<PAGE>
As filed with the Securities and Exchange Commission on May 18, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Maximum
Title of each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered Registered Per Note(1) Price(1) Fee
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<S> <C> <C> <C> <C>
11% Senior Notes due
2008.................. $800,000,000 100% $800,000,000 $211,200
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11 1/4% Senior Notes due
2010 ................. $250,000,000 100% $250,000,000 $66,000
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12 7/8% Senior Discount
Notes due 2010........ $675,000,000 53.308% $359,829,000 $94,995
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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.
---------------
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
-----------
. 11% Senior Notes due 2008
for
. Outstanding 11% Senior Notes due 2008
-----------
. 11 1/4% Senior Notes due 2010
for
. Outstanding 11 1/4% Senior Notes due 2010
-----------
. 12 7/8% Senior Discount Notes due 2010
for
. Outstanding 12 7/8% Senior Discount Notes due 2010
-----------
Terms of Exchange Offer
. The exchange offer expires 5:00 p.m., New York City time, , 2000,
unless we extend it.
. The notes to be issued in the exchange offer will not trade on any
established exchange.
See "Risk Factors" beginning on page 11 for a discussion of matters that
participants in the exchange offer should consider.
-----------
Neither the 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.
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................................................................ 11
Information Regarding Forward-Looking Statements............................ 20
Use of Proceeds............................................................. 21
Capitalization.............................................................. 21
The Exchange Offer.......................................................... 22
Description of Other Indebtedness of Level 3................................ 32
Description of Notes........................................................ 38
Certain United States Federal Income Tax Considerations..................... 84
Plan of Distribution........................................................ 89
Legal Matters............................................................... 89
Experts..................................................................... 90
Where You Can Find More Information......................................... 90
Incorporation of Material Documents by Reference............................ 90
</TABLE>
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 3,400 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 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
1
<PAGE>
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 $800,000,000 aggregate principal
amount of our 11% senior notes due 2008, $250,000,000 aggregate principal
amount of our 11 1/4% senior notes due 2010 and $675,000,000 aggregate
principal amount at maturity of our 12 7/8% senior discount 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
11% senior notes due 2008, our new 11 1/4% senior notes due 2010 and our new 12
7/8% senior discount 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, the original 2010 senior
discount notes and the new 2010 senior discount notes together as the 2010
senior discount 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 $1,000 in principal
amount or, in the case of the 2010 senior discount
notes, $1,000 in principal amount at maturity of
new notes for each $1,000 in principal amount or,
in the case of the 2010 senior discount notes,
$1,000 in principal amount at maturity 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
accreted value of 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 principal amount
or, in the case of the 2010 senior discount notes,
on the accreted value of 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 or, in the case
of the 2010 senior discount notes, any minimum
aggregate principal amount at maturity 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 United States
Federal 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
<PAGE>
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
in connection with the exchange offer.
7
<PAGE>
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........ $800,000,000 aggregate principal amount of 11%
senior notes due 2008, $250,000,000 aggregate
principal amount of 11 1/4% senior notes due 2010
and $675,000,000 aggregate principal amount at
maturity of 12 7/8% senior discount notes due 2010.
Maturity.................. March 15, 2008, March 15, 2010 and March 15, 2010.
Interest and Accreted We will pay interest on the 2008 senior notes at
Value.................... the rate of 11% 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.
The 2010 senior discount notes were issued at a
discount to their aggregate principal amount at
maturity. For a discussion of U.S. federal income
tax treatment of the 2010 senior discount notes
under the original issue discount rules, please
refer to the section of this prospectus entitled
"Certain United States Federal Income Tax
Considerations." The 2010 senior discount notes
will accrete at a rate of 12 7/8% per year to an
aggregate principal amount of $675,000,000 by March
15, 2005. The 2010 senior discount notes will not
accrue interest prior to March 15, 2005, unless we
elect to accrue interest on or after March 15,
2003. Beginning on March 15, 2005, cash interest
will accrue on the 2010 senior discount notes at
the rate of 12 7/8% per year and will be payable
semiannually on March 15 and September 15 of each
year, beginning on September 15, 2005.
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 (Euro)500
million aggregate principal amount of our 10
3/4% senior notes due 2008 and the (Euro)300
million aggregate principal amount of our 11
1/4% senior notes due 2010, and
. senior to any existing and future subordinated
debt.
We are a holding company, and the notes are
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."
8
<PAGE>
Sinking Fund.............. None.
Optional Redemption....... We may not redeem the 2008 senior notes prior to
maturity.
We may not redeem the 2010 senior notes or the 2010
senior discount 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 and up to 35% of
the aggregate principal amount at maturity of the
2010 senior discount notes with the net cash
proceeds of certain private placements or
underwritten public offerings of our common stock
at a redemption price of 111.250% of the aggregate
principal amount of the 2010 senior notes or
112.875% of the accreted value of the 2010 senior
discount notes, as applicable, in each case 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 and 65% of the aggregate principal
amount at maturity of the 2010 senior discount
notes, as applicable, 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 or accreted value of
the notes, as applicable, 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."
9
<PAGE>
Absence of a Public Market
for the Notes.............. 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 of liquidity of any market for any of
the notes. Level 3 does not intend to apply for
listing of any of the notes on any securities
exchange. See "Risk Factors--There is no public
market for the new notes, so you may be unable to
sell the new notes."
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, approximately
$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.
10
<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.
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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
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. monthly billing for these services.
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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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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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.
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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 each
issue of our outstanding and proposed notes, 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.
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. We do not intend to apply for listing of the notes on any
securities exchange or for the inclusion of the notes in any automated
quotation system.
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The original issue discount will be included in your gross income for U.S.
federal income tax purposes before you receive any cash payments on the 2010
senior discount notes
Cash interest on the 2010 senior discount notes generally will not be
payable prior to September 15, 2005. However, because the 2010 senior discount
notes will be issued at a substantial discount to their stated principal amount
at maturity, holders of 2010 senior discount notes will be required to include
original issue discount in gross income for U.S. federal income tax purposes in
advance of receiving cash payments on the 2010 senior discount notes. See
"Certain United States Federal Income Tax Considerations" for a more detailed
discussion of the material U.S. federal income tax consequences applicable to
holders of the 2010 senior discount notes.
If a bankruptcy petition were filed by or against us, you may receive a lesser
amount for a claim relating to the 2010 senior discount notes than you would be
entitled to under the indenture for the 2010 senior discount notes, and you may
realize taxable gain or loss upon payment of your claim
If a bankruptcy petition were filed by or against Level 3 under the U.S.
Bankruptcy Code after the issuance of the 2010 senior discount notes, the claim
of a holder of 2010 senior discount notes with respect to the accreted value of
such notes may be limited to an amount equal to the sum of:
(1) the initial offering price for the 2010 senior discount notes;
and
(2) that portion of the original issue discount that is not deemed to
constitute "unmatured interest" within the meaning of the U.S.
Bankruptcy Code.
Any original issue discount that was not amortized as of the date of the
bankruptcy filing would constitute unmatured interest. Accordingly, holders of
the 2010 senior discount notes under these circumstances may receive a lesser
amount than they would be entitled to under the terms of the indenture for the
2010 senior discount notes, even if sufficient funds are available. In
addition, to the extent that the U.S. Bankruptcy Code differs from the Internal
Revenue Code in determining the method of amortization of original issue
discount, a holder of 2010 senior discount notes may realize taxable gain or
loss upon payment of that holder's claim in bankruptcy.
Original issue discount relating to the 2010 senior discount notes may not be
deductible by us until paid
Depending upon the actual yield to maturity of the 2010 senior discount
notes, they may constitute applicable high yield debt obligations, or AHYDOs,
for federal income tax purposes. If they are, we may not deduct any original
issue discount, or OID, that accrues on the 2010 senior discount notes until we
actually pay it. Also, it is possible that a portion of the OID will never be
deductible by us.
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
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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.
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.
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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 $1,374,466,000, 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 $1,000 in principal amount or, in the case of the 2010
senior discount notes, $1,000 in principal amount at maturity of new notes for
each $1,000 in principal amount or, in the case of the 2010 senior discount
notes, $1,000 in principal amount at maturity 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 or, in the case of the 2010 senior discount notes, any minimum aggregate
principal amount at maturity 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 or accreted value, as
applicable, on 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 or accreted value, as applicable, 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 or accreted value, as applicable. 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 the exchange agent,
The Bank of New York 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 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 the exchange agent at its address set
forth below under "-- Exchange Agent" on or before the expiration
date; or
(2) complying with the guaranteed delivery procedures described below.
All references in this prospectus to a letter of transmittal include a
facsimile of the letter of transmittal.
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.
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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 applicable letter of transmittal and
delivering the original notes. The transfer of record ownership may take
considerable time.
Book-Entry Transfer. The exchange agent will make a request to establish an
account for the original notes at the book-entry transfer facility, The
Depository Trust Company, or DTC, for purposes of the exchange offer within two
business days after receipt of this prospectus. 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 the book-entry transfer facility to transfer the original notes into
the exchange agent's account 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 the exchange
agent at the address 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, the 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 the exchange agent.
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 the exchange agent has received at its office 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
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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 the 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 agent 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 the exchange agent 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.
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
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(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 the exchange agent at its
address 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.
The exchange agent will return the properly withdrawn original notes promptly
following receipt of notice of withdrawal. All questions as to the validity of
notices of withdrawals, including time of receipt, will be determined by Level
3, and this determination will be final and binding on all parties.
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 agent.
The 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 the 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 exchange agent's account
promptly after the exchange offer is terminated.
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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 agent 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;
(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 Agent
The Bank of New York has been appointed as the exchange agent for the
exchange offer. Letters of transmittal must be addressed to the exchange agent
at its address set forth below.
By Registered or Certified Mail: By Overnight Courier or By Hand:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, NY 10286 Corporate Trust Services Window
Attention: Enrique Lopez Ground Level
New York, New York 10286
Attention: Enrique Lopez
By Facsimile:
(212) 815-6339
Confirm by Telephone: (212) 815-2742
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 agent reasonable and customary fees for its services and will
reimburse it for reasonable out-of-pocket expenses in connection with its
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 agent and printing, accounting and legal fees, will be paid by Level 3
and are estimated at approximately $600,000.
Appraisal Rights
Holders of original notes will not have dissenters' rights or appraisal
rights in connection with the exchange offer.
United States Federal Income Tax Consequences
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 or any interest income as a result of
the exchange.
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."
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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 2008 euro notes and 2010 euro 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.
32
<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.
33
<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.
34
<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.
Euro-Denominated Senior Notes
2008 Euro Notes
On February 29, 2000, Level 3 issued (Euro)500 million aggregate principal
amount of 10 3/4% senior notes due 2008 under an indenture between Level 3 and
The Bank of New York, as trustee. The 2008 euro notes are senior unsecured
obligations of Level 3. 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
10 3/4% 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 2008 euro notes for 2008 euro notes that are registered
under the Securities Act.
The 2008 euro 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.
The indenture relating to the 2008 euro 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 euro notes that is substantially similar to that
contained in the indenture relating to the 9 1/8% senior notes.
35
<PAGE>
2010 Euro Notes
On February 29, 2000, Level 3 issued (Euro)300 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 euro notes will be senior unsecured
obligations of Level 3. 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 euro notes for 2010 euro notes that are
registered under the Securities Act.
Level 3 may redeem the 2010 euro 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 euro notes redeemed.
This premium decreases 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 euro 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 the 2010 euro 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 euro 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 euro 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.
36
<PAGE>
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.
37
<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, 2010 senior notes and 2010 senior discount
notes, like the original 2008 senior notes, 2010 senior notes and 2010 senior
discount notes, will be issued under three separate indentures, dated as of
February 29, 2000, between Level 3 and The Bank of New York, as trustee. The
2008 senior notes, the 2010 senior notes and the 2010 senior discount 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. 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 indenture. We describe the meaning for only the more important
terms under " -- Definitions. " Whenever we refer to particular defined terms
of the indenture 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 $1,000 and integral multiples of $1,000.
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 2010 senior discount notes will mature on
March 15, 2010. The notes are limited to $800,000,000 aggregate principal
amount of 2008 senior notes, $250,000,000 aggregate principal amount of 2010
senior notes and $675,000,000 aggregate principal amount at maturity of 2010
senior discount notes.
Interest on the 2008 Senior Notes will accrue at a rate of 11% 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.
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<PAGE>
The original 2010 senior discount notes were issued at a discount to their
aggregate principal amount to generate gross proceeds to us of approximately
$359,829,000. The principal on the 2010 senior discount notes will accrete in
value at a rate of approximately 12 7/8% per annum, compounded semi-annually,
to an aggregate principal amount of $675,000,000 by March 15, 2005. Except as
described under "The Exchange Offer--Special Interest," cash interest will not
accrue on the 2010 senior discount notes prior to March 15, 2005. However,
Level 3 may elect, upon not less than 60 days prior notice, to commence the
accrual of cash interest on all outstanding 2010 senior discount notes on or
after March 15, 2003. In that case, the outstanding principal amount at
maturity of each 2010 senior discount note will on the commencement date be
reduced to the Accreted Value of that 2010 senior discount note as of that date
and cash interest shall be payable on that 2010 senior discount note on each
March 15 and September 15 after that date.
