assistant Secretary. The signature of any of
these officers on the Securities may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such
<PAGE>
51
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
The Trustee shall authenticate and deliver (1) initially one or more Global
Securities for original issue in an aggregate principal amount not to exceed
(Euro)300,000,000 and (2) Exchange Securities for issue only in a Registered
Exchange Offer or a Private Exchange Offer pursuant to the Registration
Agreement, for a like principal amount of Initial Securities, upon receipt of a
Company Order, which shall specify the amount of Securities to be authenticated,
whether the Securities are to be Initial Securities or Exchange Securities, the
date on which such Securities are to be authenticated and direct the Trustee to
authenticate such Securities.
Except as described below, the Securities will be deposited with, or on
behalf of, the Depository, and registered in the name of Cede & Co. as the
Depository's nominee in the form of a global note certificate substantially in
the form of Exhibit A (the "Rule 144A Global Security"), for credit to the
respective accounts of the beneficial owners of the Securities represented
thereby.
Securities purchased by persons outside the United States pursuant to sales
in accordance with Regulation S under the Securities Act shall be deposited
with, or on behalf of, the Common Depositary, and registered in the name of Cede
& Co. as the Common Depositary's nominee in the form of one or more global note
certificates substantially in the form of Exhibit A (each a "Regulation S Global
Security"), for credit to the respective accounts of the beneficial owners of
the Securities represented thereby, provided that upon such deposit all such
--------
Securities shall be credited to or through accounts maintained at the Depository
by or on behalf of the Euroclear System or Clearstream, societe anonyme.
Securities transferred to Institutional Accredited Investors will be
deposited with, or on behalf of, the Depository, and registered in the name of
Cede & Co. as the Depository's nominee in the form of one or more global note
certificates substantially in the form of Exhibit A (each a "Institutional
Accredited Investor Global Security"), for
<PAGE>
52
credit to the respective accounts of the beneficial owners of the Securities
represented thereby.
Securities transferred to any persons who are not Qualified Institutional
Buyers or Institutional Accredited Investors (other than persons outside the
United States pursuant to sales or transfers in accordance with Regulation S
under the Securities Act) (collectively, "Non- Global Purchasers") will be
issued in registered definitive form without coupons substantially in the form
of Exhibit A (the "Physical Securities"). Upon the transfer to a Qualified
Institutional Buyer, an Institutional Accredited Investor or to a person outside
the United States pursuant to a sale or transfer in accordance with Regulation S
under the Securities Act of Physical Securities initially issued to a Non-Global
Purchaser, such Physical Security will be exchanged for an interest in a Global
Security representing the principal amount of Securities being transferred.
In case the Company, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall transfer, sell, lease, convey or
otherwise dispose of all or substantially all its assets to any other Person,
and the successor Person resulting from such consolidation, or surviving such
merger, or into which the Company shall have been merged, or the Person which
shall have received a transfer, sale, lease, conveyance or other disposition as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article Eight, any of the Securities authenticated or delivered
prior to such consolidation, merger, transfer, sale, lease, conveyance or other
disposition may, from time to time, at the request of the successor Person, be
exchanged for other Securities executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Securities surrendered for such exchange and of
like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to
<PAGE>
53
them, shall provide for the exchange of all Securities at the time Outstanding
for Securities authenticated and delivered in such new name.
SECTION 304. Temporary Securities.
---------------------
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
<PAGE>
54
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as the Company may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Security
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the "Security Registrar") for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be duly
<PAGE>
55
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any transfer tax or other similar governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1009, 1016 or
1108 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business 15
days before the selection of Securities to be redeemed under Section 1104 and
ending at the close of business on the day of such mailing of the relevant
notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (i) any mutilated Security is surrendered to the Trustee or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity sufficient to save each of
them harmless, then, in the absence of actual notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
<PAGE>
56
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other similar
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 1002;
provided, however, that each installment of interest may at the Company's option
- -------- -------
be paid by mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears in the Security Register.
<PAGE>
57
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of such Holder having
been a Holder on the Regular Record Date, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") may be paid by the Company, at its election in each
case, as provided in paragraph (1) or (2) below:
<PAGE>
58
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given in the manner provided
for in Section 106, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so given, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following paragraph (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or system on which the Securities may be listed or
eligible for trading, and upon such notice as may be required by such
exchange or system, if, after notice given by the Company to the
Trustee of the proposed
<PAGE>
59
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee in its sole discretion.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
----------------------
Prior to the due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 307) interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
<PAGE>
60
SECTION 309. Cancellation.
-------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures unless by Company Order the Company shall direct that cancelled
Securities be returned to it.
SECTION 310. Computation of Interest.
------------------------
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 311. CUSIP Number.
-------------
The Company in issuing the Securities may use a "CUSIP" number (if then
generally in use), and if so, the Trustee may use the CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided, however, that
-------- -------
any such notice may state that no representation is made as to the correctness
or accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Company shall promptly notify the Trustee in writing of any
change in the CUSIP number of the Securities.
<PAGE>
61
SECTION 312. Book-Entry Provisions for Global Securities.
--------------------------------------------
(a) The Rule 144A Global Securities and Institutional Accredited
Investor Global Securities initially shall (i) be registered in the name of The
Depository Trust Company or its nominee, (ii) be deposited with the Trustee as
custodian for the Depository and (iii) bear legends as set forth in Exhibit A.
The Regulation S Global Securities initially shall (i) be registered in the name
of The Bank of New York Depositary (Nominees) Ltd., as Common Depositary for
Euroclear and Clearstream, or its nominee, (ii) be deposited with the Common
Depositary and (iii) bear legends as set forth in the Exhibit A.
Members of, or participants in, the Depository, Euroclear or
Clearstream ("Agent Members") shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the Depository or the
Common Depositary, or the Trustee as its custodian, or under the Global
Security, and the Depository and the Common Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of the Global Securities for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or (ii)
impair, as between a Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository or the Common Depositary, as the case
may be, their respective successors or their respective nominees. Interests of
beneficial owners in a Rule 144A Global Security may be transferred or exchanged
for interests in an Institutional Accredited Investor Global Security or a
Regulation S Global Security, interests of beneficial owners in an Institutional
Accredited Investor Global Security may be transferred
<PAGE>
62
or exchanged for interests in a Rule 144A Global Security or a Regulation S
Global Security and interests of beneficial owners in a Regulation S Global
Security may be transferred or exchanged for interests in a Rule 144A Global
Security or an Institutional Accredited Investor Global Security, in each case
in accordance with the rules and procedures of the Depository, the Common
Depositary, Euroclear, Clearstream and the provisions of Section 313. Interests
of beneficial owners in the Global Securities may be transferred or exchanged
for Physical Securities in accordance with the rules and procedures of the
Depository and the provisions of Section 313. In addition, Physical Securities
shall be transferred to all beneficial owners in exchange for their beneficial
interests in a Global Security if (i) the Depository or the Common Depositary,
as the case may be, notifies the Company that it is unwilling or unable to
continue as a depository for such Global Security or if at any time the
Depository ceases to be a clearing agency registered under the Exchange Act, and
a successor depository is not appointed by the Company within 90 days, (ii) the
Company executes and delivers to the Trustee a notice that such Global Security
shall be so transferable, registrable and exchangeable, and such transfer shall
be registrable, or (iii) there shall have occurred and be continuing a Default
or Event of Default with respect to the Securities represented by such Global
Security.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Security Registrar shall (if one or more Physical Securities
are to be issued) reflect on its books and records the date and a decrease in
the principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and principal amount of authorized
denominations.
(d) In connection with the transfer of Global Securities as an entirety
to beneficial owners pursuant to paragraph (b), the Global Securities shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of
<PAGE>
63
Physical Securities of like tenor of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in a
Global Security pursuant to paragraph (b) or (c) of this Section 312 shall,
except as otherwise provided by paragraph (d) of Section 313, bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Exhibit A.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
(g) In the event that a Global Security is exchanged for Physical
Securities pursuant to this Section 312 prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of Sections 312 and 313 (including the certification requirements set
forth on the reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A, Regulation S or such other applicable exemption
from registration under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(h) Payment of principal of, premium, if any, and interest on
Regulation S Global Securities will be made in euros or in such coin or currency
of the European Union as at the time of payment is legal tender for payment of
public and private debts in immediately available funds to the Common Depositary
for Euroclear and Clearstream or its nominee, as the case may be, as the sole
registered owner and the sole holder of the Regulation S Global Securities for
all purposes under this Indenture. Payment of principal of, premium, if any, and
interest on 144A Global Securities will be made in euros or in such coin or
currency of the European Union as at the time of payment is legal tender for
payment of public and private debts in immediately available funds to the
Trustee, as custodian for DTC. On
<PAGE>
64
the record date for any payment with respect to the 144A Global Securities, the
Trustee, as custodian for DTC, shall request that DTC provide a list of DTC
participants holding beneficial interests in the 144A Global Securities. If DTC
provides such list, the Trustee, as custodian for DTC, shall solicit wire
transfer instructions from such participants for use in connection with such
payments of principal of, premium, if any, and interest on, 144A Global
Securities. Pending disbursement by the Trustee, as custodian for DTC, funds
held by the Trustee shall not accrue interest for the benefit of participants
holding beneficial interests in the 144A Global Securities.
(i) So long as the Securities are held in the form of Global
Securities, deposits of principal of, premium, if any, and interest on the
Securities with the Trustee, as custodian for DTC, or the Common Depositary
shall be deemed to be payment by the Company of such principal, premium, if any,
and interest for all purposes under this Indenture.
SECTION 313. Special Transfer Provisions.
----------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors. The
--------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB (excluding transfers to non-U.S. persons):
(1) The Security Registrar shall register the transfer of any
Security if (x) the requested transfer is not prior to that date which
is two years (or such shorter period as may be prescribed by Rule
144(k) under the Securities Act or any successor provision thereunder)
after the later of the original issue date of such Security (or of any
Predecessor Security) or three months after the last day on which the
Company or any Affiliate of the Company was the owner of such Security
or any Predecessor Security or (y) such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or who has otherwise advised the Company and the
Security Registrar in writing, that the transfer has been made to an
institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and the proposed transferee has
<PAGE>
65
delivered to the Security Registrar a certificate containing certain
representations and agreements (the form of which certificate can be
obtained from the Trustee or the Company), provided that no Initial
--------
Foreign Purchaser or any foreign purchaser who has purchased Securities
from an Initial Foreign Purchaser or from any person other than a QIB
or an Institutional Accredited Investor pursuant to paragraph (b) below
shall be permitted to transfer any Securities so purchased by it to an
Institutional Accredited Investor pursuant to this paragraph (a) prior
to the date that is 40 days following the Issue Date.
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the Securities to be transferred
consist of Physical Securities which after transfer are to be evidenced
by an interest in the Institutional Accredited Investor Global
Security, upon receipt by the Security Registrar of instructions given
in accordance with the Depository's, the Common Depositary's (or
Euroclear's and Clearstream's, as the case may be) and the Security
Registrar's procedures, the Security Registrar shall reflect on the
Security Register the date and an increase in the principal amount of
the Institutional Accredited Investor Global Security in an amount
equal to the principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred, and (ii) the proposed transferor is an Agent Member
holding a beneficial interest in a Rule 144A Global Security or a
Regulation S Global Security, upon receipt by the Security Registrar of
instructions given in accordance with the Depository's, the Common
Depositary's (or Euroclear's and Clearstream's, as the case may be) and
the Security Registrar's procedures, the Security Registrar shall
reflect on its books and records the date of such transfer and (A) a
decrease in the principal amount of such Rule 144A Global Security or
Regulation S Global Security, as the case may be, in an amount equal to
the principal amount of the beneficial interest in a Global Security to
be transferred, and (B) an increase in the principal amount of an
Institutional Accredited Investor Global Security in an amount equal to
the principal amount to be transferred.
<PAGE>
66
(b) Transfers to Non-U.S. Persons. The following provisions shall
------------------------------
apply with respect to the registration of any proposed transfer of a Security to
any non-U.S. person:
(1) The Security Registrar shall register the transfer of any
Security if (x) the requested transfer is not prior to that date which
is two years (or such shorter period as may be prescribed by Rule
144(k) under the Securities Act or any successor provision thereunder)
after the later of the original issue date of such Security (or of any
Predecessor Security) or three months after the last day on which the
Company or any Affiliate of the Company was the owner of such Security
or any Predecessor Security or (y) such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or who has otherwise advised the Company and the
Security Registrar in writing, that the transfer has been made outside
the U.S. in an offshore transaction within the meaning of Regulation S
in compliance with the exemption from registration under the Securities
Act provided by Rule 904 under the Securities Act, provided that, if
--------
such transfer is being effected by an Initial Foreign Purchaser or any
foreign purchaser who has purchased Securities from an Initial Foreign
Purchaser or from any person other than a QIB or an Institutional
Accredited Investor pursuant to this paragraph (b) prior to the date
that is 40 days following the Issue Date, the transferee shall have
certified to the Company and the Trustee that such transferee is a
non-U.S. person (within the meaning of Regulation S) and that such
transferee is acquiring the Securities in an offshore transaction
(within the meaning of Regulation S).
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the Securities to be transferred
consist of Physical Securities which after transfer are to be evidenced
by an interest in the Regulation S Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the
Depository's, the Common Depositary's (or Euroclear's and
Clearstream's, as the case may be) and the Security Registrar's
procedures,
<PAGE>
67
the Security Registrar shall reflect on the Security Register the date
and an increase in the principal amount of the Regulation S Global
Security in an amount equal to the principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred, and (ii) the proposed transferor is an Agent
Member holding a beneficial interest in a Rule 144A Global Security or
an Institutional Accredited Investor Global Security, upon receipt by
the Security Registrar of instructions given in accordance with the
Depository's, the Common Depositary's (or Euroclear's and
Clearstream's, as the case may be) and the Security Registrar's
procedures, the Security Registrar shall reflect on its books and
records the date of such transfer and (A) a decrease in the principal
amount of such Rule 144A Global Security or Institutional Accredited
Investor Global Security, as the case may be, in an amount equal to the
principal amount to be transferred and (B) an increase in the principal
amount of a Regulation S Global Security in an amount equal to the
principal amount to be transferred.
<PAGE>
68
(c) Transfers to QIBs. The following provisions shall apply with
------------------
respect to the registration of any proposed transfer of a Security to any QIB
(excluding transfers to non-U.S. persons):
(1) The Security Registrar shall register the transfer of any
Security if (x) the requested transfer is not prior to that date which
is two years (or such shorter period as may be prescribed by Rule
144(k) under the Securities Act or any successor provision thereunder)
after the later of the original issue date of such Security (or of any
Predecessor Security) or three months after the last day on which the
Company or any Affiliate of the Company was the owner of such Security
or any Predecessor Security or (y) such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or who has otherwise advised the Company and the
Security Registrar in writing, that the transfer has been made in
compliance with the exemption from registration under the Securities
Act provided under Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Security Registrar in writing,
that such transferee represents and warrants that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that each of it and any such
account is a QIB within the meaning of Rule 144A and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
the foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the Securities to be transferred
consist of Physical Securities which after transfer are to be evidenced
by an interest in the Rule 144A Global Security, upon receipt by the
Security Registrar of instructions given
<PAGE>
69
in accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall reflect on the Security
Register the date and an increase in the principal amount of the Rule
144A Global Security in an amount equal to the principal amount of the
Physical Securities to be transferred, and the Trustee shall cancel the
Physical Securities so transferred, and (ii) the proposed transferor is
an Agent Member holding a beneficial interest in an Institutional
Accredited Investor Global Security or a Regulation S Global Security,
upon receipt by the Security Registrar of instructions given in
accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall reflect on its books and
records the date of such transfer and (A) a decrease in the principal
amount of such Institutional Accredited Investor Global Security or
Regulation S Global Security, as the case may be, in an amount equal to
the principal amount to be transferred and (B) an increase in the
principal amount of a Rule 144A Global Security in an amount equal to
the principal amount to be transferred.
(d) Private Placement Legend. (1) Upon the registration of transfer,
-------------------------
exchange or replacement of Securities, the Security Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the transfer or
exchange of Initial Securities contemplated by paragraph (d)(2) or (d)(3) below
has occurred or (ii) (x) the circumstances contemplated by clause (a)(1)(x),
(b)(1)(x) or (c)(1)(x) of this Section 313 exist and (y) there is delivered to
the Security Registrar and the Trustee an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(2) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring that any such Initial Security be issued in global form will
cease to apply, and an
<PAGE>
70
Initial Security in certificated or global form without legends will be
available to the transferee of the Holder of such Initial Securities
upon exchange of such transferring Holder's certificated Initial
Security. Upon the occurrence of any of the circumstances described in
this paragraph, the Company will deliver an Officers' Certificate to
the Trustee instructing the Trustee to issue Securities without
legends.
(3) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of
such Initial Securities are offered Exchange Securities (other than
Private Exchange Securities) in exchange for their Initial Securities,
all requirements pertaining to such Initial Securities that Initial
Securities be issued in global form will cease to apply, and
certificated Initial Securities with the Private Placement Legend will
be available to Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer. Upon the occurrence of
any of the circumstances described in this paragraph, the Company will
deliver an Officers' Certificate to the Trustee instructing the Trustee
to issue Securities without legends.
(4) Upon the consummation of a Private Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Private Exchange Securities in exchange
for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will continue to apply, and Private Exchange
Securities in global form will be available to Holders that exchange
such Initial Securities in such Private Exchange Offer.
(e) Other Transfers. If a Holder proposes to transfer a Security
----------------
pursuant to any exemption from the registration requirements of the Securities
Act other than as provided for by Sections 313(a), 313(b) and 313(c) and other
than pursuant to Section 313(d)(4), the Security Registrar shall only register
such transfer or exchange if such transferor delivers to the Security Registrar
and the Trustee an
<PAGE>
71
Opinion of Counsel satisfactory to the Company and the Security Registrar that
such transfer is in compliance with the Securities Act and the terms of this
Indenture.
(f) General. By its acceptance of any Security bearing the Private
--------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 312 or this Section
313 for a period of two years, during which time such letters, notices and other
written communications shall at the written request of the Company be delivered
to the Company. After retaining any such copies of letters, notices and other
written communications for a period of at least two years, all such copies may
be destroyed by the Trustee. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable prior written notice to the
Security Registrar.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
----------------------------------------
This Indenture shall cease to be of further effect (subject to Section
1206 and except as to surviving rights of registration of transfer, transfer,
exchange and replacement of Securities expressly provided for herein or pursuant
hereto) and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(1) either
(a) all Outstanding Securities have been delivered to
the Trustee for cancellation; or
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72
(b) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable within one
year, or
(iii) are to be called for redemption within
one year under irrevocable arrangements satisfactory
to the Trustee in its sole discretion for the giving
of notice of redemption by the Trustee in the name
and at the expense of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the
entire indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of
(and premium, if any, on), and interest on, the Securities to
Maturity or the Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable by the Company hereunder; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations under Sections 607 and 609 and, if money shall have been deposited
with the Trustee pursuant to clause (1)(b) of this Section 401, the obligations
of the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.
<PAGE>
73
SECTION 402. Application of Trust Money.
---------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
------------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) failure to pay principal of (or premium, if any, on) any
Security when due; or
(2) failure to pay any interest on any Security when due,
continued for 30 days; or
(3) default in the payment of principal of (and premium, if
any) and interest on Securities required to be purchased pursuant to an
Offer to Purchase pursuant to Section 1009 when due and payable; or
(4) failure to perform or comply with the provisions of
Section 801, 803 or 1016; or
(5) failure to perform any covenant or agreement of the
Company or any Guarantor in this Indenture or in any Security (other
than a covenant a default in whose performance is elsewhere in this
Section specifically
<PAGE>
74
dealt with) continued for 60 days after written notice to the Company
by the Trustee or Holders of at least 25% in aggregate principal amount
of the Outstanding Securities, which notice shall specify the default
and state that such notice is a "Notice of Default" hereunder; or
(6) default under the terms of any instrument evidencing or
securing Debt of the Company or any Restricted Subsidiary having an
outstanding principal amount of not less than $25,000,000 or its
foreign currency equivalent at the time which default results in the
acceleration of the payment of such indebtedness or constitutes the
failure to pay such indebtedness when due (after expiration of any
applicable grace period); or
(7) the rendering of a judgment or judgments against the
Company or any Restricted Subsidiary in an aggregate amount in excess
of $25,000,000 or its foreign currency equivalent at the time and shall
not be waived, satisfied or discharged for any period of 45 consecutive
days during which a stay of enforcement shall not be in effect; or
(8) any Restricted Subsidiary Guarantee ceases to be in full
force and effect (other than in accordance with the terms of such
Restricted Subsidiary Guarantee) or any Guarantor denies or disaffirms
its obligations under its Restricted Subsidiary Guarantee; or
(9) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company or any Significant
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Significant Subsidiary under the
Federal Bankruptcy Code or any other applicable federal, state or
foreign law, or appointing a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Company or
any Significant Subsidiary or of any substantial part of its Property,
or ordering the winding up or liquidation of its affairs, and the
<PAGE>
75
continuance of any such decree or oder unstayed and in effect for a
period of 60 consecutive days; or
(10) the institution by the Company or any Significant
Subsidiary of proceedings to be adjudicated a bankrupt or insolvent, or
the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under the Federal Bankruptcy
Code or any other applicable federal, state or foreign law, or the
consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, custodian or sequestrator
(or other similar official) of the Company or any Significant
Subsidiary or of any substantial part of its Property, or the making by
it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they
become due.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
---------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 501(9) or 501(10) with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities may declare the principal amount
of all the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal amount shall become immediately due and payable. If
an Event of Default specified in Section 501(9) or 501(10) occurs with respect
to the Company, the principal amount of all the Securities shall ipso facto
---- -----
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
<PAGE>
76
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article Five, the Holders of a
majority in aggregate principal amount of the Outstanding Securities, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Outstanding
Securities,
(B) all unpaid principal of (and premium, if any, on)
any Outstanding Securities which has become due otherwise than
by such declaration of acceleration, and interest on such
unpaid principal at the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest on overdue interest at the rate borne by the
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
amounts of principal of (or premium, if any, on) Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- --------
The Company covenants that if
(a) default is made in the payment of any interest on any
Security when due, continued for 30 days, or
<PAGE>
77
(b) default is made in the payment of the principal of (or
premium, if any, on) any Security when due,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Securities the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
<PAGE>
78
SECTION 504. Trustee May File Proofs of Claim.
---------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the Property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel)
and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator or sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to
<PAGE>
79
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- -----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
-------------------------------
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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80
SECTION 507. Limitation on Suits.
--------------------
No Holder of any Securities shall have any right to institute any
proceeding with respect to this Indenture or for any other remedy hereunder,
unless
(1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request
and offered reasonable indemnity to the Trustee to institute such
proceeding as trustee; and
(3) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Securities a
direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- ---------------------
Notwithstanding any other provision in this Indenture, including
Section 507, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment as provided herein (including, if
applicable, Article Twelve) and in such Security of the principal of (and
premium, if any) and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
<PAGE>
81
SECTION 509. Restoration of Rights and Remedies.
-----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
-------------------------------
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
<PAGE>
82
SECTION 512. Control by Holders.
-------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that
--------
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
------------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all the Securities,
waive any past Default hereunder and its consequences, except a Default
(1) in the payment of the principal of (or premium, if any)
or interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite majority have consented to such waiver and attaching
such consents upon which, subject to Section 104, the Trustee may conclusively
rely. Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
<PAGE>
83
SECTION 514. Waiver of Stay or Extension Laws.
---------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which 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 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 had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
------------------------------------
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights
<PAGE>
84
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section 601;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or indemnity
reasonably satisfactory to it against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.
<PAGE>
85
SECTION 602. Notice of Default.
------------------
If a Default occurs and is continuing, the Trustee shall transmit, in
the manner and to the extent provided in TIA Section 313(c), notice of such
Default within 60 days after it is known to any Responsible Officer of the
Trustee or written notice of it is received by the Trustee; provided, however,
-------- -------
that, except in the case of a Default in the payment of the principal of (or
premium, if any) or interest on any Security, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, a trust committee of directors or Responsible Officers of the Trustee
in good faith determines that the withholding of such notice is in the interest
of the Holders.