Except as otherwise described in the paragraph above, interest on the 2010
senior discount notes will accrue at the rate of 12 7/8% per annum and will be
payable in cash semi-annually on March 15 and September 15 of each year,
beginning on September 15, 2005, to those persons who were holders of record on
the preceding March 1 or September 1 immediately preceding each interest
payment date. Interest on the 2010 senior discount notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from March 15, 2005. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
We will be obligated to pay special interest 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 Level 3, 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 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."
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<PAGE>
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 Level 3 was as
follows:
. $475 million of indebtedness outstanding under the Credit Agreement.
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 purchase upon
a Change of 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 and the 2010 senior
discount 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 or the 2010 senior discount notes, at once or over time, after giving the
required notice under the applicable indenture.
The 2010 senior notes and the 2010 senior discount 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 and 2010 senior
discount 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
or Accreted Value, as applicable.
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<PAGE>
2010 Senior Notes
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2005................................................................. 105.625%
2006................................................................. 103.750%
2007................................................................. 101.875%
2008 and thereafter.................................................. 100.000%
</TABLE>
2010 Senior Discount Notes
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2005................................................................. 106.438%
2006................................................................. 104.292%
2007................................................................. 102.146%
2008 and thereafter.................................................. 100.000%
</TABLE>
Any notice to holders of 2010 senior notes or 2010 senior discount 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.
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, in the case of the 2010 senior notes, the
original aggregate principal amount or, in the case of the 2010 senior discount
notes, the aggregate principal amount at maturity, at a redemption price equal
to, in the case of the 2010 senior notes, 111.250% of the principal amount
thereof, and in the case of the 2010 senior discount notes, 112.875% of the
Accreted Value thereof, in each case 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, and after giving effect to any
such redemption of the 2010 senior discount notes, at least 65% of the
aggregate principal amount at maturity of the 2010 senior discount 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.
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;
41
<PAGE>
(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,
(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;
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(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, 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 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
(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,
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(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
(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;
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(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 Euro 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;"
(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;"
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(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,
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
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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
(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
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(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);
(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
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(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 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;
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(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 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;
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(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 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
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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 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;
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(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:
(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
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(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.
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
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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 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
indentures 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.
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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:
(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
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(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.
Each 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 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;
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(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 2010 senior discount note as of or to any date of
determination prior to March 15, 2005, or of any other 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 (which,
in the case of the 2010 senior discount notes, will be $533.08 per
$1,000 principal amount at maturity of the 2010 senior discount notes)
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 Revenue Code) from the date of issue of
such Debt to the date of determination (which amount, in the case of
the 2010 senior discount notes, shall be amortized on a daily basis
and compounded semiannually on each March 15 and September 15 at a
rate of 12 7/8% per annum from the Issue Date through the date of
determination on the basis of a 360- day year of twelve 30-day
months), 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).
The Accreted Value of any 2010 senior discount note on or after March 15,
2005 will mean the principal amount at maturity of such 2010 senior discount
note. Notwithstanding the foregoing, if Level 3 elects to commence the accrual
of cash interest on the 2010 senior discount notes on or after March 15, 2003
and prior to March 15, 2005, the 2010 senior discount notes shall cease to
accrete, and the Accreted Value and the principal amount at maturity of such
2010 senior discount note shall be the Accreted Value on the date of
commencement of such accrual as calculated in accordance with the first
sentence of this definition.
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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;"
(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
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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
(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
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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
(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
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(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;
(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);
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(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 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.
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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.
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
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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.
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.
Euro Notes means, collectively, Level 3's 10 3/4% Senior Notes due 2008 in
an aggregate principal amount not to exceed (Euro)500,000,000 and Level 3's 11
1/4% Senior Notes due 2010 in an aggregate principal amount not to exceed
(Euro)300,000,000.
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.
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
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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
(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
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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 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
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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.
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, in the case of each of the 2008 senior notes and the
2010 senior notes, and the principal amount at maturity, in the case of the
2010 senior discount 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.
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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, in the case of the outstanding 2008
senior notes and 2010 senior notes, and the aggregate principal amount
at maturity, in the case of the outstanding 2010 senior discount
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 $1,000 aggregate
principal amount or aggregate principal amount at maturity, as
applicable, 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 $1,000 principal amount
or principal amount at maturity, as applicable;
(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 or, in the case of the 2010 senior
discount notes, accrete principal, if applicable;
(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, or, in the case of the 2010 senior discount notes,
principal thereon shall cease to accrete, if applicable, and after
the Purchase Date;
(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, in the case of each of the 2008
senior notes and 2010 senior notes and the principal amount at
maturity, in the case of the 2010 senior discount notes, of the note
the holder tendered, the
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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, in the case of each of
the 2008 senior notes and the 2010 senior notes, or the aggregate
principal amount at maturity, in the case of the 2010 senior
discount notes, 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 the case of each of
the 2008 senior notes and the 2010 senior notes, or the aggregate
principal amount at maturity, in the case of the 2010 senior
discount notes, 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
$1,000 principal amount, or, in the case of the 2010 senior
discount notes, aggregate principal amount at maturity, 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, in the case of each of the
2008 senior notes and the 2010 senior notes, or the aggregate
principal amount at maturity, in the case of the 2010 senior
discount notes, 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.
Permitted Investments means:
(1) Cash Equivalents;
(2) investments in prepaid expenses;
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(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 or Accreted Value, as applicable,
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 or Accreted Value, as applicable, 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 or Accreted Value, as applicable, 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, in the case of each of the 2008 senior
notes and the 2010 senior notes, and aggregate principal amount at
maturity, in the case of the 2010 senior discount 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, in the case
of each of the 2008 senior notes and the 2010 senior notes, and aggregate
principal amount at maturity, in the case of the 2010 senior discount 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, in the case of
each of the 2008 senior notes and the 2010 senior notes, and aggregate
principal amount at maturity, in the case of the 2010 senior discount notes, of
any series then outstanding may, in the case of the 2008 senior notes and the
2010 senior notes, accelerate the maturity of all notes of such series and, in
the case of the 2010 senior discount notes, declare the Accreted Value,
premium, if any, and accrued and unpaid interest, if any, in respect of such
notes to be immediately due and payable. However, after an acceleration or
declaration, as applicable, but before a judgment or decree based on
acceleration or declaration, as applicable, the holders of a majority in
aggregate principal amount, in the case of each of the 2008 senior notes and
the 2010 senior notes, and aggregate principal amount at maturity, in the case
of the 2010 senior discount notes, then outstanding may, under certain
circumstances, rescind and annul the acceleration or declaration, as
applicable, with respect to such series if all Events of Default, other than
the non-payment of accelerated principal or Accreted Value 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 principal
amount or Accreted Value, as applicable, the premium, if any, and accrued and
unpaid interest, if any, in respect of 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 the applicable 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, in the case
of each of the 2008 senior notes and the 2010 senior notes, and
aggregate principal amount at maturity, in the case of the 2010 senior
discount notes, 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, in the case of
each of the 2008 senior notes and the 2010 senior notes, and aggregate
principal amount at maturity of such series of notes, in the case of
the 2010 senior discount notes, then outstanding a direction
inconsistent with this request and failed to institute the proceeding
within 60 days.
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However, these limitations do not apply to a suit instituted by a holder of a
note for enforcement of payment of the principal or Accreted Value, as
applicable, 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 to:
(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; or
(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;
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,
in the case of each of the 2008 senior notes and the 2010 senior notes, and
aggregate principal amount at maturity, in the case of the 2010 senior discount
notes, 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 the applicable series:
(1) change the Stated Maturity of the principal or Accreted Value, as
applicable, of, or any installment of interest on, any note of the
applicable series, or reduce the principal amount or Accreted Value,
as applicable, 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
the applicable 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, in the case of each of the
2008 senior notes and the 2010 senior notes, or principal amount at
maturity, in the case of the 2010 senior discount notes, of the
outstanding notes of the applicable series, the consent of whose
holders is necessary for any
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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 the applicable 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 the applicable series must be repurchased according to the
Offer to Purchase;
(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;
(9) modify any provision of the indentures regarding the calculation of
Accreted Value relating to the 2010 senior discount notes; or
(10) 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, in the case
of each of the 2008 senior notes and the 2010 senior notes, and aggregate
principal amount at maturity, in the case of the 2010 senior discount notes,
of the outstanding notes of a series may, on behalf of the holders of all the
notes of the applicable 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, the 2010 senior notes and the 2010 senior discount
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 the applicable series have been delivered
to the trustee for cancelation, or
(B) all notes of the applicable 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
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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 the applicable series not
previously delivered to the trustee for cancelation, for principal
or Accreted Value, as applicable, of, or premium, if any, on, and
interest on, the notes of the applicable 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 the applicable series, except as to:
(A) rights of registration of transfer, substitution and exchange of
notes and Level 3's right of optional redemption,
(B) rights of holders to receive payment of principal or Accreted
Value, as applicable, 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 the applicable series of notes, of:
(A) money in an amount,
(B) Government Securities 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 or Accreted Value, as
applicable, of, premium, if any, on, and interest on, the applicable
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 the applicable 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.
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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.
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 Euro Notes and the New Convertible Notes.
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.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the indentures.
Level 3, the exchange agent 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.
Book-Entry System
The notes of each series will initially be issued in the form of one or
more global securities registered in the name of The Depository Trust Company,
or DTC, or its nominee.
Upon the issuance of a global security, DTC or its nominee will credit the
accounts of persons holding through it with, in the case of each of the 2008
senior notes and the 2010 senior notes, the respective principal amounts or, in
the case of the 2010 senior discount notes, the respective principal amounts at
maturity represented by the global security purchased by those persons in this
offering. Those accounts initially were designated by the initial purchasers.
Ownership of beneficial interests in a global security will be limited to
persons that have accounts with DTC, or participants, or persons that may hold
interests through participants. Ownership of beneficial interests in a global
security will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by DTC, with respect to participants'
interests and the records of participants relating to interests of persons
other than participants. The laws of some jurisdictions require that some
purchasers of securities take physical delivery of the securities in definitive
form. These limits and laws may impair the ability to transfer beneficial
interests in a global security.
Payment of principal of and interest on notes represented by a global
security will be made in immediately available funds to DTC or its nominee, as
the case may be, as the sole registered owner and the sole holder of the notes
represented by the global security for all purposes under the indentures. Level
3 has been advised by DTC that upon receipt of any payment of principal of or
interest on any global security, DTC 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 global security as shown on the records of DTC. Payments
by participants to owners of beneficial interests in a global security held
through 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.
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A global security may not be transferred except as a whole by DTC or a
nominee of DTC to a nominee of DTC or to DTC. A global security is exchangeable
for certificated notes only if:
(1) DTC notifies Level 3 that it is unwilling or unable to continue as
a depositary for the global security if at any time DTC ceases to be
a clearing agency registered under the Exchange Act;
(2) Level 3 in its discretion at any time determines not to have all
the notes represented by such global security; or
(3) 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 DTC or any successor
depositary 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 DTC or any successor depositary or its nominee. If a
global security becomes exchangeable for certificated notes:
(1) certificated notes will be issued only in fully registered form in
denominations of $1,000 principal amount or principal amount at
maturity, as applicable, or integral multiples of $1,000;
(2) payment of principal or Accreted Value, as applicable, of, and
premium, if any, and interest on, the certificated notes will be
payable, and the transfer of the certificated notes will be
registerable, at the office or agency of Level 3 maintained for
those purposes; and
(3) 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.
So long as DTC or any successor depositary for a Global Security or any
nominee is the registered owner or holder of the global security, DTC or
successor depositary or nominee, as the case may be, will be considered the
sole owner or holder of the notes represented by the global security for all
purposes under the indentures and the notes:
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 the global security.
Accordingly, each person owning a beneficial interest in a global security must
rely on the procedures of DTC or any successor depositary. And, if that person
is not a participant, the person must rely on the procedures of the participant
through which that person owns its interest, to exercise any rights of a holder
under the indenture. Under existing industry practices, if Level 3 requests any
action of holders or an owner of a beneficial interest in a global security
desires to take any action under the applicable indenture, DTC or any successor
depositary would authorize the participants holding the relevant beneficial
interest to take that action. The participants then would authorize beneficial
owners owning through the participants to take the action or would otherwise
act upon the instructions of beneficial owners owning through them.
DTC has advised Level 3 that it will take any action permitted to be taken
by a holder of notes only at the direction of one or more participants to whose
account with DTC interests in the global security are credited. Further, DTC
will take action only as to the portion of the aggregate principal amount at
maturity of the notes as to which the participant or participants has or have
given the direction.
Although DTC has agreed to the procedures described above in order to
facilitate transfers of interests in global securities among participants of
DTC, it is under no obligation to perform these procedures, and the procedures
may be discontinued at any time. None of Level 3, the trustee, any agent of
Level 3 or the initial
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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.
DTC has provided the following information to us. DTC is a:
(1) limited-purpose trust company organized under the New York Banking
Law;
(2) a banking organization within the meaning of the New York Banking Law;
(3) a member of the U.S. Federal Reserve System;
(4) a clearing corporation within the meaning of the New York Uniform
Commercial Code; and
(5) a clearing agency registered under the provisions of Section 17A of
the Securities Exchange Act.
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Certain United States Federal Income Tax Considerations
The following general discussion summarizes certain U.S. federal income tax
consequences of the exchange of the original notes and the holding and
disposition of the new notes. This discussion only deals with persons that hold
the notes as capital assets within the meaning of Section 1221 of the Internal
Revenue Code, and that purchased the original notes for cash at original issue.
This discussion does not address the U.S. federal income tax consequences that
may be relevant to a particular holder subject to special treatment under
certain U.S. federal income tax laws, such as dealers in securities or foreign
currency, banks, trusts, insurance companies, tax-exempt organizations, persons
that hold notes as part of a straddle, hedge against currency risk or
constructive sale or conversion transaction, persons that have a functional
currency other than the U.S. dollar and investors in pass-through entities.
This discussion is based on the Internal Revenue Code, the final, temporary
and proposed Treasury regulations promulgated under the Internal Revenue Code,
administrative pronouncements and judicial decisions, all as in effect on the
date of this prospectus and all of which are subject to change, possibly with
retroactive effect. Level 3 has not requested, and will not request, a ruling
from the IRS regarding any of the U.S. federal income tax consequences
described below. As a result, there can be no assurance that the IRS will not
disagree with or challenge any of the conclusions set forth in this prospectus.
This discussion does not discuss all of the U.S. federal income tax
considerations that may be relevant to a holder of notes. Prospective
participants in the exchange offer are urged to consult their own tax advisors
regarding the application to their particular situations of U.S. federal income
tax laws, as well as the laws of any state, local or foreign taxing
jurisdiction.
U.S. Holders
The following discussion is limited to persons who or which are U.S.
holders. For these purposes, U.S. holder means:
(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.
Stated Interest on Notes Other Than the 2010 Senior Discount Notes. Stated
interest on a note other than a discount note will be taxable to a U.S. Holder
as ordinary interest income in accordance with such holder's regular method of
tax accounting.
Original Issue Discount on the 2010 Senior Discount Notes. Because the
original 2010 senior discount notes were issued at a substantial discount from
their stated principal amount, both the original 2010 senior discount notes and
the new 2010 senior discount notes will be treated as issued with original
issue discount for U.S. federal income tax purposes. Original issue discount is
the excess of:
(1) a note's stated redemption price at maturity over
(2) its issue price.
The stated redemption price at maturity of a 2010 senior discount note is
the sum of the principal amount payable at maturity and all stated interest
payments to be made on the note. The issue price of a 2010 senior discount note
is the first price at which a substantial amount of the 2010 senior discount
notes is sold to the
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public for cash, excluding sales to bond houses, brokers or similar persons or
organizations acting in the capacity as underwriters, placement agents or
wholesalers.
A U.S. holder of a 2010 senior discount note is required to include
original issue discount in income as ordinary interest as it accrues under a
constant yield method in advance of receipt of cash payments attributable to
that income, regardless of the U.S. holder's regular method of tax accounting.
A U.S. holder will not be required to report separately as taxable income
actual distributions of stated interest relating to a 2010 senior discount
note. In general, the amount of original issue discount included in income by a
U.S. holder of a 2010 senior discount note is the sum of the daily portions of
original issue discount for each day during the taxable year, or portion
thereof, on which the U.S. holder held the 2010 senior discount note. The daily
portion is determined by allocating the original issue discount for an accrual
period equally to each day in that accrual period. The accrual period for a
2010 senior discount note may be of any length and may vary in length over the
term of the 2010 senior discount note. However, no accrual period may exceed
one year, and each scheduled payment of principal or interest must occur either
on the first or final day of an accrual period.
The amount of original issue discount attributable to an accrual period is
generally equal to the product of the 2010 senior discount note's adjusted
issue price at the beginning of that accrual period and its yield to maturity,
i.e., the discount rate that, when applied to all payments under the 2010
senior discount note, results in a present value equal to the issue price. The
adjusted issue price of a 2010 senior discount note at the beginning of any
accrual period is the issue price of the 2010 senior discount note, plus the
amount of original issue discount allocable to all prior accrual periods, minus
the amount of any prior payments in respect of the 2010 senior discount note,
including payments of stated interest. Under these rules, a U.S. holder
generally must include in income an increasingly greater amount of original
issue discount in each successive accrual period.
In determining the yield and maturity relating to the 2010 senior discount
notes, Level 3 will not be deemed to exercise any call option on the 2010
senior discount notes. If Level 3 elects to commence the accrual of cash
interest on the 2010 senior discount notes prior to March 15, 2005, the 2010
senior discount notes may be treated solely for the purpose of applying the
original issue discount rules as if each 2010 senior discount note were retired
and then reissued on the date of this election for an amount equal to its
adjusted issue price on that date.
If a U.S. holder is a corporation, a small portion of the amount such
holder would have to accrue may be characterized, by operation of the
applicable high yield debt obligation rules, as a dividend for purposes of
securing a dividend received deduction. Corporate U.S. holders are encouraged
to consult their tax advisors on this point.
Applicable High Yield Discount Obligation. The original issue discount on
any obligation that constitutes an applicable high yield discount obligation
generally is not deductible until paid, and deductions relating to certain
portions of original issue discount may be wholly disallowed. The new 2010
senior discount notes are applicable high yield discount obligations. As a
result, Level 3 will not be allowed a deduction for the accrual of original
issue discount on the 2010 senior discount notes until this interest is
actually paid. In addition, a portion of the OID will never be deductible by
us.
Sale, Exchange or Redemption of Notes. Upon the sale, exchange or
redemption of a note, a U.S. holder generally will recognize taxable gain or
loss equal to the difference between:
(1) the amount realized on that disposition and
(2) the U.S. holder's adjusted tax basis in the note.
A U.S. holder's adjusted tax basis in a 2010 senior discount note generally
will equal the cost of the 2010 senior discount note increased by any original
issue discount included in income through the date of disposition and decreased
by any payments received on the 2010 senior discount note, including payments
of stated interest.
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Notwithstanding the foregoing, any amounts realized in connection with any
sale, exchange, or redemption with respect to accrued interest not previously
included in income will be treated as ordinary interest income. A U.S. holder's
adjusted tax basis on a note other than a 2010 senior discount note generally
will equal the cost of such note less any principal payments received by the
holder.
Exchange Offer. The exchange of original notes for new notes in the
exchange offer should not constitute a taxable event for U.S. federal income
tax purposes. As a result:
(1) a U.S. holder of notes will not recognize taxable gain or loss as a
result of the exchange of original notes for new notes in the exchange
offer;
(2) the holding period of the new notes will include the holding period of
the original notes surrendered in exchange for the new notes; and
(3) a U.S. holder's adjusted tax basis in the new notes will be the same
as the U.S. holder's adjusted tax basis in the original notes
surrendered in exchange for the new notes.
Information Reporting and Backup Withholding. A U.S. holder of notes may be
subject to backup withholding at a 31% rate relating to reportable payments,
which include interest, including original issue discount, or principal paid on
or the gross proceeds of a sale, exchange or redemption of the notes. The payor
of any reportable payments will be required to deduct and withhold 31% of these
payments if:
(1) the payee fails to establish that it is entitled to an exemption;
(2) the payee fails to furnish a correct taxpayer identification number to
the payor in the prescribed manner;
(3) the IRS notifies the payor that the taxpayer identification number
furnished by the payee is incorrect;
(4) the payee has failed properly to report the receipt of reportable
payments and the IRS has notified the payor that backup withholding is
required; or
(5) the payee fails to certify under penalties of perjury that it is not
subject to backup withholding.
If any one of these events occurs with respect to a U.S. holder of notes, Level
3 or its paying or other withholding agent will be required to withhold 31% of
any payments of principal, premium, if any, and interest, including original
issue discount, on a note.
Any amount withheld from a payment to a U.S. holder under the backup
withholding rules will be allowed as a refund or credit against the holder's
U.S. federal income tax liability, so long as the required information is
provided to the IRS. Level 3, its paying agent or other withholding agent
generally will report to a U.S. holder of notes and to the IRS the amount of
any reportable payments made on the notes for each calendar year and the amount
of tax withheld, if any, relating to these payments. Level 3 will report
annually to the IRS and to each holder the amount of original issue discount
accrued on the note for the calendar year.
Recently adopted Treasury regulations that generally are effective for
payments made after December 31, 2000, subject to certain transition rules,
will generally expand the circumstances under which information reporting and
backup withholding may apply. Holders should consult their tax advisors
regarding the application of the information reporting and backup withholding
rules, including these Treasury regulations.
86
<PAGE>
Non-U.S. Holders
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a note that is not a U.S. holder.
Stated Interest and Original Issue Discount. Subject to the discussion of
backup withholding below, payments of interest, including original issue
discount, on a note to a non-U.S. holder generally will not be subject to U.S.
federal income or withholding tax, as long as:
(1) the holder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of Level 3 that
are entitled to vote;
(2) the holder is not:
(A) a controlled foreign corporation that is related to Level 3
through stock ownership, or
(B) a bank receiving interest on a loan entered into in the ordinary
course of business;
(3) the interest is not effectively connected with the conduct by the non-
U.S. holder of a trade or business within the U.S.; and
(4) Level 3 or its paying agent receives:
(A) from the non-U.S. holder, properly completed documentation signed
under penalties of perjury, which provides the non-U.S. holder's
name and address and certifies that the non-U.S. holder is not a
U.S. person, or
(B) from a security clearing organization, bank or other financial
institution that holds the notes in the ordinary course of its
trade or business on behalf of the non-U.S. holder, certification
under penalties of perjury that the documentation has been
received by it or by another such financial institution from the
non-U.S. holder, and a copy of the documentation is furnished to
the payor.
New Treasury regulations regarding information reporting and backup
withholding unify current certification procedures and forms and clarify
reliance standards and certain rules relating to foreign partnerships. For
example, these Treasury regulations require, in the case of notes held by a
foreign partnership, that:
(1) the certification described in clause (4) above be provided by the
partners rather than by the foreign partnership; and
(2) the partnership provide certain information, including a taxpayer
identification number. A look-through rule applies in the case of
tiered partnerships.
These regulations will become effective for payments made after December
31, 2000, subject to certain transition rules. Holders should consult their tax
advisors regarding the application of the information reporting and backup
withholding rules, including these Treasury regulations.
A non-U.S. holder that does not qualify for exemption from withholding
under the second preceding paragraph generally will be subject to withholding
of U.S. federal income tax at a 30% rate, or lower applicable treaty rate, on
payments of interest, including original issue discount, on the notes.
If interest, including original issue discount, on the notes is effectively
connected with the conduct by a non-U.S. holder of a trade or business within
the U.S., the interest will be subject to U.S. federal income tax on a net
income basis at the rate applicable to U.S. persons generally, and, for
corporate holders, may also be subject to a 30% branch profits tax. If
interest, including original issue discount, is subject to U.S. federal income
tax on a net income basis in accordance with these rules, the payments will not
be subject to U.S. withholding tax so long as the relevant non-U.S. holder
provides Level 3 or its paying agent with a properly executed Form 4224. See
the discussion above with regard to the certification rules under recently
enacted Treasury regulations.
87
<PAGE>
Non-U.S. holders should consult their own tax advisors regarding any
applicable income tax treaties, which may provide for a lower rate of
withholding tax, exemption from or reduction of branch profits tax, or other
rules different from those described above.
Sale, Exchange or Redemption of Notes. Subject to the discussion of backup
withholding, any gain realized by a non-U.S. holder on the sale, exchange or
redemption of a note generally will not be subject to U.S. federal income tax,
unless:
(1) the gain is effectively connected with the conduct by the non-U.S.
holder of a trade or business within the United States;
(2) the non-U.S. holder is an individual who is present in the United
States for 183 days or more in the taxable year of disposition and
certain other conditions are satisfied; or
(3) the non-U.S. holder is subject to tax under the provisions of U.S.
federal income tax law applicable to certain expatriates.
Information Reporting and Backup Withholding. Level 3 must report annually
to the IRS and to each non-U.S. holder the amount of any interest paid and
original issue discount accrued on the notes in that year and the amount of tax
withheld, if any, relating to those payments. Copies of those information
returns also may be made available, under the provisions of a specific treaty
or agreement, to the taxing authorities of the country in which the non-U.S.
holder resides.
Backup withholding and information reporting generally will not apply to
interest, including original issue discount, payments made to a non-U.S. holder
in respect of the notes if the non-U.S. holder furnishes Level 3 or its paying
agent with appropriate documentation signed under penalties of perjury stating
that the beneficial owner is not a U.S. person and setting forth the non-U.S.
holder's name and address. However, neither Level 3 nor its paying agent may
have actual knowledge that the holder is a U.S. person or that the conditions
of an exemption are not in fact satisfied. See the discussion above with regard
to the certification rules under recently enacted Treasury regulations.
The payment of proceeds from a non-U.S. holder's disposition of notes to or
through the U.S. office of any broker, domestic or foreign, will be subject to
information reporting and possible backup withholding unless the holder
certifies as to its non-U.S. status under penalties of perjury or otherwise
establishes an exemption. However, the broker must not have actual knowledge
that the holder is a U.S. person or that the conditions of an exemption are not
in fact satisfied. The payment of the proceeds from a non-U.S. holder's
disposition of a note to or through a non-U.S. office of either a U.S. broker
or a non-U.S. broker that is a U.S.-related person will be subject to
information reporting, but not backup withholding. However, this payment of
proceeds will not be subject to information reporting if the broker has
documentary evidence in its files that the non-U.S. holder is not a U.S. person
and the broker has no knowledge to the contrary, or the non-U.S. holder
establishes an exemption. For this purpose, a U.S.-related person is:
(1) a controlled foreign corporation for U.S. federal income tax
purposes; or
(2) a foreign person 50% or more of whose gross income from all sources
for the three-year period ending with the close of its taxable year
preceding payment, or for the part of the period that the broker has
been in existence, is derived from activities that are effectively
connected with the conduct of a U.S. trade or business.