The Trustee is not required to take notice or deemed to have notice of
any Event of Default with respect to the Securities, except an Event of Default
under Section 501(1), (2), (3) or (4) hereof (provided that in the case of
Section 501(4), such Event of Default constitutes a failure to purchase
Securities pursuant to an Offer to Purchase pursuant to Section 1016), unless
the Trustee shall have received written notice at its Corporate Trust Office
(which notice shall reference the Securities, the Company and the Indenture) of
such Event of Default from the Company or any Holder or unless a Responsible
Officer of the Trustee shall otherwise have knowledge thereof.
SECTION 603. Certain Rights of Trustee.
--------------------------
Subject to Section 601 and to the provisions of TIA Sections 315(a)
through 315(d):
(1) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a
<PAGE>
86
Company Request or Company Order and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, receive and rely upon an
Officers' Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee may act through counsel, agents, custodians
and nominees and shall not be responsible for the misconduct or
negligence of any such person appointed and supervised with due care
and in good faith;
(6) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(7) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
<PAGE>
87
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
- -----------
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 605. May Hold Securities.
--------------------
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust.
--------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
<PAGE>
88
SECTION 607. Compensation and Reimbursement.
-------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
as shall be agreed in writing between the Company and the Trustee for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Trustee's negligence, willful misconduct
or bad faith; and
(3) to indemnify the Trustee and its directors, officers,
employees and agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence, willful misconduct or
bad faith on the part of any of them, arising out of or in connection
with the acceptance or administration of this trust, including the
costs and expenses of defending itself or themselves against any claim
or liability in connection with the exercise or performance of any of
its or their powers or duties hereunder.
The obligations of the Company under this Section 607 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any,
on) or interest on particular Securities.
<PAGE>
89
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(9) or (10), the expenses (including
the reasonable charges and expenses of its counsel) of and the compensation for
such services are intended to constitute expenses of administration under any
applicable federal, state or foreign bankruptcy, insolvency or other similar
law.
The provisions of this Section 607 shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee.
SECTION 608. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests.
- ----------
(a) There shall be at all times a Trustee hereunder which shall be
subject to and comply with the provisions of Section 310(a)(1) of the Trust
Indenture Act and shall have a combined capital and surplus of at least
$50,000,000. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then, for the purposes
of this Section 608, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time a Responsible Officer of the
Trustee shall have actual knowledge that the Trustee ceases to be eligible in
accordance with the provisions of this Section 608, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article Six.
(b) The Trustee shall be subject to and comply with Section 310(b) of
the Trust Indenture Act.
SECTION 609. Resignation and Removal; Appointment of Successor.
--------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.
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90
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 610 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section
608(a) and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board
<PAGE>
91
Resolution, shall promptly appoint a successor Trustee. If the Company does not
promptly appoint a successor Trustee after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Securities delivered to the Company and the retiring Trustee. In
either case, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 106. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust Office.
(g) The retiring Trustee shall not be liable for any of the acts or
omissions of any successor Trustee appointed hereunder.
SECTION 610. Acceptance of Appointment by Successor.
---------------------------------------
<PAGE>
92
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article Six.
<PAGE>
93
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- ---------
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided that such
--------
Person shall be otherwise qualified and eligible under this Article Six, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion, consolidation or transfer of assets to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee.
In all such cases such certificates shall have the full force and effect which
this Indenture provides that the certificate of authentication of the Trustee
shall have; provided, however, that the right to adopt the certificate of
-------- -------
authentication of any predecessor Trustee or to authenticate Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion, consolidation or transfer of assets.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
---------------------------------------------
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94
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
-------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
A copy of each such report at the time of its mailing to Holders shall
be filed with the Commission and the principal national securities exchange (if
any) on which the Securities are listed.
The Company shall notify a Responsible Officer of the Trustee if the
Securities become listed on any national securities exchange or of any delisting
thereof.
SECTION 703. Reports by Company.
-------------------
The Company shall file with the Trustee and deliver to the Holders of
Securities the reports and other information required to be provided by it
pursuant to Section 1007.
<PAGE>
95
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
-----------------------------------------------------
The Company shall not, in a single transaction or a series of related
transactions, (i) consolidate with or merge into any other Person or Persons or
permit any other Person to consolidate with or merge into the Company or (ii)
directly or indirectly, transfer, sell, lease, convey or otherwise dispose of
all or substantially all its assets to any other Person or Persons, unless:
(1) in a transaction in which the Company is not the surviving
Person or in which the Company transfers, sells, leases, conveys or
otherwise disposes of all or substantially all of its assets to any other
Person, the resulting, surviving or transferee Person (the "successor
entity") is organized under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's obligations under this
Indenture;
(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes an obligation of the
Company (or the successor entity) or a Restricted Subsidiary as a result of
such transaction as having been Incurred by the Company or such Restricted
Subsidiary at the time of the transaction, no Default or Event of Default
shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or the successor entity) is equal to
or greater than that of the Company immediately prior to the transaction;
(4) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company (or the
successor entity) or
<PAGE>
96
a Restricted Subsidiary as a result of such transaction as having been
Incurred by the Company or such Restricted Subsidiary at the time of the
transaction, the Company (or the successor entity) could Incur at least
$1.00 of additional Debt pursuant to the provisions of paragraph (a) of
Section 1010;
(5) if, as a result of any such transaction, Property of the
Company (or the successor entity) or any Restricted Subsidiary would become
subject to a Lien prohibited by the provisions of Section 1014, the Company
(or the successor entity) shall have secured the Securities as required by
said covenant;
(6) in the case of a transfer, sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company,
such assets shall have been transferred as an entirety or virtually as an
entirety to one Person and such Person shall have complied with all the
provisions of this paragraph; and
(7) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, stating that such consolidation,
merger, transfer, sale, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with, and, with respect to such Officers' Certificate,
setting forth the manner of determination of the Consolidated Net Worth,
in accordance with clause (3) of this Section 801, of the Company or, if
applicable, of the successor entity as required pursuant to the foregoing.
<PAGE>
97
SECTION 802. Successor Company Substituted.
------------------------------
Upon any consolidation of the Company with or merger of the Company
with or into any other Person or any transfer, sale, lease, conveyance or other
disposition of all or substantially all the assets of the Company to any Person
or Persons in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such transfer,
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and the predecessor Company (which term shall for this
purpose mean the Person named as the "Company" in the first paragraph of this
Indenture or any successor Person which shall have become such in the manner
described in Section 801), except in the case of a lease, shall be released from
all its obligations and covenants under this Indenture and the Securities and
may be dissolved and liquidated.
SECTION 803. Guarantor May Consolidate, etc., Only on Certain Terms.
-------------------------------------------------------
The Company shall not permit any Guarantor to, in a single transaction
or a series of related transactions, (i) consolidate with or merge into any
other Person or Persons (other than the Company or another Guarantor) or permit
any other Person (other than the Company or another Guarantor) to consolidate
with or merge into such Guarantor or (ii) directly or indirectly, transfer,
sell, lease, convey or otherwise dispose of all or substantially all its assets
to any other Person or Persons (other than the Company or another Guarantor),
unless:
(1) in a transaction in which such Guarantor is not the
surviving Person or in which such Guarantor transfers, sells, leases,
conveys or otherwise disposes of all or substantially all of its assets to
any other Person, the resulting, surviving or transferee Person (the
"successor guarantor") is organized under the laws of the United States of
America or any State thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture executed and delivered to the
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98
Trustee in form satisfactory to the Trustee, all of such Guarantor's
obligations under this Indenture;
(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes an obligation of the
Company or a Restricted Subsidiary (including the successor guarantor) as a
result of such transaction as having been Incurred by the Company or such
Restricted Subsidiary at the time of the transaction, no Default or Event
of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company is equal to or greater than that of
the Company immediately prior to the transaction;
(4) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a
Restricted Subsidiary (including the successor guarantor) as a result of
such transaction as having been Incurred by the Company or such Restricted
Subsidiary at the time of the transaction, the Company could Incur at least
$1.00 of additional Debt pursuant to the provisions of paragraph (a) of
Section 1010;
(5) if, as a result of any such transaction, Property of the
Company or any Restricted Subsidiary (including the successor guarantor)
would become subject to a Lien prohibited by the provisions of Section
1014, the Company shall have secured the Securities as required by said
covenant;
(6) in the case of a transfer, sale, lease, conveyance or
other disposition of all or substantially all of the assets of such
Guarantor, such assets shall have been transferred as an entirety or
virtually as an entirety to one Person and such Person shall have complied
with all the provisions of this paragraph; and
(7) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, stating that such consolidation,
merger,
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99
transfer, sale, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with, and, with respect to such Officers' Certificate,
setting forth the manner of determination of the Consolidated Net Worth, in
accordance with clause (3) of this Section 803, of such Guarantor or, if
applicable, of the successor guarantor as required pursuant to the
foregoing.
SECTION 804. Successor Guarantor Substituted.
--------------------------------
Upon any consolidation of a Guarantor with or merger of a Guarantor
with or into any other Person or any transfer, sale, lease, conveyance or other
disposition of all or substantially all the assets of a Guarantor to any Person
or Persons in accordance with Section 803, the successor Person formed by such
consolidation or into which such Guarantor is merged or to which such transfer,
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, such Guarantor under
this Indenture with the same effect as if such successor Person had been named
as a Guarantor herein, and the predecessor Guarantor (which term shall for this
purpose mean the Person named as the "New Guarantor" in the first paragraph of
the applicable supplemental indenture or any successor Person which shall have
become such in the manner described in Section 803), except in the case of a
lease, shall be released from all its obligations and covenants under its
Restricted Subsidiary Guarantee and the Securities and may be dissolved and
liquidated.
<PAGE>
100
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
---------------------------------------------------
The Company and the Trustee may, at any time and from time to time,
without notice to or consent of any Holders of Securities, enter into one or
more indentures supplemental hereto:
(1) to evidence the succession of another Person to the Company or
a Guarantor and the assumption by such successor of the covenants of the
Company or such Guarantor herein and in the Securities; or
(2) to add to the covenants of the Company, for the benefit of the
Holders, or to surrender any right or power conferred upon the Company
hereby; or
(3) to add any additional Events of Default; or
(4) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(5) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee pursuant to the requirements of Section
610; or
(6) to secure the Securities; or
(7) to comply with the Trust Indenture Act or the Securities Act
(including Regulation S promulgated thereunder); or
(8) to add additional Guarantees with respect to the Securities or
to release Guarantors from Restricted Subsidiary Guarantees as provided by
the terms of this Indenture; or
(9) to cure any ambiguity herein, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to add any other provision with respect to matters or
<PAGE>
101
questions arising under this Indenture; provided such 84 actions shall not
--------
adversely affect the interests of the Holders in any material respect; or
(10) to make any change to Section 312 hereof or the Securities
relating to book-entry procedures for Global Securities to facilitate
trading or transferring the Securities in book-entry form.
SECTION 902. Supplemental Indentures With Consent of Holders.
------------------------------------------------
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of such Holders delivered to the
Company and the Trustee, the Company and the Trustee may enter into one or more
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
waiving or otherwise modifying in any manner the rights of the Holders, provided
--------
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the interest thereon that would be due and payable upon the
Stated Maturity thereof, or change the place of payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof; or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is necessary for any such
supplemental indenture or required for any waiver of compliance with
certain provisions of this Indenture or certain Defaults hereunder; or
(3) subordinate in right of payment, or otherwise subordinate, the
Securities to any other Debt; or
<PAGE>
102
(4) except as otherwise provided herein, release any security
interest that may have been granted in favor of the Holders of the
Securities; or
(5) reduce the premium payable upon the redemption of any Security
nor change the time at which any Security may be redeemed, as described in
Exhibit A; or
(6) reduce the premium payable upon a Change of Control Triggering
Event or, at any time after a Change of Control Triggering Event has
occurred, change the time at which the Offer to Purchase relating thereto
must be made or at which the Securities must be repurchased pursuant to
such Offer to Purchase; or
(7) at any time after the Company is obligated to make an Offer to
Purchase with the Net Available Proceeds from Asset Dispositions, change
the time at which such Offer to Purchase must be made or at which the
Securities must be repurchased pursuant thereto; or
(8) make any change in any Restricted Subsidiary Guarantee that
would adversely affect the Holders of the Securities; or
(9) modify any provision of this Section 902 (except to increase any
percentage set forth herein).
It shall not be necessary for any Act of Holders under this Section 902
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
<PAGE>
103
SECTION 903. Execution of Supplemental Indentures.
-------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate stating that all
conditions precedent to the execution of such supplemental indenture have been
fulfilled. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
----------------------------------
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
------------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform as a matter of contract or law to the requirements of the Trust
Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
---------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may bear a notation in form
approved by the Trustee and the Company as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
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104
SECTION 907. Notice of Supplemental Indentures.
----------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Article Nine, the Company shall give
notice thereof to the Holders of each Outstanding Security affected, in the
manner provided for in Section 106, setting forth in general terms the substance
of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
-----------------------------------------------------
The Company covenants and agrees for the benefit of the Holders that it
shall duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
--------------------------------
The Company shall maintain in The City of New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Corporate Trust Office of the Trustee shall be such
office or agency of the Company, unless the Company shall designate and maintain
some other office or agency for one or more of such purposes. The Company shall
give prompt written notice to the Trustee of any change in the location of any
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
<PAGE>
105
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; 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 City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent, it shall,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
<PAGE>
106
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest;
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(4) indemnify the Trustee and its officers, directors, employees and
agents against any loss, cost or liability caused by, or incurred as a
result of, such Paying Agent's acts or omissions.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
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, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request or (if then held by the Company) shall be discharged
from such trust;
<PAGE>
107
and the Holder of such Security shall thereafter, as an unsecured 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, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Corporate Existence.
--------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary of the Company; provided, however, that the Company shall not be
-------- -------
required to preserve, with respect to the Company, any such right or franchise
or, with respect to any such Subsidiary (subject to all the other covenants in
this Indenture), any such corporate existence, right or franchise, if the Board
of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries as
a whole and that the loss thereof is not disadvantageous in any material respect
to the Holders.
<PAGE>
108
SECTION 1005. Maintenance of Properties.
--------------------------
The Company shall cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
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nothing in this Section 1005 shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1006. Insurance.
----------
The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by companies similarly
situated and owning like properties.
SECTION 1007. Reports.
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109
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file them. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents (without exhibits) which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act or any successor provisions thereto if the Company were subject
thereto and (b) if filing such documents by the Company with the Commission is
not permitted under the Exchange Act, promptly upon written request, supply
copies of such documents (without exhibits) to any prospective Holder.
SECTION 1008. Statement by Officers as to Default.
------------------------------------
(a) The Company shall deliver to the Trustee, on the date of delivery
of each annual report to be delivered pursuant to Section 1007, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance during the period covered by such report with all conditions and
covenants under this Indenture. If the signer has knowledge of any noncompliance
that occurred during such period, the certificate shall describe its status and
what action the Company has taken or is taking or proposes to take with respect
thereto. For purposes of this Section 1008(a), such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of Debt of
the Company or any Restricted
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110
Subsidiary gives any notice or takes any other action with respect to a claimed
default (other than with respect to Debt in the principal amount of less than
$25,000,000 or its foreign currency equivalent at the time), the Company shall,
within 30 days of such occurrence, notice or other action, deliver to the
Trustee by registered or certified mail or by telegram, telex or facsimile
transmission an Officers' Certificate specifying such event, notice or other
action, its status and what action the Company is taking or purposes to take
with respect thereto.
SECTION 1009. Change of Control Triggering Event.
-----------------------------------
(a) Upon the occurrence of a Change of Control Triggering Event, each
Holder shall have the right to require that the Company repurchase such Holder's
Securities in whole or in part in integral multiples of (Europe)1,000, in
accordance with the procedures set forth in this Section 1009 and this
Indenture.
(b) Within 30 days of the occurrence of both a Change of Control and a
Rating Decline with respect to the Securities (a "Change of Control Triggering
Event"), the Company will be required to make an Offer to Purchase all
Outstanding Securities at a price in cash equal to 101% of the principal amount
of the Securities on the purchase date, plus accrued and unpaid interest (if
any) to such purchase date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).
(c) The Company and the Trustee shall perform their respective
obligations for the Offer to Purchase as specified in the Offer. Prior to the
Purchase Date, the Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Offer, (ii) irrevocably deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted (provided that such deposit
may be made no later than 10:00 A.M. New York City time on the Purchase Date if
the Company elects) and (iii) deliver or cause to be delivered to the Trustee
all Securities so accepted together with an Officers' Certificate stating the
Securities or
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111
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the Purchase Price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security or Securities equal in
principal amount to any unpurchased portion of the Security surrendered as
requested by the Holder. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof. In the event that the
aggregate Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Purchase Date.
(d) A "Change of Control" means the occurrence of any of the following
events:
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112
(i) if any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to either
of the foregoing), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule 13d-
5(b)(1) under the Exchange Act, other than any one or more of the Permitted
Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person will be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 35% or more of the total voting power of
the Voting Stock of the Company; provided, however, that the Permitted
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Holders are the "beneficial owners" (as defined in Rule 13d-3 under the
Exchange Act, except that a person will be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, in the aggregate of a lesser percentage of
the total voting power of the Voting Stock of the Company than such other
person or group (for purposes of this clause (i), such person or group
shall be deemed to beneficially own any Voting Stock of a corporation (the
"specified corporation") held by any other corporation (the "parent
corporation") so long as such person or group beneficially owns, directly
or indirectly, in the aggregate a majority of the total voting power of the
Voting Stock of such parent corporation); or
(ii) the sale, transfer, assignment, lease, conveyance or
other disposition, directly or indirectly, of all or substantially all the
assets of the Company and the Restricted Subsidiaries, considered as a
whole (other than a disposition of such assets as an entirety or virtually
as an entirety to a Wholly Owned Restricted Subsidiary or one or more
Permitted Holders) shall have occurred; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new
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113
directors whose election or appointment by such board or whose nomination
for election by the shareholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office; or
(iv) the shareholders of the Company shall have approved any
plan of liquidation or dissolution of the Company.
(e) The Company shall not be required to make an Offer to Purchase upon
a Change of Control Triggering Event if a third party makes the Offer to
Purchase in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to an Offer to Purchase made
by the Company and purchases all Securities validly tendered and not withdrawn
under such Offer to Purchase.
(f) In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
SECTION 1010. Limitation on Consolidated Debt.
--------------------------------
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114
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Debt, unless, after giving pro
forma effect to such Incurrence and the receipt and application of the net
proceeds thereof, no Default or Event of Default would occur as a consequence of
such Incurrence or be continuing following such Incurrence and either (i) the
ratio of (A) the aggregate consolidated principal amount (or, in the case of
Debt issued at a discount, the then-Accreted Value) of Debt of the Company and
its Restricted Subsidiaries outstanding as of the most recent available
quarterly or annual balance sheet, after giving pro forma effect to the
Incurrence of such Debt and any other Debt Incurred or repaid since such balance
sheet date and the receipt and application of the net proceeds thereof, to (B)
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters next preceding the Incurrence of such Debt for which consolidated
financial statements are available, would be less than 5.0 to 1.0, or (ii) the
Company's Consolidated Capital Ratio as of the most recent available quarterly
or annual balance sheet, after giving pro forma effect to (x) the Incurrence of
such Debt and any other Debt Incurred or repaid since such balance sheet date,
(y) the issuance of any Capital Stock (other than Disqualified Stock) of the
Company since such balance sheet date, including the issuance of any Capital
Stock to be issued concurrently with the Incurrence of such Debt, and (z) the
receipt and application of the net proceeds of such Debt or Capital Stock, as
the case may be, is less than 2.25 to 1.0.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may Incur any and all of the following (each of which
shall be given independent effect):
(i) Debt under the Securities, this Indenture or
any Restricted Subsidiary Guarantee;
(ii) Debt under Credit Facilities in an aggregate principal
amount outstanding or available (together with all refinancing Debt
outstanding or available pursuant to clause (viii) below in respect of
Debt previously Incurred pursuant to this clause (ii)) at any one time
not to exceed the greater of (x) $750,000,000, which amount shall be
permanently
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115
reduced by the amount of Net Available Proceeds used to repay Debt
under the Credit Facilities, and not reinvested in
Telecommunications/IS Assets or used to purchase Securities or repay
other Debt, pursuant to and as permitted by Section 1016, and (y) 85%
of the Eligible Receivables;
(iii) Purchase Money Debt, provided that the amount of such
--------
Purchase Money Debt does not exceed 100% of the cost of the
construction, installation, acquisition, lease, development or
improvement of the applicable Telecommunications/IS Assets;
(iv) Subordinated Debt of the Company; provided, however, that
-------- -------
the aggregate principal amount (or, in the case of Debt issued at a
discount, the Accreted Value) of such Debt, together with any other
outstanding Debt Incurred pursuant to this clause (iv), shall not
exceed $500,000,000 at any one time (which amount shall be permanently
reduced by the amount of Net Available Proceeds used to repay
Subordinated Debt of the Company, and not reinvested in
Telecommunications/IS Assets or used to purchase Securities or repay
other Debt, pursuant to and as permitted by Section 1016), except to
the extent such Debt in excess of $500,000,000 (A) is subordinated to
all other Debt of the Company other than Debt Incurred pursuant to this
clause (iv) in excess of such $500,000,000 limitation, (B) does not
provide for the payment of cash interest on such Debt prior to the
Stated Maturity of the Securities and (C) (1) does not provide for
payments of principal of such Debt at stated maturity or by way of a
sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by the Company (including
any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by
virtue of the acceleration of any payment with respect to such Debt
upon any event of default thereunder), in each case on or prior to the
Stated Maturity of the Securities, and (2) does not permit redemption
or other retirement (including pursuant to an offer to purchase made by
the Company but excluding through conversion into Capital Stock of the
Company, other than
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116
Disqualified Stock, without any payment by the Company or its
Restricted Subsidiaries to the holders thereof other than in respect of
fractional shares) of such Debt at the option of the holder thereof on
or prior to the Stated Maturity of the Securities;
(v) Debt outstanding on the Measurement Date;
(vi) Debt owed by the Company to any Restricted Subsidiary of
the Company or Debt owed by a Restricted Subsidiary of the Company to
the Company or a Restricted Subsidiary of the Company; provided,
--------
however, that (x) upon the transfer, conveyance or other disposition by
-------
such Restricted Subsidiary or the Company of any Debt so permitted to a
Person other than the Company or another Restricted Subsidiary of the
Company or (y) if for any reason such Restricted Subsidiary ceases to
be a Restricted Subsidiary, the provisions of this clause (vi) shall no
longer be applicable to such Debt and such Debt shall be deemed to have
been Incurred by the issuer thereof at the time of such transfer,
conveyance or other disposition or when such Restricted Subsidiary
ceases to be a Restricted Subsidiary;
(vii) Debt Incurred by a Person prior to the time (A) such
Person became a Restricted Subsidiary, (B) such Person merges into or
consolidates with a Restricted Subsidiary or (C) another Restricted
Subsidiary merges into or consolidates with such Person (in a
transaction in which such Person becomes a Restricted Subsidiary),
which Debt was not Incurred in anticipation of such transaction and was
outstanding prior to such transaction;
(viii) Debt Incurred to renew, extend, refinance, defease,
repay, prepay, repurchase, redeem, retire, exchange or refund (each, a
"refinancing") Debt Incurred pursuant to clause (i), (ii), (iii), (v),
(vii) or (xii) of this paragraph (b) or this clause (viii), in an
aggregate principal amount (or if issued at a discount, the then-
Accreted Value) not to exceed the aggregate principal amount (or if
issued at a discount, the then-Accreted Value) of and accrued interest
on the Debt so refinanced plus the amount of
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117
any premium required to be paid in connection with such refinancing
pursuant to the terms of the Debt so refinanced or the amount of any
premium reasonably determined by the Board of Directors as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the expenses of the Company Incurred in
connection with such refinancing; provided, however, that (A) the
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refinancing Debt shall not be senior in right of payment to the Debt
that is being refinanced and (B) in the case of any refinancing of Debt
Incurred pursuant to clause (i), (v), (vii) or (xii) or, if such Debt
previously refinanced Debt Incurred pursuant to any such clause, this
clause (viii), the refinancing Debt by its terms, or by the terms of
any agreement or instrument pursuant to which such Debt is issued, (x)
does not provide for payments of principal of such Debt at stated
maturity or by way of a sinking fund applicable thereto or by way of
any mandatory redemption, defeasance, retirement or repurchase thereof
by the Company (including any redemption, retirement or repurchase
which is contingent upon events or circumstances, but excluding any
retirement required by virtue of the acceleration of any payment with
respect to such Debt upon any event of default thereunder), in each
case prior to the time the same are required by the terms of the Debt
being refinanced and (y) does not permit redemption or other retirement
(including pursuant to an offer to purchase made by the Company) of
such Debt at the option of the holder thereof prior to the time the
same are required by the terms of the Debt being refinanced, other
than, in the case of clause (x) or (y), any such payment, redemption or
other retirement at the option of the holder of such Debt (including
pursuant to an offer to purchase made by the Company) which is
conditioned upon a change of control pursuant to provisions
substantially similar to those described under Section 1009;
(ix) Debt (A) in respect of performance, surety or appeal
bonds, Guarantees, letters of credit or reimbursement obligations
Incurred or provided in the ordinary course of business securing the
performance of contractual, franchise, lease, self-insurance or license
obligations and not in connection with the
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118
Incurrence of Debt or (B) in respect of customary agreements providing
for indemnification, adjustment of purchase price after closing, or
similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any such obligations of the Company
or any of its Restricted Subsidiaries pursuant to such agreements,
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary of the Company (other than Guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or Restricted Subsidiary of the Company for the
purpose of financing such acquisition) and in an aggregate principal
amount not to exceed the gross proceeds actually received by the
Company or any Restricted Subsidiary in connection with such
disposition;
(x) Debt consisting of Permitted Interest Rate or
Currency Protection Agreements;
(xi) Debt not otherwise permitted to be Incurred pursuant to
clauses (i) through (x) above or clause (xii) below, which, together
with any other outstanding Debt Incurred pursuant to this clause (xi),
has an aggregate principal amount not in excess of $50,000,000 at any
time outstanding; and
(xii) Issue Date Purchase Money Debt and Debt under the
Existing Notes, the New Convertible Notes, the Dollar Notes, the Euro
Notes and the related indentures and any restricted subsidiary
Guarantees issued in accordance with such related indentures.