Neither information reporting nor backup withholding will apply to a payment of
the proceeds of a non-U.S. holder's disposition of notes by or through a non-
U.S. office of a non-U.S. broker that is not a U.S. related person. See the
discussion above with regard to the certification rules under recently enacted
Treasury regulations.
Any amounts withheld under the backup withholding rules from a payment to a
non- U.S. holder will be allowed as a refund or a credit against the non-U.S.
holder's U.S. federal income tax liability, as long as the required procedures
are followed.
88
<PAGE>
New Treasury regulations that generally are effective for payments made
after December 31, 2000, subject to certain transition rules, will generally
expand the circumstances under which information reporting and backup
withholding may apply. Holders should consult their tax advisors regarding the
application of the information reporting and backup withholding rules,
including these Treasury regulations.
Effect on Level 3
Applicable High Yield Debt Obligation. The 2010 senior discount notes are
subject to special rules that apply to the deduction of original issue discount
relating to any debt instrument that is an applicable high yield debt
obligation. Under these rules, we may not deduct original issue discount until
we actually pay it. Also, a portion of the OID will never be deductible by us.
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.
89
<PAGE>
Experts
The consolidated financial statements of Level 3 Communications, Inc. as
of December 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.
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 February 29, 2000 and on Form
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
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.
90
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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.
[LEVEL 3 COMMUNICATIONS, INC. LOGO APPEARS HERE]
Level 3 Communications, Inc.
11% Senior Notes due 2008
11 1/4% Senior Notes due 2010
12 7/8% Senior Discount Notes due 2010
----------------
Prospectus
----------------
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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 11% 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 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 12 7/8% Senior
Discount Notes due 2010.
4.4 --U.S. 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
11% 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.
25.3 --Statement on Form T-1 of Eligibility of Trustee relating to the
12 7/8% Senior Discount Notes Due 2010.
99.1 --Form of Letter of Transmittal relating to the 11% Senior Notes
due 2008.
99.2 --Form of Notice of Guaranteed Delivery relating to the 11% Senior
Notes due 2008.
99.3 --Form of Letter to Clients relating to the 11% Senior Notes due
2008.
99.4 --Form of Letter to Nominees relating to the 11% Senior Notes due
2008.
99.5 --Guidelines for Certification of Taxpayer Identification Number
relating to the 11% 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.
99.11 --Form of Letter of Transmittal relating to the 12 7/8% Senior
Discount Notes due 2010.
99.12 --Form of Notice of Guaranteed Delivery relating to the 12 7/8%
Senior Discount Notes due 2010.
99.13 --Form of Letter to Clients relating to the 12 7/8% Senior
Discount Notes due 2010.
99.14 --Form of Letter to Nominees relating to the 12 7/8% Senior
Discount Notes due 2010.
99.15 --Guidelines for Certification of Taxpayer Identification Number
relating to the 12 7/8% 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 11% 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 --Indenture dated as of February 29, 2000 between the Company and
The Bank of New York as trustee relating to the 12 7/8% Senior
Discount Notes due 2010.
4.4 --U.S. 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
11% 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.
25.3 --Statement on Form T-1 of Eligibility of Trustee relating to the
12 7/8% Senior Discount Notes Due 2010.
99.1 --Form of Letter of Transmittal relating to the 11% Senior Notes
due 2008.
99.2 --Form of Notice of Guaranteed Delivery relating to the 11% Senior
Notes due 2008.
99.3 --Form of Letter to Clients relating to the 11% Senior Notes due
2008.
99.4 --Form of Letter to Nominees relating to the 11% Senior Notes due
2008.
99.5 --Guidelines for Certification of Taxpayer Identification Number
relating to the 11% 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.
99.11 --Form of Letter of Transmittal relating to the 12 7/8% Senior
Discount Notes due 2010.
99.12 --Form of Notice of Guaranteed Delivery relating to the 12 7/8%
Senior Discount Notes due 2010.
99.13 --Form of Letter to Clients relating to the 12 7/8% Senior
Discount Notes due 2010.
99.14 --Form of Letter to Nominees relating to the 12 7/8% Senior
Discount Notes due 2010.
99.15 --Guidelines for Certification of Taxpayer Identification Number
relating to the 12 7/8% Senior Notes due 2010.
</TABLE>
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* To be filed by amendment.
<PAGE>
EXHIBIT 4.1
EXECUTION COPY
- --------------------------------------------------------------------------------
LEVEL 3 COMMUNICATIONS, INC.,
Issuer
to
THE BANK OF NEW YORK,
as Trustee
_________________________________
Indenture
Dated as of February 29, 2000
_________________________________
$800,000,000
11% Senior Notes Due 2008
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PARTIES..................................................................... 1
RECITALS OF THE COMPANY..................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.................................................. 2
Accreted Value............................................... 2
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........................... 8
Code......................................................... 8
Commission................................................... 8
Common Stock................................................. 8
Company...................................................... 8
Company Order................................................ 8
Consolidated Capital Ratio................................... 8
Consolidated Cash Flow Available for
Fixed Charges.............................................. 9
Consolidated Income Tax Expense.............................. 10
Consolidated Interest Expense................................ 10
Consolidated Net Income...................................... 10
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Consolidated Net Worth...................................... 11
Consolidated Tangible Assets................................ 12
Corporate Trust Office...................................... 12
Credit Agreement............................................ 12
Credit Facilities........................................... 12
Debt........................................................ 12
Default..................................................... 13
Defaulted Interest.......................................... 13
Depository.................................................. 13
Designation................................................. 14
Disqualified Stock.......................................... 14
Disqualified Stock Dividends................................ 14
Dollar Notes................................................ 14
Eligible Receivables........................................ 14
Euro Notes.................................................. 14
European Government Obligation.............................. 15
European Union.............................................. 15
Event of Default............................................ 15
Exchange Act................................................ 15
Exchange Securities......................................... 15
Excess Proceeds............................................. 15
Existing Notes.............................................. 15
Expiration Date............................................. 15
Fair Market Value........................................... 16
Federal Bankruptcy Code..................................... 16
Global Security............................................. 16
Government Securities....................................... 16
Guarantee................................................... 16
Guarantor................................................... 17
Holder...................................................... 17
Incur....................................................... 17
Indenture................................................... 17
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................................................. 18
Invested Capital............................................ 18
Investment.................................................. 19
Issue Date.................................................. 19
Issue Date Purchase Money Debt.............................. 19
Issue Date Rating........................................... 19
Joint Venture............................................... 20
Lien........................................................ 20
Maturity.................................................... 20
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Measurement Date............................................ 20
Moody's..................................................... 20
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............................... 31
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
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Regular Record Date......................................... 33
Regulation S................................................ 33
Regulation S Global Security................................ 33
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.................................................. 37
Telecommunications/IS Assets................................ 37
Telecommunications/IS Business.............................. 38
10 1/2% Senior Discount Notes............................... 38
Trust Indenture Act......................................... 38
TIA......................................................... 38
Trustee..................................................... 38
Unrestricted Subsidiary..................................... 38
Vice President.............................................. 38
Voting Stock................................................ 38
Wholly Owned Subsidiary..................................... 38
SECTION 102. Compliance Certificates and Opinions......................... 38
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
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
SECTION 112. Conflict with Trust Indenture Act............................ 45
SECTION 113. Legal Holidays............................................... 45
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
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............................................... 52
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................................................. 57
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.................................. 61
ARTICLE FOUR SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture...................... 68
SECTION 402. Application of Trust Money................................... 70
ARTICLE FIVE REMEDIES
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
SECTION 501. Events of Default............................................ 70
SECTION 502. Acceleration of Maturity; Rescission and Annulment........... 72
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee..................................... 73
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............................... 76
SECTION 507. Limitation on Suits.......................................... 77
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................... 77
SECTION 509. Restoration of Rights and Remedies........................... 78
SECTION 510. Rights and Remedies Cumulative............................... 78
SECTION 511. Delay or Omission Not Waiver................................. 78
SECTION 512. Control by Holders........................................... 79
SECTION 513. Waiver of Past Defaults...................................... 79
SECTION 514. Waiver of Stay or Extension Laws............................. 80
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.......................... 80
SECTION 602. Notice of Default............................................ 82
SECTION 603. Certain Rights of Trustee.................................... 82
SECTION 604. Trustee Not Responsible for Recitals or Issuance
of Securities.............................................. 84
SECTION 605. May Hold Securities.......................................... 84
SECTION 606. Money Held in Trust.......................................... 84
SECTION 607. Compensation and Reimbursement............................... 85
SECTION 608. Corporate Trustee Required; Eligibility;
Conflicting Interests...................................... 86
SECTION 609. Resignation and Removal; Appointment of Successor............ 86
SECTION 610. Acceptance of Appointment by Successor....................... 88
SECTION 611. Merger, Conversion, Consolidation or Succession
to Business................................................ 90
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses
of Holders................................................. 90
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
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................................ 94
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 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......................... 106
SECTION 1009. Change of Control Triggering Event.......................... 106
SECTION 1010. Limitation on Consolidated Debt............................. 110
SECTION 1011. Limitation on Debt of Restricted
</TABLE>
vii
<PAGE>
<TABLE>
<S> <C>
Subsidiaries.............................................. 115
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............................ 126
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
ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
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......................................... 136
SECTION 1204. Conditions to Defeasance or Covenant
Defeasance................................................ 138
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>
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% Senior
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, 11% Senior 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 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)
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.
"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 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.
"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
<PAGE>
9
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 calculation of the
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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 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
<PAGE>
10
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.
"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
<PAGE>
11
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 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.
<PAGE>
12
"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 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
<PAGE>
13
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.
"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.
<PAGE>
14
"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.
"Dollar Notes" means, collectively, the Company's 11 1/4% Senior Notes
due 2010 in an aggregate principal 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
<PAGE>
15
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 Notes" means, collectively, the Company's 10 3/4% Senior Euro
Notes due 2008 in an aggregate principal amount not to exceed (Euro) 500,000,000
and 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
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 91/8% 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.
<PAGE>
16
"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 "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
<PAGE>
17
maintain working capital, equity capitalor 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 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 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.
<PAGE>
18
"Initial Purchasers" means Salomon Smith Barney Inc., Goldman, Sachs &
Co., Morgan Stanley & Co. Incorporated, Chase Securities, Inc., J.P. Morgan
Securities, Inc., Credit Suisse First Boston Corporation, BNY Capital Markets,
Inc. and First Union Securities, Inc.
"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.
"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
<PAGE>
19
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 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.
<PAGE>
20
"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.
"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.
<PAGE>
21
"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 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
<PAGE>
22
Subsidiary from escrow, such portionshall 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 $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
$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 $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 oran 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
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,
<PAGE>
28
in the case of an interest rate agreement, shall have anotional 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 U.S. 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 thereunder), in each case
prior to the final Stated Maturity
<PAGE>
37
of the Securities or (y) permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company) of such other Debt at the
option of the holder thereof prior to the final 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
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 (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.
<PAGE>
38
"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.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not
<PAGE>
39
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.
SECTION 113. Legal Holidays.
---------------
<PAGE>
46
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
$800,000,000, 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 "11% Senior
Notes Due 2008" of the Company. Their Stated Maturity shall be March
15, 2008, and they shall bear interest at the rate of 11% 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 $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 $250,000,000 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 in
accordance with Regulation S under the Securities Act shall 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 "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 credit to the respective accounts of the beneficial
owners of the Securities represented thereby.
<PAGE>
51
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 them, shall provide
for the exchange of all Securities at
<PAGE>
52
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.
SECTION 305. Registration, Registration of Transfer and
------------------------------------------
Exchange.
- ---------
<PAGE>
53
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 endorsed, or be accompanied by a written
instrument of transfer, in form satisfactory to the Company and the
<PAGE>
54
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 shall constitute an
original additional contractual obligation of the Company, whether or
not the mutilated,
<PAGE>
55
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.
SECTION 309. Cancellation.
-------------
<PAGE>
58
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 Global Securities initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be deposited with the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit A.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Security
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 the Depository and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in 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 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 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
<PAGE>
60
exchange for their beneficial interests in a Global Security if (i) the
Depository 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 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.
<PAGE>
61
(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.
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
<PAGE>
62
the Securities Act) and the proposed transferee has 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).
(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 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 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>
63
(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.
(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 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
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 and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date of such
<PAGE>
64
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>
65
(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>
66
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>
67
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
<PAGE>
68
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.
(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
<PAGE>
69
(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,
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.
<PAGE>
70
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>
71
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>
72
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 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>
73
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>
74
(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>
75
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>
76
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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77
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 and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
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78
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.
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79
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>
80
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>
81
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.
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82
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>
83
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>
84
(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>
85
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>
86
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.
<PAGE>
87
(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>
88
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>
89
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>
90
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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91
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>
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.