(c) Notwithstanding any other provision of this Section 1010, the
maximum amount of Debt that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 1010 shall not be deemed to be exceeded due solely to
the result of fluctuations in the exchange rates of currencies.
(d) For purposes of determining any particular amount of Debt under
this Section 1010, (i) Guarantees, Liens or obligations with respect to letters
of credit supporting Debt otherwise included in the determination of such
particular amount shall not be included and (ii) any Liens
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119
granted for the benefit of the Securities pursuant to the provisions referred to
in the first paragraph of Section 1014 shall not be treated as Debt. For
purposes of determining any particular amount of Debt under this Section 1010,
if any such Debt denominated in a different currency is subject to a currency
agreement that constitutes a Permitted Interest Rate or Currency Protection
Agreement with respect to U.S. dollars covering all principal of, premium, if
any, and interest payable on such Debt, the amount of such Debt expressed in
U.S. dollars will be as provided in such currency agreement. For purposes of
determining compliance with this Section 1010, in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the above
clauses, the Company, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.
SECTION 1011. Limitation on Debt of Restricted Subsidiaries.
----------------------------------------------
The Company shall not permit any Restricted Subsidiary that is not a
Guarantor to Incur any Debt except any and all of the following (each of which
shall be given independent effect):
(i) Restricted Subsidiary Guarantees;
(ii) Debt outstanding on the Measurement Date;
(iii) Debt of Restricted Subsidiaries under Credit Facilities
permitted to be Incurred pursuant to clause (ii) of paragraph (b) of
Section 1010;
(iv) Purchase Money Debt of Restricted Subsidiaries permitted
to be Incurred pursuant to clause (iii) of paragraph (b) of Section
1010;
(v) Debt owed by a Restricted Subsidiary to the Company or a
Restricted Subsidiary of the Company permitted to be Incurred pursuant
to clause (vi) of paragraph (b) of Section 1010;
(vi) Debt of Restricted Subsidiaries consisting of Permitted
Interest Rate or Currency Protection
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120
Agreements permitted to be Incurred pursuant to clause (x) of paragraph
(b) of Section 1010;
(vii) Debt of Restricted Subsidiaries permitted to be Incurred
under clause (vii) of paragraph (b) of Section 1010 or Issue Date
Purchase Money Debt permitted to be Incurred under clause (xii) of
paragraph (b) of Section 1010;
(viii) Debt of Restricted Subsidiaries permitted to be Incurred
under clause (ix) or (xi) of paragraph (b) of Section 1010; and
(ix) Debt which is Incurred to refinance any Debt of a
Restricted Subsidiary permitted to be Incurred pursuant to clauses (i),
(ii), (iii), (iv) and (vii) of this paragraph or this clause (ix), in
an aggregate principal amount (or if issued at a discount, the then-
Accreted Value) not to exceed the aggregate principal amount (or if
issued at a discount, the then-Accreted Value) of the Debt so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt so
refinanced or the amount of any premium reasonably determined by the
Board of Directors as necessary to accomplish such refinancing by means
of a tender offer or privately negotiated repurchase, plus the amount
of expenses of the Company and the applicable Restricted Subsidiary
Incurred in connection therewith; provided, however, that, in the case
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of any refinancing of Debt Incurred pursuant to clause (i), (ii) or
(vii) or, if such Debt previously refinanced Debt Incurred pursuant to
any such clause, this clause (ix), the refinancing Debt by its terms,
or by the terms of any agreement or instrument pursuant to which such
Debt is Incurred, (x) does not provide for payments of principal at the
stated maturity of such Debt or by way of a sinking fund applicable to
such Debt or by way of any mandatory redemption, defeasance, retirement
or repurchase of such Debt by the Company or any Restricted Subsidiary
(including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by
virtue of acceleration of such Debt upon an event of default
thereunder), in each case prior to the time the same
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121
are required by the terms of the Debt being refinanced and (y) does not
permit redemption or other retirement (including pursuant to an offer
to purchase made by the Company or a Restricted Subsidiary) of such
Debt at the option of the holder thereof prior to the stated maturity
of the Debt being refinanced, other than, in the case of clause (x) or
(y), any such payment, redemption or other retirement (including
pursuant to an offer to purchase made by the Company or a Restricted
Subsidiary) which is conditioned upon the change of control of the
Company pursuant to provisions substantially similar to those contained
in Section 1009.
Notwithstanding any other provision of this Section 1011, the maximum
amount of Debt that a Restricted Subsidiary may Incur pursuant to this Section
1011 shall not be deemed to be exceeded due solely as the result of fluctuations
in the exchange rates of currencies.
For purposes of determining any particular amount of Debt under this
Section 1011, Guarantees, Liens or obligations with respect to letters of credit
supporting Debt otherwise included in the determination of such particular
amount shall not be included. For purposes of determining compliance with this
Section 1011, in the event that an item of Debt meets the criteria of more than
one of the types of Debt described in the above clauses, the Company, in its
sole discretion, shall classify such item of Debt and only be required to
include the amount and type of such Debt in one of such clauses.
SECTION 1012. Limitation on Restricted Payments.
----------------------------------
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122
(a) The Company (i) shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders thereof,
excluding any dividends or distributions which are made solely to the Company or
a Restricted Subsidiary (and, if such Restricted Subsidiary is not a Wholly
Owned Subsidiary, to the other stockholders of such Restricted Subsidiary on a
pro rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value than it
would receive on a pro rata basis) or any dividends or distributions payable
solely in shares of Capital Stock of the Company (other than Disqualified Stock)
or in options, warrants or other rights to acquire Capital Stock of the Company
(other than Disqualified Stock); (ii) shall not, and shall not permit any
Restricted Subsidiary to, purchase, redeem, or otherwise retire or acquire for
value (x) any Capital Stock of the Company or any Restricted Subsidiary of the
Company or (y) any options, warrants or rights to purchase or acquire shares of
Capital Stock of the Company or any Restricted Subsidiary or any securities
convertible or exchangeable into shares of Capital Stock of the Company or any
Restricted Subsidiary, except, in any such case, any such purchase, redemption
or retirement or acquisition for value (A) paid to the Company or a Restricted
Subsidiary (or, in the case of any such purchase, redemption or other retirement
or acquisition for value with respect to a Restricted Subsidiary that is not a
Wholly Owned Subsidiary, to the other stockholders of such Restricted Subsidiary
on a pro rata basis or on a basis that results in the receipt by the Company or
a Restricted Subsidiary of payments of greater value than it would receive on a
pro rata basis) or (B) paid solely in shares of Capital Stock (other than
Disqualified Stock) of the Company; (iii) shall not make, or permit any
Restricted Subsidiary to make, any Investment (other than an Investment in the
Company or a Restricted Subsidiary or a Permitted Investment) in any Person,
including the Designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, or the Revocation of any such Designation, according to Section
1019; (iv) shall not, and shall not permit any Restricted Subsidiary to, redeem,
defease, repurchase, retire or otherwise acquire or retire for value, prior to
any scheduled maturity, repayment or sinking fund payment, Debt of the Company
which is subordin-
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123
ate in right of payment to the Securities (other than any redemption,
defeasance, repurchase, retirement or other acquisition or retirement for value
made in anticipation of satisfying a scheduled maturity, repayment or sinking
fund obligation due within one year thereof); and (v) shall not, and shall not
permit any Restricted Subsidiary to, issue, transfer, convey, sell or otherwise
dispose of Capital Stock of any Restricted Subsidiary to a Person other than the
Company or another Restricted Subsidiary if the result thereof is that such
Restricted Subsidiary shall cease to be a Restricted Subsidiary, in which event
the amount of such "Restricted Payment" shall be the Fair Market Value of the
remaining interest, if any, in such former Restricted Subsidiary held by the
Company and the other Restricted Subsidiaries (each of clauses (i) through (v)
being a "Restricted Payment") if: (1) an Event of Default, or an event that with
the passing of time or the giving of notice, or both, would constitute an Event
of Default, shall have occurred and be continuing, or (2) upon giving effect to
such Restricted Payment, the Company could not Incur at least $1.00 of
additional Debt pursuant to paragraph (a) of Section 1010, or (3) upon giving
effect to such Restricted Payment, the aggregate of all Restricted Payments made
on or after the Measurement Date, including Restricted Payments made pursuant to
clause (A) or (B) of the proviso at the end of this sentence, and Permitted
Investments made on or after the Measurement Date pursuant to clause (i) or (j)
of the definition thereof (the amount of any such Restricted Payment or
Permitted Investment, if made other than in cash, to be based upon Fair Market
Value) exceeds the sum of: (a) 50% of cumulative Consolidated Net Income (or, in
the case that Consolidated Net Income shall be negative, 100% of such negative
amount) since the end of the last full fiscal quarter prior to the Measurement
Date through the last day of the last full fiscal quarter ending at least 45
days prior to the date of such Restricted Payment and (b) plus, in the case of
any Revocation made after the Measurement Date, an amount equal to the lesser of
the portion (proportionate to the Company's equity interest in the Subsidiary
to which such Revocation relates) of the Fair Market Value of the net assets of
such Subsidiary at the time of Revocation and the amount of Investments
previously made (and treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Subsidiary; provided, however, that the Company or
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a Restricted Subsidiary of the Company
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124
may, without regard to the limitations in clause (3) but subject to clauses (1)
and (2), make (A) Restricted Payments in an aggregate amount not to exceed the
sum of $50,000,000 and the aggregate net cash proceeds received after the
Measurement Date (i) as capital contributions to the Company, from the issuance
(other than to a Subsidiary or an employee stock ownership plan or trust
established by the Company or any such Subsidiary for the benefit of their
employees) of Capital Stock (other than Disqualified Stock) of the Company, and
(ii) from the issuance or sale of Debt of the Company or any Restricted
Subsidiary (other than to a Subsidiary, the Company or an employee stock
ownership plan or trust established by the Company or any such Subsidiary for
the benefit of their employees) that after the Measurement Date has been
converted into or exchanged for Capital Stock (other than Disqualified Stock) of
the Company and (B) Investments in Persons engaged in the Telecommunications/IS
Business in an aggregate amount not to exceed the after-tax gain on the sale,
after the Measurement Date, of Special Assets to the extent sold for cash, Cash
Equivalents, Telecommunications/IS Assets or the assumption of Debt of the
Company or any Restricted Subsidiary (other than Debt that is subordinated to
the Securities or any applicable Restricted Subsidiary Guarantee) and release
of the Company and all Restricted Subsidiaries from all liability on the Debt
assumed. The aggregate net cash proceeds referred to in the immediately
preceding clauses (A)(i) and (A)(ii) shall not be utilized to make Restricted
Payments pursuant to such clauses to the extent such proceeds have been utilized
to make Permitted Investments under clause (i) of the definition of "Permitted
Investments."
(b) Notwithstanding the foregoing limitation, (i) the Company may pay
any dividend on Capital Stock of any class of the Company within 60 days after
the declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions; provided, however, that at the time of such payment of such
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dividend, no other Event of Default shall have occurred and be continuing (or
result therefrom); (ii) the Company may repurchase any shares of its Common
Stock or options to acquire its Common Stock from Persons who were formerly
directors, officers or employees of the Company or any of its Subsidiaries or
other Affiliates in an amount not to exceed $3,000,000 in any 12-month period;
<PAGE>
125
(iii) the Company and any Restricted Subsidiary may refinance any Debt otherwise
permitted by clause (viii) of paragraph (b) of Section 1010 or clause (ix) of
Section 1011; (iv) the Company and any Restricted Subsidiary may retire or
repurchase any Capital Stock of the Company or of any Restricted Subsidiary or
any Subordinated Debt of the Company in exchange for, or out of the proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company or
an employee stock ownership plan or trust established by the Company or any such
Subsidiary for the benefit of their employees) of, Capital Stock (other than
Disqualified Stock) of the Company, provided that the proceeds from any such
--------
exchange or sale of Capital Stock shall be excluded from any calculation
pursuant to clause (A)(i) in the proviso at the end of paragraph (a) above or
pursuant to clause (b) of the definition of "Invested Capital"; and (v) the
Company may pay cash dividends in any amount not in excess of $50,000,000 in any
12-month period in respect of Preferred Stock of the Company (other than
Disqualified Stock). The Restricted Payments described in the foregoing clauses
(i), (ii) and (v) shall be included in the calculation of Restricted Payments;
the Restricted Payments described in clauses (iii) and (iv) shall be excluded in
the calculation of Restricted Payments.
SECTION 1013. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries.
- ----------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction (other than
pursuant to law or regulation) on the ability of any Restricted Subsidiary (i)
to pay dividends (in cash or otherwise) or make any other distributions in
respect of its Capital Stock owned by the Company or any other Restricted
Subsidiary or pay any Debt or other obligation owed to the Company or any other
Restricted Subsidiary, (ii) to make loans or advances to the Company or any
other Restricted Subsidiary or (iii) to transfer any of its Property to the
Company or any other Restricted Subsidiary.
(b) Notwithstanding the foregoing limitation, the Company may, and may
permit any Restricted Subsidiary to,
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126
create or otherwise cause or suffer to exist (i) any encumbrance or restriction
pursuant to any agreement in effect on the Measurement Date, (ii) any customary
(as conclusively determined in good faith by the Chief Financial Officer of the
Company) encumbrance or restriction applicable to a Restricted Subsidiary that
is contained in an agreement or instrument governing or relating to Debt
contained in any Credit Facilities or Purchase Money Debt, provided that such
--------
encumbrances and restrictions permit the distribution of funds to the Company in
an amount sufficient for the Company to make the timely payment of interest,
premium (if any) and principal (whether at stated maturity, by way of a sinking
fund applicable thereto, by way of any mandatory redemption, defeasance,
retirement or repurchase thereof, including upon the occurrence of designated
events or circumstances or by virtue of acceleration upon an event of default,
or by way of redemption or retirement at the option of the holder of the Debt,
including pursuant to offers to purchase) according to the terms of this
Indenture and the Securities and other Debt that is solely an obligation of the
Company, but provided further that such agreement may nevertheless contain
----------------
customary (as so determined) net worth, leverage, invested capital and other
financial covenants, customary (as so determined) covenants regarding the merger
of or sale of all or any substantial part of the assets of the Company or any
Restricted Subsidiary, customary (as so determined) restrictions on transactions
with affiliates and customary (as so determined) subordination provisions
governing Debt owed to the Company or any Restricted Subsidiary, (iii) any
encumbrance or restriction pursuant to an agreement relating to any Acquired
Debt, which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired, (iv) any
encumbrance or restriction pursuant to an agreement effecting a refinancing of
Debt Incurred pursuant to an agreement referred to in clause (i), (ii) or (iii)
of this paragraph (b), provided, however, that the provisions contained in such
-------- -------
agreement relating to such encumbrance or restriction are no more restrictive
(as so determined) in any material respect than the provisions contained in the
agreement the subject thereof, (v) in the case of clause (iii) of paragraph (a)
above, any encumbrance or restriction contained in any security agreement
(including a Capital Lease Obligation) securing Debt of the Company or a
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127
Restricted Subsidiary otherwise permitted under this Indenture, but only to the
extent such restrictions restrict the transfer of the Property subject to such
security agreement, (vi) in the case of clause (iii) of paragraph (a) above,
customary provisions (A) that restrict the subletting, assignment or transfer of
any Property that is a lease, license, conveyance or similar contract, (B)
contained in asset sale or other asset disposition agreements limiting the
transfer of the Property being sold or disposed of pending the closing of such
sale or disposition or (C) arising or agreed to in the ordinary course of
business, not relating to any Debt, and that do not, individually or in the
aggregate, detract from the value of Property of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted Subsidiary,
(vii) any encumbrance or restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or Property of such
Restricted Subsidiary, provided that the consummation of such transaction would
--------
not result in a Default or an Event of Default, that such restriction terminates
if such transaction is abandoned and that the consummation or abandonment of
such transaction occurs within one year of the date such agreement was entered
into, and (viii) any encumbrance or restriction pursuant to this Indenture and
the Securities.
SECTION 1014. Limitation on Liens.
--------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, Incur or suffer to exist any Lien on or with respect
to any Property now owned or acquired after the Measurement Date to secure any
Debt without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities (x) equally and ratably with such Debt as
to such Property for so long as such Debt will be so secured or (y) in the event
such Debt is Debt of the Company or a Guarantor which is subordinate in right of
payment to the Securities or the applicable Restricted Subsidiary Guarantee,
prior to such Debt as to such Property for so long as such Debt will be so
secured.
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128
The foregoing restrictions shall not apply to: (i) Liens existing on the
Measurement Date and securing Debt outstanding on the Measurement Date or
Incurred by the Company or a Restricted Subsidiary on or after the Measurement
Date pursuant to any Credit Facility to secure Debt permitted to be Incurred by
the Company or such Restricted Subsidiary pursuant to clause (ii) of paragraph
(b) under Section 1010; (ii) Liens securing Debt in an amount which, together
with the aggregate amount of Debt then outstanding or available under all Credit
Facilities (together with all refinancing Debt then outstanding or available
pursuant to clause (viii) of paragraph (b) of Section 1010 in respect of Debt
previously Incurred under Credit Facilities), does not exceed 1.5 times the
Company's Consolidated Cash Flow Available for Fixed Charges for the four full
fiscal quarters preceding the Incurrence of such Lien for which the Company's
consolidated financial statements are available, determined on a pro forma basis
as if such Debt had been Incurred and the proceeds thereof had been applied at
the beginning of such four fiscal quarters; (iii) Liens in favor of the Company
or any Restricted Subsidiary; provided, however, that any subsequent issue or
-------- -------
transfer of Capital Stock or other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
the Debt secured by any such Lien (except to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Lien by the issuer thereof; (iv) Liens Incurred by the Company or a Restricted
Subsidiary to secure Purchase Money Debt permitted to be Incurred by the Company
or such Restricted Subsidiary pursuant to clause (iii) of paragraph (b) under
Section 1010, provided that any such Lien may not extend to any Property other
--------
than the Telecommunications/IS Assets installed, constructed, acquired, leased,
developed or improved with the proceeds of such Purchase Money Debt and any
improvements or accessions thereto (it being understood that all Debt to any
single lender or group of related lenders or outstanding under any single credit
facility, and in any case relating to the same group or collection of
Telecommunications/IS Assets financed thereby, shall be considered a single
Purchase Money Debt, whether drawn at one time or from time to time); (v) Liens
to secure Acquired Debt, provided that (a) such Lien attaches to the acquired
--------
Property prior to the time of the acquisition of such
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129
Property and (b) such Lien does not extend to or cover any other Property; (vi)
Liens to secure Debt Incurred to refinance, in whole or in part, Debt secured by
any Lien referred to in the foregoing clauses (i), (iv) and (v) or this clause
(vi) so long as such Lien does not extend to any other Property (other than
improvements and accessions to the original Property) and the principal amount
of Debt so secured is not increased except as otherwise permitted under clause
(viii) of paragraph (b) of Section 1010 or clause (ix) of Section 1011; (vii)
Liens not otherwise permitted by the foregoing clauses (i) through (vi) securing
Debt in an aggregate amount not to exceed 5% of the Company's Consolidated
Tangible Assets; (viii) Liens granted after the Issue Date pursuant to this
Section 1014 to secure the Securities; and (ix) Permitted Liens.
SECTION 1015. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, assume, Guarantee or otherwise become liable
with respect to any Sale and Leaseback Transaction, unless (i) the Company or
such Restricted Subsidiary would be entitled to Incur (a) Debt in an amount
equal to the Attributable Value of the Sale and Leaseback Transaction pursuant
to Section 1010 and (b) a Lien pursuant to Section 1014, equal in amount to the
Attributable Value of the Sale and Leaseback Transaction, without also securing
the Securities, and (ii) the Sale and Leaseback Transaction is treated as an
Asset Disposition and all of the conditions of Section 1016 (including the
provisions concerning the application of Net Available Proceeds) are satisfied
with respect to such Sale and Leaseback Transaction, treating all of the
consideration received in such Sale and Leaseback Transaction as Net Available
Proceeds for purposes of such Section 1015.
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130
SECTION 1016. Limitation on Asset Dispositions.
---------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Disposition unless: (i) the Company or the Restricted Subsidiary,
as the case may be, receives consideration for such disposition at least equal
to the Fair Market Value for the Property sold or disposed of as determined by
the Board of Directors in good faith and evidenced by a Board Resolution filed
with the Trustee; and (ii) at least 75% of the consideration for such
disposition consists of cash or Cash Equivalents or the assumption of Debt of
the Company or any Restricted Subsidiary (other than Debt that is subordinated
to the Securities or any applicable Restricted Subsidiary Guarantee) and release
of the Company and all Restricted Subsidiaries from all liability on the Debt
assumed (or if less than 75%, the remainder of such consideration consists of
Telecommunications/IS Assets); provided, however, that, to the extent such
-------- -------
disposition involves Special Assets, all or any portion of the consideration
may, at the Company's election, consist of Property other than cash, Cash
Equivalents, the assumption of Debt or Telecommunications/IS Assets.
The Net Available Proceeds (or any portion thereof) from Asset Dispositions
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt): (1) to the permanent repayment or reduction of Debt then outstanding
under any Credit Facility, to the extent such Credit Facility would require such
application or prohibit payments pursuant to the Offer to Purchase described in
the following paragraph (other than Debt owed to the Company or any Affiliate of
the Company); or (2) to reinvest in Telecommunications/IS Assets (including by
means of an Investment in Telecommunications/IS Assets by a Restricted
Subsidiary with Net Available Proceeds received by the Company or another
Restricted Subsidiary).
Any Net Available Proceeds from an Asset Disposition not applied in
accordance with the preceding paragraph within 360 days (or, in the case of a
disposition of Special Assets identified in clause (a) of the definition thereof
in which the Net Available
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131
Proceeds exceed $500,000,000, 540 days) from the date of the receipt of such Net
Available Proceeds shall constitute "Excess Proceeds." When the aggregate amount
of Excess Proceeds exceeds $10,000,000, the Company will be required to make an
Offer to Purchase with such Excess Proceeds on a pro rata basis according to
principal amount (or, in the case of Debt issued at a discount, the then-
Accreted Value) for (x) Outstanding Securities at a price in cash equal to 100%
of the principal amount of the Securities on the purchase date plus accrued and
unpaid interest (if any) thereon (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date) and (y) any other Debt of the Company or any Guarantor that is
pari passu with the Securities, or any Debt of a Restricted Subsidiary that is
- ---- -----
not a Guarantor, at a price no greater than 100% of the principal amount thereof
plus accrued and unpaid interest (if any) to the purchase date (or 100% of the
then-Accreted Value plus accrued and unpaid interest (if any) to the purchase
date in the case of original issue discount Debt), to the extent, in the case of
this clause (y), required under the terms thereof (other than Debt owed to the
Company or any Affiliate of the Company). To the extent there are any remaining
Excess Proceeds following the completion of the Offer to Purchase, the Company
shall apply such Excess Proceeds to the repayment of other Debt of the Company
or any Restricted Subsidiary, to the extent permitted or required under the
terms thereof. Any other remaining Excess Proceeds may be applied to any use as
determined by the Company which is not otherwise prohibited by this Indenture,
and the amount of Excess Proceeds shall be reset to zero.
The Company and the Trustee shall perform their respective obligations for
the Offer to Purchase as specified in the Offer. Prior to the Purchase Date, the
Company shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Offer, (ii) irrevocably deposit with the Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the Purchase Price of all
Securities or portions thereof so accepted (provided that such deposit may be
made no later than 10:00 A.M. New York City time on the Purchase Date if the
Company elects) and (iii) deliver or cause to be delivered to the Trustee all
Securities so accepted together with an Officers' Certificate stating the
Securities or
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132
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the Purchase Price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security or Securities equal in
principal amount to any unpurchased portion of the Security surrendered as
requested by the Holder. Any Security not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof. In the event that the
aggregate Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Purchase Date.
Not later than the date upon which written notice of an Offer to Purchase
is delivered to the Trustee, the Company shall deliver to the Trustee an
Officers' Certificate as to (i) the amount of the Offer, (ii) the allocation of
the Net Available Proceeds from the Asset Disposition pursuant to which such
Offer is being made and (iii) the compliance of such allocation with the
provisions of this Section 1016.
In the event that the Company makes an Offer to Purchase the Securities,
the Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 1017. Limitation on Issuance and Sales of Capital Stock of
----------------------------------------------------
Restricted Subsidiaries.
- ------------------------
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133
The Company shall not, and shall not permit any Restricted Subsidiary to,
issue, transfer, convey, sell or otherwise dispose of any shares of Capital
Stock of a Restricted Subsidiary or securities convertible or exchangeable into,
or options, warrants, rights or any other interest with respect to, Capital
Stock of a Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary except (i) a sale of all of the Capital Stock of such
Restricted Subsidiary owned by the Company and any Restricted Subsidiary that
complies with the provisions of Section 1016 to the extent such provisions
apply, (ii) in a transaction that results in such Restricted Subsidiary becoming
a Joint Venture, provided (x) such transaction complies with the provisions of
--------
Section 1016 to the extent such provisions apply and (y) the remaining interest
of the Company or any other Restricted Subsidiary in such Joint Venture would
have been permitted as a new Restricted Payment or Permitted Investment under
the provisions of Section 1012, (iii) the issuance, transfer, conveyance, sale
or other disposition of shares of such Restricted Subsidiary so long as after
giving effect to such transaction such Restricted Subsidiary remains a
Restricted Subsidiary and such transaction complies with the provisions of
Section 1016 to the extent such provisions apply, (iv) the transfer, conveyance,
sale or other disposition of shares required by applicable law or regulation,
(v) if required, the issuance, transfer, conveyance, sale or other disposition
of directors' qualifying shares, (vi) Disqualified Stock issued in exchange
for, or upon conversion of, or the proceeds of the issuance of which are used to
refinance, shares of Disqualified Stock of such Restricted Subsidiary, provided
--------
that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being exchanged, converted or refinanced, (vii) in a
transaction where the Company or a Restricted Subsidiary acquires at the same
time not less than its Proportionate Interest in such issuance of Capital Stock,
(viii) Capital Stock issued and outstanding on the Measurement Date, (ix)
Capital Stock of a Restricted Subsidiary issued and outstanding prior to the
time that such Person becomes a Restricted Subsidiary so long as such Capital
Stock was not issued in contemplation of such Person's becoming a Restricted
Subsidiary or otherwise being
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134
acquired by the Company and (x) an issuance of Preferred Stock of a Restricted
Subsidiary (other than Preferred Stock convertible or exchangeable into Common
Stock of any Restricted Subsidiary) otherwise permitted by this Indenture. In
the event of (a) the consummation of a transaction referred to in any of the
foregoing clauses that results in a Guarantor no longer being a Restricted
Subsidiary and (b) the execution and delivery of a supplemental indenture
providing for such release in form satisfactory to the Trustee, any such
Guarantor shall be released from all its obligations under its Restricted
Subsidiary Guarantee.
SECTION 1018. Transactions with Affiliates.
-----------------------------
<PAGE>
135
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, sell, lease, transfer, or otherwise
dispose of any of its Property to, or purchase any Property from, or enter into
any contract, agreement, understanding, loan, advance, Guarantee or transaction
(including the rendering of services) with or for the benefit of, any Affiliate
(each of the foregoing, an "Affiliate Transaction"), unless (a) such Affiliate
Transaction or series of Affiliate Transactions is (i) in the best interest of
the Company or such Restricted Subsidiary and (ii) on terms that are no less
favorable to the Company or such Restricted Subsidiary than those that would
have been obtained in a comparable arm's-length transaction by the Company or
such Restricted Subsidiary with a Person that is not an Affiliate (or, in the
event that there are no comparable transactions involving Persons who are not
Affiliates of the Company or the relevant Restricted Subsidiary to apply for
comparative purposes, is otherwise on terms that, taken as a whole, the Company
has determined to be fair to the Company or the relevant Restricted Subsidiary)
and (b) the Company delivers to the Trustee (i) with respect to any Affiliate
Transaction or series of Affiliate Transactions involving aggregate payments in
excess of $10,000,000 but less than $15,000,000, a certificate of the chief
executive, operating or financial officer of the Company evidencing such
officer's determina tion that such Affiliate Transaction or series of Affiliate
Transactions complies with clause (a) above and (ii) with respect to any
Affiliate Transaction or series of Affiliate Transactions involving aggregate
payments equal to or in excess of $15,000,000, a Board Resolution certifying
that such Affiliate Transaction or series of Affiliate Transactions complies
with clause (a) above and that such Affiliate Transaction or series of Affiliate
Transactions has been approved by the Board of Directors, including a majority
of the disinterested members of the Board of Directors, provided that, in the
--------
event that there shall not be at least two disinterested members of the Board of
Directors with respect to the Affiliate Transaction, the Company shall, in
addition to such Board Resolution, file with the Trustee a written opinion from
an investment banking firm of national standing in the United States which, in
the good faith judgment of the Board of Directors, is independent with respect
to the Company and its Affiliates and qualified to perform such task, which
opinion
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136
shall be to the effect that the consideration to be paid or received in
connection with such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary.
Notwithstanding the foregoing, the following shall not be deemed Affiliate
Transactions: (i) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with industry practice; (ii) any agreement or arrangement with respect to the
compensation of a director or officer of the Company or any Restricted
Subsidiary approved by a majority of the disinterested members of the Board of
Directors and consistent with industry practice; (iii) transactions between or
among the Company and its Restricted Subsidiaries, provided that no more than 5%
--------
of the Voting Stock (on a fully diluted basis) of any such Restricted Subsidiary
is owned by an Affiliate of the Company (other than a Restricted Subsidiary);
(iv) Restricted Payments and Permitted Investments permitted by Section 1012
(other than Investments in Affiliates that are not the Company or Restricted
Subsidiaries); (v) transactions pursuant to the terms of any agreement or
arrangement as in effect on the Measurement Date; and (vi) transactions with
respect to wireline or wireless transmission capacity, the lease or sharing or
other use of cable or fiber optic lines, equipment, rights-of-way or other
access rights, between the Company (or any Restricted Subsidiary) and any other
Person, provided that, in the case of this clause (vi), such transaction
--------
complies with clause (a) in the immediately preceding paragraph.
SECTION 1019. Limitation on Designations of Unrestricted Subsidiaries.
-------------------------------------------------------
The Company shall not designate any Subsidiary of the Company (other than a
newly created Subsidiary in which no Investment has previously been made) as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
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137
(b) immediately after giving effect to such Designation, the
Company would be able to Incur $1.00 of Debt under paragraph (a) of
Section 1010; and
(c) the Company would not be prohibited under any provision of this
Indenture from making an Investment at the time of Designation (assuming
the effectiveness of such Designation) in an amount (the "Designation
Amount") equal to the portion (proportionate to the Company's equity
interest in such Restricted Subsidiary) of the Fair Market Value of the net
assets of such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to Section 1012
for all purposes of this Indenture in the Designation Amount; provided, however,
-------- -------
that, upon a Revocation of any such Designation of a Subsidiary, the Company
shall be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary of an amount (if positive) equal to (i) the Company's "Investment" in
such Subsidiary at the time of such Revocation less (ii) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the Fair
Market Value of the net assets of such Subsidiary at the time of such
Revocation. At the time of any Designation of any Subsidiary as an Unrestricted
Subsidiary, such Subsi diary shall not own any Capital Stock of the Company or
any Restricted Subsidiary. In addition, neither the Company nor any Restricted
Subsidiary shall at any time (x) provide credit support for, or a Guarantee of,
any Debt of any Unrestricted Subsidiary (including any undertaking, agreement
or instrument evidencing such Debt); provided that the Company or a Restricted
--------
Subsidiary may pledge Capital Stock or Debt of any Unrestricted Subsidiary on a
nonrecourse basis such that the pledgee has no claim whatsoever against the
Company other than to obtain such pledged Capital Stock or Debt, (y) be directly
or indirectly liable for any Debt of any Unrestricted Subsidiary or (z) be
directly or indirectly liable for any Debt which provides that the holder
thereof may (upon notice, lapse of time or both) declare a default thereon or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity upon the occurrence of a default with respect to any Debt,
Lien or other obligation of any Unrestricted Subsidiary
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138
(including any right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (x) or (y) to the extent permitted
under Sections 1012 and 1018.
Unless Designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company will be classified as a Restricted Subsidiary;
provided, however, that such Subsidiary shall not be designated as a Restricted
- -------- -------
Subsidiary and shall be automatically classified as an Unrestricted Subsidiary
if either of the requirements set forth in clauses (a) and (b) of the
immediately following paragraph will not be satisfied immediately following such
classification. Except as provided in the first sentence of this Section 1019,
no Restricted Subsidiary may be redesig nated as an Unrestricted Subsidiary.
A Designation may be revoked (a "Revocation") by a Board Resolution
delivered to the Trustee, provided that the Company will not make any Revocation
--------
unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(b) all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have
been permitted to be Incurred at such time for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board Resolutions
delivered to the Trustee (i) certifying compliance with the foregoing provisions
and (ii) giving the effective date of such Designation or Revocation, such
delivery to the Trustee to occur within 45 days after the end of the fiscal
quarter of the Company in which such Designation or Revocation is made (or, in
the case of a Designation or Revocation made during the last fiscal quarter of
the Company's fiscal year, within 90 days after the end of such fiscal year).
Upon Designation of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Section 1019, such Restricted Subsidiary shall, by delivery
of a supplemental indenture providing for such release in form satisfactory to
the
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139
Trustee, be released from any Restricted Subsidiary Guarantee previously
made by such Subsidiary.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
--------------------
The Securities will be subject to redemption at the option of the Company,
in whole or in part, at any time or from time to time, upon not less than 30 nor
more than 60 days' prior notice, on the terms and at the redemption prices
(expressed as percentages of principal amount) set forth in the second and third
paragraphs on the reverse of the form of Security, plus accrued and unpaid
interest thereon (if any) to the Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
SECTION 1102. Applicability of Article.
-------------------------
This Article shall govern any redemption of the Securities pursuant to
Section 1101.
SECTION 1103. Election to Redeem; Notice to Trustee.
--------------------------------------
The election of the Company to redeem any Securities pursuant to Section
1101 shall be evidenced by a Board Resolution. The Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities to be redeemed and shall deliver
to the Trustee such documentation and records as shall enable the Trustee to
select the Securities to be redeemed pursuant to Section 1104. Such notice shall
be accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein.
<PAGE>
140
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
--------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions of the principal of Securities;
provided, however, that no such partial redemption shall reduce the portion of
- -------- -------
the principal amount of a Security not redeemed to less than (Euro)1,000.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
---------------------
Notice of redemption shall be given in the manner provided for in Section
106 not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Securities to be redeemed.
Each notice of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1107, if any,
<PAGE>
141
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal amounts)
of the particular Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, that on and after
the Redemption Date, upon surrender of such Security, the Holder will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and unpaid and
accrued interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and that, unless the Company defaults in making such
redemption payment or the Trustee or the Paying Agent is prohibited from making
such payment, interest thereon will cease to accrue on and after said date, and
(6) the place or places where such Securities are to be presented and
surrendered for payment of the Redemption Price and accrued interest, if any.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
----------------------------
On or prior to any Redemption Date (and if on any Redemption Date, before
10:00 A.M. New York City time, on such date), the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and unpaid and accrued interest
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) on, all the
Securities which are to be redeemed on that date.
<PAGE>
142
SECTION 1107. Securities Payable on Redemption Date.
--------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with unpaid and accrued interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest or the Trustee or the Paying Agent shall be prohibited from making such
payment) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with unpaid and accrued
interest, if any, to the Redemption Date; provided, however, that installments
-------- -------
of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. Securities Redeemed in Part.
----------------------------
Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Company main tained for such purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
<PAGE>
143
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 1202 or Section 1203 be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article Twelve.
<PAGE>
144
SECTION 1202. Defeasance and Discharge.
-------------------------
Upon the Company's exercise under Section 1201 of the option applicable
to this Section 1202, the Company shall be deemed to have been discharged from
its obligations with respect to all Outstanding Securities on the date the
conditions set forth in Section 1204 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1205 and the other Sections of this Indenture referred to in
clauses (A) and (B) below, and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003 and the
Company's rights under Section 1101, (B) rights of Holders to receive payment of
principal of, premium, if any, and interest on such Securities (but not the
Purchase Price referred to under Section 1009 or 1016) and any rights of the
Holders with respect to such amounts, (C) the rights, obligations and immunities
of the Trustee under the Indenture and (D) this Article Twelve. Subject to
compliance with this Article Twelve, the Company may exercise its option under
this Section 1202 notwithstanding the prior exercise of its option under Section
1203 with respect to the Securities. If the Company exercises its option under
this Section 1202, each Guarantor, if any, shall be released from all its
obligations under its Restricted Subsidiary Guarantee.
<PAGE>
145
SECTION 1203. Covenant Defeasance.
--------------------
Upon the Company's exercise under Section 1201 of the option applicable
to this Section 1203, the Company shall be released from its obligations under
any covenant contained in Sections 801(3), (4) and (5), in Sections 803, 1005,
1006 and 1007 and Sections 1009 through 1019 and from the operation of Sections
501(6), (7), (8), (9) and (10) (but, in the case of Sections 501(9) and (10),
with respect only to Significant Subsidiaries), with respect to the Outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities shall thereafter be
deemed not to be "Outstanding" for the purposes of any direction, waiver,
consent, declaration or other Act of Holders (and the consequences of any
thereof) in connection with such provisions, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such provision, whether directly or
indirectly, by reason of any reference elsewhere herein to any such provision or
by reason of any reference in any such provision 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 501(3), (4), (5), (6), (7), (8),
(9) or (10) (but, in the case of Section 501(9) or (10), with respect only to
Significant Subsidiaries) but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. If the Company
exercises its option under this Section 1203, each Guarantor, if any, shall be
released from all its obligations under its Restricted Subsidiary Guarantee.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
------------------------------------------------
The following shall be the conditions to application of either Section
1202 or Section 1203 to the Outstanding Securities:
<PAGE>
146
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 608 who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, at any time prior to the Maturity of the
Securities: (A) money in an amount, or (B) Government Securities or
European Government Obligations which through the payment of interest
and principal will provide, not later than one day before the due date
of payment in respect of the Securities, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge the principal of (and premium, if any, on) and interest on,
the Outstanding Securities on the Stated Maturity (or Redemption Date,
if applicable) of such principal (and premium, if any) or installment
of interest; provided that the Trustee (or such other trustee) shall
--------
have been irrevocably instructed in writing to apply such money or the
proceeds of such Government Securities to said payments with respect to
the Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 1103, a notice of its election to
redeem all of the Outstanding Securities at a future date in accordance
with Article Eleven, which notice shall be irrevocable. Such
irrevocable redemption notice, if given, shall be given effect in
applying the foregoing.
(2) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit or, insofar as paragraphs (9) and (10) of Section 501 are
concerned with respect to the Company, at any time during the period
ending on the 123rd day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a
<PAGE>
147
default under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound.
(4) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a
result of such 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 defeasance had not occurred.
(5) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities will not recognize
income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(6) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1202 or the covenant defeasance under Section 1203 (as
the case may be) have been complied with.
(7) The Company shall have delivered to the Trustee an Opinion
of Counsel acceptable to the Trustee to the effect that such defeasance
will not result in the trust relating thereto or the Trustee being
subject to regulation under the Investment Company Act of 1940.
<PAGE>
148
(8) Money denominated in currency other than euros and
Government Securities deposited pursuant to this Section 1204 shall be
subject in their entirety (including principal, interest and premium,
if any) to a customary currency agreement that is of a duration not
less than the defeasance period that fixes the exchange rate of such
money or Government Securities into euros, and that constitutes a
Permitted Interest Rate or Currency Protection Agreement for the
benefit of the Trustee. The amount of such money and Government
Securities expressed in euros will be as provided in such currency
agreement. The counterparty to such currency agreement shall be a
commercial bank organized in the United States having capital and
surplus in excess of $500 million or a commercial bank organized under
the laws of any country that is a member of the OECD having total
assets in excess of $500 million (or its foreign currency equivalent at
the time). Such counterparty may obtain from the Company an Opinion of
Counsel to the effect that such currency agreement has been duly
authorized and entered into by the Company.
SECTION 1205. Deposited Money and Government Securities to Be Held in
-------------------------------------------------------
Trust; Other Miscellaneous Provisions.
- -------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law or to the extent the
Company acts as its own Paying Agent.
<PAGE>
149
The Company shall pay and indemnify the Trustee and (if applicable) its
officers, directors, employees and agents against any tax, fee or other charge
imposed on or assessed against the Government Securities deposited pursuant to
Section 1204 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it as provided in Section
1204 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance, as
applicable, in accordance with this Article Twelve.
SECTION 1206. Reinstatement.
--------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 401 or 1205 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and any Guarantor's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 401, 1202 or 1203, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance therewith; provided, however, that if the Company or any
-------- -------
Guarantor makes any payment of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Company or such
Guarantor shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
<PAGE>
150
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ Thomas C. Stortz
---------------------------
Name: Thomas C. Stortz
Title: Group Vice President,
General Counsel and
Secretary
Attest: /s/ Neil J. Eckstein
--------------------------
Name: Neil J. Eckstein
Title: Assitant Secretary
THE BANK OF NEW YORK, as Trustee
By: /s/ Van K. Brown
--------------------------
Name: Van K. Brown
Title: Assistant Vice
President
Attest: /s/ Remo J. Reale
--------------------------
Name: Remo J. Reale
Title: Vice President
<PAGE>
EXHIBIT A
Form of Face of Security
------------------------
[If a Global Security, then insert:] THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[If a Global Security, then insert:] UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE [DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC")][BANK OF NEW YORK DEPOSITARY (NOMINEES) LIMITED ("BONY")],
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] [THE BANK
OF NEW YORK DEPOSITARY (NOMINEES) LIMITED] OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF [DTC] [BONY] (AND ANY PAYMENT IS MADE TO
[CEDE & CO.] [BONY] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF [DTC] [BONY]), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, [CEDE & CO.] [BONY], HAS AN INTEREST HEREIN.
[Private Placement Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG
AS THIS SECURITY IS ELIGIBLE FOR
<PAGE>
A-2
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), PROVIDED THAT, IF SUCH
TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS
DEFINED BELOW) PRIOR TO THE DATE THAT IS 40 DAYS FOLLOWING THE ISSUE DATE, A
CERTIFICATE THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE
IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY
PURSUANT TO THIS CLAUSE (4) PRIOR TO THE DATE THAT IS 40 DAYS FOLLOWING THE
ISSUE DATE), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
<PAGE>
A-3
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT.
[If a Physical Security, then insert:] IN CONNECTION WITH ANY TRANSFER, THE
HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND
OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
<PAGE>
A-4
LEVEL 3 COMMUNICATIONS, INC.
111/4% Senior Euro Note Due 2010
CUSIP No.
No. [up to] (Euro)
Level 3 Communications, Inc., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________, or registered assigns, the principal sum of [if a Global
Security, then insert: up to] _________ Dollars [if a Global Security, then
insert: (the outstanding principal amount of which shall be reflected in the
attached Schedule of Increases or Decreases in Global Security and the records
of the Trustee which, taken together with the outstanding principal amounts of
all other Outstanding Securities, shall not exceed (Euro) 300,000,000 in the
aggregate at any time)] on March 15, 2010, at the office or agency of the
Company referred to below, and to pay interest thereon, in cash in arrears
semiannually on March 15 and September 15 in each year, commencing on September
15, 2000, accruing from February 29, 2000 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 111/4% per annum, until the principal hereof is paid or duly provided for.
The Company shall pay interest on overdue principal at the rate borne by the
Securities, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
[Delete this paragraph if an Exchange Security (other than a Private Exchange
Security).] The Holder of this Security is entitled to the benefits of a Euro
Registration Agreement, dated as of February 24, 2000, between the Company and
the Purchasers named therein (the "Registration Agreement"). Capitalized terms
used in this paragraph but not defined herein have the meanings assigned to them
in the Registration Agreement. In the event that (i) neither the Exchange Offer
Registration Statement nor the Shelf Registration Statement has been filed with
the Commission on or prior to the 90th day following the date of the original
issuance of the Securities, (ii) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been declared effective on or
prior to the 150th day
<PAGE>
A-5
following the date of the original issuance of the Securities, (iii) neither the
Registered Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective on or prior to the 180th day following the
date of the original issuance of the Securities, or (iv) after the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable in connection with resales of the
Securities at any time that the Company is obligated to maintain the
effectiveness thereof pursuant to the Registration Agreement (each such event
referred to in clauses (i) through (iv) above being referred to herein as a
"Registration Default"), interest (the "Special Interest") shall accrue (in
addition to stated interest on the Securities) from and including the date on
which the first such Registration Default shall occur to but excluding the date
on which all Registration Defaults have been cured, at a rate per annum equal to
0.50% of the principal amount of the Securities; provided, however, that such
-------- -------
rate per annum shall increase by 0.25% per annum from and including the 91st day
after the first such Registration Default (and each successive 91st day
thereafter) unless and until all Registration Defaults have been cured; provided
--------
further, however, that in no event shall the Special Interest accrue at a rate
- ------- -------
in excess of 1.00% per annum. Accrued Special Interest, if any, shall be paid in
cash in arrears semiannually on March 15 and September 15 in each year; and the
amount of accrued Special Interest shall be determined on the basis of the
number of days actually elapsed. Any accrued and unpaid interest (including
Special Interest) on this Security upon the issuance of an Exchange Security in
exchange for this Security shall cease to be payable to the Holder hereof but
such accrued and unpaid interest (including Special Interest) shall be payable
on the next Interest Payment Date for such Exchange Security to the Holder
thereof on the related Regular Record Date.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
<PAGE>
A-6
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and such defaulted interest,
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities, may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in said Indenture. Payment
of the principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in The
City of New York, or at such other office or agency of the Company as may be
maintained for such purpose, in euros or such coin or currency of the European
Union as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
A-7
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_______________ LEVEL 3 COMMUNICATIONS, INC.