<PAGE>
94
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
<PAGE>
95
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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96
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>
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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
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98
questions arising under this Indenture; provided such actions shall not
--------
adversely affect the interests of the Holders in any material respect.
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
(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
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99
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.
<PAGE>
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
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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;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee,
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103
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.
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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.
<PAGE>
106
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 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 $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
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107
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 11:00 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.
<PAGE>
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
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113
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 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
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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
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114
contractual, franchise, lease, self-insurance or 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
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115
Debt otherwise included in the determination of such 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
<PAGE>
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
<PAGE>
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,
<PAGE>
122
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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123
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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124
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
<PAGE>
125
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.
<PAGE>
126
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 Proceeds exceed $500,000,000, 540 days) from the date
of the receipt of such Net Available
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127
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 11:00 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
<PAGE>
128
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.
- ------------------------
<PAGE>
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 determination 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
<PAGE>
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;
<PAGE>
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 Subsidiary 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
<PAGE>
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 redesignated 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.
-------------------------
<PAGE>
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.
SECTION 1203. Covenant Defeasance.
--------------------
<PAGE>
137
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.
<PAGE>
138
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:
(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 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
<PAGE>
139
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>
140
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.
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.
--------------
<PAGE>
141
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"), 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. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[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 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
<PAGE>
A-2
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 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
<PAGE>
A-3
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.
11% Senior 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 $800,000,000 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 11% 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 U.S.
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 such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the 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% Senior Notes Due 2008 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $800,000,000, 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 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 $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
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-16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is
$[ ]. 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 Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase 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
$800,000,000 of 11% Senior 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 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 Section 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 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.
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:
<PAGE>
B-7
THE BANK OF NEW YORK, as Trustee,
by
____________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.2
EXECUTION COPY
================================================================================
LEVEL 3 COMMUNICATIONS, INC.,
Issuer
to
THE BANK OF NEW YORK,
as Trustee
_______________________________________
Indenture
Dated as of February 29, 2000
_______________________________________
$250,000,000
11 1/4% Senior Notes Due 2010
<PAGE>
TABLE OF CONTENTS
<TABLE>
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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......................... 8
Code....................................................... 8
Commission................................................. 8
Common Stock............................................... 8
Company.................................................... 8
Company Order.............................................. 8
Consolidated Capital Ratio................................. 8
Consolidated Cash Flow Available for
Fixed Charges............................................ 9
Consolidated Income Tax Expense............................ 10
Consolidated Interest Expense.............................. 10
Consolidated Net Income.................................... 10
Consolidated Net Worth..................................... 11
Consolidated Tangible Assets............................... 12
Corporate Trust Office..................................... 12
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<TABLE>
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Credit Agreement............................................ 12
Credit Facilities........................................... 12
Debt........................................................ 12
Default..................................................... 13
Defaulted Interest.......................................... 13
Depository.................................................. 13
Designation................................................. 14
Disqualified Stock.......................................... 14
Disqualified Stock Dividends................................ 14
Dollar Notes................................................ 14
Eligible Receivables........................................ 14
Euro Notes.................................................. 15
European Government Obligation.............................. 15
European Union.............................................. 15
Event of Default............................................ 15
Exchange Act................................................ 15
Exchange Securities......................................... 15
Excess Proceeds............................................. 15
Existing Notes.............................................. 15
Expiration Date............................................. 15
Fair Market Value........................................... 16
Federal Bankruptcy Code..................................... 16
Global Security............................................. 16
Government Securities....................................... 16
Guarantee................................................... 16
Guarantor................................................... 17
Holder...................................................... 17
Incur....................................................... 17
Indenture................................................... 17
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.............. 18
Invested Capital............................................ 18
Investment.................................................. 19
Issue Date.................................................. 19
Issue Date Purchase Money Debt.............................. 19
Issue Date Rating........................................... 19
Joint Venture............................................... 20
Lien........................................................ 20
Maturity.................................................... 20
Measurement Date............................................ 20
Moody's..................................................... 20
Net Available Proceeds...................................... 21
New Convertible Notes....................................... 22
9 1/8% Senior Notes......................................... 22
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<TABLE>
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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
Redemption Date............................................. 32
Redemption Price............................................ 32
refinancing................................................. 32
Registered Exchange Offer................................... 32
Registration Agreement...................................... 33
Registration Default........................................ 33
Regular Record Date......................................... 33
Regulation S................................................ 33
Regulation S Global Security................................ 33
Required Filing Dates....................................... 33
Responsible Officer......................................... 33
Restricted Payment.......................................... 33
Restricted Subsidiary....................................... 33
Restricted Subsidiary Guarantee............................. 34
Revocation.................................................. 34
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<TABLE>
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Rule 144A................................................... 34
Rule 144A Global Security................................... 34
S&P......................................................... 34
Sale and Leaseback Transaction.............................. 34
Securities.................................................. 35
Securities Act.............................................. 35
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............................................. 36
Subordinated Debt........................................... 36
Subsidiary.................................................. 37
Telecommunications/IS Assets................................ 37
Telecommunications/IS Business.............................. 38
10 1/2% Senior Discount Notes............................... 38
Trust Indenture Act......................................... 38
TIA......................................................... 38
Trustee..................................................... 38
Unrestricted Subsidiary..................................... 39
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
SECTION 118. Duplicate Originals.......................................... 47
ARTICLE TWO SECURITY FORMS
SECTION 201. Forms Generally.............................................. 47
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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........................................ 58
SECTION 309. Cancellation................................................. 59
SECTION 310. Computation of Interest...................................... 59
SECTION 311. CUSIP Number................................................. 59
SECTION 312. Book-Entry Provisions for Global Securities.................. 60
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............................. 76
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................. 77
SECTION 506. Application of Money Collected............................... 77
SECTION 507. Limitation on Suits.......................................... 78
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest....................................... 78
SECTION 509. Restoration of Rights and Remedies........................... 79
SECTION 510. Rights and Remedies Cumulative............................... 79
SECTION 511. Delay or Omission Not Waiver................................. 79
SECTION 512. Control by Holders........................................... 80
SECTION 513. Waiver of Past Defaults...................................... 80
SECTION 514. Waiver of Stay or Extension Laws............................. 81
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ARTICLE SIX THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities........................... 81
SECTION 602. Notice of Default............................................. 83
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................................ 86
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........................ 90
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business.................................................... 90
ARTICLE SEVEN HOLDERS' LISTS AND
REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.................. 92
SECTION 702. Reports by Trustee............................................ 92
SECTION 703. Reports by Company............................................ 92
ARTICLE EIGHT CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.......... 93
SECTION 802. Successor Company Substituted................................. 94
SECTION 803. Guarantor May Consolidate, etc., Only on Certain Terms........ 95
SECTION 804. Successor Guarantor Substituted............................... 97
</TABLE>
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ARTICLE NINE SUPPLEMENTAL INDENTURES
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SECTION 901. Supplemental Indentures Without Consent of Holders........... 98
SECTION 902. Supplemental Indentures With Consent of Holders.............. 99
SECTION 903. Execution of Supplemental Indentures......................... 100
SECTION 904. Effect of Supplemental Indentures............................ 101
SECTION 905. Conformity with Trust Indenture Act.......................... 101
SECTION 906. Reference in Securities to Supplemental Indentures........... 101
SECTION 907. Notice of Supplemental Indentures............................ 101
ARTICLE TEN COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest......... 102
SECTION 1002. Maintenance of Office or Agency............................. 102
SECTION 1003. Money for Security Payments to Be Held in Trust............. 103
SECTION 1004. Corporate Existence......................................... 105
SECTION 1005. Maintenance of Properties................................... 105
SECTION 1006. Insurance................................................... 105
SECTION 1007. Reports..................................................... 106
SECTION 1008. Statement by Officers as to Default......................... 107
SECTION 1009. Change of Control Triggering Event.......................... 107
SECTION 1010. Limitation on Consolidated Debt............................. 110
SECTION 1011. Limitation on Debt of Restricted Subsidiaries............... 116
SECTION 1012. Limitation on Restricted Payments........................... 118
SECTION 1013. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries......................... 122
SECTION 1014. Limitation on Liens......................................... 124
SECTION 1015. Limitation on Sale and Leaseback Transactions............... 126
SECTION 1016. Limitation on Asset Dispositions............................ 126
SECTION 1017. Limitation on Issuance and Sales of Capital Stock of
Restricted Subsidiaries................................... 129
SECTION 1018. Transactions with Affiliates................................ 131
SECTION 1019. Limitation on Designations of Unrestricted Subsidiaries..... 133
ARTICLE ELEVEN REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption......................................... 136
SECTION 1102. Applicability of Article.................................... 136
SECTION 1103. Election to Redeem; Notice to Trustee....................... 136
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SECTION 1104. Selection by Trustee of Securities to Be Redeemed.......... 136
SECTION 1105. Notice of Redemption....................................... 137
SECTION 1106. Deposit of Redemption Price................................ 138
SECTION 1107. Securities Payable on Redemption Date...................... 139
SECTION 1108. Securities Redeemed in Part................................ 139
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasanse................................................ 140
SECTION 1202. Defeasance and Discharge................................... 140
SECTION 1203. Covenant Defeasance........................................ 142
SECTION 1204. Conditions to Defeasance or Covenant Defeasance............ 143
SECTION 1205. Deposited Money and Government Securities to Be Held
in Trust; Other Miscellaneous Provisions................. 145
SECTION 1206. Reinstatement.............................................. 146
</TABLE>
<PAGE>
EXHIBIT A - Form of Security
EXHIBIT B - Form of Supplemental Indenture
ix
<PAGE>
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
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 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)
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.
"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 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.
"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
<PAGE>
9
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 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 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
<PAGE>
10
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.
"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
<PAGE>
11
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 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.
<PAGE>
12
"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 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
<PAGE>
13
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.
"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.
<PAGE>
14
"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.
"Dollar Notes" means, collectively, the Company's 11% Senior Notes due
2008 in an aggregate principal amount not to exceed $800,000,000 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
<PAGE>
15
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 Notes" means, collectively, the Company's 10 3/4% Senior Euro
Notes due 2008 in an aggregate principal amount not to exceed
(EURO)500,000,000 and 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 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 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.
"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.
<PAGE>
16
"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 "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
<PAGE>
17
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
-------- -------
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 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.
<PAGE>
18
"Initial Purchasers" means Salomon Smith Barney Inc., Goldman, Sachs &
Co., Morgan Stanley & Co. Incorporated, Chase Securities, Inc., J.P. Morgan
Securities, Inc., Credit Suisse First Boston Corporation, BNY Capital
Markets, Inc. and First Union Securities, Inc.
"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.
"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
<PAGE>
19
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 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.
<PAGE>
20
"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.
"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 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
the Company.
<PAGE>
21
"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 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
<PAGE>
22
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 $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 $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 $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 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
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
<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 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,
<PAGE>
31
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 pursuant to either (x) credit facilities
secured by Receivables or (y) Receivables purchase facilities, and
<PAGE>
32
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).
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Agreement, to certain
<PAGE>
33
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 U.S. 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 designated or classified as an
Unrestricted Subsidiary pursuant to and in compliance with Section 1019 and (b)
an
<PAGE>
34
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 arrangement may be terminated by the lessee without
payment of a penalty.
<PAGE>
35
"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.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
<PAGE>
36
"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 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
<PAGE>
37
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 retirement
(including pursuant to an offer to purchase made by the Company) of such other
Debt at the option of the holder thereof prior to the final 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
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 (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
<PAGE>
38
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 provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
<PAGE>
39
"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.
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.
<PAGE>
40
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.
---------------------------------------
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
<PAGE>
41
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.
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
<PAGE>
42
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, 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
<PAGE>
43
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.
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, 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>
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 $250,000,000,
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
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>
49
SECTION 302. Denominations.
--------------
The Securities will be issued without coupons and in fully registered
form only, in minimum denominations of $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 $250,000,000 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 in
accordance with Regulation S under the Securities Act shall 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 "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 credit to the respective accounts of
the beneficial owners of the Securities represented thereby.
<PAGE>
51
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 them, shall provide for the exchange of all Securities at
<PAGE>
52
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, 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>
55
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>
56
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>
57
(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>
58
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>
59
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>
60
SECTION 312. Book-Entry Provisions for Global Securities.
--------------------------------------------
(a) The Global Securities initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be deposited with the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit A.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Security
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 the Depository and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in 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 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 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
<PAGE>
61
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (i) the Depository 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 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.
<PAGE>
62
(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.
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
<PAGE>
63
the Securities Act) and the proposed transferee has 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).
(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 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 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 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.
(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 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 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 and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date of such
<PAGE>
65
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
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
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
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70
(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; an d
(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.
---------------------------
<PAGE>
71
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 dealt with) continued for 60 days after written
notice
<PAGE>
72
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 continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or
<PAGE>
73
(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>
74
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>
75
(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>
76
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>
77
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.
<PAGE>
78
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>
79
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>
80
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>
81
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>
82
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>
83
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>
84
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
<PAGE>
85
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.
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>
86
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>
87
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.
<PAGE>
88
(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
<PAGE>
89
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 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.
<PAGE>
90
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>
91
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.
<PAGE>
92
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.
<PAGE>
93
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>
94
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>
95
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>
96
(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
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97
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.
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98
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
--------
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99
actions shall not adversely affect the interests of the Holders in any
material respect.