By:
__________________________
Authorized Signatory
Attest: _____________
<PAGE>
A-8
Form of Reverse of Security
---------------------------
This Security is one of a duly authorized issue of securities of the
Company designated as its 11 1/4% Senior Euro Notes Due 2010 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to (Euro) 300,000,000, which may be
issued under an indenture (herein called the "Indenture") dated as of February
29, 2000 between the Company and The Bank of New York, as trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Securities are subject to redemption at the option of the Company, in
whole or in part, at any time or from time to time on or after March 15, 2005,
upon not less than 30 nor more than 60 days' prior notice, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest thereon (if any) to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the twelve months
beginning March 15 of the years indicated below:
Year Redemption Price
---- ----------------
2005..................................................... 105.625%
2006..................................................... 103.750%
2007..................................................... 101.875%
2008 and thereafter...................................... 100.000%
In addition, at any time or from time to time prior to March 15, 2003, the
Company may redeem up to 35% of the original aggregate principal amount of the
Securities at a
<PAGE>
A-9
redemption price equal to 111.25% of the principal amount of the Securities so
redeemed, plus accrued and unpaid interest thereon (if any) to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), with the net cash
proceeds of one or more private placements to Persons other than Affiliates of
the Company or underwritten public offerings of Common Stock of the Company
resulting in gross proceeds of at least $100,000,000 in the aggregate; provided
--------
that at least 65% of the original aggregate principal amount of the Securities
would remain outstanding immediately after giving effect to such redemption. Any
such redemption shall be made within 90 days of such private placement or public
offering upon not less than 30 nor more than 60 days' prior notice.
Upon the occurrence of a Change of Control Triggering Event, the Holder of
this Security may require the Company, subject to certain limitations provided
in the Indenture, to repurchase this Security at a purchase price in cash in an
amount equal to 101% of the principal amount thereof, plus accrued and unpaid
interest (if any) to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
To guarantee the due and punctual payment of the principal, premium (if
any) and interest on the Securities and all other amounts payable by the Company
under the
<PAGE>
A-10
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Guarantors, if any, will unconditionally
guarantee such obligations on a senior unsecured basis pursuant to the terms of
the Indenture.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and Defaults and Events of Default, upon compliance by the Company
with certain conditions set forth therein, which provisions apply to this
Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Without the consent of any
Holder of Securities, the Company and the Trustee may amend or modify the
Indenture for certain purposes specified therein, including the release of
Guarantors, if any, from Restricted Subsidiary Guarantees as provided by the
terms of the Indenture. Any such consent or waiver by or on behalf of the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Security.
<PAGE>
A-11
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of (Euro) 1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS
<PAGE>
A-12
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
A-13
Form of Trustee's Certificate of Authentication
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________________
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, as
Trustee
By:
---------------------------
Authorized Signatory
<PAGE>
A-14
Assignment Form
---------------
If you, the holder, want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to_______________________
___________________________________________________________________
(Insert assignee's social security or tax ID number)
___________________
(Print or type assignee's name, address and zip code)
___________________
___________________
___________________
and irrevocably appoint_______________________
of _______________________________
______________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
<PAGE>
A-15
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the date that is two years (or such shorter
period as may be prescribed by Rule 144(k) under the Securities Act or any
successor provision thereunder) after the later of the date of original issuance
of such Securities (or any Predecessor Security) or three months after the last
date, if any, on which such Securities (or any Predecessor Security) were owned
by the Company or any Affiliate of the Company, the undersigned confirms that
such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [_] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) [_] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933, provided that, if
such transfer is being effected by certain transferors specified
in the Indenture prior to the date that is 40 days following the
Issue Date, a certificate which may be obtained from the Company
or the Trustee is delivered by the transferee to the Company and
the Trustee; or
<PAGE>
A-16
(5) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee or the Company), provided that certain
transferors specified in the Indenture may not transfer this
Security pursuant to this clause (5) prior to the date that is 40
days following the Issue Date; or
(6) [_] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5) or
-------- -------
(6) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
Dated: _______________ Your signature: ____________________
- (Sign
exactly as your name appears on the
other side of this Security)
By:
----------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee: ________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED:
<PAGE>
A-17
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A (including the information
specified in Rule 144A(d)(4)) or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned's
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Dated:_____________________ ____________________________
NOTICE: To be executed by an
executive officer
Option of Holder to Elect Purchase
----------------------------------
If you wish to have this Security purchased by the Company pursuant to
Section 1009 or 1016 of the Indenture, check the box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 1009 or 1016 of the Indenture, state the amount:
$___________________.
Dated: ________________ Your Signature: _________________
(Sign exactly as your name appears
on the other side of this
Security)
<PAGE>
A-18
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is (Euro)[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Transfer in Principal in Principal Amount this Global Security authorized
Amount of this of this Global following such decrease signatory of Trustee
Global Security Security or increase or Security Registrar
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of, among [GUARANTOR] (the "New Guarantor"), a subsidiary of
Level 3 Communications, Inc. (or its successor), a Delaware
corporation (the "Company"), LEVEL 3 COMMUNICATIONS, INC., on
behalf of itself and the Guarantors (the "Existing Guarantors"),
if any, under the Indenture referred to below, and THE BANK OF
NEW YORK, a New York banking corporation, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture dated as of February 29, 2000 (the "Indenture"; capitalized
terms used but not defined herein having the meanings assigned thereto in the
Indenture), providing for the issuance of an aggregate principal amount of up to
(Euro) 300,000,000 of 11 1/4% Senior Euro Notes Due 2010 (the "Securities");
WHEREAS the Indenture permits the New Guarantor to execute and deliver
to the Trustee a supplemental indenture pursuant to which the New Guarantor
shall unconditionally guarantee all the Company's obligations under the
Securities pursuant to a Guarantee on the terms and conditions set forth herein;
WHEREAS the Guarantee contained in this Supplemental Indenture shall
constitute a "Restricted Subsidiary Guarantee", and the New Guarantor shall
constitute a "Guarantor", for all purposes of the Indenture; and
WHEREAS pursuant to Section 901 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture;
<PAGE>
B-2
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Guaranties. The New Guarantor hereby unconditionally guarantees,
----------
jointly and severally, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of (and premium, if any)
and interest on the Securities when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under the Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). The New Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from the New Guarantor and that the New
Guarantor will remain bound under this Supplemental Indenture notwithstanding
any extension or renewal of any Obligation.
The New Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. The New Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of the New Guarantor hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or any
other Person under the Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of the
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Obligations; or (f) any change in the
ownership of the New Guarantor.
<PAGE>
B-3
The New Guarantor further agrees that its Guarantee herein constitutes
a guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Obligations.
Except as expressly set forth in Sections 803, 1017, 1019, 1202 and
1203 of the Indenture, the obligations of the New Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the New Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under the
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of the New Guarantor or would otherwise operate as a
discharge of the New Guarantor as a matter of law or equity.
The New Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or (premium, if any) interest on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against the New
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of (or premium, if any) or interest on any Obligation when and as the same shall
become due, whether at Stated Maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other
<PAGE>
B-4
Obligation, the New Guarantor hereby promises to and will, upon receipt of
written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to
the Holders or the Trustee an amount equal to the sum of (i) the unpaid amount
of such Obligations, (ii) accrued and unpaid interest on such Obligations (but
only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Company to the Holders and the Trustee.
The New Guarantor agrees that it shall not be entitled to any right of
subrogation in respect of any Obligations guaranteed hereby until payment in
full in cash of all Obligations. The New Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article Five of the Indenture for the purposes of the New
Guarantor's Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Five of the Indenture, such Obligations
(whether or not due and payable) shall forthwith become due and payable by the
New Guarantor for the purposes of this Section.
The New Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 1.
2. Contribution. Each of the Company and the New Guarantor (a
-------------
"Contributing Party") agrees that, in the event a payment shall be made by any
other Guarantor under any Restricted Subsidiary Guarantee (the "Claiming
Guarantor"), the Contributing Party shall indemnify the Claiming Guarantor in an
amount equal to the amount of such payment multiplied by a fraction, the
numerator of which shall be the net worth of the Contributing Party (which, in
the case of the Company, shall be measured on the Issue Date, and in the case of
the New Guarantor, on the date hereof) and the denominator of which shall be the
aggregate net worth of the Company on the Issue Date and the Guarantors on
respective dates of the Supplemental Indentures executed and delivered by such
Guarantors.
<PAGE>
B-5
3. Successors and Assigns. This Supplemental Indenture shall be
-----------------------
binding upon the New Guarantor and its successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party in the Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
4. No Waiver. Neither a failure nor a delay on the part of either
----------
the Trustee or the Holders in exercising any right, power or privilege under
this Supplemental Indenture, the Indenture or the Securities shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein and therein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Supplemental Indenture, the Indenture
or the Securities at law, in equity, by statute or otherwise.
5. Modification. No modification, amendment or waiver of any
-------------
provision of this Supplemental Indenture, nor the consent to any departure by
the New Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the New Guarantor in any case shall entitle the
New Guarantor to any other or further notice or demand in the same, similar or
other circumstances.
6. Opinion of Counsel. Concurrently with the execution and delivery
-------------------
of this Supplemental Indenture, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that this Supplemental Indenture has been duly
authorized, executed and delivered by each of the New Guarantor and the Company
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors'
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Guarantee of the New Guarantor is a legal,
valid and binding obligation of the New Guarantor, enforceable against the New
Guarantor in accordance with its terms.
<PAGE>
B-6
7. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
- ----------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
8. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
--------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT 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.
9. Counterparts. The parties may sign any number of copies of this
-------------
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. Effect of Headings. The Section headings herein are for
-------------------
convenience only and shall not effect the construction thereof.
<PAGE>
B-7
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
__________________________________
Name:
Title:
LEVEL 3 COMMUNICATIONS, INC., on behalf of
itself and the Existing Guarantors, if any,
by
__________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
by
__________________________________
Name:
Title:
<PAGE>
Execution Copy
Exhibit 4.3
LEVEL 3 COMMUNICATIONS, INC.
(Euro)800,000,000
10-3/4% Senior Notes due 2008
11-1/4% Senior Notes due 2010
EURO REGISTRATION AGREEMENT
New York, New York
February 24, 2000
To: MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
CHASE SECURITIES INC.
BARCLAYS CAPITAL INC.
CREDIT LYONNAIS SA
J.P. MORGAN SECURITIES LTD.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
KLEINWORT BENSON LIMITED
SOCIETE GENERALE
In care of:
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London, E 14 4 QA
Ladies and Gentlemen:
Level 3 Communications, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to certain purchasers (the "Purchasers"), upon the
terms set forth in a purchase agreement dated the date hereof (the "Purchase
Agreement"), (U)500,000,000 aggregate principal amount of its 10-3/4% Senior
Notes due 2008 and (U)300,000,000 aggregate principal amount of its 11-1/4%
Senior Notes due 2010 (collectively the "Securities") (the "Initial Placement").
As an inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to your obligations thereunder, the Company agrees
with you, (i) for your benefit and the benefit of the other Purchasers and (ii)
for the benefit of the holders from time to time of the Securities (including
you and the other
<PAGE>
2
Purchasers) (each of the foregoing a "Holder" and together the "Holders"), as
follows:
1. Definitions. Capitalized terms used herein without definition
------------
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Affiliate" of any specified person means any other person which,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Exchange Offer Registration Period" means the 180-day period
----------------------------------
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Securities Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the
-----------------
Purchasers) which is a broker-dealer electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities for New Securities.
"Holder" has the meaning set forth in the preamble hereto.
------
"Indentures" means the Indentures relating to the Securities and the
----------
New Securities, each to be dated as of February 29, 2000, between the Company
and The Bank of New York, as trustee, as the same may be amended from time to
time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
<PAGE>
3
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an offering of securities
under a Shelf Registration Statement.
"New Securities" means debt securities of the Company identical in all
--------------
material respects to the Securities (except that the interest rate step-up
provisions and the transfer restrictions will be modified or eliminated, as
appropriate), to be issued under the Indentures.
"Prospectus" means the prospectus included in any Registration
----------
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities or the New Securities, covered
by such Registration Statement, and all amendments and supplements to the
Prospectus, including post-effective amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
-------------------------
issue and deliver to such Holders, in exchange for the Securities, a like
principal amount of the New Securities.
"Registration Securities" has the meaning set forth in Section 3(a)
-----------------------
hereof.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, all amendments
and supplements to such registration statement, including, without limitation,
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Securities" has the meaning set forth in the preamble hereto.
----------
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
<PAGE>
4
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof which covers some
of or all the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the Commission, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Trustee" means the trustee with respect to the Securities and the New
-------
Securities under the Indentures.
"underwriter" means any underwriter of securities in connection with
-----------
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by Exchanging
------------------------------------------------------------------
Dealers; Private Exchange.
- --------------------------
(a) The Company shall prepare and, not later than 90 days after the
date of the original issuance of the Securities, shall file with the Commission
the Exchange Offer Registration Statement with respect to the Registered
Exchange Offer. The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to become effective under the Securities Act within
150 days after the date of the original issuance of the Securities.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for New Securities (assuming that such
Securities do not constitute a portion of an unsold allotment acquired by such
Holder directly from the Company and such Holder is not an affiliate of the
Company within the meaning of the Securities Act, acquires the New Securities in
the ordinary course of such Holder's business and has no arrangements with any
person to participate in the distribution of the New Securities) to trade such
New Securities from and after their receipt without any limitations or
restrictions under the Securities Act and without material restrictions under
the securities laws of a substantial proportion of the several states of the
United States.
<PAGE>
5
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
and
(iv) comply in all material respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to each
Holder of Securities, New Securities equal in principal amount to the
Securities of such Holder so accepted for exchange.
(e) The Purchasers and the Company acknowledge that, pursuant to
current interpretations by the Commission's staff of Section 5 of the Securities
Act, and in the absence of an applicable exemption therefrom, each Exchanging
Dealer is required to deliver a Prospectus in connection with a sale of any New
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer in exchange for Securities acquired for its own account as a
result of market-making activities or other trading activities. Accordingly, the
Company shall:
(i) include the information set forth in Annex A hereto on the cover
of the Exchange Offer Registration Statement, in Annex B hereto in the
forepart of the Exchange Offer Registration Statement in a section setting
forth details of the Exchange Offer, in Annex C
<PAGE>
6
hereto in the underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration Statement, and
in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer (it being understood that a Holder's
participation in the Exchange Offer is conditioned on the Holder, by
executing and returning the Letter of Transmittal, representing in writing
to the Company as set forth in Rider B of Annex D hereto); and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Securities Act during the
Exchange Offer Registration Period for delivery by Exchanging Dealers in
connection with sales of New Securities received pursuant to the Registered
Exchange Offer, as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of such Purchaser, the Company shall issue and deliver to such Purchaser
or the party purchasing New Securities registered under a Shelf Registration
Statement as contemplated by Section 3 hereof from such Purchaser, in exchange
for such Securities, a like principal amount of New Securities. The Company
shall seek to cause the CUSIP Service Bureau to issue the same CUSIP number for
such New Securities as for New Securities issued pursuant to the Registered
Exchange Offer.
3. Shelf Registration. If, (i) because of any change in law or
------------------
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof, or (ii) for
any other reason the Exchange Offer Registration Statement is not declared
effective within 150 days after the Closing Date or the Registered Exchange
Offer is not consummated within 180 days after the Closing Date, or (iii) any
Purchaser so requests with respect to Securities (or any New Securities received
pursuant to Section 2(f)) not eligible to be exchanged for New Securities in a
Registered Exchange Offer or, in the case of any Purchaser that participates in
the Registered Exchange Offer, such Purchaser does not receive freely tradable
New Securities, or (iv) any Holder (other than a Purchaser) is not eligible to
participate in the Registered Exchange Offer or (v) in the case of any such
Holder that participates in
<PAGE>
7
the Registered Exchange Offer, such Holder does not receive freely tradable New
Securities in exchange for tendered securities, other than by reason of such
Holder being an affiliate of the Company within the meaning of the Securities
Act (it being understood that, for purposes of this Section 3, (x) the
requirement that a Purchaser deliver a Prospectus containing the information
required by Items 507 and/or 508 of Regulation S-K under the Securities Act in
connection with sales of New Securities acquired in exchange for such Securities
shall result in such New Securities being not "freely tradeable" but (y) the
requirement that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer in exchange
for Securities acquired as a result of market-making activities or other trading
activities shall not result in such New Securities being not "freely
tradeable"), the following provisions shall apply:
(a) The Company shall as promptly as practicable (but in no event
more than the later of (i) 90 days after the Closing Date or (ii) 45 days after
so required or requested pursuant to this Section 3), file with the Commission
and thereafter shall use its best efforts to cause to be declared effective
under the Securities Act a Shelf Registration Statement relating to the offer
and sale of the Securities or the New Securities, as applicable, by the Holders
from time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement (such Securities or
New Securities, as applicable, to be sold by such Holders under such Shelf
Registration Statement being referred to herein as "Registration Securities");
provided, however, that, with respect to New Securities received by a Purchaser
- -------- -------
in exchange for Securities constituting any portion of an unsold allotment, the
Company may, if permitted by current interpretations by the Commission's staff,
file a post- effective amendment to the Exchange Offer Registration Statement
containing the information required by Regulation S-K Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this paragraph (a) with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years from the
date the Shelf Registration Statement is declared effective by
<PAGE>
8
the Commission or such shorter period that will terminate when all the
Securities or New Securities, as applicable, covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement (in any
such case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the Shelf Registration Period if it
voluntarily takes any action that would result in Holders of securities covered
thereby not being able to offer and sell such securities during that period,
unless (i) such action is required by applicable law or (ii) such action is
taken by the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligation hereunder), including the acquisition or
divestiture of assets, so long as the Company promptly thereafter complies with
the requirements of Section 4(k) hereof, if applicable.
4. Registration Procedures. In connection with any Shelf
------------------------
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) (i) The Company shall furnish to you, prior to the filing
thereof with the Commission, a copy of any Exchange Offer Registration
Statement, each amendment thereof and each amendment or supplement, if any,
to the Prospectus included therein and shall use its best efforts to
reflect in each such document, when so filed with the Commission, such
comments as you reasonably may propose.
(ii) The Company shall furnish to you, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement, each
amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use its best efforts to reflect in
each such document, when so filed with the Commission, such comments as any
Holder whose securities are to be included in such Shelf Registration
Statement reasonably may propose.
(b) The Company shall ensure that (i) any Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with the
Securities Act and the rules and regulations thereunder, (ii) any
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein
<PAGE>
9
or necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Registration Statement, and any amendment or
supplement to such Prospectus, does not include an untrue statement of a
material fact or omit 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.
(c) (1) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby, and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby, and, in
the case of an Exchange Offer Registration Statement, any Exchanging Dealer
which has provided in writing to the Company a telephone or facsimile
number and address for notices, and, if requested by you or any such Holder
or Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Registration Statement or the Prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material
<PAGE>
10
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
Each such Holder or Exchanging Dealer agrees by its acquisition of such
securities to be sold by such Holder or Exchanging Dealer, that, upon being
so advised by the Company of any event described in clause (iii) of this
paragraph (c)(2), such Holder or Exchanging Dealer will forthwith
discontinue disposition of such securities under such Registration
Statement or Prospectus, until such Holder's or Exchanging Dealer's receipt
of the copies of the supplemented or amended Prospectus contemplated by
paragraph 4(k) hereof, or until it is advised in writing by the Company
that the use of the applicable Prospectus may be resumed.
(d) The Company shall use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of any Registration Statement at the
earliest possible time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if
the Holder so requests in writing, any documents incorporated by reference
therein and all exhibits thereto (including those incorporated by reference
therein).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may
reasonably request; and the Company consents to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
securities in connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement thereto.
<PAGE>
11
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if the Exchanging Dealer so
requests in writing, any documents incorporated by reference therein and
all exhibits thereto (including those incorporated by reference therein).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many copies
of the Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer may
reasonably request for delivery by such Exchanging Dealer in connection
with a sale of New Securities received by it pursuant to the Registered
Exchange Offer; and the Company consents to the use of the Prospectus or
any amendment or supplement thereto by any such Exchanging Dealer, as
aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company shall
register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holder reasonably requests
in writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the securities
covered by such Registration Statement; provided, however, that the Company
-------- -------
will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
(j) The Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names
as Holders may request prior to sales of securities pursuant to such
Registration Statement.
<PAGE>
12
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the securities included therein, the
Prospectus will not include 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.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Securities or New Securities, as the case may be, registered under such
Registration Statement, and provide the Trustee with printed certificates
for such Securities or New Securities, in a form, if requested by the
applicable Holder or Holder's Counsel, eligible for deposit with The
Depository Trust Company or any successor thereto under the Indentures.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission to the extent and so
long as they are applicable to the Registered Exchange Offer or the Shelf
Registration and will make generally available to its security holders a
consolidated earnings statement (which need not be audited) covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act.
(n) The Company shall cause the Indentures to be qualified under the
Trust Indenture Act of 1939, as amended, on or prior to the effective date
of any Shelf Registration Statement or Exchange Offer Registration
Statement.
(o) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company in
writing such information regarding the Holder and the distribution of such
securities as the Company may from time to time reasonably require for
inclusion in such Registration Statement. The Company may exclude from any
such Registration Statement the securities of any
<PAGE>
13
such Holder who fails to furnish such information within a reasonable time
after receiving such request. Each Holder as to which any Shelf
Registration is being effected agrees to furnish promptly to the Company
all information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially
misleading.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post- effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters, if any, and
Majority Holders reasonably agree should be included therein and shall make
all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(q) (i) In the case of any Shelf Registration Statement, the Company
shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures no less favorable than
those set forth in Section 6 hereof (or such other provisions and
procedures acceptable to the Majority Holders and the Managing
Underwriters, if any), with respect to all parties to be indemnified
pursuant to Section 6 hereof from Holders of Securities to the Company.
(ii) Without limiting in any way paragraph (q)(i), no Holder may
participate in any underwritten registration hereunder unless such Holder
(x) agrees to sell such Holder's securities to be covered by such
registration on the basis provided in any underwriting arrangements
approved by the Majority Holders and the Managing Underwriters and (y)
completes and executes in a timely manner all customary questionnaires,
powers of attorney, underwriting agreements and other documents reasonably
required by the Company or the Managing Underwriters in connection with
such underwriting arrangements.
(r) In the case of any Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by the Holders of securities
to be registered thereunder, any underwriter
<PAGE>
14
participating in any disposition pursuant to such Registration Statement,
and any attorney, accountant or other agent retained by the Holders or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
reasonably requested by such person; (ii) cause the Company's officers,
directors and employees to supply all relevant information reasonably
requested by the Holders or any such underwriter, attorney, accountant or
agent in connection with any such Registration Statement as is customary
for due diligence examinations in connection with primary underwritten
offerings; provided, however, that any information that is nonpublic at
-------- -------
the time of delivery of such information shall be kept confidential by the
Holders or any such underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by
law, or such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to the
Holders of securities registered thereunder and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings; (iv) obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters,
if any) addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters; (v) obtain "cold comfort"
letters (or, in the case of any person that does not satisfy the conditions
for receipt of a "cold comfort" letter specified in Statement on Auditing
Standards No. 72, an "agreed-upon procedures" letter under Statement on
Auditing Standards No. 35) and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included or incorporated by
reference in the Registration Statement), addressed to each selling Holder
of securities registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten offerings;
and (vi) deliver such documents
<PAGE>
15
and certificates as may be reasonably requested by the Majority Holders and
the Managing Underwriters, if any, including those to evidence compliance
with Section 4(k) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this
Section 4(r) shall be performed (A) on the effective date of such
Registration Statement and each post-effective amendment thereto and (B) at
each closing under any underwriting or similar agreement as and to the
extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, the
Company shall (i) make reasonably available for inspection by each
Purchaser, and any attorney, accountant or other agent retained by such
Purchaser, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries reasonably
requested by such person; (ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by such
Purchaser or any such attorney, accountant or agent in connection with any
such Registration Statement as is customary for due diligence examinations
in connection with primary underwritten offerings; provided, however, that
-------- -------
any information that is nonpublic at the time of delivery of such
information shall be kept confidential by such Purchaser or any such
attorney, accountant or agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations
and warranties to such Purchaser, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten
offerings; (iv) obtain opinions of counsel to the Company (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to such Purchaser and its counsel), addressed to such
Purchaser, covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Purchaser or its counsel; (v) obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which
<PAGE>
16
financial statements and financial data are, or are required to be,
included or incorporated by reference in the Registration Statement),
addressed to such Purchaser, in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
primary underwritten offerings, or if requested by such Purchaser or its
counsel in lieu of a "cold comfort" letter, an agreed-upon procedures
letter under Statement on Auditing Standards No. 35, covering matters
requested by such Purchaser or its counsel; and (vi) deliver such documents
and certificates as may be reasonably requested by such Purchaser or its
counsel, including those to evidence compliance with Section 4(k) and with
conditions customarily contained in underwriting agreements. The foregoing
actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 4(s)
shall be performed (A) at the close of the Registered Exchange Offer and
(B) on the effective date of any post-effective amendment to the Exchange
Offer Registration Statement.
5. Registration Expenses. The Company shall bear all expenses
----------------------
incurred in connection with the performance of its obligations under
Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration
Statement, will reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel (in addition to one local counsel in
each relevant jurisdiction) designated by the Majority Holders to act as
counsel for the Holders in connection therewith ("Holders' Counsel").
Notwithstanding the foregoing, the Holders of the securities being
registered shall pay all agency or brokerage fees and commissions and
underwriting discounts and commissions attributable to the sale of such
securities and the fees and disbursements of any counsel or other advisors
or experts retained by such holders (severally or jointly), other than the
counsel and experts specifically referred to above in this Section 5,
transfer taxes on resale of any of the securities by such Holders and any
advertising expenses incurred by or on behalf of such Holders in connection
with any offers they may make.
6. Indemnification and Contribution. (a) In connection with any
---------------------------------
Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of securities covered thereby (including each Purchaser and,
with respect to any Prospectus delivery as contemplated in Section 4(h)
hereof, each Exchanging Dealer), the directors, officers, employees and
agents of each such Holder and each other person, if any, who controls any
such Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses,
<PAGE>
17
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement as originally filed
or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Company will not be liable in any case to the extent that any
- -------
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder specifically for
inclusion therein; provided further, however, that the indemnity agreement
---------------- -------
contained in this Section 6(a) shall not inure to the benefit of any indemnified
party to the extent that it is determined by a final, non-appealable judgment
that (i) a preliminary Prospectus contained an untrue statement of a material
fact or omitted to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) the sale to the
person asserting any such losses, claims, damages or liabilities was an initial
resale of securities by any Holder, (iii) any such loss, claim, damage or
liability of such indemnified party results from the fact that there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such person, a copy of any revised preliminary
Prospectus, the related Prospectus or the related Prospectus as amended or
supplemented in any case where such delivery is required by the Securities Act,
and the Company had previously furnished copies thereof to such Holder and (iv)
the revised preliminary Prospectus, the related Prospectus or the related
Prospectus as amended or supplemented corrected such untrue statement or
omission. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses (as
defined below) of, as provided in Section
<PAGE>
18
6(d), any underwriters of Securities registered under a Shelf Registration
Statement, their officers, directors, employees and agents and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Purchasers and the selling Holders provided in this
Section 6(a) and shall, if requested by any Holder, enter into an underwriting
agreement reflecting such agreement, as provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging not jointly agrees to
indemnify and hold harmless the Company, each of its directors and officers and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemni fying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indem nified party or
parties except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the
<PAGE>
19
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel (and local counsel) if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. It is understood,
however, that the Company shall, in connection with any one such 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
reasonable fees and expenses of only one separate firm of attorneys (in addition
to any local counsel) at any time for all such Holders and controlling persons.
An indemnifying party shall not be liable under this Section 6 to any
indemnified party regarding any settlement or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
is consented to by such indemnifying party, which consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any
<PAGE>
20
reason, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall have a joint and several obligation to contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, from the Initial Placement and the Registration Statement which resulted
in such Losses; provided, however, that in no case shall any Purchaser or any
-------- -------
subsequent Holder of any Security or New Security be responsible, in the
aggregate, for any amount in excess of the purchase discount or commission
applicable to such Security, or in the case of a New Security, applicable to the
Security which was exchangeable into such New Security, as set forth on the
cover page of the Final Memorandum, nor shall any underwriter be responsible for
any amount in excess of the underwriting discount or commission applicable to
the securities purchased by such underwriter under the Registration Statement
which resulted in such Losses. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the sum of (x) the total net
proceeds from the Initial Placement (before deducting expenses) as set forth on
the cover page of the Final Memorandum and (y) the total amount of additional
interest which the Company was not required to pay as a result of registering
the securities covered by the Registration Statement which resulted in such
Losses. Benefits received by the Purchasers shall be deemed to be equal to the
total purchase discounts and commissions as set forth on the cover page of the
Final Memorandum, and benefits received by any other Holders shall be deemed to
be equal to the value of receiving Securities or New Securities, as applicable,
registered under the Securities Act. Benefits received by any underwriter shall
be deemed to be equal to the total underwriting discounts and commissions, as
set forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
<PAGE>
21
information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand. The parties agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Securities Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Purchaser,
any other Holder, the Company or any underwriter or any of the officers,
directors or controlling persons referred to in this Section 6, and will survive
the sale by a Holder of securities covered by a Registration Statement.
7. Miscellaneous.
--------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that limits the rights granted to the
Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of Securities (or, after the consummation of any Exchange Offer
in accordance with Section 2 hereof, of New Securities); provided that, with
respect to any matter that directly or indirectly affects the rights of any
Purchaser hereunder,
<PAGE>
22
the Company shall obtain the written consent of each such Purchaser against
which such amendment, qualification, supplement, waiver or consent is to be
effective. Notwithstanding the foregoing (except the foregoing proviso), a
waiver or consent to departure from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose securities are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of securities being sold rather than registered
under such Registration Statement.
(c) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
facsimile, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the registrar under the
Indentures, with a copy in like manner to Salomon Smith Barney Inc. by
facsimile (212-816-7912) and confirmed by mail to it at 388 Greenwich
Street, New York, New York 10013, Attention: General Counsel;
(2) if to you, initially at the address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) 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 the need for an express assignment or any consent by
the Company or subsequent Holders of Securities and/or New Securities. The
Company hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and/or New Securities and any such Holder may specifically enforce
the provisions of this Agreement as if an original party hereto.
<PAGE>
23
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CONFLICT OF LAW PROVISIONS THEREOF).
(h) Severability. In the event that any one of more of the
-------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of principal amount of Securities
or New Securities is required hereunder, Securities or New Securities, as
applicable, held by the Company or its Affiliates (other than subsequent Holders
of Securities or New Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
(j) Termination. This Agreement shall automatically terminate,
------------
without any further action on the part of the Company or the Purchasers, upon
the termination or cancellation of the Purchase Agreement prior to the Closing
Date.
<PAGE>
24
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ Thomas C. Stortz
-----------------------
Name: Thomas C. Stortz
Title: Group Vice
President, General
Counsel and
Secretary
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written
To: MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
CHASE SECURITIES INC.
BARCLAYS CAPITAL INC.
CREDIT LYONNAIS SA
J.P. MORGAN SECURITIES LTD.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
KLEINWORT BENSON LIMITED
SOCIETE GENERALE
By: MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: /s/ Elizabeth R. Chandler
-----------------------------
Name: Elizabeth R. Chandler
Title: Managing Director
<PAGE>
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant to
the Registered Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such New Securities. 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 New
Securities received in exchange for Securities where such New Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company has agreed that, starting on the date hereof
(the "Expiration Date") and ending on the close of business on the day that is
180 days following the Expiration Date, it will make this Prospectus available
to any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
<PAGE>
ANNEX B
Each broker-dealer that receives New Securities for its own account in exchange
for Securities, where such Securities 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 Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such New Securities. The
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 Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
day that is 180 days following the Expiration Date, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until , 2000, all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus. */
-
The Company will not receive any proceeds from any sale of New Securities
by broker-dealers. New Securities 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 Securities 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 concessions from any such
broker-dealer and/or the purchasers of any such New Securities. Any broker-
dealer that resells New Securities that were received by it for its own account
pursuant to the Registered Exchange Offer and any broker or dealer that
participates in a distribution of such New Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities 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.
_____________
*/ In addition, the legend required by Item 502(e) of Regulation S-K will
-
appear on the back cover page of the Exchange Offer Prospectus.
<PAGE>
2
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (other than the expenses of counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
<PAGE>
ANNEX D
Rider A
-------
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name: _______________________________________________________
Address: ____________________________________________________
____________________________________________________
Rider B
-------
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 New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT 12
LEVEL 3 COMMUNICATIONS, INC.
Calculation of Ratios of Earnings to Fixed Charges
($ in millions, except for ratios)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------------
2000 1999
--------- ---------
<S> <C> <C>
Earnings (Loss) from Continuing Operations Before Taxes $ (225) $ (126)
Interest on Debt, net of Capitalized Interest 50 53
Interest Expense on Portion of Rental Expense 4 3
-------- --------
Earnings Available for Fixed Charges $ (171) $ (70)
======== ========
Interest on Debt $ 117 $ 64
MFS Preferred Dividends
Interest Expense Portion of Rental Expense 4 3
-------- --------
Total Fixed Charges $ 121 $ 67
======== ========
Ratio of Earnings to Fixed Charges - -
======== ========
Deficiency $ (292) $ (137)
======== ========
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Ended
-------------------------------------------------------------
1999 1998 1997 1996 1995
-------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings (Loss) from Continuing Operations Before Taxes $ (580) $ (22) $ 70 $ 116 $ (4)
Interest on Debt, net of Capitalized Interest 174 133 15 33 52
Interest Expense on Portion of Rental Expense 13 6 - 1 -
-------- ---------- ---------- --------- ---------
Earnings Available for Fixed Charges $ (393) $ 117 $ 85 $ 150 $ 48
======== ========== =========== ========= =========
Interest on Debt $ 289 $ 147 $ 15 $ 38 $ 72
MFS Preferred Dividends 8
Interest Expense Portion of Rental Expense 13 6 - 1 -
-------- ---------- ----------- --------- ---------
Total Fixed Charges $ 302 $ 153 $ 15 $ 39 $ 80
======== ========== =========== ========= =========
Ratio of Earnings to Fixed Charges - - 5.73 3.87 -
======== ========== =========== ========= =========
Deficiency $ (695) $ (36) $ - $ - $ (32)
======== ========== =========== ========= =========
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Level 3 Communications, Inc. of our report dated March
30, 1998, on our audit of the consolidated statements of operations, cash flows,
changes in stockholders' equity and comprehensive income (loss) of Level 3
Communications, Inc. (formerly Peter Kiewit Sons', Inc.) for the year ended
December 27, 1997 which report also is included in the 1999 Annual Report on
Form 10-K of Level 3 Communications, Inc. We also consent to the reference to
our firm under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Omaha, Nebraska
May 18, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Level 3 Communications, Inc. of our report dated March
8, 2000, on our audits of the consolidated financial statements and financial
statement schedules of RCN Corporation and Subsidiaries as of December 31, 1999
and 1998, and for the years ended December 31, 1999, 1998 and 1997, which report
is incorporated by reference in the 1999 Annual Report on Form 10-K/A of Level 3
Communications, Inc. We also consent to the reference to our firm under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 18, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of our report dated
February 2, 2000 on the consolidated financial statements of Level 3
Communications, Inc. as of December 31, 1999 and 1998 and for the year then
ended included in Level 3 Communications, Inc.'s Form 10-K for the year ended
December 31, 1999 and to all references to our Firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
Denver, Colorado,
May 18, 2000.
<PAGE>
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
LEVEL 3 COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
Delaware 47-0210602
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1025 Eldorado Blvd.
Broomfield, Colorado 80021
(Address of principal executive offices) (Zip code)
----------------------
10-3/4% Senior Notes due 2008
(Title of the indenture securities)
================================================================================
<PAGE>
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.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 10th day of May, 2000.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
--------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from
depository institutions:
Noninterest-bearing balances and currency and coin.. $3,247,576
Interest-bearing balances........................... 6,207,543
Securities:
Held-to-maturity securities......................... 827,248
Available-for-sale securities....................... 5,092,464
Federal funds sold and Securities purchased under
agreements to resell................................ 5,306,926
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 37,734,000
LESS: Allowance for loan and lease losses........... 575,224
LESS: Allocated transfer risk reserve............... 13,278
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,145,498
Trading Assets......................................... 8,573,870
Premises and fixed assets (including capitalized
leases)............................................. 723,214
Other real estate owned................................ 10,962
Investments in unconsolidated subsidiaries and
associated companies................................ 215,006
Customers' liability to this bank on acceptances
outstanding......................................... 682,590
Intangible assets...................................... 1,219,736
Other assets........................................... 2,542,157
-----------
Total assets........................................... $71,794,790
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $27,551,017
Noninterest-bearing................................. 11,354,172
Interest-bearing.................................... 16,196,845
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 27,950,004
Noninterest-bearing................................. 639,410
Interest-bearing.................................... 27,310,594
Federal funds purchased and Securities sold under
agreements to repurchase............................ 1,349,708
Demand notes issued to the U.S.Treasury................ 300,000
Trading liabilities.................................... 2,339,554
Other borrowed money:
With remaining maturity of one year or less......... 638,106
With remaining maturity of more than one year
through three years............................... 449
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 684,185
Subordinated notes and debentures...................... 1,552,000
Other liabilities...................................... 3,704,252
-----------
Total liabilities...................................... 66,100,355
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 866,947
Undivided profits and capital reserves................. 3,765,900
Net unrealized holding gains (losses) on
available-for-sale securities....................... (44,599)
Cumulative foreign currency translation adjustments....
(29,097)
-----------
Total equity capital................................... 5,694,435
-----------
Total liabilities and equity capital................... $71,794,790
===========
<PAGE>
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
--------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
LEVEL 3 COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
Delaware 47-0210602
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1025 Eldorado Blvd.
Broomfield, Colorado 80021
(Address of principal executive offices) (Zip code)
----------------------
11-1/4% Senior Notes due 2010
(Title of the indenture securities)
================================================================================
<PAGE>
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.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 10th day of May, 2000.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
--------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from
depository institutions:
Noninterest-bearing balances and currency and coin.. $3,247,576
Interest-bearing balances........................... 6,207,543
Securities:
Held-to-maturity securities......................... 827,248
Available-for-sale securities....................... 5,092,464
Federal funds sold and Securities purchased under
agreements to resell................................ 5,306,926
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 37,734,000
LESS: Allowance for loan and lease losses........... 575,224
LESS: Allocated transfer risk reserve............... 13,278
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,145,498
Trading Assets......................................... 8,573,870
Premises and fixed assets (including capitalized
leases)............................................. 723,214
Other real estate owned................................ 10,962
Investments in unconsolidated subsidiaries and
associated companies................................ 215,006
Customers' liability to this bank on acceptances
outstanding......................................... 682,590
Intangible assets...................................... 1,219,736
Other assets........................................... 2,542,157
-----------
Total assets........................................... $71,794,790
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $27,551,017
Noninterest-bearing................................. 11,354,172
Interest-bearing.................................... 16,196,845
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 27,950,004
Noninterest-bearing................................. 639,410
Interest-bearing.................................... 27,310,594
Federal funds purchased and Securities sold under
agreements to repurchase............................ 1,349,708
Demand notes issued to the U.S.Treasury................ 300,000
Trading liabilities.................................... 2,339,554
Other borrowed money:
With remaining maturity of one year or less......... 638,106
With remaining maturity of more than one year
through three years............................... 449
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 684,185
Subordinated notes and debentures...................... 1,552,000
Other liabilities...................................... 3,704,252
-----------
Total liabilities...................................... 66,100,355
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 866,947
Undivided profits and capital reserves................. 3,765,900
Net unrealized holding gains (losses) on
available-for-sale securities....................... (44,599)
Cumulative foreign currency translation adjustments....
(29,097)
-----------
Total equity capital................................... 5,694,435
-----------
Total liabilities and equity capital................... $71,794,790
===========
<PAGE>
EXHIBIT 99.1
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON
, , 2000 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., EASTERN STANDARD TIME, ON THE EXPIRATION DATE.
LEVEL 3 COMMUNICATIONS, INC.
1025 Eldorado Boulevard
Broomfield, Colorado 80021
LETTER OF TRANSMITTAL
For 10 3/4% Senior Notes due 2008
Exchange Agent:
Kredietbank S.A. Luxembourgeoise, as
The Bank of New York Luxembourg Exchange Agent
By Facsimile: By Facsimile
44 20 7964 6399 352 4797 3913
Confirm by telephone: Confirm by telephone:
44 20 7893 7235 352 4797 73951
By Registered or Certified Mail: By Mail, Hand or Overnight Service
The Bank of New York Kredietbank S.A. Luxembourgeoise
London Branch 43 Boulevard Royal
30 Cannon Street L-2955 Luxembourg
London EC4M 6YH Attention: Corporate Trust
Attention: Ms. Emma Wilkes
Reorganization Department
By Overnight Courier or By Hand:
The Bank of New York
London Branch
30 Cannon Street
London EC4M 6YH
Attention: Ms. Emma Wilkes
Reorganization Department
Delivery of this instrument to an address other than as set forth above does
not constitute a valid delivery.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING
THE INSTRUCTIONS TO THIS LETTER, CAREFULLY
BEFORE CHECKING ANY BOX BELOW
Capitalized terms used in this Letter and not defined herein shall have the
respective meanings ascribed to them in the Prospectus.
List in Box 1 below the Original Notes of which you are the holder. If the
space provided in Box 1 is inadequate, list the certificate numbers and
principal amount at maturity of Original Notes on a separate signed schedule
and affix that schedule to this Letter.
<PAGE>
BOX 1
TO BE COMPLETED BY ALL TENDERING HOLDERS
<TABLE>
<CAPTION>
Name(s) and
Address(es)
of
Registered
Holder(s) Principal Amount
(Please Principal Amount of Original
fill in if Certificate of Original Notes
blank) Number(s)(1) Notes Tendered(2)
<S> <C> <C> <C>
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
Totals:
- -----------------------------------------------------------
</TABLE>
(1) Need not be completed if Original Notes are being tendered by book-entry
transfer.
(2) Unless otherwise indicated, the entire principal amount of Original
Notes represented by a certificate or Book-Entry Confirmation delivered
to the Exchange Agent will be deemed to have been tendered.
The undersigned acknowledges receipt of the Prospectus dated , 2000
(the "Prospectus") of Level 3 Communications, Inc., a Delaware corporation (the
"Company"), and this Letter of Transmittal for 10 3/4% Senior Notes due 2008
which may be amended from time to time (this "Letter"), which together
constitute the Company's offer (the "Exchange Offer") to exchange, for each
(Euro)1,000 in principal amount of its outstanding 10 3/4% Senior Notes due
2008 issued and sold in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Original Notes"), (Euro)1,000 in
principal amount of 10 3/4% Senior Notes due 2008 (the "New Notes").
The undersigned has completed, executed and delivered this Letter to
indicate the action he or she desires to take with respect to the Exchange
Offer.
All holders of Original Notes who wish to tender their Original Notes must,
prior to the Expiration Date: (1) complete, sign, date and mail or otherwise
deliver this Letter to an Exchange Agent, in person or to one of the addresses
set forth above; and (2) tender his or her Original Notes or, if a tender of
Original Notes is to be made by book-entry transfer to the account maintained
by the Exchange Agents at either The Depository Trust Company, The Euroclear
System or Clearstream (each, the "Book-Entry Transfer Facility"), confirm such
book-entry transfer (a "Book-Entry Confirmation"), in each case in accordance
with the procedures for tendering described in the Instructions to this Letter.
Holders of Original Notes whose certificates are not immediately available, or
who are unable to deliver their certificates or Book-Entry Confirmation and all
other documents required by this Letter to be delivered to an Exchange Agent on
or prior to the Expiration Date, must tender their Original Notes according to
the guaranteed delivery procedures set forth under the caption "The Exchange
Offer -- How to Tender" in the Prospectus. (See Instruction 1).
The Instructions included with this Letter must be followed in their
entirety. Questions and requests for assistance or for additional copies of the
Prospectus or this Letter may be directed to either Exchange Agent, at one of
the addresses listed above, or the Company, 1025 Eldorado Blvd., Broomfield,
Colorado 80021, Attention: Vice President, Investor Relations (telephone (720)
888-2500).
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned tenders to the Company the principal amount of Original Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Original Notes tendered with this Letter, the undersigned exchanges,
assigns and transfers to, or upon the order of, the Company all right, title
and interest in and to the Original Notes tendered.
The undersigned constitutes and appoints the applicable Exchange Agent as
his or her agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company) with respect to the
2
<PAGE>
tendered Original Notes, with full power of substitution, to: (a) deliver
certificates for such Original Notes; (b) deliver Original Notes and all
accompanying evidence of transfer and authenticity to or upon the order of the
Company upon receipt by the applicable Exchange Agent, as the undersigned's
agent, of the New Notes to which the undersigned is entitled upon the
acceptance by the Company of the Original Notes tendered under the Exchange
Offer; and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of the Original Notes, all in accordance with the terms of
the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full power
and authority to tender, exchange, assign and transfer the Original Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Company to be
necessary or desirable to complete the assignment and transfer of the Original
Notes tendered.
The undersigned agrees that acceptance of any tendered Original Notes by the
Company and the issuance of New Notes in exchange therefor shall constitute
performance in full by the Company of its obligations under the registration
agreement, dated February 24, 2000, that the Company entered into with the
initial purchasers of the Original Notes (the "Registration Agreement") and
that, upon the issuance of the New Notes, the Company will have no further
obligations or liabilities under the Registration Agreement (except in certain
limited circumstances). By tendering Original Notes, the undersigned certifies
(a) that it is not an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act, that it is not a broker-dealer that owns Original
Notes acquired directly from the Company or an affiliate of the Company, that
it is acquiring the New Notes in the ordinary course of the undersigned's
business and that the undersigned is not engaged in, and does not intend to
engage in, a distribution of New Notes or (b) that it is an "affiliate" (as so
defined) of the Company or of the initial purchasers in the offering of the
Original Notes, and that it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable to it.
The undersigned acknowledges that, if it is a broker-dealer that will
receive New Notes for its own account in exchange for Original Notes that were
acquired as a result of market-making activities or other trading activities,
it will deliver a prospectus in connection with any resale of such New Notes.
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.
The undersigned understands that the Company may accept the undersigned's
tender by delivering written notice of acceptance to the applicable Exchange
Agent, at which time the undersigned's right to withdraw such tender will
terminate.
All authority conferred or agreed to be conferred by this Letter shall
survive the death or incapacity of the undersigned, and every obligation of the
undersigned under this Letter shall be binding upon the undersigned's heirs,
personal representatives, successors and assigns. Tenders may be withdrawn only
in accordance with the procedures set forth in the Instructions contained in
this Letter.
Unless otherwise indicated under "Special Delivery Instructions" below, the
applicable Exchange Agent will deliver New Notes (and, if applicable, a
certificate for any Original Notes not tendered but represented by a
certificate also encompassing Original Notes which are tendered) to the
undersigned at the address set forth in Box 1.
The undersigned acknowledges that the Exchange Offer is subject to the more
detailed terms set forth in the Prospectus and, in case of any conflict between
the terms of the Prospectus and this Letter, the Prospectus shall prevail.
3
<PAGE>
[_]CHECK HERE IF TENDERED ORIGINAL 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: ____________________________________________________
[_]CHECK HERE IF TENDERED ORIGINAL 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 Owner(s): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________________
Window Ticket Number (if available): ________________________________________
Name of Institution which Guaranteed Delivery: ______________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: _______________________________________________________________________
Address: ____________________________________________________________________
______________________________________________________________________
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
BOX 2
PLEASE SIGN HERE WHETHER OR NOT ORIGINAL NOTES ARE BEING
PHYSICALLY TENDERED HEREBY
X _____________________________ ______________
X _____________________________ ______________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: ________________________________
This box must be signed by registered holder(s) of Original Notes as their
name(s) appear(s) on certificate(s) for Original Notes, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Letter. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below. (See Instruction 3)
Name(s) _____________________________________________________________________
_____________________________________________________________________________
(Please Print)
Capacity ____________________________________________________________________
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
Signature(s) Guaranteed _____________________________________________________
by an Eligible Institution: (Authorized Signature)
(If required by______________________________________________________________
Instruction 3)
(Title)
____________________________________________________________
(Name of Firm)
5
<PAGE>
BOX 3
TO BE COMPLETED BY ALL TENDERING HOLDERS
- --------------------------------------------------------------------------------
PAYOR'S NAME: The Bank of New York, or in Luxembourg, Kredietbank S.A.