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
(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
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100
(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.
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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101
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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102
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
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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
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103
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;
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104
(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
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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.
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105
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
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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.
----------
<PAGE>
106
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.
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107
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 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 $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
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108
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 11:00 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.
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109
(d) A "Change of Control" means the occurrence of any of the
following events:
(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
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110
(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 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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(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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112
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 Disqualified Stock, without any payment by the
Company
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113
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 any premium required to be paid in connection with such
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114
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 Incurrence of Debt or (B) in respect of
customary
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115
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 granted for the
benefit of the Securities pursuant to the
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116
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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117
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
acceleration of such Debt upon an event of default thereunder), in each
case prior to the time the same
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118
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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119
(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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120
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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121
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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122
(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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123
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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124
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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125
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
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126
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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127
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
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128
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 11:00 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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129
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.
- ------------------------
<PAGE>
130
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>
131
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>
132
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 determination 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
<PAGE>
133
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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134
(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 Subsidiary 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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135
(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 redesignated 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>
136
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.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
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137
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 $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,
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial
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138
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
11:00 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>
139
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 maintained 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>
140
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.
------------------------
<PAGE>
141
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>
142
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.
<PAGE>
143
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:
(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 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
<PAGE>
144
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 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.
<PAGE>
145
(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.
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.
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
<PAGE>
146
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>
147
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"), 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. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[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 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
<PAGE>
A-2
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 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
<PAGE>
A-3
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.
11 1/4% Senior Note Due 2010
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 $250,000,000 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 11 1/4% 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 U.S.
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 such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the 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 Notes Due 2010 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $250,000,000, 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:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2005.....................................................................................105.625%
2006.....................................................................................103.750%
2007.....................................................................................101.875%
2008 and thereafter......................................................................100.000%
</TABLE>
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 $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 $[ ]. The
following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Transfer in Principal Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase Security Registrar
</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 $250,000,000 of 11 1/4% Senior 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.
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
<PAGE>
B-7
_________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
by
_________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
================================================================================
LEVEL 3 COMMUNICATIONS, INC.,
Issuer
to
THE BANK OF NEW YORK,
as Trustee
---------------------------------------------
Indenture
Dated as of February 29, 2000
---------------------------------------------
$675,000,000
12 7/8% Senior Discount Notes Due 2010
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
PARTIES.................................................................... 1
RECITALS OF THE COMPANY.................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions................................................. 2
Accreted Value.............................................. 2
Acquired Debt............................................... 3
Act......................................................... 4
Affiliate................................................... 4
Affiliate Transaction....................................... 4
Agent Member................................................ 4
Asset Disposition........................................... 4
Attributable Value.......................................... 5
Board of Directors.......................................... 6
Board Resolution............................................ 6
Business Day................................................ 6
Capital Lease Obligation.................................... 6
Capital Stock............................................... 6
Cash Equivalents............................................ 6
Change of Control........................................... 8
Change of Control Triggering Event.......................... 8
Code........................................................ 8
Commission.................................................. 8
Common Stock................................................ 8
Company..................................................... 8
Company Order............................................... 8
Company Request............................................. 8
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
<PAGE>
Consolidated Net Worth...................................... 12
Consolidated Tangible Assets................................ 12
Corporate Trust Office...................................... 12
Credit Agreement............................................ 12
Credit Facilities........................................... 12
Debt........................................................ 13
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 Notes.................................................. 15
European Government Obligation.............................. 15
European Union.............................................. 15
Event of Default............................................ 15
Exchange Act................................................ 15
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 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.............. 18
Invested Capital............................................ 18
Investment.................................................. 18
Issue Date.................................................. 19
Issue Date Purchase Money Debt.............................. 19
Issue Date Rating........................................... 20
Joint Venture............................................... 20
Lien........................................................ 20
Maturity.................................................... 20
(iii)
<PAGE>
Measurement Date............................................ 20
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........................................... 22
Officers' Certificate....................................... 25
Opinion of Counsel.......................................... 25
OECD........................................................ 25
Outstanding................................................. 26
Paying Agent................................................ 27
Permitted Holders........................................... 27
Permitted Interest Rate or Currency
Protection Agreement................................... 27
Permitted Investments....................................... 27
Permitted Liens............................................. 28
Permitted Telecommunications Capital
Asset Disposition...................................... 29
Person...................................................... 29
Physical Security........................................... 29
Predecessor Security........................................ 29
Preferred Stock............................................. 30
Preferred Stock Dividends................................... 30
Private Exchange Offer...................................... 30
Private Exchange Securities................................. 30
Private Placement Legend.................................... 30
Property.................................................... 30
Proportionate Interest...................................... 30
Purchase Amount............................................. 31
Purchase Date............................................... 31
Purchase Money Debt......................................... 31
Purchase Price.............................................. 31
Qualified Institutional Buyer............................... 31
QIB......................................................... 31
Qualified Receivable Facility............................... 31
Rating Agencies............................................. 31
Rating Date................................................. 32
Rating Decline.............................................. 32
Receivables................................................. 32
Redemption Date............................................. 32
Redemption Price............................................ 32
refinancing................................................. 32
(iii)
<PAGE>
Registered Exchange Offer................................... 32
Registration Agreement...................................... 33
Registration Default........................................ 33
Regular Record Date......................................... 33
Regulation S................................................ 33
Regulation S Global Security................................ 33
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.............................................. 35
Security Register........................................... 35
Security Registrar.......................................... 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.................................................. 37
Telecommunications/IS Assets................................ 37
Telecommunications/IS Business.............................. 38
10-1/2% Senior Discount Notes............................... 38
Trust Indenture Act......................................... 38
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
(iv)
<PAGE>
SECTION 106. Notice to Holders; Waiver................................... 43
SECTION 107. Effect of Headings and Table of Contents.................... 44
SECTION 108. Successors and Assigns...................................... 44
SECTION 109. Separability Clause......................................... 44
SECTION 110. Benefits of Indenture....................................... 44
SECTION 111. Governing Law............................................... 44
SECTION 112. Conflict with Trust Indenture Act........................... 45
SECTION 113. Legal Holidays.............................................. 45
SECTION 114. No Personal Liability of Directors, Officers,
Employees and shareholders............................. 45
SECTION 115. Independence of Covenants................................... 46
SECTION 116. Exhibits.................................................... 46
SECTION 117. Counterparts................................................ 46
SECTION 118. Duplicate Originals......................................... 46
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally............................................. 47
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms............................................. 47
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....................................... 58
SECTION 309. Cancellation................................................ 58
SECTION 310. Computation of Interest..................................... 59
SECTION 311. CUSIP Number................................................ 59
(v)
<PAGE>
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..................... 68
SECTION 402. Application of Trust Money.................................. 69
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default........................................... 70
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......... 72
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................. 73
SECTION 504. Trustee May File Proofs of Claim............................ 74
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities.......................................... 75
SECTION 506. Application of Money Collected.............................. 75
SECTION 507. Limitation on Suits......................................... 76
SECTION 508. Unconditional Right of Holders to Receive Accreted
Value, Premium and Interest............................ 77
SECTION 509. Restoration of Rights and Remedies.......................... 77
SECTION 510. Rights and Remedies Cumulative.............................. 77
SECTION 511. Delay or Omission Not Waiver................................ 78
SECTION 512. Control by Holders.......................................... 78
SECTION 513. Waiver of Past Defaults..................................... 78
SECTION 514. Waiver of Stay or Extension Laws............................ 79
(vi)
<PAGE>
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities......................... 80
SECTION 602. Notice of Default........................................... 81
SECTION 603. Certain Rights of Trustee................................... 82
SECTION 604. Trustee Not Responsible for Recitals or Issuance
of Securities.......................................... 83
SECTION 605. May Hold Securities......................................... 84
SECTION 606. Money Held in Trust......................................... 84
SECTION 607. Compensation and Reimbursement.............................. 84
SECTION 608. Corporate Trustee Required; Eligibility; Conflicting
Interests.............................................. 85
SECTION 609. Resignation and Removal; Appointment of Successor........... 86
SECTION 610. Acceptance of Appointment by Successor...................... 88
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business............................................... 88
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders................. 89
SECTION 702. Reports by Trustee........................................... 89
SECTION 703. Reports by Company........................................... 90
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms......... 90
SECTION 802. Successor Company Substituted................................ 92
(vii)
<PAGE>
SECTION 803. Guarantor May Consolidate, etc., Only on Certain Terms....... 92
SECTION 804. Successor Guarantor Substituted.............................. 94
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders........... 95
SECTION 902. Supplemental Indentures With Consent of Holders.............. 96
SECTION 903. Execution of Supplemental Indentures......................... 98
SECTION 904. Effect of Supplemental Indentures............................ 98
SECTION 905. Conformity with Trust Indenture Act.......................... 98
SECTION 906. Reference in Securities to Supplemental Indentures........... 98
SECTION 907. Notice of Supplemental Indentures............................ 99
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Accreted Value, Premium, if any, and
Interest............................................... 99
SECTION 1002. Maintenance of Office or Agency.............................. 99
SECTION 1003. Money for Security Payments to Be Held in Trust.............. 100
SECTION 1004. Corporate Existence.......................................... 102
SECTION 1005. Maintenance of Properties.................................... 102
SECTION 1006. Insurance.................................................... 103
SECTION 1007. Reports...................................................... 103
SECTION 1008. Statement by Officers as to Default.......................... 104
SECTION 1009. Change of Control Triggering Event........................... 104
SECTION 1010. Limitation on Consolidated Debt.............................. 108
SECTION 1011. Limitation on Debt of Restricted Subsidiaries................ 113
SECTION 1012. Limitation on Restricted Payments........................... 115
(viii)
<PAGE>
SECTION 1013. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries..................... 119
SECTION 1014. Limitation on Liens......................................... 121
SECTION 1015. Limitation on Sale and Leaseback Transactions............... 123
SECTION 1016. Limitation on Asset Dispositions............................ 124
SECTION 1017. Limitation on Issuance and Sales of Capital Stock of
Restricted Subsidiaries............................... 126
SECTION 1018. Transactions with Affiliates................................ 128
SECTION 1019. Calculation of Original Issue Discount...................... 130
SECTION 1020. Limitation on Designations of Unrestricted Subsidiaries..... 131
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption......................................... 133
SECTION 1102. Applicability of Article.................................... 133
SECTION 1103. Election to Redeem; Notice to Trustee....................... 133
SECTION 1104. Selection by Trustee of Securities To Be Redeemed........... 134
SECTION 1105. Notice of Redemption........................................ 134
SECTION 1106. Deposit of Redemption Price................................. 135
SECTION 1107. Securities Payable on Redemption Date....................... 136
SECTION 1108. Securities Redeemed in Part................................. 136
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance............................................ 137
SECTION 1202. Defeasance and Discharge.................................... 137
SECTION 1203. Covenant Defeasance......................................... 138
(ix)
<PAGE>
SECTION 1204. Conditions to Defeasance or Covenant Defeasance............ 140
SECTION 1205. Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions......... 142
SECTION 1206. Reinstatement.............................................. 142
EXHIBIT A - Form of Security
EXHIBIT B - Form of Supplemental Indenture
(x)
<PAGE>
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 12 7/8% Senior
Discount 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, 12 7/8% Senior Discount
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:
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:
<PAGE>
2
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
(f) "or" is not exclusive and "including" means including without
limitation.
"Accreted Value" of any Security as of or to any date of determination
prior to March 15, 2005, or of any other Debt issued at a price less than the
principal amount at
<PAGE>
3
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 (which, in the case of the
Securities, will be $533.08 per $1,000 principal amount at maturity of
Securities) 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 (which amount,
in the case of the Securities, shall be amortized on a daily basis and
compounded semiannually on each March 15 and September 15 at a rate of 12 7/8%
per annum from the Issue Date through the date of determination on the basis of
a 360-day year of twelve 30-day months), 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). The Accreted Value of any Securities on
or after March 15, 2005, will mean the principal amount at maturity of such
Security. Notwithstanding the foregoing, if the Company elects to commence the
accrual of cash interest on the Securities on or after March 15, 2003 and prior
to March 15, 2005, the Securities shall cease to accrete, and the Accreted Value
and the principal amount at maturity of such Security shall be the Accreted
Value on the date of commencement of such accrual as calculated in accordance
with the first sentence of this definition.
"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.
<PAGE>
4
"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 "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,
<PAGE>
5
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 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
<PAGE>
6
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.
"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
<PAGE>
7
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 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
<PAGE>
8
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.
"Change of Control Triggering Event" has the meaning specified in
Section 1009.
"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 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
<PAGE>
9
Controller, the Secretary or an Assistant Secretary of the Company and delivered
to the Trustee.
"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,
<PAGE>
10
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 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
<PAGE>
11
Person (other than the Company 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
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 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
- -------- -------
<PAGE>
12
(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 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,
<PAGE>
13
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, (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
<PAGE>
14
Section 1010 or (y) the notional amount of such obligation if not Incurred
pursuant to such clause.
"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 1020.
"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
<PAGE>
15
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.
"Dollar Notes" means, collectively, the Company's 11% Senior Notes due
2008 in an aggregate principal amount not to exceed $800,000,000 and the
Company's 11 1/4% Senior Notes due 2010 in an aggregate principal amount not to
exceed $250,000,000.