Luxembourgeoise
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR TIN
IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING
BELOW.
-------------------------------
Social Security
Number
or Employer
Identification Number
- --------------------------------------------------------------------------------
SUBSTITUTE Part 2--Check the box if you are NOT subject to back-up
Form W-9 withholding because (1) you have not been notified by the
Department of the Internal Revenue Service that you are subject to back-up
withholding as a result of failure to report all
Treasury Internal interest [_]
Revenue Service or dividends, or (2) the Internal Revenue Service has
notified
Payor's Request
for you that you are no longer subject to back-up withholding,
Taxpayer or
Identification (3) you are exempt from back-up withholding.
Number (TIN)
------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I
Part 3
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM
Check if
IS TRUE, CORRECT AND COMPLETE. Awaiting TIN
[_]
SIGNATURE ______________ DATE __________
BOX 4 BOX 5
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4) (See Instructions 3 and 4)
To be completed ONLY if To be completed ONLY if
certificates for Original Notes in certificates for Original Notes in
a principal amount not exchanged, a principal amount not exchanged,
or New Notes, are to be issued in or New Notes, are to be sent to
the name of someone other than the someone other than the person
person whose signature appears in whose signature appears in Box 2
Box 2, or if Original Notes or to an address other than that
delivered by book-entry transfer shown in Box 1.
which are not accepted for
exchange are to be returned by
credit to an account maintained at
the Book-Entry Transfer Facility
other than the account indicated
above.
Deliver:
(check appropriate boxes)
[_] Original Notes not
tendered
Issue and deliver: [_] New Notes, to:
(check appropriate boxes) Name ______________________________
(Please Print)
[_] Original Notes not tendered
Address ___________________________
[_] New Notes, to: ___________________________________
Name ______________________________
(Please Print)
Address ___________________________
Please complete the Substitute
Form W-9 at Box 3
Tax I.D. or Social Security
Number: ___________________________
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter and Certificates. Certificates for Original Notes
or a Book-Entry Confirmation, as the case may be, as well as a properly
completed and duly executed copy of this Letter and any other documents
required by this Letter, must be received by the applicable Exchange Agent at
one of its addresses set forth herein on or before the Expiration Date. The
method of delivery of this Letter, certificates for Original Notes or a Book-
Entry Confirmation, as the case may be, and any other required documents is at
the election and risk of the tendering holder, but except as otherwise provided
below, the delivery will be deemed made when actually received by the
applicable Exchange Agent. If delivery is by mail, the use of registered mail
with return receipt requested, properly insured, is suggested.
Holders whose Original Notes are not immediately available or who cannot
deliver their Original Notes or a Book-Entry Confirmation, as the case may be,
and all other required documents to the applicable Exchange Agent on or before
the Expiration Date may tender their Original Notes pursuant to the guaranteed
delivery procedures set forth in the Prospectus. Pursuant to such procedure:
(i) tender must be made by or through a firm that is a member of a recognized
signature guarantee medallion program within the meaning of Rule 17A(d)-15
under the Securities Exchange Act of 1934 (an "Eligible Institution"); (ii)
prior to the Expiration Date, the applicable Exchange Agent must have received
from the Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by telegram, telex, facsimile transmission, mail or hand
delivery) (x) setting forth the name and address of the holder, the description
of the Original Notes and the principal amount of Original Notes tendered, (y)
stating that the tender is being made thereby and (z) guaranteeing that, within
three New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery, this Letter together with the certificates
representing the Original Notes or a Book-Entry Confirmation, as the case may
be, and any other documents required by this Letter will be deposited by the
Eligible Institution with the applicable Exchange Agent; and (iii) the
certificates for all tendered Original Notes or a Book-Entry Confirmation, as
the case may be, as well as all other documents required by this Letter, must
be received by the Exchange Agent within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
provided in the Prospectus under the caption "The Exchange Offer--How to
Tender."
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Original Notes will be
determined by the Company, whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders that are not
in proper form or the acceptance of which, in the opinion of the Company's
counsel, would be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Original Notes. All
tendering holders, by execution of this Letter, waive any right to receive
notice of acceptance of their Original Notes.
Neither the Company, the Exchange Agents nor any other person shall be
obligated to give notice of defects or irregularities in any tender, nor shall
any of them incur any liability for failure to give any such notice.
2. Partial Tenders; Withdrawals. If less than the entire principal amount of
any Original Note evidenced by a submitted certificate or by a Book-Entry
Confirmation is tendered, the tendering holder must fill in the principal
amount tendered in the fourth column of Box 1 above. All of the Original Notes
represented by a certificate or by a Book-Entry Confirmation delivered to the
applicable Exchange Agent will be deemed to have been tendered unless otherwise
indicated. A certificate for Original Notes not tendered will be sent to the
holder, unless otherwise provided in Box 5, as soon as practicable after the
Expiration Date, in the event that less than the entire principal amount at
maturity of Original Notes represented by a submitted certificate is tendered
(or, in the case of Original Notes tendered by book-entry transfer, such non-
exchanged Original Notes will be credited to an account maintained by the
holder with the Book-Entry Transfer Facility).
7
<PAGE>
If not yet accepted, a tender pursuant to the Exchange Offer may be
withdrawn prior to the Expiration Date. To be effective with respect to the
tender of Original Notes, a notice of withdrawal must: (i) be received by the
applicable Exchange Agent before the Company notifies the applicable Exchange
Agent that it has accepted the tender of Original Notes pursuant to the
Exchange Offer; (ii) specify the name of the person who tendered the Original
Notes;
(iii) contain a description of the Original Notes to be withdrawn, the
certificate numbers shown on the particular Exchange Agent before the Company
notifies the applicable Exchange Agent that it has accepted the tender of
Original Notes pursuant to the Exchange Offer; (ii) specify the name of the
person who tendered the Original Notes; (iii) contain a description of the
Original Notes to be withdrawn, the certificate numbers shown on the particular
certificates evidencing such Original Notes and the principal amount of
Original Notes represented by such certificates; and (iv) be signed by the
holder in the same manner as the original signature on this Letter (including
any required signature guarantee).
3. Signatures on this Letter; Assignments; Guarantee of Signatures. If this
Letter is signed by the holder(s) of Original Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the
certificate(s) for such Original Notes, without alteration, enlargement or any
change whatsoever.
If any of the Original Notes tendered hereby are owned by two or more joint
owners, all owners must sign this Letter. If any tendered Original Notes are
held in different names on several certificates, it will be necessary to
complete, sign and submit as many separate copies of this Letter as there are
names in which certificates are held.
If this Letter is signed by the holder of record and (i) the entire
principal amount at maturity of the holder's Original Notes are tendered;
and/or (ii) untendered Original Notes, if any, are to be issued to the holder
of record, then the holder of record need not endorse any certificates for
tendered Original Notes, nor provide a separate bond power. If any other case,
the holder of record must transmit a separate bond power with this Letter.
If this Letter or any certificate or assignment is 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 proper evidence satisfactory to the
Company of their authority to so act must be submitted, unless waived by the
Company.
Signatures on this Letter must be guaranteed by an Eligible Institution,
unless Original Notes are tendered: (i) by a holder who has not completed the
Box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
on this Letter; or (ii) for the account of an Eligible Institution. In the
event that the signatures in this Letter or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantees must be by an eligible
guarantor institution which is a member of The Securities Transfer Agents
Medallion Program (STAMP), The New York Stock Exchanges Medallion Signature
Program (MSP) or The Stock Exchanges Medallion Program (SEMP) (collectively,
"Eligible Institutions"). If Original Notes are registered in the name of a
person other than the signer of this Letter, the Original Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company, in its sole discretion, duly executed by the registered holder with
the signature thereon guaranteed by an Eligible Institution.
4. Special Issuance and Delivery Instructions. Tendering holders should
indicate, in Box 4 or 5, as applicable, the name and address to which the New
Notes or certificates for Original Notes not exchanged are to be issued or
sent, if different from the name and address of the person signing this Letter.
In the case of issuance in a different name, the tax identification number of
the person named must also be indicated. Holders tendering Original Notes by
book-entry transfer may request that Original Notes not exchanged be credited
to such account maintained at the Book-Entry Transfer Facility as such holder
may designate.
8
<PAGE>
5. Tax Identification Number. Federal income tax law requires that a holder
whose tendered Original Notes are accepted for exchange must provide the
Exchange Agent (as payor) with his or her correct taxpayer identification
number ("TIN"), which, in the case of a holder who is an individual, is his or
her social security number. If the applicable Exchange Agent is not provided
with the correct TIN, the holder may be subject to a $50 penalty imposed by the
Internal Revenue Service. In addition, delivery to the holder of the New Notes
pursuant to the Exchange Offer may be subject to back-up withholding. (If
withholding results in overpayment of taxes, a refund or credit may be
obtained.) Exempt holders (including, among others, all corporations and
certain foreign individuals) are not subject to these back-up withholding and
reporting requirements. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
Under federal income tax laws, payments that may be made by the Company on
account of New Notes issued pursuant to the Exchange Offer may be subject to
back-up withholding at a rate of 31%. In order to avoid being subject to back-
up withholding, each tendering holder must provide his or her correct TIN by
completing the "Substitute Form W-9" referred to above, certifying that the TIN
provided is correct (or that the holder is awaiting a TIN) and that: (i) the
holder has not been notified by the Internal Revenue Service that he or she is
subject to back-up withholding as a result of failure to report all interest or
dividends; or (ii) the Internal Revenue Service has notified the holder that he
or she is no longer subject to back-up withholding; or (iii) certify in
accordance with the Guidelines that such holder is exempt from back-up
withholding. If the Original Notes are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for information on
which TIN to report.
6. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the transfer of Original Notes to it or its order pursuant to the
Exchange Offer. If, however, the New Notes or certificates for Original Notes
not exchanged are to be delivered to, or are to be issued in the name of, any
person other than the record holder, or if tendered certificates are recorded
in the name of any person other than the person signing this Letter, or if a
transfer tax is imposed by any reason other than the transfer of Original Notes
to the Company or its order pursuant to the Exchange Offer, then the amount of
such transfer taxes (whether imposed on the record holder or any other person)
will be payable by the tendering holder. If satisfactory evidence of payment of
taxes or exemption from taxes is not submitted with this Letter, the amount of
transfer taxes will be billed directly to the tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter.
7. Waiver of Conditions. The Company reserves the absolute right to amend or
waive any of the specified conditions in the Exchange Offer in the case of any
Original Notes tendered.
8. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder whose
certificates for Original Notes have been mutilated, lost, stolen or destroyed
should contact the applicable Exchange Agent at one of the addresses indicated
above, for further instructions.
9. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus or this Letter, may be directed to the Exchange Agent.
IMPORTANT: This Letter (together with certificates representing tendered
Original Notes or a Book-Entry Confirmation and all other required documents)
must be received by the applicable Exchange Agent on or before the expiration
date of the Exchange Offer (as described in the Prospectus).
9
<PAGE>
EXHIBIT 99.2
LEVEL 3 COMMUNICATIONS, INC.
Exchange Offer
to holders of its
10 3/4% Senior Notes due 2008
NOTICE OF GUARANTEED DELIVERY
As set forth in the Prospectus dated , 2000 (the "Prospectus") of Level
3 Communications, Inc. (the "Company") under "The Exchange Offer--How to
Tender" and in the Letter of Transmittal (the "Letter of Transmittal") relating
to the offer (the "Exchange Offer") by the Company to exchange up to
(Euro)500,000,000 in principal amount of its 10 3/4% Senior Notes due 2008 (the
"New Notes") for (Euro)500,000,000 in principal amount of its 10 3/4% Senior
Notes due 2008, issued and sold in a transaction exempt from registration under
the Securities Act of 1933, as amended (the "Original Notes"), this form or one
substantially equivalent hereto must be used to accept the Exchange Offer of
the Company if: (i) certificates for the Original Notes are not immediately
available; or (ii) time will not permit all required documents to reach the
applicable Exchange Agent (as defined below) on or prior to the expiration date
of the Exchange Offer (as described in the Prospectus). Such form may be
delivered by hand or transmitted by telegram, telex, facsimile transmission or
letter to the applicable Exchange Agent.
TO: The Exchange Agent
<TABLE>
<S> <C>
The Bank of New York In Luxembourg
By Facsimile: Kredietbank S.A. Luxembourgeoise,
44 20 7964 6399 as Luxembourg Exchange Agent
Confirm by telephone: By Facsimile:
44 20 7893 7235 352 4797 3913
By Registered or Certified Mail: Confirm by telephone:
The Bank of New York 352 4797 73951
London Branch
30 Cannon Street By Mail, Hand or Overnight Service:
London EC4M 6YH Kredietbank S.A. Luxembourgeoise
Attention: Emma Wilkes 43 Boulevard Royal
Reorganization Department L-2955 Luxembourg
Attention: Corporate Trust
By Overnight Courier or By Hand:
The Bank of New York
London Branch
30 Cannon Street
London EC4M 6YH
Attention: Emma Wilkes
Reorganization Department
</TABLE>
Delivery of this instrument to an address other than
as set forth above or transmittal of this instrument to
a facsimile or telex number other than as set forth
above does not constitute a valid delivery.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and conditions
set forth in the Prospectus and the Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which are hereby acknowledged, the
principal amount at maturity of Original Notes set forth below pursuant to the
guaranteed delivery procedure described in the Prospectus and the Letter of
Transmittal.
Sign Here
Principal Amount of Original Signature(s) ________________________
Notes _____________________________________
Tendered ________________________
Please Print the Following
Certificate Nos. Information
(if available) __________________
Name(s) _____________________________
_____________________________________
Total Principal Amount Represented Address _____________________________
by Original Notes _____________________________________
Certificate(s) __________________
Area Code and Tel. No(s). ___________
Account Number __________________
_____________________________________
Dated: ____________________, 2000
2
<PAGE>
GUARANTEE
The undersigned, a member of a recognized signature guarantee medallion
program within the meaning of Rule 17A(d)-15 under the Securities Exchange Act
of 1934, as amended, hereby guarantees that delivery to the Exchange Agent of
certificates tendered hereby, in proper form for transfer, or delivery of such
certificates pursuant to the procedure for book-entry transfer, in either case
with delivery of a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other required documents, is being made within
three trading days after the date of execution of a Notice of Guaranteed
Delivery of the above-named person.
Name of Firm _________________________________
Authorized Signature _________________________
Number and Street or P.O. Box ________________
______________________________________________
City ___________ State ___ Zip Code __________
Area Code and Tel. No. _______________________
Dated: , 2000
3
<PAGE>
EXHIBIT 99.3
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to (Euro)500,000,000 in principal amount of
10 3/4% Senior Notes due 2008
for
(Euro)500,000,000 in principal amount of
10 3/4% Senior Notes due 2008 issued and
sold in a transaction exempt from registration
under the Securities Act of 1933, as amended
To Our Clients:
Enclosed for your consideration is a Prospectus dated , 2000 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by Level 3 Communications, Inc. (the "Company") to
exchange up to (Euro)500,000,000 in principal amount of its 10 3/4% Senior
Notes due 2008 (the "New Notes") for (Euro)500,000,000 in principal amount of
its 10 3/4% Senior Notes due 2008, issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Original
Notes").
The material is being forwarded to you as the beneficial owner of Original
Notes carried by us for your account or benefit but not registered in your
name. A tender of any Original Notes may be made only by us as the registered
holder and pursuant to your instructions. Therefore, the Company urges
beneficial owners of Original Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee to contact such registered
holder promptly if they wish to tender Original Notes in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to tender any
or all Original Notes, pursuant to the terms and conditions set forth in the
Prospectus and Letter of Transmittal. We urge you to read carefully the
Prospectus and Letter of Transmittal before instructing us to tender your
Original Notes.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Original Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
Eastern Standard Time, on , , 2000 unless extended (the "Expiration
Date"). Original Notes tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus, at any time
prior to the Expiration Date.
If you wish to have us tender any or all of your Original Notes held by us
for your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by you to tender Original Notes held by us and registered in
our name for your account or benefit.
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer of Level 3
Communications, Inc.
This will instruct you to tender the principal amount of Original Notes
indicated below held by you for the account or benefit of the undersigned,
pursuant to the terms of and conditions set forth in the Prospectus and the
Letter of Transmittal.
Box 1 [_] Please tender my Original Notes held by you for my account or
benefit. I have identified on a signed schedule attached hereto the
principal amount of Original Notes to be tendered if I wish to tender
less than all of my Original Notes.
Box 2 [_] Please do not tender any Original Notes held by you for my account or
benefit.
Date: , 2000
_____________________________________
_____________________________________
Signature(s)
_____________________________________
_____________________________________
Please print name(s) here
- --------
Unless a specific contrary instruction is given in a signed Schedule
attached hereto, your signature(s) hereon shall constitute an instruction to us
to tender all of your Original Notes.
2
<PAGE>
EXHIBIT 99.4
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to (Euro)500,000,000 in principal amount of
10 3/4% Senior Notes due 2008
for
(Euro)500,000,000 in principal amount of
10 3/4% Senior Notes due 2008 issued and
sold in a transaction exempt from registration
under the Securities Act of 1933, as amended
To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Enclosed for your consideration is a Prospectus dated , 2000 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by Level 3 Communications, Inc. (the "Company") to
exchange up to (Euro)500,000,000 in principal amount of its 10 3/4% Senior
Notes due 2008 (the "New Notes") for (Euro)500,000,000 in principal amount of
its 10 3/4% Senior Notes due 2008, issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Original
Notes").
We are asking you to contact your clients for whom you hold Original Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Original Notes registered
in their own name. The Company will not pay any fees or commissions to any
broker, dealer or other person in connection with the solicitation of tenders
pursuant to the Exchange Offer. You will, however, be reimbursed by the Company
for customary mailing and handling expenses incurred by you in forwarding any
of the enclosed materials to your clients. The Company will pay all transfer
taxes, if any, applicable to the tender of Original Notes to it or its order,
except as otherwise provided in the Prospectus and the Letter of Transmittal.
Enclosed are copies of the following documents:
1. The Prospectus;
2. A Letter of Transmittal for your use in connection with the tender of
Original Notes and for the information of your clients;
3. A form of letter that may be sent to your clients for whose accounts you
hold Original Notes registered in your name or the name of your nominee,
with space provided for obtaining the clients' instructions with regard
to the Exchange Offer;
4. A form of Notice of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m.,
Eastern Standard Time, on , , 2000, unless extended (the "Expiration
Date"). Original Notes tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus, at any time
prior to the Expiration Date.
To tender Original Notes, certificates for Original Notes or a Book-Entry
Confirmation, a duly executed and properly completed Letter of Transmittal or a
facsimile thereof, and any other required documents, must be received by the
Exchange Agent as provided in the Prospectus and the Letter of Transmittal.
Additional copies of the enclosed material may be obtained from The Bank of
New York, the Exchange Agent, by calling (212) 815-2742 or from Kredietbank
S.A. Luxembourgeoise, the Luxembourg Exchange Agent, by calling 352 4797 73951.
<PAGE>
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH
RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
PROSPECTUS AND THE LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.5
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer--Social Security Numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the type of
number to give the payer.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the
SOCIAL SECURITY
For this type of account: number of--
- ----------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint account) The actual owner
of the account
or, if joint
funds, either
person(1)
4. Custodian account of a minor (Uniform Gift to Minors The minor(2)
Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or committee for a The ward, minor,
designated ward, minor, or incompetent person or incompetent
person(3)
7. a. The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b. So-called trust account that is not The actual
a legal or valid trust under State law owner(1)
8. Sole proprietorship account The owner(4)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of--
- --------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department The public
of Agriculture in the name of a entity
public entity (such as a State
or local government, school
district, or prison) that receives
agricultural program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business" name. You may use either your Social Security Number or
Employer Identification Number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
<PAGE>
EXHIBIT 99.6
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON
, , 2000 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., EASTERN STANDARD TIME, ON THE EXPIRATION DATE.
LEVEL 3 COMMUNICATIONS, INC.
1025 Eldorado Boulevard
Broomfield, Colorado 80021
LETTER OF TRANSMITTAL
For 11 1/4% Senior Notes due 2010
Exchange Agent:
The Bank of New York Kredietbank S.A. Luxembourgeoise, as
Luxembourg Exchange Agent
By Facsimile: By Facsimile
44 20 7964 6399 352 4797 3913
Confirm by telephone: Confirm by telephone:
44 20 7893 7235 352 4797 73951
By Registered or Certified Mail: By Mail, Hand or Overnight Service
The Bank of New York Kredietbank S.A. Luxembourgeoise
London Branch 43 Boulevard Royal
30 Cannon Street L-2955 Luxembourg
London EC4M 6YH Attention: Corporate Trust
Attention: Ms. Emma Wilkes
Reorganization Department
By Overnight Courier or By Hand:
The Bank of New York
London Branch
30 Cannon Street
London EC4M 6YH
Attention: Ms. Emma Wilkes
Reorganization Department
Delivery of this instrument to an address other than as set forth above does
not constitute a valid delivery.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING
THE INSTRUCTIONS TO THIS LETTER, CAREFULLY
BEFORE CHECKING ANY BOX BELOW
Capitalized terms used in this Letter and not defined herein shall have the
respective meanings ascribed to them in the Prospectus.
List in Box 1 below the Original Notes of which you are the holder. If the
space provided in Box 1 is inadequate, list the certificate numbers and
principal amount at maturity of Original Notes on a separate signed schedule
and affix that schedule to this Letter.
<PAGE>
BOX 1
TO BE COMPLETED BY ALL TENDERING HOLDERS
<TABLE>
<CAPTION>
Name(s) and
Address(es)
of
Registered
Holder(s) Principal Amount
(Please Principal Amount of Original
fill in if Certificate of Original Notes
blank) Number(s)(1) Notes Tendered(2)
<S> <C> <C> <C>
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
Totals:
- -----------------------------------------------------------
</TABLE>
(1) Need not be completed if Original Notes are being tendered by book-entry
transfer.
(2) Unless otherwise indicated, the entire principal amount at maturity of
Original Notes represented by a certificate or Book-Entry Confirmation
delivered to the Exchange Agent will be deemed to have been tendered.
The undersigned acknowledges receipt of the Prospectus dated , 2000
(the "Prospectus") of Level 3 Communications, Inc., a Delaware corporation (the
"Company"), and this Letter of Transmittal for 11 1/4% Senior Notes due 2010
which may be amended from time to time (this "Letter"), which together
constitute the Company's offer (the "Exchange Offer") to exchange, for each
(Euro)1,000 in principal amount of its outstanding 11 1/4% Senior Notes due
2010 issued and sold in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Original Notes"), (Euro)1,000 in
principal amount of 11 1/4% Senior Notes due 2010 (the "New Notes").
The undersigned has completed, executed and delivered this Letter to
indicate the action he or she desires to take with respect to the Exchange
Offer.
All holders of Original Notes who wish to tender their Original Notes must,
prior to the Expiration Date: (1) complete, sign, date and mail or otherwise
deliver this Letter to an Exchange Agent, in person or to one of the addresses
set forth above; and (2) tender his or her Original Notes or, if a tender of
Original Notes is to be made by book-entry transfer to the account maintained
by the Exchange Agents at either The Depository Trust Company, The Euroclear
System or Clearstream (each, the "Book-Entry Transfer Facility"), confirm such
book-entry transfer (a "Book-Entry Confirmation"), in each case in accordance
with the procedures for tendering described in the Instructions to this Letter.
Holders of Original Notes whose certificates are not immediately available, or
who are unable to deliver their certificates or Book-Entry Confirmation and all
other documents required by this Letter to be delivered to an Exchange Agent on
or prior to the Expiration Date, must tender their Original Notes according to
the guaranteed delivery procedures set forth under the caption "The Exchange
Offer -- How to Tender" in the Prospectus. (See Instruction 1).
The Instructions included with this Letter must be followed in their
entirety. Questions and requests for assistance or for additional copies of the
Prospectus or this Letter may be directed to either Exchange Agent, at one of
the addresses listed above, or the Company, 1025 Eldorado Blvd., Broomfield,
Colorado 80021, Attention: Vice President, Investor Relations (telephone (720)
888-2500).