"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 Notes" means, collectively, the Company's 10 3/4% Senior Euro Notes
due 2008 in an aggregate principal amount not to exceed (Euro)500,000,000 and
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
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).
<PAGE>
16
"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 "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).
<PAGE>
17
"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 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
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change in generally accepted accounting principles that results in an obligation
<PAGE>
18
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 Purchasers" means Salomon Smith Barney Inc., Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, Chase Securities Inc., J.P. Morgan Securities
Inc., Credit Suisse First Boston Corporation, BNY Capital Markets, Inc. and
First Union Securities, Inc.
"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.
"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
<PAGE>
19
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 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.
<PAGE>
20
"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.
"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 9-1/8% Senior Notes
were originally issued.
<PAGE>
21
"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 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
<PAGE>
22
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.
"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 at maturity 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
<PAGE>
23
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:
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 at maturity 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
<PAGE>
24
Section hereof requiring the Offer to Purchase) (the "Purchase Amount");
d. the purchase price to be paid by the Company for $1,000 aggregate
principal amount at maturity 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 $1,000 principal amount at
maturity;
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 or accrete principal, as the case may
be;
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 or the principal
thereon shall cease to accrete, as the case may be, 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 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 at maturity of
the Security the Holder tendered, the certificate number of the Security the
Holder tendered and a
<PAGE>
25
statement that such Holder is withdrawing all or a portion of his tender;
k. that (i) if Securities in an aggregate principal amount at maturity 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 at maturity
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 at maturity 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 $1,000 principal amount at maturity 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 at maturity 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 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.
<PAGE>
26
"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 whose hands the Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- --------- -------
principal amount at maturity 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
<PAGE>
27
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 Accreted Value 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
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.
"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
<PAGE>
28
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 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
<PAGE>
29
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.
"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.
<PAGE>
30
"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 at
maturity 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, 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
<PAGE>
31
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 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.
<PAGE>
32
"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).
"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 at maturity of Exchange Securities registered under
the Securities Act.
<PAGE>
33
"Registration Agreement" means the U.S. 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 designated or classified as an
Unrestricted Subsidiary pursuant to and in compliance with Section 1020 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 Accreted Value of,
<PAGE>
34
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 1020.
"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.
<PAGE>
35
"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.
"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
<PAGE>
36
Accreted Value 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 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
<PAGE>
37
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 retirement (including pursuant to
an offer to purchase made by the Company) of such other Debt at the option of
the holder thereof prior to the final 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
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 (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
<PAGE>
38
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 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 1020 and not
<PAGE>
39
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.
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:
<PAGE>
40
(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.
---------------------------------------
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
<PAGE>
41
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated (with
proper identification of each matter covered therein) and form one instrument.
SECTION 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.
<PAGE>
42
(c) The principal amount at maturity 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, 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
<PAGE>
43
Security if the Trustee receives the notice of revocation before the date such
Act becomes effective.
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.
--------------------------
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
<PAGE>
44
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.
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.
--------------
<PAGE>
45
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.
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 Accreted Value (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
<PAGE>
46
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.
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.
<PAGE>
47
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.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
----------------
The aggregate principal amount at maturity of Securities which may be
authenticated and delivered under this Indenture is limited to $675,000,000,
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.
<PAGE>
48
The Securities shall be known and designated as the "12 7/8% Senior
Discount Notes Due 2010" of the Company. Their Stated Maturity shall be March
15, 2010. The Securities shall be issued at a discount price of 53.308% of their
aggregate principal amount at maturity, and shall accrete at a rate of 12 7/8%
per annum, compounded semiannually, to 100% of their aggregate principal amount
at maturity by March 15, 2005. On March 15, 2005, cash interest shall commence
accruing at a rate of 12 7/8% per annum, which shall be payable semiannually in
arrears on March 15 and September 15 in each year, commencing on September 15,
2005, and at said Stated Maturity, until the principal thereof is paid or duly
provided for. Notwithstanding the foregoing, with respect to Initial Securities,
if there has been a Registration Default the Initial Securities shall from the
date of such Registration Default bear Special Interest up to but excluding the
date on which such Registration Default is cured, as set forth or referred to in
the text of the Securities appearing in Exhibit A hereto. Accrued Special
Interest, if any, shall be paid in cash in arrears semi-annually 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. In addition, the
Company may elect, upon not less than 60 days prior notice given in the manner
provided for in Section 106, to commence the accrual of cash interest on all
Outstanding Securities on or after March 15, 2003, in which case the outstanding
principal amount at maturity of each Security shall on such commencement date be
reduced to the Accreted Value of such Security as of such commencement date and
cash interest shall be payable with respect to such Security on each March 15
and September 15 thereafter, as set forth or referred to in the text of the
Securities.
Accreted Value 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.
<PAGE>
49
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.
SECTION 302. Denominations.
--------------
The Securities will be issued without coupons and in fully registered
form only, in minimum denominations of $1,000 principal amount at maturity 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
<PAGE>
50
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 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 at maturity not
to exceed $675,000,000 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 at maturity 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 in
accordance with Regulation S under the Securities Act shall 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 "Regulation S Global Security"),
for credit to the respective accounts of the beneficial owners of the
<PAGE>
51
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 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 at maturity 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
<PAGE>
52
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 at
maturity; 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 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 at
maturity 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
maturity.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount at maturity, 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
<PAGE>
54
required by the Company or the Security Registrar) be duly 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 at maturity, 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>
55
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>
56
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>
57
(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>
58
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 Accreted Value 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.
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
<PAGE>
59
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.
SECTION 312. Book-Entry Provisions for Global Securities.
--------------------------------------------
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be deposited with
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit A.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security 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
<PAGE>
60
any written certification, proxy or other authorization furnished by the
Depository or (ii) impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in 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 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 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 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
<PAGE>
61
decrease in the principal amount at maturity of the Global Security in an amount
equal to the principal amount at maturity 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 at maturity 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 at maturity of
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
<PAGE>
62
procedures as may from time to time be adopted by the Company.
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 containing certain representations and agreements (the form of
which certificate can be obtained from the Trustee or the Company).
(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 and the Security Registrar's procedures, the Security
Registrar shall reflect on the Security Register the date and an increase
in the principal amount at maturity of the Institutional Accredited
Investor Global Security in an amount equal to the principal amount at
maturity of the Physical Securities
<PAGE>
63
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 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 at maturity of
such Rule 144A Global Security or Regulation S Global Security, as the case
may be, in an amount equal to the principal amount at maturity of the
beneficial interest in a Global Security to be transferred, and (B) an
increase in the principal amount at maturity of an Institutional Accredited
Investor Global Security in an amount equal to the principal amount at
maturity to be transferred.
(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.
(2) Subject to paragraph (1) above, if (i) the proposed
transferee is an Agent Member, and the
<PAGE>
64
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 and the Security Registrar's procedures,
the Security Registrar shall reflect on the Security Register the date and
an increase in the principal amount at maturity of the Regulation S Global
Security in an amount equal to the principal amount of at maturity 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 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 at maturity 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 at maturity to
be transferred and (B) an increase in the principal amount at maturity of a
Regulation S Global Security in an amount equal to the principal amount at
maturity 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):
(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
<PAGE>
65
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 at
maturity of the Rule 144A Global Security in an amount equal to the
principal amount at maturity 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 at maturity of such Institutional
<PAGE>
66
Accredited Investor Global Security or Regulation S Global Security, as the
case may be, in an amount equal to the principal amount at maturity to be
transferred and (B) an increase in the principal amount at maturity of a
Rule 144A Global Security in an amount equal to the principal amount at
maturity 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
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
<PAGE>
67
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.
(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
<PAGE>
68
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
(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,
<PAGE>
69
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 Accreted Value 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.
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 Accreted Value (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>
70
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 Accreted Value 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 Accreted Value 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 at
maturity 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
<PAGE>
71
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 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
<PAGE>
72
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 at
maturity of the Outstanding Securities may declare the Accreted Value, premium,
if any, and accrued and unpaid interest in respect 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 Accreted Value,
premium, if any, and accrued and unpaid interest 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 Accreted Value, premium, if any, and
accrued and unpaid interest in respect 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 at maturity 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 Accreted Value of (and premium, if any, on) any
Outstanding Securities
<PAGE>
73
which has become due otherwise than by such declaration of
acceleration, and interest on such unpaid Accreted Value 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
Accreted Value 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 Accreted Value 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 Accreted Value (and premium, if any) and interest, and interest
on any overdue Accreted Value (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
<PAGE>
74
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.
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 Accreted Value 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 Accreted Value, 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 Accreted Value
(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,
<PAGE>
75
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 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.
-------------------------------
<PAGE>
76
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 Accreted Value (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 Accreted
Value 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 Accreted Value (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 at
maturity 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 at maturity of the Outstanding
Securities a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days;
<PAGE>
77
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 Accreted Value,
---------------------------------------------------------
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 Accreted Value 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.
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
<PAGE>
78
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 at maturity 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 at maturity of
the Outstanding Securities may, on
<PAGE>
79
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 Accreted Value 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>
80
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>
81
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 at
maturity 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
-------
Accreted Value 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>
82
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>
83
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.
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
<PAGE>
84
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 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
<PAGE>
85
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 Accreted Value 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.
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
<PAGE>
86
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 at maturity 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
<PAGE>
87
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 at maturity 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.
<PAGE>
88
(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.
---------
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
<PAGE>
89
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.
---------------------------------------------
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.
-------------------
<PAGE>
90
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.
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
<PAGE>
91
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 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
<PAGE>
92
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.
------------------------------
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
<PAGE>
93
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;
(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
<PAGE>
94
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 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.
--------------------------------
<PAGE>
95
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.
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
<PAGE>
96
(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 actions shall not
--------
adversely affect the interests of the Holders in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
------------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount at maturity 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 Accreted Value of, or
any installment of interest on, any Security, or reduce the Accreted
Value thereof or the interest thereon that would be due and payable
upon the
<PAGE>
97
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 at maturity 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
(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 the Indenture relating to the
calculation of Accreted Value with respect to the Securities; or
<PAGE>
98
(10) 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.
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
<PAGE>
99
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.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Accreted Value, Premium, if any, and
-----------------------------------------------
Interest.
- ---------
The Company covenants and agrees for the benefit of the Holders that it
shall duly and punctually pay the Accreted Value 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
<PAGE>
100
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 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 Accreted Value 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 Accreted Value 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 Accreted Value of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the Accreted Value (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 Accreted Value, 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>
101
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 Accreted
Value 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
Accreted Value, 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 Accreted Value of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such Accreted Value, premium or interest has become due and payable shall be
paid to the Company on Company Request or
<PAGE>
102
(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.
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
<PAGE>
103
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.
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.
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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 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 $1,000 principal amount
at maturity, 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
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105
Company will be required to make an Offer to Purchase all Outstanding Securities
at a price in cash equal to 101% of the Accreted Value 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 11:00 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 at maturity to any unpurchased portion of the
principal amount at maturity 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:
(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
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106
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
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"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 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
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107
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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108
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 any one time not to exceed the
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109
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
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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 Disqualified Stock, without any payment
by the Company or its Restricted Subsidiaries to the holders thereof other than
in respect of fractional
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110
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
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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 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
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111
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 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
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112
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 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, 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
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113
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 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
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114
(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 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
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115
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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116
(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
1020; (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
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117
subordinate 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
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Subsidiary of the Company 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
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119
amount not to exceed $3,000,000 in any 12-month period; (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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120
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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121
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.
<PAGE>
122
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 Property and (b) such Lien
does not
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123
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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124
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 Proceeds exceed $500,000,000, 540 days) from the date
of the receipt of such Net Available
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125
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 Accreted
Value 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 11:00 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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126
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 at maturity to any unpurchased portion of the principal amount
at maturity 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.
- ------------------------
<PAGE>
127
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
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128
otherwise being 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>
129
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 determination 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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130
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. Calculation of Original Issue Discount.
---------------------------------------
Within 30 days after the end of each calendar year, the Company shall
deliver to the Trustee a certificate setting forth the following:
(a) the total cumulative amount of "Original Issue Discount",
as defined by the Code, that had accrued on the Notes as of December 31
of such calendar year; and
(b) the portion of such Original Issue Discount that had
accrued during such calendar year.
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131
SECTION 1020. 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;
(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 Subsidiary 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
--------
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132
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 (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 1020,
no Restricted Subsidiary may be redesignated 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
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133
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 1020, such Restricted Subsidiary shall, by delivery of a supplemental
indenture providing for such release in form satisfactory to the 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 Accreted Value) 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
<PAGE>
134
Trustee of such Redemption Date and of the Accreted Value 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 .
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 Accreted Value of Securities;
provided, however, that no such partial redemption shall reduce the portion of
- -------- -------
the principal amount at maturity of a Security not redeemed to less than $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 at maturity 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 Accreted Value 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.
<PAGE>
135
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,
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal amounts
at maturity) 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 Accreted Value 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 11:00 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
<PAGE>
136
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.
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 Accreted Value (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 maintained 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
<PAGE>
137
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 Accreted Value equal to and in exchange
for the unredeemed portion of the Accreted Value of the Security so surrendered.
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.
-------------------------
<PAGE>
138
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
Accreted Value 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.
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 1020 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
<PAGE>
139
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.
<PAGE>
140
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:
(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
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
Accreted Value of (and premium, if any, on) and interest on, the Outstanding
Securities on the Stated Maturity (or Redemption Date, if applicable); 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).
<PAGE>
141
(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 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>
142
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 Accreted
Value, 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.
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.
--------------
<PAGE>
143
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 Accreted Value 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>
144
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"), 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. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[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 RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT
<PAGE>
A-2
("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 HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR
<PAGE>
A-3
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.
12 7/8% Senior Discount Note Due 2010
CUSIP No.
No. [if a Global security, insert: 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 at maturity 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 at
maturity of all other Outstanding Securities, shall not exceed $675,000,000 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, with payment commencing
on September 15, 2005 and cash interest accruing from March 15, 2005, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, at the rate of 12 7/8% per annum, until the principal amount at
maturity hereof is paid or duly provided for; provided that no cash interest
--------
shall accrue on the Accreted Value of this Security prior to March 15, 2005, and
no cash interest shall be paid on this Security prior to September 15, 2005,
except [delete text in brackets if an Exchange Security (other than a Private
Exchange Security): (a) as provided in the next paragraph and (b)] that the
Company may elect, upon not less than 60 days prior notice given in the manner
provided for in the Indenture, to commence the accrual of cash interest (at the
rate shown above) on all Outstanding Securities on or after March 15, 2003, in
which case the outstanding principal amount at maturity of this Security shall
on such commencement date be reduced to the Accreted Value of this Security as
of such commencement date and cash interest shall be payable with respect to
this Security on each March 15 and September 15 thereafter. The Company shall
pay interest on overdue Accreted Value at the rate borne by the Securities, and
it
<PAGE>
A-5
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 U.S.
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 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, if any, 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 Accreted Value 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
<PAGE>
A-6
determined on the basis of the number of days actually elapsed and the Accreted
Value for each such day. 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
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 Accreted Value 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 such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the 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
<PAGE>
A-7
provisions shall for all purposes have the same effect as if set forth at this
place.
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.
<PAGE>
A-8
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-9
Form of Reverse of Security
---------------------------
This Security is one of a duly authorized issue of securities of the
Company designated as its 12 7/8% Senior Discount Notes Due 2010 (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount at maturity to $675,000,000,
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 Accreted Value) 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............................................................. 106.438%
2006............................................................. 104.292%
2007............................................................. 102.146%
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 at
maturity of the
<PAGE>
A-10
Securities at a redemption price equal to 112.875% of the Accreted Value 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
--------
at maturity of the Securities would remain outstanding immediately after giving
effect to any such redemption. Any such redemption shall be made within 90 days
of any 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 Accreted Value 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
or accrete principal, as the case may be, 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 Accreted Value, premium
(if any) and interest on the
<PAGE>
A-11
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 Accreted Value 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 at maturity of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount at maturity 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-12
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 Accreted Value 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 at maturity, will be issued to the designated transferee or
transferees. The Securities are issuable only in registered form without
coupons in denominations of $1,000 principal amount at maturity 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 Accreted Value 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.
<PAGE>
A-13
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-14
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-15
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-16
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-17
(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-18
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
<PAGE>
A-19
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-20
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount at maturity of this Global
Security is $[ ]. The following increases or decreases in this Global
Security have been made:
<TABLE>
<CAPTION>
Date of Amount of decrease Amount of increase Principal amount at Signature of
Transfer in Principal Amount in Principal Amount Maturity of this authorized signatory
at Maturity of this at Maturity of this Global Security of Trustee or
Global Security Global Security following such Security Registrar
decrease or increase
<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 at
maturity of up to $675,000,000 of 12-7/8% Senior Discount 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 Accreted Value 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, 1020,
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 Accreted Value of (or premium, if any) or
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
Accreted Value 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
<PAGE>
B-4
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.
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
<PAGE>
B-5
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.
7. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the
- ----------
<PAGE>
B-6
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.
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:
<PAGE>
B-7
THE BANK OF NEW YORK,
as Trustee,
by
_____________________________
Name:
Title:
<PAGE>
EXECUTION COPY
Exhibit 4.4
LEVEL 3 COMMUNICATIONS, INC.
$1,725,000,000
11% Senior Notes due 2008
11-1/4% Senior Notes due 2010
12-7/8% Senior Discount Notes due 2010
U.S. REGISTRATION AGREEMENT
New York, New York
February 24, 2000
To: SALOMON SMITH BARNEY INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BNY CAPITAL MARKETS, INC.
FIRST UNION SECURITIES, INC.
In care of:
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
<PAGE>
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"), $800,000,000 aggregate principal amount of its 11% Senior Notes due
2008, $250,000,000 aggregate principal amount of its 11-1/4% Senior Notes due
2010 and $675,000,000 aggregate principal amount at maturity of its 12-7/8%
Senior Discount 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 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.
<PAGE>
3
"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.
-----------------
"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.
<PAGE>
4
"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.
"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.
<PAGE>
5
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.
(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);
<PAGE>
6
(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 cancelation 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:
<PAGE>
7
(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 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.
<PAGE>
8
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
any 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 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:
<PAGE>
9
(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 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
<PAGE>
10
(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 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
<PAGE>
11
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>
12
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
<PAGE>
13
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.
(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
<PAGE>
14
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.
(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
<PAGE>
15
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 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
<PAGE>
16
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 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
<PAGE>
17
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 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.
<PAGE>
18
(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 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
<PAGE>
19
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, claims, damages or liabilities, joint or several, to
which
<PAGE>
20
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.
<PAGE>
21
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 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 Dealer) severally and 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
<PAGE>
22
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
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified 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
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
<PAGE>
23
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 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
<PAGE>
24
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 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,
<PAGE>
25
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, 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.
<PAGE>
26
(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.
(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.
<PAGE>
27
(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 cancelation of the Purchase Agreement prior to the Closing
Date.
<PAGE>
28
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: SALOMON SMITH BARNEY INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BNY CAPITAL MARKETS, INC.
FIRST UNION SECURITIES, INC.
By: SALOMON SMITH BARNEY INC.
By: /s/ D. Scott Miller
_______________________
Name: D. Scott Miller
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
*/ 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>
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.
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)
----------------------
11% 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 25.3
================================================================================
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)
----------------------
12-7/8% Senior Discount 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 11% Senior Notes due 2008
Exchange Agent:
The Bank of New York
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 11% 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 $1,000 in
principal amount of its outstanding 11% Senior Notes due 2008 issued and sold
in a transaction exempt from registration under the Securities Act of 1933, as
amended (the "Original Notes"), $1,000 in principal amount of 11% 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 the Exchange Agent, in person or to the address 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 Agent at The Depository Trust Company (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 the 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 the Exchange Agent, at the address
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 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 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 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
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
- --------------------------------------------------------------------------------
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 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 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 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 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 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 Agent 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
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
Exchange Agent before the Company notifies the 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 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 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 Exchange Agent at the address 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 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
11% 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
$800,000,000 in principal amount of its 11% Senior Notes due 2008 (the "New
Notes") for $800,000,000 in principal amount of its 11% 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 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 Exchange Agent.
TO: The Bank of New York (the "Exchange Agent")
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 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
Name(s) _____________________________
(if available) __________________
_____________________________________
Total Principal Amount Represented by Address _____________________________
Original Notes Certificate(s)____
_____________________________________
Account Number __________________
Area Code and Tel. No(s). ___________
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 $800,000,000 in principal amount of
11% Senior Notes due 2008
for
$800,000,000 in principal amount of
11% 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 $800,000,000 in principal amount of its 11% Senior Notes due
2008 (the "New Notes") for $800,000,000 in principal amount of its 11% 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 $800,000,000 in principal amount of
11% Senior Notes due 2008
for
$800,000,000 in principal amount of
11% 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 $800,000,000 in principal amount of its 11% Senior Notes due
2008 (the "New Notes") for $800,000,000 in principal amount of its 11% 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.
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.
- --------------------------------------------------------------------------------
For this type of account:
Give the SOCIAL SECURITY number of--
- ----------------------------------------------------------------------------
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)
The ward, minor,
6. Account in the name of guardian or committee for a or incompetent
designated ward, minor, or incompetent person 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)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For this type of account:
Give the EMPLOYER IDENTIFICATION number of--
- -------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
(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
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 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
$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"), $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 the Exchange Agent, in person or to the address 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 Agent at The Depository Trust Company (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 the 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 the Exchange Agent, at the address
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 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 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 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
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
- --------------------------------------------------------------------------------
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 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 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 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 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 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 Agent 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
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
Exchange Agent before the Company notifies the 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 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 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 Exchange Agent at the address 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 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 Notes due 2010
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
$250,000,000 in principal amount of its 11 1/4% Senior Notes due 2010 (the "New
Notes") for $250,000,000 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"), 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
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
Exchange Agent.
TO: The Bank of New York (the "Exchange Agent")
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 by
Original Notes Certificate(s) ___ Address _____________________________
_____________________________________
Account Number __________________
Area Code and Tel. No(s). ___________
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 $250,000,000 in principal amount of
11 1/4% Senior Notes due 2010
for
$250,000,000 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 $250,000,000 in principal amount of its 11 1/4% Senior Notes due
2010 (the "New Notes") for $250,000,000 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 $250,000,000 in principal amount of
11 1/4% Senior Notes due 2010
for
$250,000,000 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 $250,000,000 in principal amount of its 11 1/4% Senior Notes
due 2010 (the "New Notes") for $250,000,000 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.
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.
- --------------------------------------------------------------------------------
For this type of account:
Give the SOCIAL SECURITY number of--
- ----------------------------------------------------------------------------
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)
The ward, minor,
6. Account in the name of guardian or committee for a or incompetent
designated ward, minor, or incompetent person 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)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For this type of account:
Give the EMPLOYER IDENTIFICATION number of--
- -------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
(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 99.11
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 12 7/8% Senior Discount Notes due 2010
Exchange Agent:
The Bank of New York
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 Principal Amount
Holder(s) Principal Amount at Maturity
(Please at Maturity 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 12 7/8% Senior Discount 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
$1,000 in principal amount at maturity of its outstanding 12 7/8% Senior
Discount Notes due 2010 issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Original
Notes"), $1,000 in principal amount at maturity of 12 7/8% Senior Discount
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 the Exchange Agent, in person or to the address 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 Agent at The Depository Trust Company (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 the 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 the Exchange Agent, at the address
listed above, or the Company, 1025 Eldorado Boulevard, 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 at maturity 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 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 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 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
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
- --------------------------------------------------------------------------------
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 at maturity not a principal amount at maturity not
exchanged, or New Notes, are to be exchanged, or New Notes, are to be
issued in the name of someone sent to someone other than the
other than the person whose person whose signature appears in
signature appears in Box 2, or if Box 2 or to an address other than
Original Notes delivered by book- that shown in Box 1.
entry transfer 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 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 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 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 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 at maturity 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 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 Agent 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 at
maturity 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 at maturity 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 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
Exchange Agent before the Company notifies the 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 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 at maturity 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 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 Exchange Agent at the address 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 Exchange Agent on or before the expiration date of the
Exchange Offer (as described in the Prospectus).
9
<PAGE>
EXHIBIT 99.12
LEVEL 3 COMMUNICATIONS, INC.
Exchange Offer
to holders of its
12 7/8% Senior Discount Notes due 2010
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
$675,000,000 in principal amount at maturity of its 12 7/8% Senior Discount
Notes due 2010 (the "New Notes") for $675,000,000 in principal amount at
maturity of its 12 7/8% Senior Discount Notes due 2010, 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 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 Exchange Agent.
TO: The Bank of New York (the "Exchange Agent")
By Facsimile:
(212) 815-6339
Confirm by telephone:
(212) 815-2742
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Enrique Lopez
By Overnight Courier or By Hand:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez
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 at Maturity of Signature(s) ________________________
Original Notes _____________________________________
Tendered ________________________
Please Print the Following
Certificate Nos. Information
Name(s) _____________________________
(if available) __________________
_____________________________________
Total Principal Amount at Maturity Address _____________________________
Represented 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 99.13
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to $675,000,000 in principal amount at maturity of
12 7/8% Senior Discount Notes due 2010
for
$675,000,000 in principal amount at maturity of
12 7/8% Senior Discount 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 $675,000,000 in principal amount at maturity of its 12 7/8%
Senior Discount Notes due 2010 (the "New Notes") for $675,000,000 in principal
amount at maturity of its 12 7/8% Senior Discount 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 at maturity 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 at maturity 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 99.14
LEVEL 3 COMMUNICATIONS, INC.
Offer to Exchange
Up to $675,000,000 in principal amount at maturity of
12 7/8% Senior Discount Notes due 2010
for
$675,000,000 in principal amount at maturity of
12 7/8% Senior Discount 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 $675,000,000 in principal amount at maturity of its 12 7/8%
Senior Discount Notes due 2010 (the "New Notes") for $675,000,000 in principal
amount at maturity of its 12 7/8% Senior Discount 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.
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 99.15
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.
- --------------------------------------------------------------------------------
For this type of account:
Give the SOCIAL SECURITY number of--
- ----------------------------------------------------------------------------
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)
The ward, minor,
6. Account in the name of guardian or committee for a or incompetent
designated ward, minor, or incompetent person 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)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For this type of account:
Give the EMPLOYER IDENTIFICATION number of--
- -------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
(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.