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned tenders to the Company the principal amount of Original Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Original Notes tendered with this Letter, the undersigned exchanges,
assigns and transfers to, or upon the order of, the Company all right, title
and interest in and to the Original Notes tendered.
The undersigned constitutes and appoints the applicable Exchange Agent as
his or her agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company) with respect to the
2
<PAGE>
tendered Original Notes, with full power of substitution, to: (a) deliver
certificates for such Original Notes; (b) deliver Original Notes and all
accompanying evidence of transfer and authenticity to or upon the order of the
Company upon receipt by the applicable Exchange Agent, as the undersigned's
agent, of the New Notes to which the undersigned is entitled upon the
acceptance by the Company of the Original Notes tendered under the Exchange
Offer; and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of the Original Notes, all in accordance with the terms of
the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full power
and authority to tender, exchange, assign and transfer the Original Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Company to be
necessary or desirable to complete the assignment and transfer of the Original
Notes tendered.
The undersigned agrees that acceptance of any tendered Original Notes by the
Company and the issuance of New Notes in exchange therefor shall constitute
performance in full by the Company of its obligations under the registration
agreement, dated February 24, 2000, that the Company entered into with the
initial purchasers of the Original Notes (the "Registration Agreement") and
that, upon the issuance of the New Notes, the Company will have no further
obligations or liabilities under the Registration Agreement (except in certain
limited circumstances). By tendering Original Notes, the undersigned certifies
(a) that it is not an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act, that it is not a broker-dealer that owns Original
Notes acquired directly from the Company or an affiliate of the Company, that
it is acquiring the New Notes in the ordinary course of the undersigned's
business and that the undersigned is not engaged in, and does not intend to
engage in, a distribution of New Notes or (b) that it is an "affiliate" (as so
defined) of the Company or of the initial purchasers in the offering of the
Original Notes, and that it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable to it.
The undersigned acknowledges that, if it is a broker-dealer that will
receive New Notes for its own account in exchange for Original Notes that were
acquired as a result of market-making activities or other trading activities,
it will deliver a prospectus in connection with any resale of such New Notes.
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.
The undersigned understands that the Company may accept the undersigned's
tender by delivering written notice of acceptance to the applicable Exchange
Agent, at which time the undersigned's right to withdraw such tender will
terminate.
All authority conferred or agreed to be conferred by this Letter shall
survive the death or incapacity of the undersigned, and every obligation of the
undersigned under this Letter shall be binding upon the undersigned's heirs,
personal representatives, successors and assigns. Tenders may be withdrawn only
in accordance with the procedures set forth in the Instructions contained in
this Letter.
Unless otherwise indicated under "Special Delivery Instructions" below, the
applicable Exchange Agent will deliver New Notes (and, if applicable, a
certificate for any Original Notes not tendered but represented by a
certificate also encompassing Original Notes which are tendered) to the
undersigned at the address set forth in Box 1.
The undersigned acknowledges that the Exchange Offer is subject to the more
detailed terms set forth in the Prospectus and, in case of any conflict between
the terms of the Prospectus and this Letter, the Prospectus shall prevail.
3
<PAGE>
[_]CHECK HERE IF TENDERED ORIGINAL 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: ____________________________________________________
[_]CHECK HERE IF TENDERED ORIGINAL 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 Owner(s): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________________
Window Ticket Number (if available): ________________________________________
Name of Institution which Guaranteed Delivery: ______________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: _______________________________________________________________________
Address: ____________________________________________________________________
______________________________________________________________________
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
BOX 2
PLEASE SIGN HERE WHETHER OR NOT ORIGINAL NOTES ARE BEING
PHYSICALLY TENDERED HEREBY
X _____________________________ ______________
X _____________________________ ______________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: ________________________________
This box must be signed by registered holder(s) of Original Notes as their
name(s) appear(s) on certificate(s) for Original Notes, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Letter. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below. (See Instruction 3)
Name(s) _____________________________________________________________________
_____________________________________________________________________________
(Please Print)
Capacity ____________________________________________________________________
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
Signature(s) Guaranteed _____________________________________________________
by an Eligible Institution: (Authorized Signature)
(If required by______________________________________________________________
Instruction 3)
(Title)
____________________________________________________________
(Name of Firm)
5
<PAGE>
BOX 3
TO BE COMPLETED BY ALL TENDERING HOLDERS
- --------------------------------------------------------------------------------
PAYOR'S NAME: The Bank of New York, or in Luxembourg, Kredietbank S.A.
Luxembourgeoise
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR TIN
IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING
BELOW.
-------------------------------
Social Security
Number
or Employer
Identification Number
- --------------------------------------------------------------------------------
SUBSTITUTE Part 2--Check the box if you are NOT subject to back-up
Form W-9 withholding because (1) you have not been notified by the
Department of the Internal Revenue Service that you are subject to back-up
withholding as a result of failure to report all
Treasury Internal interest [_]
Revenue Service or dividends, or (2) the Internal Revenue Service has
notified
Payor's Request
for you that you are no longer subject to back-up withholding,
Taxpayer or (3) you are exempt from back-up withholding.
Identification
Number (TIN)
------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I
Part 3
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM
Check if
IS TRUE, CORRECT AND COMPLETE. Awaiting TIN
[_]
SIGNATURE ______________ DATE __________
BOX 4 BOX 5
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4) (See Instructions 3 and 4)
To be completed ONLY if To be completed ONLY if
certificates for Original Notes in certificates for Original Notes in
a principal amount not exchanged, a principal amount not exchanged,
or New Notes, are to be issued in or New Notes, are to be sent to
the name of someone other than the someone other than the person
person whose signature appears in whose signature appears in Box 2
Box 2, or if Original Notes or to an address other than that
delivered by book-entry transfer shown in Box 1.
which are not accepted for
exchange are to be returned by
credit to an account maintained at
the Book-Entry Transfer Facility
other than the account indicated
above.
Issue and deliver: Deliver:
(check appropriate boxes)
(check appropriate boxes)
[_] Original Notes not
tendered
[_] Original Notes not tendered
[_] New Notes, to:
[_] New Notes, to:
Name ______________________________ Name ______________________________
(Please Print)
Address ___________________________ (Please Print)
Please complete the Substitute
Form W-9 at Box 3
Tax I.D. or Social Security Address ___________________________
Number: ___________________________ ___________________________________
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter and Certificates. Certificates for Original Notes
or a Book-Entry Confirmation, as the case may be, as well as a properly
completed and duly executed copy of this Letter and any other documents
required by this Letter, must be received by the applicable Exchange Agent at
one of its addresses set forth herein on or before the Expiration Date. The
method of delivery of this Letter, certificates for Original Notes or a Book-
Entry Confirmation, as the case may be, and any other required documents is at
the election and risk of the tendering holder, but except as otherwise provided
below, the delivery will be deemed made when actually received by the
applicable Exchange Agent. If delivery is by mail, the use of registered mail
with return receipt requested, properly insured, is suggested.
Holders whose Original Notes are not immediately available or who cannot
deliver their Original Notes or a Book-Entry Confirmation, as the case may be,
and all other required documents to the applicable Exchange Agent on or before
the Expiration Date may tender their Original Notes pursuant to the guaranteed
delivery procedures set forth in the Prospectus. Pursuant to such procedure:
(i) tender must be made by or through a firm that is a member of a recognized
signature guarantee medallion program within the meaning of Rule 17A(d)-15
under the Securities Exchange Act of 1934 (an "Eligible Institution"); (ii)
prior to the Expiration Date, the applicable Exchange Agent must have received
from the Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by telegram, telex, facsimile transmission, mail or hand
delivery) (x) setting forth the name and address of the holder, the description
of the Original Notes and the principal amount of Original Notes tendered, (y)
stating that the tender is being made thereby and (z) guaranteeing that, within
three New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery, this Letter together with the certificates
representing the Original Notes or a Book-Entry Confirmation, as the case may
be, and any other documents required by this Letter will be deposited by the
Eligible Institution with the Exchange applicable Agent; and (iii) the
certificates for all tendered Original Notes or a Book-Entry Confirmation, as
the case may be, as well as all other documents required by this Letter, must
be received by the Exchange Agent within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
provided in the Prospectus under the caption "The Exchange Offer--How to
Tender."
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Original Notes will be
determined by the Company, whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders that are not
in proper form or the acceptance of which, in the opinion of the Company's
counsel, would be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Original Notes. All
tendering holders, by execution of this Letter, waive any right to receive
notice of acceptance of their Original Notes.
Neither the Company, the Exchange Agents nor any other person shall be
obligated to give notice of defects or irregularities in any tender, nor shall
any of them incur any liability for failure to give any such notice.
2. Partial Tenders; Withdrawals. If less than the entire principal amount of
any Original Note evidenced by a submitted certificate or by a Book-Entry
Confirmation is tendered, the tendering holder must fill in the principal
amount tendered in the fourth column of Box 1 above. All of the Original Notes
represented by a certificate or by a Book-Entry Confirmation delivered to the
applicable Exchange Agent will be deemed to have been tendered unless otherwise
indicated. A certificate for Original Notes not tendered will be sent to the
holder, unless otherwise provided in Box 5, as soon as practicable after the
Expiration Date, in the event that less than the entire principal amount at
maturity of Original Notes represented by a submitted certificate is tendered
(or, in the case of Original Notes tendered by book-entry transfer, such non-
exchanged Original Notes will be credited to an account maintained by the
holder with the Book-Entry Transfer Facility).
7
<PAGE>
If not yet accepted, a tender pursuant to the Exchange Offer may be
withdrawn prior to the Expiration Date. To be effective with respect to the
tender of Original Notes, a notice of withdrawal must: (i) be received by the
applicable Exchange Agent before the Company notifies the applicable Exchange
Agent that it has accepted the tender of Original Notes pursuant to the
Exchange Offer; (ii) specify the name of the person who tendered the Original
Notes;
(iii) contain a description of the Original Notes to be withdrawn, the
certificate numbers shown on the particular Exchange Agent before the Company
notifies the applicable Exchange Agent that it has accepted the tender of
Original Notes pursuant to the Exchange Offer; (ii) specify the name of the
person who tendered the Original Notes; (iii) contain a description of the
Original Notes to be withdrawn, the certificate numbers shown on the particular
certificates evidencing such Original Notes and the principal amount of
Original Notes represented by such certificates; and (iv) be signed by the
holder in the same manner as the original signature on this Letter (including
any required signature guarantee).
3. Signatures on this Letter; Assignments; Guarantee of Signatures. If this
Letter is signed by the holder(s) of Original Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the
certificate(s) for such Original Notes, without alteration, enlargement or any
change whatsoever.
If any of the Original Notes tendered hereby are owned by two or more joint
owners, all owners must sign this Letter. If any tendered Original Notes are
held in different names on several certificates, it will be necessary to
complete, sign and submit as many separate copies of this Letter as there are
names in which certificates are held.
If this Letter is signed by the holder of record and (i) the entire
principal amount at maturity of the holder's Original Notes are tendered;
and/or (ii) untendered Original Notes, if any, are to be issued to the holder
of record, then the holder of record need not endorse any certificates for
tendered Original Notes, nor provide a separate bond power. If any other case,
the holder of record must transmit a separate bond power with this Letter.
If this Letter or any certificate or assignment is 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 proper evidence satisfactory to the
Company of their authority to so act must be submitted, unless waived by the
Company.
Signatures on this Letter must be guaranteed by an Eligible Institution,
unless Original Notes are tendered: (i) by a holder who has not completed the
Box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
on this Letter; or (ii) for the account of an Eligible Institution. In the
event that the signatures in this Letter or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantees must be by an eligible
guarantor institution which is a member of The Securities Transfer Agents
Medallion Program (STAMP), The New York Stock Exchanges Medallion Signature
Program (MSP) or The Stock Exchanges Medallion Program (SEMP) (collectively,
"Eligible Institutions"). If Original Notes are registered in the name of a
person other than the signer of this Letter, the Original Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company, in its sole discretion, duly executed by the registered holder with
the signature thereon guaranteed by an Eligible Institution.
4. Special Issuance and Delivery Instructions. Tendering holders should
indicate, in Box 4 or 5, as applicable, the name and address to which the New
Notes or certificates for Original Notes not exchanged are to be issued or
sent, if different from the name and address of the person signing this Letter.
In the case of issuance in a different name, the tax identification number of
the person named must also be indicated. Holders tendering Original Notes by
book-entry transfer may request that Original Notes not exchanged be credited
to such account maintained at the Book-Entry Transfer Facility as such holder
may designate.
8
<PAGE>
5. Tax Identification Number. Federal income tax law requires that a holder
whose tendered Original Notes are accepted for exchange must provide the
Exchange Agent (as payor) with his or her correct taxpayer identification
number ("TIN"), which, in the case of a holder who is an individual, is his or
her social security number. If the applicable Exchange Agent is not provided
with the correct TIN, the holder may be subject to a $50 penalty imposed by the
Internal Revenue Service. In addition, delivery to the holder of the New Notes
pursuant to the Exchange Offer may be subject to back-up withholding. (If
withholding results in overpayment of taxes, a refund or credit may be
obtained.) Exempt holders (including, among others, all corporations and
certain foreign individuals) are not subject to these back-up withholding and
reporting requirements. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
Under federal income tax laws, payments that may be made by the Company on
account of New Notes issued pursuant to the Exchange Offer may be subject to
back-up withholding at a rate of 31%. In order to avoid being subject to back-
up withholding, each tendering holder must provide his or her correct TIN by
completing the "Substitute Form W-9" referred to above, certifying that the TIN
provided is correct (or that the holder is awaiting a TIN) and that: (i) the
holder has not been notified by the Internal Revenue Service that he or she is
subject to back-up withholding as a result of failure to report all interest or
dividends; or (ii) the Internal Revenue Service has notified the holder that he
or she is no longer subject to back-up withholding; or (iii) certify in
accordance with the Guidelines that such holder is exempt from back-up
withholding. If the Original Notes are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for information on
which TIN to report.
6. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the transfer of Original Notes to it or its order pursuant to the
Exchange Offer. If, however, the New Notes or certificates for Original Notes
not exchanged are to be delivered to, or are to be issued in the name of, any
person other than the record holder, or if tendered certificates are recorded
in the name of any person other than the person signing this Letter, or if a
transfer tax is imposed by any reason other than the transfer of Original Notes
to the Company or its order pursuant to the Exchange Offer, then the amount of
such transfer taxes (whether imposed on the record holder or any other person)
will be payable by the tendering holder. If satisfactory evidence of payment of
taxes or exemption from taxes is not submitted with this Letter, the amount of
transfer taxes will be billed directly to the tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter.
7. Waiver of Conditions. The Company reserves the absolute right to amend or
waive any of the specified conditions in the Exchange Offer in the case of any
Original Notes tendered.
8. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder whose
certificates for Original Notes have been mutilated, lost, stolen or destroyed
should contact the applicable Exchange Agent at one of the addresses indicated
above, for further instructions.
9. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus or this Letter, may be directed to the Exchange Agent.
IMPORTANT: This Letter (together with certificates representing tendered
Original Notes or a Book-Entry Confirmation and all other required documents)
must be received by the applicable Exchange Agent on or before the expiration
date of the Exchange Offer (as described in the Prospectus).
9
<PAGE>
EXHIBIT 99.7
LEVEL 3 COMMUNICATIONS, INC.
Exchange Offer
to holders of its
11 1/4% Senior Discount Notes due 2008
NOTICE OF GUARANTEED DELIVERY
As set forth in the Prospectus dated , 2000 (the "Prospectus") of Level
3 Communications, Inc. (the "Company") under "The Exchange Offer--How to
Tender" and in the Letter of Transmittal (the "Letter of Transmittal") relating
to the offer (the "Exchange Offer") by the Company to exchange up to
(Euro)300,000,000 in principal amount of its 11 1/4% Senior Notes due 2008 (the
"New Notes") for (Euro)300,000,000 in principal amount of its 11 1/4% Senior
Notes due 2008, issued and sold in a transaction exempt from registration under
the Securities Act of 1933, as amended (the "Original Notes"), this form or one
substantially equivalent hereto must be used to accept the Exchange Offer of
the Company if: (i) certificates for the Original Notes are not immediately
available; or (ii) time will not permit all required documents to reach the
applicable Exchange Agent (as defined below) on or prior to the expiration date
of the Exchange Offer (as described in the Prospectus). Such form may be
delivered by hand or transmitted by telegram, telex, facsimile transmission or
letter to the applicable Exchange Agent.
TO: The Exchange Agent
<TABLE>
<S> <C>
The Bank of New York
By Facsimile: In Luxembourg
44 20 7964 6399 Kredietbank S.A. Luxembourgeoise,
as Luxembourg Exchange Agent
Confirm by telephone: By Facsimile:
44 20 7893 7235 352 4797 3913
By Registered or Certified Mail: Confirm by Telephone:
The Bank of New York 352 4797 73951
London Branch
30 Cannon Street By Mail, Hand or Overnight Service:
London EC4M 6YH Kredietbank S.A. Luxembourgeoise
Attention: Emma Wilkes 43 Boulevard Royal
Reorganization Department L-2955 Luxembourg
Attention: Corporate Trust
By Overnight Courier or By Hand:
The Bank of New York
London Branch
30 Cannon Street
London EC4M 6YH
Attention: Emma Wilkes
Reorganization Department
</TABLE>
Delivery of this instrument to an address other than
as set forth above or transmittal of this instrument to
a facsimile or telex number other than as set forth
above does not constitute a valid delivery.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and conditions
set forth in the Prospectus and the Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which are hereby acknowledged, the
principal amount at maturity of Original Notes set forth below pursuant to the
guaranteed delivery procedure described in the Prospectus and the Letter of
Transmittal.
Sign Here
Principal Amount of Original Signature(s) ________________________
Notes Tendered ________________________ _____________________________________
Please Print the Following
Certificate Nos. Information
(if available) __________________
Name(s) _____________________________
_____________________________________
Total Principal Amount Represented Address _____________________________
by Original Notes _____________________________________
Certificate(s) __________________
Area Code and Tel. No(s). ___________
Account Number __________________
_____________________________________
Dated: ____________________, 2000
2
<PAGE>
GUARANTEE
The undersigned, a member of a recognized signature guarantee medallion
program within the meaning of Rule 17A(d)-15 under the Securities Exchange Act
of 1934, as amended, hereby guarantees that delivery to the Exchange Agent of
certificates tendered hereby, in proper form for transfer, or delivery of such
certificates pursuant to the procedure for book-entry transfer, in either case
with delivery of a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other required documents, is being made within
three trading days after the date of execution of a Notice of Guaranteed
Delivery of the above-named person.
Name of Firm _________________________________
Authorized Signature _________________________
Number and Street or P.O. Box ________________
______________________________________________
City __________ State ___ Zip Code ___________
Area Code and Tel. No. _______________________
Dated: , 2000
3
<PAGE>
EXHIBIT 99.8
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to (Euro)300,000,000 in principal amount of
11 1/4% Senior Notes due 2010
for
(Euro)300,000,000 in principal amount of
11 1/4% Senior Notes due 2010 issued and
sold in a transaction exempt from registration
under the Securities Act of 1933, as amended
To Our Clients:
Enclosed for your consideration is a Prospectus dated , 2000 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by Level 3 Communications, Inc. (the "Company") to
exchange up to (Euro)300,000,000 in principal amount of its 11 1/4% Senior
Notes due 2010 (the "New Notes") for (Euro)300,000,000 in principal amount of
its 11 1/4% Senior Notes due 2010, issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Original
Notes").
The material is being forwarded to you as the beneficial owner of Original
Notes carried by us for your account or benefit but not registered in your
name. A tender of any Original Notes may be made only by us as the registered
holder and pursuant to your instructions. Therefore, the Company urges
beneficial owners of Original Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee to contact such registered
holder promptly if they wish to tender Original Notes in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to tender any
or all Original Notes, pursuant to the terms and conditions set forth in the
Prospectus and Letter of Transmittal. We urge you to read carefully the
Prospectus and Letter of Transmittal before instructing us to tender your
Original Notes.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Original Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
Eastern Standard Time, on , , 2000 unless extended (the
"Expiration Date"). Original Notes tendered pursuant to the Exchange Offer may
be withdrawn, subject to the procedures described in the Prospectus, at any
time prior to the Expiration Date.
If you wish to have us tender any or all of your Original Notes held by us
for your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by you to tender Original Notes held by us and registered in
our name for your account or benefit.
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer of Level 3
Communications, Inc.
This will instruct you to tender the principal amount of Original Notes
indicated below held by you for the account or benefit of the undersigned,
pursuant to the terms of and conditions set forth in the Prospectus and the
Letter of Transmittal.
Box 1 [_] Please tender my Original Notes held by you for my account or
benefit. I have identified on a signed schedule attached hereto the
principal amount of Original Notes to be tendered if I wish to tender
less than all of my Original Notes.
Box 2 [_] Please do not tender any Original Notes held by you for my account or
benefit.
Date: , 2000
_____________________________________
_____________________________________
Signature(s)
_____________________________________
_____________________________________
Please print name(s) here
- --------
Unless a specific contrary instruction is given in a signed Schedule
attached hereto, your signature(s) hereon shall constitute an instruction to us
to tender all of your Original Notes.
2
<PAGE>
EXHIBIT 99.9
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to (Euro)300,000,000 in principal amount of
11 1/4% Senior Notes due 2010
for
(Euro)300,000,000 in principal amount of
11 1/4% Senior Notes due 2010 issued and
sold in a transaction exempt from registration
under the Securities Act of 1933, as amended
To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Enclosed for your consideration is a Prospectus dated , 2000 (as the
same may be amended or supplemented from time to time, the "Prospectus") and a
form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by Level 3 Communications, Inc. (the "Company") to
exchange up to (Euro)300,000,000 in principal amount of its 11 1/4% Senior
Notes due 2010 (the "New Notes") for (Euro)300,000,000 in principal amount of
its 11 1/4% Senior Notes due 2010, issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Original
Notes").
We are asking you to contact your clients for whom you hold Original Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Original Notes registered
in their own name. The Company will not pay any fees or commissions to any
broker, dealer or other person in connection with the solicitation of tenders
pursuant to the Exchange Offer. You will, however, be reimbursed by the Company
for customary mailing and handling expenses incurred by you in forwarding any
of the enclosed materials to your clients. The Company will pay all transfer
taxes, if any, applicable to the tender of Original Notes to it or its order,
except as otherwise provided in the Prospectus and the Letter of Transmittal.
Enclosed are copies of the following documents:
1. The Prospectus;
2. A Letter of Transmittal for your use in connection with the tender of
Original Notes and for the information of your clients;
3. A form of letter that may be sent to your clients for whose accounts you
hold Original Notes registered in your name or the name of your nominee,
with space provided for obtaining the clients' instructions with regard
to the Exchange Offer;
4. A form of Notice of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m.,
Eastern Standard Time, on , , 2000, unless extended (the "Expiration
Date"). Original Notes tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus, at any time
prior to the Expiration Date.
To tender Original Notes, certificates for Original Notes or a Book-Entry
Confirmation, a duly executed and properly completed Letter of Transmittal or a
facsimile thereof, and any other required documents, must be received by the
Exchange Agent as provided in the Prospectus and the Letter of Transmittal.
Additional copies of the enclosed material may be obtained from The Bank of
New York, the Exchange Agent, by calling (212) 815-2742 or from Kredietbank
S.A. Luxembourgeoise, the Luxembourg Exchange Agent, by calling 352 4797 73951.
<PAGE>
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH
RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
PROSPECTUS AND THE LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.10
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer--Social Security Numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the type of
number to give the payer.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the
SOCIAL SECURITY
For this type of account: number of--
- ----------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint account) The actual owner
of the account
or, if joint
funds, either
person(1)
4. Custodian account of a minor (Uniform Gift to Minors The minor(2)
Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or committee for a The ward, minor,
designated ward, minor, or incompetent person or incompetent
person(3)
7. a. The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b. So-called trust account that is not The actual
a legal or valid trust under State law owner(1)
8. Sole proprietorship account The owner(4)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of--
- --------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department The public
of Agriculture in the name of a entity
public entity (such as a State
or local government, school
district, or prison) that receives
agricultural program payments
</TABLE>
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(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business" name. You may use either your Social Security Number or
Employer Identification Number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
